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Exhibit 10.14
SECOND AMENDMENT AND MODIFICATION
TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT AND MODIFICATION TO LOAN AND SECURITY
AGREEMENT (the "Amendment" ) is made effective as of the
day of
,
2006, by and among INFO LOGIX INC. , a Delaware corporation
( "Infologix" ), OPT ACQUISITION LLC , a Pennsylvania
limited liability company ( "Optasia" ), EMBEDDED
TECHNOLOGIES, LLC , a Delaware limited liability company (
"Embedded" and together with Infologix and Optasia, jointly,
severally and collectively "Borrowers" and each a
"Borrower" ) and SOVEREIGN BANK (the "Bank"
).
BACKGROUND
A.
Pursuant to that certain Loan and Security Agreement dated March
16, 2006 by and among Borrowers and Bank (as amended by that
certain First Amendment and Modification to Loan and Security
Agreement dated August 25, 2006 (the "First Amendment" ) and
as the same may hereafter be amended, modified, supplemented or
restated from time to time, being referred to herein as the
"Loan Agreement" ), Bank agreed, inter alia , to
extend to Borrowers the following credit facilities: (i) a
line of credit in the maximum principal amount of Eight Million
Five Hundred Thousand Dollars ($8,500,000.00), (ii) a term loan in
the original principal amount of One Million Five Hundred Thousand
Dollars ($1,500,000.00) and (iii) a term loan in the original
principal amount of One Million Dollars ($1,000,000.00).
B.
Borrowers have requested and Bank has agreed to amend the Loan
Agreement in accordance with the terms and conditions contained
herein.
C.
All capitalized terms contained herein and not otherwise defined
herein shall have the meanings set forth in the Loan Agreement.
NOW, THEREFORE , intending to be legally bound hereby,
the parties hereto agree as follows:
1.
Waiver of Covenant Default .
(a)
Bank hereby waives any Default or Event of Default that exists or
may arise under the Loan Agreement as a result of Borrowers’
failure to comply with the Fixed Charge Coverage Ratio set forth in
Section 8.3 of the Loan Agreement as of
Borrowers’ fiscal quarter ended September 30, 2006.
(b)
The foregoing waiver applies solely with respect to the covenant
and period referenced in Section 1(a) above and does
not apply to or constitute a waiver for any other Default or Event
of Default that exists or may exist under the Loan Agreement or any
of the other Loan Documents, including, without limitation,
Borrower’s failure to comply with the covenant set forth in
Section 8.3 of the Loan Agreement as of any other
date.
2.
Definitions . Section 1.1(o)A of
the Loan Agreement is hereby deleted in its entirety and replaced
with the following:
3.
Term Loan B - Principal Payments .
Section 4.3A of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
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"4.3A Principal Payments on
Term Loan B . Subject to the next succeeding sentence,
Borrowers will pay the principal of Term Loan B in (a) equal and
consecutive monthly installments of Twenty-Seven Thousand Seven
Hundred Seventy-Seven and 78/100 Dollars ($27,777.78) each, on the
first day of each calendar month commencing on December 1, 2006,
and (b) one (1) final payment of the remaining principal balance,
plus all accrued and unpaid interest thereon on March 15,
2009. Notwithstanding the foregoing, if the Capital Raise
Date has not occurred prior to the Cut-Off Date, Borrower will pay
the entire outstanding principal balance of Term Loan B, plus all
accrued and unpaid interest thereon on December 31, 2006."
4.
Additional Conditions . Section
11 of the First Amendment is hereby deleted and replaced
with the following:
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"11.
Additional Conditions . If the Capital Raise
Date does not occur prior to the Cut-Off Date, on November 30,
2006, at Borrowers’ sole option, (i) Bank shall institute a
reserve against Eligible Receivables or Eligible Inventory in an
amount equal to Five Hundred Thousand Dollars ($500,000.00) or (ii)
Borrower shall deposit in a non-interest bearing cash collateral
account maintained at Bank (the "Additional Cash Collateral
Account" ) an amount equal to Five Hundred Thousand Dollars
($500,000.00).
Bank will have sole dominion and control over all items and
funds in the Additional Cash Collateral Account and such items and
funds may be withdrawn only by Bank. Bank will have the right
to apply all or any part of such funds towards payment of any of
the Bank Indebtedness. Items and funds in the Additional Cash
Collateral Account shall be referred to herein as the
"Additional Cash Collateral" ."
5.
Amendment/References . The Loan Agreement and
the Loan Documents are hereby amended to be consistent with the
terms of this Amendment. All references in the Loan Agreement and
the Loan Documents to (a) the "Loan Agreement" shall mean
the Loan Agreement as amended hereby; and (b) the "Loan
Documents" shall include this Amendment and all other
instruments or agreements executed pursuant to or in connection
with the terms hereof.
6.
Cross-Collateralization; Confirmation of Collateral .
Borrowers hereby confirm, acknowledge and agree that all
Bank Indebtedness is and shall be cross-collateralized and, without
limiting the foregoing, Term Loan B, the other Loans, and all other
Bank Indebtedness are and shall continue to be secured by all
liens, security interests, assignments, suretyship obligations,
stock pledges, rights and remedies granted to Bank in the Loan
Documents, which liens, mortgages, security interests, rights and
remedies are hereby reaffirmed and continued as security for the
foregoing; and all of the Loan Documents are hereby amended to
reflect the same. None of the
2
Collateral shall be impaired by anything
contained herein and all such Collateral shall
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