Exhibit 10.13

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made as of
September 26, 2016, by MAM SOFTWARE GROUP, INC., a Delaware corporation (the
“Borrower”) and JPMORGAN CHASE BANK, N.A., a national banking association (the
“Lender”).

 

RECITALS

 

A.     .The Borrower and the Lender are parties to a Credit Agreement dated
December 1, 2015 (as amended, restated, modified, substituted, extended, and
renewed from time to time, the “Credit Agreement”). The Credit Agreement
provides for some of the agreements between the Borrower and the Lender with
respect to the “Loans” (as defined in the Credit Agreement), including a
revolving credit facility in an amount not to exceed $2,500,000.00 and a term
facility in the original principal amount of $9,500,000.00.

 

B.     .The Borrower has requested that the Lender amend certain covenants in
the Credit Agreement.

 

C.     .The Lender is willing to agree to the Borrower’s request on the
condition, among others, that this Agreement be executed.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Borrower and the
Lender agree as follows:

 

1.     .The Borrower and the Lender agree that the Recitals above are a part of
this Agreement. Unless otherwise expressly defined in this Agreement, terms
defined in the Credit Agreement shall have the same meaning under this
Agreement.

 

2.     .The Borrower and the Lender agree that on the date hereof the aggregate
outstanding principal balance under the Revolving Credit Note (subject to change
for returned items and other adjustments made in the ordinary course of
business) is $1,250,000.00 and under the Term Note is $8,075,000.03.

 

3.     .The Credit Agreement is hereby amended as follows:

 

(a)     ()Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended
by adding the following new definition in its correct alphabetical order:

 

“Minimum Liquidity” means, on the date of determination, the sum of (i)
unrestricted cash, plus (ii) Availability.

 

(b)     ()The definition of “Applicable Rate” in Section 1.01 (Defined Terms) of
the Credit Agreement is hereby amended by restating the chart contained therein
in its entirety to read as follows:

 

Total Leverage

Ratio

Revolving

Commitment

CBFR

Spread

Revolving

Commitment

Eurodollar

Spread

Term Loan CBFR Spread

Term Loan Eurodollar Spread

Commitment Fee Rate

Category 1

< 1.50 to 1.00

 

CB Floating Rate + 3.50%

 

LIBO Rate + 3.50%

 

CB Floating Rate + 3.50%

 

LIBO Rate + 3.50%

 

0.30%

Category 2

< 2.00 to 1.00 but

 > 1.50 to 1.00

 

CB Floating Rate + 3.75%

 

LIBO Rate + 3.75%

 

CB Floating Rate + 3.75%

 

LIBO Rate + 3.75%

 

0.30%

Category 3

> 2.00 to 1.00

 

CB Floating Rate + 4.00%

 

LIBO Rate + 4.00%

 

CB Floating Rate + 4.00%

LIBO Rate + 4.00%

 

0.30%

 

(c)     ()Section 5.01(b) (Financial Statements and Other Information) of the
Credit Agreement is here by amended and restated in its entirety to read as
follows:

 

“(b)     for the period beginning October 1, 2016, within 30  days after the end
of each month except the final month of the fiscal year of the Borrower, and for
the period beginning after the Lender has, in its sole discretion, provided
written notice of such change to the Borrower, within 45  days after the end of
each of the first three fiscal quarters of the Borrower, its consolidated
balance sheet and related statements of operations and cash flows as of the end
of and for such fiscal quarter and the then elapsed portion of such fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by a Financial Officer as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

 

(d)     ()Subsections (e), (i), (j), (k), and (l) of Section 6.01 (Indebtedness)
of the Credit Agreement are hereby amended and restated in their entireties to
read as follows:

 

“(e)     Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (f) below; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) below, shall not exceed
$50,000 at any time outstanding, provided however, such limit may be increased
to $100,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower;”

 

“(i)     Subordinated Indebtedness in an aggregate principal amount not
exceeding $50,000 at any time outstanding, provided however, such limit may be
increased to $100,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower;”

 

“(j)     Indebtedness of any Person that becomes a Subsidiary after the date
hereof; provided that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (ii) the aggregate principal amount
of Indebtedness permitted by this clause (j) together with any Refinance
Indebtedness in respect thereof permitted by clause (f) above, shall not exceed
$50,000 at any time outstanding, provided however, such limit may be increased
to $100,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower;”

 

“(k)     Existing operating lease obligations (in effect as of the Effective
Date), including increases in existing operating lease obligations and new
operating lease obligations; provided that the sum of such increases in existing
operating lease obligations, plus new operating lease obligations do not exceed,
in the aggregate, $100,000 annually, provided however, such limit may be
increased to $500,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower; and”

 

“(l)     any other unsecured Indebtedness, provided however, the Borrower may
incur other unsecured Indebtedness in an aggregate principal amount not to
exceed $100,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower.”

 

(e)     ()Section 6.02(d) (Liens) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

“(d)     Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 85% of the cost of acquiring, constructing or
improving such fixed or capital assets at any time outstanding, provided
however, such limit may be increased to 100% of the cost of acquiring,
constructing or improving such fixed or capital assets at any time outstanding
for the period beginning after the Lender has, in its sole discretion, provided
written notice of such increase to the Borrower, and (iv) such Liens shall not
apply to any other property or assets of the Borrower or any Subsidiary;”

 

(f)     ()Subsections (d) and (f) of Section 6.04 (Investments, Loans, Advances,
Guarantees and Acquisitions) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

“(d)     loans or advances (excluding non-cash allocation of costs or expenses
among Subsidiaries done in the ordinary course of business) made by any Loan
Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other
Subsidiary, provided that (i) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged pursuant to the Security
Agreement and (ii) the amount of such loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties (together with outstanding investments
permitted under Section 6.04(c) and outstanding Guarantees permitted under
Section 6.04(e)) shall not exceed $100,000 at any time outstanding, provided
however, such limit may be increased to $250,000 for the period beginning after
the Lender has, in its sole discretion, provided written notice of such increase
to the Borrower (in each case determined without regard to any write-downs or
write-offs);”

 

“(f)     loans or advances made by a Loan Party to its employees on an
arms-length basis in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $50,000 in the aggregate at any one time
outstanding, provided however, such limit may be increased to $100,000 for the
period beginning after the Lender has, in its sole discretion, provided written
notice of such increase to the Borrower;”

 

(g)     ()Section 6.05(g) (Asset Sales) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

 

“(g)     sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $100,000 during
any fiscal year of the Borrower, provided however, such limit may be increased
to $250,000 for the period beginning after the Lender has, in its sole
discretion, provided written notice of such increase to the Borrower;”

 

(h)     ()Subsections (a) and (b) of Section 6.12 (Financial Covenants) of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

(a)     Maximum Total Leverage Ratio. The Borrower will not permit the Total
Leverage Ratio, on the last day of each month for the period beginning on
September 30, 2016, through and including September 30, 2017, and of any fiscal
quarter thereafter, ending during any period set forth below, to be greater than
the ratio set forth below opposite such period:

 

Period

Maximum Total Leverage Ratio

 

September 30, 2016, through and including August 31, 2017

 

2.50 to 1.00

 

September 30, 2017

 

2.25 to 1.00

 

December 31, 2017, and thereafter

 

2.0o 1.00

 

 

 

(b)     Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending
on the last day of the fiscal quarter ending December 31, 2017, and for each
fiscal quarter thereafter, to be less than 1.20 to 1.00.

 

(i)     ()Section 6.12 (Financial Covenants) of the Credit Agreement is hereby
amended by adding the following new subsections:

 

(c)     Minimum LTM EBITDA. The Borrower will not permit EBITDA, for any period
of twelve consecutive months ending on the last day of each month for the period
beginning on September 30, 2016, through and including September 30, 2017, to be
less than $3,750,000.00.

 

(d)     Minimum Liquidity. The Borrower will not permit Minimum Liquidity, for
any period of twelve consecutive months ending on the last day of each month for
the period beginning on September 30, 2016, through and including September 30,
2017, to be less than $750,000.00.

 

4.     .The agreement of the Lender under this Agreement are subject to the
following terms and conditions, time being of the essence:

 

(a)     ()At the time this Agreement is executed and delivered, the Borrower
shall pay the Lender an amendment fee in the amount of $25,000.00, which fee is
fully earned and non-refundable.

 

(b)     ()At the time this Agreement is executed and delivered, the Guarantor
(as that term is defined in the Credit Agreement) shall execute and deliver the
Agreement of Guarantor below.

 

5.     .The Borrower represents and warrants to the Lender as follows:

 

(a)     ()The Borrower (i) is duly organized, existing and in good standing
under the laws of the jurisdiction of its formation stated in the preamble to
this Agreement and is organized in no other jurisdiction, (ii) has the entity
power to own its property and to carry on its business as now being conducted,
and (iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary.

 

(b)     ()The Borrower has the entity power and authority to execute and deliver
this Agreement and to incur and perform its obligations hereunder and has taken
all necessary and appropriate entity action to authorize the execution, delivery
and performance of this Agreement.

 

(c)     ()The Credit Agreement, as amended by this Agreement, and each of the
other Loan Documents remain in full force and effect, and each constitutes the
valid and legally binding obligation of the Borrower, enforceable in accordance
with its terms.

 

(d)     ()All of the Borrower’s representations and warranties contained in the
Credit Agreement and the other Loan Documents are true and correct on and as of
the date of the Borrower’s execution of this Agreement.

 

(e)     ()No Event of Default and no event which, with notice, lapse of time or
both would constitute an Event of Default, has occurred and is continuing under
the Credit Agreement or the other Loan Documents which has not been waived in
writing by the Lender.

 

(f)     ()The execution, delivery and performance of the terms of this Agreement
will not conflict with, violate or be prevented by (i) as applicable, charter or
bylaws, operating agreement, articles of organization, partnership agreements,
or other constituent certificates, documents and agreements governing the
Borrower’s formation, governance and management, (ii) any existing mortgage,
indenture, contract or agreement binding on the Borrower or affecting its
property, or (iii) any Laws.

 

6.     .The Borrower hereby issues, ratifies and confirms the representations,
warranties and covenants contained in the Credit Agreement, as amended hereby.
The Borrower agrees that this Agreement is not intended to and shall not cause a
novation with respect to any or all of the Obligations.

 

7.     .The Borrower acknowledges and warrants that the Borrower has no (and
alternatively waives each and every) counterclaim, recoupment, setoff, reduction
or defense with respect to the Obligations or otherwise, however arising, in
contract, in tort or otherwise and whenever arising; and alternatively,
releases, withdraws, waives and discharges any and all claims, rights, demands,
damages, causes of action, judgments or liabilities which the Borrower has, had
or may have ever had against the Lender, including but not limited to any
arising in connection with the Obligations or otherwise.

 

8.     .The Borrower shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Lender and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of counsel and all
recording fees, taxes and charges.

 

9.     .This Agreement and the rights and obligations of the parties hereunder
shall be governed by and interpreted in accordance with the Laws of New York.

 

10.     .This Agreement is one of the Loan Documents. This Agreement may be
executed in any number of duplicate originals or counterparts, each of such
duplicate originals or counterparts shall be deemed to be an original and all
taken together shall constitute but one and the same agreement. Each party to
this Agreement agrees that the respective signatures of the parties may be
delivered by fax, PDF, or other electronic means acceptable to the Lender and
that the parties may rely on a signature so delivered as an original. Any party
who chooses to deliver its signature in such manner agrees to provide promptly
to the other parties a copy of this Agreement with its inked signature, but the
party’s failure to deliver a copy of this Agreement with its inked signature
shall not affect the validity, enforceability and binding effect of this
Agreement.

 

Signatures begin on the following page.

 

Signature Page to
FIRST AMENDMENT TO CREDIT AGREEMENT

 

IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement
under seal as of the date and year first written above.

 

ATTEST:     MAM SOFTWARE GROUP, INC.

 

 

 

_____________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

 

 

WITNESS:     JPMORGAN CHASE BANK, N.A.

 

 

 

_____________________________     By:__________________________(SEAL)

Name:

Title:

 

Agreement of Guarantor begins on the following page.

 

 

 
 

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FIRST AMENDMENT TO CREDIT AGREEMENT

 

AGREEMENT OF GUARANTOR

 

Reference is made to the foregoing First Amendment to Credit Agreement (the
“First Amendment”) for the meaning of capitalized terms not otherwise defined in
this Agreement of Guarantor. The undersigned is the “Guarantor” under a Guaranty
of Payment Agreement, dated December 1, 2015 (as amended, modified, substituted,
extended and renewed from time to time, the “Guaranty”), in favor of the Lender.
In order to induce the Lender to enter into the First Amendment, the Guarantor
(a) consents to the transactions contemplated by, and agreements made by the
Borrower under, the First Amendment, (b) ratifies, confirms and reissues the
terms, conditions, promises, covenants, grants, assignments, security
agreements, waivers, agreements, representations, warranties and provisions
contained in the Guaranty, and (c) agrees that the Guarantor has no (and
alternatively waives each and every) counterclaim, recoupment, setoff, reduction
or defense with respect to the Guarantor's obligations under the Guaranty,
however arising, in contract, in tort or otherwise and whenever arising; and (d)
alternatively, releases, withdraws, waives and discharges any and all claims,
rights, demands, damages, causes of action, judgments or liabilities which the
Guarantor has, had or may have ever had against the Lender, including but not
limited to any arising in connection with the Guaranty or the other Loan
Documents. Without limiting the foregoing, the Guarantor acknowledges and agrees
that in the Guaranty the Guarantor agreed, among other things, that the parties
to the Credit Agreement may from time to time modify, amend, change or terminate
any provisions of any of the Loan Documents without in any way releasing,
affecting or in any way impairing the obligations and liabilities of the
Guarantor under the Guaranty, and notwithstanding the acceptance of this
Agreement of Guarantor by the Lender, the parties may hereafter modify, amend,
change or terminate any provisions of any of the Loan Documents without notice
to, the further agreement of, or the consent of the Guarantor. This Agreement is
one of the Loan Documents. This Agreement may be executed in any number of
duplicate originals or counterparts, each of such duplicate originals or
counterparts shall be deemed to be an original and all taken together shall
constitute but one and the same agreement. Each party to this Agreement agrees
that the respective signatures of the parties may be delivered by fax, PDF, or
other electronic means acceptable to the Lender and that the parties may rely on
a signature so delivered as an original. Any party who chooses to deliver its
signature in such manner agrees to provide promptly to the other parties a copy
of this Agreement with its inked signature, but the party’s failure to deliver a
copy of this Agreement with its inked signature shall not affect the validity,
enforceability and binding effect of this Agreement.

 

Signature to Agreement of Guarantor begins on the following page.

 

 

 
 

--------------------------------------------------------------------------------

 

 

First AMENDMENT TO credit AGREEMENT

 

Signature page to
AGREEMENT OF GUARANTOR

 

WITNESS signature and seal of the Guarantor as of the date of the First
Amendment.

 

WITNESS OR ATTEST:     MAM SOFTWARE, INC.

 

 

 

______________________________     By:__________________________(SEAL)

Name:     Brian H. Callahan

Title:     Chief Financial Officer

 

 

 

 

4836-6248-1208, v. 2