Exhibit 10.1

 

AMENDMENT NUMBER 1 TO THE LOAN AND SECURITY AGREEMENT

AND TO THE LOAN AGREEMENT SCHEDULE

 

This Amendment Number 1 to the Loan and Security Agreement and to the Loan
Agreement Schedule (“Amendment No. 1”) dated effective as of December 9, 2016 by
and between SYSOREX GLOBAL, a Nevada corporation with offices at 2479 East
Bayshore Road, Suite 195, Palo Alto, CA 94303 (“SG”), SYSOREX USA, a California
corporation with offices at 2479 East Bayshore Road, Suite 195, Palo Alto, CA
94303 (“SUSA”) and SYSOREX GOVERNMENT SERVICES, INC., a Virginia corporation
with offices at 2479 East Bayshore Road, Suite 195, Palo Alto, CA 94303 (“SGS”
and together with SUSA and SG, jointly and severally the “Borrower”), and GEMCAP
LENDING I, LLC, a Delaware limited liability company with offices at 24955
Pacific Coast Highway, Suite A202, Malibu, CA 90265 (together with its
successors and assigns, the “Lender”).

 

RECITALS

 

A.       Borrower and Lender are parties to the Loan and Security Agreement
dated as of November 14, 2016 (the “Loan Agreement”).

 

B.       In connection with the Loan Agreement, Borrower executed and delivered
to Lender (i) the Loan Agreement Schedule dated as of November 14, 2016 (the
“Loan Schedule”), and (ii) other Loan Documents.

 

C.       Borrower acknowledges that for the period from November 21, 2016
through and including December 6, 2016, Borrower did not deposit Collections of
Accounts received by Borrower in the account designated by Lender in violation
of the Loan Documents.

 

D.       Borrower has requested additional availability for unbilled Accounts.

 

E.       As an accommodation to Borrower, Lender has consented to provide
additional availability for unbilled Accounts in accordance with this Amendment
No. 1, subject to the terms and conditions set forth herein.

 

F.       In consideration of Lender’s consent and accommodation, Borrower has
agreed to pay all of Lender’s fees and costs including Lender’s attorneys’ fees
and costs in respect of the transactions regarding this Amendment No. 1.

 

G.       Capitalized terms used but not defined herein have the meanings set
forth in the Loan Agreement.

 

 

 

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements herein contained and other good and valuable consideration, Lender
and Borrower mutually covenant, warrant and agree as follows:

 

1.       Amendments. Subject to Section 2 below, the Loan Agreement and the Loan
Schedule, effective as of the date hereof, are amended as follows:

 

A.       The definition of “Borrowing Base” in Section 1.14 of the Loan
Agreement is hereby deleted and restated in its entirety as follows:

 

“Borrowing Base” shall be calculated at any time as the sum of (i) the product
obtained by multiplying the outstanding amount of all Eligible Accounts (not
including and specifically excluding Eligible Unbilled Accounts), net of all
Taxes, discounts, allowances and credits given or claimed, by up to eighty-five
percent (85%), and (ii) (A) for the period from December 9, 2016 through and
including January 9, 2017, the product obtained by multiplying the amount of
only Eligible Unbilled Accounts net of all Taxes, discounts, allowances and
credits given or claimed, by up to eighty-five percent (85%), (B) for the period
from January 10, 2017 through and including February 8, 2017, the product
obtained by multiplying the amount of only Eligible Unbilled Accounts net of all
Taxes, discounts, allowances and credits given or claimed, by up to seventy
percent (70%), (C) for the period from February 9, 2017 through and including
March 9, 2017, the product obtained by multiplying the amount of only Eligible
Unbilled Accounts net of all Taxes, discounts, allowances and credits given or
claimed, by up to fifty percent (50%), and (D) from and after March 10, 2017,
the product obtained by multiplying the amount of only Eligible Unbilled
Accounts net of all Taxes, discounts, allowances and credits given or claimed,
by zero percent (0%), it being the understanding of Borrower, that on and after
March 10, 2017, Lender shall not make Advances against Eligible Unbilled
Accounts; provided, that, at all times, the aggregate amount of Eligible
Unbilled Accounts shall not exceed twenty percent (20%) of the aggregate amount
of Eligible Accounts. For the avoidance of doubt, when any Eligible Unbilled
Account becomes an Eligible Account, Lender shall credit the amount already
Advanced by Lender on any such Eligible Unbilled Account.

 

B.       The following definition shall be added as a new Section 1.29A;

 

1.29A “Eligible Unbilled Accounts” means Accounts (i) for which goods are to be
provided to an Account Debtor or work or services are to be performed for an
Account Debtor and the Borrower has not invoiced the Account Debtor within
thirty (30) days after such Accounts are first included on the Borrowing
Certificate, and (ii) which otherwise satisfy (1), (3), (5) through and
including (12) and (14) through and including (22) of the definition of Eligible
Accounts. For the avoidance of doubt, any unbilled Account that has not been
invoiced to the Account Debtor within thirty (30) days after the date the
Eligible Unbilled Account is first included on the Borrowing Certificate will be
made ineligible on the thirty-first (31st) day.

 

C.       Section 7(b)(ii) of the Loan Schedule is hereby deleted and restated in
its entirety as follows:

 

(ii) Monthly Financial Statements. Not later than thirty (30) days after the end
of each calendar month, the unaudited balance sheets and the related statements
of income of Borrower, certified by the Chief Financial Officer, subject to
year-end audit adjustments, with an aging schedule for all accounts receivable
and accounts payable, together with such other information with respect to the
business of Borrower as Lender may request

 

 -2- 

 

 

D.       Section 7(b)(vi) of the Loan Schedule is hereby deleted and restated in
its entirety as follows:

 

(vi) Other Weekly Reports. Weekly aging schedule for all Accounts, accounts
payable and such other reports as requested by Lender, in such form as Lender
may request.

 

2.       Effectiveness. The effectiveness of this Amendment No. 1 is conditioned
upon and subject to the receipt by the Lender of each of the following on or
before the dates set forth below:

 

a.       A copy of this Amendment No. 1 duly executed by Borrower and delivered
to Lender by e-mail on or before December 9, 2016 with the original of this
Amendment No. 1 duly executed by Borrower and delivered to Lender on or before
December 12, 2016;

 

b.       Borrower shall have paid to Lender an accommodation fee in the amount
of $50,000 on December 9, 2016. The accommodation fee shall be fully earned on
Lender’s receipt of such fee; and

 

c.       Receipt by Lender on or before December 9, 2016, of all costs of Lender
(including Lender’s attorneys’ fees and expenses) in respect of the transactions
relating to the Loan Documents and this Amendment No. 1.

 

3.       Waiver. Upon the terms and subject to the conditions set forth in this
Amendment No. 1, Lender hereby waives any Event of Default resulting from the
failure to deposit Collections of Accounts received by Borrower in the account
designated by Lender through December 6, 2016. This waiver shall be effective
only in this specific instance and for the specific purpose for which it is
given, and shall not entitle Borrower to any other or further waiver in any
similar or other circumstances.

 

4.       Miscellaneous. Except as herein expressly amended by this Amendment No.
1, all of the terms and provisions of the Loan Agreement and the Loan Agreement
Schedule shall continue in full force and effect and the foregoing together with
the other Loan Documents are hereby ratified and confirmed by Borrower. The
Borrower acknowledges to Lender that no offsets, counterclaims or defenses exist
as of the date of this Amendment No. 1 with respect to any of the Loan Documents
and the Obligations. The foregoing is without prejudice to Lender’s rights under
the Loan Agreement and the other Loan Documents referred to therein, including,
without limitation, applicable law, all of which rights are hereby expressly
reserved. In addition to the representations, warranties and covenants set forth
in the Loan Agreement, the Borrower represents, warrants and covenants to Lender
that (i) Borrower been represented by the law firm of Mitchell Silberberg &
Knupp LLP in connection with the negotiation, execution and delivery of this
Amendment No. 1, and (ii) such law firm has reviewed and approved this Amendment
No. 1. This Amendment No. 1 may be executed in counterparts and by facsimile or
other electronic signatures, each of which when so executed, shall be deemed an
original, but all of which shall constitute but one and the same instrument

 

[SIGNATURE PAGE FOLLOWS]

 

 -3- 

 

 

By: /s/ Nadir Ali   Name: Nadir Ali   Title: CEO  

 

SYSOREX USA

 

By: /s/ Nadir Ali   Name: Nadir Ali   Title: CEO  

 

SYSOREX GOVERNMENT SERVICES, INC.

 

By: /s/ Wendy Loundermon   Name: Wendy Loundermon   Title: President  

 

LENDER:

 

GEMCAP LENDING I, LLC

 

By: /s/ James Thieken  

James Thieken,

Executive Vice President

 

 

[SIGNATURE PAGE - AMENDMENT NUMBER 1 TO THE LOAN AND SECURITY AGREEMENT
AND TO THE LOAN AGREEMENT SCHEDULE]

 

 

-4-