Exhibit 10.18


 





AMENDMENT NUMBER
THREE TO BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS


 


 


This AMENDMENT
NUMBER THREE TO BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS (this “Amendment”),
dated and effective as of December 31, 2014, is entered into by and among BRIDGE
BANK, NATIONAL ASSOCIATION
(“Lender”), on
the one hand,
and LILIEN SYSTEMS, a California corporation
(“Lilien”),  and
SYSOREX GOVERNMENT SERVICES, INC., a Virginia corporation (“SGSI”)
(Lilien and SGSI are sometimes collectively referred to herein as “Borrowers”
and each individually as a “Borrower”),
on the other hand, with reference to the following facts:


 


A. 
Borrowers and Lender previously entered into that certain Business Financing Agreement, dated as of March 15, 2013, as amended
by that certain Amendment Number One to Business Financing Agreement, Waiver of Defaults and Consent, dated as of August 29, 2013,
and that certain Amendment Number
Two to Business
Financing Agreement, Waiver
and Consent, dated
as of May 13, 2014 to be effective as of April 16, 2014 (as so amended, the “Agreement”);


 


B. 
Borrowers are in
default of the
provisions of the
Agreement set forth
on Schedule 1 attached hereto,
as at the dates indicated in such Schedule (the “Existing Defaults”).


 


C. 
Borrowers have requested
that Lender waive
the Existing Defaults,
and Lender has agreed with such
request, subject to the terms and conditions set forth in this Amendment.


 


NOW,  THEREFORE,
 in  consideration 
of  the  foregoing, 
the  parties  hereto 
hereby  agree  as follows:


 


1.
Defined Terms.  All
initially capitalized terms
used but not
defined herein shall
have the meanings assigned to such terms in the Agreement.


 2. 
Amendment to Section
2.2. A new clause
(h) is hereby
added to Section
2.2 of the Agreement, immediately
following clause (g) thereof, as follows:


 


	(h)		Waiver Fee. 
Borrowers shall pay
to Lender a
fully-earned non- refundable waiver fee in the amount of $51,216.55 (“Waiver
Fee”).  The Waiver
Fee shall be
due and payable
as follows: (i) $10,000 upon
Borrowers’ execution of
the Third Amendment, and (ii) $41,216.55
upon the earliest to occur of (x) Borrowers’ delivery of their monthly financial statements pursuant to Section 4.8(b)
of  this  Agreement 
for  the  fiscal 
month  ending March 31, 2015, (y) April 30, 2015, or (z) the occurrence of an
Event of Default; provided that Lender shall waive receipt of the second installment of the Waiver Fee if, and only, if,
(1) no Event of Default has occurred and is continuing as of Borrower’s fiscal month and quarter ended March 31, 2015, as
determined by Lender in its sole discretion based upon Borrowers’ financial statements and compliance certificate delivered
by Borrowers pursuant to Sections 4.8(b) and
(f), respectively, of this Agreement
and such other information available to Lender, and (2) no Event of Default has occurred and is continuing as of the date of Lender’s
determination pursuant to clause (1) of this Section 2.2(h).



 


3. Amendment
to Section 4.12(b). 
:Section 4.12(b) of
the Agreement is
hereby amended in its entirety as follows:


 






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		(b)	Adjusted EBITDA for each fiscal quarter not at any time less than the amount
set forth in the table below opposite the applicable fiscal quarter:



 


	Fiscal Quarter Ending	
        Minimum Quarterly

        Adjusted EBITDA

	December 31, 2014	$125,000
	March 31, 2015 and each fiscal quarter ending thereafter	$200,000







 


4.
 Amendments to Section
12.1.  The following
new definitions are
hereby added to Section 12.1 of
the Agreement in alphabetical order:


 


“Adjusted EBITDA”
means Borrowers’ combined Net Income plus interest expense, taxes, depreciation expense, amortization expense, and non-cash,
non-recurring expenses, calculated in accordance with GAAP.


 


“Third Amendment”
means that certain Amendment Number Three to Business Financing Agreement and Waiver of Defaults, dated as of December 31,
2014, among Borrowers and Lender, amending this Agreement.


 


5.
 Replacement Exhibit A.
Exhibit A attached
to the Agreement
is hereby replaced
with Exhibit A attached to this Amendment.





6.
Waiver of Existing
Defaults. Upon the
terms and subject
to the conditions
set forth in this
Amendment, Lender hereby
waives the Existing
Defaults.  This waiver
of the Existing
Defaults shall be effective only in
this specific instance and
for the specific purpose
for which it is
given, and shall not entitle Borrowers
to any other or further waiver in any similar or other circumstances.





7.
Conditions Precedent to
Effectiveness of Amendment.
 The effectiveness
of this Amendment and the waiver of the Existing Defaults set forth in Section
6 above are subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction
of Lender:


 


(a)
 Lender shall
have received (i)
this Amendment, duly
executed by Borrowers, (ii) the
Acknowledgment  and  Agreement 
of  Guarantors  attached 
hereto,  duly  executed 
by  each Guarantor, and (iii) the Acknowledgment and Agreement of Creditors
attached hereto, duly executed by each Creditor;





(b)
 Lender shall have received the first installment of the Waiver Fee;





(c)
 After giving effect to this Amendment, no Event of Default or Default shall have occurred
and be continuing; and 


(d)
 After giving
effect to this
Amendment, all of
the representations and
warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof
(except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).






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8.
 Representations  and 
Warranties.  In  order to
 induce  Lender 
to  enter  into 
this Amendment, each Borrower hereby represents and warrants to Lender that:


 (a)  After
 giving  effect 
to  this  Amendment, 
no  Event  of 
Default  or  Default 
is continuing;


 


(b)
 After giving
effect to this
Amendment, all of
the representations and
warranties set forth in
the Agreement and
in the Agreement
are true, complete
and accurate in
all respects (except for representations
and warranties which are expressly stated to be true and correct as of the date of the Agreement); and





(c)
 This Amendment has been duly executed and delivered by Borrowers, and the Agreement
continues to constitute the legal, valid and binding agreements and obligations of Borrowers, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency, and
similar laws and
equitable principles affecting the
enforcement of creditors’ rights
generally.





9.
Counterparts; Telefacsimile Execution.
 This Amendment
may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall
be deemed to
be an original,
and all of
which, when taken
together, shall constitute but
one and the same Amendment.  Delivery of an executed counterpart of this Amendment
by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment. 
Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.





10.
Integration.  The
Agreement as amended
by this Amendment
constitutes the entire agreement
and understanding between the parties hereto with respect to the subject matter hereof and thereof, and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.





11.
No Other Waiver. 
The execution of
this Amendment and
the acceptance of
all other agreements and instruments related hereto shall not be deemed to
be a waiver of any Default or Event of Default (other than the Existing Defaults), whether or not known to Lender and whether
or not existing on the date of this Amendment.





12.
Release.





(a)
 Each Borrower, each Guarantor signing the Acknowledgment and Agreement of Guarantors
set forth below, and each Creditor signing the Acknowledgment and Agreement of Creditors set forth below, hereby absolutely and
unconditionally releases and forever discharges Lender, and any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof, together
with all of
the present and
former directors, officers, agents and employees of any of the foregoing, from
any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract
or tort or under any state or federal law or otherwise, which such Borrower, such Guarantor, or such Creditor, has had, now
has or has
made claim to
have against any
such person for
or by reason
of any act,
omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment,
whether such claims, demands and causes of action are matured or unmatured or known or unknown. 
Each Borrower, each
Guarantor signing the
Acknowledgment and Agreement
of Guarantors set forth below, and each Creditor signing the Acknowledgment
and Agreement of Creditors set forth below, certifies that it has read the following
provisions of California Civil Code Section 1542:





A general
release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his
or her settlement with the debtor.


 






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(b)
 Each Borrower, each Guarantor signing the Acknowledgment and Agreement of Guarantors
set forth below, and each Creditor signing the Acknowledgment and Agreement of Creditors set forth below, 
understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542
is that even if it should eventually suffer additional damages arising out of the facts referred to above, it will not be able
to make any claim for those damages. Furthermore, each Borrower, each
Guarantor signing the
Acknowledgment and Agreement
of Guarantors set
forth below, and each Creditor signing the Acknowledgment and Agreement of Creditors
set forth below, acknowledges that it intends these consequences even as to claims for damages that may exist as of the date of
this release but which it does not know exist, and which, if known, would materially affect its decision to execute this Agreement,
regardless of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.





13. Reaffirmation of the Agreement.  The Agreement as amended hereby and the Loan
Documents remain in full force and effect.


 


[remainder of page intentionally left blank]


 






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IN
WITNESS WHEREOF, the
parties hereto have
duly executed and
delivered this Amendment as of the
date first hereinabove written.


 


	 	LILIEN SYSTEMS,
	 	a California corporation
	 	 
	 	 
	 	By: 	/s/ Nadir Ali
	 	 	Name: 
Nadir Ali
Title: 
Chairman



 


	 	
	 	 
	 	SYSOREX GOVERNMENT SERVICES, INC.,
	 	a Virginia corporation
	 	 
	 	 
	 	 
	 	 
	 	By: 	/s/  
Wendy Loundermon
	 	 	Name: 
Wendy Loundermon
Title:  President
and Chief Financial Officer



 





 


 


 


 


 


[Signatures continue on the following page].


 






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	 	BRIDGE BANK, NATIONAL ASSOCIATION
	 	 
	 	 
	 	By: 	/s/ David Feiock
	 	 	Name: 
David Feiock
Title:  Assistant
Vice President



 


 



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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS


 


The undersigned,
as guarantors of the obligations of LILIEN SYSTEMS, a California corporation (“Lilien”), and SYSOREX
GOVERNMENT SERVICES, INC., a Virginia corporation (“SGSI”)
(Lilien and SGSI are sometimes collectively referred to herein as “Borrowers”
and each individually as a “Borrower”), to BRIDGE
BANK, NATIONAL ASSOCIATION (“Lender”), pursuant to the separate
Guaranty of each of the undersigned (each, a “Guaranty”),
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the terms (including without limitation the release
set forth in Section 12 of
the Amendment) and
execution thereof; (iii)
reaffirms all obligations
to Lender pursuant
to the terms of his Guaranty; and (iv) acknowledges that Lender may amend, restate, extend, renew or otherwise
modify the Loan
Documents and any
indebtedness or agreement
of Borrowers, or
enter into any agreement or extend additional or other credit accommodations,
without notifying or obtaining the consent of the undersigned and without impairing the obligations of the undersigned under her
or her Guaranty.


 





	 	SYSOREX FEDERAL, INC., 	 
	 	a Delaware corporation	 
	 	 	 
	 	By: /s/  Nadir Ali	 
	 	Name: 
Nadir Ali	 
	 	Title:  President	 
	 	 	 
	 	 	 
	 	SYSOREX GLOBAL HOLDINGS CORP.,	 
	 	a Nevada corporation	 
	 	 	 
	 	By: /s/  Nadir Ali	 
	 	Name:  Nadir Ali	 
	 	Title:  President	 
	 	 	 
	 	 	 
	 	SHOOM, INC.,	 
	 	a California corporation	 
	 	 	 
	 	By: /s/  Nadir Ali	 
	 	Name: Nadir Ali	 
	 	Title: Director	 
	 	 	 
	 	 	 
	 	AIRPATROL CORPORATION,
a	 
	 	Nevada corporation	 
	 	 	 
	 	By: /s/  Nadir Ali	 
	 	Name: Nadir Ali	 
	 	Title: Director	 



  


Acknowledgement and Agreement of Guarantors


 



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ACKNOWLEDGMENT AND AGREEMENT OF CREDITORS


 


The undersigned,
as creditors of LILIEN SYSTEMS, a California corporation (“Lilien”),
and SYSOREX GOVERNMENT SERVICES, INC., a Virginia corporation (“SGSI”)
(Lilien and SGSI are sometimes collectively referred to herein as “Borrowers”
and each individually as a “Borrower”), subordinated to the obligations of Borrowers owing to BRIDGE
BANK, NATIONAL ASSOCIATION (“Lender”), pursuant to the separate
Subordination Agreement of each of the undersigned (each, a “Subordination Agreement”), hereby (i) acknowledges
receipt of the foregoing Amendment; (ii) consents to the terms (including without limitation the release set forth in Section 12
of the Amendment) and execution thereof; (iii) reaffirms all obligations to Lender pursuant to the terms of his Subordination Agreement;
and (iv) acknowledges that Lender may amend, restate, extend, renew or otherwise modify the Loan Documents and any indebtedness
or agreement of Borrowers, or enter into any agreement or extend additional or other credit accommodations, without notifying or
obtaining the consent of the undersigned and without impairing the obligations of the undersigned under her or her Subordination
Agreement.


 


 








	 	SYSOREX CONSULTING, INC.,	 
	 	a California corporation	 
	 	 	 
	 	By: /s/ Salam Qureishi
 	 
	 	Name: Salam Qureishi
	 
	 	Title:  Chairman	 
	 		 
	 	 	 
	 	/s/ Abdus Salam Qureishi	 
	 	Abdus Salam Qureishi, trustee of QUREISHI 1998	 
	 	FAMILY TRUST	 
	 	 	 
	 	 	 
	 	/s/ Bret R. Osborn	 
		BRET R. OSBORN	 
	 		 
	 	 	 
	 	/s/ Dhruv Gulati	 
	 	DHRUV GULATI	 
			 
	 	 	 
	 	/s/ Geoffrey I. Lilien	 
	 	GEOFFREY I. LILIEN	 
	 		 



  



 



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SCHEDULE 1


TO


AMENDMENT NUMBER THREE TO BUSINESS FINANCING
AGREEMENT, AND WAIVER OF DEFAULTS


 


EXISTING DEFAULTS


 





	Section of Agreement	Required Performance	Actual Performance
	
        Section 4.12(b) – Performance to

        Plan
	
        Combined revenue not to deviate by more
        than 20% or $100,000 from the projections of combined revenue approved by Borrowers’ boards of directors with respect

        to the rolling three month period ended
        on the date of determination, tested as at the end of each month
	Failed to meet in respect of such required performance for the rolling three month periods ended on November 30, 2014
	
        Section 4.12(b) – Performance to

        Plan
	
        Combined Net Income not to deviate by
        more than 20% or

        $100,000 from the projections of combined
        Net Income approved by Borrowers’ boards of directors with respect to the rolling three month period ended on the date of
        determination, tested as at the end of each month
	
        Failed to meet in respect of such required
        performance for the rolling three month periods ended on July 31, 2014,

        August 31, 2014, September 30,

        2014, October 31, 2014, and

        November 30, 2014








 







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EXHIBIT A TO


AMENDMENT NUMBER THREE TO BUSINESS
FINANCING AGREEMENT, AND WAIVER OF DEFAULTS


 


FORM OF COMPLIANCE CERTIFICATE




 


 


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