Exhibit 10.1


 





AMENDMENT


to



Loan
and security agreement


 


THIS
AMENDMENT to Loan and Security Agreement (this “Agreement”) is entered into this 27th
day of February 2015 by and between Silicon Valley Bank (“Bank”), on the one side, and DecisionPoint Systems, Inc.,
a Delaware corporation (“DSI”), DecisionPoint Systems International, Inc., a Delaware corporation (“DSII”),
DecisionPoint Systems Group, Inc., a Delaware corporation (“DSG”), DecisionPoint Systems CA, Inc., a California corporation
(“DSCA”), DecisionPoint Systems CT, Inc., a Connecticut corporation (“DSCT”) and CMAC, Inc., a Georgia
corporation (“CMAC” and together with DSI, DSII, DSG, DSCA and DSCT, jointly and severally, the “Borrower”)
whose address is 8697 Research, Irvine, CA 92618, on the other side.


Recitals


A.Bank and Borrower have
entered into that certain Loan and Security Agreement dated as of December 15, 2006 (as the same may from time to time be amended,
modified, supplemented or restated, the “Loan Agreement”).


B.Bank has extended credit
to Borrower for the purposes permitted in the Loan Agreement.


C.Borrower
has requested that Bank amend the Loan Agreement, as herein set forth, and Bank has agreed to the same, but only to the extent,
in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth herein.


Agreement


Now,
Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:


1.Definitions.
Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Loan Agreement.


2.Amendments
to Loan Agreement.


2.1Modified
Interest Rate Regarding Advances. Section 2.3(a)(i) of the Loan Agreement that currently reads as follows:


(i)Advances.
Subject to Section 2.3(b), the amounts outstanding under the Revolving Line shall accrue interest at a per annum rate equal to
3.75 percentage points above the Prime Rate; provided, however, after Borrower achieves, if ever, two consecutive
fiscal quarters (beginning with any fiscal quarter ending on or after March 31, 2013) of profitability, then the amounts outstanding
under the Revolving Line shall accrue interest at a per annum rate equal to 3.25 percentage points above the Prime Rate. 






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is
hereby amended in its entirety to read as follows:


(i)Advances.
Subject to Section 2.3(b), the amounts outstanding under the Revolving Line shall accrue interest at a per annum rate equal to
the following: 


 


	Adjusted Quick Ratio	Interest Rate
	Equal to or greater than 1.0 to 1.0 	Prime Rate plus 2.25%
	Less than 1.0 to 1.0 but equal to or greater than 0.75 to 1.0 	Prime Rate plus 2.75%
	Less than 0.75 to 1.0	Prime Rate plus 3.25% (the “Regular Rate”)


 


The initial interest rate in
effect on the date hereof shall be the Regular Rate.


Changes
in the interest rate based on the Borrower’s Adjusted Quick Ratio (calculated on a consolidated basis but excluding Apex
Systems Integrators Inc.) as provided above shall go into effect as of the first day of the month following the month in which
Borrower’s financial statements are received, reviewed and approved by Bank. If, based on the Adjusted Quick Ratio (calculated
on a consolidated basis but excluding Apex Systems Integrators Inc.) as shown in Borrower’s financial statements there is
to be an increase in the interest rate, the interest rate increase may be put into effect by Bank as of the first day of the month
closest to the date on which the financial statements are due, even if the delivery of the financial statements is delayed.


2.2Modified
Prepayment Fee Provision Regarding Revolving Line. Section 4.1 of the Loan Agreement is hereby amended in its entirety to read
as follows:


4.1Grant of Security Interest.
Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest
in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all
times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall
promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank. Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank
Services Agreements with Bank.  Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower
owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such
Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted
Liens that may have superior priority to Bank’s Lien in this Agreement). Borrower agrees that, unless otherwise agreed in
a writing signed by Bank and Borrower, (a) the security interest granted herein by Borrower shall survive the termination of this
Agreement and shall terminate only upon the termination of all Bank Services Agreements, and (b) if, on the effective date of the
termination of this Agreement, there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash
collateral in an amount equal to 105% of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest,
fees and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure
all of the Obligations relating to such Letters of Credit.


 



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This Agreement
may be terminated prior to the Revolving Maturity Date by Borrower, effective three (3) Business Days after written notice of termination
is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(c).
Notwithstanding any such termination, Bank’s lien and security interest in the Collateral shall continue until Borrower fully
satisfies its Obligations. If such termination is at Borrower’s election or at Bank’s election due to the occurrence
and continuance of an Event of Default, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing,
a termination fee in an amount equal to 2.0% of the Maximum Dollar Amount if termination occurs on or before February 28, 2016,
and 1.0% of the Maximum Dollar Amount if termination occurs after February 28, 2016; provided that no termination fee shall be
charged if the credit facility hereunder is replaced with a new facility from another division of Silicon Valley Bank. Upon payment
in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall release
its liens and security interests in the Collateral and all rights therein shall revert to Borrower.


2.3Modified
Financial Covenants. Section 6.9 of the Loan Agreement is hereby amended in its entirety and shall read as follows:


6.9Financial Covenants.


 


Borrower
shall maintain as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its
Subsidiaries (provided, however, the term “Subsidiaries” shall not include Apex Systems Integrators Inc.
for purposes of this Section 6.9):


(a)Liquidity
Coverage. [Omitted].


(b)Tangible
Net Worth. Commencing with the reporting period ending January 31, 2015, a Tangible Net Worth of at least the following (“Minimum
Tangible Net Worth”): <$8,600,000> plus (i) 50% of all consideration received on or after February 1, 2015
for equity securities and subordinated debt of the Borrower, plus (ii) 50% of the Borrower’s net income (but not net
loss) in each fiscal quarter ending on or after March 31, 2015. For the purposes hereof, “< >” denotes a negative
number or loss.


Increases
in the Minimum Tangible Net Worth based on consideration received for equity securities and subordinated debt of the Borrower shall
be effective as of the end of the month in which such consideration is received, and shall continue effective thereafter. Increases
in the Minimum Tangible Net Worth based on net income shall be effective on the last day of the fiscal quarter in which said net
income is realized, and shall continue effective thereafter. In no event shall the Minimum Tangible Net Worth be decreased.


Furthermore,
Bank and Borrower agree that any non-cash warrant liability of Borrower arising as a result of warrants issued as part of the Equity
Financing Transaction (as defined in that certain Forbearance to Loan and Security Agreement dated August 16, 2013) will not be
included in the calculation of the Tangible Net Worth Financial Covenant.


 


(c)Minimum
Fixed Charge Coverage Ratio. [Omitted].






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2.4Added Definition
of Adjusted Quick Ratio. The definition of “Adjusted Quick Ratio” is hereby added to Section 13.1 of the Loan Agreement,
in alphabetical order, and shall read as follows:


“Adjusted
Quick Ratio” is the ratio of Borrower’s (a) unrestricted balance sheet cash plus net billed accounts receivable
to (b) total Current Liabilities minus the current portion of Deferred Revenue. The foregoing shall be calculated on a consolidated
basis but shall exclude Apex Systems Integrators Inc.


2.5Modified
Definition of Borrowing Base. The definition of “Borrowing Base” in Section 13.1 of the Loan Agreement is hereby
amended in its entirety to read as follows:


“Borrowing
Base” is (a) 80% of Eligible Accounts, as determined by Bank from Borrower’s most recent Transaction
Report minus (b) 100% of the outstanding Obligations of Term Loan II; provided, however, that Bank
may decrease the foregoing percentage in subclause (a) above in its good faith business judgment based on events, conditions, contingencies,
or risks which, as determined by Bank, may adversely affect Collateral.


2.6 Added Definition
of Current Liabilities. The definition of “Current Liabilites” is hereby added to Section 13.1 of the Loan Agreement,
in alphabetical order, and shall read as follows:


“Current Liabilities”
are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s Total
Liabilities that mature within one (1) year.


 


2.7Modified
Definition of Revolving Line Maturity Date. The definition of “Revolving Line Maturity Date” in Section 13.1 of
the Loan Agreement is hereby amended in its entirety to read as follows:


“Revolving
Line Maturity Date” is February 28, 2017.


2.8 Anniversary
Fee. In addition to all interest and any other fees payable by Borrower under the Loan Agreement and this Amendment, Borrower
agrees that it shall pay to Bank, on February 28, 2016 (or upon termination of the Loan Agreement if such termination occurs on
or before such date), a fully earned, non-refundable anniversary fee with respect to the Revolving Line in the amount of $100,000.


2.9Modified Compliance
Certificate. The form of Compliance Certificate, attached as Exhibit E to the Loan Agreement, is amended in its entirety to
read as set forth on Exhibit E attached hereto.


 


3.Limitation
of Agreements.


3.1The
agreements set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition
of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under
or in connection with any Loan Document.


3.2This
Agreement shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect.






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4.Representations
and Warranties. To induce Bank to enter into this Agreement, Borrower hereby represents and warrants to Bank as follows:


4.1Immediately
after giving effect to this Agreement (a) the representations and warranties contained in the Loan Documents are true, accurate
and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is
continuing;


4.2Borrower
has the power and authority to execute and deliver this Agreement and to perform its obligations under the Loan Agreement, as amended
by this Agreement;


4.3The
organizational documents of Borrower delivered to Bank on the Effective Date (or such date as Borrower became a party to the Loan
Agreement) remain true, accurate and complete and have not been amended (except to reflect the name change of each Borrower through
June 29, 2012), supplemented or restated and are and continue to be in full force and effect;


4.4The
execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement,
as amended by this Agreement, have been duly authorized;


4.5The
execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement,
as amended by this Agreement, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any
contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;


4.6The
execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan Agreement,
as amended by this Agreement, do not require any order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on
either Borrower, except as already has been obtained or made; and


4.7This
Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.


5.Counterparts.
This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute
one and the same instrument.


6.Effectiveness.
This Agreement shall be deemed effective upon (a) the due execution and delivery to Bank of this Agreement by each party hereto
and (b) Borrower’s payment of an amendment fee in an amount equal to $100,000, which is fully earned on the date hereof,
is in addition to all interest and all other fees, and is non-refundable.


[Signature Page Follows]






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In
Witness Whereof, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first
written above.


 


 


	BANK	 	 
	
         

        Silicon Valley Bank

         

         

        By:  /s/ Victor Le

        

        

        
	 	
         

         

	Name:  Victor Le	 	 
	Title:  Vice President	 	 
	 	 	 
	 	 	 
	 	 	 
	BORROWER	 	BORROWER
	
         

        DecisionPoint Systems, Inc.

         

         

        By: /s/ Michael Roe

        

        
	 	
         

        DecisionPoint Systems International, Inc.

         

         

        By:  /s/ Michael Roe

        

        

	Name:  Michael Roe	 	Name:  Michael Roe
	Title:  CFO	 	Title:  CFO
	 	 	 
	BORROWER	 	BORROWER
	
         

        DecisionPoint Systems Group, Inc.

         

         

        By:  /s/ Michael Roe

        

        
	 	
         

        DecisionPoint Systems CA, Inc.

         

         

        By:  /s/ Michael Roe

        

        

	Name:  Michael Roe	 	Name:  Michael Roe
	Title:  CFO	 	Title:  CFO
	 	 	 
	 	 	 
	BORROWER	 	BORROWER
	
         

        DecisionPoint Systems CT, Inc.

         

         

        By:  /s/ Michael Roe

        

        
	 	
         

        CMAC, Inc.

         

         

        By:  /s/ Michael Roe

        

        

	Name:  Michael Roe	 	Name:  Michael Roe
	Title:  CFO	 	Title:  CFO
	 	 	 


 



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EXHIBIT E


 


COMPLIANCE CERTIFICATE


 


 


[Omitted]




 


 


 


 


 


 


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