LOAN AGREEMENT



 





EXHIBIT 10.40




U.S. $700,000




LOAN AGREEMENT




Dated as of February 13, 2004




Between




EN POINTE GLOBAL SERVICES, INC.




as Borrower




and




EN POINTE TECHNOLOGIES, INC.




and




OVEX TECHNOLOGIES LTD.




as Lenders




 









 








LOAN AGREEMENT




          This Loan Agreement (this “Agreement”) dated as of February 13, 2004 is by
and among EN POINTE GLOBAL SERVICES, INC., a Delaware corporation (the
“Borrower”), EN POINTE TECHNOLOGIES, INC. (“ENPT”) and OVEX TECHNOLOGIES
LTD.(“OPK”, and together with ENPT, each individually a “Lender” and
collectively the “Lenders”).



     WHEREAS, Borrower wishes to borrow up to $700,000 in aggregate principal
amount from the Lenders on the terms and conditions set forth herein.



     WHEREAS, ENPT wishes to lend up to $600,000 in aggregate principal amount
to Borrower, and OPK wishes to lend up to $100,000 in aggregate principal
amount to Borrower, all on the terms and conditions set forth herein.



     NOW THEREFORE, in consideration of the premises and covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lenders and Borrower,
intending to be legally bound, hereby agree as follows:



1. Definitions and Accounting Terms.




     1.1. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):



          1.1.1. “Business Day” means a day of the year on which banks are not
required or authorized by law to close in New York City.



          1.1.2. “Loan” means the indebtedness of the Borrower to each of the
Lenders.



          1.1.3. “Loan Documents” means this Agreement and the Notes.



          1.1.4. “Note” means individually and “Notes” means collectively, the
promissory notes of the Borrower payable to the order of each Lender, in
substantially the form of Exhibits A-1 and A-2 hereto, evidencing the
indebtedness of the Borrower to each Lender resulting from the Loan made by
each Lender.



          1.1.5. “Outstanding Principal Amount” means, as of any date of
determination, the aggregate principal amount outstanding under this Agreement
and the Notes.



          1.1.6. “Person” means an individual, corporation, partnership, firm, joint
venture, limited liability company or partnership, association, joint-stock
company, trust, unincorporated organization or governmental entity or body.



 









 





     1.2. Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean “to
but excluding”.



     1.3. Accounting Terms. Any accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.



2. Amounts of the Loan.




     2.1. The Loan. The Lenders agree on the terms and conditions hereinafter set
forth, to make the Loan to the Borrower on the date hereof; provided, that (i)
the aggregate principal amount of the Loan from ENPT shall be $600,000, and
(ii) the aggregate principal amount of the Loan from OPK shall be $100,000.
Any amount borrowed under this Section 2.1 and repaid or prepaid may not be
reborrowed under the terms hereof.



     2.2. Repayment. The Borrower shall repay the principal amount then outstanding
for the Loan, together with all accrued and unpaid interest, to the applicable
Lender, or its registered assignee(s), on the earlier of: (i) February 13,
2009 (the “Maturity Date”), or (ii) an initial underwritten public offering of
the Borrower’s Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended.



     2.3. Interest. The Borrower shall pay interest on the unpaid principal amount
of the Loan from the date hereof until such principal amount shall be paid in
full, at the rate of six percent (6%) per annum, payable on the Maturity Date.
Notwithstanding anything to the contrary, if the provisions of the Loan
Documents would require the Borrower to pay interest hereon at a rate exceeding
the highest rate allowed by applicable law, the Borrower shall instead pay
interest under the Loan Documents at the highest rate permitted by applicable
law.



     2.4. Optional Prepayments. Upon at least five (5) Business Day’s notice to the
Lender(s), the Borrower may prepay the outstanding principal amount of the Loan
in whole or in part to one or both of the Lenders. Such prepayment must be
accompanied by the accrued interest to the date of such prepayment on the
principal amount prepaid. The written notice of such prepayment must state the
proposed date and aggregate principal amount of the prepayment.



     2.5. Payments and Computations.



          2.5.1. The Borrower shall make all payments hereunder and under the Notes,
on the day when due in U.S. dollars to the Lenders at their addresses set forth
on the signature page to this Agreement in same day funds. All payments are
subject to reduction for taxes that Borrower is required by law to withhold and
pay to the relevant taxing authorities.



          2.5.2. All computations of interest shall be made by the Lenders on the
basis of a year of 365 or 366 days, as the case may be, for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest is payable.



          2.5.3. Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding



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Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.


3. Conditions to Lending. The obligation of the Lenders to make the Loans shall
be subject to the conditions precedent that the Lenders shall have received the
following, each in form and substance satisfactory to the Lenders: (i) this
Agreement, duly executed by the Borrower; and (ii) the Notes, each duly
executed by the Borrower.



4. Representations and Warranties.




     4.1. Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:



          4.1.1. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. The Borrower has heretofore
delivered to the Lenders accurate and complete copies of its Certificate of
Incorporation and Bylaws, as currently in full force and effect.



          4.1.2. The Borrower is not in violation or default of any term of its
Certificate of Incorporation or Bylaws, or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound, or of any judgment, decree, order, writ or, to its
knowledge, any statute, rule or regulation applicable to the Borrower. The
execution, delivery and performance by the Borrower of the Loan Documents, and
the consummation of the transactions contemplated thereby, are within the
Borrower’s corporate powers, have been duly authorized by all necessary
corporate action, and will not, with or without the passage of time or giving
of notice, result in any violation or contravene (i) the Borrower’s Certificate
of Incorporation or Bylaws, (ii) any law, license, authorization, approval or
permit or (iii) any contractual restriction binding on or affecting the
Borrower.



          4.1.3. No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance by the
Borrower of any Loan Document.



          4.1.4. This Agreement has been, and the other Loan Documents when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and the other Loan Documents when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective terms.



          4.1.5. There is no pending or threatened action, suit, investigation,
litigation or proceeding affecting the Borrower before any court, governmental
agency or arbitrator that purports to affect the legality, validity or
enforceability of any Loan Document, or the consummation of the transactions
contemplated hereby.



5. Covenants of the Borrower.




     5.1. Covenants. So long as the Loan shall remain unpaid, the Borrower will:



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          5.1.1. Compliance with Laws, Etc. Comply in all material respects, with
all applicable laws, rules, regulations and orders.



          5.1.2. Preservation of Existence, Etc. Preserve and maintain its
existence, rights (charter and statutory) and franchises.



          5.1.3. Use of Loan Proceeds. The Borrower shall use the proceeds from the
Loans for working capital needs and general corporate purposes and shall not
use the proceeds from the Loans to pay off or satisfy any existing debt (other
than trade creditors), including, without limitation, debt to any affiliate of
the Borrower, or to repurchase any of its equity, without the written consent
of the Lenders.


6. Subordination. Lenders hereby agree that the indebtedness of Borrower to
each Lender arising under this Agreement and the Notes, whether principal,
interest or otherwise, shall be subordinated to all other indebtedness of
Borrower, other than trade indebtedness. The Lenders agree to take
commercially reasonable action, including the execution of a subordination
agreement on terms and conditions reasonably acceptable to them, to effect the
foregoing.




7. Miscellaneous.




     7.1. No Waiver; Remedies. No failure on the part of any Lender to exercise,
and no delay in exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.



     7.2. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed in all respects by the laws of the State of
Delaware without regard to the conflicts of laws principals of any
jurisdiction. No suit, action or proceeding with respect to this Agreement may
be brought in any court or before any similar authority other than in a court
of competent jurisdiction in the State of Delaware and the parties hereby
submit to the exclusive jurisdiction of such courts for the purpose of such
suit, proceeding or judgment. Each of the parties hereto hereby irrevocably
waives any right which it may have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority
and agreed not to claim or plead the same. Each of the parties hereto hereby
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding in relation to this Agreement and for any counterclaim therein.



     7.3. Amendment and Waiver. This Agreement may not be altered, amended or
modified at any time, or compliance with any provision waived, unless such
alteration, amendment, modification or waiver is approved in writing by the
party against whom such modification, amendment, alteration or waiver is sought
to be enforced.



     7.4. Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any party hereto and the
closing of the transactions contemplated hereby.



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     7.5. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors (including the
Borrower), and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by the Borrower or
the Lenders without the prior written consent of the other party(ies), which
consent shall not be unreasonably withheld. Notwithstanding any of the
foregoing, ENPT may assign, without any such prior written consent, its rights
and interests arising hereunder and arising under the related Note to its
commercial lenders.



     7.6. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall
be sent to the party to be notified at the address as set forth on the
signature page hereof or at such other address as such party may designate by
ten (10) days advance written notice to the other parties hereto.



     7.7. Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.



     7.8. Entire Agreement. This Agreement and the Exhibits hereto, constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof and no party shall be liable or bound
to any other party in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein.



     7.9. Counterparts; Execution by Facsimile Signature. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument. This Agreement may
be executed by facsimile signature(s) which shall be binding on the party
delivering same, to be followed by delivery of originally executed signature
pages.



[SIGNATURES ON FOLLOWING PAGES]




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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.



	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	EN POINTE GLOBAL SERVICES, INC.
	 
	 	 	 	 
	

	 	By
	 	/s/ Mark Briggs
	

	 	 	 	
 
	

	 	 	 	Name: Mark Briggs
	

	 	 	 	Title: Chairman/CEO
	

	 	 	 	Address: The Crusman Building

    55 N. First Street, Suite 300 
    Clarksville, TN 37040 USA
	

	 	 	 	Telephone:         
               
        
	

	 	 	 	Facsimile:         
               
           
	 
	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 
	 	 	EN POINTE TECHNOLOGIES, INC.
	 
	 	 	 	 
	

	 	By
	 	/s/ Kevin D. Ayers
	

	 	 	 	
 
	

	 	 	 	Name: Kevin D. Ayers
	

	 	 	 	Title: CFO
	

	 	 	 	Address: 100 N. Sepulveda Boulevard 
    19th Floor 
    El Segundo, CA 90245 USA
	

	 	 	 	Telephone:         
               
        
	

	 	 	 	Facsimile:         
               
           
	 
	 	 	 	 
	 	 	OVEX TECHNOLOGIES LTD.
	 
	 	 	 	 
	

	 	By
	 	/s/ Omar Saeed
	

	 	 	 	
 
	

	 	 	 	Name: Omar Saeed
	

	 	 	 	Title:
	

	 	 	 	Address: 2nd Floor, Evacuee Trust Complex 
    F-5/1 Sir Aga Khan Road
    Islamabad, Pakistan
	

	 	 	 	Telephone:         
               
        
	

	 	 	 	Facsimile:         
               
           







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EXHIBIT A-1




FORM OF PROMISSORY NOTE FOR ENPT




			
	U.S.$600,000
	 	Dated: February 13, 2004







          FOR VALUE RECEIVED, the undersigned, EN POINTE GLOBAL SERVICES, INC., a
Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY to the order of
EN POINTE TECHNOLOGIES, INC. (the “Lender”), or the registered holder of this
Promissory Note, on the Maturity Date, as defined in the Loan Agreement (as
defined below), the principal sum of U.S.$600,000, together with interest on
the unpaid principal amount of this Promissory Note from the date hereof until
such principal amount is paid in full at such interest rate as is specified in
the Loan Agreement.



          Both principal and interest are payable as set forth in the Loan Agreement
in lawful money of the United States of America to the Lender at its office at
100 N. Sepulveda Blvd., El Segundo, CA 90245 USA, in same day funds.



          This Promissory Note is one of the Notes referred to in, and is entitled
to the benefits of, the Loan Agreement of even date herewith between the
Borrower, the Lender and Ovex Technologies Ltd. (the “Loan Agreement”; the
terms defined therein being used herein as therein defined). The Loan
Agreement, among other things, (i) provides for the making of a Loan by the
Lender to the Borrower in the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from such Loan being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified, all such provisions of which are deemed to be a
part of this Promissory Note.



          This Promissory Note contains original issue discount, as defined in
Section 1273 of the Internal Revenue Code of 1986, as amended. Please contact
Mark R. Briggs, Chairman and CEO of the Borrower, at phone number 931-551-8888
for the issue date of the note, the original issue discount in the note and the
yield to maturity.


	 	 	 	 	 
	 	EN POINT GLOBAL SERVICES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 




A-1









 






	 	 	 	 	 



EXHIBIT A-2




FORM OF PROMISSORY NOTE FOR OPK




					
	U.S.$100,000
	 	 
	 	Dated: February 13, 2004







          FOR VALUE RECEIVED, the undersigned, EN POINTE GLOBAL SERVICES, INC., a
Delaware corporation (the “Borrower”), HEREBY PROMISES TO PAY to the order of
OVEX TECHNOLOGIES LTD. (the “Lender”), or the registered holder of this
Promissory Note, on the Maturity Date, as defined in the Loan Agreement (as
defined below), the principal sum of U.S.$100,000, together with interest on
the unpaid principal amount of this Promissory Note from the date hereof until
such principal amount is paid in full at such interest rate as is specified in
the Loan Agreement.



          Both principal and interest are payable as set forth in the Loan Agreement
in lawful money of the United States of America to the Lender at its office at
2nd Floor, Evacuee Trust Complex, F-5/1 Sir Aga Khan Road, Islamabad, Pakistan,
in same day funds.



          This Promissory Note is one of the Notes referred to in, and is entitled
to the benefits of, the Loan Agreement of even date herewith between the
Borrower, the Lender and En Pointe Technologies, Inc. (the “Loan Agreement”;
the terms defined therein being used herein as therein defined). The Loan
Agreement, among other things, (i) provides for the making of a Loan by the
Lender to the Borrower in the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from such Loan being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified, all such provisions of which are deemed to be a
part of this Promissory Note.



          This Promissory Note contains original issue discount, as defined in
Section 1273 of the Internal Revenue Code of 1986, as amended. Please contact
Mark R. Briggs, Chairman and CEO of the Borrower, at phone number 931-551-8888
for the issue date of the note, the original issue discount in the note and the
yield to maturity.


	 	 	 	 	 
	 	EN POINT GLOBAL SERVICES, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





A-2