Document:

Exhibit 10.27

FIRST AMENDMENT

 

TO FINANCING AGREEMENT

 

FIRST AMENDMENT, dated as of August 9th, 2016 (this “Amendment”), to the Financing Agreement, dated as of June 24, 2016 (as amended, supplemented, replaced or otherwise modified from time to time, the “Financing Agreement”), by and among Rimini Street, Inc., a Nevada corporation (the “Parent”; and together with each other Person that executes a joinder agreement and becomes a “Borrower” thereunder, each a “Borrower” and collectively, the “Borrowers”), each subsidiary of the Parent listed as a “Guarantor” on the signature pages thereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” thereunder or otherwise guaranties all or any part of the Obligations (as thereinafter defined), each a “Guarantor” and collectively, the “Guarantors”), the lenders from time to time party hereto (each a “Lender” and collectively, the “Lenders”), Cortland Capital Market Services LLC (“Cortland”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), Cortland, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”) and CB Agent Services LLC, a Delaware limited liability company (“Colbeck”) as origination agent for the Lenders (in such capacity, together with its successors and permitted assigns in such capacity, the “Origination Agent” and together with the Collateral Agent and the Administrative Agent, each an “Agent” and collectively, the “Agents”).

 

WHEREAS, the Borrowers, the Guarantors, the Agents and the Required Lenders wish to amend certain terms and provisions of the Financing Agreement as hereinafter set forth.

 

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

 

1.          Definitions.  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.

 

2.          Amendments.

 

(a)          New Definitions.  Section 1.01 of the Financing Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:

 

““First Amendment” means the First Amendment to Financing Agreement, dated as of August 9th, 2016, by and among the Agents, the Lenders party thereto and the Loan Parties.”

 

““First Amendment Effective Date” means the date on which each of the conditions precedent set forth in Section 4 of the First Amendment have been either satisfied or waived.”

 

(b)          Existing Definitions.

 

(i)          The definition of “Excluded Account” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Excluded Account” means (a) any deposit account specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Loan Party’s employees, (b) any non-U.S. deposit account and (c) any cash collateral account that solely has on deposit cash permitted to be pledged pursuant to clause (r) of the definition of Permitted Liens.”

 

(ii)          The definition of “Permitted Indebtedness” in Section 1.01 of the Financing Agreement is hereby amended by (i) deleting the “.” at the end of clause (1) therein and inserting “;” at the end therein and (ii) amending and restating clause (m) therein and adding the following new clause (n) therein to read as follows:

 

“(m) Indebtedness of the Loan Parties and their Domestic Subsidiaries with respect to letters of credit in an aggregate principal amount not to exceed $500,000 at any time outstanding; and

 

(n)          other unsecured Indebtedness of the Loan Parties and their Subsidiaries in an aggregate principal amount not to exceed $500,000 at any time outstanding.”

 

(iii)          The definition of “Permitted Liens” in Section 1.01 of the Financing Agreement is hereby amended by (i) deleting the “and” at the end of clause (q) therein and (ii) amending and restating clause (r) therein and adding the following new clause (s) therein to read as follows:

 

“(r)          Liens on cash collateral on deposit in an Excluded Account of the type described in clause (c) of the definition of Excluded Account in an aggregate amount not to exceed $500,000 at any time outstanding solely securing Indebtedness permitted by clause (m) of the definition of Permitted Indebtedness; and

 

(s)          other Liens which do not secure Indebtedness for borrowed money or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $250,000.”

 

(c)          Section 7.01(a) (Reporting Requirements).  Section 7.01(a)(iii) of the Financing Agreement is hereby amended by replacing the reference therein to “September 1, 2016” with “September 30, 2016”.

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3.          Representations and Warranties.  Each Loan Party hereby represents and warrants to the Agents and the Lenders as follows:

 

(a)          Representations and Warranties; No Event of Default.  The representations and warranties herein, in Article VI of the Financing Agreement and in each other Loan Document, certificate or other writing delivered by or on behalf of the Loan Parties to any Agent or any Lender pursuant to the Financing Agreement or any other Loan Document on or prior to the First Amendment Effective Date are true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the First Amendment Effective Date as though made on and as of such date (unless such representations or warranties are stated to relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date), and no Default or Event of Default has occurred and is continuing as of the First Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms.

 

(b)          Organization, Good Standing, Etc.  Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite corporate (or equivalent) power and authority to conduct its business as now conducted and as presently contemplated and to execute this Amendment and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated hereby and by the Financing Agreement, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could reasonably be expected to have a Material Adverse Effect.

 

(c)          Authorization, Etc.  The execution, delivery and performance of this Amendment by the Loan Parties, and the performance of the Financing Agreement, (i) have been duly authorized by all necessary corporate (or equivalent) action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable material Requirement of Law to the extent such contravention would adversely affect the material operations of the Borrowers or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document or any other Permitted Lien) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, except for any violation referred to in clause (ii)(C) or clause (iv) above which could not reasonably be expected to have a Material Adverse Effect.

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(d)          Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of this Amendment or any other Loan Document to which it is or will be a party other than filings and recordings with respect to Collateral that were made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Effective Date.

 

4.          Conditions to Effectiveness.  This Amendment shall become effective only upon satisfaction in full, in a manner reasonably satisfactory to the Origination Agent, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied or waived being herein called the “First Amendment Effective Date”):

 

(a)          The Agents shall have received this Amendment, duly executed by the Loan Parties, each Agent and the Required Lenders.

 

(b)          The representations and warranties contained in this Amendment and in Article VI of the Financing Agreement and in each other Loan Document shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the First Amendment Effective Date as though made on and as of such date (unless such representations or warranties are stated to relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date).

 

(c)          No Default or Event of Default shall have occurred and be continuing on the First Amendment Effective Date or result from this Amendment becoming effective in accordance with its terms.

 

(d)          The Borrowers shall have paid on or before the First Amendment Effective Date all fees, costs and expenses then payable pursuant to Section 2.06 and Section 12.04, including, without limitation, the reasonable fees and expenses of Schulte Roth & Zabel LLP, counsel to the Origination Agent.

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5.          Continued Effectiveness of the Financing Agreement and Other Loan Documents.  Each Loan Party hereby (i) acknowledges and consents to this Amendment, (ii) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the First Amendment Effective Date all references in any such Loan Document to “the Financing Agreement”, the “Agreement”, “thereto”, “thereof’, “thereunder” or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended or modified by this Amendment, and (iii) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge to the Collateral Agent for the benefit of the Agents and the Lenders, or to grant to the Collateral Agent for the benefit of the Agents and the Lenders a security interest in or Lien on, any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect of the Financing Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects.  This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of Financing Agreement, or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agents or any Lender under the Financing Agreement or any other Loan Document, nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.

 

6.          Release.  Each Loan Party hereby acknowledges and agrees that, on the First Amendment Effective Date: (a) neither it nor any of its Affiliates has any claim or cause of action arising on or prior to the First Amendment Effective Date against any Agent or any Lender (or any of their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) under the Financing Agreement and the other Loan Documents and (b) each Agent and each Lender has, prior to the First Amendment Effective Date, properly performed and satisfied in a timely manner all of its obligations prior to the First Amendment Effective Date to such Loan Party and its Affiliates under the Financing Agreement and the other Loan Documents.  Notwithstanding the foregoing, the Agents and the Lenders wish (and each Loan Party agrees) to eliminate, to the fullest extent permitted under applicable law, any possibility that any past conditions, acts, omissions, events or circumstances which occurred prior to the First Amendment Effective Date would impair or otherwise adversely affect any of the Agents’ and the Lenders’ rights, interests, security and/or remedies under the Financing Agreement and the other Loan Documents.  Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Loan Party (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge each Agent, each Lender and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, arising on or prior to the First Amendment Effective Date, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the First Amendment Effective Date and arising out of, connected with or related in any way to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction on or prior to the First Amendment Effective Date related or attendant thereto, or the agreements of any Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of each Loan Party, or the making of any Loans, or the management of such Loans or the Collateral, in each case, on or prior to the First Amendment Effective Date.

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As to each and every claim released hereunder, each Loan Party hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

As to each and every claim released hereunder, each Loan Party also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action arising on or prior to the First Amendment Effective Date and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Loan Party understands, acknowledges and agrees that to the extent permitted under applicable law, the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

Each Loan Party, for itself and on behalf of its successors, assigns, and officers, directors, employees and agents, and any Person acting for or on behalf of, or claiming through it, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of the Released Parties above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) the Released Parties on the basis of any claim released, remised and discharged by such Person pursuant to this Section 6.  Each Loan Party further agrees that it shall not dispute the validity or enforceability of the Financing Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Financing Agreement or the other Loan Documents.  If any Loan Party or any of its respective successors, assigns, or officers, directors, employees and agents, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as the Released Parties may sustain as a result of such violation, all reasonable attorneys’ fees and costs incurred by the Released Parties as a result of such violation.

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7.          Miscellaneous.

 

(a)          This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.

 

(b)          Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

(c)          This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

 

(d)          Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Financing Agreement.  Accordingly, it shall be an Event of Default under the Financing Agreement if any representation or warranty made by a Loan Party under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made.

 

(e)          Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(f)          The Borrowers will pay on demand all reasonable fees, costs and expenses of the Agents and the Lenders party to this Amendment in connection with the preparation, execution and delivery of this Amendment or otherwise payable under the Financing Agreement, including, without limitation, reasonable fees, disbursements and other charges of counsel to the Agents and the Lenders party to this Amendment.

 

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

	 	
BORROWERS:

	 	 
	 	
RIMINI STREET, INC.

	 	 
	 	
By:

	
/s/ Thomas Shay

	 	 	
Name: Thomas Shay

	 	 	
Title: SVP and CIO

	 	
COLLATERAL AGENT AND ADMINISTRATIVE AGENT:

	 	 	 
	 	
CORTLAND CAPITAL MARKET SERVICES LLC

	 	 
	 	
By:

	
/s/ Matthew Trybula

	 	 	
Name: Matthew Trybula

	 	 	
Title: Associate Counsel

	 	
ORIGINATION AGENT:

	 	 	 
	 	
CB AGENT SERVICES LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner & COO

	
 

	
LENDER:

	 	 
	 	
COLBECK CAPITAL MANAGEMENT, LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner

	
 

	
LENDER:

	 	 
	 	
COLBECK STRATEGIC LENDING MASTER, L.P.

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Authorized Signatory

	
 

	
LENDER:

	 	 
	 	
CB PARTICIPATIONS SPV, LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner & COO

	
 

	
LENDER:

	 	 
	 	
CION Investment Corp.

	 	 
	 	
By:

	
/s/ Harry Giovani

	 	 	
Name: Harry Giovani

	 	 	
Title: Senior Managing Director and Chief Credit Officer

	
 

	
LENDER: Alpine Associates, A Limited Partnership

	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	
 

	
LENDER: Alpine Heritage, L.P.

	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	
 

	
LENDER: Alpine Heritage II, L.P.

	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	
 

	
LENDER: Alpine Heritage Offshore Fund Ltd.

	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior AnalystExhibit 10.28

SECOND AMENDMENT

TO FINANCING AGREEMENT

SECOND AMENDMENT, dated as of October 28, 2016 (this “Amendment”), to the Financing Agreement, dated as of June 24, 2016 (as amended, supplemented, replaced or otherwise modified from time to time, the “Financing Agreement”), by and among Rimini Street, Inc., a Nevada corporation (the “Parent”; and together with each other Person that executes a joinder agreement and becomes a “Borrower” thereunder, each a “Borrower” and collectively, the “Borrowers”), each subsidiary of the Parent listed as a “Guarantor” on the signature pages thereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” thereunder or otherwise guaranties all or any part of the Obligations (as thereinafter defined), each a “Guarantor” and collectively, the “Guarantors”), the lenders from time to time party hereto (each a “Lender” and collectively, the “Lenders”), Cortland Capital Market Services LLC (“Cortland”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), Cortland, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”) and CB Agent Services LLC, a Delaware limited liability company (“Colbeck”) as origination agent for the Lenders (in such capacity, together with its successors and permitted assigns in such capacity, the “Origination Agent” and together with the Collateral Agent and the Administrative Agent, each an “Agent” and collectively, the “Agents”).

WHEREAS, the Borrowers, the Guarantors, the Agents and the Required Lenders wish to amend certain terms and provisions of the Financing Agreement as hereinafter set forth.

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

1.          Definitions.  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.

 

2.          Amendments.

 

(a)          Recitals.  The recitals to the Financing Agreement are hereby amended and restated in their entirety to read as follows:

 

“The Borrowers have asked the Lenders to extend credit to the Borrowers consisting of a multi-draw term loan in the aggregate principal amount of $125,000,000.  The proceeds of the term loan shall be used to pay the final judgment of the Oracle Litigation (as hereinafter defined), to pay legal fees or other costs and expenses related to the Oracle Litigation, for general working capital purposes of the Borrowers and to pay fees and expenses related to this Agreement.  The Lenders are severally, and not jointly, willing to extend such credit to the Borrowers subject to the terms and conditions hereinafter set forth.

 

In consideration of the premises and the covenants and agreements contained herein, the parties hereto agree as follows:”

(b)          New Definitions.  Section 1.01 of the Financing Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:

 

““Budget” means, collectively, the consolidated cash requirement forecasts, cash flow statements, statements of operations and cash availability schedules in the form attached hereto as Schedule 1.01(C), which are (a) prepared by or on behalf of the Loan Parties on a weekly basis (for the next succeeding 13 weeks) and on a monthly basis (for the months from the Second Amendment Effective Date through the Final Maturity Date), and (b) delivered by the Loan Parties to the Agents and the Lenders (i) on or before the Second Amendment Effective Date pursuant to Section 4 of the Second Amendment and (ii) each quarter thereafter pursuant to Section 7.01(a)(xx) hereto (or more frequently should the Agents so elect), in each case, which shall be in substance satisfactory and approved by the Origination Agent at the time of delivery thereof.”

 

““Customer Prepayment” means any payment received by a Borrower from a customer with respect to the rendering of services by a Borrower to a customer that are to commence and be rendered at least twelve (12) months or later after the date of such payment.”

 

““Material Adverse Deviation” means, as of any date of determination, the occurrence of any of the following: (i) actual cash receipts, in the aggregate, for any four week test period are less than ninety percent (90%) of the amount projected in the Budget for such four week period, (ii) actual cash disbursements, on a line item basis, for any four week test period exceed one hundred ten percent (110%) of the amount projected for such line item in the Budget for such four week period, (iii) actual cash receipts, in the aggregate, for any eight week test period on a rolling basis are less than ninety-five percent (95%) of the amount projected in the Budget for such eight week period, or (iv) actual cash disbursements, on a line item basis, for any eight week test period on a rolling basis exceed one hundred five percent (105%) of the amount projected for such line item in the Budget for such eight week period.”

 

““Second Amendment” means the Second Amendment to Financing Agreement, dated as of October 28, 2016, by and among the Agents, the Lenders party thereto and the Loan Parties.”

 

““Second Amendment Effective Date” means the date on which each of the conditions precedent set forth in Section 4 of the Second Amendment have been either satisfied or waived.”

 

““Second Amendment Equity Issuance” means the Equity Issuance described in Section 4(e)(ii) of the Second Amendment.”

(c)          Existing Definitions.

(i)          The definition of “Amortization Commencement Date” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(ii)          The definition of “Appealable Claims” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

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(iii)          The definition of “Applicable Premium Trigger Event” in Section 1.01 of the Financing Agreement is hereby amended by amending and restating clause (a) therein in its entirety to read as follows:

 

“(a)          any payment by any Loan Party of all, or any part, of the principal balance of any Term Loan for any reason (including, but not limited to, any optional prepayment or mandatory prepayment, but excluding (x) any regularly scheduled amortization payment made pursuant to the first sentence of Section 2.03(A), (y) any mandatory prepayment made pursuant to Section 2.05(c)(iv) from the insurance proceeds paid in connection with any casualty event and (z) any mandatory prepayment made pursuant to Section 2.05(c)(vi) or Section 2.05(c)(vii)) whether before or after (i) the occurrence of an Event of Default, or (ii) the commencement of any Insolvency Proceeding, and notwithstanding any acceleration (for any reason) of the Obligations;”

 

 (iv)          The definition of “Budget Compliance Report” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Budget Compliance Report” means a report, in form and substance reasonably satisfactory to the Origination Agent, that sets forth, through the end of the immediately preceding month, a comparison of  (a) (i) the actual cash receipts for the immediately preceding four week period to the projected cash receipts for such four week period, and (ii) the actual cash disbursements, on a line item basis, for the immediately preceding four week period to the projected cash disbursements, on a line item basis, for such four week period, and (b) (i) the actual cash receipts for the immediately preceding eight week period to the projected cash receipts for such eight week period, and (ii) the actual cash disbursements, on a line item basis, for the immediately preceding eight week period to the projected cash disbursements, on a line item basis, for such eight week period, each as set forth in the Budget for such period, together with a statement as to whether a Material Adverse Deviation has occurred or not.”

 

(v)          The definition of “Churn Rate” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Churn Rate” means, with respect to the Parent and its Subsidiaries for any period, the result (expressed as a percentage) of (a) the aggregate amount of recurring invoicing of the Parent and its Subsidiaries lost during such period, divided by (b) the aggregate amount of recurring invoicing of the Parent and its Subsidiaries as of the beginning of such period.”

 

(vi)          The definition of “Collections” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).”

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(vii)          The definition of “Excluded Equity Issuance” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Excluded Equity Issuance” means (a) in the event that the Parent or any of its Subsidiaries forms any Subsidiary in accordance with this Agreement, the issuance by such Subsidiary of Equity Interests to the Parent or such Subsidiary, as applicable, (b)  the issuance of Equity Interests of the Parent to directors, officers and employees of the Parent and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors of the Parent, (c) the issuance of Equity Interests by a Subsidiary of the Parent to its parent or member in connection with the contribution by such parent or member to such Subsidiary of the proceeds of an issuance described in clauses (a) – (b) above, (d) the issuance of Equity Interests by the Parent to any Secured Party or their successors or assigns, and (e) the Second Amendment Equity Issuance.”

 

(viii)          The definition of “Excluded Hartford Insurance Proceeds” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(ix)          The definition of “Extraordinary Receipts” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Extraordinary Receipts” means any cash received by the Parent or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.05(c)(i), (ii), (iii) or (vii) hereof), including, without limitation, (a) foreign, United States, state or local tax refunds, (b) pension plan reversions, (c) proceeds of insurance, (d) judgments, proceeds of appeals, settlements or other consideration of any kind in connection with any cause of action, (e) condemnation awards (and payments in lieu thereof), (f) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of the Parent or any of its Subsidiaries or (ii) received by the Parent or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person) and (g) any purchase price adjustment received in connection with any purchase agreement.”

 

(x)          The definition of “Fee Letter” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Fee Letter” means the amended and restated fee letter, dated as of the Second Amendment Effective Date, among the Borrowers and the Origination Agent, as amended, amended and restated, supplemented or otherwise modified from time to time.”

 

(xi)          The definition of “Insurance Loan” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

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(xii)          The definition of “Oracle Litigation Computer Access Damages” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xiii)          The definition of “Oracle Litigation Expenses” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xiv)          The definition of “Permitted Indebtedness” in Section 1.01 of the Financing Agreement is hereby amended by amending and restating clause (l) therein in its entirety to read as follows:

 

“(l)          Intentionally Omitted;”

 

(xv)          The definition of “Permitted Liens” in Section 1.01 of the Financing Agreement is hereby amended by amending and restating clause (q) therein in its entirety to read as follows:

 

“(q)          Intentionally Omitted;”

 

(xvi)          The definition of “Retained Equity Issuance Proceeds” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Retained Equity Issuance Proceeds” means, as of any date of determination, an amount equal to 50% of the Net Cash Proceeds of all Equity Issuances (other than Excluded Equity Issuances) after the Second Amendment Effective Date, which proceeds shall be deposited into the Blocked Collection Account.”

 

(xvii)          The definition of “Retained Hartford Insurance Proceeds” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xviii)          The definition of “Retained Insurance Proceeds” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xix)          The definition of “Semi-Monthly Report” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xx)          The definition of “Specified Collections” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xxi)          The definition of “Specified Disbursements” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xxii)          The definition of “Threshold Amount” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

 

(xxiii)          The definition of “Total Hartford Insurance Proceeds” in Section 1.01 of the Financing Agreement is hereby deleted in its entirety.

5

 

(xxiv)          The definition of “Total Sales and Marketing Expense” in Section 1.01 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

““Total Sales and Marketing Expense” means, with respect to the Parent and its Subsidiaries for any period, the aggregate dollar amount of sales and marketing disbursements for such period, which disbursements constitute charges and expenses attributable to sales and marketing, advertising and promotional efforts during such period, and shall include, without limitation, wages, commissions, bonuses, materials costs and event planning related to such efforts and activities.”

 

(d)          Section 2.03 (Repayment of Loans; Evidence of Debt).  Section 2.03 of the Financing Agreement is hereby amended by replacing the reference therein to “the Amortization Commencement Date” with “November 1, 2016”.

 

(e)          Section 2.05(c) (Mandatory Prepayments).  Section 2.05(c)(iv) of the Financing Agreement is hereby deleting the reference therein to “(other than Excluded Hartford Insurance Proceeds)”.

 

(f)          Section 2.05(c) (Mandatory Prepayments).  Section 2.05(c)(v) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(v)          Notwithstanding the foregoing, with respect to Net Cash Proceeds received by any Loan Party or any of its Subsidiaries in connection with a Disposition or the receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards that are required to be used to prepay the Obligations pursuant to Section 2.05(c)(i) or Section 2.05(c)(iv), as the case may be, up to $250,000 in the aggregate in any Fiscal Year of the Net Cash Proceeds from all such Dispositions and Extraordinary Receipts shall not be required to be so used to prepay the Obligations to the extent that such Net Cash Proceeds are used to replace, repair or restore properties or assets (other than current assets) used in such Person’s business, provided that, (A) no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds, (B) the Administrative Borrower delivers a certificate to the Administrative Agent within 5 days after such Disposition or loss, destruction or taking or receipt of Extraordinary Receipts, as the case may be, stating that such Net Cash Proceeds shall be used to replace, repair or restore properties or assets used in such Person’s business within a period specified in such certificate not to exceed 90 days (or, if a binding agreement relating to such reinvestment has been executed within such 90 day period but such reinvestment has not closed, an additional 180 days following such 90 day period) after the date of receipt of such Net Cash Proceeds (which certificate shall set forth estimates of the Net Cash Proceeds to be so expended), (C) such Net Cash Proceeds are deposited in the Blocked Collection Account, and (D) upon the earlier of (1) the expiration of the period specified in the relevant certificate furnished to the Administrative Agent pursuant to clause (B) above or (2) the occurrence and continuance of an Event of Default, such Net Cash Proceeds, if not theretofore so used, shall be used to prepay the outstanding Obligations in accordance with Section 2.05(c)(i) or Section 2.05(c)(iv) as applicable.”

6

(g)          Section 2.05(c) (Mandatory Prepayments).  Section 2.05(c)(vi) of the Financing Agreement is hereby amended by replacing the reference therein to “25%” with “75%”.

 

(h)          Section 2.05(c) (Mandatory Prepayments).  The following new Section 2.05(c)(vii) of the Financing Agreement is hereby added to the Financing Agreement to read as follows:

 

“(vii)          Within five (5) Business Days after the receipt by any Loan Party or any of its Subsidiaries of any Customer Prepayments on or after April 1, 2017, the Borrowers shall prepay the outstanding principal of the Loans in accordance with Section 2.05(d) in an amount equal to 100% of the cash proceeds received by such Person in connection therewith.”

 

(i)          Section 2.05 (d) (Application of Payments).  Section 2.05(d) of the Financing Agreement is hereby amended by amending and restating the first sentence therein in its entirety to read as follows:

 

“Each prepayment pursuant to subsections (c)(i), (c)(ii), (c)(iii), (c)(iv), (c)(v), (c)(vi) and (c)(vii) above shall be applied to the Term Loan, until paid in full.”

 

(j)          Section 5.02 (Conditions Precedent to Loans made from Delayed Draw A Term Loan Commitments).  Section 5.02(e) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(e)          Additional Conditions Precedent.  The Origination Agent and the Required Lenders shall have provided their prior written consent to the making of any such Loan.”

 

(k)          Section 6.01(g) (Financial Statements).  Section 6.01(g) of the Financing Agreement is hereby amended by amending and restating the first sentence of Section 6.01(g)(i) in its entirety to read as follows:

 

“Except as set forth on Schedule 6.01(g), the Financial Statements, copies of which have been delivered to each Agent and each Lender, fairly present in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at the respective dates thereof and the consolidated results of operations of the Parent and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP.”

 

(l)          Section 6.01(s) (Use of Proceeds).  Section 6.01(s) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(s)          Use of Proceeds.  The proceeds of the Loans shall be used to (a) pay fees and expenses in connection with the transactions contemplated hereby, (b) to pay the final judgment of the Oracle Litigation, and pay the legal fees and other costs and expenses related to the Oracle Litigation and (c) fund working capital and general corporate purposes of the Borrowers; provided, that with respect to a Term Loan made after the Effective Date, the proceeds of such Term Loan may only be used to pay the verdict, legal fees or other costs and expenses related to the Oracle Litigation, for general working capital purposes of the Borrowers and to pay fees and expenses related to this Agreement.”

7

(m)          Section 6.01(bb) (Advisors).  The following new Section 6.01(bb) is hereby added to the Financing Agreement to read as follows:

 

“(bb)          Advisors.  Each Loan Party has disclosed to the Agents the (i) identity of all financial advisors, investment bankers, legal counsel, consultants and other advisors that have been retained by the Loan Parties during the two (2) year period prior to the Second Amendment Effective Date and (ii) the aggregate amount of fees and expenses paid by the Loan Parties to such advisors during such period.”

 

(n)          Section 7.01(a) (Reporting Requirements).  Section 7.01(a)(iii) of the Financing Agreement is hereby amended by replacing the reference therein to “September 30, 2016” with “December 15, 2016”.

 

(o)          Section 7.01(a) (Reporting Requirements).  Section 7.01(a)(v) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(v)          as soon as available and in any event within 10 days after the end of each fiscal month of the Parent and its Subsidiaries, commencing with the first fiscal month of the Parent and its Subsidiaries ending after the Effective Date, reports in form and detail reasonably satisfactory to the Origination Agent and certified by an Authorized Officer of the Administrative Borrower as being accurate and complete in all material respects (A) listing all Accounts Receivable of the Loan Parties as of such day, which shall include the amount and age of each such Account Receivable, showing separately those which are more than 30, 60, 90 and 120 days past due and a description of all known Liens, set-offs, defenses and counterclaims with respect thereto, together with a reconciliation of such schedule with the schedule delivered to the Agents pursuant to this clause (v)(A) for the immediately preceding fiscal month, and such other information as the Origination Agent may reasonably request, (B) listing all accounts payable of the Loan Parties as of each such 30, 60, 90 and 120 days past due which shall include the amount and age of each such account payable, and such other information as the Origination Agent may reasonably request and (C) listing all Customer Prepayments received by the Loan Parties for the immediately preceding fiscal month;”

 

(p)          Section 7.01(a) (Reporting Requirements).  Section 7.01(a)(xiv) of the Financing Agreement is hereby amended by replacing the reference therein to “clause (c)” with “clause (b)”.

 

(q)          Section 7.01(a) (Reporting Requirements).  Section 7.01(a) of the Financing Agreement is hereby amended by (i) deleting the word “and” at the end of clause (xix) therein and (ii) amending and restating clause (xx) therein in its entirety and inserting new clauses (xxi) and (xxii) therein, in each case, to read as follows:

8

“(xx)          on or about the fifth day (5th) after the end of each fiscal quarter of the Parent and its Subsidiaries, commencing with the first fiscal quarter of the Parent and its Subsidiaries ending after the Second Amendment Effective Date, a Budget for (A) the next succeeding 13-week period and (B) for the months from the Second Amendment Effective Date through the Final Maturity Date, in each case, prepared in form and substance satisfactory to the Origination Agent, which Budget, when delivered and as so updated, shall be (1) consistent with the Budget delivered to the Agents on or prior to the Second Amendment Effective Date, (2) believed by the Loan Parties at the time furnished to be reasonable, (3) prepared on a reasonable basis and in good faith, and (4) based on assumptions believed by the Loan Parties to be reasonable at the time made and upon the best information then reasonably available to the Loan Parties, and shall be accompanied by a certificate of an Authorized Officer of the Administrative Borrower certifying as to the matters set forth in subclauses (1), (2), (3) and (4) above; provided, that such updated Budget must be approved by the Origination Agent;

 

(xxi)          as soon as available and in any event not later than 5:00 p.m. (Eastern time) on the last day of each month commencing with the first month ending after the Second Amendment Effective Date, (x) a Budget Compliance Report and (y) a report, in form and substance satisfactory to the Origination Agent, setting forth (A) all financial advisors, investment bankers, legal counsel, consultants and other advisors that have been retained and/or paid by the Loan Parties during such month and (B) the aggregate amount of fees and expenses paid by the Loan Parties to such advisors during such month; and

 

(xxii)          promptly upon request, such other information concerning the condition or operations, financial or otherwise, of any Loan Party as the Origination Agent may from time to time may reasonably request.”

 

(r)          Section 7.01(r) (Industry Consultant).  The following new Section 7.01(r) is hereby added to the Financing Agreement to read as follows:

 

“(r)          Industry Consultant.  Permit the Required Lenders to retain and appoint an industry consultant at any time at the sole cost and expense of the Loan Parties.  At any time after the Required Lenders have retained and appointed such an industry consultant, the Loan Parties shall provide such industry consultant with unfettered access in order to, among other things, examine and make copies of and abstracts from their records and books of account, to visit and inspect their properties, to verify materials, leases, notes, accounts receivable, deposit accounts and their other assets, to conduct audits, physical counts, valuations, appraisals and to discuss their affairs, finances and accounts (and share observations and suggestions) with any of their directors, committees and  sub-committees of the Board of Directors of the Parent, officers, managerial employees, independent accountants or any of their other representatives.”

 

(s)          Section 7.01(s) (Chief Financial Officer).  The following new Section 7.01(s) is hereby added to the Financing Agreement to read as follows:

 

“(s)          Chief Financial Officer.  Within thirty (30) days after the Second Amendment Effective Date, (x) retain a chief financial officer and (y) deliver a fully-executed copy of his or her employment agreement with the Parent to the Origination Agent, certified as a true and correct copy by an Authorized Officer of the Parent.  The Parent will use its reasonable best efforts to continue the retention of such chief financial officer approved by its Board of Directors.”

9

(t)          Section 7.01(t) (Equity Raise).  The following new Section 7.01(t) is hereby added to the Financing Agreement to read as follows:

 

“(t)          Equity Raise.  On or prior to the seven (7) month anniversary of the Second Amendment Effective Date, consummate one or more Equity Issuances after the Second Amendment Effective Date (other than the Second Amendment Equity Issuance) that result in Net Cash Proceeds of at least $35,000,000 in the aggregate; which cash proceeds shall be applied in accordance with Section 2.05(c)(iii).”

 

(u)          Section 7.02(v) (Insurance Settlements).  The following new Section 7.02(v) is hereby added to the Financing Agreement to read as follows:

 

“(v)          Insurance Settlements.  None of the Loan Parties, nor any of their Subsidiaries, shall enter into any settlement exceeding $500,000 in respect of an individual claim with any of their insurance carriers without the prior written consent of the Origination Agent.”

 

(v)          Section 7.03 (Financial Covenants).  Section 7.03 of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“7.03          Financial Covenants.  So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:

 

(a)          Leverage Ratio.  At any time after the Loans in respect of the Delayed Draw A Term Loan Commitments have been made hereunder, permit the Leverage Ratio of the Parent and its Subsidiaries for any period of four consecutive fiscal quarters of the Parent and its Subsidiaries for which the last quarter ends on a date set forth below to be greater than the ratio set forth opposite such date:

 

	 	
Fiscal Quarter End

	
Leverage Ratio

	 
	 	
December 31, 2016

	
5.00 to 1.00

	 
	 	
March 31, 2017

	
4.00 to 1.00

	 
	 	
June 30, 2017

	
3.50 to 1.00

	 
	 	
September 30, 2017

	
3.00 to 1.00

	 
	 	
December 31, 2017

	
2.50 to 1.00

	 
	 	
March 31, 2018

	
2.00 to 1.00

	 
	 	
June 30, 2018

	
1.50 to 1.00

	 
	 	
September 30, 2018 and on the last day of each fiscal quarter thereafter

	
1.00 to 1.00

	 

10

(b)          Liquidity.  At any time, permit the Liquidity of the Parent and its Subsidiaries to be less than the amount set forth in the table below for the applicable period:

 

	
Period

	 	
Amount

	 
	
From the Second Amendment Effective Date through and including June 30, 2018

	 	
$

	
10,000,000

	 
	
From July 1, 2018 through and including December 31, 2018

	 	
$

	
20,000,000

	 
	
From January 1, 2019 through and including June 30, 2019

	 	
$

	
25,000,000

	 
	
At all times from and after July 1, 2019

	 	
$

	
30,000,000

	 

(c)          Churn Rate.  Permit the Churn Rate of the Parent and its Subsidiaries to exceed 20% during any period of four consecutive fiscal quarters of the Parent and its Subsidiaries.

11

                          (d)          Asset Coverage Ratio.  Permit the Asset Coverage Ratio of the Parent and its Subsidiaries as of the end of any fiscal month of the Parent and its Subsidiaries to be less than the ratio set forth opposite the date set forth below

 

	 	
Fiscal Month End

	
Asset Coverage Ratio

	 
	 	
October 31, 2016

	
1.50 to 1.00

	 
	 	
November 30, 2016

	
1.50 to 1.00

	 
	 	
December 31, 2016

	
1.50 to 1.00

	 
	 	
January 31, 2017

	
1.50 to 1.00

	 
	 	
February 28, 2017

	
1.50 to 1.00

	 
	 	
March 31, 2017

	
1.50 to 1.00

	 
	 	
April 30, 2017

	
1.75 to 1.00

	 
	 	
May 31, 2017

	
1.75 to 1.00

	 
	 	
June 30, 2017

	
1.75 to 1.00

	 
	 	
July 31, 2017

	
2.00 to 1.00

	 
	 	
August 31, 2017

	
2.00 to 1.00

	 
	 	
September 30, 2017

	
2.00 to 1.00

	 
	 	
October 31, 2017

	
2.00 to 1.00

	 
	 	
November 30, 2017

	
2.00 to 1.00

	 
	 	
December 31, 2017

	
2.00 to 1.00

	 
	 	
January 31, 2018

	
2.50 to 1.00

	 
	 	
February 28, 2018

	
2.50 to 1.00

	 
	 	
March 31, 2018

	
2.50 to 1.00

	 
	 	
April 30, 2018

	
3.00 to 1.00

	 
	 	
May 31, 2018

	
3.00 to 1.00

	 
	 	
June 30, 2018

	
3.00 to 1.00

	 
	 	
July 31, 2018 and on the last day of each fiscal month thereafter

	
3.50 to 1.00

	 

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(e)          Marketing Return Ratio.  Permit the Marketing Return Ratio of the Parent and its Subsidiaries for any period of four consecutive fiscal quarters of the Parent and its Subsidiaries to be less than the ratio set forth opposite the date set forth below:

 

	 	
Fiscal Quarter End

	
Marketing Return Ratio

	 
	 	
December 31, 2016

	
1.35 to 1.00

	 
	 	
March 31, 2017

	
1.35 to 1.00

	 
	 	
June 30, 2017

	
1.45 to 1.00

	 
	 	
September 30, 2017

	
1.45 to 1.00

	 
	 	
December 31, 2017 and on the last day of each fiscal quarter thereafter

	
1.55 to 1.00

	 

 

(f)          Minimum Gross Margin.  Permit the Gross Margin of the Parent and its Subsidiaries as of the end of any fiscal quarter of the Parent, for any period of four consecutive fiscal quarters of the Parent and its Subsidiaries, to be less than the percentage set forth opposite the date set forth below:

 

	 	
Fiscal Quarter End

	
Gross Margin

	 
	 	
December 31, 2016

	
55%

	 
	 	
March 31, 2017

	
55%

	 
	 	
June 30, 2017

	
55%

	 
	 	
September 30, 2017

	
55%

	 
	 	
December 31, 2017

	
57.5%

	 
	 	
March 31, 2018

	
57.5%

	 
	 	
June 30, 2018

	
57.5%

	 
	 	
September 30, 2018 and on the last day of each fiscal quarter thereafter

	
60%”

	 

13

 (w)          Section 8.01 (Cash Management Agreements).  Section 8.01(a)  of the Financing Agreement is hereby amended by amending and restating the last two sentences therein to read as follows:

 

“From and after the Effective Date, the Loan Parties shall cause any Net Cash Proceeds of any Excluded Equity Issuances and Retained Equity Issuance Proceeds to be deposited directly into the Blocked Collection Account.”

 

 (x)          Section 8.01 (Cash Management Agreements).  Section 8.01(c)  of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(c)          Not less than five 5 Business Days prior to the end of each month, the Parent shall deliver a certificate to the Agents, detailing the Loan Parties’ estimated aggregate customer billed invoices and the Loan Parties’ exact cash disbursement needs for the succeeding month (each, a “Monthly Cash Disbursement Report”).  Each such report shall be accompanied by a Budget Compliance Report.  Subject to the Origination Agent’s timely receipt and satisfaction with the Monthly Cash Disbursement Report and the Budget Compliance Report, so long as no Event of Default has occurred and is continuing, the Origination Agent will direct the Collateral Agent in writing to direct, and the Collateral Agent shall direct, the Cash Management Bank to transfer the cash disbursement needs set forth in each Monthly Cash Disbursement Report from the Blocked Collection Account to a Cash Management Account that is an operating or disbursement account of the Loan Parties on the first Business Day of the following month; provided, that the Origination Agent may, in its discretion, direct the Collateral Agent to direct the Cash Management Bank to transfer additional disbursements from the Blocked Collection Account to an operating or disbursement account of the Loan Parties at additional times and in additional amounts.  Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may direct the Cash Management Bank to transfer funds in any Cash Management Account to the Administrative Agent’s Account.”

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(y)          Section 9.01(c) (Events of Default).  Section 9.01(c) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(c)          any Loan Party shall fail to perform or comply with any covenant or agreement contained in Section 7.01(a), Section 7.01(c), Section 7.01(d) (as to preservation and maintenance of existence), Section 7.01(f), Section 7.01(h), Section 7.01(k), Section 7.01(q), Section 7.01(r), Section 7.01(s), Section 7.01(t), Section 7.02 or Section 7.03 or Article VIII, or any Loan Party shall fail to perform or comply with Sections 6(g), 6(h), 6(j) and 6(l) (other than 6(l)(ii) of the Security Agreement) of the Security Agreement;”

 

(z)          Section 9.01(j) (Events of Default).  Section 9.01(j) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(j)          (i) one or more judgments, orders, actions or awards (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order or award) for the payment of money exceeding $500,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has been notified and has not denied coverage) shall be rendered or proposed to be rendered against any Loan Party and remain unsatisfied or (ii) any adverse order or action is entered or proposed to be entered against any Loan Party or any of its Subsidiaries in any court proceeding;”

 

(aa)          Section 9.01(k) (Events of Default).  Section 9.01(k) of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“(k)          the Parent or any of its Subsidiaries is enjoined, restrained or in any way prevented (or it is proposed that the Parent or any of its Subsidiaries be enjoined, restrained or in any way prevented) by the order of any court or any Governmental Authority (other than if an order has been obtained suspending such enjoinment or restraint) from conducting any part of the Parent’s business;”

15

(bb)          Section 9.01 (Events of Default).  Section 9.01 of the Financing Agreement is hereby amended by (i) deleting the word “or” at the end of clause (p) therein, (ii) deleting the “,” at the end of clause (q) therein and adding “;” and (iii) adding the following new clauses (r) and (s) therein to read as follows:

 

“(r)          a Material Adverse Deviation shall have occurred; or

 

 (s)          an event or development occurs which could reasonably be expected to have a Material Adverse Effect;”

 

(cc)          Section 12.20 (Public Disclosure).  Section 12.20  of the Financing Agreement is hereby amended and restated in its entirety to read as follows:

 

“Disclosure.          Each Loan Party agrees that neither it nor any of its Affiliates will now or in the future issue any press release or other disclosure using the name of an Agent, any Lender or any of their respective Affiliates or referring to this Agreement or any other Loan Document without the prior written consent of such Agent or such Lender, except to the extent that such Loan Party or such Affiliate is required to do so under applicable law (in which event, such Loan Party or such Affiliate will consult with such Agent or such Lender before issuing such press release or other disclosure).  In addition, each Loan Party agrees that neither it nor any of its Affiliates will now or in the future issue any other press release or other disclosure relating to this Agreement, any other Loan Document or any matter related thereto without the prior written consent of such Agent or such Lender, except to the extent that such Loan Party or such Affiliate is required to do so under applicable law (in which event, such Loan Party or such Affiliate will consult with such Agent or such Lender before issuing such press release or other disclosure).  Each Loan Party hereby authorizes each Agent and each Lender, after consultation with the Borrowers, to advertise the closing of the transactions contemplated by this Agreement, and to make appropriate announcements of the financial arrangements entered into among the parties hereto, as such Agent or such Lender shall deem appropriate, including, without limitation, on a home page or similar place for dissemination of information on the Internet or worldwide web, or in announcements commonly known as tombstones, in such trade publications, business journals, newspapers of general circulation and to such selected parties as such Agent or such Lender shall deem appropriate.”

 

(dd)          Schedule 1.01(A) (Lenders and Lenders’ Commitments).  Schedule 1.01(A) to the Financing Agreement is hereby amended and restated in its entirety to read as set forth on Annex I to this Amendment.

 

(ee)          Schedule 1.01(C) (Budget).  The new Schedule 1.01(C) to the Financing Agreement is hereby added to read as set forth on Annex II to this Amendment.

 

(ff)          Schedule 2.03 (Amortization Schedule).  Schedule 2.03 to the Financing Agreement is hereby amended and restated in its entirety to read as set forth on Annex III to this Amendment.

16

(gg)          Schedule 6.01(g) (Financial Statements).  The new Schedule 6/01(g) to the Financing Agreement is hereby added to read as set forth on Annex IV to this Amendment.

 

3.          Representations and Warranties.  Each Loan Party hereby represents and warrants to the Agents and the Lenders as follows:

 

(a)          Representations and Warranties; No Event of Default.  The representations and warranties herein, in Article VI of the Financing Agreement and in each other Loan Document, certificate or other writing delivered by or on behalf of the Loan Parties to any  Agent or any Lender pursuant to the Financing Agreement or any other Loan Document on or prior to the Second Amendment Effective Date are true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the Second Amendment Effective Date as though made on and as of such date (unless such representations or warranties are stated to relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date), and no Default or Event of Default has occurred and is continuing as of the Second Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms.

 

(b)          Organization, Good Standing, Etc.  Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite corporate (or equivalent) power and authority to conduct its business as now conducted and as presently contemplated and to execute this Amendment and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated hereby and by the Financing Agreement, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could reasonably be expected to have a Material Adverse Effect.

 

(c)          Authorization; Etc.  The execution, delivery and performance of this Amendment by the Loan Parties, and the performance of the Financing Agreement, (i) have been duly authorized by all necessary corporate (or equivalent) action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable material Requirement of Law to the extent such contravention would adversely affect the material operations of the Borrowers or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document or any other Permitted Lien) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, except for any violation referred to in clause (ii)(C) or clause (iv) above which could not reasonably be expected to have a Material Adverse Effect.

17

(d)          Governmental Approvals.  No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of this Amendment or any other Loan Document to which it is or will be a party other than filings and recordings with respect to Collateral that were made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Effective Date.

(e)          Budget.  The Budget, when delivered shall be believed by the Loan Parties at the time furnished to be reasonable, shall have been prepared on a reasonable basis and in good faith by the Loan Parties, and shall have been based on assumptions believed by the Loan Parties to be reasonable at the time made and upon the best information then reasonably available to the Loan Parties, and the Loan Parties shall not be aware of any facts or information that would lead it to believe that such Budget is incorrect or misleading in any material respect.

4.          Conditions to Effectiveness.  This Amendment shall become effective only upon satisfaction in full, in a manner reasonably satisfactory to the Origination Agent, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied or waived being herein called the “Second Amendment Effective Date”):

 

(a)          The Agents shall have received this Amendment, duly executed by the Loan Parties, each Agent and the Required Lenders.

 

(b)          The representations and warranties contained in this Amendment and in Article VI of the Financing Agreement and in each other Loan Document shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the Second Amendment Effective Date as though made on and as of such date (unless such representations or warranties are stated to relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applied to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date).

 

(c)          No Default or Event of Default shall have occurred and be continuing on the Second Amendment Effective Date or result from this Amendment becoming effective in accordance with its terms.

 

(d)          The Origination Agent shall have received the Fee Letter, duly executed by the Borrowers.

18

(e)          The Origination Agent shall have received satisfactory evidence that the Borrowers have received, in cash, at least (i) $40,200,000 in insurance proceeds from The Hartford Insurance and (ii) $10,000,000 of Net Cash Proceeds of an Equity Issuance on or about the Second Amendment Effective Date, in each case, which shall be applied to pay the final judgment amount rendered in the Oracle Litigation described in clause (i) of the definition thereof.

 

(f)          The Agents shall have received a certified copy of the final judgments entered by the applicable Governmental Authority in the litigation described in clause (i) of the definition of Oracle Litigation.

 

(g)          The Origination Agent shall have received a wire instruction letter executed by the Borrowers instructing the Origination Agent to wire $124,400,000 from the Blocked Collection Account to pay the final judgment amount rendered in the Oracle Litigation described in clause (i) of the definition thereof pursuant to the wire instructions set forth in such wire instruction letter.

 

(h)          The Agents shall have received a copy of the Budget, together with a certificate of an Authorized Officer of the Administrative Borrower stating that such Budget has been prepared on a reasonable basis and in good faith and is based on assumptions believed by the Loan Parties to be reasonable at the time made and from the best information then available to the Loan Parties, which Budget shall be in form and substance satisfactory to the Agents.

 

(i)          The Borrowers shall have paid on or before the Second Amendment Effective Date all fees, costs and expenses then payable pursuant to Section 2.06 and Section 12.04, including, without limitation, the reasonable fees and expenses of Schulte Roth & Zabel LLP, counsel to the Origination Agent.

 

5.          Consent and Waivers.

 

(a)          Pursuant to the request by the Loan Parties, but subject to satisfaction of the conditions set forth in Section 4 hereof, and in reliance upon (A) the representations and warranties of Loan Parties set forth herein and in the Financing Agreement and (B) the agreements of the Loan Parties set forth herein, the Agents and the Required Lenders hereby (w) consent to the Parent using (i) insurance proceeds in the amount of $40,200,00 actually received by the Parent from The Hartford Insurance, and (ii) cash proceeds in the amount of $10,000,000 actually received by the Parent from an Equity Issuance on or about the Second Amendment Effective Date, in each case, to be applied to pay the final judgment amount rendered in the Oracle Litigation described in clause (i) of the definition thereof in the aggregate amount of $124,400,000, (x) waive any Event of Default that has or would otherwise arise under (i) Section 9.01(c) of the Financing Agreement solely by reason of the Loan Parties failing to deliver the audited financials of the Parent and its Subsidiaries for the Fiscal Year ended December 31, 2015 pursuant to Section 7.01(a)(iii) of the Financing Agreement by September 30, 2016 and (ii) Section 9.01(j)(ii) with respect to the litigation described in clause (i) of the definition of Oracle Litigation on or prior to the Second Amendment Effective Date; provided, the Agents and the Lenders do not waive any Events of Default that may arise after the Second Amendment Effective Date with respect to the Oracle Litigation, (y) waive any default interest (but not any other interest) that has accrued at the Post-Default Rate prior to the Second Amendment Effective Date as a result of the occurrence of the Events of Default that are waived pursuant to this Section 5, and (z) solely with respect to the funding of a $12,500,000 Loan pursuant to the Delayed Draw B Term Loan Commitment on the Second Amendment Effective Date, waive the condition precedent set forth in Section 5.03(f)(ii) of the Financing Agreement.

19

(b)          The consent and waivers in this Section 5 shall be effective only in these specific instances and for the specific purposes set forth herein and do not allow for any other or further departure from the terms and conditions of the Financing Agreement or any other Loan Document, which terms and conditions shall continue in full force and effect.

 

6.          Continued Effectiveness of the Financing Agreement and Other Loan Documents.  Each Loan Party hereby (i) acknowledges and consents to this Amendment, (ii) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Second Amendment Effective Date all references in any such Loan Document to “the Financing Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended or modified by this Amendment, and (iii) confirms and agrees that to the extent that any such Loan Document purports to assign or pledge to the Collateral Agent for the benefit of the Agents and the Lenders, or to grant to the Collateral Agent for the benefit of the Agents and the Lenders a security interest in or Lien on, any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect of the Financing Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects.  This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of Financing Agreement, or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agents or any Lender under the Financing Agreement or any other Loan Document, nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.

20

7.          Release.  Each Loan Party hereby acknowledges and agrees that, on the Second Amendment Effective Date:  (a) neither it nor any of its Affiliates has any claim or cause of action arising on or prior to the Second Amendment Effective Date against any Agent or any Lender (or any of their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) under the Financing Agreement and the other Loan Documents and (b) each Agent and each Lender has, prior to the Second Amendment Effective Date, properly performed and satisfied in a timely manner all of its obligations prior to the Second Amendment Effective Date to such Loan Party and its Affiliates under the Financing Agreement and the other Loan Documents.  Notwithstanding the foregoing, the Agents and the Lenders wish (and each Loan Party agrees) to eliminate, to the fullest extent permitted under applicable law, any possibility that any past conditions, acts, omissions, events or circumstances which occurred prior to the Second Amendment Effective Date would impair or otherwise adversely affect any of the Agents’ and the Lenders’ rights, interests, security and/or remedies under the Financing Agreement and the other Loan Documents.  Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Loan Party (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge each Agent, each Lender and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, arising on or prior to the Second Amendment Effective Date, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Second Amendment Effective Date and arising out of, connected with or related in any way to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction on or prior to the Second Amendment Effective Date related or attendant thereto, or the agreements of any Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of each Loan Party, or the making of any Loans, or the management of such Loans or the Collateral, in each case, on or prior to the Second Amendment Effective Date.

 

As to each and every claim released hereunder, each Loan Party hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

As to each and every claim released hereunder, each Loan Party also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

21

Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action arising on or prior to the Second Amendment Effective Date and agrees that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Loan Party understands, acknowledges and agrees that to the extent permitted under applicable law, the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

Each Loan Party, for itself and on behalf of its successors, assigns, and officers, directors, employees and agents, and any Person acting for or on behalf of, or claiming through it, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of the Released Parties above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) the Released Parties on the basis of any claim released, remised and discharged by such Person pursuant to this Section 7.  Each Loan Party further agrees that it shall not dispute the validity or enforceability of the Financing Agreement or any of the other Loan Documents or any of its obligations thereunder, or the validity, priority, enforceability or the extent of Collateral Agent’s Lien on any item of Collateral under the Financing Agreement or the other Loan Documents.  If any Loan Party or any of its respective successors, assigns, or officers, directors, employees and agents, or any Person acting for or on behalf of, or claiming through it violate the foregoing covenant, such Person, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as the Released Parties may sustain as a result of such violation, all reasonable attorneys’ fees and costs incurred by the Released Parties as a result of such violation.

 

Each Lender hereby acknowledges and agrees that, on the Second Amendment Effective Date:  (a) neither it nor any of its Affiliates has any claim or cause of action arising on or prior to the Second Amendment Effective Date against Cortland Capital Market Services LLC, Colbeck Capital Management, LLC or CB Agent Services LLC (or any of their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) under the Financing Agreement and the other Loan Documents and (b) each of Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC and their respective Affiliates has, prior to the Second Amendment Effective Date, properly performed and satisfied in a timely manner all of its obligations prior to the Second Amendment Effective Date to such Lender and its Affiliates under the Financing Agreement and the other Loan Documents.  Notwithstanding the foregoing, Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC and their respective Affiliates wish (and each Lender agrees) to eliminate, to the fullest extent permitted under applicable law, any possibility that any past conditions, acts, omissions, events or circumstances which occurred prior to the Second Amendment Effective Date would give rise to any claim by any Lender against Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC and their respective Affiliates under the Financing Agreement and the other Loan Documents.  Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Lender (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Lender Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Colbeck/Cortland Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, arising on or prior to the Second Amendment Effective Date, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Lender Releasor has heretofore had or now or hereafter can, shall or may have against any Colbeck/Cortland Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Second Amendment Effective Date and arising out of, connected with or related in any way to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction on or prior to the Second Amendment Effective Date related or attendant thereto, or the agreements of Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC or any of their respective Affiliates contained therein, or the possession, use, operation or control of any of the assets of each Loan Party, or the making of any Loans, or the management of such Loans or the Collateral, in each case, on or prior to the Second Amendment Effective Date.

22

As to each and every claim released hereunder, each Lender hereby represents that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

As to each and every claim released hereunder, each Lender also waives the benefit of each other similar provision of applicable federal or state law (including without limitation the laws of the state of New York), if any, pertaining to general releases after having been advised by its legal counsel with respect thereto.

 

8.          Miscellaneous.

 

(a)          This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.

 

(b)          Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

(c)          This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

 

(d)          Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Financing Agreement.  Accordingly, it shall be an Event of Default under the Financing Agreement if any representation or warranty made by a Loan Party under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made.

23

(e)          Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(f)          The Borrowers will pay on demand all reasonable fees, costs and expenses of the Agents and the Lenders party to this Amendment in connection with the preparation, execution and delivery of this Amendment or otherwise payable under the Financing Agreement, including, without limitation, reasonable fees, disbursements and other charges of counsel to the Agents and the Lenders party to this Amendment.

 

[remainder of page intentionally left blank]

24

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

	 	                     BORROWERS:
	 	 
	 	
RIMINI STREET, INC.

	 	 
	 	
By:

	
/s/ Seth A. Ravin

	 	 	
Name: Seth A. Ravin

	 	 	
Title: CEO

		
COLLATERAL AGENT AND ADMINISTRATIVE AGENT:

		 
	 	
CORTLAND CAPITAL MARKET SERVICES LLC

	 	 
	 	
By:

	
/s/ Emily Ergang Pappas

	 	 	
Name: Emily Ergang Pappas

	 	 	
Title: Associate Counsel

		
ORIGINATION AGENT:

		 
	 	
CB AGENT SERVICES LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner & COO

		
LENDER:

	 	 
	 	
COLBECK CAPITAL MANAGEMENT, LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner & COO

 

		
LENDER:

	 	 
	 	
COLBECK STRATEGIC LENDING MASTER, L.P.

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Authorized Signatory

	 	
LENDER:

	 	 
	 	
CB PARTICIPATIONS SPV, LLC

	 	 
	 	
By:

	
/s/ Morris Beyda

	 	 	
Name: Morris Beyda

	 	 	
Title: Partner & COO

	 	
NORTH HAVEN CREDIT PARTNERS II, L.P.

	 	
As LENDER

	 	
By: MS Credit Partners II GP L.P., its general partner

	 	 
	 	
By: MS Credit Partners II GP Inc., its general partner

	 	 
	 	
By:

	
/s/ Ashwin Krishnan

	 	 	
Name: Ashwin Krishnan

	 	 	
Title: Managing Director

	 	
LENDER:

	 	 
	 	
CION Investment Corp.

	 	 
	 	
By:

	
/s/ Michael Reisner

	 	 	
Name: Michael Reisner

	 	 	
Title: Co-President and Co-Chief Executive Officer

	 	
LENDER: Alpine Associates, A Limited Partnership

	 	 
	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	 	
LENDER: Alpine Heritage, L.P.

	 	 
	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	 	
LENDER: Alpine Heritage II, L.P.

	 	 
	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

	 	
LENDER: Alpine Heritage Offshore Fund Ltd.

	 	 
	 	 
	 	
By:

	
/s/ Gary Moorman

	 	 	
Name: Gary Moorman

	 	 	
Title: Senior Analyst

Annex I

 

SCHEDULE 1.01(A)

	
Name of Lender

	 	
Effective Date 

Term Loan 

Commitment1

	 	 	
Delayed Draw A 

Term Loan 

Commitment

	 	 	
Delayed Draw B 

Term Loan 

Commitment

	 	 	
Total Term 

Loan 

Commitment

	 
	
North Haven Credit Partners II L.P.

	 	
$

	
8,684,210.53

	 	 	
$

	
18,815,789.47

	 	 	
$

	
5,100,000.00

	 	 	
$

	
32,600,000.00

	 
	
CION Investment Corp.

	 	
$

	
5,526,315.79

	 	 	
$

	
11,973,684.21

	 	 	
$

	
2,300,000.00

	 	 	
$

	
19,800,000.00

	 
	
Colbeck Capital Management LLC

	 	
$

	
0

	 	 	
$

	
0

	 	 	
$

	
17,500,000.00

	 	 	
$

	
17,500,000.00

	 
	
Colbeck Strategic Lending Master, L.P.

	 	
$

	
11,052,631.57

	 	 	
$

	
23,947,368.43

	 	 	
$

	
5,100,000.00

	 	 	
$

	
40,100,000.00

	 
	
CB Participations SPV, LLC

	 	
$

	
4,736,842.11

	 	 	
$

	
6,842,105.26

	 	 	
$

	
0

	 	 	
$

	
11,578,947.37

	 
	
Alpine Associates, A Limited Partnership

	 	
$

	
0

	 	 	
$

	
684,210.53

	 	 	
$

	
0

	 	 	
$

	
684,210.53

	 
	
Alpine Heritage, L.P.

	 	
$

	
0

	 	 	
$

	
1,915,789.47

	 	 	
$

	
0

	 	 	
$

	
1,915,789.47

	 
	
Alpine Heritage II, L.P.

	 	
$

	
0

	 	 	
$

	
547,368.42

	 	 	
$

	
0

	 	 	
$

	
547,368.42

	 
	
Alpine Heritage Offshore Fund Ltd.

	 	
$

	
0

	 	 	
$

	
273,684.21

	 	 	
$

	
0

	 	 	
$

	
273,684.21

	 
	
Total

	 	
$

	
30,000,000

	 	 	
$

	
65,000,000

	 	 	
$

	
30,000,000

	 	 	
$

	
125,000,000

	 

1 The Effective Date Term Loan Commitments were funded and terminated on the Effective Date.

 

Annex II

 

SCHEDULE 1.01(C)

[see attached Budget]

	
Outlook          Final          Plan A

	
Nov-2016

	
Dec-2016

	
Jan-2017

	
Feb-2017

	
Mar-2017

	
Apr-2017

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
13,918

	
19,375

	
20,876

	
24,475

	
21,462

	
12,598

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	
919

	
434

	 	 	 	 
	
From Travelers

	 	 	 	 	
697

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
14,837

	
19,809

	
20,876

	
24,475

	
22,159

	
12,598

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
6,599

	
6,654

	
6,744

	
6,958

	
6,793

	
6,870

	
Commissions

	
722

	
881

	
2,656

	
487

	
649

	
2,580

	
Company Bonus (non-commissioned employees)

	 	
4,103

	 	 	
2,896

	 
	
Benefits

	
677

	
680

	
688

	
688

	
689

	
691

	
Other employee related costs (recruitment, training, etc.)

	
179

	
104

	
129

	
86

	
90

	
106

	
Contract Labor

	
1,875

	
1,942

	
2,109

	
1,182

	
1,774

	
1,774

	
Marketing Trade Show Sponsorship

	
312

	
283

	
253

	
253

	
149

	
149

	
Other Marketing and Advertising

	
313

	
343

	
357

	
304

	
304

	
304

	
Travel and Entertainment

	
285

	
268

	
266

	
706

	
705

	
268

	
Facilities / Rent

	
382

	
382

	
398

	
398

	
398

	
398

	
Computer & Office Supplies, telecom, etc.

	
459

	
429

	
467

	
451

	
456

	
458

	
Annual Insurance Payment

	
600

	 	 	 	 	 
	
SW License Payment - Microsoft

	 	 	
225

	 	 	
225

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	 
	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,023

	
2,375

	
2,838

	
2,849

	
1,101

	
248

	
Audit

	
278

	
348

	
266

	
167

	
156

	
159

	
Other

	
544

	
658

	
539

	
486

	
404

	
298

	
Operating Taxes

	
163

	
139

	
749

	
252

	
25

	
559

	
Other Opex

	
18

	
18

	
18

	
18

	
118

	
18

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
14,429

	
19,606

	
18,701

	
15,285

	
16,705

	
15,103

	
Capex

	
100

	
100

	
100

	
270

	
150

	
150

	
Facility

	
1,690

	
1,963

	
1,959

	
1,953

	
1,951

	
1,946

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
May-2017

	
Jun-2017

	
Jul-2017

	
Aug-2017

	
Sep-2017

	
Oct-2017

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
16,698

	
26,713

	
25,980

	
26,925

	
14,168

	
9,859

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
697

	
0

	
0

	
697

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
16,698

	
27,410

	
25,980

	
26,925

	
14,865

	
9,859

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
6,813

	
6,878

	
6,870

	
6,767

	
6,780

	
6,913

	
Commissions

	
907

	
2,376

	
2,172

	
710

	
971

	
4,070

	
Company Bonus (non-commissioned employees)

	 	
2,931

	 	 	
2,948

	 
	
Benefits

	
691

	
692

	
692

	
693

	
694

	
694

	
Other employee related costs (recruitment, training, etc.)

	
114

	
110

	
110

	
86

	
132

	
107

	
Contract Labor

	
1,784

	
1,784

	
1,784

	
1,817

	
1,857

	
2,072

	
Marketing Trade Show Sponsorship

	
149

	
149

	
149

	
149

	
149

	
149

	
Other Marketing and Advertising

	
304

	
304

	
304

	
304

	
304

	
304

	
Travel and Entertainment

	
317

	
467

	
668

	
518

	
268

	
269

	
Facilities / Rent

	
398

	
398

	
398

	
398

	
398

	
398

	
Computer & Office Supplies, telecom, etc.

	
458

	
462

	
461

	
464

	
469

	
467

	
Annual Insurance Payment

	 	 	 	 	
200

	 
	
SW License Payment - Microsoft

	 	 	
225

	 	 	
225

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	
650

	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
939

	
939

	
939

	
939

	
991

	
1,043

	
Audit

	
141

	
116

	
109

	
112

	
100

	
84

	
Other

	
299

	
302

	
305

	
306

	
327

	
335

	
Operating Taxes

	
92

	
39

	
872

	
79

	
32

	
596

	
Other Opex

	
18

	
18

	
18

	
18

	
18

	
18

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
13,424

	
17,965

	
16,075

	
13,361

	
16,639

	
18,393

	
Capex

	
150

	
150

	
250

	
150

	
150

	
150

	
Facility

	
1,943

	
4,935

	
2,475

	
2,464

	
2,453

	
2,443

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
Nov-2017

	
Dec-2017

	
Jan-2018

	
Feb-2018

	
Mar-2018

	
Apr-2018

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
17,827

	
22,642

	
23,376

	
29,694

	
21,405

	
18,437

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
697

	
0

	
0

	
888

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
17,827

	
23,339

	
23,376

	
29,694

	
22,293

	
18,437

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
6,764

	
6,755

	
6,864

	
7,074

	
6,907

	
6,977

	
Commissions

	
835

	
970

	
3,866

	
549

	
719

	
2,749

	
Company Bonus (non-commissioned employees)

	 	
2,948

	 	 	
2,948

	 
	
Benefits

	
694

	
695

	
706

	
706

	
706

	
706

	
Other employee related costs (recruitment, training, etc.)

	
141

	
90

	
136

	
99

	
102

	
106

	
Contract Labor

	
2,146

	
2,246

	
2,427

	
3,320

	
4,032

	
4,032

	
Marketing Trade Show Sponsorship

	
149

	
149

	
149

	
149

	
154

	
154

	
Other Marketing and Advertising

	
304

	
304

	
318

	
359

	
359

	
359

	
Travel and Entertainment

	
269

	
269

	
269

	
773

	
802

	
302

	
Facilities / Rent

	
398

	
398

	
398

	
398

	
398

	
398

	
Computer & Office Supplies, telecom, etc.

	
469

	
478

	
473

	
488

	
493

	
492

	
Annual Insurance Payment

	
600

	 	 	 	 	 
	
SW License Payment - Microsoft

	 	 	
250

	 	 	
250

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	 
	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,043

	
1,043

	
1,043

	
1,043

	
1,140

	
1,276

	
Audit

	
96

	
104

	
105

	
105

	
131

	
164

	
Other

	
320

	
319

	
320

	
322

	
325

	
329

	
Operating Taxes

	
138

	
37

	
1,053

	
305

	
117

	
864

	
Other Opex

	
18

	
18

	
19

	
19

	
19

	
19

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
14,383

	
16,822

	
18,395

	
15,706

	
19,352

	
19,175

	
Capex

	
150

	
150

	
150

	
-

	
164

	
164

	
Facility

	
2,431

	
2,421

	
2,721

	
2,396

	
2,386

	
2,686

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
May-2018

	
Jun-2018

	
Jul-2018

	
Aug-2018

	
Sep-2018

	
Oct-2018

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
21,198

	
43,096

	
29,033

	
30,801

	
22,035

	
14,831

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
888

	
0

	
0

	
888

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
21,198

	
43,984

	
29,033

	
30,801

	
22,923

	
14,831

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
6,891

	
6,944

	
6,936

	
6,852

	
6,852

	
6,982

	
Commissions

	
859

	
2,156

	
1,944

	
722

	
976

	
4,022

	
Company Bonus (non-commissioned employees)

	 	
2,959

	 	 	
2,959

	 
	
Benefits

	
706

	
707

	
707

	
707

	
708

	
708

	
Other employee related costs (recruitment, training, etc.)

	
104

	
125

	
122

	
99

	
140

	
120

	
Contract Labor

	
4,032

	
4,032

	
4,032

	
4,032

	
4,032

	
4,232

	
Marketing Trade Show Sponsorship

	
154

	
154

	
154

	
154

	
154

	
154

	
Other Marketing and Advertising

	
359

	
359

	
359

	
359

	
359

	
359

	
Travel and Entertainment

	
341

	
341

	
276

	
276

	
276

	
277

	
Facilities / Rent

	
398

	
398

	
398

	
398

	
398

	
398

	
Computer & Office Supplies, telecom, etc.

	
496

	
502

	
503

	
501

	
518

	
515

	
Annual Insurance Payment

	 	 	 	 	
200

	 
	
SW License Payment - Microsoft

	 	 	
250

	 	 	
250

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	
700

	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,313

	
1,313

	
1,313

	
1,313

	
1,313

	
1,313

	
Audit

	
147

	
122

	
114

	
118

	
118

	
114

	
Other

	
330

	
333

	
337

	
339

	
360

	
369

	
Operating Taxes

	
120

	
45

	
1,000

	
136

	
53

	
900

	
Other Opex

	
19

	
19

	
19

	
19

	
19

	
19

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
16,269

	
20,509

	
18,465

	
16,025

	
19,434

	
21,431

	
Capex

	
164

	
164

	
264

	
164

	
164

	
164

	
Facility

	
2,363

	
5,075

	
2,923

	
2,596

	
2,581

	
2,878

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
Nov-2018

	
Dec-2018

	
Jan-2019

	
Feb-2019

	
Mar-2019

	
Apr-2019

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
29,557

	
28,078

	
20,037

	
44,504

	
46,294

	
15,935

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
888

	
0

	
0

	
734

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
29,557

	
28,966

	
20,037

	
44,504

	
47,028

	
15,935

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
6,836

	
6,835

	
6,988

	
7,350

	
7,178

	
7,248

	
Commissions

	
820

	
1,120

	
4,731

	
572

	
739

	
2,752

	
Company Bonus (non-commissioned employees)

	 	
2,959

	 	 	
2,959

	 
	
Benefits

	
708

	
709

	
742

	
742

	
742

	
742

	
Other employee related costs (recruitment, training, etc.)

	
164

	
102

	
169

	
102

	
105

	
109

	
Contract Labor

	
4,412

	
4,512

	
4,783

	
5,925

	
5,745

	
5,745

	
Marketing Trade Show Sponsorship

	
154

	
154

	
154

	
154

	
190

	
190

	
Other Marketing and Advertising

	
359

	
359

	
373

	
428

	
428

	
428

	
Travel and Entertainment

	
277

	
277

	
277

	
907

	
912

	
287

	
Facilities / Rent

	
398

	
398

	
399

	
399

	
399

	
399

	
Computer & Office Supplies, telecom, etc.

	
513

	
531

	
524

	
541

	
546

	
546

	
Annual Insurance Payment

	
600

	 	 	 	 	 
	
SW License Payment - Microsoft

	 	 	
275

	 	 	
275

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	 
	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,313

	
1,313

	
1,313

	
1,313

	
1,302

	
1,290

	
Audit

	
114

	
112

	
115

	
115

	
139

	
169

	
Other

	
355

	
354

	
356

	
358

	
365

	
372

	
Operating Taxes

	
189

	
47

	
1,355

	
370

	
122

	
1,114

	
Other Opex

	
19

	
19

	
19

	
19

	
19

	
20

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
17,230

	
19,801

	
22,574

	
19,294

	
21,891

	
21,685

	
Capex

	
164

	
164

	
164

	
150

	
150

	
150

	
Facility

	
2,550

	
2,536

	
2,833

	
2,504

	
2,491

	
2,787

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
May-2019

	
Jun-2019

	
Jul-2019

	
Aug-2019

	
Sep-2019

	
Oct-2019

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
28,346

	
53,811

	
27,313

	
35,296

	
31,755

	
17,641

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
734

	
0

	
0

	
734

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
28,346

	
54,545

	
27,313

	
35,296

	
32,489

	
17,641

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
7,164

	
7,215

	
7,204

	
7,116

	
7,115

	
7,232

	
Commissions

	
879

	
2,165

	
1,950

	
739

	
991

	
4,009

	
Company Bonus (non-commissioned employees)

	 	
3,052

	 	 	
3,053

	 
	
Benefits

	
742

	
742

	
742

	
742

	
742

	
742

	
Other employee related costs (recruitment, training, etc.)

	
107

	
130

	
113

	
102

	
145

	
110

	
Contract Labor

	
5,745

	
5,745

	
5,745

	
5,745

	
5,745

	
5,970

	
Marketing Trade Show Sponsorship

	
190

	
190

	
190

	
190

	
190

	
190

	
Other Marketing and Advertising

	
428

	
428

	
428

	
428

	
428

	
428

	
Travel and Entertainment

	
371

	
371

	
887

	
887

	
287

	
287

	
Facilities / Rent

	
399

	
399

	
399

	
399

	
399

	
399

	
Computer & Office Supplies, telecom, etc.

	
550

	
553

	
555

	
557

	
562

	
563

	
Annual Insurance Payment

	 	 	 	 	
200

	 
	
SW License Payment - Microsoft

	 	 	
275

	 	 	
275

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	
750

	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,290

	
1,290

	
1,290

	
1,290

	
1,290

	
1,290

	
Audit

	
151

	
126

	
119

	
122

	
122

	
119

	
Other

	
374

	
378

	
383

	
386

	
407

	
416

	
Operating Taxes

	
214

	
54

	
1,141

	
194

	
68

	
1,145

	
Other Opex

	
20

	
20

	
20

	
20

	
20

	
20

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
18,625

	
22,859

	
21,439

	
18,917

	
21,763

	
23,945

	
Capex

	
150

	
150

	
250

	
150

	
150

	
150

	
Facility

	
2,460

	
4,732

	
2,617

	
2,289

	
2,274

	
2,571

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
Nov-2019

	
Dec-2019

	
Jan-2020

	
Feb-2020

	
Mar-2020

	
Apr-2020

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
35,991

	
39,150

	
23,286

	
48,238

	
57,859

	
17,112

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
734

	
0

	
0

	
969

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
35,991

	
39,884

	
23,286

	
48,238

	
58,828

	
17,112

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
7,089

	
7,089

	
7,218

	
7,594

	
7,420

	
7,491

	
Commissions

	
833

	
1,131

	
4,708

	
574

	
740

	
2,724

	
Company Bonus (non-commissioned employees)

	 	
3,053

	 	 	
3,053

	 
	
Benefits

	
742

	
742

	
775

	
775

	
775

	
775

	
Other employee related costs (recruitment, training, etc.)

	
177

	
105

	
149

	
102

	
105

	
109

	
Contract Labor

	
6,250

	
6,450

	
6,652

	
7,798

	
7,448

	
7,448

	
Marketing Trade Show Sponsorship

	
190

	
190

	
190

	
190

	
190

	
190

	
Other Marketing and Advertising

	
428

	
428

	
443

	
428

	
428

	
428

	
Travel and Entertainment

	
287

	
287

	
287

	
974

	
975

	
287

	
Facilities / Rent

	
399

	
399

	
399

	
399

	
399

	
399

	
Computer & Office Supplies, telecom, etc.

	
566

	
575

	
572

	
577

	
583

	
583

	
Annual Insurance Payment

	
600

	 	 	 	 	 
	
SW License Payment - Microsoft

	 	 	
300

	 	 	
300

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	 
	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,290

	
1,290

	
1,290

	
1,290

	
1,556

	
1,821

	
Audit

	
119

	
116

	
120

	
120

	
141

	
169

	
Other

	
403

	
402

	
405

	
408

	
448

	
488

	
Operating Taxes

	
227

	
60

	
1,385

	
437

	
124

	
1,374

	
Other Opex

	
20

	
20

	
19

	
19

	
19

	
20

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
19,619

	
22,337

	
24,912

	
21,687

	
24,404

	
24,606

	
Capex

	
150

	
150

	
150

	
150

	
150

	
150

	
Facility

	
2,243

	
2,228

	
2,525

	
2,197

	
2,182

	
2,478

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
May-2020

	
Jun-2020

	
Jul-2020

	
Aug-2020

	
Sep-2020

	
Oct-2020

	
with          Judgement -

Cash receipts

	 	 	 	 	 	 
	
From Invoicing

	
38,852

	
65,708

	
26,968

	
38,433

	
39,282

	
20,944

	
From Hartford - Judgement Settlement

	 	 	 	 	 	 
	
From AIG

	 	 	 	 	 	 
	
From Travelers

	
0

	
969

	
0

	
0

	
969

	
0

	
From Scotsdale

	 	 	 	 	 	 
	
Colbeck Debt

	 	 	 	 	 	 
	
Hartford Debt

	 	 	 	 	 	 
	
Equity (Adams Street)

	 	 	 	 	 	 
	
Incremental Colbeck Loan

	 	 	 	 	 	 
	
Others

Sub-total incoming cash

	 	 	 	 	 	 
	
38,852

	
66,677

	
26,968

	
38,433

	
40,251

	
20,944

	
Operating Expenses

	 	 	 	 	 	 
	
Payroll & related taxes

	
7,408

	
7,460

	
7,447

	
7,359

	
7,357

	
7,472

	
Commissions

	
878

	
2,145

	
1,934

	
740

	
988

	
3,964

	
Company Bonus (non-commissioned employees)

	 	
3,149

	 	 	
3,150

	 
	
Benefits

	
775

	
775

	
775

	
775

	
775

	
775

	
Other employee related costs (recruitment, training, etc.)

	
107

	
135

	
113

	
102

	
145

	
110

	
Contract Labor

	
7,448

	
7,448

	
7,448

	
7,448

	
7,448

	
7,698

	
Marketing Trade Show Sponsorship

	
190

	
190

	
190

	
190

	
190

	
190

	
Other Marketing and Advertising

	
428

	
428

	
428

	
428

	
428

	
428

	
Travel and Entertainment

	
396

	
396

	
287

	
287

	
287

	
287

	
Facilities / Rent

	
399

	
399

	
399

	
399

	
399

	
399

	
Computer & Office Supplies, telecom, etc.

	
587

	
588

	
591

	
594

	
600

	
600

	
Annual Insurance Payment

	 	 	 	 	
200

	 
	
SW License Payment - Microsoft

	 	 	
300

	 	 	
300

	
Annual SW License Payment - Salesforce

	 	 	 	 	 	
800

	
Outside Services:

	 	 	 	 	 	 
	
Legal

	
1,821

	
1,821

	
1,821

	
1,821

	
1,821

	
1,821

	
Audit

	
151

	
126

	
119

	
122

	
122

	
119

	
Other

	
491

	
494

	
499

	
502

	
523

	
532

	
Operating Taxes

	
313

	
61

	
1,253

	
241

	
80

	
1,334

	
Other Opex

	
20

	
20

	
20

	
20

	
20

	
20

	
Other (unidentified)

Sub-total Operating expense payments

	 	 	 	 	 	 
	
21,413

	
25,637

	
23,623

	
21,028

	
24,534

	
26,851

	
Capex

	
150

	
150

	
250

	
150

	
150

	
150

	
Facility

	
70

	
8

	
319

	
7

	
6

	
318

	
Ongoing cash payments - Interest and fees

	
Outlook          Final          Plan A

	
Nov-2020

	
Dec-2020

	
with          Judgement -

Cash receipts

	 	 
	
From Invoicing

	
42,785

	
43,578

	
From Hartford - Judgement Settlement

	 	 
	
From AIG

	 	 
	
From Travelers

	
0

	
969

	
From Scotsdale

	 	 
	
Colbeck Debt

	 	 
	
Hartford Debt

	 	 
	
Equity (Adams Street)

	 	 
	
Incremental Colbeck Loan

	 	 
	
Others

Sub-total incoming cash

	 	 
	
42,785

	
44,547

	
Operating Expenses

	 	 
	
Payroll & related taxes

	
7,329

	
7,325

	
Commissions

	
832

	
1,126

	
Company Bonus (non-commissioned employees)

	 	
3,150

	
Benefits

	
775

	
775

	
Other employee related costs (recruitment, training, etc.)

	
187

	
105

	
Contract Labor

	
8,048

	
8,248

	
Marketing Trade Show Sponsorship

	
190

	
190

	
Other Marketing and Advertising

	
428

	
428

	
Travel and Entertainment

	
287

	
287

	
Facilities / Rent

	
399

	
399

	
Computer & Office Supplies, telecom, etc.

	
603

	
610

	
Annual Insurance Payment

	
600

	 
	
SW License Payment - Microsoft

	 	 
	
Annual SW License Payment - Salesforce

	 	 
	
Outside Services:

	 	 
	
Legal

	
1,821

	
1,821

	
Audit

	
119

	
116

	
Other

	
519

	
519

	
Operating Taxes

	
257

	
70

	
Other Opex

	
20

	
20

	
Other (unidentified)

Sub-total Operating expense payments

	 	 
	
22,413

	
25,189

	
Capex

	
150

	
150

	
Facility

	
5

	
5

	
Ongoing cash payments - Interest and fees

 

Annex III

 

SCHEDULE 2.03

 

AMORTIZATION SCHEDULE

Commencing on November 1, 2016, the outstanding principal of the Term Loan shall be repayable on the first Business Day of every month, as set forth below:

 

	
Month

	 	
Amortization Payment

	 
	
November 2016

	 	
$

	
250,000

	 
	
December 2016

	 	
$

	
250,000

	 
	
January 2017

	 	
$

	
500,000

	 
	
February 2017

	 	
$

	
500,000

	 
	
March 2017

	 	
$

	
500,000

	 
	
April 2017

	 	
$

	
500,000

	 
	
May 2017

	 	
$

	
500,000

	 
	
June 2017

	 	
$

	
500,000

	 
	
July 2017

	 	
$

	
1,000,000

	 
	
August 2017

	 	
$

	
1,000,000

	 
	
September 2017

	 	
$

	
1,000,000

	 
	
October 2017

	 	
$

	
1,000,000

	 
	
November 2017

	 	
$

	
1,000,000

	 
	
December 2017

	 	
$

	
1,000,000

	 
	
January 2018

	 	
$

	
1,000,000

	 
	
February 2018

	 	
$

	
1,000,000

	 
	
March 2018

	 	
$

	
1,000,000

	 
	
April 2018

	 	
$

	
1,000,000

	 
	
May 2018

	 	
$

	
1,000,000

	 
	
June 2018

	 	
$

	
1,000,000

	 
	
July 2018

	 	
$

	
1,250,000

	 
	
August 2018

	 	
$

	
1,250,000

	 
	
September 2018

	 	
$

	
1,250,000

	 
	
October 2018

	 	
$

	
1,250,000

	 
	
November 2018

	 	
$

	
1,250,000

	 
	
December 2018

	 	
$

	
1,250,000

	 
	
January 2019

	 	
$

	
1,250,000

	 
	
February 2019

	 	
$

	
1,250,000

	 
	
March 2019

	 	
$

	
1,250,000

	 
	
April 2019

	 	
$

	
1,250,000

	 
	
May 2019

	 	
$

	
1,250,000

	 
	
June 2019

	 	
$

	
1,250,000

	 
	
July 2019

	 	
$

	
1,250,000

	 
	
August 2019

	 	
$

	
1,250,000

	 
	
September 2019

	 	
$

	
1,250,000

	 
	
October 2019

	 	
$

	
1,250,000

	 
	
November 2019

	 	
$

	
1,250,000

	 
	
December 2019

	 	
$

	
1,250,000

	 
	
January 2020

	 	
$

	
1,250,000

	 
	
February 2020

	 	
$

	
1,250,000

	 
	
March 2020

	 	
$

	
1,250,000

	 
	
April 2020

	 	
$

	
1,250,000

	 
	
May 2020

	 	
$

	
1,250,000

	 
	
June 2020

	 	
$

	
1,250,000

	 

provided, that if the Borrowers fail to timely comply with the provision of Section 7.01(t) of the Financing Agreement, the outstanding principal of the Term Loan shall then be repayable on the first Business Day of every month after such failure, as set forth below:

	
Month

	 	
Amortization Payment

	 
	
November 2016

	 	
$

	
250,000

	 
	
December 2016

	 	
$

	
250,000

	 
	
January 2017

	 	
$

	
500,000

	 
	
February 2017

	 	
$

	
500,000

	 
	
March 2017

	 	
$

	
500,000

	 
	
April 2017

	 	
$

	
500,000

	 
	
May 2017

	 	
$

	
500,000

	 
	
June 2017

	 	
$

	
1,750,000

	 
	
July 2017

	 	
$

	
2,250,000

	 
	
August 2017

	 	
$

	
2,250,000

	 
	
September 2017

	 	
$

	
2,250,000

	 
	
October 2017

	 	
$

	
2,250,000

	 
	
November 2017

	 	
$

	
2,250,000

	 
	
December 2017

	 	
$

	
2,250,000

	 
	
January 2018

	 	
$

	
2,250,000

	 
	
February 2018

	 	
$

	
2,250,000

	 
	
March 2018

	 	
$

	
2,250,000

	 
	
April 2018

	 	
$

	
2,250,000

	 
	
May 2018

	 	
$

	
2,250,000

	 
	
June 2018

	 	
$

	
2,250,000

	 
	
July 2018

	 	
$

	
2,500,000

	 
	
August 2018

	 	
$

	
2,500,000

	 
	
September 2018

	 	
$

	
2,500,000

	 
	
October 2018

	 	
$

	
2,500,000

	 
	
November 2018

	 	
$

	
2,500,000

	 
	
December 2018

	 	
$

	
2,500,000

	 
	
January 2019

	 	
$

	
2,500,000

	 
	
February 2019

	 	
$

	
2,500,000

	 
	
March 2019

	 	
$

	
2,500,000

	 
	
April 2019

	 	
$

	
2,500,000

	 
	
May 2019

	 	
$

	
2,500,000

	 
	
June 2019

	 	
$

	
2,500,000

	 
	
July 2019

	 	
$

	
2,500,000

	 
	
August 2019

	 	
$

	
2,500,000

	 
	
September 2019

	 	
$

	
2,500,000

	 
	
October 2019

	 	
$

	
2,500,000

	 
	
November 2019

	 	
$

	
2,500,000

	 
	
December 2019

	 	
$

	
2,500,000

	 
	
January 2020

	 	
$

	
2,500,000

	 
	
February 2020

	 	
$

	
2,500,000

	 
	
March 2020

	 	
$

	
2,500,000

	 
	
April 2020

	 	
$

	
2,500,000

	 
	
May 2020

	 	
$

	
2,500,000

	 
	
June 2020

	 	
$

	
2,500,000

	 

Annex IV

 

SCHEDULE 6.01(G)

 

Prior to the 2015 audit, the Parent changed auditors from BDO USA, LLP  to KPMG. The financial statements originally audited by BDO for 2014 will be replaced with the 2014 financial statements audited by KPMG.  As a consequence of KPMG’s  re-audit of 2014, certain adjustments to the BDO audited financial statements are expected.  The adjustments, for the most part, are due to changes in estimates and differing opinions of the two audit groups as pertains to certain accounting policies.  The differences are not deemed to be significant and the Parent will comply with the views of its current auditors.

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