Document:

ex10-99p.htm

EXHIBIT 10.99p

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Employment Agreement ("Agreement"), is entered into as of October 5, 2011 with the effective date of October 24, 2011 (the "Effective Date") by and between Location Based Technologies, a Nevada Corporation ("Company"), and Mr. Gregory Gaines ("Executive").

 

W I T N E S S E T H:

 

WHEREAS, Company is a technology and telecommunications company that has designed and patented wireless communications products and systems combining advanced wireless technology to provide features of location based devices; and

 

WHEREAS, Company wishes to assure itself of the services of Executive for the period and upon the terms and conditions provided in this Agreement; and

 

WHEREAS, Executive is willing to serve in the employ of Company on a full-time basis for said period and upon the terms and conditions provided in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

 

1.           Employment.

 

a.           Term and Title.  Subject to the terms and conditions of this Agreement, Company hereby agrees to employ Executive as Chief Marketing and Sales Officer, or in such other responsible or additional executive capacity as set forth herein, commencing on the Effective Date and continuing in full force and effect until the First (1st) anniversary of the Effective Date; additional one-year periods may be extended prior to the end of the Term then in effect (“Employment Term”) upon agreement of both parties.

 

b.           Duties and Responsibilities.  During the Employment Term, Executive agrees to devote his working time and attention to the business and affairs of Company and to faithfully and efficiently perform all reasonable responsibilities and duties commensurate with his position in Company to the best of his skill and abilities, in a competent and professional manner.  Executive agrees to fulfill such general management duties and responsibilities as are consistent with his position.

 

c.           Exclusive Services.  During the Employment Term, Executive further agrees not to engage in any business or perform any services that are competitive with the business of or services provided by Company or that may be deemed to constitute a conflict of interest.  Notwithstanding anything to the contrary contained in this Section 1(c), Executive shall not be prohibited from (i) rendering services to relatives, charitable or community organizations; (ii) managing his personal investments in such manner as to not interfere with the performance of his duties hereunder; or (iii) owning no more than  4.99% of the equity securities of a corporation or other entity,  whose securities are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

 

2.           Compensation; Benefits.  During the Employment Term, Executive shall be entitled to the compensation package and benefits provided below:

 

  

  

  

 

a.           Base Salary and Stock Compensation.  During the Employment Term, in full consideration for the services to be rendered by Executive and in complete discharge of Company's salary obligations hereunder, Company shall pay to Executive a base salary ("Base Salary") of Thirteen-Thousand five hundred dollars ($13,500) per month, which amount shall be paid to Executive in accordance with Company's payroll policies as in effect from time to time for senior executives of Company, subject to all standard payroll deductions, if any.

 

b.           Commissions.  Each quarter, the Executive will receive a commission payout which will be based on achieving specific annual sales targets (“Revenue Target”) based on the gross sales of the Company. Gross sales shall be determined by the value of purchase orders received by the Company. The Revenue Targets that are established by the Board and are as follows:

 

1.  Prorata payment based on the percent of Revenue Target achieved during the initial 1 year Term of this Agreement.  The Revenue Target shall be $28,000,000 with “at risk” compensation of $150,000. So, for example, if Company acheives gross sales of $10,000,000 (which equals 37.5% of the Revenue Target), during the initial 1 year Term of this Agreement, Executive shall receive 35.7% of his, “at risk” compensation, or $53,571.42.

 

2.  Commission payments will be made to Executive within thirty (30) days after the end of each quarter in which the commission was earned.

 

d.           Stock Incentive Plan/Options for Performance. Executive shall be entitled to participate in the Stock Incentive Plan (“Plan”) of the Company on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan.

In addition, stock options with a  strike price of FMV shall be granted for the initial milestone. Subsequent option prices will be established by the Board at or near the time of milestone achievement or as otherwise provided in the Plan:

1.  100,000 options upon signing the Employment Agreement.

2.  100,000 options upon achieving $14,000,000 in Gross Sales.

3.  75,000 options upon achieving $21,000,000 in Gross Sales.

4.  75,000 options upon achieving $28,000,000 in Gross Sales.

5.  250,000 options upon achieving 125% of Revenue Target or $35,000,000.

Upon the sale of 50.1% or more of the Company (“Company Sale”), the next tiered award above what has been achieved to date will be accelerated and awarded to the Executive. If the Company Sale is completed within eight (8) months of the signing of this Agreement, Executive shall  be entitled to a minimum of 275,000 options, even if Executive has not achieved the corresponding milestones listed above.

 

e.          Expenses.  Company recognizes that in connection with Executive's performance of Executive's duties and obligations under this Agreement, Executive shall incur certain expenses of a business character.  Company shall reimburse Executive for all ordinary and reasonable expenses incurred by Executive in connection with performance of his duties hereunder, provided that Executive submits to Company substantiation of such expenses.

 

f.          Fringe Benefits/Insurance.  Executive shall be entitled to participate in any and all benefits and perquisites as are generally provided by the Company for the benefit of its executive employees including, but not limited to, eligibility for participation in any group life, health, dental, vision, hospitalization, disability or accident insurance, pension plan, retirement savings plan, 401(k) plan, or other such benefit plan or policy which may presently be in effect or which may hereafter be adopted by the Company; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy, or to preclude the Company from amending or terminating any plan or policy.

 

  

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g.          Vacation and Holidays.  Executive shall be entitled to 3 weeks paid vacation per year.  Executive shall also be entitled to all paid holidays given by Company to its employees.

 

3.          Termination of Employment.

 

a.          Termination upon Death or Incapacity.  Executive's employment hereunder shall terminate upon his death. If, as a result of Executive's incapacity due to physical or mental illness, Executive shall have been absent from his duties hereunder on a full-time basis for the entire period of two consecutive months, and within thirty (30) days after written notice of termination is given, Executive shall not have returned to the performance of his duties hereunder on a full-time basis, the Company may terminate Executive's employment hereunder.

 

b.          Termination by Executive-Resignation.  Executive may resign his current position with Company and thereby terminate his employment, for any reason by giving Company 30 days advance written notice.

 

c.          Termination for Cause.  Notwithstanding anything to the contrary contained in this Agreement, Company may, by written notice to Executive, immediately terminate Executive's employment for "Cause."  For purposes of this Agreement, "Cause" shall mean that one of the following events (each, a "Cause Event") shall have occurred after the Effective Date:  (i)  Executive's ongoing material breach of a material provision of this Agreement, following written notice of such breach from the board of directors of Company and a reasonable period of time to cure; (ii) chronic alcoholism or any other form of addiction that prevents Executive from performing the essential functions of his position with a reasonable accommodation; (iii) gross negligence or willful misconduct of the Executive in connection with carrying out the performance objectives of the Company that have been conveyed to the Executive in writing.

 

d.          Suspension for Cause.  Company may, by written notice to Executive, suspend the employment of Executive only for Cause.  If Company exercises such right of suspension, Executive's obligation to render services, and the Company's obligation to pay Executive's Base Salary, shall be suspended for the period of time set forth in the notice; but in no event shall such suspension exceed a period of time equal to 3 consecutive months.  Company may, in its reasonable discretion by written notice, terminate the employment of Executive at or during the suspension period.

 

e.          Termination without Cause by Company.  Without limiting the foregoing, “Termination Without Cause” may occur under any of the following circumstances:  (i) termination of Executive’s full-time employment hereunder for any reason other than set forth in Sections 3(a) through (d) above; (ii) failure to elect or re-elect, or appoint or re-appointment, Executive as Chief Marketing and Sales Officer of the Company; (iii) termination of Executive’s full-time employment pursuant to Company’s unfettered discretion.

 

  

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4.           Rights Upon Termination.

 

a.        Upon termination of Executive's employment pursuant to Sections 3(a) through Section 3(e) hereof, Executive shall receive (i) any salary or monies previously due and owing to Executive and remaining unpaid and all other salary and monies due for amounts earned up to and including the date of termination; (ii) outstanding reimbursable business expenses; (iii) all earned but unused vacation time; (iv) and all commissions that are due, accrued or that will be due for the quarter ending on or after the date of termination for Gross Sales generated by Executive up to and including the date of termination.

 

b.        In addition to the amounts that Executive is entitled to receive pursuant Section 4 (a) hereof, if Executive’s employment is terminated without cause under Section 3(e), Executive shall be entitled to receive Severance Pay from Company for a period (the “Severance Period”) equal to the lesser of (i) twelve months or (ii) the number of months (including fractional amounts for any period that is less than a complete month) from the Effective Date through the date of termination. The amount of Severance Pay to be paid to Executive each month shall be equal to Executive's monthly Base Salary and automobile allowance (adjusted for any fractional month hereunder) at the time the Agreement is terminated, less applicable payroll tax withholding. Severance pay shall be due and payable regardless of whether or not Executive becomes employed during such Severance Period.

 

c.         Sole Obligations of Company.  Company shall have no other contractual obligations to Executive upon termination of Executive's employment for any reason, except as explicitly set forth in this Section 4 of this Agreement.

 

5.           Cooperation Following Termination.

 

Executive agrees that, following notice of termination of his employment with Company, he/she will cooperate fully with Company in all matters relating to the completion of his pending work on behalf of Company and the orderly transition of such work to such other officer as Company may designate.  Executive further agrees that during and following the termination of his employment with Company, s/he will cooperate fully with Company as to any and all claims, controversies, disputes or complaints over which he has any knowledge other than his or her employment relationship with Company; provided, however, Executive will be reimbursed by Company for any out of pocket expenses incurred pursuant to his duties under this Section 5 and reasonably compensated for his time.  Such cooperation includes, but is not limited to, providing Company with all information known to him/her related to such claims, controversies, disputes or complaints and appearing and giving testimony in any forum.

 

  

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6.           Confidential Information.

 

a.           Company Information.  Executive acknowledges that during the course of employment, Executive will have access to information about Company and that Executive's employment with Company shall bring Executive into close contact with proprietary information of Company.  In recognition of the foregoing, Executive agrees at all times during and following Executive's employment with Company, to hold in confidence, and not to use, except for the benefit of Company, or to intentionally disclose to any person, firm, corporation or other entity without written authorization of Company, any "Confidential Information" of Company which Executive obtains or creates.  Further, Executive shall not solicit customers, suppliers or vendors of Company to compete, directly or indirectly, therewith following the conclusion of his employment. Executive understands that "Confidential Information" means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists, prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawing, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to Executive by Company in writing or by drawings of parts or equipment, or created by Executive during the period of Executive 's employment (the "Employment Period").  Executive understands that "Confidential Information" includes information pertaining to any aspects of Company's business which is either information not known by actual or potential competitors of Company or is proprietary information of Company or its customers or suppliers, whether of a technical nature or otherwise.  Executive further understands that Confidential Information does not include any of the foregoing items which have become publicly known and made generally available through no wrongful act of Executive.

 

b.           Third Party Information. Executive recognizes that Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on Company's part to maintain the confidentiality of such information and to use such information only for certain limited purposes.  Executive agrees to hold all such confidential or proprietary information in confidence and not to intentionally disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for Company consistent with Company's agreement with such third party.

 

7.           Inventions.

 

a.           Inventions Retained and Licensed.  Executive represents and warrants to Company that there are no inventions, original works of authorship, developments, improvements, or trade secrets which were made by Executive prior to the commencement of his employment with the Company under this Agreement (collectively, "Prior Invention(s)"), which belong solely to Executive or belong to Executive jointly with another, which relate in any way to any of Company's proposed businesses, products or research and development, and which are not assigned to Company hereunder.  If, in the course of the Employment Period, Executive incorporates into a Company product, process or machine a Prior Invention owned by Executive, Company is hereby granted and shall have a non-exclusive, non-royalty-based, license to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such Company product, process or machine.

 

b.           Assignment of Inventions.  Executive agrees that Executive will promptly make full written disclosure to Company, will hold in trust for the right and benefit of Company, and hereby assigns to Company, or its designee, all rights, title and interests throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registerable under copyright or similar laws, which Executive may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice during the Employment Period that (i) relate at the time of conception or development to the actual or demonstrably proposed business or research and development activities of Company; (ii) result from or relate to any work performed for Company during normal business hours; and (iii) are developed through the use of Confidential Information (collectively, "Inventions").  Executive further acknowledges that all Inventions, which are made by Executive (solely or jointly with others) within the scope of and during the period of Executive’s employment with Company, are "works made for hire" and are compensated by the Base Salary, unless regulated otherwise by a separate agreement between the “Company” and the “Executive”.

 

  

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c.           Inventions on Executive's Own Time.  The provisions of Section 7(a) and 7(b) above do not apply to any invention which qualifies fully under the provisions of California Labor Code §2870, which provides as follows:§ 2870 - Invention on Own time - Exemption from Agreement:

 

(1).  Any provision in an employment agreement which provides that an Executive shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the Executive developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either (i) relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (ii) result from any work performed by the Executive for the employer.

 

(2).  To the extent a provision in an employment agreement purports to require an Executive to assign an invention otherwise excluded from being required to be assigned under subdivision (a) of Section 2870, the provision is against the public policy of this state and is unenforceable.

 

d.           Patent and Copyright Rights.  Executive agrees to assist Company, or its designee, at Company's expense, in every reasonable way to secure Company's rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordation’s, and all other instruments which are necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights, or other intellectual property rights relating thereto.

 

  

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8.           Return of Company Documents.  Executive agree that, at the time of termination of employment with Company for any reason, Executive will deliver to Company (and will not keep in my possession, recreate or deliver to anyone else) any and all Confidential Information and all other documents, materials, information or property belonging to Company, its successors or assigns. Executive further agrees that any property situated on Company's premises and owned by Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.

 

9.           Injunctive Relief.  Executive expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in Sections 6 and 7 of this Agreement will result in substantial, continuing and irreparable injury to Company.  Therefore, Executive hereby agrees that, in addition to any other remedy that may be available to Company, Company shall be entitled to injunctive relief, specific performance or other equitable relief by a court of appropriate jurisdiction in the event of any breach of threatened breach of the terms of this Agreement.

 

10.           Miscellaneous.

 

a.          Governing Law. This Agreement is deemed to be entered into and performed in Orange County, California.  Except as otherwise explicitly noted, this Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict of law rules of California.  The parties hereby submit to the exclusive jurisdiction of the state of California in connection with any dispute arising from or related to this Agreement, and Orange County shall be the sole venue therefore.

 b.          Modifications and Amendments.  This Agreement may be modified or amended only by a written instrument executed by the parties hereto and approved in writing by a duly authorized officer of Company and signed by the Executive impacted,. No modification or amendment shall be effective absent such approval.

c.          Independence and Severability.  Each of the rights enumerated above shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to Company at law or in equity.  If any of the covenants contained herein or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants or rights or remedies which shall be given full effect without regard to the invalid portions.  If any of the covenants contained herein are held to be invalid or unenforceable because of the duration of such provision or the area or scope covered thereby, Executive agrees that the court or arbitrator making such determination shall have the power to reduce the duration, scope and/or area of such provision and in its reduced form said provision shall then be enforceable.

d.          Notice.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given as of the date if delivered in person or by telecopy, on the next business day, if sent by a nationally recognized overnight courier service, and on the third business day if mailed by registered mail, return receipt requested, postage prepaid, and if addressed to the Company then at its principal place of business, or if addressed to Executive, then his last known address on file with the Company.

e.          Waiver.  The observation or performance of any condition or obligation imposed upon Executive hereunder may be waived only upon the written consent of Company and the Executive.  Such waiver shall be limited to the terms thereof and shall not constitute a waiver of any other condition or obligation of Executive under this Agreement.

 

  

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f.          Assignment.  This Agreement is personal to Executive and shall not be assigned by him/her. Company may assign its rights hereunder to (a) any corporation or other legal entity resulting from any merger, consolidation or other reorganization to which Company is a party or (b) any corporation, partnership, association or other legal entity or person to which Company may transfer all or substantially all of the assets and business of Company existing at such time.  All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

g.          Headings.  The headings have been inserted for convenience only and are not to be considered when construing the provisions of this Agreement.

h.          Counterparts.  This Agreement may be executed in one or more counterparts and transmitted by facsimile, a copy of which shall constitute an original and each of which, when taken together, shall constitute one and the same agreement.

i.          Survival of Provisions.  Notwithstanding anything to the contrary in this Agreement, Sections 5, 6, 7, 8, 9 and 10 of this Agreement shall survive the termination of this Agreement for the period of time so specified or implied in such Sections, respectively.

j.          Arbitration.  Any controversy, dispute or claim of any nature whatsoever involving Company and Executive or Executive's spouse or family, including without limitation any claims arising out of, in connection with, or in relation to this Agreement or Executive's employment with Company, any claims of unlawful discrimination, sexual harassment or wrongful termination, and any issues of arbitrability of any such disputes, will be resolved by final and binding arbitration before the American Arbitration Association in Orange County, California, in accordance with its employee arbitration rules.  Both parties herein waive jury trial, court trial, and all discovery rights, except for limited deposistions that are approved by the assigned arbitrator.  Said waiver is made to the fullest extent possible and is made after each party has had the opportunity to and been advised to seek independent cousel regarding this matter and all of the provisions contained in this agreement.  Said waiver of jury trial and of discovery rights is done voluntarily, knowingly, and is binding in every respect.  Further, the parties agree that any dispute specified in this paragraph shall be resolved solely and exclusively by arbitration.  Each party shall share arbitration fees equally, unless a separate allocation is required by law.  By initialing the space immediately below, the parties agree to the terms specified in this paragraph.

	 	
___________ 

	
_____________

	 	
Company 

	
Executive

 

k.          Severability.  If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement shall not be affected.Waivers.  A waiver or breach of cevenanat or provision in this Agreement shall not be deemed a wiaver of an other covenant or provision in this Agreement, and no waiver shall be valid unless in writing and executed by the waiving party.  An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act.

l.          Attorney Fees.  If litigation is commenced between the parties, the Prevailing Party in that litigation shall be entitled to recover from the nonprevailing party all reasonable attorney fees and costs.  “Prevailing Party” shall include without limitation a party who dismissed an action in exchange for sums allegedly due; the party who receives performance from the other party for an alleged breach or contract or a desired remedy where the performance is substantially equal to the relief sought in an action; or the party determined to be the prevailing party by a court of law or arbitrator.

 

  

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m.          Entire Agreement.  This Agreement constitutes the entire understanding between the parties hereto in respect of the employment of Executive by Company, superseding all negotiations, prior discussions, prior written, implied and oral agreements, preliminary agreements and understandings with Company or any of its officers, employees or agents.

 

IN WITNESS WHEREOF, this Agreement is executed and agreed to as of

 

October  5, 2011.

 

EXECUTIVE

 

/s/ Gregory Gaines

Gregory Gaines

Location Based Technologies, Inc.

By: /s/ David M. Morse

David M. Morse

Chief Executive Officer

By: /s/ Desiree Mejia

Desiree Mejia

Chief Operating Officer

 

 

9ex10-1.htm

Exhibit 10.1

 

EXECUTION VERSION

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

AND

SCHEDULE TO LOAN AND SECURITY AGREEMENT

 

This Sixth Amendment to the Loan and Security Agreement and Schedule to the Loan and Security Agreement (“Amendment”) is made as of this 26th day of October, 2011 by and among EMTEC, INC. (a Delaware corporation), EMTEC, INC. (a New Jersey corporation), EMTEC VIASUB LLC (a Delaware limited liability company), EMTEC FEDERAL, INC. (formerly known as WESTWOOD COMPUTER CORPORATION) (a New Jersey corporation), EMTEC GLOBAL SERVICES LLC (formerly known as EMTEC FEDERAL SERVICES LLC, formerly known as WESTWOOD FEDERAL SERVICES, LLC) (a Delaware limited liability company),  LUCEO, INC. (an Illinois corporation), EBUSINESS APPLICATION SOLUTIONS, INC. (a New Jersey corporation), AVEEVA, INC. (a Delaware corporation), SECURE DATA, INC. (a Delaware corporation), EMTEC INFRASTRUCTURE SERVICES CORPORATION (a Delaware corporation), KOAN-IT (US) Corp. (a Delaware Corporation), COVELIX, INC. (a Delaware corporation, DINERO  SOLUTIONS, LLC (a Georgia limited liability company) and GNUCO LLC d/b/a Emerging Solutions LLC (a Delaware limited liability company) (jointly and severally, “Borrower”), whose address is 100 Matsonford Road, Two Radnor Corporate Center, Suite 420, Radnor PA 19087, and DE LAGE LANDEN FINANCIAL SERVICES, INC. ("DLL"), whose address is 1111 Old Eagle School Road, Wayne,  PA 19087.

 

BACKGROUND

 

A.           Existing Borrowers and DLL are party to that certain Loan and Security Agreement dated December 7, 2006 (as it may otherwise have been and may hereafter be modified, amended, extended, restated, supplemented or replaced, from time to time, the “Loan and Security Agreement”), including that certain Schedule to the Loan and Security Agreement dated December 7, 2006 executed by Borrower and DLL in connection with and as a part of the Loan and Security Agreement (as it may otherwise have been and may hereafter be modified, amended, extended, restated, supplemented or replaced, from time to time, the “Schedule”), pursuant to which DLL established certain credit facilities in favor of Borrower.  The Loan and Security Agreement, collectively together with the Schedule, as either may otherwise have been and may hereafter be modified, amended, extended, restated, supplemented or replaced, from time to time, are referred to herein collectively as the “Loan Agreement”.   The Loan Agreement and all instruments, documents and agreements executed in connection therewith or related thereto are referred to herein collectively as the “Existing Loan Documents.”  All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Loan Agreement.

 

B.           Borrower and DLL have mutually agreed to make certain amendments and modifications to the Loan Agreement and the credit facilities established thereunder to provide for (i) a temporary increase in the Total Facility from $32,000,000 to $35,000,000 for the remainder of 2011 and (ii) certain related amendments agreed to by Borrower in consideration of such temporary increase, all in accordance with the provisions of and on and subject to the terms and conditions set forth in this Amendment.

 

 

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NOW, THEREFORE, with the foregoing Background incorporated by reference and made a part hereof and intending to be legally bound, the parties agree as follows:

1.             Amendments to the Schedule.  Upon the effectiveness of this Amendment as provided for in Section 3 below, the Schedule is hereby amended and modified in the following manner.

 

(A)           Amendments to Definition of Fixed Excess Collateral Reserve.  The definition of “Fixed Excess Collateral Reserve” in Section 1 of the Schedule titled “DEFINITIONS” is hereby amended and restated as follows:

 

“Fixed Excess Collateral Reserve” means a Loan Reserve in the amount of (i) at all times through October 31, 2011, $1,000,000, (ii) from November 1, 2011 through November 30, 2011, $2,000,000, (iii) from December 1, 2011 through December 31, 2011, $2,500,000, (iv) from January 1, 2012 through January 31, 2012, $3,000,000, (v) from February 1, 2012 through February 29, 2012, $3,250,000 and (v) from March 1, 2012 and at all times thereafter, (x) $3,250,000 plus (y) an amount equal to $250,000 mulitplied by the number of calendar months that have commenced on or after March 1, 2012.

 

(B)           Amendment for Temporary Increase of Total Facility Amount.  Section 2.1 of the Schedule titled “TOTAL FACILITY” is hereby amended and restated as follows:

 

The Total Facility amount shall be (i) from October 26, 2011 through December 31, 2011, Thirty Five Million Dollars ($35,000,000) and (ii) at all times from and after January 1, 2012, Thirty Two Million Dollars ($32,000,0000).

 

(C)           Amendment for Temporary Increase of Revolving Credit Limit.  In the subsection entitled “Revolving Credit Loans” of Section 2.2 of the Schedule titled “LOANS”, the subparagraph (a) of the first paragraph thereof shall be amended and restated as follows:

 

(a)      the amount equal to (x) from October 26, 2011 through December 31, 2011, Thirty Five Million Dollars ($35,000,000) and (y) at all times from and after January 1, 2012, Thirty Two Million Dollars ($32,000,0000) minus the outstanding principal balance under any Canadian Credit Facility as of such date (provided that, to the extent the loans and advances of credit under any such Canadian Credit Facility are denominated in any currency other than US Dollars, the amount of the principal balance outstanding under such Canadian Credit Facility as of any date shall be the actual amount outstanding as of such date in the applicable currency as converted into the US Dollar equivalent thereof based on prevailing market currency exchange rates as of such date) (the “Revolving Credit Limit”), less any Loan Reserves, or

 

 

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(i)      In Section 2.2 of the Schedule titled “LOANS”, the first paragraph of the subsection entitled “Floorplan Loans” shall be amended and restated as follows:

 

Floorplan Loans:  A floorplan line of credit consisting of loans made to Borrower against Floorplanned Inventory (“Floorplan Loans”) of Borrower in an aggregate principal amount not to exceed as of any date the amount equal to (x) from October 26, 2011 through December 31, 2011, Thirty Five Million Dollars ($35,000,000) and (y) at all times from and after January 1, 2012, Thirty Two Million Dollars ($32,000,0000) minus the outstanding principal balance under any Canadian Credit Facility as of such date (provided that, to the extent the loans and advances of credit under any such Canadian Credit Facility are denominated in any currency other than US Dollars, the amount of the principal balance outstanding under such Canadian Credit Facility as of any date shall be the actual amount outstanding as of such date in the applicable currency as converted into the US Dollar equivalent thereof based on prevailing market currency exchange rates as of such date) (“Maximum Floorplan Amount”) less the aggregate amount of any open approvals given by DLL to any Vendor of Floorplanned Inventory that are outstanding as of such date.  No individual Floorplan Loan shall exceed one hundred percent (100%) of the Vendor’s invoice price for the applicable Floorplanned Inventory financed through such Floorplan Loan.

 

(D)           Amendment to Correct Leverage Ratio.  Section 6.1.13 of the Schedule titled “Financial Covenants” is hereby amended by amending and restating in its entirety the paragraph thereof entitled “Total Funded Senior Debt to Adjusted EBITDA Ratio” as follows:

 

Total Funded Senior Debt to Adjusted EBITDA Ratio.  Borrower and its Consolidated Subsidiaries shall maintain, as of the last Business Day of each fiscal quarter, a ratio of (i) Total Funded Senior Debt on such date to (ii) Adjusted EBITDA for the trailing twelve (12) month fiscal measurement period ending as of the last day of such fiscal quarter, of not more than the level in the right hand column below for each period set forth in the corresponding left hand column below:

 

	
Fiscal Quarter Ending On:

	
Ratio

 

	
November 30, 2011

	
4.0 to 1.0

	
February 28, 2012

	
3.5 to 1.0

	
May 31, 2012

	
3.5 to 1.0

	
August 31, 2012

	
4.0 to 1.0

	
November 30, 2012

	
4.0 to 1.0

	
February 28, 2013

	
3.5 to 1.0

	
May 31, 2013

	
3.5 to 1.0

	
August 31, 2013

	
3.5 to 1.0

 

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2.           Covenant Regarding Future Consent to Additional Subordinated Indebtedness.  Borrower has advised DLL that Borrower has entered into discussions with Peachtree II, L.P. (“Peachtree”) regarding the possible extension of $3,000,000 in additional Subordinated Debt by Peachtree to Borrower, as such discussions are further described and summarized in that certain Addendum dated September 14, 2011 between Emtec Parent and Peachtree (the “Peachtree Addendum”), a copy of which has been provided by Borrower to DLL.  The parties hereto acknowledge and agree that (i) the incurrence of any such additional Subordinated Debt as contemplated by the Peachtree Addendum and/or the granting of any liens to secure the same without the prior written consent of DLL would be a breach of Section 6.2.11 and Section 6.2.17 of the Loan Agreement that would result in the occurrence of an Event of Default, (ii) DLL has not yet granted, and is not granting pursuant to this Amendment, such consent and (iii) DLL hereby reserves and preserves all of its rights and discretion under the Loan Agreement to consent to and approve (or not to consent to or approve) the terms and conditions of such additional Subordinated Debt and/or any liens granted to secure the same and to consent to and approve (or not to consent to or approve) the terms and conditions of the subordination thereof in favor of the repayment of the Obligations (and the subordination of any liens granted in connection therewith).  Without contradicting or limiting any of the foregoing, and as consideration for the amendments to the Loan Agreement provided for herein, Borrower hereby acknowledges and agrees that at a minimum, no such consent shall be given by DLL unless Borrower shall agree, at the time such consent is granted, that upon receipt by Borrower of the proceeds of any such additional Subordinated Debt from Peachtree, Borrower shall immediately make an repayment and prepayment of the outstanding principal amount of the Revolving Credit Loans in an amount of not less than $2,000,000.

 

3.            Effectiveness Conditions.          This Amendment shall be effective upon the satisfaction of the following conditions (any and all Loan Documents, agreements, documents, contracts, certificates, authorizing resolutions, etc. required to be delivered below must be satisfactory in form and substance, and on terms and conditions acceptable to, DLL and its counsel in their Permitted Discretion) (the “Effectiveness Conditions”):

 

(A)           execution and delivery of this Amendment by all parties hereto;

 

(B)           execution and delivery by Borrower  to DLL of (i)  an Amended and Restated Secured Revolving Credit Note in the maximum principal amount of $35,000,000 and (ii) an Amended and Restated Secured Floorplan Loan Note in the maximum principal amount of $35,000,000;

 

 

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(C)           Delivery to DLL of a certificate of the secretary or assistant secretary of each Borrower entity:  (i) certifying the name, title and signature of the officer of such Borrower entity executing this Amendment and/or any other related instrument, document or agreement on behalf of such Borrower entity, (ii) certifying either (z) that there has been no change to the certificate/articles of incorporation and bylaws (or other equivalent organizational documents) since the original closing on the Loan and Security Agreement on December 7, 2006 (or, in the case of any such Borrower entity that was not an original signatory to the Loan Agreement, since the date such Borrower entity was joined as one of the Borrower entities under the Existing Loan Documents) and that the certified copies of such Borrower entity’s organizational documents as delivered to DLL at that time are still in full force and effect or (y) full and complete copies of the certificate/articles of incorporation and bylaws or other equivalent organizational documents (and including all amendments thereto) of such Borrower entity as in effect on the date of such certificate as attached thereto (and each such certificate/articles of incorporation (or other equivalent document) shall be a certified copy recently provided by the appropriate governmental official in such Borrower entity’s jurisdiction of organization), and (iii) a copy of the resolutions and/or written actions or consents of the board of directors, the board of managers or the member(s), as applicable, of such Borrower entity authorizing and/or ratifying the execution of this Amendment and/or any other related instrument, document or agreement (including the Amended and Restated Secured Revolving Credit Note, Amended and Restated Secured Floorplan Loan Note) and the performance of the transactions contemplated hereby and thereby; and

 

(D)           Payment by Borrower of (i) an amendment and modification fee of $10,000 (the “Sixth Amendment Fee”), which such fee shall be due and payable, fully earned and non-refundable upon the effective date of this Amendment and (ii) all reasonable fees, costs and expenses (including without limitation any and all reasonable legal fees and expenses) incurred by DLL in the negotiation, preparation and execution of this Amendment.  Borrower hereby authorizes DLL to charge the Borrower’s revolving loan account with the amount of such Sixth Amendment Fee  and all such costs and expenses of DLL in satisfaction thereof, and requests that DLL make one or more Revolving Credit Loan(s) on or after the date hereof in an aggregate amount equal to the total amount of the Sixth Amendment Fee  plus all such costs and expenses, and that DLL disburse the proceeds of such Revolving Credit Loan(s) in satisfaction thereof.

 

4.           Post Closing Covenants.  Borrower acknowledges that as an accommodation to Borrower, DLL has agreed  (i) to close on this Amendment, and to have this Amendment become effective, upon the satisfaction of only the Effectiveness Conditions set forth in Section 3 hereof, without the prior satisfaction of other conditions that DLL would otherwise require as conditions precedent to the effectiveness of this Amendment and (ii) to extend the deadline with respect to certain of the “Post Closing Covenants” specified in Section 7(B) of the Fifth Amendment.  Therefore, in consideration of this agreement and accommodation by DLL, Borrower hereby covenants and agrees Borrower shall cause each of the conditions and covenants set forth in this Section 4 below (the “Post Closing Covenants”) to be fully satisfied and performed to the satisfaction of DLL and its counsel in their Permitted Discretion by the respective deadlines set forth in this Section 4.  Borrower specifically acknowledges and agrees that in the event that any one or more of the Post Closing Covenants is not fully satisfied and performed to the satisfaction of DLL and its counsel in their Permitted Discretion by the applicable deadline therefor set forth in this Section 4, an immediate and automatic Event of Default shall be deemed to have occurred under the Loan Agreement and in consequence thereof, DLL shall immediately and automatically become entitled to exercise all of the rights and remedies available to DLL under the Existing Loan Documents (or any future Loan Documents that may hereafter be executed and delivered by the parties hereto), at law and in equity as a consequence of such an occurrence of such Event(s) of Default under the Loan Agreement (specifically including without limitation all rights and remedies described in Section 7.2 of the Loan Agreement).  The Post Closing Covenants are as follows:

 

 

5

 

 

(A)           No later than October 31, 2011, Borrower shall cause the following Post-Closing Conditions to be satisfied:

 

(i)      Establishment of appropriate Blocked Accounts for Covelix,

 

Inc., Dinero, Inc. and Emerging Solutions and execution and delivery of appropriate blocked account agreements in favor of with respect thereto as required by Section 7(B)(i) of the Fifth Amendment, and the previous deadline of September 30, 2011 for the satisfaction of such requirement as set forth in such Section 7(B)(i) of the Fifth Amendment is hereby deemed retroactively (as of September 30, 2011) extended to October 31, 2011;

 

(ii)      Use its commercially reasonable efforts to deliver a landlord waiver in form and substance acceptable to DLL with respect to each of Borrower’s leased business locations in Suwanee, GA and Jacksonville, FL (which was mistakenly listed as Radnor, PA in Section 7(B)(ii) of the Fifth Amendment) as required by Section 7(B)(ii) of the Fifth Amendment, and the previous deadline of September 30, 2011 for the satisfaction of such requirement as set forth in such Section 7(B)(i) of the Fifth Amendment is hereby deemed retroactively (as of September 30, 2011) extended to October 31, 2011; and

 

(iii)                 Payment by Borrower of all reasonable fees, costs and expenses (including without limitation any and all reasonable legal fees and expenses) incurred by DLL in the documenting and coordinating the satisfaction of the Post Closing Conditions described in this Section 4(A).  Borrower hereby authorizes the DLL to charge the Borrower’s revolving loan account with the amount of all such costs and expenses of DLL in satisfaction thereof, and requests that DLL make one or more Revolving Credit Loan(s) on or after the date hereof in an aggregate amount equal to the total amount of all such costs and expenses, and that DLL disburse the proceeds of such Revolving Credit Loan(s) in satisfaction thereof.

 

(B)           No later than November 15, 2011, Borrower shall cause the following Post-Closing Conditions to be satisfied:

 

(i)      Establishment of appropriate Blocked Accounts for Covelix,

 

Inc., Dinero, Inc. and Emerging Solutions and execution and delivery of appropriate blocked account agreements in favor of with respect thereto as required by Section 7(B)(i) of the Fifth Amendment, and the previous deadline of September 30, 2011 for the satisfaction of such requirement as set forth in such Section 7(B)(i) of the Fifth Amendment is hereby deemed retroactively (as of September 30, 2011) extended to November 15, 2011; and

 

 

6

 

 

(ii)      Payment by Borrower of all reasonable fees, costs and expenses (including without limitation any and all reasonable legal fees and expenses) incurred by DLL in the documenting and coordinating the satisfaction of the Post Closing Conditions described in this Section 4(B).  Borrower hereby authorizes the DLL to charge the Borrower’s revolving loan account with the amount of all such costs and expenses of DLL in satisfaction thereof, and requests that DLL make one or more Revolving Credit Loan(s) on or after the date hereof in an aggregate amount equal to the total amount of all such costs and expenses, and that DLL disburse the proceeds of such Revolving Credit Loan(s) in satisfaction thereof.

 

(C)           No later than November 30, 2011, Borrower shall cause the following Post-Closing Conditions to be satisfied:

 

(i)      Execution and delivery of appropriate “contingent”/”with notification”/”springing” deposit account control agreements with respect to the operating accounts and other Deposit Accounts (excluding Blocked Accounts) of each Borrower entity by the Borrower entities, DLL and the applicable bank(s) at which such operating accounts and other Deposit Accounts are maintained, provided, however, that this Section 4(B)(i) shall not apply to (i) any operating account or other Deposit Account exclusively used for payroll, payroll taxes or other employee wage and benefit payments, (ii) operating accounts or other Deposit Accounts with balances in the aggregate for all such accounts not in excess of $10,000 at any time or (iii) any operating account or other Deposit Account that is already subject to a deposit account control agreement among the applicable Borrower entity, DLL and the applicable bank at which such operating account or other Deposit Account is maintained; and

 

(ii)      Payment by Borrower of all reasonable fees, costs and expenses (including without limitation any and all reasonable legal fees and expenses) incurred by DLL in the documenting and coordinating the satisfaction of the Post Closing Conditions described in this Section 4(C).  Borrower hereby authorizes the DLL to charge the Borrower’s revolving loan account with the amount of all such costs and expenses of DLL in satisfaction thereof, and requests that DLL make one or more Revolving Credit Loan(s) on or after the date hereof in an aggregate amount equal to the total amount of all such costs and expenses, and that DLL disburse the proceeds of such Revolving Credit Loan(s) in satisfaction thereof.

 

5.           Representations and Warranties.          Each Borrower entity  represents and warrants to DLL that:

 

(A)           After giving effect to this Amendment, all warranties and representations made to DLL under the Loan Agreement and all other Existing Loan Documents as to each Borrower entity are accurate in all material respects as though made on the date hereof (except to the extent any such representation and warranty was made only as of a specific, earlier date).

 

(B)           As of the date hereof, Borrower has all requisite power and authority to execute and deliver the Amendment and each other document to be delivered in connection herewith to which it is a party  (including the Amended and Restated Secured Revolving Credit Note, the Amended and Restated Secured Floorplan Loan Note) and to perform all of its Obligations hereunder and under the Loan Agreement and all other Existing Loan Documents as amended hereby and has not taken any steps to wind up, dissolve or otherwise liquidate its assets.

 

 

7

 

 

(C)           As of the date hereof, the execution and delivery by Borrower of this Amendment, and the performance by it of the transactions herein contemplated (i) have been authorized by all necessary corporate action and (ii) do not and shall not constitute a violation of any applicable law or of Borrower’s Articles or Certificate of Incorporation or By-Laws (or, if applicable, Certificate of Formation or Operating Agreement) or any other document, agreement or instrument to which such entity is a party or by which such entity or its assets are bound.

 

(D)           As of the date hereof, each of the Amendment, and any assignment, instrument, document, or agreement executed and delivered in connection herewith, and the Loan Agreement and all other Existing Loan Documents as amended hereby, are the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with its terms subject to the effect of any applicable bankruptcy, fraudulent transfer, moratorium, insolvency, reorganization or other similar laws affecting the rights of creditors generally and the effect of general principles of equity whether applied by a court of equity or law.

 

(E)           As of the date hereof, both immediately prior and after giving effect to this Amendment, no Event of Default, or event that with the passage of time or giving of notice or both will become an Event of Default, exists under the Loan Agreement or any other Existing Loan Documents.

 

6.           Collateral.

 

(A)           Reaffirmation of Liens.  To secure the payment and performance of all of the Obligations when due (specifically including without limitation, all Canadian Guaranty Obligations and all Loans made pursuant to the temporary increases in the Total Facility, Revolving Credit Limit and Maximum Floorplan Amount), Borrower hereby reconfirms and restates its grant under the Loan Agreement and the other Existing Loan Documents of a security interest and lien in favor of DLL and DLL Canadian Lender on all of its Collateral (including all Excess Cash Collateral), whether now owned or hereafter acquired, created or arising and wherever located (but subject to the second paragraph of Section 3.1 of the Loan Agreement).  Borrower hereby confirms and agrees that all security interests and liens granted under the Loan Agreement and the other Existing Loan Documents to DLL and DLL Canadian Lender continue in full force and effect and shall continue to secure the Obligations.  All Collateral remains free and clear of any Liens other than Permitted Encumbrances.  Nothing herein contained is intended to in any manner impair or limit the validity, priority and extent of DLL’s and DLL Canadian Lender’s security interest in and liens upon the Collateral.

 

 

8

 

 

(B)           Confirmation of No Change in Priority.  Without limiting the generality of the foregoing paragraphs (A), Borrower (acknowledges and agrees that the Obligations secured by the Collateral and the grants of security interests and liens in the Collateral by Borrower in favor of DLL and DLL Canadian Lender include all present and future loans, advances, debts, liabilities, obligations, covenants, duties and indebtedness at any time owing by Borrower to DLL (specifically including without limitation all Loans made pursuant to the temporary increases in the Total Facility, Revolving Credit Limit and Maximum Floorplan Amount) or DLL Canadian Lender, whether evidenced by the Loan Agreement, the Canadian Guaranty, any note or other instrument or document or otherwise, whether arising from an extension of credit, opening of a letter of credit, banker's acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including, without limitation, those acquired by assignment and any participation by DLL in Borrower's debts owing to others), absolute or contingent, due or to become due, and that the foregoing would include any such debts, liabilities, obligations and indebtedness owing to DLL from Borrower in connection with any operating or capital lease.

 

(C)           Provisions regarding Collateral Agency.   Borrower  acknowledges and agrees that, for the convenience of Borrower, DLL and each DLL Canadian Lender:  (i) without limiting either the validity, enforceability or perfection of any security interests or liens granted by any Borrower entity directly to any DLL Canadian Lender pursuant to this Amendment, the Loan Agreement or any other Loan Document (specifically including the Existing Pledge Agreements and the Covelix Pledge Agreement (as each such term is defined in the Fifth Amendment)) (in each case now existing or hereafter entered into, and as amended or restated from time to time) or the ability of any DLL Canadian Lender to exercise any rights and remedies available to it as the holder of such security interests and liens, DLL shall act as collateral agent for the benefit of each DLL Canadian Lender, and all security interests and liens granted by any Borrower entity directly to DLL pursuant to this Amendment, the Loan Agreement or any other Loan Document (specifically including the Existing Pledge Agreements and the Covelix Pledge Agreement (as each such term is defined in the Fifth Amendment)) (in each case now existing or hereafter entered into) (all such existing and future Loan Documents pursuant to which any such security interest or lien shall heretofore, now or hereafter be granted by any Borrower entity directly to DLL and/or pursuant to which any such security interest or lien granted by any Borrower entity directly to DLL was or is perfected (specifically including each blocked account or other deposit account control agreement giving DLL “control” (as defined in Article 9 of the Code) over any deposit account of any Borrower entity), in each case as heretofore or hereafter amended or restated from time to time, a “DLL Lien Document”) shall be held by DLL not only for its own benefit but also as collateral agent for the benefit of each DLL Canadian Lender, regardless of whether any such DLL Lien Document shall state that DLL is party thereto in its agency capacity or otherwise make reference to such agency capacity or to DLL Canadian Lender, and regardless of whether any such DLL Lien Document shall make reference to the Loan Agreement without making reference to the Canadian Guaranty, (ii) DLL may exercise all rights and remedies available to it under such DLL Lien Document (or available to it under applicable law (including the Code) or in equity as a result of the execution and delivery of such DLL Lien Document by the applicable Borrower entity or entities) either for its own benefit and/or for the benefit of each DLL Canadian Lender, all in such order and manner as DLL may elect in its sole discretion and (iii) without contradicting or limiting the provisions of the foregoing clause (i) and (ii), DLL may (but shall not be obligated to) in its sole discretion amend any existing UCC-1 financing statements filed by DLL against any Borrower entity to indicate DLL’s status as collateral agent and/or to add any DLL Canadian Lender as an additional secured part (provided that the failure of DLL to exercise its rights under this clause (iii) shall have no adverse effect or implications for DLL’s status as collateral agent or the liens and security interests granted by the Borrower entities directly to any DLL Canadian Lender).  For the avoidance of doubt, nothing in this paragraph shall apply with respect to any security interests or liens granted directly by any Canadian Subsidiary directly to any DLL Canadian Lender.

 

 

9

 

 

7.           Ratification of Loan Documents.  Except as otherwise expressly set forth herein, all of the terms and conditions of the Loan Agreement and the other Existing Loan Documents are hereby ratified and confirmed and continue unchanged and in full force and effect.  All references to the Loan Agreement shall mean the Loan Agreement as modified by this Amendment.  Borrower hereby acknowledges and agrees that this Amendment constitutes a "Loan Document" under the Loan Agreement.  Accordingly, it shall be an Event of Default under the Loan Agreement if (i) any representation or warranty made by Borrower under or in connection with this Amendment shall have been untrue, false or misleading in any material respect when made, or (ii) Borrower shall fail to perform or observe any term, covenant or agreement contained in this Amendment.

 

A.           Release.  Borrower acknowledges and agrees that it has no actual or potential claim or cause of action against DLL relating to the Loan Agreement or any other Loan Document and/or the Obligations arising thereunder or related thereto, in any such case arising on or before the date hereof.  As further consideration for the consents and amendments set forth herein, Borrower hereby waives and releases and forever discharges DLL, DLL Canada and their respective past and present officers, directors, attorneys, agents, professionals and employees (all collectively the “Released Parties”) from any liability, damage, claim, loss or expense of any kind that Borrower had, may now have or may hereafter have against any one or more of the Released Parties arising out of or relating to (a) this Amendment (and any documents, agreements being executed in connection herewith), the Loan Agreement, any other Loan Document, the Canadian Guaranty and any Canadian Subsidiary Credit Facility, (b) any and all Loans  or other extensions of credit made thereunder through the date hereof, (c) any other Obligations heretofore made and/or outstanding under the Loan Agreement or any other Loan Document and any Covered Obligations (as defined therein) under the Canadian Guaranty, (d) any transactions pursuant to or contemplated by or arising from or entered into in connection with this Amendment (and any documents, agreements being executed in connection herewith), the Loan Agreement, any other Loan Document, the Canadian Guaranty, any Canadian Subsidiary Credit Facility, any such Loans or extensions of creditor  or any other Obligation and/or (e) any action (or failure to act) taken (or, as applicable, not taken or taken only after any delay or after satisfaction of any conditions) by any of the Released Parties either in connection with any of the foregoing, or as contemplated by the Loan Agreement or by any Loan Documents, the Canadian Guaranty or any Canadian Subsidiary Credit Facility, or in connection with the negotiation or administration of the Loan Agreement, this Amendment (and any documents, agreements being executed in connection herewith) or any other Loan Document, the Canadian Guaranty or any Canadian Subsidiary Credit Facility, in each such case to the extent such liability, damage, claim, loss or expense arises out of an event or circumstance that has occurred, arisen or is in existence as of the date hereof.

 

 

10

 

 

8.           Governing Law.  THIS AGREEMENT, AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), INCLUDING WITHOUT LIMITATION ENFORCEMENT OF THE OBLIGATIONS, SHALL BE INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF PENNSYLVANIA GOVERNING CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.  Each Borrower specifically acknowledges that the  provisions of Section 9.26 of the Loan Agreement regarding consent to jurisdiction and service of process are incorporated herein by reference.

 

9.           WAIVER OF JURY TRIAL.  DLL AND BORROWER EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS AMENDMENT; (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN DLL AND BORROWER; OR (iii) ANY CONDUCT, ACTS OR OMISSIONS OF DLL OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH DLL OR BORROWER; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

 

10.           Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same respective agreement.  Signature by facsimile or other electronic transmission (including email transmission of a PDF copy of any signature) shall bind the parties hereto.

 

11.           Joint and Several Obligations of Borrower.  If more than one Person is named as the “Borrower” above, or hereafter becomes a “Borrower” hereunder by means of a joinder, amendment or other modification hereto or to the Loan Agreement, then all references herein to “Borrower” shall be deemed to be a joint and several reference to each and every such Borrower entity and/or to any such Borrower entity as the context shall require.  The liability of all such Borrower entities for the Loans and other Obligations shall be joint and several as further provided for in Section 9.29 of the Loan Agreement.

 

12.           Miscellaneous.  All terms, conditions, promises, covenants, provisions and warranties hereof and of the Loan Documents shall inure to the benefit of and bind DLL's and Borrower's respective representatives, successors and assigns (but Borrower may not sell, assign or transfer any interest in this Amendment or any other Loan Document, or any portion thereof, including, without limitation, any of Borrower's obligations, rights, title, interests, remedies, powers and duties hereunder or thereunder).  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 provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Each Borrower specifically acknowledges that the provisions of Section 9.17 of the Loan Agreement regarding injunctive relief, Section 9.22 of the Loan Agreement regarding liability and damages and Section 8.1 of the Loan Agreement regarding costs and expenses and indemnities are incorporated herein by reference.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

SIGNATURES ON FOLLOWING PAGES

 

 

11

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

DE LAGE LANDEN FINANCIAL SERVICES, INC.

 

	By:	/s/ GREG BURKE	 	 
	Name:	Greg Burke	 	 
	Title:	VP - Risk	 	 

  

BORROWER ENTITIES:

 

EMTEC INC. (a Delaware corporation)

EMTEC INC. (a New Jersey corporation)

EMTEC VIASUB LLC (a Delaware limited liability company)

EMTEC FEDERAL, INC. (a New Jersey corporation)

EMTEC GLOBAL SERVICES LLC (a Delaware limited liability company)

LUCEO, INC. (an Illinois corporation)

EBUSINESS APPLICATION SOLUTIONS, INC. (a New Jersey corporation)

AVEEVA, INC. (a Delaware corporation)

SECURE DATA, INC. (a Delaware corporation)

EMTEC INFRASTRUCTURE SERVICES CORPORATION (a Delaware corporation)

KOAN-IT (US) Corp. (a Delaware Corporation)

COVELIX, INC. (a Delaware corporation)

DINERO SOLUTIONS, LLC (a Georgia limited liability company)

GNUCO LLC (a Delaware Corporation)

 

 

	By: 	/s/ SAMIR R. BHATT	(SEAL)	 

Name: Samir R. Bhatt

Title:     Secretary

[Signature Page 1 of 1 to Sixth Amendment to DLL/Emtec Loan and Security Agreement and Schedule]

[Borrower’s Notary Pages on Following Pages]

 

 

  

 

 

BORROWER’S NOTARY PAGE – 1 of 1

 

	
UNITED STATES OF AMERICA

	
:

	
STATE OF NEW JERSEY

	
:  S.S.

	
COUNTY OF UNION

	
:

On this 26th day of October, 2011 before me, a Notary Public for the said County and State, personally appeared Samir R. Bhatt, known to me or satisfactorily proven to me to be such individual, who states that s/he is Secretary of each of the Borrower entities  named in the foregoing Sixth Amendment to the Loan and Security Agreement and Schedule to the Loan and Security Agreement (“Amendment”) and s/he acknowledged to me that s/he executed the foregoing Amendment as an authorized officer of or signer for each such entity, that the said instrument was signed on behalf of each such entity as authorized by its Board of Directors or other applicable entity governance authority and that said instrument to be the free act and deed of each such entity.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
 

	/s/ DELORES L. IRVING	 
	 	 	 	 
	 	Notary Public	 
	 	My Commission Expires: 12-28-2015

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