Document:

Exhibit

TENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT 

This TENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “Amendment”) is entered into as of June 18, 2015, by and among VIRCO MFG. CORPORATION, a Delaware corporation (“VMC”), VIRCO INC., a Delaware corporation (“Virco”, and together with VMC, “Borrowers” and, each individually, a “Borrower”), the financial institutions from time to time party to the Credit Agreement (as defined below) as lenders (collectively, “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative agent for Lenders (PNC, in such capacity, “Agent”), with respect to the following:
A.Borrowers, Lenders and Agent have previously entered into that certain Revolving Credit and Security Agreement, dated as of December 22, 2011 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”). 
B.Borrowers have requested that Agent and Lenders revise Section 2.1(a)(iii) of the Credit Agreement.  Agent and Lenders are agreeable to the Borrowers’ requests but only on the terms and conditions set forth below. 
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Credit Agreement, the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.Definitions Incorporated.  Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Credit Agreement, as amended hereby.
2.Amendments to the Credit Agreement.  The Credit Agreement is hereby amended as follows:
(a)The following new definitions are hereby added to Section 1.2 of the Credit Agreement in proper alphabetical order to read as follows:
“‘Tenth Amendment’ means the Tenth Amendment to Revolving Credit and Security Agreement dated as of June 18, 2015 among Borrowers, the Lenders party thereto and Agent.”
“‘Tenth Amendment Date means June 18, 2015.”
(b)Section 2.1(a)(iii) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(iii)    with respect to each fiscal year of the Borrowers, during the respective period set forth below for such fiscal year, the amount applicable to such period
	
		
	Period
	Amount

	January 1 through February 28 (29)
	$8,000,000

	March
	$11,000,000

	April
	$14,000,000

	May
	$14,000,000

	June 
	$14,000,000

	July
	$11,000,000

	August 1 through 15
	$8,000,000

plus” 
3.Amendment Fee.  On the date hereof, Borrowers shall pay to Agent, in addition to all other fees and charges set forth in the Credit Agreement, a non-refundable amendment fee of $15,000, which fee may be charged to the Borrowers’ Account as a Revolving Advance (the “Amendment Fee”). 

4.Conditions Precedent.  The obligations of Agent and Lenders hereunder, and this Amendment, will be effective on the date (the “Tenth Amendment Effective Date”) of satisfaction of each of the following conditions precedent, each in a manner in form and substance acceptable to Agent:  
(a)Representations and Warranties.  The representations and warranties contained herein and in the Credit Agreement, as amended hereby, shall be true and correct in all material respects as of the date hereof as if made on the date hereof, except for such representations and warranties limited by their terms to a specific date, in which case each such representation and warranty shall be true and correct in all material respects as of such specific date;
(b)No Default.  After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing;
(c)Amendment.  Borrowers shall have delivered to Agent an executed original of this Amendment; 
(d)Fees.  Borrowers shall have paid the Amendment Fee, or in Agent’s discretion, Agent shall have charged the Amendment Fee to the Borrowers’ Account as a Revolving Advance; and
(e)Other.  All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated hereby shall be satisfactory in form and substance to Agent and its counsel.
5.Representations and Warranties.  To induce Lenders and Agent to enter into this Amendment, each Borrower represents and warrants to Lenders and Agent as of the date hereof as follows:
(a)Such Borrower has full power, authority and legal right to enter into this Amendment and to perform all its respective Obligations hereunder.  This Amendment has been duly executed and delivered by such Borrower and the Credit Agreement, as amended by this Amendment constitutes the legal, valid and binding obligation of such Borrower enforceable in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.  The execution, delivery and performance of this Amendment (i) are within such Borrower’s powers, have been duly authorized by all necessary company action, are not in contravention of law or the terms of such Borrower’s by-laws, certificate of incorporation, or other applicable documents relating to such Borrower’s formation or to the conduct of such Borrower’s business or of any material agreement or undertaking to which such Borrower is a party or by which such Borrower is bound, (ii) will not conflict with or violate any law or regulation, or any judgment, order, writ, injunction or decree of any court or Governmental Body, (iii) will not require the Consent of any Governmental Body or any other Person, except those Consents which will have been duly obtained, made or compiled prior to date hereof and which are in full force and effect, and (iv) will not conflict with, nor result in any breach in any of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Encumbrances upon any asset of such Borrower under the provisions of any material agreement, charter document, instrument, by-law or other instrument to which such Borrower is a party or by which it or its property is a party or by which it may be bound.
(b)After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement are true and correct in all material respects except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case each such representation and warranty is true and correct in all material respects as of such specific date, and no Default or Event of Default has occurred and is continuing.
6.Reaffirmation.  Except as specifically modified by this Amendment, the Credit Agreement and the other Loan Documents remain in full force and effect in accordance with their respective terms and are hereby ratified, reaffirmed and confirmed by Borrowers.  
7.Events of Default.  Any failure to comply with the terms of this Amendment will constitute an Event of Default under the Credit Agreement.
8.Integration.  This Amendment, together with the Credit Agreement and the Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
9.Severability.  If any part of this Amendment is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.

10.Submission of Amendment.  The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Agent or Lenders to amend or otherwise modify any of the provisions of the Credit Agreement and this Amendment shall have no binding force or effect until the Tenth Amendment Effective Date.
11.Counterparts; Facsimile Signatures.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.
12.Governing Law.  This Amendment is a Loan Document and is governed by the Applicable Law pertaining in the State of New York, other than those conflict of law provisions that would defer to the substantive laws of another jurisdiction.  This governing law election has been made by the parties in reliance on, among other things,  Section 5-1401 of the General Obligations Law of the State of New York, as amended (as and to the extent applicable), and other Applicable Law.
13.Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of Borrowers, Lenders, Agent, and all future holders of the Obligations and their respective successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations under this Amendment without the prior written consent of Agent.
14.Attorneys’ Fees; Costs.  Borrowers agree to promptly pay, upon written demand, all reasonable and documented attorneys’ fees and costs incurred in connection with the negotiation, documentation and execution of this Amendment.  If any legal action or proceeding shall be commenced at any time by any party to this Amendment in connection with its interpretation or enforcement, the prevailing party or parties in such action or proceeding shall be entitled to reimbursement of its reasonable attorneys’ fees and costs in connection therewith, in addition to all other relief to which the prevailing party or parties may be entitled.
15.Jury Trial Waiver.  To the extent not prohibited by applicable law, each party to this Amendment hereby expressly waives any right to trial by jury of any claim, demand, action, or cause of action (a) arising under this Amendment or any other instrument, document, or agreement executed or delivered in connection herewith, or (b) in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to this Amendment or any other instrument, document, or agreement executed or delivered in connection herewith, or the transactions related hereto or thereto in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise and each party hereto hereby consents that any such claim, demand, action, or cause of action shall be decided by court trial without a jury, and that any party to this Amendment may file an original counterpart or a copy of this Section with any court as written evidence of the consents of the parties hereto to the waiver of their right to trial by jury.  Without limiting the applicability of any other provision of the Credit Agreement, the terms of Article XII of the Credit Agreement shall apply to this Amendment.
16.Total Agreement.  This Amendment, the Credit Agreement, and the other Loan Documents contain the entire understanding among Borrowers, Lenders and Agent and supersede all prior agreements and understandings, if any, relating to the subject matter hereof. Any promises, representations, warranties, or guarantees not herein contained and hereinafter made have no force and effect unless in writing, signed by Borrowers’ and Agent’s respective officers.  Neither this Amendment nor any portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled, or terminated orally or by any course of dealing, or in any manner other than by an agreement in writing, signed by the party to be charged.  Each Borrower acknowledges that it has been advised by counsel in connection with the execution of this Amendment and the other Loan Documents and is not relying upon oral representations or statements inconsistent with the terms and provisions of this Amendment.
[Remainder of Page Intentionally Left Blank]
58739034_2

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first written above.
VIRCO MFG. CORPORATION,
a Delaware corporation, as a Borrower

By:                        
Name:  Robert E. Dose
Title:    Vice President

VIRCO INC.,
a Delaware corporation, as a Borrower

By:                        
Name:  Robert E. Dose
Title:    Vice President

PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent

By:                        
Name:   Jeanette Vandenbergh
Title:      Senior Vice Presidentex10-6.htm

Exhibit 10.6

 

Garden State Securities Inc.

328 Newman Springs Rd.

Red Bank, NJ 07707

March 25, 2015

INNOVUS PHARMACEUTICALS, INC.

9171 Towne Centre Drive, Suite 440,

San Diego, CA  92122

ATT:  Dr. Bassam Damaj, Chief Executive Officer

 

Re:           Engagement Agreement

Dear Dr. Damaj,

    

This letter sets forth the Agreement (the “Letter Agreement”) by and among Innovus Pharmaceuticals, Inc. and its subsidiaries and affiliates (collectively herein referred as the “Company”) and Garden State Securities Inc. and its subsidiaries and its affiliates (“GSS”) with respect to the engagement of GSS to act as a non-exclusive selling/placement agent for the Company.

 

In connection with its engagement hereunder, this Letter Agreement confirms the Company’s understanding of GSS’s intention to attempt to utilize its best efforts to affect the following:

	
1.   

	
Review the business and operation of the Company and its historical and projected financial condition.

	
2.   

	
Advise Company of “best efforts” private placement of debt or equity securities to fulfill the Company’s business plan and a possible public listing through a self-filing and/or reverse merger. 

	
3.   

	
Contact for the Company possible financing sources.

 

Notwithstanding the foregoing, the intent herein described shall not obligate GSS to effect any public or private financing for the Company. Any such obligation shall be conditioned in its entirety upon the execution and delivery by GSS of an Agency or Underwriting Agreement satisfactory to GSS and the Company and satisfactory due diligence performed by GSS.

 

1. Term:

 

GSS shall act as the Company’s non-exclusive placement/selling agent until terminated pursuant hereto.  

 

  

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2.  Compensation:

 

The Company agrees to pay to GSS at each full or incremental closing of any equity financing, convertible debt financing, debt conversion or any instrument convertible or exercisable into the Company’s common stock (the “Securities Financing”) on any Source(s) (described in Section 5) contacted by GSS for the purpose of investing in a Securities Financing; (i) a cash transaction fee in the amount of 10% of the amount of the Securities Financing;  and (ii) warrants (the “Warrants”) with “piggy back” registration rights, equal to 10% of the amount of securities sold the Securities Financing at an exercise price equal to the investor’s warrant exercise price of the Securities Financing or the price of the Securities Financing, if there are no warrants issued to investors.   The Warrants shall have a 5-year term and a cashless exercise provision.  The Company will also pay, at closing, the expense of GSS’s or investor’s legal counsel in connection to the Securities Financing, which will be disclosed in the Term Sheet for the Securities Financing. The Company shall also cause, at its cost and expense, all “blue sky” filings related to the Securities Financing and required by applicable law to be made in due and proper form and substance and in a timely manner as required under the laws of the states in which Securities are sold (“Blue Sky Filings”).  In addition, the Company shall cause, at its cost and expense, a Form D related to the Securities Financing to be filed with the Securities and Exchange Commission (“SEC”) in due and proper form and substance and in a timely manner.  The Company shall deliver true and correct copies of all Blue Sky Filings and the Form D, as filed with the SEC, to GSS within 15 days of the final closing date. 

 

3.  Access to Premises:  

In connection with the performance of services hereunder, the Company shall reasonably make its facilities, management and employees available to GSS and its representatives, during normal working hours, and shall be responsive to any and all reasonable requests for information made by GSS, with reasonable notice and with confidentiality. In performing its services hereunder, GSS shall be entitled to rely upon and assume, without independent verification, the accuracy and completeness of all information that is available from public sources and of all information that has been furnished to it by the Company and shall have no obligation to verify the accuracy or completeness of any such information or to conduct any appraisal of any assets.

 

4.  Reserved:

  

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5.  Future Financing: 

If the Company were to receive any additional capital within twelve  (12) months from either the later of; (i) the closing of the Securities Financing from any investors that invested in the Securities Financing; and/or (ii) date of termination of this Letter Agreement from any Source(s) contacted by GSS for the purpose of investing in the Securities Financing; the Company will pay to GSS a cash fee of 10% of the amount raised at the closing of any such financing along with the Warrants detailed above in Section 2 of this Letter Agreement. The Company will not circumvent GSS and will not attempt to deal directly or indirectly through agents or representatives of the Company, with such Source(s) or investors without prior written consent of an officer of GSS.  As used in this Letter Agreement, the term “Source(s)” shall be defined to include, without limitation, any corporation, company, institution, partnership, individual and all of the Source(s)’ affiliates that are directly or indirectly contacted by GSS for the purpose of investing in the Securities Financing or the purpose of entering into a Transaction. The Company has provided a list of investors that GSS shall not contact and shall not be considered a Source(s), which is listed as Exhibit A.  Any investors that GSS contacts that is not listed on Exhibit A, shall officially become a Source(s) as contemplated by this Letter Agreement.  This paragraph shall survive any termination of this Letter Agreement.

6.  Expenses: 

Except as provided in Section 2 of this Letter Agreement, the Company hereby agrees to pay all reasonable filing fees, charges and expenses incident to the performance by the Company of its obligations hereunder, including, without limitation, all reasonable fees, charges, and expenses in connection with:  (i) the issuance, sale, transfer, and delivery of the Securities, including any transfer or other taxes payable thereon and the fees of any transfer agent or registrar; (ii) the securing of an exemption therefrom under state or foreign "blue sky" or securities laws, including without limitation, filing fees payable in the jurisdictions in which such registration or qualification or exemption therefrom is sought and disbursements in connection therewith; (iii) filing fees payable to the SEC, if any;.

 

7.  Intentionally Left Blank: 

 

8.  Indemnification: 

The Company agrees to indemnify GSS and certain other entities and persons as set forth in Schedule I.

  

-3-

  

 

9.  Disclosure:

	
(a)

	
The Company recognizes and confirms that GSS, in acting pursuant to this engagement, will be using information in reports and other information provided by others, including, without limitation, information provided by or on behalf of the Company, and that GSS does not assume responsibility for and may rely, without independent verification, on the accuracy and the completeness of any such reports and information. The Company hereby warrants that all of its information relating to the Company will not contain any untrue statement of a material fact or omit to state any material fact or omit to state any material fact necessary to make the statements contained herein, in the light of the circumstances under which they were made, not misleading. The Company agrees to provide GSS with (i) prompt notice of any material development affecting the Company; (ii) such other information concerning the business and financial condition of the Company as GSS may from time to time reasonably request provided that such information is maintained by GSS pursuant to a confidentiality agreement.  GSS agrees to distribute information regarding the Company, not in the public domain, only with written approval by the Company.

	
(b)

	
The Company agrees that any information or advice rendered by GSS or its representatives in connection with this engagement is for the confidential use of the Company only and, except as otherwise required by law, the Company has not and will not permit any third party to disclose or otherwise refer to such advice or information in any manner without GSS’s prior written consent, unless such information becomes part of the public domain through no fault of the Company.

	
(c)

	
GSS agrees that any information, plans or data regarding the Company and its activities are for the confidential use of GSS only and, except as otherwise required by law or otherwise in the public domain, GSS will not disclose or otherwise permit any third party to disclose or otherwise refer to, without the Company’s prior written consent.

10.  Termination: 

The Company and GSS will each have the right to terminate this Letter Agreement at any time, provided prior written notice is given 20 days before termination.  Any termination of this Letter Agreement shall not affect or limit (i) the rights of GSS or any other indemnified person (as defined in schedule I hereto) to receive indemnification, (ii) rights to receive fees accrued prior to such termination, (iii) the rights of GSS to receive fees and be covenanted to all of the terms and conditions detailed in Section 2, and Section 5 of this Letter Agreement on any Securities Financing that was negotiated during the term of this Letter Agreement and/or closes after any termination and (iv) the rights detailed in Section 5 of this Letter Agreement.

11.  Miscellaneous:

GSS may, at its own expense, place announcements or advertisements in financial newspapers and journals describing its services hereunder, provided that the same shall comply with securities laws and shall be approved by the Company prior to dissemination.

 

  

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12.  Governing Law: 

This Agreement (a) shall be governed by and construed in accordance with the laws of the State of Delaware and the parties agree that any dispute, claim or controversy relating to or arising out of this Agreement or the performance of its terms shall be resolved and conducted in the County and State of Delaware , regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof, (b) incorporates the entire understanding of the parties with respect to the subject matter hereof and supersedes all previous agreements should they exist hereto, (c) may not be amended or modified except in writing executed by the Company and GSS and (d) shall be binding upon and inure to the benefit of the Company, GSS, and other indemnified Parties and their respective successors and assigns. In the event of litigation between the parties arising hereunder, GSS shall be entitled to costs and reasonable attorney's fees.

 

If you are in agreement with the foregoing, please execute the enclosed counterpart of this letter in the space below provided for that purpose and deliver it to the undersigned, whereupon the terms hereof shall become a binding agreement between us.

The investment banking staff of GSS and its affiliates look forward to working with you.

Very truly yours,

 

_______________________________

Ernest Pellegrino

Garden State Securities Corp.

 

AGREED TO AND ACCEPTED

THIS ___ DAY OF ____________, 2015

_______________________________

By: Dr. Bassam Damaj, CEO

Innovus Pharmaceuticals, Inc

  

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Schedule I

 

Innovus Pharmaceuticals, Inc. (the “Company”) referred to in the attached Letter Agreement (the “Letter Agreement”) agrees to indemnify and hold harmless Garden State Securities Inc. (“GSS”) and its affiliates, and the respective directors, officers, agents and employees of GSS and its affiliates and each other entity or person, if any, controlling GSS or any of its affiliates within the meaning of Section 15 of the Securities Act of 1933, as amended,  (GSS and each such entity or person being referred to as an “Indemnified Person”) from and against any losses, claims, damages or liabilities (or actions in respect thereof) relating to or arising out of activities performed pursuant to the Letter Agreement, the transactions contemplated thereby or GSS’s role in connection therewith, or caused by any untrue statements of material nature contained in any document provided to GSS by the Company which documents are relied upon by GSS in connection with its performance of the Letter Agreement, and will reimburse GSS and any other Indemnified Person for all expenses (including, without limitation, reasonable fees and disbursements of counsel) incurred by GSS or any such other Indemnified Person in connection with investigating, preparing or defending any such action or claim, whether or not in connection with pending or threatened litigation to which GSS (or any other Indemnified Person) is a party, in each case, as such expenses are incurred or paid.  The Company will not, however, be responsible for any such losses, claims, damages, liabilities or expenses of any Indemnified Person that are determined by final judgment of a court of competent jurisdiction to have primarily resulted from actions taken or omitted to be taken by such Indemnified Person in bad faith, intentional misconduct, or from such indemnified Person’s  negligence.  The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the Letter Agreement, any transactions contemplated thereby or GSS’s role in connection therewith, expect for any such liability for losses, claims, damages liabilities or expenses incurred by the Company that are determined by final judgment of a court of competent jurisdiction to have resulted primarily from actions taken or omitted to be taken by such Indemnified Person in bad faith, intentional misconduct, or from such Indemnified Person’s gross negligence.

Upon receipt by an Indemnified Person of actual notice of a claim, action or proceeding against such Indemnified Person in respect of which indemnity may be sought hereunder, such Indemnified Person shall promptly notify the Company after any action is commenced by way of service with a summons or other legal process (giving information as to the nature and basis of the claim) against such Indemnified Person.  In any event, failure so to notify the Company shall not relieve the Company from any liability that the Company may have on account of this indemnity or otherwise, except to the extent the Company shall have been materially prejudiced by such failure.  The Company will, if requested by an Indemnified Person, assume the defense of any litigation or proceeding in respect of which indemnity may be sought hereunder, including the employment of counsel reasonably satisfactory to GSS and the payment of the fees and expenses of such counsel, in which event, except as provided below, the Company shall not be liable for the fees and expenses of any other counsel retained by any Indemnified Person in connection with such litigation or proceeding.  In any such litigation or proceeding the defense of which the Company shall have so assumed, any Indemnified Person shall have the right to participate in such litigation or proceeding and to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Company and such Indemnified Person shall have mutually agreed in writing to the retention of such counsel or (ii) the named parties to any such litigation or proceeding (including any impeded parties) include the Company and such Indemnified Person and representation of both parties by the same counsel would in the opinion of counsel to such Indemnified Person, be inappropriate due to actual or potential differing interests between the Company and such Indemnified Person.  The Company shall not be liable for any settlement of any litigation or proceeding effected without its prior written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify the Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  If the Company assumes the defense of any litigation or proceeding, the Company will not settle such litigation or proceeding without GSS’s written consent, which shall not be unreasonably withheld.

 

If for any reason the foregoing indemnification is unavailable to an Indemnified Person or insufficient to hold it harmless, the Company shall contribute to the amount paid or payable by the Indemnified Person as a result of such loss, claim, damage or liability in proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Indemnified Person on the other hand.  Notwithstanding the foregoing, under no circumstances shall any Indemnified Person’s aggregate contribution to any losses, claims, damages and expenses with respect to which contribution is available hereunder exceed the amount of fees actually received hereunder. Notwithstanding the foregoing, under no circumstances shall the Company’s aggregate contribution to any losses, claims, damages and expenses with respect to which contribution is available hereunder exceed the amount of fees actually received hereunder.

The provisions contained in this Schedule I shall remain operative and in full force and effect regardless of the expiration of any termination of the Letter Agreement.

 

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