Document:

Exhibit 10.1

 

Wells Fargo Bank Business Credit 

119 West 40th Street 

New York, NY 10018 

as of November 14, 2007

Infotech USA, Inc. a New Jersey corporation

Infotech USA, Inc. a Delaware corporation

Information Technology Services, Inc.

c/o Infotech USA, Inc.

7 Kingsbridge Road 

Fairfield, New Jersey 07004 

Attn:  Mr. Robert Patterson 

	
             
 	
            RE: 
 	
            Credit and Security Agreement, dated as of June 29, 2004 (as amended from time 
 

to time, the “Credit Agreement”), among Infotech USA, Inc., a New Jersey

corporation, as borrower (the “Borrower”), Infotech USA, Inc., a Delaware

corporation, and Information Technology Services, Inc., a New York corporation,

as guarantors (together with the Borrower, the “Obligors”) and Wells Fargo Bank,

National Association. as successor by merger to Wells Fargo Business Credit,

Inc., acting through its Wells Fargo Business Credit operating division, as lender

(the “Lender”) 

Ladies and Gentlemen: 

This letter agreement (“Letter Agreement”) is entered into by the parties hereto in connection with the Credit Agreement referenced above.  Other terms which are capitalized herein and not otherwise defined shall have the respective meanings ascribed to them in the Credit Agreement. 

Obligors have advised Lender that Obligors failed to comply with the certain of the financial covenants set forth in Section 6.2 of the Credit Agreement as follows: (x) as of the last day of the fiscal quarter ended September 30, 2007, Obligors have failed to maintain the minimum Book Net Worth required under Section 6.1(b) of the Credit Agreement for such date of $1,575,000 and (y) for the four fiscal quarter period ended September 30, 2007, Obligors have failed to achieve the minimum Net Income required under Section 6.l(c) of the Credit Agreement for such measurement period of not worse than ($570,000). These failures to comply with the requirement of Sections 6.2(b) and 6.2(c) of the Credit Agreement constitute Events of Default under Section 7.1(b) of the Credit Agreement (such Events of Default, the “Specified Events of
Default”). As of the date hereof, and prior to the effectiveness of this Letter Agreement, the Specified Events of Default remain outstanding. 

Obligors have requested that Lender agree to waive the Specified Events of Default, and Lender has agreed to such request on the terms and subject to the conditions contained herein.. 

Therefore, Lender and Obligors hereby agree as. follows: 

(i)        Obligors hereby acknowledge, represent and warrant that, as of the date hereof immediately prior to the effectiveness of this Letter Agreement, (x) the Specified Events of Default have occurred and are continuing under the Credit Agreement and (y) no other Default 

 

 

or Event of Default has occurred and remains outstanding and unwaived.  Upon the effectiveness of this Letter Agreement as provided for below, Lender shall be deemed to have waived the Specified Events of Default as of the date hereof.  Lender’s waiver of the Specified Events of Default shall in no way be construed as an agreement to waive any Event of Default under the Credit Agreement that may have occurred prior to the date hereof other than the Specified Events of Default nor to waive any Event of Default arising after the date hereof, in either case whether or not such existing or future Event of Default is of the same type and/or arises from the same or similar events or circumstances as the Specified Events of Default, including without limitation, any other Event of Default arising from a violation of any of the financial covenants provided for in Section 6.2 of the Credit Agreement (any such
existing or future Event of Default other than the Specified Events of Default, “Excluded Default”). Lender reserves al1 of its rights and remedies under the Credit Agreement and the Loan Documents and at law and in equity as to any such Excluded Default which may exist and/or may hereafter occur. Lender shall have no obligation to grant any waivers with respect to any such existing or future Excluded Default, and the granting of the waiver of the Specified Events of Default under this Letter Agreement shall not be construed as a course of conduct or dealing on the part of Lender. 

This Letter Agreement shall become effective upon (i) execution hereof by all parties hereto and (ii) payment by Obligors of all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) of Lender in connection with the negotiation, preparation, execution and delivery of this Letter Agreement.  Borrower hereby agrees that Lender may make a Revolving Advance in the amount necessary to pay all such costs and expenses (and charge Borrower’s loan account therefore) and disburse the proceeds thereof to reimburse Lender for and/or directly pay all such costs and expenses. 

Except to the extent set forth in this Letter Agreement, no other change in any of the terms or conditions of the Credit Agreement or any of the other Loan Documents is intended or implied. The obligations of each Obligor under Credit Agreement and each of the other Loan Documents to which such Obligor is a party (specifically including the obligations of Parent and ITSI under the Guaranty dated June 29, 2004 executed by each of them in favor of Lender with respect to the Obligations (as amended or modified from time to time, the “Guaranty”)) shall be unaffected by the execution hereof and are hereby reaffirmed by each Obligor (provided that, the foregoing reaffirmations shall not in any way be deemed to impair, diminish or otherwise affect, or establish a contrary course of conduct or dealing with respect to, the waivers and other
agreements of Parent and ITSI under Sections 8 and 9 of the Guaranty). THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPALS, and the provisions of Section 8.15 of the Credit Agreement dealing with jurisdiction, venue, service of process and waiver of jury trial are incorporated herein by reference. If the foregoing is acceptable to you and is in accordance with your understanding of our agreement, kindly sign in the space below to indicate your agreement and acceptance. 

[Signatures on following Page]

[Remainder of Page Left Intentionally Blank] 

 

 

In witness of the foregoing, the parties to this Letter Agreement have executed and entered into this Letter Agreement for good and sufficient consideration, the receipt of which is hereby acknowledged by all parties hereto, and intending to be legally bound, as of the date first set forth above. 

	
             
 	
            Very truly yours,
 
	
             
 	
             
 
	
             
 	
            WELLS FARGO BANK, NATIONAL
 ASSOCIATION, acting through its Wells Fargo
 Business Credit Operating Division.
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ Sal Mutone
 
	
             
 	
            Name:
 	
            Sal Mutone
 
	
             
 	
            Title:
 	
            Vice President
 

 

Accepted, acknowledged and agreed to:

	
            INFOTECH USA, INC., a New Jersey corporation
 INFORMATION TECHNOLOGY SERVICES, INC.
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
            By:
 	
            /s/ J. Robert Patterson
 	
             
 	
             
 
	
            Name:
 	
            J. Robert Patterson
 	
             
 
	
            Title:
 	
            Chief Financial Officer, Vice President and Treasurer
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            INFOTECH USA, INC., a Delaware corporation
 	
             
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ J. Robert Patterson
 	
             
 	
             
 
	
            Name:
 	
            J. Robert Patterson
 	
             
 
	
            Title:
 	
            Secretary and Treasurer
 	
             
 

 

 

[Signature Page to Letter Agreement Re Waiver of September 2007 Financial Covenant Defaults]EX-10.1 DYNAMIC DECISION NOTE

 

EXHIBIT
10.1

THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”). THIS SECURITY CANNOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THIS SECURITY IS
REGISTERED UNDER THE ACT OR THE COMPANY IS FURNISHED WITH AN ACCEPTABLE OPINION OF COUNSEL THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET
FORTH IN THAT CERTAIN AMENDED AND RESTATED SUBORDINATION AGREEMENT (THE “SUBORDINATION AGREEMENT”)
DATED AS OF SEPTEMBER 26, 2007 AMONG, BORROWER, U.S. VOICE & DATA, LLC, THE SUBORDINATED CREDITOR
(AS SUCH TERM IS DEFINED THEREIN) PARTY THERETO AND HILCO FINANCIAL LLC, A DELAWARE LIMITED
LIABILITY COMPANY, TO THE SENIOR INDEBTEDNESS (AS SUCH TERM IS DEFINED IN THE SUBORDINATION
AGREEMENT); AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE SUBORDINATION AGREEMENT.

SUBORDINATED PROMISSORY NOTE

			
	U.S. $1,000,000.00
	 	August 30, 2007

Substituted and Amended September 26, 2007

Tampa, FL

     FOR VALUE RECEIVED, Brookside Technology Holdings Corp. (“Borrower”) hereby unconditionally
promises to pay to the order of DD Growth Premium Fund (the “Holder”) the principal sum of One
Million and No/100 DOLLARS ($1,000,000.00) in lawful money of the United States of America and in
immediately available funds on December 30, 2008 plus interest as described herein.

     1) Interest. The unpaid principal evidenced by this Note shall bear interest prior to
repayment at a rate per annum equal to 10%. Interest on amounts evidenced by this Note shall be
due and payable in three installments, to the extent permitted by the Subordination Agreement, with
the first installment becoming due on February 28, 2008, the second on August 20, 2007, and the
third installment becoming due on December 30, 2008. Interest on amounts evidenced by this Note
shall be computed on the basis of a year consisting of 360 days and paid for actual days elapsed.

     2) Default. Any failure to make any payment when due shall constitute an Event of
Default under this Note. Upon an Event of Default, Holder shall be entitled to exercise all rights
and remedies available to it at law or in equity, all such rights and remedies being cumulative,
not exclusive, and enforceable alternatively, successively and concurrently.

     3) Prepayment. Borrower may prepay all or part of the indebtedness evidenced by this
Note at any time without penalty. Permitted partial prepayments shall not affect or vary the duty
of Borrower to pay all obligations when due and shall not impair the right of Holder to pursue all
remedies available to it hereunder.

 

 

     4) Successors and Assigns. Any reference to the Holder hereof shall be deemed to
include the successors and assigns of such Holder, and all covenants, promises, and agreements by
or on behalf of the Borrower that are contained in this Note shall bind and inure to the benefit of
the successors and assigns of such Holder and to any future holders of this Note, whether or not
such persons expressly become parties hereto or thereto.

     5) Waivers. All persons or entities now or at any time liable, whether primarily or
secondarily, for the payment of the indebtedness hereby evidenced, for themselves, their heirs,
legal representatives, successors and assigns, respectively, hereby(a) expressly waive presentment
for payment, notice of dishonor, notice of non-payment, protest and notice of protest; and (b)
agree that the Holder, in order to enforce payment of this Note, shall not be required first to
institute any suit or to exhaust any of its remedies against the undersigned or any person or party
to become liable hereunder.

     6) Controlling Law. This Note and all matters related hereto shall be governed,
construed and interpreted strictly in accordance with the laws of the State of Florida, without
regard to its principles of conflicts of law.

     7) TIME IS OF THE ESSENCE OF THIS NOTE.

     8) Modifications; Waivers. No act of omission or commission of the Holder, including
specifically any failure to exercise any right, remedy or recourse, shall be deemed to be a waiver
or release of the same, such waiver or release to be effected only through a written document
executed by the Holder and then only to extent specifically recited therein. A waiver or release
with reference to any one event shall not be construed as continuing, as a bar to, or as a waiver
or release of any subsequent right, remedy or recourse as to a subsequent event. This Note may not
be changed orally, but only by agreement in writing, signed by the party against whom enforcement
of any waiver, change, modification or discharge is sought.

     9) WAIVER OF JURY TRIAL. BORROWER AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS, CROSSCLAIMS OR THIRD-PARTY CLAIMS) ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF HOLDER OR HOLDER’S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HOLDER WOULD NOT,
IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
BORROWER ACKNOWLEDGES THAT THE HOLDER HAS BEEN INDUCED TO LOAN FUNDS IN THE AMOUNT OF THE PRINCIPAL
AMOUNT TO BORROWER BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS PARAGRAPH.

2

 

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed and its seal affixed on the
day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	Brookside Technology Holdings Corp.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

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