Document:

Letter Agreement

 Exhibit 4.1
 May 28, 2003 
 
Allin Corporation 
Allin Corporation of California 
Allin Corporation of
Pennsylvania, Inc.
Allin Interactive Corporation
Allin Digital Imaging Corp.
Allin Network Products, Inc. 
Allin Holdings Corporation
381 Mansfield Ave., suite 400 
Pittsburgh, PA 
 
Dear Richard and Timothy:

         I am pleased to inform you that S & T Bank (hereinafter the “Bank”) has approved a $5,000,000 following financing request for Allin Corporation,
Allin Corporation of California, Allin Corporation of Pennsylvania, Inc., Allin Interactive Corporation, Allin Digital Imaging Corp., Allin Network Products, Inc., Allin Holdings Corporation (hereinafter the “Borrower”). This offer is
subject to the terms and conditions in the documents signed by the parties to evidence the loan transaction and includes, but is not limited to, the following terms and conditions:

			
	Borrower:	 	Allin Corporation
	   	 	Allin Corporation of California
	   	 	Allin Corporation of Pennsylvania. Inc.
	  	 	Allin Interactive Corporation
	  	 	Allin Network Products, Inc.
	   	 	Allin Holdings Corporation
	 	 	 
	Amount:	 	$ 5,000,000
	 	 	 
	Rate:	 	Prime + 1
	 	 	 
	Repayment:	 	Interest monthly
	 	 	 
	Maturity Date:	 	9/30/04
	 	 	 
	Security:	 	1st lien UCC-1’s filed on all business assets.

  Allin Corporation 
May 29, 2003 
Page 2

			
	Guarantors:	 None
	 	 	 
	Purpose:	 To reaffirm the subject’s existing $5,000,000 asset-based line of credit
	  	 	 
	Conditions:	1.	Annual CPA audited financial statements on the borrower.
	 	2.	Monthly consolidated management prepared financial statements on the borrower.
	 	3.	Hazard insurance on the collateral with S&T Bank named as loss payee.
	 	4.	Borrowing base certificate with each advance and on a weekly basis.
	  	5.	Advances limited to 80% of eligible accounts receivable (0-60 days from date of invoice).
	 	6.	Monthly accounts aging schedule.
	 	7.	Minimum cash flow coverage ratio of 1.0 to 1.0.
	 	8.	Series C Preferred Stock dividends be allowed to accrue without payment.
	 	9.	The borrower will reimburse the Bank for all expenses in connection with the documentation, closing and collection of  this loan.
	 	10.	Borrower shall further provide any additional information that the Bank shall reasonably request.
	 	11.	Contingent upon receipt of an executed commitment letter and appropriate loan documents as determined by the Bank.

  Allin Corporation 
May 29, 2003 
Page 3
                              The Borrower agrees to execute and deliver such
instruments, documents, certificates, opinions, assurances, and actions as the Bank may request, to effect the purpose of the transaction described in this commitment letter. The Bank’s obligation to make the loan shall be subject to receipt by
the Bank of properly executed documents in form and substance satisfactory to the Bank and Bank’s counsel. All proceedings, agreements, instruments, documents, and other matters relating to the making of the loan, and all other transactions
herein contemplated, shall be satisfactory to the Bank and to Bank’s counsel. While our mutual efforts will be directed toward the closing of this transaction, we may require that the transaction be restructured or otherwise
modified.
                              This commitment is
issued in reliance on, and the validity and binding effect of this commitment shall be subject to, the accuracy of all information, representations, schedules, and other materials or data submitted by the Borrower on the Borrower’s financial
standing and the financial standing of the principals of the Borrower as set forth in the financial statements and other information submitted by the Borrower to the Bank and in reliance on the Borrower’s statements as to the value of the
Collateral and its intended usage, all of which is deemed material. Any misrepresentation of a material fact, whether intentional or otherwise, made prior to issuance of this commitment or any change of any material fact (in the business, assets,
operations, or conditions, financial or otherwise, of Borrower and/or any other party guarantying or pledging collateral on behalf of the Borrower) after the issuance hereof shall, at the Bank’s sole option, render this commitment void without
further notice to the Borrower. In such event, the Bank, at its sole option, may elect not to close the loan.
                              If the terms of this loan are satisfactory, please
sign, date and return the enclosed copy of this letter in the envelope provided. This commitment is effective for thirty (30) days from the date of this letter. This offer will expire if we have not closed the loan within ninety (90) days of the
commitment letter date. If you have any questions or desire clarification on the conditions, please give me a call at (724) 465-1430.
                              This commitment cannot be assigned to any other
party without the express written consent of S&T Bank.
                              I appreciate the opportunity to be of service to
you and look forward to a mutually beneficial relationship.

		
	  	Sincerely,
	 	 
	 	 
	  	/s/ DAVID G. ANTOLIK
	 	 
 
	  	David G. Antolik
Senior Vice President

 DGA/mam
 

 
 Allin Corporation 
May 29,
2003 Page 4
                              Agreed to this 31st day of July, 2003 with the
intent of being legally bound; the undersigned hereby accepts the foregoing Commitment and agrees to the terms and conditions here.

		 	
	  	 	Allin Corporation
Allin Corporation of California
Allin Corporation of Pennsylvania, Inc.
Allin Interactive Corporation
Allin Network Products, Inc.
Allin Holdings
Corporation
	 	 	 
	   	By:	 /s/ RICHARD W. TALARICO  
 
	   	 	Richard W. Talarico, Chairman & CEO
	 	 	 
	 	By:	 /s/ DEAN C. PRASKACHChange in Terms

  [LOGO OF S&T BANK] 
  Exhibit 4.2
 CHANGE IN TERMS
AGREEMENT

	 	 	 	 
	Borrower:	Allin Corporation; Allin Interactive Corporation;	Lender:	S&T Bank
	  	Allin Corporation of	 	Main Office
	 	California d/b/a Allin Consulting; Allin Network	 	800 Philadelphia St
	 	Products, Inc.; Allin Holdings Corporation; and Allin	 	Indiana, PA 15701
	 	Consulting of Pennsylvania, Inc.	 	(800) 325-2265
	 	381 Mansfield Ave, Ste 400
	 	Pittsburgh, PA 15220-2751

 
 Principal Amount:
$5,000,000.00      Initial Rate: 5.250%      Date of Agreement: June 30, 2003
 DESCRIPTION OF EXISTING INDEBTEDNESS.  A revolving line of
credit Promissory Note dated October 1, 1998, as amended, in the original maximum available principal amount of Five Million & 00/100 Dollars (5,000,000.00), together with a variable interest rate of S&T Bank Prime plus 1.000% per annum and
a current maturity date of September 30, 2003.
 DESCRIPTION OF COLLATERAL.  Loan and Security Agreement, as amended, and UCC-1 Financing Statements filed on collateral, which is referenced hereby,
and as is more fully described in the Loan and Security Agreement dated October 1,1998.
 DESCRIPTION OF CHANGE IN TERMS.  Extend the maturity date to September 30, 2004.
 PROMISE TO PAY.  Allin Corporation; Allin Interactive Corporation; Allin Corporation of California d/b/a Allin Consulting; Allin Network Products, Inc., Allin Holdings Corporation; and Allin Consulting of
Pennsylvania, Inc (“Borrower”) jointly and severally promise to pay to S&T Bank (“Lender”), or order, in lawful money of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00)
or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.
 PAYMENT.  Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 30, 2004. In addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning July 30, 2003, with all subsequent interest payments to be due on the same day of each month after that. Interest on this Agreement is computed on a 365/360 simple interest basis; that is, by applying
the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown
above or at such other place as Lender may designate in writing.
 VARIABLE INTEREST RATE.  The interest rate on this Agreement is subject to change from time to time based on changes in an index
which is Lender’s Prime Rate (the “Index”). This is the rate Lender charges, or would charge, on 90-day unsecured loans to the most creditworthy corporate customers. This rate may or may not be the lowest rate available from Lender at
any given time. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index
currently is 4.250% per annum. The interest rate to be applied to the unpaid principal balance of the Note will be at a rate of 1.000 percentage point over the Index, resulting in an initial rate of 5.750% per annum. NOTICE: Under no circumstances
will the interest rate on the Note be more than the maximum rate allowed by applicable law.
 PREPAYMENT.  Borrower may pay without penalty all or a portion of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower
agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Agreement, and
Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full”
of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: S&T Bank, Main Office, 800 Philadelphia St, Indiana, PA 15701.
 LATE CHARGE.  If a payment is 16 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $20.00, whichever is greater.
 INTEREST AFTER
DEFAULT.  Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Agreement to 4.000 percentage points over the index. The
interest rate will not exceed the maximum rate permitted by applicable law. If a judgment is entered in connection with this Agreement, interest will continue to accrue on this Agreement after judgment at the interest rate applicable to this
Agreement at the time judgment is entered.
 DEFAULT.  Each of the following shall constitute an event of default under this Agreement:

	 	Payment Default. Borrower fails to make any payment when due under the indebtedness.

 

	 	Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any
term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

 

	 	Default in Favor of Third Parties. Borrower defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that
may materially affect any of Borrower’s property or Borrower’s ability to perform Borrower’s obligations under this Agreement or any of the Related Documents.

 

	 	False Statements. Any warranty, representation or statement made or furnished to Lender or Borrower or on Borrower’s behalf under this Agreement or Related Documents is false or misleading in any material
respect, either now or at the time made ot furnished or becomes false or misleading at any time thereafter.  

 

	 	Insolvency.  The dissolution or termination of the Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of the Borrower’s property, any
assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

 

  Page 2

	 	Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the indebtedness. This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 

	 	Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or
accommodation party dies or becomes incompetent, or revokes or disputes the validity of , or liability under, any Guaranty of the indebtedness evidenced by this Note.

 

	 	Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 

	 	Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment ot performance of the Indebtedness is impaired. 

 

	 	Insecurity.  Lender in good faith believes itself insecure.

 
 LENDER’S RIGHTS.  Upon default, Lender may, after giving such notices as
required by applicable law, declare the entire unpaid principal balance on this Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.
 ATTORNEYS’ FEES;
EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and
Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by
applicable law, Borrower will also pay any court costs, in addition to all other sums provided by law.
 JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial In any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.
 GOVERNING LAW. This Agreement will be governed by, construed and enforced In accordance with federal law and
the laws of the Commonwealth of Pennsylvania. This Agreement has been accepted by Lender In the Commonwealth of Pennsylvania.
 CHOICE OF VENUE.  If there is a lawsuit, Borrower agrees upon
Lender’s request to submit to the jurisdiction of the courts of Indiana County, Commonwealth of Pennsylvania.
 RIGHT OF SETOFF.. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does
not include any IRA or Keough accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such
accounts.
 LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances under this Agreement may be requested orally by Borrower or by Borrower or as provided in this paragraph.
Lender may, but need not, request that all oral requests shall be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above. Borrower agrees to be
liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Agreement at any time may be evidenced by
endorsement on this Agreement or by Lender’s internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Agreement if: (A) Borrower or any guarantor is in default under the terms of this
Agreement or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Agreement; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Agreement or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Agreement for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure.
 CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including
all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict performance of the obligations) as changed, nor obligate Lender
to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including
accommodation parties, unless a party is expressly released by lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign
this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non–signing party consents to the changes and provisions of this Agreement or otherwise
will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.
 PRIOR NOTE. This Change in Terms is an
amended and restated renewal of the Revolving Credit Note in the original principal amount of $5,000,000.00 from Allin Communications Corporation, Allin Interactive Corporation, Allin Digital Imaging Corp., Kent Consulting Group, Inc., Netright,
Inc., Allin Holdings Corporation and KCS Computer Services, Inc. to S&T Bank dated October 1, 1998. This Change in Terms is intended to amend and restate, and is not intended to be in substitution for or a novation of the Revolving Credit Note
dated October t, 1998.
 SUCCESSOR INTERESTS. The terms of this Agreement shall be binding on the Borrower, and upon Borrower’s heirs, personal representatives, successors, and assigns, and shall
be enforceable by Lender and its successors and assigns.

  MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Each Borrower understands and agrees
that, with or without notice to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise
change one or more times the time for payment or other terms any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any
security, with or without the substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreements,
as Lender in its discretion may determine; (e) release, substitute, agree not to sue, or deal with any one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; and (f) determine how,
when and what application of payments and credits shall be made on any other indebtedness owing by such other Borrower. Borrower and any other person who signs, guarantees or endorses this Agreement, to the extent allowed by law, waive presentment,
demand far payment, protest and notice of dishonor. Upon

  Page 3
 any change in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this
Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. If any portion of this Agreement is for any reason determined to be
unenforceable, it will not affect the enforceability of any other provisions of this Agreement.
 CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE
PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS AGREEMENT, AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE
ENTIRE PRINCIPAL BALANCE OF THIS AGREEMENT AND ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COST OF SUIT, AND AN ATTORNEY’S
COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO
DOING, THIS AGREEMENT OR A COPY OF THIS AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL
CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS AGREEMENT. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES
THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER’S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
 CONTINUED ON NEXT PAGE

  Page 4
 PRIOR TO SIGNING THIS AGREEMENT, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
 THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND
HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
 BORROWER:

	 		 
	ALLIN CORPORATION	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Corporation
	 	 
	 	 
	ALLIN INTERACTIVE CORPORATION	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Interactive Corporation
	 	 
	 	 
	ALLIN CORPORATION OF CALIFORNIA D/B/A ALLIN CONSULTING	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Corporation of California d/b/a Allin Consulting
	 	 
	 	 
	ALLIN NETWORK PRODUCTS, INC.	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Network Products, Inc.
	 	 
	 	 
	ALLIN HOLDINGS CORPORATION	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Holdings Corporation
	 	 
	 	 
	ALLIN CONSULTING OF PENNSYLVANIA, INC.	 
	 	 
	By: 	/s/ DEAN C. PRASKACH
	 	 
 	(Seal)
	 	Dean C. Praskach, V P/Finance Sec./Treas. of Allin
	 	Consulting of Pennsylvania, Inc.

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