Document:

ex_132453.htm

 

Exhibit 10.1

 

CONSENT AND AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS CONSENT AND AMENDMENT No. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment"), dated January 2, 2019 (effective as of January 1, 2019), is made and entered into by and among ASURE SOFTWARE, INC., a Delaware corporation ("Borrower"), the Guarantors party hereto, WELLS FARGO BANK, NATIONAL ASSOCIATION a national banking association, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, "Agent") and the Lenders party hereto.

 

RECITALS

 

WHEREAS, Borrower, the lenders party thereto as "Lenders" and Agent have entered into that certain Second Amended and Restated Credit Agreement dated as of March 29, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement;

 

WHEREAS, Borrower has informed Agent and Required Lenders that Borrower desires to enter into that certain Equity Purchase Agreement attached hereto as Exhibit A (the "Purchase Agreement"), with an effective date of January 1, 2019, by and among EVOLUTION PAYROLL PROCESSING LLC, a Delaware limited liability company (“Evolution”), PAYROLL MAXX LLC, a Colorado limited liability company ( “PMax”), Gregory D. Erwin, a Colorado resident, Daniel G. Pankow, a Nebraska resident, Gary L. Vander Woude, a Nebraska resident, and William F. Harvey, a Nebraska resident (each a “Seller” and together, “Sellers”), whereby Sellers will sell and transfer 100% of the issued and outstanding Financial Units and Governance Units (as each such term is defined in the Purchase Agreement) of PMax to Evolution (the "PMax Acquisition") in violation of Section 6.9 of the Credit Agreement, which, in absence of a written consent of Agent and Required Lenders, would be an Event of Default under Section 8.2(a) of the Credit Agreement;

 

WHEREAS, in connection with the PMax Acquisition, Borrower has informed Agent and Required Lenders that Borrower desires to borrow a Delayed Term Loan Draw of $8,000,000 (the "PMax DDTL"), such PMax DDTL to be funded on or about the date hereof, in all cases, in accordance with the terms and conditions set forth in Section 2.2(b) of the Credit Agreement (other than the ten (10) Business Days prior notice requirement as set forth in Section 2.2(b)(ii) of the Credit Agreement (the “DDTL Consent”);

 

WHEREAS, Borrower has requested that Agent and Required Lenders agree to certain amendments to the Credit Agreement as more fully set forth herein; and

 

WHEREAS, Agent and the Required Lenders are willing (a) to consent to the PMax Acquisition as a "Permitted Acquisition", (b) to agree to certain amendments to the Credit Agreement, and (c) to agree to the DDTL Consent and fund the PMax DDTL as a Delayed Term Loan Draw, in each case subject to the terms and conditions set forth herein;

 

 

 

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

 

ARTICLE I

CONSENT

 

Notwithstanding anything to the contrary in the Credit Agreement or elsewhere in the Loan Documents, subject to the satisfaction of the conditions set forth herein, and in reliance on the representations and warranties set forth herein, Agent and the Required Lenders hereby (a) consent to the consummation of the PMax Acquisition in accordance with the terms of the Purchase Agreement, (b) agree that no Default or Event of Default shall have occurred or be deemed to have occurred under the Credit Agreement or any of the Loan Documents solely as a result of the consummation of the PMax Acquisition in accordance with the terms of the Purchase Agreement, and (c) consent and agree that the PMax Acquisition shall be deemed to be a “Permitted Acquisition” for all purposes of the Credit Agreement and the Loan Documents. In connection therewith, the Borrower hereby acknowledges and agrees that $40,654,730.50 of the aggregate basket in clause (k) of the definition of "Permitted Acquisition" has been used in connection with all Permitted Acquisitions consummated after March 29, 2018, including the PMax Acquisition, and $28,306,503.25 remains available under clause (k) of the definition of "Permitted Acquisition".

 

ARTICLE II

FUNDING OF THE PMAX DDTL

 

Subject to the satisfaction of the conditions set forth herein and set forth in Section 2.2(b) and Section 3.2 of the Credit Agreement, and in reliance on the representations and warranties set forth herein, on January 2, 2019 the Lenders shall fund a Delayed Term Loan Draw in an aggregate amount of $8,000,000 and Borrower shall pay to Agent the fee set forth in Section A.3. "Delayed Draw Term Loan Fee" of the Fee Letter (as such term is defined after giving effect to this Amendment). Agent and the Required Lenders hereby agree that this request has been made in writing hereunder and hereby waive the ten (10) Business Days prior notice requirement as set forth in Section 2.2(b)(ii) of the Credit Agreement.

 

ARTICLE III

AMENDMENTS TO THE CREDIT AGREEMENT

 

Notwithstanding anything to the contrary in the Credit Agreement or elsewhere in the Loan Documents, subject to the satisfaction of the conditions set forth herein, and in reliance on the representations and warranties set forth herein, effective as of the Effective Date (as defined below), the Credit Agreement is hereby amended and supplemented as follows:

 

3.01     Section 7(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(b)     Leverage Ratio. Have a Leverage Ratio, measured on a quarter-end basis, of not greater than the applicable ratio set forth in the following table for the applicable date set forth opposite thereto:

 

-2-

 

 

	
			Applicable Ratio

				
			Applicable Date(s)

			
	
			5.75:1.00

				
			June 30, 2017

			
	
			5.75:1.00

				
			September 30, 2017

			
	
			5.65:1.00

				
			December 31, 2017

			
	
			6.50:1.00

				
			March 31, 2018

			
	
			6.50:1.00

				
			June 30, 2018

			
	
			6.00:1.00

				
			September 30, 2018

			
	
			6.00:1.00

				
			December 31, 2018

			
	
			6.00:1.00

				
			March 31, 2019

			
	
			6.00:1.00

				
			June 30, 2019

			
	
			6.00:1.00

				
			September 30, 2019

			
	
			5.50:1.00

				
			December 31, 2019

			
	
			5.25:1.00

				
			March 31, 2020

			
	
			5.10:1.00

				
			June 30, 2020

			
	
			5.00:1.00

				
			September 30, 2020

			
	
			4.75:1.00

				
			December 31, 2020

			
	
			3.75:1.00

				
			March 31, 2021

			
	
			3.50:1.00

				
			June 30, 2021

			
	
			3.25:1.00

				
			September 30, 2021 and each quarter-end thereafter

			

 

3.02     The definition of "EBITDA" set forth in Schedule 1.1 is hereby amended and restated in its entirety as follows:

 

"EBITDA" means, with respect to any fiscal period:

 

(a)     Borrower's consolidated net earnings (or loss),

 

minus

 

-3-

 

 

 

(b)     without duplication, the sum of the following amounts of Borrower for such period to the extent included in determining consolidated net earnings (or loss) for such period:

 

(i)     any extraordinary, unusual, or non-recurring gains,

 

(ii)     interest income,

 

(iii)     any software development costs to the extent capitalized during such period,

 

(iv)     exchange, translation or performance gains relating to any hedging transactions or foreign currency fluctuations, and

 

(v)     income arising by reason of the application of FAS 141R,

 

plus

 

(c)     without duplication, the sum of the following amounts of Borrower for such period to the extent included in determining consolidated net earnings (or loss) for such period:

 

(i)     any extraordinary, unusual, or non-recurring non-cash losses,

 

(ii)     Interest Expense,

 

(iii)     Tax expense based on income, profits or capital, including federal, foreign, state, franchise and similar Taxes (and for the avoidance of doubt, specifically excluding any sales Taxes or any other Taxes held in trust for a Governmental Authority),

 

(iv)     depreciation and amortization for such period,

 

(v)     with respect to any Permitted Acquisition, costs, fees, charges, or expenses consisting of out-of-pocket expenses owed by Borrower or any of its Subsidiaries to any Person for services performed by such Person in connection with such Permitted Acquisition (including, for example, but without limitation, costs and expenses related to due diligence, quality of earnings analysis, SEC compliance, legal fees, valuation expenses and audit expenses related to the business acquired in a Permitted Acquisition) incurred within 180 days (Borrower may request an addback for such expenses incurred after 180 days but within 365 days as determined in Agent's and Required Lenders' respective sole discretion) prior to or after the consummation of such Permitted Acquisition, (A) up to an aggregate amount (for all such items in this clause (v)) for such Permitted Acquisition not to exceed the greater of (x)

 

-4-

 

 

$500,000 or (y) 5.0% of the Purchase Price of such Permitted Acquisition and (B) in any amount to the extent such costs, fees, charges, or expenses are paid with proceeds of new equity investments in exchange for Qualified Equity Interests of Borrower contemporaneously made by Permitted Holders,

 

(vi)     with respect to any Permitted Acquisitions: (A) purchase accounting adjustments, including, without limitation, a dollar for dollar adjustment for that portion of revenue that would have been recorded in the relevant period had the balance of deferred revenue (unearned income) recorded on the closing balance sheet and before application of purchase accounting not been adjusted downward to fair value to be recorded on the opening balance sheet in accordance with GAAP purchase accounting rules; and (B) non-cash adjustments in accordance with GAAP purchase accounting rules under FASB Statement No. 141 and EITF Issue No. 01-3, in the event that such an adjustment is required by Borrower's independent auditors, in each case, as determined in accordance with GAAP,

 

(vii)     fees, costs, charges and expenses, in respect of Earn-Outs incurred in connection with any Permitted Acquisition to the extent permitted to be incurred under the Agreement that are required by the application of FAS 141R to be and are expensed by Borrower and its Subsidiaries,

 

(viii)     non-cash compensation expense (including deferred non-cash compensation expense), or other non-cash expenses or charges, arising from the sale or issuance of Equity Interests, the granting of stock options, and the granting of stock appreciation rights and similar arrangements (including any repricing, amendment, modification, substitution, or change of any such Equity Interests, stock option, stock appreciation rights, or similar arrangements) minus the amount of any such expenses or charges when paid in cash to the extent not deducted in the computation of net earnings (or loss),

 

(ix)     one-time non-cash restructuring charges,

 

(x)     non-cash exchange, translation, or performance losses relating to any hedging transactions or foreign currency fluctuations,

 

(xi)     non-cash losses on sales of fixed assets or write-downs of fixed or intangible assets,

 

(xii)     with respect to any Permitted Acquisition, Permitted Acquisition Charges, up to an aggregate amount (for all such items in

 

-5-

 

 

this clause (xii)) not to exceed 5.0% of the Purchase Price of such Permitted Acquisition,

 

(xiii)     fees, costs, charges and expenses, in respect for any Specified Equity Issuance, to the extent incurred within 180 days of the consummation of the Specified Equity Issuance, up to an aggregate amount (for all such items in this clause (xiii)) not to exceed $250,000,

 

(xiv)     fees and expenses in respect of any amendment, waiver or consent with respect to this Agreement and the other Loan Documents, to the extent (A) incurred within 180 days of the consummation of such amendment, waiver or consent and (B) paid to or on behalf of the Agent or the Lenders or legal counsel engaged by the Borrower in connection with any amendment, waiver or consent, and

 

(xv)     without duplication of clause (xii) above, one-time restructuring charges to the extent actually incurred (excluding, for purposes of clarity, anticipated charges) with respect to (A) the relocation or closing of business locations, including employee severance payments, lease terminations, recruiting fees, duplicate employee wages and other relocation or closing costs, up to an aggregate amount (for all such items in this clause (A)) not to exceed $1,500,000 for any one Reference Period (as defined below), (B) procurement and implementation of an enterprise resource planning (ERP) software system, up to an aggregate amount not to exceed $750,000 for any one Reference Period, (C) costs associated with modifications to the accounting functions of the Borrower and its Subsidiaries related solely to severance, duplicate salaries or recruitment costs, up to an aggregate not to exceed $1,000,000 for any one Reference Period, and (D) royalties associated with time clock vendors with expiring contracts, up to an aggregate amount not to exceed $600,000 for any one Reference Period.

 

in each case, determined on a consolidated basis in accordance with GAAP.

 

For the purposes of calculating EBITDA hereunder, (a) for any period of 4 consecutive fiscal quarters (each, a "Reference Period"), if at any time during such Reference Period (and after the Closing Date), Borrower or any of its Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, in each case to be agreed by Agent and Required Lenders) or in such other manner acceptable to Agent and Required Lenders as if any such Permitted Acquisition or adjustment occurred on the first day of such Reference Period, (b) EBITDA for the fiscal quarter ended December 31,

 

-6-

 

 

2017 shall be deemed to be $4,540,848, (c) EBITDA for the fiscal quarter ended March 31, 2018 shall be deemed to be $5,675,919, (d) EBITDA for the fiscal quarter ended June 30, 2018, shall be deemed to be $4,912,835 and (e) EBITDA for the fiscal quarter ended September 30, 2018, shall be deemed to be $4,177,846.

 

3.03     Clause (c)(v) of the definition of "Excess Cash Flow" set forth in Schedule 1.1 is hereby amended and restated in its entirety as follows:

 

(v)     the amount of cash items included in the calculation of EBITDA pursuant to clauses (c)(v), (vii), (xii), (xiii) and (xv) of the definition of EBITDA for such period (to the extent that the applicable payments are not made with the proceeds of Indebtedness (other than proceeds of Revolving Loans)),

 

3.04     The definition of "Fee Letter" set forth in Schedule 1.1 is hereby amended and restated in its entirety as follows:

 

"Fee Letter" means that certain amended and restated fee letter, dated effective as of January 1, 2019, between Borrower and Agent, in form and substance reasonably satisfactory to Agent, as such fee letter is amended, amended and restated, or otherwise modified from time to time

 

3.05     Clause (d) of the definition of “Permitted Acquisition” set forth in Schedule 1.1 is hereby amended by inserting the words “at least ten (10) Business Days prior to the consummation thereof” immediately after the words “proposed Acquisition” in the second line thereof.

 

3.06     The phrase "Monthly (within 30 days (45 days in the case of a month that is the end of a fiscal quarter) after the end of each month)" set forth in the first column, first row of the table set forth on Schedule 5.2 is hereby amended and restated in its entirety to read "Monthly (within 35 days (45 days in the case of a month that is the end of a fiscal quarter) after the end of each month)".

 

ARTICLE IV

NO WAIVER

 

This Amendment is a limited consent and amendment and other than as set forth above in Article I or Article II hereof, nothing contained in this Amendment shall be construed as a consent or amendment to or waiver by Agent or any Lender of any covenant or provision of the Credit Agreement, the other Loan Documents, this Amendment, or of any other contract or instrument between any Loan Party and Agent or any Lender, and the failure of Agent or any Lender at any time or times hereafter to require strict performance by the Loan Parties of any provision thereof shall not waive, affect or diminish any right of Agent to thereafter demand strict compliance therewith. Agent and each Lender hereby reserves all rights granted under the Credit Agreement, the other Loan Documents, this Amendment and any other contract or instrument between any Loan Party and Agent or any Lender.

 

-7-

 

 

ARTICLE V

CONDITIONS PRECEDENT AND SUBSEQUENT

 

5.01     Conditions to Effectiveness. This Amendment shall become effective only upon the satisfaction in full, in a manner satisfactory to Agent and Required Lenders, of the following conditions precedent (the first date upon which all such conditions have been satisfied being herein called the "Effective Date"):

 

(a)     Agent shall have received the following documents or items, each in form and substance satisfactory to Agent and Required Lenders and their respective legal counsel (unless such conditions are waived by Agent and Required Lenders and their respective legal counsel in their sole discretion):

 

(i)     a Joinder to the Amended and Restated Intercompany Subordination Agreement executed by PMax,

 

(ii)     a Supplement to Perfection Certificate (giving effect to the consummation of the PMax Acquisition and the joinder of Pax as a Loan Party) executed by Borrower on behalf of all Loan Parties,

 

(iii)     a Joinder to the Amended and Restated Guaranty and Security Agreement executed by PMax, along with supplemental schedules,

 

(iv)     a Sixth Amended and Restated Fee Letter between Agent and Borrower,

 

(v)     a certificate from an officer of PMax (after consummation of the PMax Acquisition), Evolution, and Borrower (i) attesting to the resolutions of each of PMax's, Evolution's and Borrower's boards of directors authorizing its execution, delivery, and performance of this Amendment and the other Loan Documents to which any of PMax, Evolution or Borrower are a party, (ii) authorizing specific officers of each of PMax, Evolution and Borrower to execute the same, (iii) attesting to the incumbency and signatures of such specific officers of each of PMax, Evolution and Borrower, (iv) representing and warranting that each of PMax, Evolution and Borrower's Governing Documents attached thereto are true, correct and complete as of the date thereof, and (v) attesting to a certificate of status with respect to each of PMax, Evolution and Borrower, dated within 10 days prior to the date hereof, such certificates to be issued by the appropriate officer of the jurisdiction of organization of each of PMax, Evolution and Borrower, which certificates shall indicate that each of PMax, Evolution and Borrower are in good standing in such jurisdiction,

 

(vi)     a fully executed copy of the Purchase Agreement and that certain subordinated promissory note dated as of January 1, 2019, issued to Sellers and attached hereto as Exhibit B, including all amendments thereto, and all other requested agreements or documents in connection therewith,

 

-8-

 

 

(vii)     all other documents Agent may reasonably request with respect to any matter relevant to this Amendment or the transactions contemplated hereby, including without limitation a legal opinion of Borrower's counsel and all other documents listed on the Closing Checklist attached hereto (including, without limitation, any deliverables required under Section 5.11 of the Credit Agreement in connection therewith) as Exhibit C;

 

(b)     Agent and each Lender party hereto shall have received a copy of this Amendment executed and delivered by Agent, Required Lenders and Borrower;

 

(c)     All corporate and other proceedings, and all documents instruments and other legal matters in connection with the transactions contemplated by each of this Amendment and the PMax Acquisition shall be satisfactory in form and substance to Agent and its counsel.

 

(d)     Borrower and the other Loan Parties shall have satisfied each of the requirements of the "Permitted Acquisition" definition in Schedule 1.1 to the Credit Agreement with respect to the PMax Acquisition except with respect to clause (a) and, subject to Section 3.01 above, (c) thereof.

 

(e)     After giving effect to each of this Amendment and the PMax Acquisition, the representations and warranties made by Borrower contained herein and by each Loan Party in the Credit Agreement and the other Loan Documents, shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date hereof, as if those representations and warranties were made for the first time on such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date);

 

(f)     After giving effect to this Amendment, each Loan Party is in compliance with all applicable covenants and agreements contained in the Credit Agreement and the other Loan Documents;

 

(g)     After giving effect to this Amendment, no Default or Event of Default shall exist under any of the Loan Documents, and no Default or Event of Default will result under any of the Loan Documents from the execution, delivery or performance of this Amendment;

 

(h)     Borrower has delivered to Agent, at least five (5) Business Days prior to the date hereof, updated pro forma certified calculations of the financial covenants set forth in Section 7 of the Credit Agreement evidencing compliance on a pro forma basis with Section 7 of the Credit Agreement (after giving effect to the borrowing of the PMax DDTL) for the most recently ended fiscal quarter for which financial statements have been received pursuant to Section 5.1 of the Credit Agreement;

 

-9-

 

 

(i)     Borrower has delivered to Agent, at least five (5) Business Days prior to the date hereof, an updated pro forma certified calculation of the Leverage Ratio (after giving effect to the PMax DDTL) for the most recently ended fiscal quarter for which financial statements have been received pursuant to Section 5.1 of the Credit Agreement, and such pro forma calculations demonstrate Leverage not greater than 5.75:1.00;

 

(j)     Borrower has delivered to Agent, at least five (5) Business Days prior to the date hereof, an updated pro forma certified calculation of the Liquidity (after giving effect to the applicable PMax DDTL) for the most recently ended fiscal quarter for which financial statements have been received pursuant to Section 5.1 of the Credit Agreement, and such Liquidity is greater than $6,000,000; and

 

(k)     Borrower has paid to Agent the fee set forth in Section A.1. "Closing Fee" of the Fee Letter (as such term is defined after giving effect to this Amendment).

 

5.02     Post-Closing Covenants.

 

(a)     On or prior to January 31, 2019, Borrower shall provide Agent and Required Lenders a quality of earnings report with respect to PMax.

 

(b)     On or prior to the date that is 15 Business Days from the Effective Date (or such longer period as agreed to by Agent in its sole discretion), Borrower shall deliver to Agent the original certificate representing all outstanding membership interests of PMax, together with an assignment separate from certificate executed in blank, each in form and substance acceptable to Agent.

 

Failure to comply with any provision of this Section 5.02 shall be an immediate Event of Default.

 

ARTICLE VI

RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

 

6.01     Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and the other Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect. Borrower and the other Loan Parties hereby agree that all liens and security interest securing payment of the Obligations under the Credit Agreement are hereby collectively renewed, ratified and brought forward as security for the payment and performance of the Obligations. Borrower and the other Loan Parties, and Agent, on behalf of itself and the Lenders, agree that the Credit Agreement and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms, and that this Amendment shall not constitute a novation.

 

6.02     Representations and Warranties. Borrower and each Guarantor each hereby represents and warrants, jointly and severally, to Agent and the Lender Group as of the date hereof as follows: (a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (b) the execution, delivery and performance by it of this

 

-10-

 

 

Amendment, the Credit Agreement and all other Loan Documents executed and/or delivered in connection herewith are within its powers, have been duly authorized, and do not contravene (i) its Governing Documents or (ii) any applicable law; (c) no consent, license, permit, approval or authorization of, or registration, filing or declaration with any governmental body or other Person, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment, the Credit Agreement or any of the other Loan Documents executed and/or delivered in connection herewith by or against it, except for those consents, approvals or authorizations which (i) will have been duly obtained, made or compiled prior to the Effective Date and which are in full force and effect or (ii) the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect; (d) this Amendment, the Credit Agreement and all other Loan Documents executed and/or delivered in connection herewith have been duly executed and delivered by it; (e) this Amendment, the Credit Agreement and all other Loan Documents executed and/or delivered in connection herewith constitute its legal, valid and binding obligation enforceable against it in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally or by general principles of equity; (f) no Default or Event of Default exists, has occurred and is continuing or would result by the execution, delivery or performance of this Amendment; (g) each Loan Party is in compliance with all applicable covenants and agreements contained in the Credit Agreement and the other Loan Documents, as consented to, amended or expressly waived herein; (h) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified in the text thereof) on and as of the date hereof as though made on and as of each such date, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and complete on and as of such earlier date); (i) the PMax Acquisition meets all of the requirements of the "Permitted Acquisition" definition in the Credit Agreement except with respect to clause (a) and, subject to Section 3.01 above, (c) thereof; and (j) the proceeds of the PMax DDTL shall be solely used to finance the PMax Acquisition and/or transaction expenses with respect thereto.

 

ARTICLE VII

MISCELLANEOUS PROVISIONS

 

7.01     Survival of Representations and Warranties. All representations and warranties made in the Credit Agreement or the other Loan Documents, including, without limitation, any document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Agent shall affect the representations and warranties or the right of Agent to rely upon them.

 

7.02     Expenses of Agent and the Lender Group. The Borrower agrees to pay on demand all Lender Group Expenses incurred by Agent and any Lender in connection with this Amendment any and all amendments, modifications, and supplements to the other Loan Documents, including, without limitation, the reasonable costs and fees of legal counsel, and all costs and expenses incurred by Agent in connection with the enforcement or preservation of any

 

-11-

 

 

rights under the Credit Agreement or any other Loan Documents, including, without, limitation, the costs and fees of Agent's and Required Lenders' legal counsel.

 

7.03     Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

 

7.04     Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of Agent and each Loan Party and their respective successors and assigns, except that no Loan Party may assign or transfer any of its respective rights or obligations hereunder without the prior written consent of Agent and each Lender.

 

7.05     Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment. Receipt by telecopy or electronic mail of any executed signature page to this Amendment shall constitute effective delivery of such signature page. This Amendment to the extent signed and delivered by means of a facsimile machine or other electronic transmission including email transmission of a PDF image), shall be treated in all manner and respects and for all purposes as an original agreement or amendment and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature or agreement or amendment was transmitted or communicated through the use of a facsimile machine or other electronic transmission as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

 

7.06     Effect of Amendment. No consent or amendment, express or implied, by Agent to or for any breach of or deviation from any covenant or condition by any Loan Party shall be deemed a consent to or waiver or amendment of any other breach of the same or any other covenant, condition or duty.

 

7.07     Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

 

7.08   Applicable Law. THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

7.09     Final Agreement. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS MODIFIED HEREBY, REPRESENT THE ENTIRE EXPRESSION

 

-12-

 

 

OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS MODIFIED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AGREEMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE BORROWER AND AGENT.

 

7.10     Release. AS A MATERIAL PART OF THE CONSIDERATION FOR AGENT AND LENDERS ENTERING INTO THIS AMENDMENT, ON THE DATE HEREOF EACH LOAN PARTY, ON BEHALF OF ITSELF AND ITS SUCCESSORS (INCLUDING, WITHOUT LIMITATION, ANY TRUSTEES ACTING ON BEHALF OF SUCH LOAN PARTY AND ANY DEBTOR-IN-POSSESSION WITH RESPECT TO SUCH LOAN PARTY), ASSIGNS, SUBSIDIARIES AND AFFILIATES HEREBY RELEASES AND FOREVER DISCHARGES AGENT AND EACH LENDER AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES, SUBSIDIARIES, PARENTS, SUCCESSORS AND ASSIGNS FROM ANY AND ALL LIABILITIES, OBLIGATIONS, ACTIONS, CONTRACTS, CLAIMS, CAUSES OF ACTION, DAMAGES, DEMANDS, COSTS AND EXPENSES WHATSOEVER, OF EVERY KIND AND NATURE, HOWEVER EVIDENCED OR CREATED, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE EFFECTIVE DATE INVOLVING THE EXTENSION OF CREDIT UNDER OR ADMINISTRATION OF THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENTS OR COLLATERAL, THE OBLIGATIONS INCURRED BY BORROWERS OR ANY OTHER TRANSACTIONS EVIDENCED BY THE CREDIT AGREEMENT OR THE LOAN DOCUMENTS.

 

7.11     Consent of Guarantors. The Borrower and each Guarantor, hereby (a) consent to the transactions contemplated by this Amendment, including the PMax Acquisition; and (b) agree that the Credit Agreement and the other Loan Documents (as amended, restated, supplemented or otherwise modified from time to time) are and shall remain in full force and effect. Although each Guarantor has been informed of the matters set forth herein and has acknowledged and agreed to the same, each understands that neither the Agent nor any Lender has any obligation to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty. Borrower and each Guarantor, acknowledges that its Guaranty is in full force and effect and ratifies the same, acknowledges that the undersigned has no defense, counterclaim, set-off or any other claim to diminish the undersigned's liability under such document.

 

[Remainder of page intentionally left blank; signature pages follow]

 

 

-13-

 

 

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first above written.

 

	
			ASURE SOFTWARE, INC.,

			a Delaware corporation, as Borrower

			

			

			By: /s/ Patrick Goepel                                      

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			ASURE COBRASOURCE, LLC,

			a Delaware limited liability company, as a Guarantor

			

			

			By: /s/ Patrick Goepel                                     

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			MANGROVE EMPLOYER SERVICES, INC.,

			a Florida corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel                                     

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			MANGROVE PAYROLL SERVICES, INC.,

			a Florida corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			MANGROVE SOFTWARE, INC.,

			a Florida corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

	
			ASURE CONSULTING INC.,

			a Washington corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			COMPASS HRM, INC.,

			a Florida corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			ISYSTEMS INTERMEDIATE HOLDCO, INC.,

			a Delaware corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			ISYSTEMS LLC,

			a Vermont limited liability company, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			EVOPRO SOLUTIONS, INC.,

			a Florida corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

	
			ASSOCIATED DATA SERVICES, INC,

			an Alabama Corporation, as a Guarantor  

			 

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			PAY SYSTEMS OF AMERICA, INC.,

			a Tennessee corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			TELEPAYROLL, INC.,

			a California corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			SAVERS ADMINISTRATIVE SERVICES, INC.,

			a North Carolina corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			 

			 

			
	
			EVOLUTION PAYROLL PROCESSING LLC,

			a Delaware limited liability company, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

	
			USA PAYROLLS INC.,

			a New York corporation, as a Guarantor

			

			

			By: /s/ Patrick Goepel ​​​​​​​                                    

			Name: Patrick Goepel

			Title: Chief Executive Officer and President

			

 

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

 

	
			WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent and as a Lender

			

			By: /s/Brad Blakey                                          

			Name: Brad Blakey                                         

			Title: Authorized Signatory                             

			

 

 

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

 

	
			GOLDMAN SACHS SPECIALTY LENDING HOLDINGS, INC., as a Lender

			

			

			By: /s/ Justin Betzen                                        

			Name: Justin Betzen                                        

			Title: Senior Vice President                             

			

 

 

 

Signature Page to Consent and Amendment No. 2 to Second Amended and Restated Credit Agreement

 

 

 

 

 

EXHIBIT A

TO

CONSENT AND AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

Purchase Agreement

 

 

 

 

See attached.

 

 

 

 

 

 

 

EXHIBIT B

TO

CONSENT AND AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

Subordinated Seller Note

 

 

 

 

See attached.

 

 

 

 

 

 

 

 

EXHIBIT C

TO

CONSENT AND AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

 

Closing Checklist

 

 

 

 

See attached.Exhibit 10.1

 

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDMENT
TO EMPLOYMENT AGREEMENT (the “Second Amendment”) is entered into by and between CCUR Holdings, Inc. (fka Concurrent
Computer Corporation), a Delaware corporation (“CCUR”), and Warren Sutherland (the “Employee”)
effective as of the 1st day of January 2019 (the “Effective Date”).

 

RECITALS:

 

WHEREAS, CCUR and Employee
are parties to that certain Employment Agreement dated May 15, 2017, as amended by the First Amendment to Employment Agreement
dated January 30, 2018 (collectively the “Agreement”); unless otherwise noted, all section references used herein
are to the specific sections of the Agreement, pursuant to which CCUR has employed Employee; and

 

WHEREAS, CCUR and Employee
now mutually desire to amend certain terms and conditions of the Agreement.

 

WITNESSETH:

 

NOW THEREFORE, for
and in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, CCUR and Employee hereby agree as follows:

 

		1.	Capitalized Terms. All capitalized terms used in this Second Amendment that are not otherwise
defined herein shall have the meaning ascribed to them in the Agreement.

 

		2.	Position; Duties; Responsibilities. Section 2.1 of the Agreement is hereby amended by deleting
the first sentence thereof in its entirety and substituting the following in lieu thereof:

 

“2.1      The
term of employment (the “Term”) hereunder shall commence on the date hereof and continue until March 1, 2020 (the “Initial
Term”) unless earlier terminated pursuant to Sections 4.1- 4.7. Unless notice of non-renewal is provided by either party
at least ninety (90) days prior to the end of the Initial Term, the Term will automatically extend beyond the Initial Term on an
ongoing basis until employment is terminated under Sections 4.1-4.7.

 

		3.	Annual Bonus Opportunity. Section 3.2 of the Agreement is hereby amended by deleting it
in its entirety and substituting the following in lieu thereof:

 

“During the Term of employment
hereunder, the Employee will be eligible for a bonus opportunity under the Company’s annual bonus program (the “NAV
Program"), which currently provides an annual bonus opportunity related to the net value increase in the Company’s
assets during the annual bonus period. The Employee shall be eligible to receive a target amount of twenty-five percent (25%) of
the eligible bonus pool, to be reviewed annually in accordance with the Company’s regular bonus review schedule. The targets
and objectives for each year and other terms and conditions of the bonus opportunity shall be established each year by the Compensation
Committee of the Board of Directors with the input of the Chief Executive Officer.”

 

     

     

    

 

		4.	Termination Following Change of Control. Section 4.5 of the Agreement is hereby amended
by deleting it in its entirety and substituting the following in lieu thereof:

 

“If there
is a “change of control” (as defined in the CCUR Holdings, Inc. Amended and Restated 2011 Stock Incentive Plan), and
within one year after such “change of control” the Employee’s employment is terminated by the Company (other
than for Due Cause, death or Continuing Disability), subject to executing a release in a form acceptable to the Company and such
release becoming irrevocable, the Employee will be entitled to receive (a) salary continuation payments for a period of 12 months
from the date of such termination, at the salary in effect, pursuant to Section 3.1 above, immediately prior to such termination,
(b) the amount, if any, paid as an annual bonus in the year preceding the Employee’s termination of employment, and (c) COBRA
continuation coverage under the Company’s Health Plan for Employee and his eligible dependents who were covered under the
Health Plan at the time of his termination, but during the 12 month period following Employee’s termination, Employee shall
be eligible to continue such coverage at the same premium charged to active employees during such period. The salary continuation
payments pursuant to Section 4.5(a) and (b) above shall be made in substantially equal installments on each regularly scheduled
Pay Date, beginning with the first Pay Date following the thirtieth (30th) day after the date of the Employee’s Separation
from Service, but with the first payment being a lump sum payment covering all payment periods from the date of the Employee’s
Separation from Service through the date of such first payment. To the extent applicable, such payments shall be subject to the
payment restrictions set forth in the third paragraph of Section 4.4.”

 

		5.	Constructive Termination of the Employee by the Company without
Due Cause. Section 4.6 of the Agreement is hereby amended by deleting it in its entirety and substituting the following
in lieu thereof:

 

“Anything
herein to the contrary notwithstanding, if the Company:

 

		(i)	demotes or otherwise elects or appoints the Employee to a lesser office than set forth in Section
2.1, or

 

		(ii)	causes a material change in the nature or scope of the authorities, duties or responsibilities
attached to the Employee’s position as described in Section 2.1, or

 

     

     

    

 

		(iii)	materially decreases the Employee’s salary or annual bonus opportunity below the most recent
levels provided for by the terms of Sections 3.1 and 3.2,

 

		(iv)	commits any other material breach of this Agreement, or

 

		(v)	the Agreement is not renewed past the Initial Term,

 

then such action
(or inaction) by the Company, unless consented to in writing by the Employee, shall constitute a constructive termination of the
Employee’s employment. If, within thirty (30) days of learning of the action (or inaction) described herein as a basis for
a constructive termination of employment, the Employee (unless he has given written consent thereto) notifies the Company in writing
that he wishes to effect a constructive termination of his employment pursuant to this Section 4.6, and such action (or inaction)
is not reversed or otherwise remedied by the Company within 30 days following receipt by the Company of such written notice, then
effective at the end of such second 30 day period, the employment of the Employee hereunder shall be deemed to have terminated
by the Company other than for Due Cause pursuant to Section 4.4 above, and the Employee shall (subject to the terms and conditions
set forth in such section, including executing a release in a form acceptable to the Company, and such release becoming irrevocable)
be entitled to Severance Compensation in accordance with Section 4.4; provided, however, that if Employee elects to assert constructive
termination as a result of clause (v) above, the Severance Compensation shall not include any bonus amount contemplated by clause
(b) of Section 4.4.”

 

		6.	Notices. Section 11 of the Agreement is hereby amended by deleting it in its entirety and
substituting the following in lieu thereof:

 

“Any notice to be given hereunder
shall be in writing and delivered personally or sent by certified mail, postage prepaid, return receipt requested, addressed to
the party concerned at the address indicated below or to such other address as such party may subsequently give notice of hereunder
in writing:

 

	COMPANY:	 	CCUR Holdings, Inc.
	 	 	4375 River Green Parkway
	 	 	Suite 210
	 	 	Duluth, GA 30096
	 	 	Attn: General Counsel
	 	 	 
	EMPLOYEE:	 	At the most recent address for the Employee in the Company’s records.”

 

		7.	Noncompete and Nonsolicitation of Customers or Employees. Section
1 of Exhibit A to the Agreement is hereby amended by deleting it in its entirety and substituting the following in lieu thereof:

 

     

     

    

 

“During
my employment by the Company, I will devote my full time and best efforts to the business of the Company and I will not, directly
or indirectly, alone or as a partner, officer, director, employee or holder of more than 5% of the common stock of any other organization,
engage in any business activity which competes directly or indirectly with the products or services being developed, manufactured
or sold by the Company and its subsidiaries. I also agree that, following any termination of such employment, I will not, directly
or indirectly, for any period in which I receive severance payments from the Company, plus one (1) year, (a) engage in or provide
any services substantially similar to the services that I provided to the Company or its subsidiaries at any time during the last
twelve (12) months of my employment to or on behalf of any person or entity that competes with the businesses in which the Company
or its subsidiaries are engaged at the time of termination of my employment anywhere in the continental United States, which I
acknowledge and agree is the primary geographic area in which the Company and its subsidiaries compete in these businesses and
thus, by virtue of my senior executive position and responsibilities with the Company, also the primary geographic area of my employment
with the Company, (b) solicit or attempt to solicit, for the purpose of competing with the businesses in which the Company or any
of its subsidiaries is engaged at the time of termination of my employment, any customers or active prospects of the Company or
its subsidiaries with which I had any material business contact for or on behalf of the Company or its subsidiaries at any time
during the last twelve (12) months of my employment, or (c) recruit or otherwise seek to induce any employees of the Company or
its subsidiaries to terminate their employment or violate any agreement with the Company or its subsidiaries.”

 

		8.	No Other Amendments. Except as amended hereby, the Agreement and all provisions, terms,
and conditions of thereof, shall remain unchanged and is hereby ratified by the parties. In the event of any conflict in the terms
of this Second Amendment, and the typed, printed or handwritten provisions of the Agreement, the terms of this Second Amendment
shall control.

 

		9.	Capitalized Terms. Capitalized terms used herein shall have the same meaning ascribed to
them in the Agreement, unless defined herein.

 

		10.	Captions. The captions contained in this Second Amendment are for convenience and reference
only and in no event define, describe or limit the scope or intent of this Second Amendment or any of the provisions or terms thereof.

 

		11.	Counterparts; Electronic Signatures. This Second Amendment may be executed in duplicate
counterparts, each of which collectively shall be deemed an original. Faxed or e-mailed signatures shall have the same effect as
original signatures.

 

[Signature
Page Follows]

 

     

     

    

 

	CCUR Holdings, Inc.	 
	 	 
	By:	/s/ Wayne Barr, Jr.	 
	 	Wayne Barr, Jr.	 
	 	Executive Chairman, CEO & President	 
	 	 
	Employee	 
	 	 
	By:	/s/ Warren Sutherland	 
	 	Warren Sutherland	 

 

 

Signature Page to
Second Amendment to Employment Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}]]