EXHIBIT 10.12
SECOND AMENDMENT TO ACQUISITION LOAN AGREEMENT AND OTHER LOAN DOCUMENTS
This SECOND AMENDMENT TO ACQUISITION LOAN AGREEMENT AND OTHER LOAN
DOCUMENTS (this "Amendment"), dated as of November 8, 2004, is entered into by
and between CAPITALSOURCE FINANCE LLC, a Delaware limited liability company, in
its capacity as agent (in such capacity, "Agent") for the Lenders under the Loan
Agreement referenced below, the Lenders party thereto, and INFOCROSSING, INC., a
Delaware corporation ("Borrower").
R E C I T A L S:
A. The Borrower, Agent and the Lenders have entered into that certain
Acquisition Loan Agreement dated as of July 29, 2004 (as the same has been
amended by that certain Amended and Restated Consent, Waiver and First Amendment
to Acquisition Loan Agreement dated as of October 6, 2004 (the "First
Amendment") and may further be amended, restated, supplemented or otherwise
modified from time to time, the "Loan Agreement").
B. Borrower, Agent and the Lenders desire to amend and modify the Loan
Agreement and the First Amendment as herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms used herein, including in the above
recitals, but not elsewhere defined herein shall have the respective meanings
ascribed to such terms in the Loan Agreement.
2. Amendments.
2.1 Amendments to the Loan Agreement. Section 6.17 of the Loan
Agreement hereby is amended and restated in its entirety to read as follows:
6.17 Certain Bank Accounts. To the extent Borrower or
any Subsidiary of Borrower has not entered into a Deposit
Account Control Agreement with respect to (a) any deposit,
checking or other similar bank account (but not including any
payroll, zero-balance or similar account), permit the
aggregate amount on deposit in all such accounts at any time
to exceed $75,000; (b) any payroll account, permit the
aggregate amount on deposit in all payroll accounts (whether
subject to Deposit Account Control Agreements or not) at any
time to exceed the aggregate amount reasonably necessary to
fund the payroll requirements of Borrower and its Subsidiaries
in the ordinary course of business at such time and (c) any
zero-balance or similar account, permit the aggregate amount
on deposit in each such account at any time to exceed $-0-.
2.2 Amendments to First Amendment. The First Amendment
ereby is amended as follows:
(a) Section 4(c) of the First Amendment hereby is amended by
deleting the date "November 8, 2004" and substituting "December 31, 2004"
therefor.
(b) Exhibit A attached to the First Amendment hereby is
amended by deleting Paragraph 5(b) in its entirety and substituting the
following therefor:
(b) to Borrower's knowledge, the matters described in
Schedule 3.1.7(b)(1) to the Purchase and Sale Agreement dated
as of September 1, 2004 between the Borrower and Verizon Data
Services Inc. could not reasonably be expected to have a
Material Adverse Effect.
3. Conditions to Effectiveness. The effectiveness of this Amendment
shall be subject to the satisfaction of all of the following conditions in a
manner, form and substance satisfactory to the Agent:
(a) the representations and warranties contained herein and in all other
Loan Documents, as amended hereby, shall be true and correct in all
material respects as of the date hereof, except for such
representations and warranties limited by their terms to a specific
date;
(b) no Default or Event of Default shall be in existence;
(c) the Borrower shall have delivered to the Agent an executed original
copy of this Amendment and each other agreement, document or instrument
reasonably requested by the Agent in connection with this Amendment,
each in form and substance reasonably satisfactory to Agent and
Lenders;
(d) the Borrower shall have paid all fees, costs and expenses owed to
and/or incurred by the Agent and Lenders arising in connection with the
Loan Documents and/or this Amendment; and
(e) all proceedings taken in connection with the transactions contemplated
by this Amendment and all documentation and other legal matters
incident thereto shall be satisfactory to the Agent.
4. Loan Agreement in Full Force and Effect as Amended. Except as
specifically amended hereby, the Loan Agreement and other Loan Documents,
including the First Amendment, shall remain in full force and effect and hereby
are ratified and confirmed as so amended. Except as expressly set forth herein,
this Amendment shall not be deemed to be a waiver, amendment or modification of
any provisions of the Loan Agreement or any other Loan Document, including the
First Amendment, or any right, power or remedy of Agent or Lenders, or
constitute a waiver of any provision of the Loan Agreement or any other Loan
Document, including the First Amendment, or any other document, instrument
and/or agreement executed or delivered in connection therewith or of any Default
or Event of Default under any of the foregoing, in each case whether arising
before or after the date hereof or as a result of performance hereunder or
thereunder. Except as set forth herein, Agent and Lenders reserve all rights,
remedies, powers, or privileges available under the Loan Agreement, the other
Loan Documents (including the First Amendment), at law or otherwise. All
references to the Loan Agreement shall be deemed to mean the Loan Agreement as
modified hereby. This Amendment shall not constitute a novation or satisfaction
and accord of the Loan Agreement and/or other Loan Documents (including the
First Amendment), but shall constitute an amendment thereof. The parties hereto
agree to be bound by the terms and conditions of the Loan Agreement and the
other Loan Documents (including the First Amendment) as amended by this
Amendment, as though such terms and conditions were set forth herein. Each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of similar import shall mean and be a reference to the Loan
Agreement as amended by this Amendment, and each reference herein or in any
other Loan Document (including the First Amendment) to the "Loan Agreement" or
"Credit Agreement" shall mean and be a reference to the Loan Agreement as
amended and modified by this Amendment.
5. Representations. Borrower hereby represents and warrants to Agent
and Lenders as follows:
(a) it is duly incorporated, validly existing and in good
standing under the laws of Delaware;
(b) the execution, delivery and performance by it of this
Amendment 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 articles of incorporation, by-laws, or
other organizational documents, or (ii) any applicable law;
(c) no consent, license, permit, approval or authorization of,
or registration, filing or declaration with, any Governmental Authority
or other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment or any other
Loan Documents executed and/or delivered in connection herewith by or
against it;
(d) this Amendment and all other Loan Documents executed
and/or delivered in connection herewith have been duly executed and
delivered by it;
(e) this Amendment 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 its 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) after giving effect to this Amendment, it is not in
default under the Loan Documents and no Default or Event of Default
exists, has occurred and is continuing; and
(g) the representations and warranties contained in the Loan
Documents (including the First Amendment) as amended hereby are true
and correct in all material respects as of the date hereof as if made
on the date hereof, except for such representations and warranties
limited by their terms to a specific date.
6. Miscellaneous.
(a) This Amendment may be executed in any number of
counterparts (including by facsimile), and by the different parties
hereto on the same or separate counterparts, each of which shall be
deemed to be an original instrument but all of which together shall
constitute one and the same agreement. Each party agrees that it will
be bound by its own facsimile signature and that it accepts the
facsimile signature of each other party. The descriptive headings of
the various sections of this Amendment are inserted for convenience of
reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof or thereof. Whenever the
context and construction so require, all words herein in the singular
number herein shall be deemed to have been used in the plural, and vice
versa, and the masculine gender shall include the feminine and neuter
and the neuter shall include the masculine and feminine.
(b) This Amendment may not be changed, amended, restated,
waived, supplemented, discharged, canceled, terminated or otherwise
modified orally or by any course of dealing or in any manner other than
as provided in the Loan Agreement. This Amendment shall be considered
part of the Loan Agreement and the First Amendment, as applicable, and
shall be a Loan Document for all purposes under the Loan Agreement and
the other Loan Documents.
(c) This Amendment, the Loan Agreement and the other Loan
Documents (including the First Amendment) constitute the final, entire
agreement and understanding between the parties with respect to the
subject matter hereof and thereof and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements
between the parties, and shall be binding upon and inure to the benefit
of the successors and assigns of the parties hereto and thereto. There
are no unwritten oral agreements between the parties with respect to
the subject matter hereof and thereof.
(d) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH
IN THE LOAN AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL
AND NOTICE PROVISIONS OF THE LOAN AGREEMENT.
(e) Borrower may not assign, delegate or transfer this
Amendment or any of its rights or obligations hereunder. No rights are
intended to be created under this Amendment for the benefit of any
third party donee, creditor or incidental beneficiary of Borrower or
any Guarantor. Nothing contained in this Amendment shall be construed
as a delegation to Agent or Lenders of Borrower's or any Guarantor's
duty of performance, including, without limitation, any duties under
any account or contract in which Agent has or Lenders have a security
interest or Lien. This Amendment shall be binding upon the Borrower and
its successors and assigns.
(f) Borrower shall pay all costs and expenses incurred by
Agent and Lenders or any of their affiliates, including, without
limitation, reasonable attorneys' fees and expenses, in connection with
entering into, negotiating, preparing, reviewing and executing this
Amendment and the documents, agreements and instruments contemplated
hereby and all related agreements, documents and instruments, and all
of the same shall be part of the Obligations. If Agent, any Lender or
any of their affiliates uses in-house counsel for any of the purposes
set forth above the Borrower expressly agrees that the Obligations
include reasonable charges for such work commensurate with the fees
that would otherwise be charged by outside legal counsel selected by
such Person in its sole discretion for the work performed.
(g) Borrower hereby (i) agrees that this Amendment shall not
limit or diminish the obligations of Borrower under the Loan Documents,
(ii) reaffirms its obligations under each of the Loan Documents to
which it is a party, and (iii) agrees that each of such Loan Documents,
as amended hereby, remains in full force and effect and is hereby
ratified and confirmed.
(h) All representations and warranties made in this Amendment
shall survive the execution and delivery of this Amendment and no
investigation by Agent or Lenders shall affect such representations or
warranties or the right of Agent or Lenders to rely upon them.
(i) BORROWER ACKNOWLEDGES AND AGREES THAT (A) IT HAS NO
CLAIMS, COUNTERCLAIMS, OFFSETS, CREDITS OR DEFENSES TO THE LOAN
DOCUMENTS AND THE PERFORMANCE OF ITS OBLIGATIONS THEREUNDER, OR (B) IF
IT HAS ANY SUCH CLAIMS, COUNTERCLAIMS, OFFSETS, CREDITS OR DEFENSES TO
THE LOAN DOCUMENTS AND/OR ANY TRANSACTION RELATED TO THE LOAN DOCUMENTS
AND/OR THE OBLIGATIONS, THE SAME ARE HEREBY WAIVED, RELINQUISHED AND
RELEASED IN CONSIDERATION OF AGENT'S AND LENDERS' EXECUTION AND
DELIVERY OF THIS AMENDMENT.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
Second Amendment to Acquisition Loan Agreement and Other Loan Documents
IN WITNESS WHEREOF, each of the parties has duly executed this
Amendment as of the day and year first written above.
INFOCROSSING, INC.,
a Delaware corporation, as Borrower
By: /s/ ZACH LONSTEIN
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Name: Zach Lonstein
Title: Chairman and CEO
CAPITALSOURCE FINANCE LLC,
as Agent and a Lender
By: /s/ STEVEN A. MUSELES
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Name: Steven A. Museles
Title: Senior Vice President