On August 29, 2012, Emtec Inc.and certain of the company's direct and indirect subsidiaries entered into Amendment No. 2 to the Amended and Restated Subordinated Loan Agreement with NewSpring SBIC Mezzanine Capital II, L.P. and Peachtree II, L.P. and NewSpring in its capacity as collateral agent for the Investors, pursuant to which the Investors and the Collateral Agent have agreed to make certain modifications to the Loan Agreement. The modifications provided for in the Amendment, among other things, (1) amend the definition of Fixed Charge Coverage Ratio to allow the company to fully offset the amount of cash taxes paid by any tax refunds received, (2) amend at restate the requirements under the financial rations and covenants in there entirety as follows: (a) require the company and the Subsidiaries to maintain: (i) as of the last Business Day of the fiscal quarter ending August 31, 2012, a ratio of Total Funded Senior Debt on such date to Pro Forma Adjusted EBITDA on a trailing 12 months basis for such period of not greater than 4.5 to 1.0, (ii) thereafter as of the last Business Day of each fiscal quarter ending on February 28th, May 31st and August 31st of each fiscal year, a ratio of Total Funded Senior Debt on such date to Pro Forma Adjusted EBITDA on a trailing 12 months basis for such period of not greater than 3.75 to 1.0, (c) eliminate the requirement for the company and the Subsidiaries to test as of the last Business Day of the last Business Day of each fiscal quarter ending on November, 30 of each fiscal year, a ratio of Total Funded Senior Debt on such date to Pro Forma Adjusted EBITDA on a trailing 12 months basis for such period and (d) require the company and the Subsidiaries to maintain, as of the last Business Day of each fiscal quarter on a trailing 12 months basis, a Fixed Charge Coverage Ratio of not less than 1.25 to 1.0.