Exhibit 10.10
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of March 3, 1997, by
and between Aurum Software, Inc. (the "Borrower") whose address is 0000 Xxxxx
Xxxxxxxxx, Xxxxx Xxxxx, XX 00000 and Silicon Valley Bank, (the "Lender"), whose
address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
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be owing by Borrower to Lender, Borrower is indebted to Lender pursuant to,
among other documents, a Promissory Note, dated July 13,1993, in the original
principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
"Note"), as amended and a Promissory Note, dated July 15,1996, in the original
principal amount of One Million Two Hundred Fifty Thousand and 00/100 Dollars
($1,250,000.00) (the "Term Note"), as amended. The Note has been modified
pursuant to, among other documents, a Loan Modification Agreements, dated
September 25,1996, pursuant to which, among other things, the principal amount
of the Note was increased to Three Million and 00/100 Dollars ($3,000,000.00).
The Note and the Term Note, together with other promissory notes from Borrower
to Lender, are governed by the terms of a Business Loan Agreement, dated July
13,1993, between Borrower and Lender, as such agreement may be amended from time
to time (the "Loan Agreement"). Defined terms used but not otherwise defined
herein shall have the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness".
2. DESCRIPTION OF COLLATERAL: Repayment of the Indebtedness is secured by a
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Commercial Security Agreement, dated July 8,1992, as amended, and a Collateral
Assignment, Patent Mortgage and Security Agreement, dated April 11, 1994.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
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A. Modification(s) to Note.
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1. The principal amount of the Note is Three Million and 00/100
Dollars ($3,000,000.00) (the "Committed Line"). For purposes of
determining availability, the Cash Management and Letter of
Credit Sublimits shall be reserved under the Committed Line.
2. The interest rate to be applied to the unpaid principal balance
of the Note is hereby decreased, effective as of the date hereof,
to a rate equal to Lender's current Index (as defined in the
Note).
B. Modification(s) to the Term Note.
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1. The Term Note is hereby cancelled. Accordingly, no further
advances shall be allowed thereunder.
C. Modification(s) to Loan Agreement.
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1. The paragraph entitled "Borrowing Base Formula" is hereby deleted
in its entirety.
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2. The paragraph entitled "Financial Covenants" is hereby amended to
read, in its entirety, as follows:
Borrower shall maintain, on a quarterly basis, a minimum quick
ratio of 2.00 to 1.00; a minimum tangible net worth of
$38,000,000.00; and minimum quarterly net income of $1.00;
provided however, Borrower may incur one quarterly loss, provided
(i) such loss shall not exceed $2,000,000.00 and (ii) provided
that Borrower achieves annual profitability.
For purposes of calculation, deferred maintenance revenue and
restricted cash shall be excluded from the quick ratio covenant.
3. The paragraph entitled "Accounts Receivable and Accounts Payayble
Agings" is hereby amended to read, in its entirety, as follows:
Accounts Receivable Audits. Lender shall conduct an audit of
Borrower's accounts receivable books and records within forty
five (45) days after Borrower's initial advance under the Note.
Thereafter, such audits shall be performed on an annual basis.
Borrower's deposit account will be debited for the audit expense
and a notification will be mailed to Borrower.
4. The paragraph entitled "Financial Statements" is hereby amended
to read, in its entirety, as follows:
Financial Statements, Reports, Certificates. Borrower shall
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deliver to Bank: (a) as soon as available, but in any event
within one hundred twenty (120) days after the end of Borrower's
fiscal year, audited consolidated financial statements of
Borrower prepared in accordance with GAAP, consistently applied,
together with an unqualified opinion on such financial statements
of an independent certified public accounting firm reasonably
acceptable to Bank; (b) within five (5) days of filing, copies of
all statements, reports and notices sent or made available
generally by Borrower to its security holders or to any holders
of subordinated debt and all reports on Form 10-K, 10-Q and 8-K
filed with the Securities and Exchange Commission; and (c) just
prior to borrowing and at such times as there are outstandings
under the Note, within forth five (45) days after the last day of
each quarter, Borrower shall deliver to Bank a compliance
certificate.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
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necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor
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signing below) agrees that, as of this date, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
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6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
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below) understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Lender and Borrower
to retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Lender in writing. No maker,
endorser, or guarantor will be released by virtue of this Loan Modification
Agreement. The terms of this Paragraph apply not only to this Loan Modification
Agreement, but also to all subsequent loan modification agreements.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: LENDER:
AURUM SOFTWARE, INC. SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxx X. Xxxx Name: Xxxxxxx Xxxxxx
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Title: CFO Title: Vice President
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COMPLIANCE CERTIFICATE
To: SILICON VALLEY BANK From: AURUM SOFTWARE, INC.
Credit Department
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
The undersigned authorized Officer of Aurum Software, Inc. ("Borrower"), hereby
certifies that in accordance with the terms and conditions of the Business Loan
Agreement, as modified from time to time, the Borrower is in complete compliance
for the period ending _____________________ of all required conditions and terms
except as noted below. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistent from one period to the next except as explained in an accompanying
letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies" column.
REPORTING COVENANT REQUIRED COMPLIES
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8K, 10K and 10Q Reports Within 5 days of filing with the SEC YES/NO
Annual (CPA Audited) FYE within 120 days YES/NO
Compliance Certificate Quarterly within 45 days* YES/NO
* when borrowing or prior to initial advance
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
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TO BE TESTED QUARTERLY, UNLESS OTHERWISE NOTED:
Minimum Quick Ratio/1/ 2.00:1.00 :1.00 YES/NO
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Minimum TNW $38,000,000.00 $___________ YES/NO
Profitability Quarterly and Annual $___________ YES/NO
With allowance for one quarterly loss not to exceed $2,000,000.00
Annual basis beginning FYE 1997.
/1/ Excluding deferred maintenance revenue and restricted cash excluded from
calculation.
Comments Regarding Financial Covenants:
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BANK USE ONLY
Received By: ___________________
Date: _______________
Reviewed By: ___________________
Compliance Status: YES/NO
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Very truly yours,
AURUM SOFTWARE, INC.
By:
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Name:
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Title:
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[SILICON VALLEY BANK LETTERHEAD]
March 4, 1997
Xxxxx Xxxx
Chief Financial Officer
Aurum Software
0000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
Dear Xxxxx:
Enclosed please find the original Loan Modification Agreement along with the
revised Compliance Certificate to be signed and executed by you. The Loan
Modification Agreement states the changes in the credit facility we had mutually
agreed upon.
Please review the above and feel free to call me or Xxxx should you have any
questions with these documents. Thank you for giving us this opportunity and we
look forward to continuing our support for Aurum Software, Inc..
Sincerely,
SILICON VALLEY BANK
/S/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Assistant Vice President
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