EXHIBIT 10.23
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of January 9, 2003, by and
between EpicEdge, Inc. (the "Borrower") and Silicon Valley Bank ("Bank").
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated November 6, 2002, as may be
amended from time to time (the "Loan Agreement"). The Loan Agreement provides
for, among other things, a Committed Revolving Line in the original principal
amount of One Million Dollars ($1,000,000). Defined terms used but not otherwise
defined herein shall have the same meanings as set forth in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Obligations."
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement. Additionally, a specific amount
of the Obligations under the Committed Revolving Line is guaranteed by Edgewater
Private Equity Fund III, L.P. (the "Guarantor") pursuant to the terms and
conditions of that certain Unconditional Guaranty agreement (the "Guaranty").
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Obligations shall be referred
to as the "Security Documents". Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Obligations shall be
referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. Item "(iii)" under Section 2.8 entitled "Limitation on Credit
Extensions" is hereby amended to read as follows:
...(iii) $1,700,000, decreasing to $1,400,000 on July 31, 2003
and thereafter.
2. Notwithstanding the terms and conditions stated in Section 3.2
entitled "Conditions Precedent to all Credit Extensions" and
Section 6.2 entitled "Financial Statements, Reports,
Certificates", Bank shall complete an audit of Borrower's
Collateral, with results satisfactory to Bank, prior to the
aggregate Obligations exceeding $1,000,000.
3. The following defined term under Section 13.1 entitled
"Definitions" is hereby amended to read as follows:
"Committed Revolving Line" is a Credit Extension of up to
$1,300,000 decreasing to $1,000,000 beginning July 31, 2003
through the Revolving Maturity Date.
B. Modification(s) to Guaranty.
1. The first paragraph in the Guaranty is hereby amended to read
as follows:
In consideration of SILICON VALLEY BANK'S ("Bank") loan to
EpicEdge, Inc., a Texas corporation ("Borrower"), under the
Loan and Security Agreement with an Effective Date (as defined
therein) of November 6, 2002 (the "Agreement"), Edgewater
Private Equity Fund III, L.P., a Delaware limited partnership
("Guarantor") unconditionally and irrevocably guarantees
payment of all amounts Borrower owes Bank and Borrower's
performance of the Agreement and any
other agreements between Borrower and Bank entered into in
connection with the Agreement, as amended from time to time
(collectively the "Agreements"), according to their terms;
provided, however, that the maximum liability of Guarantor
under this guaranty (this "Guaranty") shall not exceed at any
one time the sum of (a) principal indebtedness equal to the
lesser of (i) $1,300,000 or (ii) the outstanding Advances
under the Committed Revolving Line as both are defined in the
Agreement, but no less than $1,000,000 (collectively, the
"Principal Indebtedness"), plus (b) all interest accrued and
unpaid on such indebtedness pursuant to the terms of the
Agreement, plus (c) all of Bank's costs, expenses and
reasonable attorneys' fees incurred in connection with or
relating to the enforcement of this Guaranty. Attorneys' fees
include, without limitation, attorneys' fees whether or not
there is a lawsuit, and if there is a lawsuit, any fees and
costs for trial and appeals.
2. Section 10.4 of the Guaranty is hereby amended to read as
follows:
Maintain as of the last day of each quarter a
Liquidity Coverage Ratio of not less than 2.00 to
1.00. Liquidity Coverage Ratio shall be defined as
cash plus unrestricted marketable securities plus
callable capital allocated to Borrower minus the
amount of funded debt and other contingent
liabilities, divided by the Principal Indebtedness,
as defined above.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against paying any
of the Obligations.
6. PAYMENT OF FEE. Borrower shall pay Bank a fee in the amount of Two
Thousand Dollars ($2,000) ("Variance Fee"), plus all out-of-pocket expenses.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
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. Bank's agreement to modifications
to the existing Obligations pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Obligations.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Obligations. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. Unless expressly released herein, 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.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Variance Fee.
REMAINDER OF PAGE LEFT BLANK
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
EPICEDGE, INC. SILICON VALLEY BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
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Name: Xxxxxx X. Xxxxxx Name: /s/ Xxxxx Xxxxxx
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Title: COO/CFO Title: Vice President
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The undersigned hereby consents to the modifications to the Obligations pursuant
to this Loan Modification Agreement, hereby ratifies all the provisions of the
GUARANTY, as amended herein, and confirms that all provisions of that document
are in full force and effect.
GUARANTOR:
EDGEWATER PRIVATE EQUITY FUND III, L.P.
By: EDGEWATER III MANAGEMENT, L.P.,
its General Partner
By: Xxxxxx Management, Inc.,
its sole General Partner
By: /s/ Xxxx Mc Manigal Date: 1/17/03
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Name: Xxxx Mc Manigal
-----------------------------
Title: V.P.
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[GRAPHIC OMITTED]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: EPICEDGE, INC.
LOAN OFFICER: XXXXX XXXXXX
DATE: JANUARY 9, 2003
