EXHIBIT 10.10
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
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THIS AMENDMENT dated as of March 1, 1993, to the Note and Warrant
Purchase Agreement, dated December 21, 1990 (the "Agreement") between
Information Management Associates, Inc., a Connecticut Corporation (the
"Company") and Wand/IMA Investments, L.P., a Delaware limited partnership
("Wand/IMA").
WHEREAS, the Agreement was previously amended pursuant to the terms of
the Exchange and Note Modification Agreement and Amendment to Note and Warrant
Purchase Agreement dated as of October 29 1991; and
WHEREAS, the Company and Wand/IMA desire to further amend the Agreement
as set forth herein.
NOW THEREFORE, in consideration of the premises and in order to permit
the Company to conduct its business as currently conducted, the Company and
Wand/IMA hereby agree as follows:
1. Section 9.8 of the Agreement is hereby amended by deleting the last
sentence thereof in its entirety and substituting the following therefor:
"This Section 9.8 shall not prohibit (a) any transaction between the
Company and one or more of its wholly-owned subsidiaries or between two
or more such subsidiaries, (b) the payment of bonuses to officers in
accordance with the terms of the Bonus Plan, (c) the payment of other
compensation (including, without limitation, amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of the Company or any Subsidiary, so long as the Board of
Directors of the Company in good faith shall have approved the terms
thereof and deemed the services theretofore or thereafter to be performed
for such compensation to be fair compensation therefor, (d) lease
payments pursuant to the Affiliated Lease, (e) the repayment of the
demand note of the Company payable to Xxxxxx X. Xxxxxxxx in the principal
amount of $46,000 and (f) the non-interest bearing short-term advances
between certain stockholders and the Company included as other assets in
the Financial Statements of the Company as of
December 31, 1992, and 1991, a copy of which has previously been
delivered to Wand/IMA, as set forth in Note 8 thereto."
2. Section 9.9 of the Agreement is hereby amended by deleting it in
its entirety and substituting the following therefor:
"9.9 Minimum Consolidated Tangible Net Worth. The Company will
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not at any time permit Consolidated Tangible Net Worth to be
less than $800,000."
3. Section 9.10 of the Agreement is hereby amended by deleting it
in its entirety and substituting the following therefor:
"9.10 Limitation on Indebtedness. The Company will not, and will
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not permit any Subsidiary to, create, incur, assume or guarantee
or in any other manner become directly or indirectly liable for
the payment of, any Indebtedness other than the Permitted
Indebtedness, unless at the time of such event and after giving
effect thereto the aggregate amount of all outstanding
Indebtedness of the Company and its Subsidiaries, including all
Permitted Indebtedness other than the Notes, does not exceed 80%
of the Company's Net Amount of Accounts (the "Borrowing Base")
as set forth in the most recent statement of Net Amount of
Accounts delivered pursuant to Section 8.1(d)."
4. Section 15.1 of the Agreement is hereby amended by deleting the
definition of "Consolidated Tangible Net Worth" in its entirety and
substituting the following therefor:
"Consolidated Tangible Net Worth. With respect to any Person
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means, as of any date, (1) the net book value (after deducting
related depreciation, obsolescence, amortization, valuation and other
proper reserves) at which the Adjusted Tangible Assets of the Company
and all Subsidiaries would be shown on a consolidated balance sheet
at such date, but excluding any amount on account of write-ups of
assets after May 1, 1989, minus (2) the amount at which the
liabilities, (other than the Notes, deferred taxes, capital stock and
surplus) would be shown on such balance sheet and including as
liabilities all reserves for contingencies and other potential
liabilities. For purposes of this definition, "Adjusted Tangible
Assets" means all assets except (1) net capitalized software; (2)
Intellectual Property Rights,
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franchises, goodwill and other similar intangibles, and (3) accounts,
notes and other receivables due from Affiliates."
5. Section 15.1 of the Agreement is hereby amended by deleting the
definition of Permitted Indebtedness in its entirety and substituting the
following therefor:
"Permitted Indebtedness. (a) Indebtedness of the Company under this
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Agreement and the Notes; (b) Indebtedness of the Company in a
principal amount not to exceed $150,000 (the "Basket Amount");
provided, however, that during any period when the Company maintains
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Consolidated Tangible Net Worth of at least $1,650,000 the Basket
Amount shall be $300,000, (c) Indebtedness of the Company and its
Subsidiaries with respect to the endorsement of negotiable
instruments in the ordinary course of business; (d) the obligations
of the Company under the Affiliated Lease and the guarantee by the
Company of the indebtedness of the Partnership to People's Bank under
a Promissory Note dated December 18, 1992, in the principal amount of
$1,150,000 (the "Loan Note"), as set forth in a Guaranty Agreement,
dated December 18, 1992, from the Company to the Bank (the "Bank
Guarantee"), and under any extension, renewal, modification or
refinancing of the loan evidenced by the Loan Note, provided that the
principal amount outstanding at the time of any such extension,
renewal modification or refinancing is not increased; (e) obligations
of the Company under Capital Leases for equipment in an aggregate
amount not to exceed $500,000; (f) Intercompany Debt Obligations
provided, however, that the obligation of each obligor of such
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Indebtedness shall be subordinated in right of payment from and after
such time as the Notes shall be come due and payable (whether at
stated maturity, by acceleration or otherwise) to the payment and
performance of such obligor's obligation under this Agreement and the
Notes and the Board of Directors of such obligor shall have adopted
resolutions giving effect to the requirements of this proviso and
such resolutions shall be in full force and effect; and (g) Senior
Indebtedness owed by the Company to People's Bank in an aggregate
principal amount not exceeding $1,000,000 and all extensions,
renewals, refinancings or modifications thereof, provided that the
aggregate principal amount thereof does not exceed $2,000,000."
6. Section 15.1 of the Agreement is hereby amended by deleting the
definition of "Affiliated Lease" in its entirety and substituting the following
therefor:
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"Affiliated Lease. The lease, dated December 18, 1992, between the
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Partnership and the Company."
7. Section 15.1 of the Agreement is hereby amended by deleting the
definition of "Change in Control" and substituting the following therefor:
"Change in Control: Any transaction, the result of which is that
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Xx. Xxxx X. Xxxxxxx, Mr. Andrei Poludnewycz and Xx. Xxxxxx X.
Xxxxxxxx, Xx., as a group, shall directly or indirectly, own less
than 38% of the common equity of the Company on a fully-diluted
basis. Change in Control shall not include (a) any Minimum Public
Offering, (b) so long as Messrs. Xxxxxxx, Poludnewycz and Subbloie,
as a group, continue to Control at least 38% of the common equity
of the Company on a fully-diluted basis, the creation of any will
or trust for the sole benefit of the spouses and lineal descendants
of such persons, or (c) the transfer of common equity through
testamentary disposition or the laws of intestate succession as a
result of the death of the first to die of Messrs. Xxxxxxx,
Poludnewycz or Subbloie."
8. Except as previously amended and except as amended by the
provisions contained herein, the Agreement shall remain in full force and
effect.
9. This Amendment may be executed in any number of counterparts
each of which shall be an original, but all of which together shall constitute
one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as
of the date first above written.
INFORMATION MANAGEMENT
ASSOCIATES, INC.
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxx, Xx.
President
WAND/IMA INVESTMENTS, L.P.
by WAND PARTNERS INC., AS
GENERAL PARTNER
By /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
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