FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (this "Amendment")
is entered into as of February 5, 1998, by and between SILICON VALLEY BANK
("Bank") and BROADVISION, INC. ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of July 2, 1997 (the "Original Agreement"), as amended from
time to time (collectively, the "Agreement"). Borrower has failed to comply with
Sections 6.8 and 6.10 of the Agreement. Borrower has asked Bank to waive Bank's
remedies regarding Borrower's default under those sections. The parties desire
to amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Certain defined terms in Section 1.1 of the Agreement are
hereby added or amended as follows:
"Advance" or "Advances" means a cash advance or cash advances
under the Equipment Facility, Leasehold Facility or the Revolving Facility.
"Borrowing Base" has the meaning set forth in Section 2.1(c)
hereof.
"Committed Line" means Four Million Two Hundred Fifty Thousand
Dollars ($4,250,000).
"Eligible Accounts" means those Accounts that arise in the
ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; provided, that
standards of eligibility may be fixed and revised from time to time by Bank in
Bank's reasonable judgment and upon thirty (30) days prior written notification
thereof to Borrower in accordance with the provisions hereof. Unless otherwise
agreed to by Bank, Eligible Accounts shall not include the following:
(1) Accounts that the account debtor has failed to
pay within ninety (90) days of invoice date;
(2) Accounts with respect to an account debtor, fifty
percent (50%) of whose Accounts the account debtor has failed to pay within
ninety (90) days of invoice date;
(3) Accounts with respect to which the account debtor
is an officer, employee, or agent of Borrower;
(4) Accounts with respect to which goods are placed
on consignment, guaranteed sale, sale or return, sale on approval, xxxx and
hold, or other terms by reason of which the payment by the account debtor may be
conditional;
(5) Accounts with respect to which the account debtor
is an Affiliate of Borrower;
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(6) Accounts with respect to which the account debtor
does not have its principal place of business in the United States, except for
Eligible Foreign Accounts, and Accounts arising from products shipped to or
services provided to branches or offices located in the United States of any
account debtor that does not have its principal place of business in the United
States;
(7) Accounts with respect to which the account debtor
is the United States or any department, agency, or instrumentality of the United
States;
(8) Accounts with respect to which Borrower is liable
to the account debtor for goods sold or services rendered by the account debtor
to Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;
(9) Accounts with respect to an account debtor,
including Subsidiaries and Affiliates, whose total obligations to Borrower
exceed twenty-five percent (25%) of all Accounts, to the extent such obligations
exceed the aforementioned percentage, and as approved in writing by Bank;
(10) Accounts with respect to which the account
debtor disputes liability or makes any claim with respect thereto as to which
Bank believes, in its sole discretion, that there may be a basis for dispute
(but only to the extent of the amount subject to such dispute or claim), or is
subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business; and
(11) Accounts the collection of which Bank reasonably
determines to be doubtful.
"Eligible Foreign Accounts" means Accounts with respect to
which the account debtor does not have its principal place of business in the
United States, that Bank approves on a case-by-case basis, and that are: (1)
covered by credit insurance in form and amount, and by an insurer satisfactory
to Bank less the amount of any deductible(s) which may be or become owing
thereon; or (2) supported by one or more letters of credit in favor of Bank as
beneficiary, in an amount and of a tenor, and issued by a financial institution,
acceptable to Bank.
"Equipment Committed Line" means One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000).
"Equipment Facility Availability Date" means July 31, 1998.
"Equipment Maturity Date" means July 31, 2001.
"Final Leasehold Improvement Budget" means a final budget
prepared by Borrower and approved by Bank for the Leasehold Improvements to be
financed under Section 2.1(b).
"Foreign Exchange Reserve" has the meaning set forth in
Section 2.1(c)(ii) herein.
"Intellectual Property Security Agreement" means the
Intellectual Property Security Agreement dated as of July 2, 1997, by and
between Borrower and Bank.
"Leasehold Committed Line" means Two Million Five Hundred
Thousand Dollars ($2,500,000).
"Leasehold Facility Availability Date" means March 31, 1998.
"Leasehold Maturity Date" means March 31, 2005.
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"Letter of Credit" or "Letters of Credit" has the meaning set
forth in Section 2.1(c)(i) herein.
"Preliminary Leasehold Improvement Budget" means a preliminary
budge prepared by Borrower and approved by Bank for the Leasehold Improvements
to be financed under Section 2.1(b).
"Revolving Advance" or "Revolving Advances" means a cash
advance or cash advances under the Revolving Facility.
"Revolving Committed Line" means Two Million Two Hundred Fifty
Thousand Dollars ($2,250,000).
"Revolving Facility" means the facility under which Borrower
may request Bank to issue cash advances, as specified in Section 2.1(c) hereof.
"Revolving Maturity Date" means the date immediately preceding
the first anniversary of the date of this Agreement.
2. Section 2.1 is hereby amended and replaced in its entirety as
follows:
2.1 Advances
(a) Equipment Advances. Subject to and upon the terms
and conditions of this Agreement, Bank agrees, at any time from the date hereof
through the Equipment Facility Availability Date, to make Equipment Advances to
Borrower in an aggregate principal amount of up to the Equipment Committed Line.
Prior to or on the date of each Equipment Advance, Borrower shall provide
invoices and other documents as requested by Bank, in form and content
reasonably satisfactory to Bank, demonstrating that the Equipment Advance (i)
shall be used to finance or refinance, as the case may be, Eligible Equipment,
and (ii) shall not exceed one hundred percent (100%) of the cost of such
Eligible Equipment, including any and all installation, freight or warranty
expenses or sales taxes, and (iii) that no more than twenty-five percent (25%)
of the value of any such Eligible Equipment for each Equipment Advance is
comprised of software licenses, taxes, freight, installation, or other soft
costs. Amounts borrowed pursuant to this Section 2.1(a) may not be reborrowed
once repaid.
(b) Leasehold Advances. Subject to and upon the terms
and conditions of this Agreement, Bank agrees, at any time from the date hereof
through the Leasehold Facility Availability Date, to make Leasehold Advances to
Borrower in an aggregate principal amount not to exceed the lesser of (i) the
Leasehold Committed Line or (ii) the total of the Preliminary Leasehold
Improvement Budget plus Two Hundred Fifty Thousand Dollars ($250,000), provided
such costs shall be supported by the final Leasehold Improvement Budget provided
to Bank prior to the Leasehold Facility Availability Date. Prior to or on the
date of the initial Leasehold Advances, Borrower shall provide Bank a copy of
the Preliminary Leasehold Improvement Budget. Each Leasehold Advance (i) shall
be used to finance Leasehold Improvements in accordance with the Preliminary
Leasehold Improvement Budget, and (ii) shall not exceed one hundred percent
(100%) of the cost of such Leasehold Improvements. Amounts borrowed pursuant to
this Section 2.1(b) may not be reborrowed once repaid.
(c) Revolving Facility. Subject to and upon the terms
and conditions of this Agreement, Bank agrees to make Revolving Advances to
Borrower in an aggregate amount not to exceed the lesser of the Revolving
Committed Line or the Borrowing Base, minus the sum of (i) the face amount of
all outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit), and (ii) the Foreign Exchange Reserve. For purposes of this Agreement,
"Borrowing Base" shall mean an amount equal to eighty percent (80%) of Eligible
Accounts. Subject to the terms and conditions of
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this Agreement, amounts borrowed pursuant to this Section 2.1(c) may be repaid
and reborrowed at any time prior to the Revolving Maturity Date.
(i) Letters of Credit.
(a) Subject to the terms and conditions of
this Agreement, Bank agrees to issue or cause to be issued letters of credit
(each a "Letter of Credit," collectively, the "Letters of Credit") for the
account of Borrower in an aggregate outstanding face amount not to exceed (i)
the lesser of the Revolving Committed Line or the Borrowing Base, minus (ii) the
then outstanding principal balance of the Revolving Advances (including drawn
but unreimbursed Letters of Credit), minus (iii) the Foreign Exchange Reserve;
provided that the aggregate face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit and any Letter of Credit
Reserve) shall not in any case exceed the Revolving Committed Line. Each Letter
of Credit shall have an expiry date no later than the Revolving Maturity Date.
All Letters of Credit shall be, in form and substance, acceptable to Bank in its
sole discretion and shall be subject to the terms and conditions of Bank's form
of standard application and letter of credit agreement.
(b) The obligation of Borrower to
immediately reimburse Bank for drawings made under Letters of Credit shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and such Letters of Credit, under
all circumstances whatsoever. Borrower shall indemnify, defend, protect, and
hold Bank harmless from any loss, cost, expense or liability, including, without
limitation, reasonable attorneys' fees, arising out of or in connection with any
Letters of Credit.
(c) Borrower may request that Bank issue a
Letter of Credit payable in a currency other than United States Dollars. If a
demand for payment is made under any such Letter of Credit, Bank shall treat
such demand as a Revolving Advance to Borrower of the equivalent of the amount
thereof (plus cable charges) in United States currency at the then prevailing
rate of exchange in San Francisco, California, for sales of that other currency
for cable transfer to the country of which it is the currency.
(d) Upon the issuance of any letter of
credit payable in a currency other than United States Dollars, Bank shall create
a reserve under the Revolving Committed Line for letters of credit against
fluctuations in currency exchange rates, in an amount equal to ten percent (10%)
of the face amount of such letter of credit. The amount of such reserve may be
amended by Bank from time to time account for fluctuations in the exchange rate.
The availability of funds under the Revolving Committed Line shall be reduced by
the amount of such reserve for so long as such letter of credit remains
outstanding.
(ii) Foreign Exchange Contract; Foreign
Exchange Settlements.
(a) Subject to the terms of this Agreement,
Borrower may enter into foreign exchange contracts (the "Exchange Contracts")
not to exceed an aggregate amount of (i) the lesser of the Revolving Committed
Line or the Borrowing Base, minus (ii) the then outstanding principal balance of
the Revolving Advances (including drawn but unreimbursed Letters of Credit),
minus (iii) the face amount of the outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) (the "Contract Limit"), pursuant to
which Bank shall sell to or purchase from Borrower foreign currency on a spot or
future basis. Borrower shall not request any Exchange Contracts at any time it
is out of compliance with any of the provisions of this Agreement. All Exchange
Contracts must provide for delivery of settlement on or before the Revolving
Maturity Date. The amount available under the Revolving Committed Line at any
time shall be reduced by the following amounts (the "Foreign Exchange Reserve")
on any given day (the "Determination Date"): (i) on all outstanding Exchange
Contracts on which delivery is to be effected or settlement allowed more than
two business days after the Determination Date, ten percent (10%) of the gross
amount of
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the Exchange Contracts; plus (ii) on all outstanding Exchange Contracts on which
delivery is to be effected or settlement allowed within two (2) business days
after the Determination Date, one hundred percent (100%) of the gross amount of
the Exchange Contracts.
(b) Bank may, in its discretion, terminate
the Exchange Contracts at any time (i) that an Event of Default occurs or (ii)
that there is no sufficient availability under the Revolving Committed Line and
Borrower does not have available funds in its bank account to satisfy the
Foreign Exchange Reserve. If Bank terminates the Exchange Contracts, and without
limitation of any applicable indemnities, Borrower agrees to reimburse Bank for
any and all fees, costs and expenses relating thereto to arising in connection
therewith.
(c) Borrower shall not permit the total
gross amount of all Exchange Contracts on which delivery is to be effected and
settlement allowed in any two (2) business day periods to be more than the
Revolving Committed Line (the "Settlement Limit"), nor shall Borrower permit the
total gross amount of all Exchange Contracts to which Borrower is a party,
outstanding at any one time, to exceed the Contract Limit. Notwithstanding the
above, however, the amount which may be settled in any two (2) business day
period may be increased above the Settlement Limit up to, but in no event to
exceed, the amount of the Contract Limit under either of the following
circumstances:
(i) if there is sufficient
availability under the Revolving Committed Line in the amount of the
Foreign Exchange Reserve as of each Determination Date, provided that
Bank in advance shall reserve the full amount of the Foreign Exchange
Foreign Reserve against the Revolving Committed Line; or
(ii) if there is insufficient
availability under the Revolving Committed Line, as to settlements
within any two (2) business day period, provided that Bank, in its sole
discretion, may: (A) verify good funds overseas prior to crediting
Borrower's deposit account with Bank (in the case of Borrower's sale of
foreign currency); or (B) debit Borrower's deposit account with Bank
prior to delivering foreign currency overseas (in the case of
Borrower's purchase of foreign currency).
(d) In the case of Borrower's purchase of
foreign currency, Borrower in advance shall instruct Bank upon settlement either
to treat the ]settlement amount as an advance under the Revolving Committed
Line, or to debit Borrower's account for the amount settled.
(e) Borrower shall execute all standard form
applications and agreements of Bank in connection with the Exchange Contracts
and, without limiting any of the terms of such applications and agreements,
Borrower will pay all standard fees and charges of Bank in connection with the
Exchange Contracts.
(f) Without limiting any of the other terms
of this Agreement or any such standard form applications and agreement of Bank,
Borrower agrees to indemnify Bank and hold it harmless, from and against any and
all claims, debts, liabilities, demands, obligations, actions, costs and
expenses (including, without limitation, attorneys' fees of counsel of Bank's
choice), of every nature and description which it may sustain or incur, based
upon, arising out of, or in any way relating to any of the Exchange Contracts or
any transactions relating thereto or contemplated thereby.
(d) Procedures. Whenever Borrower desires an Advance,
Borrower shall notify Bank by facsimile transmission or telephone no later than
3:00 p.m. California time, one (1) Business Day before the day on which the
Advance is requested to be made. Each such notification shall be promptly
confirmed by a Payment/Advance Form in substantially the form of Exhibit B
hereto. The notice shall be signed by a Responsible Officer and, as to an
Equipment Advance, include
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a copy of the invoice for the Eligible Equipment to be financed. Bank is
authorized to make Advances under this Agreement, based upon instructions
received from a Responsible Officer, or without instructions if in Bank's
discretion such Advances are necessary to meet Obligations which have become due
and remain unpaid. Bank shall be entitled to rely on any telephonic notice given
by a person who Bank reasonably believes to be a Responsible Officer, and
Borrower shall indemnify and hold Bank harmless for any damages or loss suffered
by Bank as a result of such reliance. Bank will credit the amount of Advances
made under this Section 2.1 to Borrower's deposit account.
(e) Interest and Principal. Interest shall accrue
from the date of each Advance at the rate specified in Section 2.3(a), and shall
be payable monthly on the Payment Date of each month through the term of this
Agreement. Bank shall, at its option, charge such interest, all Bank Expenses,
and all Periodic Payments against any of Borrower's deposit accounts, against
the Revolving Committed Line, or against the Committed Line, in which case those
amounts shall thereafter accrue interest at the rate then applicable hereunder.
Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then
applicable hereunder. All Equipment Advances that are outstanding on the
Equipment Facility Availability Date will be payable in thirty-six (36) equal
monthly installments of principal, plus accrued interest, on the Payment Date
for each month through the Equipment Maturity Date. All Leasehold Advances that
are outstanding on the Leasehold Facility Availability Date will be payable in
eighty-four (84) equal monthly installments of principal, plus accrued interest,
on the Payment Date for each month through the Leasehold Maturity Date.
(f) Maturity. The Revolving Facility shall terminate
on the Revolving Maturity Date, at which time all Obligations owing under the
Revolving Facility shall be immediately due and payable. The Equipment Facility
shall terminate on the Equipment Maturity Date, at which time all Obligations
owing under the Equipment Facility shall be immediately due and payable. The
Leasehold Facility shall terminate on the Leasehold Maturity Date, at which time
all Obligations owing under this Section 2.1 and all other amounts under this
Agreement shall be immediately due and payable.
(g) Overadvances. If, at any time or for any reason,
the amount of Obligations owed by Borrower to Bank pursuant to Section 2.1(c) of
this Agreement is greater than (i) the lesser of the Revolving Committed Line or
the Borrowing Base, minus (ii) the face amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit), minus (iii) the
Foreign Exchange Reserve, Borrower shall immediately pay to Bank, in cash, the
amount of such excess.
3. The reference in Section 2.2 to "Section 2.3(a)" is hereby replaced
with "Section 2.3(a)(i) and Section 2.3(a)(ii)".
4. Section 2.3(a) is hereby amended and replaced in its entirety as
follows:
a. Interest Rate.
(i) Equipment Advances under Equipment Facility.
Except as set forth in Section 2.3(b) and subject to the following sentence, all
outstanding Equipment Advances shall bear interest at a floating rate equal to
the Prime Rate. Except as set forth in Section 2.3(b), Borrower shall have a
one-time option as to the Equipment Advances outstanding on the Equipment
Facility Availability Date, to elect that all outstanding Equipment Advances
shall bear interest at a rate equal to three and one-tenth (3.10) percentage
points above the thirty-six (36) month, and eighty-four (84) month, Treasury
Note Yield to maturity, for the Equipment Facility, as such rate is quoted by
Bank. Such fixed rate option, once elected, shall continue for the term of the
Equipment Facility.
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(ii) Leasehold Advances under Leasehold Facility.
Except as set forth in Section 2.3(b) and subject to the following sentence, all
outstanding Leasehold Advances shall bear interest at a floating rate equal to
the Prime Rate. Except as set forth in Section 2.3(b), Borrower shall have a
one-time option as to the Leasehold Advances outstanding on the Leasehold
Facility Availability Date, to elect that all outstanding Leasehold Advances
shall bear interest at a rate equal to three and one-tenth (3.10) percentage
points above the thirty-six (36) month, and eighty-four (84) month, Treasury
Note Yield to maturity, for the Leasehold Facility, as such rate is quoted by
Bank. Such fixed rate option, once elected, shall continue for the term of the
Leasehold Facility.
(iii) Revolving Advances. Except as set forth in
Section 2.3(b), all Revolving Advances shall bear interest, on the average Daily
Balance thereof, at a rate equal to the Prime Rate.
5. The following paragraph is hereby added at the end of Section
6.3 as follows:
Within twenty (20) days after the last day of each month,
Borrower shall deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in substantially the form of Exhibit D hereto, together with
aged listings of accounts receivable and accounts payable.
Bank shall have a right from time to time to audit Borrower's
Accounts and Inventory at Borrower's reasonable expense; provided that, such
audits shall not occur more often than every six (6) months unless an Event of
Default has occurred and is continuing.
6. Bank waives Bank's remedies under the Agreement regarding
Borrowers' failure to:
a. comply with the Cash Position/Debt Service Coverage
covenant (Section 6.8 of the Original Agreement) for the months ending October
31, 1997 and November 31, 1997; and
b. comply with the Tangible Net Worth covenant (Section 6.10
of the Original Agreement) for the months ending August 31, 1997, October 31,
1997 and November 30, 1997.
Such waiver does not constitute a waiver (i) of Bank's remedies regarding
compliance with those sections for any other month, (ii) of any other failure by
Borrower to comply with the Agreement or any other Events of Default, now
existing or hereafter arising, or (iii) Bank's right to require compliance at
all times with the terms and conditions of the Agreement. Bank reserves all its
rights under the Agreement and under applicable law.
7. Section 6.7 is hereby amended and replaced in its entirety as
follows:
6.7 Principal Depository. Borrower shall maintain its
principal depository and operating accounts with Bank. Borrower shall maintain
average outstanding deposit balances held at Bank of no less than Five Million
Dollars ($5,000,000) (the "Minimum Balance"). In the event that Borrower's
average outstanding deposits are less than the Minimum Balance, Borrower shall
pay to Bank an amount equal to one (1) percent per annum of the difference
between the Minimum Balance and the actual daily average outstanding deposit
balance held at Bank, which fee shall be fully earned and non-refundable on the
last day of each fiscal quarter, payable in arrears.
8. Section 6.8 is hereby amended and replaced in its entirety as
follows:
6.8 Liquidity Coverage/Debt Service Coverage. Subject to the
following sentence, Borrower shall maintain, as of the last day of each calendar
month, (a) the sum of (i) unrestricted cash and cash equivalents plus (ii) the
amount of Revolving Advances able to be borrowed but not borrowed under Section
2.1(c) divided by the outstanding balance of all Equipment Advances and
Leasehold Advances Borrower owes to Bank, of at least (a) two (2) times the
outstanding amount of
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Equipment Advances and Leasehold Advances. Notwithstanding the foregoing, from
and after the time Borrower achieves for three (3) consecutive fiscal quarters a
Debt Service Coverage of at least 1.50 to 1.00, Borrower shall not be subject to
the minimum liquidity requirement set forth above, but instead shall maintain,
as of the last day of each fiscal quarter, a Debt Service Coverage of at least
1.50 to 1.00.
9. Section 6.9 is hereby amended and replaced in its entirety as
follows:
6.9 Adjusted Quick Ratio. Borrower shall maintain, as of the
last day of each fiscal quarter, a ratio of Quick Assets to Current Liabilities
(excluding deferred revenue) of at least 2.0 to 1.0; provided, however, for each
calendar month within each fiscal quarter, Borrower shall maintain, as of the
last day of each calendar month, a ratio of Quick Assets to Current Liabilities
(excluding deferred revenue) of at least 1.5 to 1.0.
10. Section 6.10 is hereby amended and replaced in its entirety as
follows:
6.10 Tangible Net Worth. Borrower shall maintain, on a
consolidated basis, a Tangible Net Worth plus Subordinated Debt in the following
amounts: (i) as of the last day of each fiscal quarter, at least Fourteen
Million Dollars ($14,000,000); and (ii) as of the last day of each calendar
month during the term of the Agreement, at least Ten Million Dollars
($10,000,000).
11. Exhibits B, C and the Disbursement Request and Authorization
are hereby replaced in their entirety with the attached Exhibits B, C and the
Disbursement Request and Authorization.
12. Exhibit D attached hereto is hereby added.
13. Borrower hereby reaffirms all of its obligations under the
Intellectual Property Security Agreement.
14. As a condition to the effectiveness of this Amendment,
Borrower shall pay Bank all Bank Expenses (including reasonable attorneys' fees)
incurred through the date of this Amendment, which fee and expenses become
nonrefundable and fully earned on the date hereof.
15. The obligation of Bank to make any further Advance pursuant to
the terms of the Agreement, as amended hereby, is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:
a. this Amendment, duly executed by the Borrower;
b. updated Exhibits A, B and C to the Intellectual Property
Security Agreement;
c. Bank shall have received, in form and substance
satisfactory to Bank, results of an audit of Borrower's Accounts;
d. a certificate of secretary of the Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Amendment;
e. payment of Bank Expenses then due as specified in Section
14 hereof; and
f. such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
16. Unless otherwise defined, all capitalized terms in this
Amendment shall be as defined in the Agreement. Except as amended, the Agreement
remains in full force and effect.
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17. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
18. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
BROADVISION, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Title: CFO
-----------------------------------
SILICON VALLEY BANK
By: /s/ Xxxx X. China
--------------------------------------
Title: VICE PRESIDENT
-----------------------------------
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EXHIBIT B
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
-----------------------------
FAX#: (000) 000-0000 TIME:
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FROM: BROADVISION, INC.
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CLIENT NAME (BORROWER)
REQUESTED BY: XXXXXXX XXXXXX
-------------------------------------------------------------------
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE: /s/ Xxxxxxx Xxxxxx
-----------------------------------------------------------
PHONE NUMBER:000.000.0000
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FROM ACCOUNT # TO ACCOUNT #
--------------------------------------- --------------
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
-------------------------- ---------------------
PRINCIPAL INCREASE (EQUIPMENT ADVANCE) $
-----------------
PRINCIPAL INCREASE (LEASEHOLD ADVANCE) $
-----------------
PRINCIPAL INCREASE (REVOLVING ADVANCE) $
-----------------
PRINCIPAL PAYMENT (ONLY) $
-----------------
INTEREST PAYMENT (ONLY) $
-----------------
PRINCIPAL AND INTEREST (PAYMENT) $
-----------------
OTHER INSTRUCTIONS:
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All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for and Advance confirmed by this Borrowing
Certificate; provided, however, that those representations and warranties
expressly referring to another date shall be true, correct and complete in all
material respects as of such date.
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BANK USE ONLY
TELEPHONE REQUEST:
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
--------------------------------------- -------------------------
Authorized Requester
Phone #
--------------------------------------- -------------------------
Received By (Bank)
Phone #
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EXHIBIT C
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: BROADVISION, INC.
The undersigned authorized officer of BroadVision, Inc. hereby certifies
that in accordance with the terms and conditions of the Loan and Security
Agreement, as amended, between Borrower and Bank (the "Agreement"), (i) Borrower
is in complete compliance for the period ending ______ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. 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
consistently applied 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
------------------ -------- --------
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
A/R & A/P Agings Monthly within 20 days Yes No
A/R Audit Initial and Semi-Annual Yes No
Quarterly 10-Q Within 5 days Yes No
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Maintain on a Monthly Basis
(Inter-Quarter Only):
Liquidity(1) (2) $________ Yes No
Adjusted Quick Ratio 1.5:1.0 $________
Minimum Tangible Net Worth $10,000,000 $________
Maintain on a Quarterly Basis:
Adjusted Quick Ratio(3) 2.0:1.0(4) _____:1.0 Yes No
Minimum Tangible Net Worth(5) $14,000,000(6) $________ Yes No
Debt Service Coverage 1.5:1.0 _____:1.0 Yes No
(1) see Section 6.8 for definition; converts to Debt Service Coverage on
profitability for 3 consecutive quarters
(2) two (2) times the outstanding Equipment Advances and Leasehold Advances
(3) Current Liabilities to exclude deferred revenue
(4) 1.5 to 1.0 for each calendar month within each fiscal quarter
(5) see Section 6.10 for definition
(6) $10,000,000 for each calendar month
Comments Regarding Exceptions: See Attached. -----------------------------
BANK USE ONLY
Sincerely, Received by:
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---------------------------------- AUTHORIZED SIGNER
SIGNATURE Date:
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---------------------------------- Verified:
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TITLE AUTHORIZED SIGNER
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DATE
C-1
EXHIBIT D
BORROWING BASE CERTIFICATE
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Borrower: BroadVision, Inc. Lender: Silicon Valley Bank
Revolving Commitment Amount:$2,250,000
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ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of
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$
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2. Additions (please explain on reverse) $
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3. TOTAL ACCOUNTS RECEIVABLE $
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ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due $
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5. Balance of 50% over 90 day accounts $
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6. Concentration Limits $
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7. Foreign Accounts $
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8. Governmental Accounts $
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9. Contra Accounts $
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10. Promotion or Demo Accounts $
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11. Intercompany/Employee Accounts $
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12. Other (please explain on reverse) $
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13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $
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14. Eligible Accounts (#3 minus #13) $
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15. LOAN VALUE OF ACCOUNTS (80% of #14) $
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BALANCES
16. Maximum Loan Amount $
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17. Total Funds Available [Lesser of #16 or #15] $
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18. Present balance owing on Line of Credit $
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19. Outstanding under Sublimits ( ) $
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20. Outstanding under Sublimits (Letters of Credit) $
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21. Outstanding under Sublimits (Foreign Exchange) $
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22. RESERVE POSITION (#17 minus #18, #19, #20, and #21) $
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The undersigned represents and warrants that the foregoing is true, complete and correct, and that the
information reflected in this Borrowing Base Certificate complies with the representations and warranties set
forth in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.
COMMENTS:
BROADVISION, INC. ---------------------------
BANK USE ONLY
By: /s/ Xxxxxxx Xxxxxx Rec'd By:
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Auth. Signer
Authorized Signer Date:
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Verified:
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Auth. Signer
Date:
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DISBURSEMENT REQUEST AND AUTHORIZATION
Borrower: BroadVision, Inc. Bank: Silicon Valley Bank
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LOAN TYPE. This is a variable rate, convertible to a fixed rate, equipment and
leasehold line of credit of an aggregate principal amount up to $4,250,000 and a
variable rate, revolving line of credit of an aggregate principal amount up to
$2,250,000.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for business.
SPECIFIC PURPOSE. The specific purpose of this loan is: equipment and leasehold
improvements financing.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:
Revolving Advance Equipment/Leasehold
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Amount paid to Borrower directly:
Undisbursed Funds
Principal
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
Charges Paid in Cash: $
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$TBD UCC Search Fees
$TBD UCC Filing Fees
$TBD Patent Filing Fees
$TBD Trademark Filing Fees
$TBD Copyright Filing Fees
$TBD Outside Counsel Fees and Expenses (Estimate)
Total Charges Paid in Cash $
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AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered ______ the amount of any loan payment. If the funds
in the account are insufficient to cover any payment, Bank shall not be
obligated to advance funds to cover the payment.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK. THIS
AUTHORIZATION IS DATED AS OF JULY 2, 1997.
BORROWER:
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/s/ Xxxxxxx Xxxxxx
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Authorized Officer
CORPORATE RESOLUTIONS TO BORROW
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Borrower: BroadVision, Inc.
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I, the undersigned Secretary or Assistant Secretary of BroadVision,
Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Delaware.
I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true
and complete copies of the Certificate of Incorporation and Bylaws of the
Corporation, each of which is in full force and effect on the date hereof.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation, duly called and held, at which a quorum was present and voting (or
by other duly authorized corporate action in lieu of a meeting), the following
resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
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acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
Borrow Money. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers, employees,
or agents and Bank, such sum or sums of money as in their judgment should be
borrowed, without limitation, including such sums as are specified in that
certain Loan and Security Agreement dated as of July 2, 1997, as amended,
including, without limitation, by the First Amendment to Loan and Security
Agreement dated as of February 5, 1998 (the "Loan Agreement").
Execute Notes. To execute and deliver to Bank the promissory note or
notes of the Corporation, on Lender's forms, at such rates of interest and on
such terms as may be agreed upon, evidencing the sums of money so borrowed or
any indebtedness of the Corporation to Bank, and also to execute and deliver to
Lender one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for one or more of the notes, or any portion of
the notes.
Grant Security. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.
Negotiate Items. To draw, endorse, and discount with Bank all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to the Corporation or in which the Corporation may have an
interest, and either to receive cash for the same or to cause such proceeds to
be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.
Letters of Credit; Foreign Exchange. To execute letters of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.
Further Acts. In the case of lines of credit, to designate additional
or alternate individuals as being authorized to request advances thereunder, and
in all cases, to do and perform such other acts and things, to pay any and all
fees and costs, and to execute and deliver such other documents and agreements
as they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to
these resolutions and performed prior to the passage of these resolutions are
hereby ratified and approved, that these Resolutions shall remain in full force
and effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above
are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on July 2, 1997, and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
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Attachment 1 - Certificate of Incorporation
Attachment 2 - Bylaws
