EXHIBIT 10.44
EXECUTION VERSION
AMENDMENT NO. 9 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 9, dated as of March 16, 2001, to the LOAN AND
SECURITY AGREEMENT, dated as of March 31, 1998, (the "LOAN AND SECURITY
AGREEMENT"), between FOOTHILL CAPITAL CORPORATION, a California corporation,
with a place of business located at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000X, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000 ("FOOTHILL"), and AXS-ONE INC. (formerly known as
COMPUTRON SOFTWARE, INC.), a Delaware corporation, with its chief executive
offices located at 000 Xxxxx 00 Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (THE
"BORROWER").
PREAMBLE
The Borrower has requested Foothill to amend the Loan and Security
Agreement to (i) shorten the number of days of Borrower's Collections of
Accounts that are used to calculate the maximum principal amount of the
outstanding Advances, Term Loans and Letters of Credit, (ii) increase the amount
of the Term Loan and amend the amortization schedule of the Term Loan, (iii)
reduce the monthly servicing fee, (iv) extend the renewal date of the Loan and
Security Agreement to March 31, 2004 and (iv) revise the financial covenants.
Accordingly, the Borrower and Foothill hereby agree as follows:
1. DEFINITIONS. All terms used herein which are defined in
the Loan and Security Agreement and not otherwise defined herein are used
herein as defined therein.
2. EBITDA. The definition of the term "EBITDA" in Section 1.1
of the Loan and Security Agreement is hereby amended in its entirety to read
as follows:
""EBITDA" means, with respect to any fiscal period of the
Borrower, an amount equal to the sum for such fiscal period of (i)
Net Income, plus (ii) provision for taxes based on income, plus
(iii) Interest Expense, plus (iv) depreciation, amortization and
other non-cash charges, plus (v) one time restructuring charges,
minus (vi) extraordinary gains."
3. REVOLVING ADVANCES. Section 2.1(d) of the Loan and
Security Agreement is hereby amended in its entirety to read as follows:
"(d) Foothill shall have no obligation to make Advances
pursuant to this Section 2.1, to make the Term Loan pursuant to
Section 2.3, or to issue any Letter of Credit pursuant to Section
2.2 if, after giving effect to such Advance, Term Loan or Letter of
Credit, the aggregate outstanding principal amount of such Advances,
Term Loan and the undrawn amount of all Letters of Credit would
exceed the lesser of (i) 100% of the Eligible Recurring Maintenance
Revenues, and (ii) an amount equal to Borrower's Collections with
respect to Accounts for the immediately preceding sixty (60) days."
4. TERM LOAN. Section 2.3 of the Loan and Security Agreement
is hereby amended in its entirety to read as follows:
"2.3 TERM LOAN. (a) On the Closing Date, Foothill made a term
loan (the "Initial A Term Loan") to the Borrower in the original
principal amount of $5,000,000. On December 22, 1999, Foothill made
available a second term loan (the "Additional A Term Loan" and
together with the Initial A Term Loan, the "A Term Loan") to the
Borrower in the original principal amount of $1,300,000. The
outstanding principal amount of the A Term Loan on March 15, 2001 is
$2,122,222.20. On December 22, 1999, Foothill made available a new
term loan (the "Initial B Term Loan") to the Borrower in the
original principal amount of $750,000, of which $625,000 is
outstanding on March 15, 2001.
(b) On March 16, 2001, Foothill will make available an
additional term loan (the "Additional B Term Loan", and together
with the Initial B Term Loan, the "B Term Loan"; the B Term Loan
together with the A Term Loan each a "Term Loan" and collectively,
the "Term Loans") to the Borrower in the original principal amount
of up to $2,000,000.
(c) Each B Term Loan shall be made upon the Borrower's request
(pursuant to the terms of SECTION 2.9), at any time on or after
March 16, 2001 but before December 31, 2001. The Additional B Term
Loan will be made in not more than three borrowings. Each request
for a borrowing under the Additional B Term Loan must specify (i)
the amount of the requested Term Loan, which can not exceed (A)
$750,000 if such request is made on or after March 16, 2001 but
before December 31, 2001, plus (B) an additional $500,000 if such
request is made on or after April 30, 2001 but before December 31,
2001, plus (C) an additional $750,000 if such request is made on or
after July 31, 2001 but before December 31, 2001, and which must be
in a minimum amount of $500,000, provided that the financial
covenants in Section 7.20 have been met and there is no Event of
Default; and (ii) the requested funding date of the Term Loan.
(d) The aggregate outstanding principal amount of the Term
Loans shall be repaid in monthly installments of $150,000 over the
remaining term of the Loan and Security Agreement. Each such
installment shall be due and payable on the first day of each month
commencing on April 1, 2001 and continuing on the first day of each
succeeding month until and including the date on which the aggregate
unpaid balance of the Term Loans are paid in full. The installments
shall be applied first to the full repayment of the aggregate unpaid
principal balance of the A Term Loan and then to the full repayment
of the aggregate unpaid principal balance of the B Term Loan. The
outstanding principal balance and all accrued and unpaid interest
under the Term Loans shall be due and payable upon the termination
of this Agreement, whether by its terms on March 31, 2004, by
prepayment, by acceleration, or otherwise. Except upon the
termination of this Agreement and as provided in paragraph (e)
below, the unpaid principal balance of the Term Loans may not be
prepaid in whole or in part. All amounts outstanding under the Term
Loans shall constitute Obligations.
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(e) Notwithstanding anything herein to the contrary, if the
aggregate outstanding principal amount of the Term Loans exceeds the
lesser of (i) (A) from and after March 16, 2001 until and including
December 31, 2001, an amount equal to 45% of Eligible Recurring
Maintenance Revenues at such time, (B) from and after January 1,
2002 until and including December 31, 2002, an amount equal to 40%
of Eligible Recurring Maintenance Revenue at such time, and (C) from
and after January 1, 2003 until and including March 31, 2004, an
amount equal to 25% of Eligible Recurring Maintenance Revenue at
such time and (ii) $4,500,000, then the Borrower shall prepay the
principal amount of the Term Loans in an amount sufficient to cause
the aggregate principal amount of the Term Loans to be less than or
equal to the relevant amounts set forth in clauses (i) and (ii)
above. All such prepaid amounts shall be applied to the installments
due on the Term Loan in the inverse order of their maturity;
PROVIDED that (A) all such prepaid amounts shall be applied pro rata
to the A Term Loan and to the B Term Loan and (B) if the aggregate
principal amount of the Term Loan outstanding prior to giving effect
to such prepayment is less than $4,500,000 then such prepaid amounts
shall be applied to the installments due on the Term Loan in the
order of their maturity."
5. FEE.
(a) Section 2.11(e) of the Loan and Security Agreement is
hereby amended in its entirety to read as follows:
"(e) SERVICING FEE. On the first day of each month during the
term of this Agreement, and thereafter so long as any Obligations
are outstanding, a servicing fee in an amount equal to $3,000;
PROVIDED, HOWEVER, that if the Borrower implements electronic
reporting on or before March 31, 2001, with respect to its reporting
requirements under Section 6.2 of this Agreement, the servicing fee
shall be in an amount equal to $2,000."
(b) Section 2.11 of the Loan and Security Agreement is hereby
amended by adding the following new paragraph (g):
"(g) ADDITIONAL B TERM LOAN DRAWING FEE. On the date of each
drawing of the Additional B Term Loan, a fee in an amount equal to
1% of the amount of the Additional B Term Loan drawn on such date
shall be charged to the Borrower."
6. RENEWAL DATE. Section 3.4 of the Loan and Security
Agreement is hereby amended to change the Renewal Date from March 31, 2003 to
March 31, 2004.
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7. FINANCIAL COVENANTS. Section 7.20 of the Loan and Security
Agreement is hereby amended to read in its entirety as follows:
"EBITDA. Failure to maintain EBITDA of at least the following
amounts, measured on a cumulative basis for the period from the
beginning of a calendar year to each calendar quarter end set forth
below:
Quarter End EBITDA
----------- ------
3/31/01 ($1,500,000)
6/30/01 ($500,000)
9/30/01 $1,000,000
12/31/01 $2,200,000
provided that, thereafter, upon receipt of the financial projections
required to be delivered to Foothill pursuant to Section 6.3 (fourth
paragraph) hereof for each fiscal year, the Borrower and Foothill
shall negotiate in good faith to determine the minimum EBITDA as of
the end of each calendar quarter covered by such financial
projections and, in the event that the Borrower and Foothill are
unable to agree upon the amounts of such EBITDA on or before the
date that is 30 days after the date that Foothill has received such
projections, the EBITDA at the end of each calendar quarter of the
fiscal year covered by such financial projections shall not be less
than the greater of (i) 70% of the EBITDA contained in such
financial projections and (ii) the amount set forth for the
corresponding calendar quarter end set forth above PLUS 10% of such
amount."
8. CONDITIONS PRECEDENT. This Amendment shall become effective
(and the covenants set forth in Section 7 above shall be applicable as of the
date of this Amendment) only upon satisfaction in full of the following
conditions precedent (the date upon which all such conditions have been
satisfied being herein called the "Effective Date"):
(a) The representations and warranties contained in this
Amendment and in Section 5 of the Loan and Security Agreement and each other
Loan Document, after giving effect to this Amendment, shall be correct on and as
of the Effective Date as though made on and as of such date (except where such
representations and warranties relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date); no Default or Event of Default shall have occurred and be continuing on
the Effective Date or result from this Amendment becoming effective in
accordance with its terms;
(b) Foothill shall have received a counterpart of this
Amendment, duly executed by the Borrower; and
(c) All legal matters incident to this Amendment shall be
satisfactory to Foothill and its counsel.
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9. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to Foothill as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
has all requisite corporate power, authority and legal right to execute, deliver
and perform this Amendment, and to perform the Loan and Security Agreement, as
amended hereby.
(b) The execution, delivery and performance of this Amendment
by the Borrower, and the performance by the Borrower of the Loan and Security
Agreement, as amended hereby (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not contravene its charter or by-laws or
any applicable law, and (iii) except as provided in the Loan Documents, do not
and will not result in the creation of any Lien upon or with respect to any of
its respective properties.
(c) This Amendment and the Loan and Security Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its terms, except
as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally.
(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required in connection
with the due execution, delivery and performance by the Borrower of this
Amendment and the performance by the Borrower of the Loan and Security Agreement
as amended hereby.
(e) The representations and warranties contained in Section 5
of the Loan and Security Agreement and each other Loan Document, after giving
effect to this Amendment, are correct on and as of the Effective Date as though
made on and as of the Effective Date (except to the extent such representations
and warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date), and no Default or Event of Default has occurred and is continuing on and
as of the Effective Date or will result from this Amendment becoming effective
in accordance with its terms.
10. CONTINUED EFFECTIVENESS OF THE LOAN AND SECURITY AGREEMENT AND
LOAN DOCUMENTS. The Borrower hereby (i) confirms and agrees that each Loan
Document to which it is a party is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects except that on and
after the Effective Date of this Amendment all references in any such Loan
Document to "the Loan and Security Agreement", the "Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan and
Security Agreement shall mean the Loan and Security Agreement as amended by this
Amendment; and (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to Foothill, or to grant a security
interest in or Lien on, any collateral as security for the obligations of the
Borrower from time to time existing in respect of the Loan and Security
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects.
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11. MISCELLANEOUS.
(a) This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(c) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
(d) The Borrower will pay on demand all reasonable fees, costs
and expenses of Foothill in connection with the preparation, execution and
delivery of this Amendment including, without limitation, reasonable fees,
disbursements and other charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to
Foothill.
AXS-ONE INC.,
a Delaware corporation
By:
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Name:
Title:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
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Name:
Title:
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