Exhibit 10.7.4
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Agreement")
effective as of June 13, 1999, by and among SILICON VALLEY BANK, a
California-chartered bank ("Bank") with its principal place of business at 0000
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and doing business in Virginia as
"Silicon Valley East, Inc. with a loan production office located at 00000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 and SKY ALLAND RESEARCH,
INC., a Maryland corporation ("Sky Alland") and THE DATA GROUP II, INC., a
Maryland corporation (each a "Borrower" and collectively, the "Borrowers").
RECITALS.
A. Borrowers and Bank have entered into that certain Loan and Security
Agreement dated May 28, 1998 (the Loan and Security Agreement as amended from
time to time, is called the "Loan Agreement"), pursuant to which Bank has agreed
to establish a line of credit in the amount of $3,500,000 and a committed
equipment line in favor of Borrowers in the maximum principal amount of
$2,000,000.
B. Borrowers have requested that Bank extend the maturity date of the
committed line of credit and Bank has agreed on the condition, among others,
that this Agreement be executed and delivered by Borrowers to Bank.
C. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings set forth in the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Borrowers and Bank do hereby agree as follows:
1. RECITALS. The parties hereto acknowledge and agree that the above
Recitals are true and correct in all material respects and that the same are
incorporated herein and made a part hereof by reference.
2. REVOLVING MATURITY DATE. From and after the effective date of this
Agreement, all references in the Loan Agreement and the Loan Documents to
"Revolving Maturity Date" shall mean September 13, 1999.
3. ACKNOWLEDGMENTS OF BORROWERS. The Borrowers hereby acknowledge and
agree that the Borrowers are currently in violation of the requirements of
Section 6.10 of the Loan Agreement.
4. LETTERS OF CREDIT. From and after the effective date hereof, Section
2.1.1(a) of the Loan Agreement is amended and restated in its entirety:
(a) Subject to the terms and conditions of this Agreement,
Bank agrees to issue or cause to be issued Letters of Credit for the
account of one or more of Borrowers in an aggregate outstanding face
amount not to exceed (i) the lesser of the Committed Revolving Line or
the Borrowing Base, whichever is less, minus (ii) the then outstanding
principal balance of the Advances; PROVIDED that the 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 One Million Dollars ($1,000,000). Each Letter of Credit shall
have an expiry date no later than one hundred eighty (180) days after
the Revolving Maturity Date, provided, that Borrowers' Letter of Credit
reimbursement obligations shall be secured by cash on terms acceptable
to bank at any time after the Revolving Maturity Date, if the term of
this Agreement is note extended by Bank. All Letters of Credit shall
be, in form and substance, acceptable to Bank
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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.
5. TANGIBLE NET WORTH DEFAULT. The Bank hereby waives the Borrowers'
compliance with the requirements of Section 6.10 for the periods ending April
30, 1999, May 31, 1999 and June 30, 1999. Notwithstanding anything in this
Agreement to the contrary, commencing with the month ending July 31, 1999 and at
all times thereafter, Borrowers shall comply with the provisions of Section 6.8.
6. TANGIBLE NET WORTH. From and after the effective date hereof Section
6.10 of the Loan Agreement is hereby amended and restated in its entirety to
read as follows:
6.10 TANGIBLE NET WORTH. Borrowers shall maintain, as of the
last day of each calendar month, a Tangible Net Worth of not less than
$8,500,000.
7. LETTERS OF CREDIT. From and after the effective date hereof, Section
2.1.1(a) of the Loan Agreement is amended and restated in its entirety:
(a) Subject to the terms and conditions of this Agreement,
Bank agrees to issue or cause to be issued Letters of Credit for the
account of one or more of Borrowers in an aggregate outstanding face
amount not to exceed (i) the lesser of the Committed Revolving Line or
the Borrowing Base, whichever is less, minus (ii) the then outstanding
principal balance of the Advances; PROVIDED that the 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 One Million Dollars ($1,000,000). Each Letter of Credit shall
have an expiry date no later than one hundred eighty (180) days after
the Revolving Maturity Date, provided, that Borrowers' Letter of Credit
reimbursement obligations shall be secured by cash on terms acceptable
to bank at any time after the Revolving Maturity Date, if the term of
this Agreement is note extended by Bank. 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.
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8. CONDITIONS PRECEDENT. This Agreement shall become effective on the
date Bank receives the following documents, each of which shall be satisfactory
in form and substance to Bank:
(a) A Third Amended and Restated Revolving Promissory Note
issued and delivered by the Borrowers in the form of EXHIBIT "E" attached hereto
and incorporated herein by reference, payable to the order of the Lender in the
maximum principal amount of Three Million Five Hundred Thousand Dollars
($3,500,000.00) (which Second Amended and Restated Revolving Promissory Note is
sometimes referred to herein as the "Replacement Revolving Note");
(b) Proof that Borrowers have paid all costs and expenses to
Bank in connection with this Agreement, including but not limited to Bank's
reasonable attorneys fees; and
(c) Such other information, instruments, opinions, documents,
certificates and reports as Bank may deem necessary.
9. REPLACEMENT NOTE. EXHIBIT E to the Loan Agreement is hereby replaced
in its entirety with EXHIBIT "E" attached hereto. The Borrowers shall execute
and deliver to the Lender on the date hereof the Replacement Revolving
Promissory Note in substitution for and not satisfaction of, the issued and
outstanding Revolving Promissory Note and the Replacement Revolving Promissory
Note shall be the "Revolving Promissory Note" for all purposes of the Loan
Documents. The Replacement Revolving Note shall not operate as a novation of the
joint and several Obligations of the Borrowers, or nullify, discharge, or
release any such Obligations
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or the continuing contractual relationship of the Borrowers in accordance with
the provisions of the Loan Documents. All references in the Financing Agreements
to the "Revolving Promissory Note" shall be deemed to refer to the Replacement
Revolving Note.
10. REPRESENTATIONS. Borrowers hereby confirm that:
(a) The covenants set forth in Sections 5 and 7 of the Loan
Agreement as hereby amended, are true and correct as of the date hereof;
(b) The Borrowers have no defenses, rights of setoff, claims,
counterclaims, or causes of action of any kind or nature whatsoever against the
Bank or any agent, attorney, legal representative, predecessor-in-interest, or
affiliate of the Bank, directly or indirectly in any manner connected with,
pursuant to, or by virtue of the Obligations or any of the Loan Documents, and
TO THE EXTENT ANY SUCH DEFENSES, RIGHTS OF SETOFF, CLAIMS, COUNTERCLAIMS, OR
CAUSES OF ACTION EXIST, SUCH DEFENSES, RIGHTS, CLAIMS, COUNTERCLAIMS, AND CAUSES
OF ACTION ARE HEREBY FOREVER WAIVED, DISCHARGED AND RELEASED; and
(c) No defaults exist under the Loan Documents.
11. COUNTERPARTS. This Agreement may be executed in any number of
duplicate originals or counterparts, each of which duplicate original or
counterpart shall be deemed to be an original and all taken together shall
constitute one and the same instrument.
12. LOAN DOCUMENTS; GOVERNING LAW; ETC. This Agreement is one of the
Loan Documents defined in the Loan Agreement and shall be governed and construed
in accordance
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with the laws of the State of Maryland. The headings and captions in this
Agreement are for the convenience of the parties only and are not a part of this
Agreement.
13. ACKNOWLEDGMENTS. Borrowers hereby confirm to Bank the
enforceability and validity of each of the Loan Documents. In addition,
Borrowers hereby agree to the execution and delivery of this Agreement and the
terms and provisions, covenants or agreements contained in this Agreement shall
not in any manner release, impair, lessen, modify, waive or otherwise limit the
joint and several liability and obligations of Borrowers under the terms of any
of the Loan Documents, except as otherwise specifically set forth in this
Agreement. Borrowers issue, ratify and confirm the representations, warranties
and covenants contained in the Loan Documents.
14. MODIFICATIONS. This Agreement may not be supplemented, changed,
waived, discharged, terminated, modified or amended, except by written
instrument executed by the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
WITNESS OR ATTEST: SKY ALLAND RESEARCH, INC.
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
WITNESS OR ATTEST: THE DATA GROUP II, INC.
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SILICON VALLEY EAST, INC.
By: /s/ Xxxx XxXxxxxx
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Xxxx XxXxxxxx
Vice President
SILICON VALLEY BANK
By: /s/ Xxxx XxXxxxxx
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Xxxx XxXxxxxx
Vice President
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