EXHIBIT 10.1
SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement (the "Amendment") is
entered into as of October 29, 1999, by and between Comerica Bank-California
("Bank") and XXX.Xxxxxxxx Corporation ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of August 11, 1999, as amended by the First Amendment to
Loan and Security Agreement dated as of October 4, 1999 (the "Agreement").
The parties desire to amend the Agreement in accordance with the terms of
this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Section 1.1 of the Agreement is amended by amending the
following defined terms:
"Committed Revolving Line" means a credit extension of
Twelve Million Dollars ($12,000,000).
"Term Loan" means the term loan in the amount of Eight
Million Dollars ($8,000,000) pursuant to the provisions of Section 2.1.2.
2. Sections 2.1.2 (a) and (b) are amended to read as follows:
Section 2.1.2 (a): Subject to and upon the terms and
conditions of this Agreement, Bank agrees to make one term loan to Borrower
by November 30, 1999 in an aggregate amount of Eight Million Dollars
($8,000,000). The Term Loan shall be payable in thirty (30) equal monthly
installments in the amount of Two Hundred Sixty Six Thousand Six Hundred
Sixty Seven Dollars ($266,667), plus all accrued interest, beginning on
December 1, 1999, and continuing on the same day of each month thereafter
through the Maturity Date, at which time all amounts due under this Section
2.12 and any other amounts relating to the Term Loan shall be immediately due
and payable.
Section 2.1.2 (b) Deleted in its entirety.
3. Sections 6.11 and 6.14 are amended to read as follows:
6.11 TOTAL LIABILITIES-EFFECTIVE TANGIBLE NET WORTH.
Borrower shall maintain, as of the last day of each fiscal quarter, a ratio
of Total Liabilities less Subordinated Debt and deferred revenue to Effective
Tangible Net Worth of not more than 3.00 to 1.00 as of March 31, 2000, and
not more than 2.50 to 1.00 thereafter.
6.14 EFFECTIVE TANGIBLE NET WORTH. Borrower shall
maintain a minimum Effective Tangible Net Worth, as follows:
MEASUREMENT DATE MINIMUM EFFECTIVE TANGIBLE NET WORTH
June 30, 1999 $ 2,000,000
September 30, 1999 $ 6,500,000
December 31, 1999 $10,000,000
March 31, 2000 $15,000,000
June 30, 2000 $19,000,000
September 30, 2000 and each $19,000,000 plus 75% of Borrower's
fiscal quarter net income per quarter and 100% of
thereafter the net proceeds received from the
sale or issuance of equity securities
after June 30, 2000.
In determining compliance with Sections 6.11 and 6.14, deferred income taxes
resulting from Borrower's acquisition of Marc Analysis shall be excluded from
the calculation of both intangible assets and liabilities.
4. Borrower shall deliver to Bank agings of Borrower's
accounts payable and accounts receivable effective as of September 30, 1999,
and for each fiscal quarter thereafter, within thirty (30) days of the last
day of each fiscal quarter.
5. The Compliance Certificate is amended to be in
substantially the form of Exhibit D attached hereto.
6. 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.
7. 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. The parties confirm that the Agreement remains in full force and
effect as of the date of this Amendment.
8. 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.
XXX.XXXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Title: Chief Financial Officer
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COMERICA BANK-CALIFORNIA
By: /s/ Xxxxx Xxxxx
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Title: Vice President
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EXHIBIT D
COMPLIANCE CERTIFICATE
TO: COMERICA BANK-CALIFORNIA
FROM: XXX.Xxxxxxxx Corporation
The undersigned authorized officer, on behalf of XXX.Xxxxxxxx
Corporation hereby certifies that in accordance with the terms and conditions
of the Loan and Security Agreement 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; provided,
however that those representations and warranties expressly referring to
another date shall be true and correct as of such date. 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 income statements Monthly within 30 days Yes No
Quarterly balance sheet, income Quarterly within 45 days Yes No
statement and statement of cash flows
Annual (CPA Audited) FYE within 90 days Yes No
10K and 10Q Within 5 days Yes No
Domestic balance sheet, A/R & Monthly within 30 days Yes No
A/P Agings when applicable)
A/R Audit Initial and Annual Yes No
A/R & A/P Agings Quarterly within 30 days Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
Maintain on a Quarterly Basis:
Minimum Quick Ratio 1.50:1.00 _____:1.00 Yes No
Maximum Senior Liabilities-EBITDA (1) _____:1.0 Yes No
Maximum Debt-ETNW 3.00:1.00 (2) _______ Yes No
Minimum Profitability $1.00 (3) $_______ Yes No
Minimum Fixed Charge Coverage 1.10:1.00 (4) _____:1.00 Yes No
Minimum Effective TNW (5)
(1) 4.5:1.0 on 6/30/99; 3.25:1.0 on 9/30/99; 2.0:1.0 on 12/31/99.
Terminates on 3/31/2000.
(2) Beginning March 31, 2000.
(3) Profitable Annually; no more than 1 quarter of losses.
(4) Beginning December 31, 1999 on Quarterly Basis, increasing to 1.25:1.00
as of June 30, 2000 and thereafter.
(5) $2,000,000 on 6/30/99; $6,500,000 on 9/30/99; $15,000,000 on 12/31/99
to be increased by 75% of net income plus 100% of equity proceeds
received thereafter.
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BANK USE ONLY
COMMENTS REGARDING EXCEPTIONS: See Attached
Received by:________
Sincerely, AUTHORIZED SIGNER
______________ Date: _________
SIGNATURE
______________ Verified: __________
TITLE AUTHORIZED SIGNER
______________ Date: _________
DATE
Compliance Status: Yes No
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