EXHIBIT 10.5
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of November 13, 2002, by and
between Corillian Corporation ("Borrower") and Silicon Valley Bank ("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated November 9, 2000, as may be
amended from time to time (the "Loan Agreement"). The Loan Agreement provided
for, among other things, a Committed Equipment Line in the original principal
amount of Five Million Dollars ($5,000,000). Defined terms used but not
otherwise defined herein shall have the same meanings as set forth in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured by the
Collateral as described in the Loan Agreement. In addition, Borrower has agreed
not to encumber any of its Intellectual Property pursuant to that certain
Negative Pledge Agreement, dated November 9, 2000.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. Sub-section (i), Sub-section (ii) and Sub-section (iv)
under Section 6.7 entitled "Financial Covenants" are
hereby amended and/or incorporated to read as follows:
Borrower will maintain as of the last day of each month:
(i) Adjusted Quick Ratio. A ratio of Quick Assets to
Current Liabilities, less deferred revenue plus
the long-term portion of all outstanding
Equipment Advances, of at least 1.40 to 1.00 for
the month ending November 30, 2002 through the
month ending December 31, 2002 and 1.20 to 1.00
for the month ending January 31, 2003 and for
each month ending thereafter. Upon Borrower
maintaining a Debt Service Coverage Ratio of
2.00 to 1.00 for two consecutive quarters, the
long-term portion of all Equipment Advances will
be eliminated from the calculation of the
Adjusted Quick Ratio. Concurrently, Borrower
shall comply with a Debt Service Coverage Ratio
covenant as defined in the Loan Agreement.
(ii) Tangible Net Worth. A Tangible Net Worth of at
least $11,000,000 plus 50% of new equity for the
month ending November 30, 2002 through the month
ending December 31, 2002 and $8,500,000 plus 50%
of new equity for the month ending January 31,
2003 and for each month ending thereafter.
(iv) Borrower shall maintain a certificate of deposit
to be held on account with Bank or investments
to be held through Bank in a minimum principal
amount equivalent to 100% of the aggregate
outstanding Obligations at such time as Borrower
fails to meet any financial covenants or
conditions set forth in Section 6.7 of this
Agreement and until such time as Borrower
restores and maintains compliance with the terms
of this Agreement. Provided Borrower maintains
such certificate of deposit held on account
with Bank or investments to be held through
Bank, it shall not be deemed an Event of
Default if Borrower does not comply with
any financial covenant set forth in
Section 6.7 of this Agreement.
B. Waiver of Financial Covenant Default(s)
1. Bank hereby waives Borrower's existing default under the
Loan Agreement by virtue of Borrower's failure to comply
with the Tangible Net Worth covenant as of the month
ended September 30, 2002. Bank's waiver of Borrower's
compliance of this covenant shall apply only to the
foregoing period. Accordingly, for the period ended
October 31, 2002, Borrower shall be in compliance with
this covenant.
Bank's agreement to waive the above-described default
(1) in no way shall be deemed an agreement by the Bank
to waive Borrower's compliance with the above-described
covenant as of all other dates and (2) shall not limit
or impair the Bank's right to demand strict performance
of this covenant as of all other dates and (3) shall not
limit or impair the Bank's right to demand strict
performance of all other covenants as of any date.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it has
no defenses against the obligations to pay any amounts under the Indebtedness.
6. PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Five
Thousand Dollars ($5,000) ("Loan Fee") plus all out-of-pocket expenses.
7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Indebtedness pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Indebtedness. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Indebtedness. It is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Bank in writing.
Unless expressly released herein, no maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
CORILLIAN CORPORATION SILICON VALLEY BANK
By: By:
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Name: Name:
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Title: Title:
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[SILICON VALLEY BANK LOGO]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: CORILLIAN CORPORATION
LOAN OFFICER: XXX X. XXXXXXX
DATE: NOVEMBER 13, 2002
LOAN FEE $5,000.00
DOCUMENTATION FEE $ 250.00
TOTAL FEE DUE $5,250.00
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Please indicate the method of payment:
{ } A check for the total amount is attached.
{ } Debit DDA # _____________________ for the total amount.
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Borrower (Date)
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Silicon Valley Bank (Date)
Account Officer's Signature
EXHIBIT D
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
FROM: CORILLIAN CORPORATION
The undersigned authorized officer of Corillian Corporation ("Borrower")
certifies that under 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 in the Agreement are
true and correct in all material respects on this date. Attached are the
required documents supporting the certification. The Officer certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) consistently applied from one period to the next except as explained in
an accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
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Consolidated and Consolidating
Financial statements & CC(1) Monthly within 45 days Yes No
Annual (Audited) financial statements FYE within 120 days Yes No
Quarterly 10-Q report & CC Quarterly within 5 days of filing Yes No
Annual 10-K report & CC Annually within 5 days of filing Yes No
All other SEC filings than 10-Q & 10-K Within 5 days of filing Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
Maintain on a Monthly Basis:
Minimum Quick Ratio (Adjusted) 1.40:1.00 for 11/30/02(2)
through 12/31/02 ____:1.00 Yes No
1.20:1.00 for 1/31/03
and thereafter ____:1.00 Yes No
Minimum Tangible Net Worth $11,000,000 plus 50% of
new equity for 11/30/02
through 12/31/02 $________ Yes No
$8,500,000 plus 50% of
new equity for 1/31/03
and thereafter $________ Yes No
Minimum Debt Service Coverage Ratio 2.00:1.00(2) ____:1.00 Yes No
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1. Company prepared consolidated and consolidating financial statements.
2. Once Borrower has maintained a Debt Service Coverage Ration of 2.00 to 1.00
for two consecutive quarters, the Adjusted Quick Ratio will be amended to
eliminate the long-term portion of all Equipment Advances. Concurrently, a Debt
Service Coverage Ratio covenant of 2.00 to 1.00 will be implemented.
Borrower only has deposit accounts located at the following institutions:
_________________________________.
COMMENTS REGARDING EXCEPTIONS: See Attached.
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Sincerely, BANK USE ONLY
Received by:
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CORILLIAN CORPORATION AUTHORIZED SIGNER
Date:
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SIGNATURE Verified:
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AUTHORIZED SIGNER
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TITLE Date:
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DATE Compliance Status: Yes No
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