EXHIBIT 10.6
[LOGO] SILICON VALLEY BANK
QUICKSTART LOAN AND SECURITY AGREEMENT
Borrower: Mission Critical Software, Inc. Address: 000 Xxxxx Xxxx Xxx Xxxx
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Suite 505
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Date: February 7, 1997 Xxxxxxx, XX 00000
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THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK, a California chartered bank ("Silicon"), whose address is
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production
office located at 9442 Capital of Texas Highway North, Arboretum Plaza One,
Austin, TX 78759 and the borrower named above, (jointly and severally, the
"Borrower"), whose chief executive office is located at the above address
("Borrower's Address").
1. Loans. Silicon will make loans to Borrower (the "Loans") in amounts
determined by Silicon in its reasonable business judgment up to the amount (the
"Credit Limit") shown on the Schedule to this Agreement (the "Schedule"),
provided no Event of Default and no event which, with notice or passage of time
or both, would constitute an Event of Default has occurred. All Loans and other
monetary Obligations will bear interest at the rate shown on the Schedule.
Interest will be payable monthly, on the date shown on the monthly billing from
Silicon. Silicon may, in its discretion, charge interest to Borrower's deposit
accounts maintained with Silicon.
2. Security Interest. As security for all present and future indebtedness,
guarantees, liabilities, and other obligations, of Borrower to Silicon
(collectively, the "Obligations"), Borrower hereby grants Silicon a continuing
security interest in all of Borrower's interest in the following types of
property, whether now owned or hereafter acquired, and wherever located
(collectively, the "Collateral"): All "accounts," "general intangibles,"
"chattel paper," "documents," "letters of credit," "instruments," "deposit
accounts," "inventory," "farm products," "fixtures" and "equipment," as such
terms are defined in the Texas Uniform Commercial Code in effect on the date
hereof, and all products, proceeds and insurance proceeds of the foregoing.
3. Representations And Agreements Of Borrower. Borrower represents to Silicon
as follows, and Borrower agrees that the following representations will continue
to be true, and that Borrower will comply with all of the following agreements
throughout the term of this Agreement:
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The execution, delivery
and performance by Borrower of this Agreement, and all other documents
contemplated hereby have been duly and validly authorized, and do not violate
any law or any provision of, and are not grounds for acceleration under, any
agreement or instrument which is binding upon Borrower.
3.2 Name; Places of Business. The name of Borrower set forth in this
Agreement is its correct name. Borrower shall give Silicon 15 days' prior
written notice before changing its name. The address set forth in the heading to
this Agreement is Borrower's chief executive office. In addition, Borrower has
places of business and Collateral is located only at the locations set forth on
the Schedule. Borrower will give Silicon at least 15 days prior written notice
before changing its chief executive office or locating the Collateral at any
other location.
3.3 Collateral. Silicon has and will at all times continue to have a
first-priority perfected security interest in all of the Collateral other than
specific equipment. Borrower will immediately advise Silicon in writing of any
material loss or damage to the Collateral.
3.4 Financial Condition and Statements. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles. Since the last date covered by
any such statement, there has been no material adverse change in the financial
condition or business of Borrower. Borrower will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by
Borrower, and such other information as Silicon shall reasonably request; (ii)
within 120 days following the end of Borrower's fiscal year, complete annual
financial statements, certified by independent certified public accountants
acceptable to Silicon and accompanied by the unqualified report thereon by said
independent certified public accountants; and (iii) other financial information
reasonably requested by Silicon from time to time.
3.5 Taxes; Compliance with Law. Borrower has filed, and will file, when
due, all tax returns and reports required by applicable law, and Borrower has
paid, and will pay, when due, all taxes, assessments, deposits and contributions
now or in the future owed by Borrower. Borrower has complied, and will comply,
in all material respects, with all applicable laws, rules and regulations.
3.6 Insurance. Borrower shall at all times insure all of the tangible
personal property Collateral and carry such other business insurance as is
customary in Borrower's industry.
3.7 Access to Collateral and Books and Records. At reasonable times, on
one business day notice, Silicon, or its
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SILICON VALLEY BANK QUICKSTART LOAN AND SECURITY AGREEMENT
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agents, shall have the right to inspect the Collateral, and the right to audit
and copy Borrower's books and records.
3.8 Additional Agreements. Borrower shall not, without Silicon's prior
written consent, do any of the following: (i) enter into any transaction outside
the ordinary course of business except for the sale of capital stock to venture
investors, provided that Borrower promptly delivers written notification to
Silicon of any such sale; (ii) sell or transfer any Collateral, except for the
sale of finished inventory or non-exclusive software licenses in the ordinary
course of Borrower's business, and the sale of obsolete or unneeded equipment in
the ordinary course of business; (iii) grant a security interest in intellectual
property to any third party (excluding Borrower's venture investors); (iv) pay
or declare any dividends on Borrower's stock (except for dividends payable
solely in stock of Borrower); or (v) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Borrower's stock other than the
repurchase of up to five percent (5%) of Borrower's then issued stock in any
fiscal year from Borrower's employees or directors pursuant to written agreement
with Borrower.
4. Term. This Agreement shall continue in effect until the maturity date set
forth on the Schedule (the "Maturity Date"). This Agreement may be terminated,
without penalty, prior to the Maturity Date as follows: (i) by Borrower,
effective three business days after written notice of termination is given to
Silicon; or (ii) by Silicon at any time after the occurrence of an Event of
Default, without notice, effective immediately. On the Maturity Date or on any
earlier effective date of termination, Borrower shall pay all Obligations in
full, whether or not such Obligations are otherwise then due and payable. No
termination shall in any way affect or impair any security interest or other
right or remedy of Silicon, nor shall any such termination relieve Borrower of
any Obligation to Silicon, until all of the Obligations have been paid and
performed in full.
5. Events of Default and Remedies. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement: (a) Any
representation, statement, report or certificate given to Silicon by Borrower or
any of its officers, employees or agents, now or in the future, is untrue or
misleading in a material respect; or (b) Borrower fails to pay when due any Loan
or any interest thereon or any other monetary Obligation; or (c) the total
Obligations outstanding at any time exceed the Credit Limit; or (d) Borrower
fails to perform any other non-monetary Obligation, which failure is not cured
within 5 business days after the date due; or (e) Dissolution, termination of
existence, insolvency or business failure of Borrower; or appointment of a
receiver, trustee or custodian, for all or any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by or against Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect; or (f) a material
change in the ownership of Borrower, without the prior written consent of
Silicon except for the sale of capital stock to venture investors, provided that
Borrower promptly delivers written notification to Silicon of any such sale; or
(g) a material adverse change in the business, operations, or financial or other
condition of Borrower. If an Event of Default occurs, Silicon, shall have the
right to accelerate and declare all of the Obligations to be immediately due and
payable, increase the interest rate by an additional four percent per annum, and
exercise all rights and remedies accorded it by applicable law.
6. General. If any provision of this Agreement is held to be unenforceable, the
remainder of this Agreement shall still continue in full force and effect. This
Agreement and any other written agreements, documents and instruments executed
in connection herewith are the complete agreement between Borrower and Silicon
and supersede all prior and contemporaneous negotiations and oral
representations and agreements, all of which are merged and integrated in this
Agreement. There are no oral understandings, representations or agreements
between the parties which are not in this Agreement or in other written
agreements signed by the parties in connection this Agreement. The failure of
Silicon at any time to require Borrower to comply strictly with any of the
provisions of this Agreement shall not waive Silicon's right later to demand and
receive strict compliance. Any waiver of a default shall not waive any other
default. None of the provisions of this Agreement may be waived except by a
specific written waiver signed by an officer of Silicon and delivered to
Borrower. The provisions of this Agreement may not be amended, except in a
writing signed by Borrower and Silicon. Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all other reasonable costs incurred by Silicon,
in connection with this Agreement (whether or not a lawsuit is filed). If
Silicon or Borrower files any lawsuit against the other predicated on a breach
of this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys' fees from the non-prevailing party. Borrower may
not assign any rights under this Agreement without Silicon's prior written
consent. This Agreement shall be governed by the laws of the State of Texas.
7. Arbitration. Silicon and Borrower agree that all disputes, claims and
controversies between them, whether individual or joint, or class in nature,
arising from this agreement or otherwise, including, without limitation,
contract or tort disputes, shall be arbitrated pursuant to the rules of the
american arbitration association, upon request of either party.
Borrower:
Mission Critical Software, Inc.
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By /s/ Xxxxx Xxxxxxxx (President)
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President or Vice President 2/7/97
Silicon:
SILICON VALLEY BANK
By /s/ Signature Illegible
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Title Senior Vice President
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[LOGO] SILICON VALLEY BANK
CERTIFIED RESOLUTION
BORROWER: Mission Critical Software Inc., A CORPORATION
ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE
DATE:
I, the undersigned, corporate officer of the above-named borrower, a
corporation organized under the laws of the state set forth above, do hereby
certify that the following is a full, true and correct copy of resolutions duly
and regularly adopted by the Board of Directors of said corporation as required
by law, and by the by-laws of said corporation, and that said resolutions are
still in full force and effect and have not been in any way modified, repealed,
rescinded, amended or revoked.
RESOLVED, that this corporation borrow from Silicon Valley Bank & California
chartered bank ("Silicon"), from time to time, such sum or sums of money as, in
the judgment of the officer or officers authorized hereby, this corporation may
require.
RESOLVED FURTHER, that any officer of this corporation be, and he or she is
hereby authorized, in the name of this corporation, to execute and deliver to
Silicon the loan agreements, security agreements, notes, financing statements,
and other documents and instruments providing for such loans and evidencing or
securing such loans, and said authorized officers are authorized from time to
time to execute renewals, extensions and/or amendments of said loan agreements,
security agreements, and other documents and instruments.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized, as security for any and all indebtedness of this corporation to
Silicon, whether arising pursuant to this resolution or otherwise, to grant, to
Silicon, or deed in trust for its benefit, any property of any and every kind,
belonging to this corporation, including, but not limited to, any and all real
property, accounts, inventory, equipment, general intangibles, instruments,
documents, chattel paper, notes, money, deposit accounts, furniture, fixtures,
goods, and other property of every kind, and to execute and deliver to Silicon
any and all pledge agreements, mortgages, deeds of trust, financing statements,
security agreements and other agreements, which said instruments and the note or
notes and other instruments referred to in the preceding paragraph may contain
such provisions, covenants, recitals and agreements as Silicon may require, and
said authorized officers may approve, and the execution thereof by said
authorized officers shall be conclusive evidence of such approval.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized to issue warrants to purchase this corporation's capital stock, for
such class, series and number, and on such terms, as said officers shall deem
appropriate
RESOLVED FURTHER, that Silicon may conclusively rely on a certified copy of
these resolutions and a certificate of the corporate officer of this corporation
as to the officers of this corporation and their officers and signatures, and
continue to conclusively rely on such certified copy of these resolutions and
said certificate for all past, present and future transactions until written
notice of any change hereto or thereto is given to Silicon by this corporation
by certified mail, return receipt requested.
The undersigned further hereby certifies that the following persons are the
duly elected and acting officers of the corporation named above as borrower and
that the following are their actual signatures:
NAMES OFFICE(S) ACTUAL SIGNATURES
----- -------- -----------------
Xxxxx X. Xxxxxxxx President x /s/ Xxxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxx, Xx. Secretary x /s/ Xxxx X. Xxxxxxx, Xx.
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-------------------------- ------------------- x --------------------------
IN WITNESS WHEREOF, I have hereunto set my hand as such corporate officer on the
date set forth above
By /s/ Xxxx X. Xxxxxxx, Xx.
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Its SECRETARY
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FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform Commercial Code
and will remain effective, with certain exceptions, for 5 years from date of filing.
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A. NAME & TEL. # OF CONTACT AT FILER (optional) | B. FILING OFFICE ACCT. # (OPTIONAL)
|
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C. RETURN COPY TO: (Name and Mailing Address)
---- ----
| Silicon Valley Bank |
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
NC661
| |
---- ----
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D. OPTIONAL DESIGNATION (if applicable): [_] LESSOR/LESSEE [_] CONSIGNOR/CONSIGNEE [_] NON-UCC FILING
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1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (1a or 1b)
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| 1a. ENTITY'S NAME
| Mission Critical Software, Inc.
OR ------------------------------------------------------------------------------------------------------------------------
| 1b. INDIVIDUAL'S LAST NAME |FIRST NAME |MIDDLE NAME |SUFFIX
| | | |
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1c. MAILING ADDRESS |CITY |STATE |COUNTRY |POSTAL CODE
000 Xxxxx Xxxx Xxx Xx., Xxx. 000 | Houston | TX | US | 77024
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1d. S.S. OR TAX I.D. # | OPTIONAL |1e. TYPE OF ENTITY |1f. ENTITY'S STATE |1g. ENTITY'S ORGANIZATIONAL I.D.S, IF ANY
|ADD'NL INFO FOR | |OR COUNTRY OF |
| ENTITY DEBTOR | |ORGANIZATION | [_] NONE
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2a. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (2a or 2b)
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| 2a. ENTITY'S NAME
|
OR ------------------------------------------------------------------------------------------------------------------------
| 2b. INDIVIDUAL'S LAST NAME |FIRST NAME |MIDDLE NAME |SUFFIX
| | | |
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2c. MAILING ADDRESS |CITY |STATE |COUNTRY |POSTAL CODE
| | | |
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2d. S.S. OR TAX I.D. # | OPTIONAL |2e. TYPE OF ENTITY |2f. ENTITY'S STATE |2g. ENTITY'S ORGANIZATIONAL I.D.S, IF ANY
|ADD'NL INFO FOR | |OR COUNTRY OF |
| ENTITY DEBTOR | |ORGANIZATION | [_] NONE
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3. SECURED PARTY'S (ORIGINAL S/P or ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - Insert only one secured party name (3a or 3b)
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| 3a. ENTITY'S NAME
| Silicon Valley Bank
OR ------------------------------------------------------------------------------------------------------------------------
| 3b. INDIVIDUAL'S LAST NAME |FIRST NAME |MIDDLE NAME |SUFFIX
| | | |
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3c. MAILING ADDRESS |CITY |STATE |COUNTRY |POSTAL CODE
0000 Xxxxxx Xx. | Santa Xxxxx | CA | US | 95054
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3d. S.S. OR TAX I.D. # | OPTIONAL |3e. TYPE OF ENTITY |1f. ENTITY'S STATE |3g. ENTITY'S ORGANIZATIONAL I.D.S, IF ANY
|ADD'NL INFO FOR | |OR COUNTRY OF |
| ENTITY DEBTOR | |ORGANIZATION | [_] NONE
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4. THIS financing statement covers the following type or items of property:
See attached Exhibit "a"
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5. CHECK [_] This FINANCING STATEMENT is signed by the Secured Party instead of the |7. If filed in Florida (check stmt)
Box Debtor to protect a security interest (a) in collateral already subject |[_] Documentary [_] Documentary stamp
(if applicable) to a maturity judgement in another jurisdiction when it was brought into| stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state or |
(b) in accordance with other statutory provisions (additional date may |
be required)
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6. REQUIRED SIGNATURE Mission Critical Software, Inc. |8. [_] This FINANCING STATEMENT is to be filed (for record)
| (or amendment) in the REAL ESTATE RECORDS
/S/ [SIGNATURE] 2/7/97 | Attach Addendum (if applicable)
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Silicon Valley Bank |9. Check if REQUEST SEARCH CERTIFICATE(s) on Debtor(s)
|[ADDITIONAL FEE]
/S/ [SIGNATURE] |(withdrawal) [_] All Debtors [_] Debtor 1 [_] Debtor 2
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(2) ACKNOWLEDGMENT COPY -- NATIONAL FINANCING STATEMENT (FORM UCC1) (TRANS) (REV. 12/18/95)
============================================================================================================================
EXHIBIT "A" TO UCC-FINANCING STATEMENT
Debtor hereby grants Secured Party a security interest in all of the following,
whether now owned or hereafter acquired, and wherever located, as collateral for
the payment and performance of all present and future indebtedness, liabilities,
guarantees and obligations of Debtor to Secured Party: All "accounts," "general
intangibles," "chattel paper," "documents," "letters of credit," "instruments,"
"deposit accounts," "inventory," "farm products," "fixtures" and "equipment," as
such terms are defined in the Texas Uniform Commercial Code in effect on the
date hereof, and all products, proceeds and insurance proceeds of any or all of
the foregoing.
[LOGO] Silicon Valley Bank
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (EQUIPMENT ADVANCES)
BORROWER: Mission Critical Software, Inc.
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DATE: February 7, 1997
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This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank, a California chartered bank ("Silicon") and the
above-named borrower ("Borrower") of even date.
Credit Limit (Equipment)
(Section 1): $ 750,000 (such amount to be funded under the
aggregate Credit Limit). Equipment Advances will be
made only on or prior to August 7, 1997 (the "Last
Advance Date") and only for the purpose of
purchasing equipment reasonably acceptable to
Silicon. Borrower must provide invoices for the
equipment to Silicon on or before the Last Advance
Date.
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect from
time to time, plus 1% per annum. Interest shall be
calculated on the basis of a 360-day year for the
actual number of days elapsed. "Prime Rate" means
the rate announced from time to time by Silicon as
its "prime rate;" it is a base rate upon which
other rates charged by Silicon are based, and it is
not necessarily the best rate available at Silicon.
The interest rate applicable to the Obligations
shall change on each date there is a change in the
Prime Rate.
Maturity Date (Section 4): After the Last Advance Date, the unpaid principal
balance of the Equipment Advances shall be repaid
in 36 equal monthly installments of principal plus
interest commencing on September 7, 1997 and
continuing on the same day of each month thereafter
until the entire unpaid principal balance and all
accrued unpaid interest of the Equipment Advances
have been paid (subject to Silicon's right to
accelerate the Equipment Advances on an Event of
Default).
BORROWER: SILICON:
Mission Critical Software, Inc. SILICON VALLEY BANK
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By /s/ Xxxxx Xxxxxxxx BY /s/ Signature Illegible
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President or Vice President Title Senior Vice President
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[LOGO] SILICON VALLEY BANK
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (MASTER)
BORROWER: Mission Critical Software, Inc.
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DATE: February 7, 1997
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This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank, a California chartered bank ("Silicon") and the
above-named borrower ("Borrower") of even date.
Credit Limit (Aggregate)
(Section 1): $750,000 (includes, without limitation, Equipment
Advances and the Merchant Services Reserve and
Business Visa Reserve, if any)
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect from
time to time, plus 1% per annum. Interest shall be
calculated on the basis of a 360-day year for the
actual number of days elapsed. "Prime Rate" means
the rate announced from time to time by Silicon as
its "prime rate;" it is a base rate upon which
other rates charged by Silicon are based, and it is
not necessarily the best rate available at Silicon.
The interest rate applicable to the Obligations
shall change on each date there is a change in the
Prime Rate.
Maturity Date (Section 4): June 7, 1998
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Other Locations and Addresses
(Section 3.2): N/A
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Other Agreements: Borrower also agrees as follows:
1. Loan Fee. Borrower shall concurrently pay
Silicon a non-refundable Loan Fee in the amount of
$3,750.00
2. Banking Relationship. Borrower shall at all
times maintain its primary banking relationship
with Silicon.
BORROWER: SILICON:
Mission Critical Software, Inc. SILICON VALLEY BANK
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By /s/ Xxxxx Xxxxxxxx By /s/ [SIGNATURE]
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President or Vice President Title Senior Vice President
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[LOGO] SILICON VALLEY BANK
SCHEDULE TO QUICKSTART LOAN AND SECURITY AGREEMENT (MERCHANT SERVICES/BUSINESS
CREDIT CARD SUBLIMIT)
BORROWER: Mission Critical Software, Inc.
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DATE: February 11, 1997
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This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
MERCHANT SERVICES/
BUSINESS CREDIT CARD
Sublimit (Section 1): The aggregate Credit Limit shall be reduced by an
amount equal to the sum of (a) $N/A (the "Merchant
Service Reserve") and (b) $30,000.00 (the "Business
Credit Card Reserve"). Silicon may, in its sole
discretion, charge as Loans, any amounts that may
become due or owing to Silicon in connection with
merchant credit card processing services and/or
business credit card services furnished to Borrower
by or through Silicon, collectively, the "Credit
Card Services." Borrower shall execute all standard
form applications and agreements, including without
limitation, the Indemnification and Pledge
Agreement, of Silicon in connection with the Credit
Card Services and, without limiting any of the
terms of such applications and agreements, Borrower
will pay all standard fees and charges of Silicon
in connection with the Credit Card Services and,
without limiting any of the terms of such
applications and agreements, Borrower will pay all
standard fees and charges of Silicon in connection
with the Credit Card Services.
MATURITY DATE (Section 4): June 7, 1998
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BORROWER: SILICON:
Mission Critical Software, Inc. SILICON VALLEY BANK
--------------------------------
By /s/ Xxxx X. Xxxxxxx, Xx. BY
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President or Vice President Title
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EXHIBIT 10.6.1
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of January 23, 1998, by
and between Mission Critical Software, Inc. ("Borrower") whose address is 000
Xxxxx Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000 and Silicon Valley Bank a
California-chartered bank ("Silicon") with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 with a loan production office located
at 9442 Capital of Texas Highway North, Arboretum Plaza One, Austin, TX 78759.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Silicon, Borrower is indebted to Silicon pursuant to, among
other documents, a QuickStart Loan and Security Agreement, (and Schedules
thereto) dated February 7, 1997, as may be amended from time to time, (the "Loan
Agreement"). The Loan Agreement provided for, among other things, a Credit Limit
the original principal amount of Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00). Defined terms used but not otherwise defined herein shall have
the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Silicon shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement.
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. Subparagraph (h) is hereby incorporated into Section 5 entitled
"Events of Default and Remedies" to read as follows:
(h) Borrower's failure to comply with or to perform any other
term, obligation, covenant or condition contained in any other
agreement between Silicon and Borrower.
B. Modification(s) to Schedule (Equipment Advances).
1. The paragraph entitled "Credit Limit (Equipment)" is hereby
amended in its entirety to read as follows:
$750,000.00 (such amount to be funded under the aggregate Credit
Limit). Equipment Advances will be made only on or prior to March
7, 1998 (the "Last Advance Date") and only for the purpose of
purchasing equipment reasonably acceptable to Silicon. Borrower
must provide invoices for the equipment to Silicon on or before
the Last Advance Date. Equipment Advances shall be allowed up to
85% of eligible existing equipment and 100% of new equipment
purchases excluding taxes, shipping, software and installation
expenses. Eligible equipment shall consist of invoices dated
after July 1, 1997.
2. The first sentence of the paragraph entitled "Interest Rate" is
hereby amended in its entirety to read as follows:
A rate equal to the "Prime Rate" in effect from time to time.
2. The paragraph entitled "Maturity Date" is hereby amended in its
entirety to read as follows:
After the Last Advance Date, the unpaid principal balance of the
Equipment Advances shall be repaid in thirty (30) equal monthly
installments of principal plus interest commencing on April 7,
1998 and continuing on the same day of each month thereafter
until the entire unpaid principal balance and all accrued unpaid
interest of the Equipment Advances have been paid (subject to
Silicon's right to accelerate the Equipment Advances on an Event
of Default).
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Silicon 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. Silicon's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Silicon 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 Silicon and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Silicon in writing. 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.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: SILICON:
MISSION CRITICAL SOFTWARE, INC. SILICON VALLEY BANK
By /s/ Xxxxx X. Xxxxxxxx BY
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Name: Xxxxx X. Xxxxxxxx Name:
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Title: President Title
-------------------------- --------------------------
2
