EXHIBIT 10.1
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: ONYX SOFTWARE CORPORATION
DATE: MARCH 28, 2006
THIS AMENDMENT TO LOAN DOCUMENTS (the "Amendment") is entered into between
Silicon Valley Bank ("Silicon") and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated February 14, 2002 (as otherwise amended, if at all, the "Loan Agreement"),
as follows, effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment shall have the meanings set forth in the Loan
Agreement.)
1. MODIFIED ACQUISITION PROVISION. The following is hereby added at the
end of Section 5.5 of the Loan Agreement and shall read as follows:
Notwithstanding anything to the contrary in this Section 5.5, Borrower
will be permitted to merge or consolidate with another corporation or
entity without the prior written consent of Silicon if such acquisition
satisfies each of the following requirements: (a) the acquired entity
is in the same or similar line of business as Borrower, (b) the
acquisition is a non-hostile acquisition (as determined by Silicon in
its good faith business judgment), (c) no Default or Event of Default
exists both before such acquisition and after giving effect to such
acquisition, (d) the acquired entity must show a positive trailing six
month EBITDA (earnings before interest, taxes, depreciation and other
non-cash amortization expenses, determined in accordance with generally
accepted accounting principles, consistently applied), (e) the total
cash consideration paid by Borrower in each such acquisition cannot
exceed $5,000,000 and (f) the Borrower must be the surviving
corporation of such merger or consolidation.
2. MODIFIED PREPAYMENT PROVISION. Section 6.2 of the Loan Agreement is
hereby amended to read as follows:
6.2 EARLY TERMINATION. This Agreement may be terminated 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. If this Agreement is terminated
by Borrower or by
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Silicon under this Section 6.2, Borrower shall pay to Silicon a
termination fee in an amount equal to the following: (a) 1.5% of the
Maximum Credit Limit if terminated before June 30, 2006; (b) 1.3125% of
the Maximum Credit Limit if terminated after June 30, 2006 but before
September 30, 2006; (c) 1.125% of the Maximum Credit Limit if
terminated after September 30, 2006 but before December 31, 2006; (d)
0.9375% of the Maximum Credit Limit if terminated after December 31,
2006 but before March 31, 2007; (e) 0.75% of the Maximum Credit Limit
if terminated after March 31, 2007 but before June 30, 2007; (f)
0.5625% of the Maximum Credit Limit if terminated after June 30, 2007
but before September 30, 2007; (g) 0.375% of the Maximum Credit Limit
if terminated after September 30, 2007 but before December 31, 2007;
and (h) 0.1875% of the Maximum Credit Limit if terminated after
December 31, 2007 but before the Maturity Date. Notwithstanding the
foregoing, no termination fee shall be charged if the credit facility
hereunder is replaced with a new facility from another division of
Silicon Valley Bank. The termination fee shall be due and payable on
the effective date of termination and thereafter shall bear interest at
a rate equal to the highest rate applicable to any of the Obligations.
3. MODIFIED AUDIT PROVISION. The following sentence is hereby added after
the first sentence of Section 5.4 of the Loan Agreement and shall read as
follows:
The parties contemplate that such audits will be performed no more
frequently than annually, but nothing herein restricts Silicon's right
to conduct such audits more frequently if (i) Silicon believes that it
is advisable to do so in Silicon's good faith business judgment, or
(ii) Silicon believes in good faith that a Default or Event of Default
has occurred.
Moreover, the charges for such inspections and audits shall be $750 per person
per day (or such higher amount as shall represent Silicon's then current
standard charge for the same), plus reasonable out of pocket expenses.
4. ADDING DEFINITION OF FOREIGN RECEIVABLES. Subclause (viii) of the
Minimum Eligibility Requirements set forth in the definition of "Eligible
Receivables" set forth in Section 8 of the Loan Agreement is hereby amended to
read as follows:
(viii) the Receivable must not be owing from an Account Debtor located
outside the United States or Canada (each a "Foreign Receivable")
(unless pre-approved by Silicon in its discretion in writing, or backed
by a letter of credit satisfactory to Silicon, or FCIA insured
satisfactory to Silicon; provided, however, such pre-approval is not
required provided the Foreign Receivable is an otherwise Eligible
Receivable and is within the Foreign Receivables Sublimit),
5. MODIFIED CREDIT LIMIT. Section 1 of the Schedule to Loan and Security
Agreement, entitled "Credit Limit," is hereby amended to read as follows:
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
1. CREDIT LIMIT
(Section 1.1): An amount equal to the sum of 1 and 2 below:
1. Term Loan. An amount equal to the unpaid
principal balance from time to time outstanding of
the Loan ("Term Loan") previously made by Silicon,
the current principal balance of which is
$180,555.53. The Term Loan shall be used to
refinance the Borrower's Cisco Voice Over IP
Network. Any portion of the Term Loan, once
repaid, cannot be reborrowed.
As used in this Agreement, the word "Loans"
includes the Term Loan and the Revolving Loans.
2. Revolving Loans. An amount not to exceed the
following:
(A) The lesser of:
(i) $8,000,000 at any one time
outstanding (the "Maximum Credit
Limit"), or
(ii) (a) or (b) below, whichever is
applicable:
(a) the sum of (I) and (II) below
(the "Borrowing Base"):
(I) 80% (an "Advance Rate") of the
amount of Borrower's Eligible
Receivables (as defined in
Section 8 above), plus
(II) 80% of Borrower's Foreign
Receivables (that are otherwise
Eligible Receivables except for
the Account Debtor being
located outside the United
States or
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Canada and which have not been
pre-approved by Silicon in
writing, are not backed by a
letter of credit satisfactory
to Silicon or are not FCIA
insured satisfactory to
Silicon) that are billed and
collected within the United
States, up to a maximum of
$2,500,000.
OR
(b) Loans in the aggregate
principal amount outstanding of
not more than $8,000,000 (the
"Non-Formula Loan").
Loans will be made pursuant to subclause 2(A)
(ii)(b) above only if, and as long as, Borrower
maintains, at all times, unrestricted cash in
accounts maintained at Silicon of at least
$12,500,000 (the "Minimum Cash On Hand
Requirement"). At all other times, Loans will
be made pursuant to subclause 2(A)(ii)(a)
above.
Notwithstanding the foregoing, Silicon may, in
its sole discretion, make Loans to Borrower
from time to time which exceed the limitations
on borrowing against Eligible Receivables as
set forth in subparagraph 2(A)(ii)(a) above
(the "Overadvance Loans") which shall be
secured by securities and investments of
Borrower maintained with SVB Securities. The
aggregate outstanding Overadvance Loans shall
not at anytime exceed $500,000. Moreover, the
aggregate outstanding Loans, including any
Overadvance Loans, shall not at any time
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
exceed the Maximum Credit Limit. This paragraph
shall not apply at all times that Borrower
satisfies the Minimum Cash On Hand Requirement.
minus
(B) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters
of Credit), and minus the FX Reserve, and minus
all amounts for Cash Management Services utilized
under the Cash Management Services Sublimit.
Silicon may, from time to time, modify the Advance
Rates, in its good faith business judgment, upon
notice to the Borrower, based on changes in
collection experience with respect to Receivables
or other issues or factors relating to the
Receivables or other Collateral.
LETTER OF CREDIT
SUBLIMIT
(Section 1.6): An amount equal to (A) the lesser of the Maximum
Credit Limit or the Borrowing Base or the Non-
Formula Loan (whichever is applicable), minus (B)
the FX Reserve, and minus (C) all amounts for Cash
Management Services utilized under the Cash
Management Services Sublimit, and minus (D) all
outstanding Loans; provided that the total of all
outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), and the FX
Reserve, and all amounts for Cash Management
Services utilized under the Cash Management
Services Sublimit may not exceed $8,000,000.
CASH MANAGEMENT
SUBLIMIT: An amount equal to (A) the lesser of the Maximum
Credit Limit or the Borrowing Base or the Non-
Formula Loan (whichever is applicable), minus (B)
the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of
Credit), and minus (C) the FX Reserve, and minus
(D) all outstanding Loans; provided that the total
of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit), and the
FX Reserve, and all amounts for Cash
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Management Services utilized under the Cash
Management Services Sublimit may not exceed
$8,000,000.
CASH MANAGEMENT
SERVICES: Borrower may use up to the Cash Management
Sublimit above, for Silicon's Cash Management
Services (as defined below), including, merchant
services, business credit card, ACH and other
services identified in the cash management
services agreement related to such service (the
"Cash Management Services"). Silicon may charge to
Borrower's Loan account, any amounts that may
become due or owing to Silicon in connection with
the Cash Management Services. Borrower agrees to
execute and deliver to Silicon all standard form
applications and agreements of Silicon in
connection with the Cash Management 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 Cash Management Services. The Cash
Management Services shall terminate on the
Maturity Date.
FOREIGN EXCHANGE
CONTRACT SUBLIMIT: An amount equal to (A) the lesser of the Maximum
Credit Limit or the Borrowing Base or the Non-
Formula Loan (whichever is applicable), minus (B)
the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of
Credit), and minus (C) all amounts for Cash
Management Services utilized under the Cash
Management Services Sublimit, and minus (D) all
outstanding Loans; provided that the total of all
outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), and the FX
Reserve, and all amounts for Cash Management
Services utilized under the Cash Management
Services Sublimit may not exceed $8,000,000.
FX RESERVE: Borrower may enter into foreign exchange forward
contracts with Silicon, on its standard forms,
under which Borrower commits to purchase from or
sell to Silicon a set amount of foreign currency
more than one business day after the contract date
(the "FX Forward Contracts"); provided that (1) at
the time the FX Forward Contract is entered into
Borrower has Loans available to it under this
Agreement in an amount at
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
least equal to 10% of the amount of the FX Forward
Contract; and (2) the total FX Forward Contracts
at any one time outstanding may not exceed 10
times the amount of the FX Sublimit set forth
above. The "FX Reserve" shall be a reserve (which
shall be in addition to all other reserves) in an
amount equal to 10% of the total FX Forward
Contracts from time to time outstanding. Silicon
may, in its discretion, terminate the FX Forward
Contracts at any time that an Event of Default
occurs and is continuing. Borrower shall execute
all standard form applications and agreements of
Silicon in connection with the FX Forward
Contracts, and without limiting any of the terms
of such applications and agreements, Borrower
shall pay all standard fees and charges of Silicon
in connection with the FX Forward Contracts.
6. MODIFIED INTEREST RATE. The Interest Rate set forth in Section 2 of the
Schedule to Loan and Security Agreement is hereby amended to read as follows:
INTEREST RATE (Section 1.2):
With respect to the Revolving Loans:
A rate equal to the "Prime Rate" in effect from
time to time, plus 0.0% per annum.
With respect to the Term Loan:
A rate equal to the "Prime Rate" in effect from
time to time, plus 0.25% per annum.
With respect to all Loans:
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.
7. MODIFIED COLLATERAL MONITORING FEE. The Collateral Monitoring Fee set
forth in Section 3 of the Schedule to Loan and Security Agreement is hereby
amended to read as follows:
Collateral Monitoring
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Fee: [Omitted]
8. MODIFIED UNUSED LINE FEE. The Unused Line Fee set forth in Section 3 of
the Schedule to the Loan Agreement is hereby amended to read as follows:
Unused Line Fee: In the event, in any calendar month (or portion
thereof at the beginning and end of the term
hereof), the average daily principal balance of
the Loans and the aggregate amount of the
Letters of Credit outstanding during the month
is less than the amount of the Maximum Credit
Limit, Borrower shall pay Silicon an unused
line fee in an amount equal to 0.25% per annum
on the difference between the amount of the
Maximum Credit Limit and the average daily
principal balance of the Loans and the
aggregate amount of the Letters of Credit
outstanding during the calendar month, which
unused line fee shall be computed and paid
monthly, in arrears, on the first day of the
following month.
9. MODIFIED MATURITY DATE. The Maturity Date set forth in Section 4 of the
Schedule to Loan and Security Agreement is hereby amended to read as follows:
4. MATURITY DATE
(Section 6.1): MARCH 28, 2008.
Notwithstanding the foregoing, with respect to
the Term Loan: The outstanding principal
balance of the Term Loan shall continue to be
repaid by Borrower to Silicon in thirty-six
(36) equal monthly payments of principal,
having commenced on May 1, 2004 and continuing
on the first day of each subsequent month until
the earlier of the following dates: (i) April
1, 2007, or (ii) the date the Term Loan has
been indefeasibly paid in full, or (iii) the
date the Revolving Loans are terminated, or
(iv) the date this Agreement terminates by its
terms or is terminated by either party in
accordance with its terms. On the earlier to
occur of the foregoing dates, the entire unpaid
principal balance of the Term Loan, plus all
accrued and unpaid interest thereon, shall be
due and payable. Interest on the Term Loan
shall be payable monthly as provided in Section
1.2 of this Agreement.
10. MODIFIED MINIMUM TANGIBLE NET WORTH FINANCIAL COVENANT. The Minimum
Tangible Net Worth Financial Covenant set forth in Section 5 of the Schedule to
Loan and
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Security Agreement, entitled "5. FINANCIAL COVENANTS (Section 5.1)," is hereby
amended to read as follows:
MINIMUM TANGIBLE
NET WORTH: Borrower shall, on a consolidated basis,
maintain a Tangible Net Worth of not less than
the following:
For the month ending March 31, 2006 and each
month ending thereafter: $5,000,000 plus an
amount equal to (i) 50% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower, plus (ii) 50% of the Borrower's net
income in each fiscal quarter ending after
March 1, 2006.
Increases in the Minimum Tangible Net Worth
Covenant based on consideration received for
equity securities and subordinated debt of the
Borrower shall be effective as of the end of
the month in which such consideration is
received, and shall continue effective
thereafter. Increases in the Minimum Tangible
Net Worth Covenant based on net income shall be
effective on the last day of the fiscal quarter
in which said net income is realized, and shall
continue effective thereafter. In no event
shall the Minimum Tangible Net Worth Covenant
be decreased.
11. MODIFIED DEFINITION OF ADJUSTED QUICK RATIO. The definition of
Adjusted Quick Ratio in Section 5 of the Schedule to Loan and Security Agreement
is hereby amended to read as follows:
"Adjusted Quick Ratio" shall mean, as of any applicable date, the
ratio of (i) consolidated cash, cash equivalents and Receivables of
Borrower determined in accordance with generally accepted accounting
principles, consistently applied, to (ii) Borrower's current
liabilities plus the face amount of all outstanding Letters of Credit
reserved against the Loans less Borrower's deferred revenues.
12. MODIFIED REPORTING REQUIREMENTS.
(a) As long as Borrower continually satisfies the Minimum Cash On Hand
Requirement (as defined above), Borrower shall be required, in addition to the
General Reporting Requirements described below, to submit monthly unaudited
financial statements and a Compliance Certificate as provided for in the Loan
Agreement.
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
(b) If Borrower fails to comply with the Minimum Cash On Hand
Requirement, Borrower shall be required, in addition to the General Reporting
Requirement below, to submit monthly transaction reports, accounts receivable
agings, accounts payable agings, unaudited financial statements and a Compliance
Certificate as provided for in the Loan Agreement.
(c) General Reporting Requirements. Borrower shall be required to
submit to Silicon annual operating budgets and projections, quarterly and annual
audited financial statements and such other reports and information as Silicon
may require from time to time as provided for in the Loan Agreement.
13. STREAMLINE FACILITY AGREEMENT. Borrower and Silicon acknowledge that
that certain Streamline Facility Agreement between them dated March 30, 2005 is
no longer in effect.
14. EXIM LOAN AGREEMENT. Reference is made to that certain Loan and
Security Agreement (Exim Program) dated May 5, 2003 between Borrower and Silicon
(the "Exim Loan Agreement"). Borrower and Silicon agree that no more loans will
be available under the Exim Loan Agreement. Moreover, once all Obligations under
the Exim Loan Agreement have been satisfied, the Exim Loan Agreement shall no
longer be in effect in accordance with the terms thereof.
15. FEE. In consideration for Silicon entering into this Amendment,
Borrower shall pay Silicon a fee in the following amounts:
(a) $40,000 (the "Year 1 Fee"), which is fully earned on a monthly
basis going forward and which shall be non-refundable and in addition to all
interest and other fees payable to Silicon under the Loan Documents. The Year 1
Fee shall accrue at the rate of $3,333.33 per month for each month (or partial
month) ending after the date hereof and shall be payable at the end of each
quarter. Silicon is authorized to charge said Year 1 Fee, as provided for above,
to Borrower's loan account.
(b) $20,000 (the "Year 2 Fee"), which will be fully earned on a
monthly basis going forward, commencing with the first anniversary date of this
Amendment and which shall be non-refundable and in addition to all interest and
other fees payable to Silicon under the Loan Documents. The Year 2 Fee shall
accrue at the rate of $1,666.67 per month for each month (or partial month)
ending after the first anniversary date of this Amendment and shall be payable
at the end of each quarter. Silicon is authorized to charge said Year 2 Fee, as
provided for above, to Borrower's loan account.
16. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
17. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and Borrower, and the
other written documents and agreements between Silicon and Borrower set forth in
full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions, representations,
agreements and understandings between the
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
parties with respect to the subject hereof. Except as herein expressly amended,
all of the terms and provisions of the Loan Agreement, and all other documents
and agreements between Silicon and Borrower shall continue in full force and
effect and the same are hereby ratified and confirmed.
BORROWER: SILICON:
ONYX SOFTWARE CORPORATION SILICON VALLEY BANK
BY /s/ XXXXXX XXXXXX BY /s/ XXXXX XXXXXXX
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TREASURER TITLE RELATIONSHIP MANAGER
BY /s/ XXXX XXXXXX
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SECRETARY OR ASS'T SECRETARY
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