Exhibit 10.28
EXECUTION VERSION
AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
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AMENDMENT NO. 1, dated as of June 30, 1998, to the LOAN AND SECURITY
AGREEMENT, dated as of March 31, 1998, (the "LOAN AND SECURITY AGREEMENT"),
between FOOTHILL CAPITAL CORPORATION, a California corporation, with a place of
business located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000, and COMPUTRON SOFTWARE, INC., a Delaware corporation,
with its chief executive offices located at 000 Xxxxx 00 Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000.
PREAMBLE
The Borrower has requested Foothill to amend the Loan and Security
Agreement to amend the Operating Income and Tangible Net Worth financial
covenants. Accordingly, the Borrower and Foothill hereby agree as follows:
1. DEFINITIONS. All terms used herein which are defined in the
Loan and Security Agreement and not otherwise defined herein are used herein as
defined therein.
2. FINANCIAL COVENANTS. Section 7.20 of the Loan and Security
Agreement is hereby amended in its entirety to read as follows:
"7.20 FINANCIAL COVENANTS. Fail to maintain:
(a) OPERATING INCOME. Operating Income of at least the
following amounts, measured on a cumulative basis for the period from the
beginning of a calendar year to each calendar quarter end set forth below:
3/31/98 $ (5,500,000)
6/30/98 $ (9,750,000)
9/30/98 $(10,700,000)
12/31/98 $ (8,200,000)
provided that, thereafter, upon receipt of the financial projections required to
be delivered to Foothill pursuant to Section 6.3 (fourth paragraph) hereof for
each fiscal year, the Borrower and Foothill shall negotiate in good faith to
determine the minimum Operating Income as of the end of each fiscal quarter
covered by such financial projections and, in the event that the Borrower and
Foothill are unable to agree upon the amounts of such Operating Income on or
before the
date that is 30 days after the date that Foothill has received such projections,
the Operating Income at the end of each fiscal quarter of the fiscal year
covered by such financial projections shall not be less than the amount set
forth for the corresponding fiscal quarter end set forth above plus a positive
increase of 10% of such amount.
(b) TANGIBLE NET WORTH. Tangible Net Worth of at least the
following amounts, measured on a fiscal quarter-end basis, as of the following
dates:
3/31/98 $(6,070,000)
6/30/98 $(9,200,000)
9/30/98 $(9,900,000)
12/31/98 $(7,200,000)
provided that, thereafter, upon receipt of the financial projections required to
be delivered to Foothill pursuant to Section 6.3 (fourth paragraph) hereof for
each fiscal year, the Borrower and Foothill shall negotiate in good faith to
determine the minimum Tangible Net Worth as of the end of each fiscal quarter
covered by such financial projections and, in the event that the Borrower and
Foothill are unable to agree upon the amounts of such Tangible Net Worth on or
before the date that is 30 days after the date that Foothill has received such
projections, the Tangible Net Worth at the end of each fiscal quarter of the
fiscal year covered by such financial projections shall not be less than the
amount set forth for the corresponding quarter end set forth above plus a
positive increase of 10% of such amount.
3. CONDITIONS. This Amendment shall become effective (and the
covenants set forth in Section 2 above shall be applicable as of the date of
this Amendment) only upon satisfaction in full of the following conditions
precedent (the date upon which all such conditions have been satisfied being
herein called the "Effective Date"):
(a) The representations and warranties contained in this
Amendment and in Section 5 of the Loan and Security Agreement and each other
Loan Document shall be correct on and as of the Effective Date as though made on
and as of such date (except where such representations and warranties relate to
an earlier date in which case such representations and warranties shall be true
and correct as of such earlier date); no Default or Event of Default shall have
occurred and be continuing on the Effective Date or result from this Amendment
becoming effective in accordance with its terms.
(b) Foothill shall have received a counterpart of this
Amendment, duly executed by the Borrower.
(c) The Borrower shall pay to Foothill a non-refundable
amendment fee of $2,500, which fee is earned in full on the date hereof.
(d) All legal matters incident to this Amendment shall be
satisfactory to Foothill and its counsel.
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4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to Foothill as follows:
(a) The Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) has all requisite corporate power, authority and legal right to
execute, deliver and perform this Amendment, and to perform the Loan and
Security Agreement, as amended hereby.
(b) The execution, delivery and performance of this
Amendment by the Borrower, and the performance by the Borrower of the Loan and
Security Agreement, as amended hereby (i) have been duly authorized by all
necessary corporate action, (ii) do not and will not contravene its charter or
by-laws or any applicable law, and (iii) except as provided in the Loan
Documents, do not and will not result in the creation of any Lien upon or with
respect to any of its respective properties.
(c) This Amendment and the Loan and Security Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its terms.
(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required in connection
with the due execution, delivery and performance by the Borrower of this
Amendment and the performance by the Borrower of the Loan and Security Agreement
as amended hereby.
(e) The representations and warranties contained in Section
5 of the Loan and Security Agreement and each other Loan Document are correct on
and as of the Effective Date as though made on and as of the Effective Date
(except to the extend such representations and warranties expressly relate to an
earlier date in which case such representations and warranties shall be true and
correct as of such earlier date), and no Default or Event of Default has
occurred and is continuing on and as of the Effective Date or will result from
this Amendment becoming effective in accordance with its terms.
5. CONTINUED EFFECTIVENESS OF THE LOAN AND SECURITY AGREEMENT AND
LOAN DOCUMENTS. The Borrower hereby (i) confirms and agrees that each Loan
Document to which it is a party is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects except that on and
after the Effective Date of this Amendment all references in any such Loan
Document to "the Loan and Security Agreement", the "Agreement", "thereto",
"thereof", "thereunder", or words of like import referring to the Loan and
Security Agreement shall mean the Loan and Security Agreement as amended by this
Amendment; and (ii ) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to Foothill or to grant a security
interest in or Lien on, any collateral as security for the obligations of the
Borrower from time to time existing in respect of the Loan and Security
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects.
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6. MISCELLANEOUS.
(a) This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(c) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California.
(d) The Borrower will pay on demand all reasonable fees,
costs and expenses of Foothill in connection with the preparation, execution and
delivery of this Amendment including, without limitation, reasonable fees
disbursements and other charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to
Foothill.
COMPUTRON SOFTWARE, INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X Xxxx
Title: President
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
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