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WORLDTALK COMMUNICATIONS CORPORATION EXHIBIT 10.1
Amendment to Loan and Security Agreement, dated
January 9, 1997, between Registrant and General Bank
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AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement is entered into as of
January 9, 1997, by and between General Bank ("Bank") and Worldtalk Corporation
("Borrower").
RECITALS
Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of October 25, 1995, as amended from time to time (the
"Agreement"). Borrower and Bank desire to extend the term of the Agreement in
accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The following terms defined in Section 1.1 are amended to read as
follows:
"Committed Line" means Two Million Dollars ($2,000,000).
"Maturity Date" means January 31, 1998.
2. The concentration limit in clause (i) of the term Eligible
Accounts shall be twenty percent (20%) of Eligible Accounts.
3. The first sentence of Section 2.3(a) is amended to read as
follows:
(a) Interest Rate. Except as set forth in Section 2.3(b), any
Advances shall bear interest, on the average Daily Balance,
at a rate equal to one half (0.5) percentage point above the
Prime Rate.
4. Section 6.3 is amended to read as follows:
6.3 Financial Statements, Reports, Certificates. Borrower
shall deliver to Bank: (a) as soon as available, but in
any event within thirty (30) days after the end of each
fiscal quarter, a company prepared consolidated balance
sheet and income statement covering Borrower's
consolidated operations during such period, certified by
a Responsible Officer; (b) as soon as available, but in
any event within ninety (90) days after the end of
Borrower's fiscal year, audited consolidated financial
statements of Borrower prepared in accordance with GAAP,
consistently applied, together with an unqualified
opinion on such financial statements of an independent
certified public accounting firm reasonably acceptable to
Bank; (c) within five (5) days upon becoming available,
copies of all statements, reports and notices sent or
made available generally by Borrower to its security
holders or to any holders of Subordinated Debt and all
reports on Form 10-K and 10-Q filed with the Securities
and Exchange Commission; (d) promptly upon receipt of
notice thereof, a report of any legal actions pending or
threatened against Borrower or any Subsidiary that could
result in damages or costs to Borrower or any Subsidiary
of One Hundred Thousand Dollars ($100,000) or more; and
(e) such budgets, sales projections,
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operating plans or other financial information as Bank
may reasonably request from time to time.
Within thirty (30) days after the last day of each month,
Borrower shall deliver to Bank a Borrowing Base Certificate
signed by a Responsible Officer in substantially the form of
Exhibit C hereto, together with aged listings of accounts
receivable and accounts payable.
Borrower shall deliver to Bank with the quarterly financial
statements a Compliance Certificate signed by a Responsible
Officer in substantially the form of Exhibit D hereto.
Bank shall have a right from time to time hereafter to audit
Borrower's Accounts at Borrower's expense, provided that such
audits will be conducted no more often than once every twelve
(12) months unless an Event of Default has occurred and is
continuing.
5. Sections 6.8, 6.9 and 6.10 are amended to read as follows,
and Section 6.11 is deleted:
6.8 Quick Ratio. Borrower shall maintain, as of the last day
of each fiscal quarter, a ratio of Quick Assets to Current
Liabilities (excluding 80% of net deferred revenue) of at
least 1.0 to 1.0.
6.9 Debt-Net Worth Ratio. Borrower shall maintain, as of the
last day of each fiscal quarter, a ratio of Total Liabilities
(excluding 80% of net deferred revenue) less Subordinated
Debt to Tangible Net Worth plus Subordinated Debt of not more
than 2.0 to 1.0.
6.10 Tangible Net Worth. Borrower shall maintain, as of the
last day of each fiscal quarter, a Tangible Net Worth plus
Subordinated Debt of not less than Ten Million Dollars
($10,000,000).
6. Exhibit D is amended to read as Exhibit D attached hereto.
7. 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.
8. 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.
9. 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.
10. As a condition to the effectiveness of this Amendment, Bank
shall receive a non-refundable loan fee of Seven Thousand
Five Hundred Dollars ($7,500) plus an amount equal to the
Bank Expenses incurred in connection with this Amendment.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.
WORLDTALK CORPORATION
By
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Title
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GENERAL BANK
By
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Title
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EXHIBIT D
COMPLIANCE CERTIFICATE
TO: GENERAL BANK
FROM: WORLDTALK CORPORATION
The undersigned authorized officer of Worldtalk 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. 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
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Quarterly financial statements Quarterly within 30 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
A/R & A/P Agings Monthly within 30 days Yes No
A/R Audit Initial and Semi-Annual Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
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Maintain on a Monthly Basis:
Minimum Quick Ratio 1.0:1.0 _____:1.0 Yes No
Minimum Tangible Net Worth + Sub Debt $10,000,000 $________ Yes No
Maximum Debt/Tangible Net Worth 2.0:1.0 _____:1.0 Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached.
Sincerely,
SIGNATURE
TITLE
DATE
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CORPORATE RESOLUTIONS TO BORROW
BORROWER: WORLDTALK CORPORATION
I, the undersigned Secretary or Assistant Secretary of Worldtalk
Corporation (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State
of _______________.
I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true
and complete copies of the Certificate of Incorporation and Bylaws of the
Corporation, each of which is in full force and effect on the date hereof.
I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation, duly called and held, at which a quorum was present and voting (or
by other duly authorized corporate action in lieu of a meeting), the following
resolutions were adopted.
BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
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acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from General Bank ("Bank"),
on such terms as may be agreed upon between the officers, employees, or agents
and Bank, such sum or sums of money as in their judgment should be borrowed,
without limitation, including such sums as are specified in that certain
Amendment to Loan and Security Agreement dated as of January 9, 1997 (the "Loan
Agreement").
EXECUTE NOTES. To execute and deliver to Bank the promissory note or
notes of the Corporation, on Lender's forms, at such rates of interest and on
such terms as may be agreed upon, evidencing the sums of money so borrowed or
any indebtedness of the Corporation to Bank, and also to execute and deliver to
Lender one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for one or more of the notes, or any portion of
the notes.
GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.
NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to the Corporation or in which the Corporation may have an
interest, and either to receive cash for the same or to cause such proceeds to
be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.
LETTERS OF CREDIT; FOREIGN EXCHANGE. To execute letters of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.
ISSUE WARRANTS. To issue warrants to purchase the Corporation's capital
stock, for such series and number, and on such terms, as an officer of the
Corporation shall deem appropriate.
FURTHER ACTS. In the case of lines of credit, to designate additional
or alternate individuals as being authorized to request advances thereunder, and
in all cases, to do and perform such other acts and things, to pay any and all
fees and costs, and to execute and deliver such other documents and agreements
as they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.
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BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to
these resolutions and performed prior to the passage of these resolutions are
hereby ratified and approved, that these Resolutions shall remain in full force
and effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above
are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on January 9, 1997 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
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