Exhibit 10.45
AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
----------------------------------------------
This Amendment No. 1, dated as of December 31, 1996, to the Loan and
Security Agreement, dated October 26, 1995 (the "Loan and Security Agreement")
is by and among People's Bank, a Connecticut banking corporation having its
chief executive office at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000
("Secured Party"), Information Management Associates, Inc., a Connecticut
corporation having its chief executive office located at Xxx Xxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000 ("IMA"), and Information Management Associates
Limited, a company registered in England and having its principal office at
Suite 404, Exchange Tower, One Harbour Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx X00 0XX
("IMA Limited"). Capitalized terms used herein and not defined herein shall
have the meanings assigned to them in the Loan and Security Agreement.
WHEREAS, the parties named above have heretofore entered into the Loan and
Security Agreement; and
WHEREAS, the parties named above acknowledge that they desire to make
certain amendments to the Loan and Security Agreement pursuant to the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and in further
consideration of the mutual covenants contained herein, the parties hereto agree
as follows:
Section 1. Amendments.
-----------
A. Paragraph 2(w) of the Loan and Security Agreement is hereby deleted in
its entirety and the following shall be substituted in lieu thereof:
(w) "Tangible Net Worth" shall mean the aggregate tangible assets of
Debtor, less the aggregate liabilities, including subordinated indebtedness, as
determined in accordance with generally accepted accounting principles, provided
--------
that, for purposes of this calculation, redeemable convertible preferred stock
----
and redeemable common stock warrants shall be excluded from the liabilities of
Debtor.
B. Paragraph 5(f) of the Loan and Security Agreement is hereby deleted in
its entirety and the following shall be substituted in lieu thereof:
(f) The outstanding principal balance of the Line of Credit Note, any
accrued but unpaid interest thereon and other sums due and payable pursuant to
the Loan Documents, shall be due and payable on the date (the "Line of Credit
Maturity Date") which is the earlier to occur
of (i) June 1, 1997, (ii) the closing of an Initial Public Offering or (iii) the
date repayment of the Line of Credit Loans is accelerated after the occurrence
of an Event of Default, unless such Line of Credit Maturity Date is extended in
writing from time to time in Secured Party's sole and absolute discretion.
C. Paragraph 6(a) of the Loan and Security Agreement is hereby deleted in
its entirety and the following shall be substituted in lieu thereof:
(a) Maintain (i) at least a 1.10 to 1.00 ratio of current assets to
current liabilities (excluding from such calculation Deferred Revenue), (ii) a
net working capital (excluding from such calculation Deferred Revenue) of not
less than $700,000.00, and (iii) a Tangible Net Worth plus subordinated debt of
not less than $1,500,000.
D. Paragraph 7(f) of the Loan and Security Agreement is hereby deleted in
its entirety and the following shall be substituted therefor:
(f) Enter into any transactions with any of its Affiliates other than
in the ordinary course of business and on terms no less favorable to Debtor than
are at the time available to it from non-Affiliates, provided that, Debtor shall
-------------
be permitted to make loans to officers in an aggregate amount not to exceed
$150,000 during 1997.
E. Paragraph 7(m) of the Loan and Security Agreement is hereby deleted in
its entirety and the following shall be substituted in lieu thereof:
(m) Purchase or otherwise acquire fixed assets including, without
limitation, land, buildings, fixtures, or Equipment in any fiscal year involving
expenditures or commitments, in the aggregate and on a non-cumulative basis, in
excess of $750,000.00 in the fiscal year commencing January 1, 1995 or
$1,000,000.00 in any fiscal year commencing after January 1, 1996.
Section 2. Miscellaneous
-------------
A. Secured Party hereby waives all covenant violations of the Loan and
Security Agreement occurring prior to the effectiveness of this Amendment No. 1
to the Loan and Security Agreement, provided, however, that no provision
--------
contained herein shall be construed as a waiver of any violation of any such
covenants occurring subsequent to the effectiveness of this Amendment No. 1 to
the Loan and Security Agreement.
B. Except as expressly modified herein, the Loan and Security Agreement
shall otherwise remain unmodified and in full force and effect. IMA and IMA
Limited acknowledge that they are validly indebted to Secured Party under the
Loan and Security Agreement, as amended hereby, without defense, counterclaim or
offset and that all obligations of IMA and IMA Limited
2
thereunder and under the Notes continue to be secured by a valid, perfected
First Lien Security Interest in the collateral.
C. IMA and IMA Limited hereby represent and warrant to the Secured Party
that each of IMA and IMA Limited has duly authorized the execution, delivery and
performance of this Amendment No. 1 to the Loan and Security Agreement and this
Amendment No. 1 to the Loan and Security Agreement has been duly executed and
delivered by each of IMA and IMA Limited and constitutes a legal, valid and
binding obligation of each of IMA and IMA Limited, enforceable in accordance
with their respective terms.
D. This Amendment No. 1 to the Loan and Security Agreement may be executed
in several original counterparts. Each such counterpart shall, for all
purposes, be deemed to be an original, and all counterparts shall together
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
The parties have executed this Amendment No. 1 to the Loan and Security
Agreement effective as of the date first above written.
PEOPLE'S BANK
By: [SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
INFORMATION MANAGEMENT ASSOCIATES, INC.
By: [SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
INFORMATION MANAGEMENT ASSOCIATES
LIMITED
By: [SIGNATURE APPEARS HERE]
------------------------------
Name:
Title:
4
