FIRST AMENDMENT TO AMENDED AND RESTATED
LOAN AGREEMENT AND LIMITED WAIVER
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND LIMITED
WAIVER ("AMENDMENT") is made and entered into as of April 19, 2002, between
EVOLVE SOFTWARE, INC., a Delaware corporation (herein called "BORROWER"), and
COMERICA BANK-CALIFORNIA ("BANK").
RECITALS
A. Borrower and Bank entered into that certain Amended and Restated Loan
Agreement dated as of November 13, 2001 (as the same may from time to time be
modified, amended, supplemented, restated or superseded, the "LOAN AGREEMENT"),
pursuant to which Bank agreed to extend and maintain loans available to Borrower
upon the terms and conditions contained therein. Unless otherwise defined
herein, all terms defined in the Loan Agreement have the same meaning when used
herein.
B. Borrower is presently in violation of the financial covenant set forth
in Section 8 of the Loan Agreement that Borrower maintain Maximum Leverage Ratio
not to exceed 2.25 for the applicable period commencing on December 31, 2001
until March 31, 2002, which violation constitutes an Event of Default under
Section 10 of the Loan Agreement (the "Current Event of Default").
C. Borrower has requested that (i) Bank waive the Current Event of Default,
and (ii) amend the Loan Agreement and Bank is willing to do so, but only to the
extent, in accordance with the terms, subject to the conditions, and in reliance
upon the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, and to induce Bank to enter into this Amendment, Borrower and
Bank hereby agree as follows:
SECTION 1. LIMITED WAIVER. At Borrower's request, Bank hereby waives the
Current Event of Default.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is Hereby
amended as follows:
2.1 SECTION 8. Sections 8.(f), 8(g) and 8(h) of the Loan Agreement are
deleted in their entirety and the following is inserted in lieu thereof:
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"FINANCIAL COVENANTS. Borrower shall:
(f) BANK LIQUIDITY RATIO. Maintain at all times a Bank Liquidity
Ratio of not less than 1.25:1.00. As used herein, "BANK LIQUIDITY RATIO" on any
given date shall be defined as (a) the sum of cash deposited by Borrower with
Bank plus cash deposited by Borrower with Custodian to (b) the sum of the
aggregate amount of Committed Revolving Line and Equipment Advances not
otherwise cash-collateralized as of such date.
(g) MINIMUM UNRESTRICTED CASH. Maintain at all times, measured on
a monthly basis, Unrestricted Cash of not less than $8,000,000. "UNRESTRICTED
CASH" shall mean cash deposited by Borrower with Bank plus cash deposited by
Borrower with Custodian plus the amounts on deposit in Borrower's Certificate of
Deposit with Bank.
(h) MINIMUM REVENUE. Measured on a quarterly basis, maintain
revenues greater than:
during the quarter ending March 31, 2002, $2,500,000;
during the quarter ending June 30, 2002, $3,500,000;
during the quarter ending September 30, 2002, $4,500,000; and during
the quarter ending December 31, 2002 and
during each quarter thereafter, $6,500,000."
2.2 The following definition is added to the list of definitions set
forth on Exhibit A to the Loan Agreement, inserted in its proper alphabetical
sequence:
"FIRST AMENDMENT" shall mean that certain First Amendment to Amended
and Restated Loan Agreement and Limited Waiver dated as of April 19, 2002, by
and between Borrower and Bank."
2.3 The definition of "Loan Documents" set forth on Exhibit A to the Loan
Agreement is hereby amended by adding "the First Amendment" to the documents
listed therein.
SECTION 3. LIMITATIONS ON AMENDMENTS.
3.1. The waiver set forth in SECTION 1 above, and the amendment set forth
in SECTION 2 above, shall be limited precisely as written and shall not be
deemed to (i) be a waiver of or an amendment to any other term or condition of
the Loan Agreement or any other Loan Document, (ii) prejudice any right or
remedy which any party may now have or may have in the future under or in
connection with the Loan Agreement or any other Loan Document, or (iii) be a
consent to any future waiver or amendment.
3.2. This Amendment shall be construed in connection with and as part of
the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein
waived or amended, are hereby ratified and confirmed and shall remain in full
force and effect.
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SECTION 4. REAFFIRMATION AND ACKNOWLEDGEMENT. Borrower hereby reaffirms its
obligations under the Loan Documents and ratifies and reaffirms the validity and
enforceability of all of the liens and security interests heretofore granted to
Bank pursuant to the Loan Documents, as collateral security for the Obligations,
and acknowledges that all of such liens and security interests, and all
Collateral heretofore pledged as security for such Obligations, continues to be
and remain collateral for such Obligations from and after the date hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES. In order to induce Bank to enter
into this Amendment, Borrower hereby represents and warrants to Bank as follows:
6.1 Immediately after giving effect to this Amendment (i) the
representations and warranties contained in the Loan Documents (other than those
which expressly relate to a different date) are true, accurate and complete in
all material respects as of the date hereof and (ii) no Default or Event of
Default has occurred and is continuing;
6.2 Borrower has the power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment, and each of the other Loan Documents to which it is a party; and
6.3 The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, and each of the other Loan Documents to which it is a party
have been duly authorized by all necessary corporate action on the part of
Borrower.
SECTION 7. CONDITIONS PRECEDENT. The legal effectiveness of this Amendment
is subject to the satisfaction of all of the following conditions precedent:
7.1 EXECUTED AMENDMENT. Bank shall have received this Amendment duly
executed and delivered by Borrower and the same shall have become effective.
7.2 WAIVER FEE. Bank shall have received from the Borrower a waiver fee in
the amount of Two Hundred Fifty Dollars ($250).
7.3 MATERIAL ADVERSE CHANGE. There shall have occurred no material adverse
change in either (a) the business, financial condition or prospects of Borrower
as shown on the most recent financial statements submitted to Bank or disclosed
to Bank, respectively, and relied upon by Bank in entering into this Amendment,
or (b) in the prospect of repayment of any portion of the Obligations, or (c)
the value or priority of Bank's security interest in the Collateral.
7.4 NO DEFAULT. Other than Current Event of Default, no Event of Default
has occurred that remains uncured and is continuing or will result from the
consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default.
7.5 PAYMENT OF FEES. Bank shall have received reimbursement from Borrower
of its costs and expenses incurred (including, without limitation, its
attorneys' fees and expenses) in connection with this Amendment and the
transactions contemplated hereby.
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7.6 OTHER DOCUMENTS. Bank shall have received such other documents,
information and items from Borrower as it shall reasonably request to effectuate
the transactions contemplated hereby.
SECTION 8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts, each of which when so delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument. Each such agreement shall become effective upon the
execution of a counterpart hereof or thereof by each of the parties hereto and
telephonic notification that such executed counterparts has been received by
Borrower and Bank.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed and delivered by its duly authorized officer as of the date first
written above.
BANK: BORROWER:
COMERICA BANK-CALIFORNIA EVOLVE SOFTWARE, INC.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxxx
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Title: Assistant Vice President Title: CFO
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