EXHIBIT 10.2
ACCOUNTS RECEIVABLE FINANCING MODIFICATION AGREEMENT
This Accounts Receivable Financing Modification Agreement is entered
into as of April 6, 2001, by and between GlGA INFORMATION GROUP, INC. (the
"Borrower") whose address is 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000 and Silicon
Valley Bank ("Bank"), whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Accounts Receivable Financing Agreement, dated April 7, 2000 by and
between Borrower and Bank, as may be amended from time to time (the "Accounts
Receivable Financing Agreement"). Capitalized terms used without definition
herein shall have the meanings assigned to them in the Accounts Receivable
Financing Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness" and the Accounts Receivable Financing Agreement and any and
all other documents executed by Borrower in favor of Bank shall be referred to
as the "Existing Documents."
2. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Accounts Receivable Financing Agreement,
effective as of the date first written above:
1. The following defined terms in Section 1 are hereby
amended to read as follows:
"ADVANCE RATE" is 80% or another percentage as Bank
establishes under Section 2.2, provided however, in
the event the Borrower is unable to maintain the
Adjusted Quick Ratio as of the Reconciliation Date
then effective the first calendar day of the month
following the missed Adjusted Quick Ratio the Advance
Rate will be 80% net of Deferred Maintenance Revenue
and offsets related to each specific Account Debtor.
"APPLICABLE RATE" is a rate per annum equal to the
"Prime Rate" plus .50 percentage point.
"FACILITY PERIOD" is the period beginning on this
date and continuing until April 5, 2002, unless the
period is terminated sooner by Bank with notice to
Borrower.
2. Section 1 entitled definitions is hereby amended to
include the following definitions:
"CONTINGENT OBLIGATION" is, for any Person, any
direct or indirect liability. contingent or not, of
that Person for (i) any Indebtedness, lease,
dividend, letter of credit or other obligation of
another such as an obligation directly or indirectly
guaranteed, endorsed, co-made, discounted or sold
with recourse by that Person, or for which that
Person is directly or indirectly liable; (ii) any
obligations for undrawn letters of credit for the
account of that Person; and (iii) all obligations
from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or
other agreement or arrangement designated to protect
a Person against fluctuation in interest rates,
currency exchange rates or commodity prices; but
"Contingent Obligation" does not include endorsements
in the ordinary course of business. The amount of a
Contingent Obligation is the stated or determined
amount of the primary obligation for which the
Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated
liability for it determined by the Person in good
faith; but the amount may not exceed the maximum of
the obligations under the guarantee or other support
arrangement.
"INDEBTEDNESS" is (a) indebtedness for borrowed money
or the deferred price of property or services, such
as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations
evidenced by notes, bonds, debentures or similar
instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"PERSON" is any individual, sole proprietorship,
partnership, limited liability company, joint
venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, firm, joint stock company, estate,
entity or government agency.
3. Section 6.2 entitled AFFIRMATIVE COVENANTS is hereby
amended as follows:
Subsection (K) is hereby amended in its entirety to
read as follows:
(K) Semi-annually Borrower will allow Bank to audit
Borrower's Collateral, including but not limited to
Borrower's Accounts, at Borrower's expense. Provided
however, if an Event of Default has occurred, Bank
may audit Borrower's Collateral, including but not
limited to Borrower's Accounts at Bank's sole
discretion and without notification and authorization
from Borrower.
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Subsection (M) is hereby deleted and replaced with
the following:
(M) Borrower to increase the annual value of its
contract value of subscriptions on a quarterly basis.
Borrower's annual value as of December 31, 2000 was
$67,328,163.
Included the following Subsections:
(N) Provide Bank with, no later than 30 days
following each calendar quarter, a Revenue Run Rate
Report.
(O) Borrower will maintain an Adjusted Quick Ratio of
at least 1.25 to 1.00.
3. CONSISTENT CHANGES. The Existing Documents are each hereby amended wherever
necessary to reflect the changes described above.
4. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
5. PAYMENT OF LINE FEE. Borrower shall pay Bank a fee in the amount of $25,000
("Line Fee") plus all out-of-pocket expenses.
6. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Documents. Except as
expressly modified pursuant to this Accounts Receivable Financing Modification
Agreement, the terms of the Existing Documents remain unchanged and in full
force and effect. Bank's agreement to modifications to the existing Indebtedness
pursuant to this Accounts Receivable Financing Modification Agreement in no way
shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Accounts Receivable Financing Modification Agreement shall
constitute a satisfaction of the Indebtedness. It is the intention of Bank and
Borrower to retain as liable parties all makers and endorsers of Existing
Documents, unless the party is expressly released by Bank in writing. No maker,
endorser, or guarantor will be released by virtue of this Accounts Receivable
Financing Modification Agreement. The terms of this paragraph apply not only to
this Accounts Receivable Financing Modification Agreement, but also to any
subsequent Accounts Receivable Financing modification agreements.
7. CONDITIONS. The effectiveness of this Accounts Receivable Financing
Modification Agreement is conditioned upon payment of the Line Fee and Borrower
executing and returning to Bank the attached Intellectual Property Security
Agreement.
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This Accounts Receivable Financing Modification Agreement is executed as of the
date first written above.
BORROWER: BANK:
Giga Information Group, Inc. Silicon Valley Bank
By: /s/ X.X. XXXXX By: /s/ XXXX XXXXX
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Name: Xxxxxxxx X. Xxxxx Name: Xxxx Xxxxx
Title: Vice President & Corporate Title: SVP
Controller & Assistant Secretary
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