Exhibit 10.1
 
SECOND MODIFICATION TO BUSINESS FINANCING AGREEMENT
This Second Modification to Business Financing Agreement (this “Amendment”) is
entered into as of July 19, 2018, by and among NETWORK DATA, INC., a Delaware
corporation (“Network”), ASTEA INTERNATIONAL INC., a Delaware
corporation (“Astea” and together with Network, individually and collectively,
“Borrower”), and WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS:  Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Business Financing Agreement, dated August 11, 2017, by and
among Borrower and Lender, as may be amended from time to time (the “Business
Financing Agreement”).  Capitalized terms used without definition herein shall
have the meanings assigned to them in the Business Financing Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the “Indebtedness” and the Business Financing Agreement and any and all other
documents executed by Borrower in favor of Lender shall be referred to as the
“Existing Documents”.
2. DESCRIPTION OF CHANGE IN TERMS.
A. Section 1.1(b). Section 1.1(b) of the Business Financing Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:

(b)
Advance Requests.  Borrower may request that Lender make an Advance by
delivering to Lender an Advance Request therefor and Lender shall be entitled to
rely on all the information provided by Borrower to Lender on or with the
Advance Request.  In addition to the Advance Request, Borrower shall deliver (i)
a Borrowing Base Certificate setting forth Eligible Receivables and Receivable
Amounts thereof, (ii) a detailed aging report of Borrower’s Receivables by
invoice, and (iii) a summary aging by account debtor, together with payable
aging, inventory analysis, sales or billings journal, and cash receipts journal.
Each of the Borrowing Base Certificates, reports, certificates, and summaries
delivered to Lender pursuant to foregoing sentence shall be dated no more than 3
business days prior to the date of Borrower’s submission of the Advance Request
to Lender. Lender may honor Advance Requests, instructions or repayments given
by any Authorized Person.  So long as all of the conditions for an Advance set
forth herein have been satisfied, Lender shall fund such Advance into Borrower’s
Account within one (1) business day of Lender’s receipt of the applicable
Advance Request.

B. Section 1.1(d)(ii). Section 1.1(d)(ii) of the Business Financing Agreement is
hereby amended by deleting it in its entirety and replacing it with the
following:
(ii) Lender shall apply the Collections deposited into the Collection Account to
the outstanding Account Balance.  Lender may apply all Collections to the
Obligations in such order and manner as Lender may determine.  If an item of
Collections is not honored or Lender does not receive good funds for any reason,
any amount previously transferred to Borrower’s Account or applied to the
Account Balance shall be reversed as of the date transferred or applied, as
applicable, and, if applied to the Account Balance, the Finance Charge will
accrue as if the Collections had not been so applied.  Lender shall have, with
respect to any goods related to the Receivables, all the rights and remedies of
an unpaid seller under the UCC and other applicable law, including the rights of
replevin, claim and delivery, reclamation and stoppage in transit.
 
 

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C. Section 2.1(a).  Section 2.1(a) of the Business Financing Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:

(a)
Advances. Lender may, but is not required to, deduct the amount of accrued
Finance Charge from Collections received by Lender.  The accrued and unpaid
Finance Charge shall be due and payable immediately upon Borrower’s receipt of
any Collections.

D. Section 4.15.  Section 4.15 of the Business Financing Agreement is hereby
amended by deleting the second sentence thereof.
E. Section 4.15(h).  Section 4.15(h) of the Business Financing Agreement is
hereby amended by deleting it in its entirety and replacing it with the
following:

(h)
Within (i) 5 business days after the 15th day of each month and (ii) 10 days
after the last day of each Month End, a Borrowing Base Certificate setting forth
Eligible Receivables and Receivable Amounts thereof dated as of the 15th or
Month End, as applicable.

F. Section 4.15(i).  Section 4.15(i) of the Business Financing Agreement is
hereby amended by deleting it in its entirety and replacing it with the
following:

(i)
Within (i) 5 business days after the 15th day of each month and (ii) 10 days
after the last day of each Month End, a detailed aging of Borrower’s Receivables
by invoice and a summary aging by account debtor, together with payable aging,
inventory analysis, sales or billings journal, and cash receipts journal, each
of which shall be dated as of the 15th or Month End, as applicable.

G. Section 4.19. Section 4.19 of the Business Financing Agreement is hereby
amended by deleting clause (a) (Asset Coverage Ratio) thereof in its entirety
and replacing it with the following:

(a)
Reserved.

H. Section 12.1.
1. The following definitions set forth in Section 12.1 of the Business Financing
Agreement are hereby amended by deleting them in their entirety and replacing
them with the following:
“Credit Limit” means Two Million Eight Hundred Fifty Thousand Dollars
($2,850,000), which is intended to be the maximum amount of Advances at any time
outstanding.
“Maturity Date” means November 15, 2020 or such earlier date as Lender shall
have declared the Obligations immediately due and payable pursuant to Section
7.2.
“Revolving Facility Fee” means a payment of an annual fee due upon each
anniversary of the Closing Date so long as any Advance is outstanding or
available hereunder in the following amounts: (a) Fourteen Thousand Two Hundred
Fifty Dollars ($14,250) on August 11, 2018, and (b) Seventeen Thousand Eight
Hundred Thirteen Dollars ($17,813) on August 11, 2019 and each anniversary of
the Closing Date thereafter.
“Revolving Termination Fee” means a payment equal to Fourteen Thousand Two
Hundred Fifty Dollars ($14,250).
2. The defined terms “Asset Coverage Ratio”, “Liquidity”, “Streamline Balance”
and “Streamline Period” set forth in Section 12.1 of the Business Financing
Agreement and their respective definitions are hereby deleted in their entirety.
 
 

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3. Exhibit A (Compliance Certificate).  The Compliance Certificate is amended in
its entirety and replaced with the Compliance Certificate in the form of
Exhibit A attached hereto.
4. CONSISTENT CHANGES.  The Existing Documents are each hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER/GENERAL RELEASE.  Borrower agrees that, as of this
date, it has no defenses against the obligations to pay any amounts under the
Indebtedness.  Each Borrower (each, a “Releasing Party”) acknowledges that
Lender would not enter into this Amendment without Releasing Party’s assurance
that it has no claims against Lender or any of Lender’s officers, directors,
employees or agents.  Except for the obligations arising hereafter under this
Amendment, each Releasing Party releases Lender, and each of Lender’s and
entity’s officers, directors and employees from any known or unknown claims that
Releasing Party now has against Lender of any nature, including any claims that
Releasing Party, its successors, counsel, and advisors may in the future
discover they would have now had if they had known facts not now known to them,
whether founded in contract, in tort or pursuant to any other theory of
liability, including but not limited to any claims arising out of or related to
the Agreement or the transactions contemplated thereby.  Releasing Party waives
the provisions of California Civil Code section 1542, which states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
The provisions, waivers and releases set forth in this section are binding upon
each Releasing Party and its shareholders, agents, employees, assigns and
successors in interest.  The provisions, waivers and releases of this section
shall inure to the benefit of Lender and its agents, employees, officers,
directors, assigns and successors in interest.  The provisions of this section
shall survive payment in full of the Obligations, full performance of all the
terms of this Amendment and the Business Financing Agreement, and/or Lender’s
actions to exercise any remedy available under the Business Financing Agreement
or otherwise.
6. CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the
existing Indebtedness, Lender is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Documents.  Except as
expressly modified pursuant to this Amendment, the terms of the Existing
Documents remain unchanged and in full force and effect.  Lender’s agreement to
modifications to the existing Indebtedness pursuant to this Amendment in no way
shall obligate Lender to make any future modifications to the Indebtedness. 
Nothing in this Amendment shall constitute a satisfaction of the Indebtedness. 
It is the intention of Lender and Borrower to retain as liable parties all
makers and endorsers of Existing Documents, unless the party is expressly
released by Lender in writing.  No maker, endorser, or guarantor will be
released by virtue of this Amendment.  The terms of this paragraph apply not
only to this Amendment, but also to any subsequent Business Financing Agreement
modifications.
7. CONDITIONS.  The effectiveness of this Amendment is conditioned upon payment
of the Modification Fee.
8. NOTICE OF FINAL AGREEMENT.  BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS
AND AGREES THAT:  (a) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES, (b) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES, AND (c) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF
ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF
THE PARTIES.
9. COUNTERSIGNATURE.  This Amendment shall become effective only when executed
by Lender and Borrower.
[Signature Page Follows].
 
 

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BORROWER:
 
ASTEA INTERNATIONAL INC., a Delaware corporation
LENDER:
 
WESTERN ALLIANCE BANK, an ARIZONA corporation
   
By:
                                                        
By:
                                                                 
Name:
                                                         
Name:
                                                                 
Title:
                                                         
Title:
                                                                 
NETWORK DATA, INC., a Delaware corporation
         
By:
                                                                 
Name:
                                                                 
Title:
                                                           

 
[Signature Page to Second Modification to Business Financing Agreement]
 
 

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EXHIBIT A
COMPLIANCE CERTIFICATE

TO:
WESTERN ALLIANCE BANK, an Arizona corporation (the “Lender”)

FROM:
NETWORK DATA, INC., a Delaware corporation, and ASTEA INTERNATIONAL INC., a
Delaware corporation (individually and collectively, the “Borrower”)

Each of the undersigned authorized officers of each Borrower hereby certifies
that in accordance with the terms and conditions of the Business Financing
Agreement among Borrower and Lender (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 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
         
Monthly financial statements (consolidated and consolidating)
with Compliance Certificate
Monthly within 30 days
 
Yes
No
Annual financial statements (CPA Audited)
FYE within 180 days
     
A/R & A/P Agings, sales or billings journal,
cash receipts journal
Within 5 business days after the 15th day of each month and within 10 days after
the last day of each month
     
Borrowing Base Certificates
Within 5 business days after the 15th day of each month and within 10 days after
the last day of each month
 
Yes
No
Board approved budget
FYE within 60 days and as amended/updated
 
Yes
No
         
Financial Covenant
Required
Actual
 
Complies
           
EBITDA (trailing 6 month, tested quarterly)
$1.00
   
Yes
No
           
Deposits
                     
Deposits held at Bridge Bank:
$________________________
         
Deposits held outside of Bridge Bank:
$_________________
           

 

   
Comments Regarding Exceptions:  See Attached.
BANK USE ONLY
     
Received
by:                                                                                                                                           
Sincerely,
AUTHORIZED SIGNER
   
ASTEA INTERNATIONAL INC.
Date:                                                                                                                                           
                                                                            
Verified:                                                                                                                                           
SIGNATURE
AUTHORIZED SIGNER
                                                                             
Date:                                                                                                                                           
TITLE
   
Compliance Status
 
Yes
No
                                                                           
DATE
 

NETWORK DATA, INC.
                                                                           
SIGNATURE
                                                                           
TITLE
                                                                           
DATE

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