EXHIBIT 10.10

 

FOURTH AMENDMENT

TO

LOAN AGREEMENT

 

This Fourth Amendment to Loan Agreement is entered into as of February 11, 2003
(the “Amendment”), by and between COMERICA BANK—CALIFORNIA (“Bank”) and
LOGICVISION, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Amended and Restated Loan
Agreement dated as of December 19, 2001, as amended, including without
limitation by that certain First Amendment to Loan and Security Agreement dated
as of June 25, 2002, that certain Second Amendment to Loan and Security
Agreement dated as of August 6, 2002, and that certain Third Amendment to Loan
Agreement dated as of December 16, 2002 (collectively, the “Agreement”). The
parties desire to amend the Agreement in accordance with the terms of this
Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.      Section 6.10 of the Agreement is hereby amended in its entirety to read
as follows:

 

6.10  Quarterly Net Loss; Profitability.  Borrower shall not suffer a quarterly
net loss in excess of (i) Four Million Dollars ($4,000,000) for the fiscal
quarter ending on March 31, 2003, (ii) Four Million Five Hundred Thousand
Dollars ($4,500,000) for the fiscal quarter ending on June 30, 2003, (iii) Three
Million Two Hundred Fifty Thousand Dollars ($3,250,000) for the fiscal quarter
ending on September 30, 2003, and (iv) One Million Two Hundred Fifty Thousand
Dollars ($1,250,000) for the fiscal quarter ending on December 31, 2003.
Borrower shall show a net profit of at least $1.00 for the fiscal quarter ending
on March 31, 2004 and for each quarter thereafter.

 

2.    The Compliance Certificate to be delivered after the date of this
Amendment shall be in the form of Exhibit C attached hereto.

 

3.    Bank waives Borrower’s failure to comply with Section 6.10 of the
Agreement for the quarter ended on December 31, 2002. Bank does not waive
Borrower’s obligations under Section 6.10 after December 31, 2002, and Bank does
not waive any other failure by Borrower to perform its Obligations under the
Loan Documents. This waiver shall not be deemed a continuing waiver with respect
to any Event of Default of a similar nature that may occur after December 31,
2002.

 

4.    Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of the
Agreement and all instruments, documents and agreements entered into in
connection with the Agreement.

 

5.    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.

 

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6.    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.

 

7.    As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

(a)  this Amendment, duly executed by Borrower;

 

(b)  an amendment fee equal to $1,500, which shall be nonrefundable, plus an
amount equal to all Bank Expenses incurred through the date of this Amendment;
and

 

(c)  such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

LOGICVISION, INC.

 

By:

 

/s/ John H. Barnet

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Title:

 

John H. Barnet, Chief Financial Officer

 

COMERICA BANK—CALIFORNIA

 

By:

 

/s/ Guy Simpson

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Title:

 

Assistant Vice President

 

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EXHIBIT C

COMPLIANCE CERTIFICATE

 

TO: COMERICA BANK-CALIFORNIA

 

FROM: LogicVision, Inc.

 

The undersigned authorized officer of LogicVision, Inc. hereby certifies that in
accordance with the terms and conditions of the Amended and Restated Loan
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 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

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Required

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Complies

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Company prepared financial statements (Consolidated and Consolidating)

  

Quarterly within 45 days

  

Yes

    

No

                  

Annual

  

FYE within 90 days

  

Yes

    

No

                  

(CPA Audited; Consolidated and Consolidating)10K and 10Q

  

On the date of delivery to the Securities Exchange Commission

  

Yes

    

No

Financial Covenant

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Required

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Actual

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Complies

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Maintain on a Quarterly Basis:

                       

Minimum Unrestricted Cash

  

$25,000,000

  

$

________

  

Yes

    

No

Total Liabilities / Tangible Net Worth

  

0.50 : 1.00  

  

 

____: 1.00

  

Yes

    

No

Net Loss; Profitability

  

*

  

$

________

  

Yes

    

No

* Borrower shall not suffer a quarterly net loss in excess of (i) Four Million
Dollars ($4,000,000) for the fiscal quarter ending on March 31, 2003, (ii) Four
Million Five Hundred Thousand Dollars ($4,500,000) for the fiscal quarter ending
on June 30, 2003, (iii) Three Million Two Hundred Fifty Thousand Dollars
($3,250,000) for the fiscal quarter ending on September 30, 2003, and (iv) One
Million Two Hundred Fifty Thousand Dollars ($1,250,000) for the fiscal quarter
ending on December 31, 2003. Borrower shall show a net profit of at least $1.00
for the fiscal quarter ending on March 31, 2004 and for each quarter thereafter.

 

     

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Comments Regarding Exceptions: See Attached.

      

BANK USE ONLY

        

Received by:                                       
                                              

Sincerely,

      

AUTHORIZED SIGNER

        

Date:                                    
                                                                

 

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Verified:                                    
                                                         

SIGNATURE

 

 

      

AUTHORIZED SIGNER

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Date:                                    
                                                                

TITLE

 

 

        

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Compliance Status                                 Yes             No

DATE

              

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