Exhibit 10.10

 

Silicon Valley Bank

 

Amendment to Loan Documents

 

Borrower:

Unify Corporation

 

 

Date:

As of June 5, 2005 (the “June 2005 Amendment Date”)

 

THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley Bank
(“Silicon”) and the borrower named above (“Borrower”).

 

Silicon and Borrower agree to amend the Loan and Security Agreement between
them, dated June 6, 2003 (as otherwise amended, if at all, the “Loan
Agreement”), as follows, effective as of the date hereof.  (Capitalized terms
used, but not defined, in this Amendment shall have the meanings set forth in
the Loan Agreement.)  The term “June 2005 Amendment Date” as defined above
hereby is incorporated into the Loan Agreement.

 

1.                                      Amendments to Loan Agreement.

 

(a) Modification of Advance Rate relative to Eligible Accounts.  The portion of
Section 1 of the Schedule to Loan Agreement that currently reads as follows:

 

1.  Revolving Loans.  An amount equal to: (A) the lesser of:  (i) $1,000,000 at
any one time outstanding (the “Maximum Credit Limit”), or (ii) the sum of
(a) 75% (an “Advance Rate”) of the amount of Borrower’s Eligible Accounts (as
defined in Section 8 above) plus (b) 30% (an “Advance Rate”) of the amount of
Borrower’s unrestricted cash in investment accounts maintained at Silicon minus
(B) the Term Loans (as defined below).

 

, hereby is amended and restated in its entirety to read as follows:

 

1.  Revolving Loans.  Subject to the terms and conditions of this Agreement,
Silicon agrees to make revolving advances (individually and collectively,
“Revolving Loans”) up to an aggregate amount equal to: (A) the lesser of:
(i) $1,000,000 at any one time outstanding (the “Maximum Credit Limit”), or
(ii) the sum of (a) 80% (an “Advance Rate”) of the amount of Borrower’s Eligible
Accounts (as defined in Section 8 above) plus (b) 30% (an “Advance Rate”) of the
amount of Borrower’s unrestricted cash in investment accounts maintained at
Silicon minus (B) the then aggregate outstanding amount of Term Loans (as
defined below).

 

1

--------------------------------------------------------------------------------

 

(b) Modification of Definition of Eligible Accounts.  Clause (viii) of the
Minimum Eligibility Requirements set forth in the definition of “Eligible
Accounts” in Section 8 of the Loan Agreement, which currently reads as follows:

 

(viii) the Account must not be owing from an Account Debtor located outside the
United States or Canada (unless pre-approved by Silicon in its discretion in
writing, or backed by a letter of credit satisfactory to Silicon, or FCIA
insured satisfactory to Silicon),

 

, hereby is amended and restated in its entirety to read as follows:

 

(viii) the Account must not be owing from an Account Debtor located outside the
United States or Canada (a “Foreign Account”), except for (A) Foreign Accounts
in an aggregate amount (up to $250,000) determined by Silicon in its discretion
from time to time, and (B) any other Foreign Accounts otherwise pre-approved by
Silicon in its discretion in writing, or backed by a letter of credit
satisfactory to Silicon, or FCIA insured satisfactory to Silicon,

 

(c) Modification of Term Loans (including moving the Term Loan principal
amortization provisions formerly in Section 4 of the Schedule to Section 1 of
the Schedule).  The portion of Section 1 of the Schedule to Loan Agreement that
currently reads as follows:

 

2.  Term Loans.  An amount equal to the aggregate unpaid principal balance from
time to time outstanding of the Loans (“Term Loans”) made from time to time by
Silicon to Borrower in a total amount not to exceed $500,000 for the purchase by
Borrower of new or used Equipment acceptable to Silicon in its sole discretion,
including computer equipment, office equipment, lab equipment, test equipment
and furnishings.  To evidence each of the Term Loans, Borrower shall deliver to
Silicon, at the time of each Term Loan request, an invoice for the Equipment
(a) to be purchased or (b) which was previously purchased by the Borrower.  The
Loan request with respect to any particular Equipment must be made within 90
days of the date such Equipment was purchased.  The Term Loans shall be used
only to (a) purchase Equipment or (b) reimburse the Borrower for previously
purchased Equipment and shall not exceed 100% of the invoice amount of such
Equipment approved from time to time by Silicon.  Subject to and upon the terms
and conditions of this Agreement, Term Loans shall be available through
December 31, 2004.  The Term Loans shall be repaid as provided for herein.
 Interest shall accrue from the date of each Term Loan at the rate provided for
herein and is payable monthly as provided for herein.  Term Loans shall be made
in disbursements of not less than $100,000.

 

2

--------------------------------------------------------------------------------

 

, hereby is amended and restated in its entirety to read as follows:

 

2. Term Loans. Subject to the terms and conditions of this Agreement:
(a) Silicon previously made the following term loans (individually and
collectively, the “First Tranche Term Loans”): (i) that certain term loan
designated internally by Silicon as Loan #UNI-06, which has an outstanding
principal balance of $16,666.60 as of June 5, 2005; (ii) that certain term loan
designated internally by Silicon as Loan #UNI-07, which has an outstanding
principal balance of $20,833.27 as of June 5, 2005; and (iii) that certain term
loan designated internally by Silicon as Loan #UNI-08, which has an outstanding
principal balance of $68,021.59 as of June 5, 2005; and (b) Silicon agrees to
make additional term loans (individually and collectively, “Second Tranche Term
Loans”), in an aggregate original principal amount not to exceed the result of
(i) $250,000, minus (ii) the aggregate outstanding principal amount of the First
Tranche Term Loans as of the June 2005 Amendment Date; for the purchase by
Borrower of new or used Equipment acceptable to Silicon in its sole discretion,
including computer equipment, office equipment, lab equipment, test equipment
and furnishings.  As used herein, the term “Term Loans” means, individually and
collectively, the First Tranche Term Loans and the Second Tranche Term Loans.
 To evidence each of the Term Loans, Borrower shall deliver to Silicon, at the
time of each Term Loan request, an invoice for the Equipment (a) to be purchased
or (b) which was previously purchased by the Borrower.  The Loan request with
respect to any particular Equipment must be made within 90 days of the date such
Equipment was purchased.  The Term Loans shall be used only to (a) purchase
Equipment or (b) reimburse the Borrower for previously purchased Equipment and
shall not exceed 100% of the invoice amount of such Equipment approved from time
to time by Silicon.  Subject to and upon the terms and conditions of this
Agreement, Second Tranche Term Loans may be made by Silicon during the period
commencing on the June 2005 Amendment Date and ending on December 31, 2005.  The
Term Loans shall be repaid as provided for herein.  Interest shall accrue from
the date of each Term Loan at the rate provided for herein and is payable
monthly as provided for herein.  Term Loans shall be made in disbursements of
not less than $100,000.

 

The outstanding principal balance of each Term Loan shall be repaid by Borrower
to Silicon in twenty-four (24) equal monthly payments of principal, commencing
on the last day of the calendar month in which the applicable Term Loan is made
and continuing on the same day of each subsequent month until the earlier of

 

3

--------------------------------------------------------------------------------

 

the following dates (with respect to each Term Loan, the “Term Loan Maturity
Date”): (i) the date such Term Loan has been indefeasibly paid in full; or
(ii) the Revolving Loans Maturity Date; or (iii) the date this Agreement
terminates by its terms or is terminated by either party in accordance with its
terms.  With respect to each Term Loan, on the Term Loan Maturity Date for such
Term Loan, the entire unpaid principal balance of such Term Loan, plus all
accrued and unpaid interest thereon, shall be due and payable.  Interest on each
Term Loan shall be payable monthly as provided in Section 1.2 of this Agreement.

 

(d) Modification of Maturity Date (including moving the Term Loan principal
amortization provisions formerly in Section 4 of the Schedule to Section 1 of
the Schedule).  Section 4 of the Schedule to Loan Agreement, which currently
reads as follows:

 

4.         MATURITY DATE

(Section 6.1):                         June 5, 2005.

 

Notwithstanding the foregoing, with respect to the Term Loans: The outstanding
principal balance of each Term Loan shall be repaid by Borrower to Silicon in
twenty-four (24) equal monthly payments of principal, commencing on the last day
of the calendar month in which the applicable Term Loan is made and continuing
on the same day of each subsequent month until the earlier of the following
dates: (i) the date such Term Loan has been indefeasibly paid in full, or
(ii) the date the Revolving Loans are terminated, or (iii) the date this
Agreement terminates by its terms or is terminated by either party in accordance
with its terms.  On the earlier to occur of the foregoing dates, the entire
unpaid principal balance of the Term Loans, plus all accrued and unpaid interest
thereon, shall be due and payable.  Interest on each Term Loan shall be payable
monthly as provided in Section 1.2 of this Agreement.

 

, hereby is amended and restated in its entirety to read as follows:

 

4.         MATURITY DATE

(Section 6.1):         With respect to all Obligations other than the Term Loan
Obligations, June 4, 2006 (the “Revolving Loans Maturity Date”).

 

4

--------------------------------------------------------------------------------

 

With respect to each Term Loan and Obligations specifically identified to such
Term Loan (collectively, “Term Loan Obligations”), the Term Loan Maturity Date
applicable to such Term Loan as set forth in Section 1 of this Schedule.

 

(e) Modification of Early Termination Fee.  The portion of Section 6.2 of the
Loan Agreement that currently reads as follows:

 

If this Agreement is terminated by Borrower or by Silicon under this
Section 6.2, Borrower shall pay to Silicon a termination fee in an amount equal
to one percent (1.0%) of the Maximum Credit Limit, provided that no termination
fee shall be charged if the credit facility hereunder is replaced with a new
facility from another division of Silicon Valley Bank.

 

, hereby is amended and restated in its entirety to read as follows:

 

If this Agreement is terminated by Borrower or by Silicon under this
Section 6.2, Borrower shall pay to Silicon a termination fee in an amount equal
to one-half of one percent (0.5%) of the Maximum Credit Limit, provided that no
termination fee shall be charged if the credit facility hereunder is replaced
with a new facility from another division of Silicon Valley Bank.

 

(f) Modification of Certain Reporting Requirements.  The portion of Section 6 of
the Schedule to Loan Agreement that currently reads as follows:

 

2.                                       Monthly accounts receivable agings,
aged by invoice date, within fifteen days after the end of each month.

 

3.                                       Monthly accounts payable agings, aged
by invoice date, and outstanding or held check registers, if any, within fifteen
days after the end of each month.

 

4.                                       Monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, and general
ledger, within fifteen days after the end of each month.

 

, hereby is amended and restated in its entirety to read as follows:

 

2.                                       Monthly accounts receivable agings,
aged by invoice date, within thirty days after the end of each month.

 

3.                                       Monthly accounts payable agings, aged
by invoice date, and outstanding or held check registers, if any, within thirty
days after the end of each month.

 

5

--------------------------------------------------------------------------------

 

4.                                       Monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, and general
ledger, within thirty days after the end of each month.

 

(g) Modification of Certain Streamline Provision.  Subsection (2) of
Section 8(c) of the Schedule to Loan Agreement, which currently reads as
follows:

 

(2)          In order for a Streamline Period to go into effect, and at all
times during the Streamline Period, no Revolving Loans may be outstanding or
made, no Letters of Credit may be outstanding, the combined amount of the
required FX Reserves and Cash Management Reserves may not exceed $250,000 and
the amount of Obligations outstanding with respect to the Term Loans may not
exceed $500,000.

 

, hereby are amended and restated in their respective entirety to read as
follows:

 

(2)          In order for a Streamline Period to go into effect, and at all
times during the Streamline Period, no Revolving Loans may be outstanding or
made, and no Letters of Credit may be outstanding.

 

(h) Modification of Financial Covenant (including deletion of existing Tangible
Net Worth financial covenant and addition of new Liquidity Covenant).  Section 5
of the Schedule to Loan Agreement, which currently reads as follows:

 

5.         FINANCIAL COVENANTS

(Section 5.1):                         Borrower shall comply with each of the
following covenants:

 

Minimum Tangible

Net Worth:                               Borrower shall maintain a Tangible Net
Worth of not less than the following amounts as of the end of each of the
following months:

 

As of end of:

 

Minimum Tangible
Net Worth

May, 2004

 

$

2,250,000

June, 2004

 

$

2,250,000

July, 2004

 

$

3,000,000

August, 2004

 

$

2,250,000

 

6

--------------------------------------------------------------------------------

 

September, 2004

 

$

2,250,000

October, 2004

 

$

3,000,000

November, 2004

 

$

2,250,000

December, 2004

 

$

2,250,000

January 2005

 

$

2,750,000

February 2005

 

$

2,250,000

March 2005

 

$

2,250,000

April 2005

 

$3,000,000; unless on or before March 31, 2005, the Minimum Tangible Net Worth
Covenant shall be reset, by mutual written agreement of Silicon and Borrower in
their respective discretion, for April 2005 and each month thereafter based on
Borrower’s projected financial statements for such period, such projected
financial statements to have been approved by the Borrower’s Board of Directors
and accepted jointly by Borrower and by Silicon in their respective discretion,
which projected financial statements Borrower hereby covenants and agrees to
deliver to Silicon no later than March 15, 2005.

May 2005

 

$

2,250,000

 

Definitions.                                  For purposes of the foregoing
financial covenants, the following term shall have the following meaning:

 

“Tangible Net Worth” shall mean the excess of total assets over total
liabilities, determined in accordance with GAAP, with the following adjustments:

 

7

--------------------------------------------------------------------------------

 

(A)      there shall be excluded from assets:  (i) notes, accounts receivable
and other obligations owing to Borrower from its officers or other Affiliates,
and (ii) all assets which would be classified as intangible assets under GAAP,
including without limitation goodwill, licenses, patents, trademarks, trade
names, copyrights, capitalized software and organizational costs, licenses and
franchises

 

(B)        there shall be excluded from liabilities:  all indebtedness which is
subordinated to the Obligations under a subordination agreement in form
specified by Silicon or by language in the instrument evidencing the
indebtedness which Silicon agrees in writing is acceptable to Silicon in its
good faith business judgment.

 

, hereby is amended and restated in its entirety to read as follows:

 

5.         FINANCIAL COVENANTS

(Section 5.1):                         Borrower shall comply with each of the
following covenants:

 

Minimum

Liquidity:                                         During each month, Borrower
shall maintain Liquidity of at least $2,000,000.

 

Definitions.                                                     For purposes of
the foregoing financial covenants, the following term shall have the following
meaning:

 

“Liquidity” shall mean, as of any date of determination, the sum of
(a) Borrower’s unrestricted cash maintained on deposit at Silicon, plus (b) the
net amount of all Eligible Accounts of Borrower.

 

2.                                      Limited Waiver.  Silicon and Borrower
hereby agree that the failure of Borrower to comply with the Tangible Net Worth
financial covenant required under Section 5 of the Schedule to Loan Agreement
(as in effect immediately prior to the effectiveness of this Amendment) solely
for the month ending April 30, 2005 (the “Designated TNW Default”) hereby is
waived. It is understood, however, that the foregoing waiver of the Designated
TNW Default does not constitute a waiver of the aforementioned covenant with
respect to any other date or time period, or of any other provision or term of
the Loan Agreement or any other Loan Document, nor an agreement to waive in the
future such covenant with respect to any other date

 

8

--------------------------------------------------------------------------------

 

or time period or any other provision or term of the Loan Agreement or any other
Loan Document.

 

3.                                      Fee.  In consideration for Silicon
entering into this Amendment, Borrower shall concurrently pay Silicon a fee in
the amount of $15,000.00, which shall be fully-earned and non-refundable and in
addition to all interest and other fees payable to Silicon under the Loan
Documents.  Silicon is authorized to charge such fee to Borrower’s loan account.

 

4.                                      Representations True.  Borrower
represents and warrants to Silicon that all representations and warranties set
forth in the Loan Agreement, as amended hereby, are true and correct.

 

5.                                      General Provisions.  This Amendment, the
Loan Agreement, any prior written amendments to the Loan Agreement signed by
Silicon and Borrower, and the other written documents and agreements between
Silicon and Borrower set forth in full all of the representations and agreements
of the parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof.  Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and Borrower shall continue in full force and effect
and the same are hereby ratified and confirmed.

 

[remainder of page intentionally left blank; signature page follows]

 

9

--------------------------------------------------------------------------------

 

6.                                      Counterparts.  This Amendment may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same document.  Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Amendment.

 

 

Borrower:

Silicon:

 

 

 

UNIFY CORPORATION

SILICON VALLEY BANK

 

 

 

 

 

By

/s/ Todd E. Wille

 

By

/s/ Mark Harris

 

President or Vice President

Title

Relationship Manager

 

 

 

 

By

/s/ Todd E. Wille

 

 

Secretary or Ass’t Secretary

 

 

10

--------------------------------------------------------------------------------