EXHIBIT 10.5

 

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SECOND AMENDMENT TO CREDIT AGREEMENT

 

This Second Amendment to Credit Agreement is entered into as of October 29,
2004, by and between Digital Insight Corporation, a Delaware corporation
(“Borrower”), and City National Bank, a national banking association (“CNB”).

 

RECITALS

 

A. Borrower and CNB are parties to that certain Credit Agreement, dated as of
October 25, 2002, as amended by that certain First Amendment to Credit Agreement
dated as of October 31, 2003, (the Credit Agreement, as herein amended,
hereinafter the “Credit Agreement”).

 

B. Borrower and CNB desire to supplement and amend the Credit Agreement as
hereinafter set forth.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Definitions. Capitalized terms used in this Amendment without definition
shall have the meanings set forth in the Credit Agreement.

 

2. Amendments. The Credit Agreement is amended as follows:

 

  2.1 The definition of Covenant Compliance Certificate in the Credit Agreement
is stricken and replaced with the following:

 

“Covenant Compliance Certificate” shall be in the form attached hereto as
Exhibit A.

 

  2.2 The definition of Current Assets in the Credit Agreement is stricken and
replaced with the following:

 

““Current Assets” will be determined on a consolidated basis for Borrower and
the Subsidiaries in accordance with GAAP.”

 

  2.3 The definition of Current Liabilities in the Credit Agreement is stricken
and replaced with the following:

 

““Current Liabilities” will be determined on a consolidated basis for Borrower
and the Subsidiaries in accordance with GAAP.”

 

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  2.4 The definition of Tangible Net Worth in the Credit Agreement is stricken
and replaced with the following:

 

““Tangible Net Worth” means the total of all assets appearing on a balance sheet
prepared in accordance with GAAP for Borrower and the Subsidiaries on a
consolidated basis, minus (a) all intangible assets, including, without
limitation, Affiliate receivables or advances, goodwill, patents, trademarks,
the excess of purchase price over underlying values of acquired companies, any
covenants not to compete, deferred charges, copyrights, franchises and appraisal
surplus; minus (b) all obligations which are required by GAAP to be reflected as
a liability on the consolidated balance sheet of Borrower and the Subsidiaries;”

 

  2.5 The definition of Termination Date in the Credit Agreement is stricken and
replaced with the following:

 

““Termination Date” shall be three hundred and sixty four (364) days after each
condition set forth in Section 4 of this Amendment has been satisfied, but in no
event later than October 31, 2005, unless the Revolving Credit Commitment is
renewed for an additional term by CNB giving Borrower prior written notice of
such renewal, in which event the Termination Date will mean the renewed maturity
date of the Revolving Credit Commitment set forth in the notice. Notwithstanding
the foregoing, CNB may, at its option, terminate this Agreement pursuant to
Section 8.3; the date of any such termination will become the Termination Date
as that term is used in this Agreement.”

 

  2.6 Section 5.9.1 is stricken and replaced with the following:

 

“5.9.1 Tangible Net Worth of not less than $80,000,000.00 at all times;”

 

  2.7 Section 5.9.2 is stricken and replaced with the following:

 

“5.9.2 Quarterly Operating Income of not less than $3,000,000.00;”

 

  2.8 Section 6.10 is stricken and the number reserved.

 

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3. Existing Agreement. Except as expressly amended herein, the Credit Agreement
shall remain in full force and effect, and in all other respects is affirmed.

 

4. Conditions Precedent. This Amendment shall become effective upon the
fulfillment of all of the following conditions to CNB’s satisfaction:

 

  4.1 CNB shall have received this Amendment duly executed by Borrower; and

 

  4.2 CNB shall have received a renewal Fee for the period equal to $20,000.00.

 

5. Counterparts. This Amendment may be executed in any number of counterparts,
and all such counterparts taken together shall be deemed to constitute one and
the same instrument.

 

6. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be construed in accordance with, and governed by the laws of the
State of California.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first above written.

 

“Borrower”   Digital Insight Corporation,     a Delaware corporation    

By:

 

 

/s/ Elizabeth S.C.S. Murray

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“CNB”       City National Bank,         a national banking association    

By:

 

 

/s/ Sajeda Simjee

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Sajeda Simjee,

Vice President

 

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