Exhibit 10.16(v)

 

SECOND AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is entered into this 9th day of November, 2007, but effective as of
September 29, 2007, by and among SILICON VALLEY BANK (“Bank”), MEDECISION, INC.,
a Pennsylvania corporation (“MEDecision”), and MEDECISION INVESTMENTS, INC., a
Delaware corporation (“MEDecision Investments”; and together with MEDecision,
jointly, severally and collectively, “Borrower”) whose address is 601 Lee Road,
Wayne, Pennsylvania 19087.

 

RECITALS

 

A.                                    Bank and Borrower have entered into that
certain Amended and Restated Loan and Security Agreement dated as of September
28, 2006 (as the same has been amended, modified, supplemented or restated, the
“Loan Agreement”).

 

B.                                    Bank has extended credit to Borrower for
the purposes permitted in the Loan Agreement.

 

C.                                    Borrower has requested that Bank amend the
Loan Agreement to (i) extend the Revolving Line Maturity Date and (ii) make
certain other revisions to the Loan Agreement as more fully set forth herein.

 

D.                                    Bank has agreed to so amend certain
provisions of the Loan Agreement, but only to the extent, in accordance with the
terms, subject to the conditions and in reliance upon the representations and
warranties set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

 

1.                                      DEFINITIONS. CAPITALIZED TERMS USED BUT
NOT DEFINED IN THIS AMENDMENT SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE LOAN
AGREEMENT.

 

2.                                      AMENDMENTS TO LOAN AGREEMENT.

 

2.1                               SECTION 6.8 (FINANCIAL COVENANTS).
NOTWITHSTANDING THE REQUIREMENTS OF SECTION 6.8 OF THE LOAN AGREEMENT TO THE
CONTRARY, BANK AGREES THAT (I) THE ADJUSTED QUICK RATIO COVENANT CONTAINED IN
SECTION 6.8(A) WILL NOT BE TESTED FOR THE MONTH ENDED SEPTEMBER 30, 2007, AND
(II) THE TANGIBLE NET WORTH COVENANT CONTAINED IN SECTION 6.8(B) WILL NOT BE
TESTED FOR THE QUARTER ENDED SEPTEMBER 30, 2007.

 

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2.2                               SECTION 13 (DEFINITIONS). THE FOLLOWING TERM
AND ITS DEFINITION SET FORTH IN SECTION 13.1 IS AMENDED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING:

 

“Revolving Line Maturity Date” is December 15, 2007.

 

2.3                               COMPLIANCE CERTIFICATE. THE COMPLIANCE
CERTIFICATE TO THE LOAN AGREEMENT IS REPLACED IN ITS ENTIRETY WITH EXHIBIT D
ATTACHED HERETO.

 

3.                                      LIMITATION OF AMENDMENTS.

 

3.1                               THE AMENDMENTS SET FORTH IN SECTION 2, ABOVE,
ARE EFFECTIVE FOR THE PURPOSES SET FORTH HEREIN AND SHALL BE LIMITED PRECISELY
AS WRITTEN AND SHALL NOT BE DEEMED TO (A) BE A CONSENT TO ANY AMENDMENT, WAIVER
OR MODIFICATION OF ANY OTHER TERM OR CONDITION OF ANY LOAN DOCUMENT, OR
(B) OTHERWISE PREJUDICE ANY RIGHT OR REMEDY WHICH BANK MAY NOW HAVE OR MAY HAVE
IN THE FUTURE UNDER OR IN CONNECTION WITH ANY LOAN DOCUMENT.

 

3.2                               THIS AMENDMENT SHALL BE CONSTRUED IN
CONNECTION WITH AND AS PART OF THE LOAN DOCUMENTS AND ALL TERMS, CONDITIONS,
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS SET FORTH IN THE LOAN
DOCUMENTS, EXCEPT AS HEREIN AMENDED, ARE HEREBY RATIFIED AND CONFIRMED AND SHALL
REMAIN IN FULL FORCE AND EFFECT.

 

4.                                      REPRESENTATIONS AND WARRANTIES. TO
INDUCE BANK TO ENTER INTO THIS AMENDMENT, BORROWER HEREBY REPRESENTS AND
WARRANTS TO BANK AS FOLLOWS:

 

4.1                               IMMEDIATELY AFTER GIVING EFFECT TO THIS
AMENDMENT (A) THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE LOAN DOCUMENTS
ARE TRUE, ACCURATE AND COMPLETE IN ALL MATERIAL RESPECTS AS OF THE DATE HEREOF
(EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES RELATE TO AN EARLIER
DATE, IN WHICH CASE THEY ARE TRUE AND CORRECT AS OF SUCH DATE), AND (B) NO EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING;

 

4.2                               BORROWER HAS THE POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AMENDMENT AND TO PERFORM ITS OBLIGATIONS UNDER THE LOAN
AGREEMENT, AS AMENDED BY THIS AMENDMENT;

 

4.3                               THE ORGANIZATIONAL DOCUMENTS OF BORROWER
DELIVERED TO BANK ON THE EFFECTIVE DATE REMAIN TRUE, ACCURATE AND COMPLETE AND
HAVE NOT BEEN AMENDED, SUPPLEMENTED OR RESTATED AND ARE AND CONTINUE TO BE IN
FULL FORCE AND EFFECT;

 

4.4                               THE EXECUTION AND DELIVERY BY BORROWER OF THIS
AMENDMENT AND THE PERFORMANCE BY BORROWER OF ITS OBLIGATIONS UNDER THE LOAN
AGREEMENT, AS AMENDED BY THIS AMENDMENT, HAVE BEEN DULY AUTHORIZED;

 

4.5                               THE EXECUTION AND DELIVERY BY BORROWER OF THIS
AMENDMENT AND THE PERFORMANCE BY BORROWER OF ITS OBLIGATIONS UNDER THE LOAN
AGREEMENT, AS AMENDED BY THIS AMENDMENT, DO NOT AND WILL NOT CONTRAVENE (A) ANY
LAW OR REGULATION BINDING ON OR AFFECTING BORROWER, (B) ANY CONTRACTUAL
RESTRICTION WITH A PERSON BINDING ON BORROWER, (C) ANY ORDER, JUDGMENT OR DECREE
OF ANY COURT OR OTHER GOVERNMENTAL OR PUBLIC BODY OR AUTHORITY, OR SUBDIVISION
THEREOF, BINDING ON BORROWER, OR (D) THE ORGANIZATIONAL DOCUMENTS OF BORROWER;

 

2

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4.6                               THE EXECUTION AND DELIVERY BY BORROWER OF THIS
AMENDMENT AND THE PERFORMANCE BY BORROWER OF ITS OBLIGATIONS UNDER THE LOAN
AGREEMENT, AS AMENDED BY THIS AMENDMENT, DO NOT REQUIRE ANY ORDER, CONSENT,
APPROVAL, LICENSE, AUTHORIZATION OR VALIDATION OF, OR FILING, RECORDING OR
REGISTRATION WITH, OR EXEMPTION BY ANY GOVERNMENTAL OR PUBLIC BODY OR AUTHORITY,
OR SUBDIVISION THEREOF, BINDING ON BORROWER, EXCEPT AS ALREADY HAS BEEN OBTAINED
OR MADE; AND

 

4.7                               THIS AMENDMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY BORROWER AND IS THE BINDING OBLIGATION OF BORROWER, ENFORCEABLE
AGAINST BORROWER IN ACCORDANCE WITH ITS TERMS, EXCEPT AS SUCH ENFORCEABILITY MAY
BE LIMITED BY BANKRUPTCY, INSOLVENCY, REORGANIZATION, LIQUIDATION, MORATORIUM OR
OTHER SIMILAR LAWS OF GENERAL APPLICATION AND EQUITABLE PRINCIPLES RELATING TO
OR AFFECTING CREDITORS’ RIGHTS.

 

5.                                      COUNTERPARTS. THIS AMENDMENT MAY BE
EXECUTED IN ANY NUMBER OF COUNTERPARTS AND ALL OF SUCH COUNTERPARTS TAKEN
TOGETHER SHALL BE DEEMED TO CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

6.                                      EFFECTIVENESS. THIS AMENDMENT SHALL BE
DEEMED EFFECTIVE UPON (A) THE DUE EXECUTION AND DELIVERY TO BANK OF THIS
AMENDMENT BY EACH PARTY HERETO, (B) BORROWER’S PAYMENT OF A NON REFUNDABLE
AMENDMENT FEE IN AN AMOUNT EQUAL TO NINE THOUSAND FIVE HUNDRED DOLLARS ($9,500)
AND (C) PAYMENT OF BANK’S LEGAL FEES AND EXPENSES IN CONNECTION WITH THE
NEGOTIATION AND PREPARATION OF THIS AMENDMENT.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

By:

/s/ Richard White

 

 

Name: Richard White

 

Title: Relationship Manager

 

 

 

 

 

BORROWERS

 

 

 

 

 

MEDECISION, INC.

 

 

 

 

 

By:

 /s/ Carl E. Smith

 

 

Name: Carl E. Smith

 

Title: Executive Vice President and Chief

 

Financial Officer

 

 

 

 

 

 

 

MEDECISION INVESTMENTS, INC.

 

 

 

 

 

By:

/s/ Harold F. Kalbach, Jr.

 

 

Name: Harold F. Kalbach, Jr.

 

Title: Treasurer

 

 

 

[Signature Page to Second Amendment to Amended and Restated L&SA]

 

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EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

TO:

SILICON VALLEY BANK

 

Date:

FROM: MEDECISION, INC.

 

 

 

 

The undersigned authorized officer of MEDecision, Inc. (“Borrower”) certifies
that under the terms and conditions of the Amended and Restated Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is
in complete compliance for the period ending                      with all
required covenants except as noted below, (2) there are no Events of Default,
(3) all representations and warranties in the Agreement are true and correct in
all material respects on this date except as noted below; provided, however,
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date, (4) Borrower, and each of its
Subsidiaries, has timely filed all required tax returns and reports, and
Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise
permitted pursuant to the terms of Section 6.8 of the Agreement, and (5) no
Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank. Attached are the
required documents supporting the certification. The undersigned certifies that
these are prepared in accordance with GAAP consistently applied from one period
to the next except as explained in an accompanying letter or footnotes. The
undersigned acknowledges that no borrowings may be requested at any time or date
of determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered. Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

 

Required

 

Complies

 

 

 

 

 

 

 

Monthly financial statements with Compliance Certificate

 

Monthly within 30 days

 

Yes No

 

Annual financial statement (CPA Audited) + CC

 

FYE within 120 days

 

Yes No

 

Field Audits

 

1x a year

 

Yes No

 

10-Q

 

Within 45 days after filing with SEC

 

Yes No

 

10-K and 8-K

 

Within 90 days after filing with SEC

 

Yes No

 

Borrowing Base Certificate A/R & A/P Agings

 

Monthly within 30 days

 

Yes No

 

Board Projections (Annual internal operating plans)

 

Annually, 30 days prior to FYE

 

Yes No

 

Board Projections (Annual financial projections)

 

Annually, 15 days prior to FYE

 

Yes No

 

 

The following Intellectual Property was registered after the Effective Date (if
no registrations, state “None”)    

 

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Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

 

 

*

Minimum Tangible Net Worth (Tested Quarterly):

 

 

 

 

 

 

 

 

March 31 2007

 

$

9,000,000

 

$

 

 

Yes No

 

 

June 30, 2007

 

$

9,000,000

 

$

 

 

Yes No

 

 

September 30, 2007

 

$

9,000,000

 

$

 

 

Yes No

 

 

December 31, 2007

 

$

12,000,000

 

$

 

 

Yes No

 

 

At all times thereafter

 

$

12,000,000

 

$

 

 

Yes No

 

 

 

 

 

 

 

 

 

 

*

*Adjusted Quick Ratio (Tested Monthly):

 

 

 

 

 

 

 

 

February 28, 2007 through September 30, 2007

 

1.50:1.00

 

:1.00

 

Yes No

 

 

October 31, 2007 and at all times thereafter

 

1.75:1.00

 

:1.00

 

Yes No

 

 

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* not tested for the quarter ended September 30, 2007

 

** not tested for the month ended September 30, 2007

 

The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.

 

The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)

 

 

 

 

 

MEDECISION, INC.

BANK USE ONLY

 

 

 

Received by:

 

 

By:

 

 

 

AUTHORIZED SIGNER

Name:

 

 

Date:

 

 

Title:

 

 

 

 

Verified

 

 

 

 

AUTHORIZED SIGNER

 

 

Date:

 

 

 

 

 

 

 

Compliance Status:  Yes  No

 

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Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

Dated:                               

 

I.                                         Adjusted Quick Ratio (Section 6.8(a))

 

Required:

 

February 28, 2007 through September 30, 2007

 

1.50:1.00

October 31, 2007 and at all times thereafter

 

1.75:1.00

 

Actual:

 

A.

 

Aggregate value of the unrestricted cash and cash equivalents of Borrower and
its Subsidiaries

 

$

 

 

B.

 

Aggregate value of accounts receivable of Borrower and its Subsidiaries

 

$

 

 

C.

 

Aggregate value of the Investments with maturities of fewer than 12 months of
Borrower and it Subsidiaries

 

$

 

 

D.

 

Quick Assets (the sum of lines A through C)

 

$

 

 

E.

 

Aggregate value of Obligations to Bank

 

$

 

 

F.

 

Aggregate value of liabilities that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all
Indebtedness, and not otherwise reflected in line E above that matures within
one (1 year)

 

$

 

 

G.

 

Current Liabilities (the sum of lines E and F)

 

$

 

 

H.

 

50% of deferred revenues

 

$

 

 

I.

 

Line G minus line H

 

$

 

 

J.

 

Adjusted Quick Ratio (line D divided by line I)

 

 

 

 

Is line E equal to or greater than         :1:00?

 

              No, not in
compliance                                                                                                                                 
                         Yes, in compliance

 

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II.                                     Tangible Net Worth (Section 6.8(b))

 

Required:

 

March 31 2007

 

$

9,000,000

 

June 30, 2007

 

$

9,000,000

 

September 30, 2007

 

$

9,000,000

 

December 31, 2007

 

$

12,000,000

 

At all times thereafter

 

$

12,000,000

 

 

Actual:

 

A.

 

Aggregate value of total assets of Borrower and its Subsidiaries

 

$

 

B.

 

Aggregate value of goodwill of Borrower and its Subsidiaries

 

$

 

C.

 

Aggregate value of intangible assets of Borrower and its Subsidiaries (including
unamortized debt discount and expense, capitalized software, deferred tax
assets, patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses)

 

$

 

D.

 

Aggregate value of all notes, accounts receivable and other obligations owing to
Borrower from its officers or other Affiliates

 

$

 

E.

 

Aggregate value of any reserves not already deducted from assets

 

$

 

F.

 

Aggregate value of liabilities that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness
and current portion of Subordinated Debt permitted by Bank to be paid by
Borrower, but excluding all other Subordinated Debt

 

$

 

G.

 

Tangible Net Worth (line A minus line B minus line C minus line D minus line E
minus line F)

 

$

 

 

Is line G equal to or greater than required amount?

 

           No, not in
compliance                                                                                                                                          
         Yes, in compliance

 

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