Exhibit 10.6

 

Amendment to Junior Secured Convertible Promissory Notes

 

This Amendment to Junior Secured Convertible Promissory Notes (this “Amendment”)
is made and entered into as of December 27, 2016, by and between Determine,
Inc., a Delaware corporation (the “Company”), and Lloyd I. Miller, III (the
“Lenders’ Agent” and, together with the Company, the “Parties”). Capitalized
terms used in this Amendment but not otherwise defined herein shall have the
meanings ascribed to them in the Existing Notes (as defined below).

 

Recitals

 

A.     The Parties previously entered into the (i) Junior Secured Convertible
Note Purchase Agreement, dated as of March 11, 2015, pursuant to which the
Company sold to certain Lenders Junior Secured Convertible Promissory Notes in
the aggregate principal amount of $3 million, which promissory notes were
amended by the Second Purchase Agreement (as defined in this Recital A) (the
“March 2015 Notes”) and (ii) Junior Secured Convertible Note Purchase Agreement,
dated as of December 16, 2016 (the “Second Purchase Agreement”), pursuant to
which the Company sold to certain Lenders Junior Secured Convertible Promissory
Notes in the aggregate principal amount of $2.5 million (the “December 2015
Notes” and, collectively with the March 2015 Notes, the “Existing Notes”).

 

B.     Certain of the Lenders have agreed to make certain additional loans to
the Company pursuant to a Junior Secured Convertible Note Purchase Agreement,
dated as of December 27, 2016, by and among the Company and such Lenders.

 

C.     In order to induce such Lenders to make such additional loans to the
Company, the Company and the Lenders’ Agent desire to amend the Existing Notes,
as more fully set forth below.

 

D.     Pursuant to Section 11 of the Existing Notes, any provision of the
Existing Notes may be amended, waived or modified with the written consent of
the Company and the Lenders’ Agent, which such amendment, waiver or modification
shall be binding upon the Company and all Lenders.

 

Agreement

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other consideration, the receipt and adequacy of which is hereby
acknowledged, the Parties agree as follows:

 

 

1.

Amendment to December 2015 Notes.

 

(a)     Section 1(b) of each December 2015 Note is hereby amended to add the
following paragraph at the end of Section 1(b):

 

“Notwithstanding the foregoing, beginning with the first quarterly interest
payment due on December 31, 2016, and continuing until the Maturity Date, the
PIK Right described above shall be of no further force and effect and shall be
superseded by the following provisions: Provided the Company is not then in
default pursuant to this Note or any other Loan Document, upon each quarterly
interest payment date on and after December 31, 2016, the Company may elect to
pay the accrued interest due on such date by capitalizing, compounding and
adding to the unpaid Principal Amount the amount of interest accrued such
quarter (“PIK Interest”); provided, however, that any such PIK Interest shall be
deemed to have accrued at the rate of ten percent (10%) per annum simple
interest (computed on the basis of actual days elapsed and a fiscal year of 364
days). Amounts representing PIK Interest shall be treated as Principal Amount
for all purposes under this Note and the Loan Documents and shall bear interest
in accordance with this Section 1. The obligation of the Company to pay all such
PIK Interest so added shall be automatically evidenced by this Note. The PIK
Interest election shall be made by the Company by written notice to Lender on or
prior to the date such interest payment is due.”

 

 

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(b)     Section 6(a) of each of the December 2015 Notes is hereby amended and
restated in its entirety to read as follows:

 

“(a) Subject to applicable NASDAQ listing rule limitations (including, if
applicable, approval by the Company’s stockholders), at any time following the
date of this Note and up to the Maturity Date, the then outstanding Obligations
under this Note (or any portion thereof) may be converted into fully paid and
nonassessable shares of Company Common Stock, $0.0001 par value per share (the
“Conversion Shares”), at the sole election of Lender upon written notice to the
Company (the “Conversion Notice”), which Conversion Notice shall state the
proposed effective date of such conversion (which date shall be no fewer than
ten (10) business days following the date of delivery of the Conversion Notice)
(the “Conversion Date”). The Obligations hereunder shall convert at a conversion
price equal to $3.00 per share, subject to adjustment for any stock dividend,
stock split, combination or other similar recapitalization event with respect to
the Company’s Common Stock (each a “Recapitalization Event”); provided, however,
that if prior to the Maturity Date the Company offers and sells its Common Stock
(or other securities that are convertible into or exercisable for shares of
Common Stock) in a private placement primarily intended to raise capital at a
price per share of Common Stock of $2.50 or less (subject to adjustment for any
Recapitalization Event), then the conversion price of the Obligations under this
Note shall be reduced to such Common Stock offer price plus $0.50 per share (the
applicable conversion price with respect to a conversion under this Section 6(a)
hereinafter is referred to as the “Conversion Price”).”

 

(c)     A new Section 19 is hereby added to each December 2015 Note, as follows:

 

“19.     Change of Control. In the event of a Change of Control occurring prior
to the repayment or conversion of the Obligations under this Note pursuant to
its terms, this Note, including all Obligations hereunder, shall be, at the
option of Lender, either (i) repaid in cash as of the closing of such Change of
Control or, (ii) subject to applicable NASDAQ listing rule limitations
(including, if applicable, approval by the Company’s stockholders), converted
into Conversion Shares at the then-current Conversion Price, to be issued to
Lender immediately prior to the closing of such Change of Control. The Company
shall provide at least 20 business days’ notice to Lender of the closing of a
Change of Control.”

 

“‘Change of Control’ means (i) a direct or indirect merger or consolidation of
the Company into or with another entity after which the stockholders of the
Company immediately prior to such transaction do not own, immediately following
the consummation of the transaction by virtue of their shares in the Company or
securities received in exchange for such shares in connection with the
transaction, a majority of the voting power of the surviving entity in
proportions substantially similar to those that existed immediately prior to
such transaction, (ii) the direct or indirect sale, transfer or issuance by the
Company, or the sale or transfer by stockholders of the Company, in a
transaction or series of related transactions, to a person or “group” within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended and
Rule 13D thereunder, in either case, as a result of which more than 50% of the
voting power of the Company is beneficially owned by such person or group , and
(iii) the direct or indirect sale, transfer or other disposition (but not
including a transfer or disposition by pledge or mortgage to a bona fide lender)
of all or substantially all of the assets or intellectual property of the
Company. Notwithstanding the foregoing, the following shall not be deemed a
Change of Control: a merger effected exclusively for the purpose of changing the
domicile of the Company.”

 

 
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2.

Amendment to March 2015 Notes.

 

(a)     Section 1(b) of each March 2015 Note is hereby amended to add the
following paragraph at the end of Section 1(b):

 

“Notwithstanding the foregoing, beginning with the first quarterly interest
payment due on December 11, 2016, and continuing until the Maturity Date, the
PIK Right described above shall be of no further force and effect and shall be
superseded by the following provisions: Provided the Company is not then in
default pursuant to this Note or any other Loan Document, upon each quarterly
interest payment date on and after December 11, 2016, the Company may elect to
pay the accrued interest due on such date by capitalizing, compounding and
adding to the unpaid Principal Amount the amount of interest accrued such
quarter (“PIK Interest”); provided, however, that any such PIK Interest shall be
deemed to have accrued at the rate of ten percent (10%) per annum simple
interest (computed on the basis of actual days elapsed and a fiscal year of 364
days). Amounts representing PIK Interest shall be treated as Principal Amount
for all purposes under this Note and the Loan Documents and shall bear interest
in accordance with this Section 1. The obligation of the Company to pay all such
PIK Interest so added shall be automatically evidenced by this Note. The PIK
Interest election shall be made by the Company by written notice to Lender on or
prior to the date such interest payment is due.”

 

(b)     A new Section 19 is hereby added to each March 2015 Note, as follows::

 

“19.     Change of Control. In the event of a Change of Control occurring prior
to the repayment or conversion of the Obligations under this Note pursuant to
its terms, this Note, including all Obligations hereunder, shall be, at the
option of Lender, either (i) repaid in cash as of the closing of such Change of
Control or, (ii) subject to applicable NASDAQ listing rule limitations
(including, if applicable, approval by the Company’s stockholders), converted
into Conversion Shares at the then-current Conversion Price, to be issued to
Lender immediately prior to the closing of such Change of Control. The Company
shall provide at least 20 business days’ notice to Lender of the closing of a
Change of Control.”

 

“‘Change of Control’ means (i) a direct or indirect merger or consolidation of
the Company into or with another entity after which the stockholders of the
Company immediately prior to such transaction do not own, immediately following
the consummation of the transaction by virtue of their shares in the Company or
securities received in exchange for such shares in connection with the
transaction, a majority of the voting power of the surviving entity in
proportions substantially similar to those that existed immediately prior to
such transaction, (ii) the direct or indirect sale, transfer or issuance by the
Company, or the sale or transfer by stockholders of the Company, in a
transaction or series of related transactions, to a person or “group” within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended and
Rule 13D thereunder, in either case, as a result of which more than 50% of the
voting power of the Company is beneficially owned by such person or group , and
(iii) the direct or indirect sale, transfer or other disposition (but not
including a transfer or disposition by pledge or mortgage to a bona fide lender)
of all or substantially all of the assets or intellectual property of the
Company. Notwithstanding the foregoing, the following shall not be deemed a
Change of Control: a merger effected exclusively for the purpose of changing the
domicile of the Company.”

 

 
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3.     Continuing Effect. Except as expressly amended hereby, all terms and
conditions of the Existing Notes shall remain in full force and effect and shall
apply to this Amendment; provided, however, that the Lenders’ Agent acknowledges
and agrees that this Amendment will have effect with respect to the interest
payments due on December 11, 2016 and December 31, 2016 under the March 2015
Notes and December 2015 Notes, respectively, even if the effective date of this
Amendment is after one or both such interest payment due dates.

 

4.     Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflict of laws.

 

5.     Counterparts; Facsimile. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

 

[Signature Pages Follow]

 

 
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IN WITNESS WHEREOF, the undersigned parties have executed this Amendment to
Junior Secured Convertible Promissory Notes as the date first set forth above.

 

 

 

COMPANY:

 

 

 

 

 

          DETERMINE, INC.             By: /s/ John K. Nolan  

 

Name:

John K. Nolan

 

  Title: Chief Financial Officer                                                
    LENDERS’ AGENT:                     LLOYD I. MILLER, III                    
/s/ Lloyd I. Miller, III     Signature