**EXHIBIT 10.54**

 

THIRD LOAN MODIFICATIONAGREEMENT

 

This Third Loan ModificationAgreement (the “Agreement”) is entered into as of April     ,2005, by and among SILICON VALLEY BANK (“Bank” or “Lender”), whose address is3003 Tasman Drive, Santa Clara, California 95054 and having a loan productionoffice at 8020 Towers Crescent Drive, Suite 475, Vienna, Virginia 22182and MANUGISTICS GROUP, INC., a corporation organized under the laws of theState of Delaware whose address is 9715 Key West Avenue, Rockville, Maryland20850 (the “Company”), MANUGISTICS, INC., a corporation organized under thelaws of the State of Delaware whose address is 9715 Key West Avenue, Rockville,Maryland 20850, and any Persons who are now or hereafter made parties to theLoan Agreement (as hereinafter defined) (each a “Borrower” and collectively, “Borrowers”).

 

1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS:  Among other indebtedness which may be owingby Borrowers to Lender, Borrowers are indebted to Lender pursuant to, amongother documents, a Loan and Security Agreement dated April 12, 2002, (asmay be amended from time to time, the “Loan Agreement”).  The Loan Agreement provides for, among otherthings, a Committed Equipment Line in the original principal amount of FiveMillion Dollars ($5,000,000) (the “Equipment Facility”).  In addition, pursuant to that certain LoanAgreement dated January 14, 2003 by and among the Borrowers and Bank, Bankhas agreed to make a revolving line of credit (the “Revolving Facility”) toBorrowers in the maximum principal amount of Twenty Million Dollars($20,000,000) which amount was reduced to Fifteen Million Dollars ($15,000,000)pursuant to that certain Third Amendment to Loan Agreement, dated March 31,2004.  Hereinafter, all indebtednessowing by Borrowers to Lender under the Equipment Facility shall be referred toas the “Indebtedness.”  Capitalized termsused herein and not otherwise defined herein shall have the meaning attributedto such terms in the Loan Agreement.

 

2.                                       DESCRIPTION OF COLLATERAL.  Repayment of the Indebtedness shall besecured by the Collateral described in the Loan Agreement.  Hereinafter, the Loan Agreement, togetherwith all other documents securing repayment of the Indebtedness shall bereferred to as the “Existing Loan Documents”.

 

3.                                       MODIFICATIONS TO LOAN AGREEMENT.

 

(a)                                  Section 6.3  of the Loan Agreement is amended and restatedin its entirety as follows:

 

6.3                                 FinancialCovenants.  Borrowers will maintain as ofthe last day of each fiscal quarter:

 

(a)                                  Quick Ratio. A ratio of (i) Quick Assets to (ii) Current Liabilities, pluslong term Indebtedness to Bank and outstanding letters of credit under theCommitted Revolving Line from Bank to Borrower, minus deferred revenue of atleast 2.00 to 1.00.

 

(b)                                 Tangible Net Worth.  A Tangible Net Worth of at least $90,000,000,plus fifty percent (50%) consolidated net income (without regard to any loss)from each fiscal quarter of the Borrowers.

 

(b)                                 The definition of “Total Liabilities” setforth in Section 13.1 of the Loan Agreement is amended and restated in itsentirety as follows:

 

“Total Liabilities” is onany day, obligations that should, under GAAP, be classified as liabilities ofthe Company and its consolidated Subsidiaries, including all Indebtedness, andthe current portion of Subordinated Debt, if any, that Borrowers are allowed topay under Section 7.8 hereof, but only to the extent the Borrowers havenotified Bank in writing that they plan to make such a payment.

 

(c)                                        Exhibit C to the Loan Agreement isreplaced in its entirety with Exhibit C attached hereto.

 

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4.                                       CONSISTENT CHANGES.  The Existing Loan Documents are herebyamended wherever necessary to reflect the changes described above.

 

5.                                       NO DEFENSES OF BORROWERS.  Borrowers agree that they have no defensesagainst the obligations to pay any amounts under the Indebtedness.

 

6.                                       CONTINUING VALIDITY.  Each Borrower understands and agrees that inmodifying the existing Indebtedness, Lender is relying upon Borrowers’representations, warranties, and agreements, as set forth in the Existing LoanDocuments.  Except as expressly modifiedpursuant to this Agreement, the terms of the Existing Loan Documents remainunchanged and in full force and effect. Lender’s agreement to modifications to the existing Indebtednesspursuant to this Agreement in no way shall obligate Lender to make any futuremodifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction of theIndebtedness.  It is the intention ofLender and Borrowers to retain as liable parties all makers and endorsers ofExisting Loan Documents, unless the party is expressly released by Lender inwriting.  No maker, endorser, orguarantor will be released by virtue of this Agreement.  The terms of this paragraph apply not only tothis Agreement, but also to all subsequent loan modification agreements.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

 

This Agreement is executedas of the date first written above.

 

BORROWERS:

 

MANUGISTICS GROUP, INC.

 

 

By:

Name:

Title:

 

MANUGISTICS, INC.

 

 

By:

Name:

Title:

 

 

LENDER:

 

SILICON VALLEY BANK

 

 

By:

Name:

Title:

 

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