Exhibit

10.43




 




FIFTH

MODIFICATION TO AMENDED AND RESTATED


LOAN AND SECURITY AGREEMENT




 




This Fifth Modification to Amended and Restated Loan

and Security Agreement (the “Modification”) is entered into as of

February 27, 2004 by and between Broadvision, Inc., a Delaware corporation

(“Borrower”), and Silicon Valley Bank, a California-chartered bank (“Bank”).




 




1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS.  Among

other indebtedness which may be owing by Borrower to Bank, Borrower is indebted

to Bank pursuant to that certain Amended and Restated Loan and Security

Agreement dated as of March 31, 2002, as amended by that certain Modification

to Amended and Restated Loan and Security Agreement dated as of

February 28, 2003, that certain Second Modification to Amended and Restated

Loan and Security Agreement dated as of June 30, 2003, that certain Third

Modification to Amended and Restated Loan and Security Agreement dated as of

June 30, 2003 and that certain Fourth Modification to Amended and Restated

Loan and Security Agreement dated as of January 21, 2004 (as may be

further amended from time to time, the “Loan Agreement”).  The Loan Agreement provides for, among other

things, a Committed Revolving Line in the principal amount of Twenty-Seven

Million Two Hundred Fifty Thousand Dollars ($27,250,000). Capitalized terms

used but not otherwise defined herein shall have the respective meanings

accorded to them in the Loan Agreement; provided that hereinafter all

indebtedness owing by Borrower to Bank under the Loan Agreement shall be

referred to as the “Indebtedness.”




 




2.                                       DESCRIPTION OF COLLATERAL.  Repayment

of the Indebtedness is secured by the Collateral as described in the Loan

Agreement and herein.  Hereinafter, all

documents securing repayment of the Indebtedness, together with all other

documents evidencing or securing the Indebtedness, shall be referred to as the

“Existing Loan Documents.”




 




3.                                       DESCRIPTION OF CHANGES TO TERMS OF EXISTING LOAN

DOCUMENTS.




 




3.1                                 Equipment

Advances.  A new Section 2.1.5

is hereby added to read in full as follows:




 




(a)                                  Subject

to the terms and conditions of this Agreement, Bank agrees to lend to Borrower

equipment advances (the “Equipment Advances”) in an aggregate amount not to

exceed the Committed Equipment Line. 

The Equipment Advances may be used for any purpose.  Each Equipment Advance, when repaid, may not

be re-borrowed. All Equipment Advances shall be made during the twelve-month

period ending on the Commitment Termination Date, and Bank’s obligation to make

Equipment Advances shall terminate on the earlier of (i) the occurrence

and continuance of an Event of Default, or (ii) the Commitment Termination

Date.  Each Equipment Advance shall be

for an amount greater than or equal to $25,000.00, and there shall be no more

than five Equipment Advances hereunder.




 




(b)                                 To

obtain an Equipment Advance, Borrower must notify Bank by facsimile or

telephone by 12:00 p.m., Pacific Time, at least one (1) Business Day

before the proposed Funding Date. 

Borrower must promptly confirm the notification by delivering to Bank a

completed Loan Payment/Advance Request Form in the form attached hereto as

Exhibit B.  On the Funding Date, Bank

will specify the Payment Dates on which the Equipment Advance will be repaid,

and Bank will disburse such Equipment Advance by internal transfer to

Borrower’s deposit account with Bank. 

Bank may make Equipment Advances under this Agreement based on

instructions from a Responsible Officer or his or her designee.  Bank may rely on any telephone notice given

by a person whom Bank




 




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reasonably believes is a

Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank

suffers due to such reliance.




 




(c)                                  Bank’s

obligation to make the Equipment Advances will terminate if, in Bank’s sole

discretion, there has been a Material Adverse Change or there has occurred any

material adverse deviation from the most recent business plan of Borrower

presented to and accepted by Bank prior to the execution of this Agreement.




 




3.2                                 Interest

on Revolving Advances.  Section

2.3(a) of the Loan Agreement is hereby amended to read in full as follows:




 




(a)                                  Revolving

Advances shall accrue interest on the aggregate principal balance thereof from

time to time outstanding at a per annum rate equal to the Prime Rate and the

Deferred Amount (if any) shall accrue interest on the aggregate principal

balance thereof from time to time outstanding at a per annum rate equal to the

Prime Rate plus one-half percent (0.50%); provided, however, that if Borrower

fails to maintain minimum revenues (on a rolling six-month basis) of at least

$40,000,000.00 for each six-month period commencing on March 31, 2004,

Revolving Advances shall accrue interest at the per annum rate of the Prime

Rate plus three-quarters of one percent (0.75%) and the Deferred Amount, if

any, shall accrue interest at the per annum rate of the Prime Rate plus one and

one-quarter percent (1.25%).  Term Loan

#1 shall accrue interest on the aggregate principal balance thereof from time

to time outstanding at a per annum rate equal to the Prime Rate.  Term Loan #2 shall accrue interest on the

aggregate principal balance thereof from time to time outstanding at a per

annum rate equal to the Prime Rate plus one and one-quarter percent

(1.25%).  After an Event of Default,

Obligations shall accrue interest at a rate equal to three percent (3.00%)

above the respective rates effective for such Obligations immediately before

the Event of Default. The interest rate shall increase or decrease when the

Prime Rate changes.  Interest is

computed on a 360-day year for the actual number of days elapsed.




 




3.3                                 Interest

on Equipment Advances.  A new

Section 2.3.2 is hereby added to read in full as follows:




 




(a)                                  Borrower

will repay each of the Equipment Advances in accordance with this

Section 2.3.2.  Each Equipment

Advance shall amortize and be payable in equal monthly payments of principal

over the Repayment Period for such Equipment Advance, plus accrued and unpaid

interest thereon (each, a “Scheduled Payment”), commencing on the first day of

the calendar month following the Funding Date of such Equipment Advance and

continuing thereafter during the Repayment Period on the first day of each

calendar month (each, a “Payment Date”) until the Equipment Maturity Date for such

Equipment Advance, at which time all unpaid principal and accrued interest

shall be due and payable in full.  When

a payment is due on a day that is not a Business Day, the payment shall be due

on the next Business Day and additional interest and fees shall accrue to such

date.  Payments received after 12:00

noon, Pacific Time, are considered received at the opening of business on the

next Business Day.  Each Equipment Advance

may be prepaid at any time without premium or penalty upon the prior written consent

of Bank.




 




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(b)                                 Each

Equipment Advance will bear interest at the per annum rate of interest equal to

the Prime Rate plus three-quarters of one percent (0.75%).  Any amounts outstanding during the continuance

of an Event of Default shall bear interest at a per annum rate equal to five

percent (5.00%) in excess of the rate otherwise from time to time in effect but

for the occurrence of the Event of Default. 

If any change in the law increases Bank’s expenses or decreases its

return from the Equipment Advances (other than a change in law that results in

such increase or decrease solely because such change increases the taxes

payable by Bank upon its net revenues), Borrower will pay Bank upon request the

amount of such increase of expenses or an amount equal to the difference

between Bank’s anticipated return from the Equipment Advances and the decreased

return actually received by Bank (as the case may be).




 




(c)                                  If

the Equipment Advances are accelerated following the occurrence of an Event of

Default, then Borrower will immediately pay to Bank, without duplication,

(i) all unpaid Scheduled Payments (including principal and interest), (ii)

the principal amount of all remaining Scheduled Payments, (iii) all accrued

and unpaid interest, including the default rate of interest, to the date of the

prepayment, and (iv) all other sums, if any, that shall have become due

and payable with respect to the Equipment Advances.




 




3.4                                 Reporting

Requirements.  Section 6.2 of

the Loan Agreement is hereby amended to read in full as follows:




 




6.2                                 Financial

Statements, Reports, Certificates.




 




(a)

Borrower will deliver to Bank:  (i) as

soon as available, but no later than 45 days after the last day of each

calendar quarter, company-prepared unaudited balance sheets and income

statements covering the operations of Borrower and its Subsidiaries during the

period, certified by a Responsible Officer and in a form acceptable to Bank;

(ii) as soon as available but no later than 120 days after the last day of

Borrower’s fiscal year, audited financial statements for Borrower, and its

Subsidiaries prepared under GAAP, consistently applied, together with an

unqualified opinion on the financial statements from an independent certified

public accounting firm reasonably acceptable to Bank; (iii) a prompt

report of any legal actions pending or threatened against Borrower or any

Subsidiary that could result in damages or costs to Borrower or any Subsidiary

of $250,000 or more; and (iv) prompt notice of any material change in the

composition of the Intellectual Property, including any subsequent ownership

right of Borrower or any Subsidiary in or to any Copyright, Patent or Trademark

not shown in any intellectual property security agreement between Borrower and

Bank or knowledge of an event that could reasonably be expected to materially

adversely affect the value of the Intellectual Property.




 




(b)  Within 45 days after the last day of

each calendar quarter, Borrower will deliver to Bank a Compliance Certificate

in the form of Exhibit C, signed by a Responsible Officer.




 




(c)  Borrower will allow Bank to audit the

Collateral at Borrower’s expense.  Such

audits shall be conducted one every twelve months, commencing no later than

April 30, 2003, unless an Event of Default has occurred and is continuing

(in which case the foregoing limitation on frequency will not apply).




 




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3.5                                 Deposits.  Section 6.6 of the Loan Agreement is

hereby amended to read in full as follows:




 




6.6                                 Deposits.




 




Until all Obligations are

paid in full, Borrower will maintain in accounts with Bank and its Affiliates

an amount equal to at least $30,000,000 (as of each quarter-end) or $25,000,000

(at all other times) of Borrower’s Unrestricted Cash, net of all borrowings

under this Agreement.  In addition,

Borrower will at all times maintain an operating account with Bank.




 




3.6                                 Financial

Covenants.




 




(a)                                  The

financial covenant set forth in Section 6.7(a) of the Loan Agreement is

hereby deleted in full.




 




(b)                                 Bank

hereby waives Borrower’s failure to comply with the covenant set forth in

Section 6.7(a) of the Loan Agreement for the period of February 9-27, 2004.




 




3.7                                 Definitions.  The following Definitions are hereby amended

as follows:




 




“Advances”

are the aggregate of (i) the then-outstanding principal balance of all

Revolving Advances, (ii) all amounts utilized under the Cash Management

Services Sublimit, (iii) the then-outstanding principal balance of the

Equipment Advances, (iv) the face amount of all outstanding Letters of Credit

(including drawn but unreimbursed Letters of Credit), and (v) all amounts

utilized under the FX Sublimit.




 




“Committed

Equipment Line” is $500,000 of Equipment Advances.




 




“Commitment

Termination Date” is February 26, 2005.




 




“Credit

Extension” is each Revolving Advance, Equipment Advance, Cash

Management Service, Letter of Credit, FX Forward Contract or any other

extension of credit made by Bank to Borrower or for Borrower’s benefit.




 




“Equipment”

is all present and future machinery, equipment, tenant improvements, furniture,

fixtures, vehicles, tools, parts and attachments in which Borrower has any

interest.




 




“Equipment

Advance” is defined in Section 2.1.5.




 




“Equipment

Maturity Date” is, as to each Equipment Advance, the last day of the

Repayment Period for such Equipment Advance or, if earlier, the date of

acceleration of the Equipment Advance by Bank following an Event of Default.




 




“Funding Date”

is a date on which an Equipment Advance is made to or on account of Borrower.




 




“Prime Rate”

is Bank’s most recently announced “prime rate,” even if it is not the lowest

rate at which Bank makes loans or otherwise extends credit.  The Prime Rate may change from time to time

over the term of




 




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this Agreement,

but in no event shall the Prime Rate at any time be lower than four percent

(4%) for purposes of this Agreement.




 




“Repayment

Period”  as to each Equipment

Advance is 36 months.




 




“Revolving

Maturity Date”  is February

26, 2005.




 




“Scheduled

Payments” is described in Section 2.3.2(a).




 




3.8                                 Amended

Exhibit C.  Exhibit C to the

Loan Agreement is hereby amended to read in full as attached hereto as

Attachment No. 1.




 




4.                                       CONSISTENT CHANGES.  The Existing Loan Documents are

hereby amended wherever necessary to reflect the changes described in Section 3

hereof.




 




5.                                       NO DEFENSES OF BORROWER.  Borrower

agrees that, as of the date hereof, it has no defenses against the obligations

to pay any amounts of the Indebtedness.




 




6.                                       CONTINUING VALIDITY.  Borrower

understands and agrees that in modifying the Existing Loan Documents, Bank is

relying upon Borrower’s representations, warranties and agreements, all as set

forth in the Existing Loan Documents. 

Except as expressly modified pursuant to this Fifth Modification, the

terms of the Existing Loan Documents remain unchanged and in full force and

effect, and hereafter the Existing Loan Documents shall include the terms of

this Fifth Modification as if set forth therein in full.  Bank’s agreement to modifications to the

Existing Loan Documents pursuant to this Fifth Modification shall in no way

obligate Bank to make any future modifications to the Existing Loan

Documents.  Nothing in this Fifth

Modification shall constitute a satisfaction of the Indebtedness or any portion

thereof.  It is the intention of Bank

and Borrower to retain as liable parties all makers and endorsers of Existing

Loan Documents, unless the party is expressly released by Bank in writing, and no

maker, endorser or guarantor will be released by virtue of this Fifth

Modification.  The terms of this

paragraph apply not only to this Fifth Modification, but also to all subsequent

loan modification agreements.




 




7.                                       CONDITION PRECEDENT TO EFFECTIVENESS.  Before

this Fifth Modification, and Bank’s and Borrower’s respective rights and

obligations hereunder, shall be effective Borrower shall have paid to Bank all

Bank Expenses incurred by Bank in connection with its entering into this Fifth

Modification.  Borrower will pay Bank a

Loan Fee for this Fifth Amendment as follows: 

(i) for the Equipment Advances, $5,000.00 on the date hereof; and (ii)

for the renewal of the Revolving Advances, $34,062.50 on the date hereof

and  $34,062.50 on August 27, 2004.




 




 




IN WITNESS WHEREOF, each of the parties hereto has

caused its duly authorized representative to execute and deliver this Fifth

Modification as of the date first set forth above.




 




 




	

  BORROWER:


  	

   


  	

  BANK:


  
	

   


  	

   


  	

   


  
	

  BROADVISION, INC.,


  	

   


  	

  SILICON VALLEY BANK,


  
	

  a Delaware corporation


  	

   


  	

  a California-chartered bank


  
	

   


  	

   


  	

   


  
	

  By:


  	

      /s/

  William E. Meyer


  	

   


  	

  By:


  	

      /s/

  Armand Zand


  
	

  Name:


  	

  William E. Meyer


  	

   


  	

  Name:


  	

  Armand Zand


  
	

  Title:


  	

  Chief

  Financial Officer


  	

   


  	

  Title:


  	

  Vice

  President


  
							





 




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ATTACHMENT NO. 1




 




REVISED FORM OF




 




EXHIBIT C




 




COMPLIANCE

CERTIFICATE




 




	

  TO:


  	

   


  	

  SILICON VALLEY BANK


  
	

  FROM:


  	

   


  	

  BROADVISION, INC.


  
	

  DATED:


  	

   


  	

   


  	

   


  





 




The undersigned authorized officer (the “Officer”) of

Broadvision, Inc. (“Borrower”) certifies that, under the terms and conditions

of the Amended and Restated Loan and Security Agreement dated as of March 31,

2002 between Borrower and Bank (as amended from time to time, the “Agreement”):

(i) Borrower is in complete compliance for the period ending on the date

first set forth above with all required covenants except as noted below and

(ii) all representations and warranties in the Agreement are true and

correct in all material respects on this date. 

In addition, the Officer certifies that Borrower and each Subsidiary (a)

has timely filed all required tax returns and paid, or made adequate provision

to pay, all material taxes, except those being contested in good faith with

adequate reserves under Generally Accepted Accounting Principles (GAAP) and (b)

does not have any legal actions pending or threatened against Borrower or any

Subsidiary which Borrower has not previously notified in writing to Bank.  Attached are the required documents

supporting the certification.  The

Officer 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 Officer

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.




 




Please indicate compliance status by circling Yes/No under

“Complies” column.




 




	

  Reporting Covenants


  	

   


  	

  Required


  	

   


  	

   


  	

   


  	

  Complies


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  1.  Interim financial statements + CC


  	

   


  	

  Quarterly within 45

  days


  	

   


  	

   


  	

   


  	

  Yes


  	

   


  	

  No


  
	

  2.  Annual audited financial statements + CC


  	

   


  	

  Within 120 days of FYE


  	

   


  	

   


  	

   


  	

  Yes


  	

   


  	

  No


  





 




	

  Financial Covenant


  	

   


  	

  Required


  	

   


  	

  Actual


  	

   


  	

  Complies


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Minimum Net Income


  	

   


  	

  $1.00 for each quarter


  	

   


  	

   


  	

   


  	

  Yes


  	

   


  	

  No


  





 




	

  Deposit Covenant


  	

   


  	

  Required


  	

   


  	

  Actual


  	

   


  	

  Complies


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Deposits with Bank and

  its Affiliates


  	

   


  	

  An amount equal to at

  least $30,000,000 of Borrower’s Unrestricted Cash, net of all borrowings

  under the Agreement, at each quarter-end and $25,000,000 at all other times


  	

   


  	

   


  	

   


  	

  Yes


  	

   


  	

  No


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Have there been updates

  to Borrower’s intellectual property?


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  Yes


  	

   


  	

  No


  





 































 




Comments Regarding Exceptions:  See Attached.




 




	

   


  	

   


  	

  BANK USE ONLY


  
	

   


  	

   


  	

  Received by:


  	

   


  
	

   


  	

   


  	

  authorized signer


  
	

  Sincerely,


  	

   


  	

  Date:


  	

   


  
	

   


  	

   


  	

   


  
	

  Broadvision, Inc.,


  	

   


  	

  Verified:


  	

   


  
	

  a Delaware corporation


  	

   


  	

  authorized signer


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Signature


  	

   


  	

  Date:


  	

   


  
	

   


  	

   


  	

   


  
	

  Title


  	

   


  	

  Compliance Status:


  	

  Yes


  	

  No


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Date