**Exhibit10.36**

 

**SECONDMODIFICATION TO AMENDED AND RESTATEDLOAN AND SECURITY AGREEMENT**

 

This Second Modification toAmended and Restated Loan and Security Agreement (the “Modification”) isentered into as of June 30, 2003, by and between Broadvision, Inc., aDelaware corporation (the “Borrower”) and Silicon Valley Bank, aCalifornia-chartered bank (“Bank”).

 

1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS.  Amongother Indebtedness which may be owing by Borrower to Bank, Borrower is indebtedto Bank pursuant to that certain Amended and Restated Loan and SecurityAgreement dated as of March 31, 2002 as amended by that certainModification to Amended and Restated Loan and Security Agreement dated as ofFebruary 28, 2003 (as may be further amended from time to time, the “LoanAgreement”).  The Loan Agreementprovides for, among other things, a Committed Revolving Line in the originalprincipal amount of Twenty-Five Million Dollars ($25,000,000), Capitalizedterms used but not otherwise defined herein shall have the respective meaningsaccorded to them in the Loan Agreement; provided, that hereinafter allIndebtedness owing by Borrower to Bank under the Loan Agreement shall bereferred to as the “Indebtedness.”

 

2.                                       DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is secured by the Collateral as describedin 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 CHANGE IN TERMS OF EXISTING LOANDOCUMENTS.

 

3.1                                 CashManagement Services Sublimit.  Thefirst sentence of Section 2.1.2 of the Loan Agreement is amended to readin full as follows:

 

“Borrowermay use up to the maximum amount from time to time available under theCommitted Revolving Line (as adjusted from time to time pursuant toparagraph (a) of Section 2.1.1.) (the “Cash Management ServicesSublimit”) for Bank’s Cash Management Services, which may include merchantservices, direct deposit of payroll, automated clearing-house transactions,controlled disbursement accounts, business credit cards and check cashingservices, all as identified in various cash management services agreementsrelated to such services (“Cash Management Services”).

 

3.2                                 Interest on Revolving Advances.  Section2.3(a) of the Loan Agreement is hereby amended to read in full as follows:

 

(a)  Revolving Advances shall accrue interest onthe aggregate principal balance thereof from time to time outstanding at a perannum rate equal to the Prime Rate, and the Deferred Amount (if any) shallaccrue interest on the aggregate principal balance thereof from time to timeoutstanding at a per annum rate equal to the Prime Rate plus one-half percent(0.50%); provided, however, that if Borrower fails to maintain the followingminimum revenues (on a rolling six-month basis) for the corresponding six-monthperiods, Revolving Advances shall accrue interest at the per annum rate of thePrime Rate plus three-quarters percent (0.75%) and the Deferred Amount, if any,shall accrue interest at the per annum rate of the Prime Rate plus one andone-quarter percent (1.25%): (i) $48,000,000 for the six months ending June 30, 2003;(ii) $48,000,000 for the six months ending September 30, 2003; and(iii) $50,000,000 for every six-month period thereafter.  Term Loan #1 shall accrue interest on theaggregate principal balance thereof from time to time outstanding at a perannum rate equal to the Prime Rate. Term Loan #2 shall accrue interest on the aggregate principal balancethereof from time to time outstanding at a per annum rate equal to the PrimeRate plus one and one-quarter percent (1.25%). After an Event of Default, Obligations shall accrue interest at a rateequal to three percent (3.00%) above the respective rates effective for suchObligations immediately before the Event of Default. The interest rate shallincrease or decrease when the Prime Rate

 

1

----

 

changes.  Interest is computed on a 360-day year forthe actual number of days elapsed.

 

3.2                                 ReportingRequirements.  Section 6.2(c)of the Loan Agreement is hereby amended to read in full as follows:

 

(c)  Borrower will allow Bank to audit theCollateral at Borrower’s expense.  Suchaudits shall be conducted once every twelve months, commencing no later thanJuly 31, 2003, unless an Event of Default has occurred and is continuing(in which case the foregoing limitation on frequency will not apply).

 

3.3                                 Deposits.  Section 6.6of the Loan Agreement is hereby amended to read in full as follows:

 

6.6                                 Deposits.

 

Borrower will at alltimes, until all Obligations are paid in full, maintain in accounts with Bankand its Affiliates an amount equal to at least $40,000,000 of Borrower’sUnrestricted Cash, net of all borrowings under this Agreement.  In addition, Borrower will at all timesmaintain an operating account with Bank.

 

3.4                                 FinancialCovenants.  Section 6.7(a) of theLoan Agreement is hereby amended to read in full as follows:

 

(a)  Until all Obligations are paid in full,Borrower will maintain the following minimum amounts on Borrower’s balancesheet as Unrestricted Cash, cash equivalents and long-term investments(exclusive of equities holdings), in each case net of all borrowings under thisAgreement:  (i) $55,000,000 throughSeptember 30, 2003; (ii) $50,000,000 through December 31, 2003;and (iii) $45,000,000 thereafter.

 

3.5                                 Definitions.  The following definition in Section 13.1 of the Loan Agreement is hereby amended to readin full as follows:

 

“**Committed Revolving Line**” is $27,250,000.

 

3.6                                 AmendedExhibit C.  Exhibit C of theLoan Agreement is hereby amended to read in full as attached hereto asAttachment No. 1.

 

4.                                       CONSISTENT CHANGES.  TheExisting Loan Documents are hereby amended wherever necessary to reflect thechanges described in Section 3 hereof.

 

5.                                       NO DEFENSES OF BORROWER.  Borroweragrees that, as of the date hereof, it has no defenses against the obligationsto pay any amounts of the Indebtedness.

 

6.                                       CONTINUING VALIDITY.  Borrowerunderstands and agrees that in modifying the Existing Loan Documents, Bank isrelying upon Borrower’s representations, warranties and agreements, all as setforth in the Existing Loan Documents. Except as expressly modified pursuant to this Second Modification, theterms of the Existing Loan Documents remain unchanged and in full force andeffect, and hereafter the Existing Loan Documents shall include the terms ofthis Second Modification as if set forth therein in full.  Bank’s agreement to modifications to theExisting Loan Documents pursuant to this Second Modification shall in no wayobligate Bank to make any future modifications to the Existing Loan Documents.  Nothing in this Second Modification shallconstitute a satisfaction of the Indebtedness or any portion thereof.  It is the intention of Bank and Borrower toretain as liable parties all makers and endorsers of Existing Loan Documents,unless the party is expressly released by Bank in writing, and no maker, endorseror guarantor will be released by virtue of this Second Modification.  The terms of this paragraph apply not onlyto this Second Modification, but also to all subsequent loan modificationagreements.

 

2

----

 

7.                                       CONDITION PRECEDENT TO EFFECTIVENESS.  Beforethis Second Modification, and Bank’s and Borrower’s respective rights andobligations hereunder, shall be effective Borrower shall have paid to Bank acommitment fee of $2,500.00 and all Bank Expenses incurred by Bank inconnection with its entering into this Second Modification.

 

IN WITNESS WHEREOF, each of theparties hereto has caused its duly authorized representative to execute anddeliver this Second Modification as of the date first set forth above.

 
| **BORROWER:**                                  | **BANK:**                                             |
|------------------------------------------------|-------------------------------------------------------|
|                                           |                                                  |
| **BROADVISION, INC.,  a Delaware corporation** | **SILICON VALLEY BANK,  a California-chartered bank** |
|                                           |                                                  |
|                                           |                                                  |
| By:                                            | /s/ William E. Meyer                                  |   | By: | /s/  Arman Band |   |
| Name:                                          |                                                  | William  E. Meyer |   | Name: |   | Arman  Band |   |
| Title:                                         |                                                  | Chief  Financial Officer |   | Title: |   | Vice  President |   |
|                                                |                                                       |  |  |  |  |  |  |  |  |  |  |

 

3

----