**Exhibit10.39**

 

**THIRDMODIFICATION TO AMENDED AND RESTATEDLOAN AND SECURITY AGREEMENT**

 

This Third Modification to Amended and Restated Loan and SecurityAgreement (the “Modification”) is entered into as of June 30, 2003, by andbetween Broadvision, Inc., a Delaware corporation (the “Borrower”) and SiliconValley Bank, a California-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 certain Modification toAmended and Restated Loan and Security Agreement dated as of February 28,2003, and that certain Second Modification to Amended and Restated Loan andSecurity Agreement dated as of even date herewith (as may be further amendedfrom time to time, the “Loan Agreement”). The Loan Agreement provides for, among other things, a CommittedRevolving Line in the principal amount of Twenty-Seven Million Two HundredFifty Thousand Dollars ($27,250,000). Capitalized terms used but not otherwisedefined herein shall have the respective meanings accorded to them in the LoanAgreement; provided that hereinafter all indebtedness owing by Borrower to Bankunder the Loan Agreement shall be referred 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                                 FinancialCovenants.  Section 6.7(b) of theLoan Agreement is hereby amended to read in full as follows:

 

(b)  Until allObligations are paid in full, Borrower shall maintain minimum quarterly netincome (calculated in accordance with GAAP but excluding charges related to theimpairment of Goodwill and Intangibles and any non-cash portion ofrestructuring charges) for each of Borrower’s fiscal quarters as follows: (i)<$500,000> for the fiscal quarter ending June 30, 2003; and (ii) $1.00for each fiscal quarter thereafter.

 

3.2                                 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 Third 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 Third Modification as if set forth therein in full.  Bank’s agreement to modifications to theExisting Loan Documents pursuant to this Third Modification shall in no wayobligate Bank to make any future modifications to the Existing LoanDocuments.  Nothing in this ThirdModification shall constitute a satisfaction of the Indebtedness or any portionthereof.  It is the intention of Bankand Borrower to retain as liable parties all makers and endorsers of ExistingLoan Documents, unless the party is expressly released by Bank in writing, andno maker, endorser or guarantor will be released by virtue of this ThirdModification.  The terms of thisparagraph apply not only to this Third Modification, but also to all subsequentloan modification agreements.

 

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7.                                       CONDITION PRECEDENT TO EFFECTIVENESS.  Beforethis Third Modification, and Bank’s and Borrower’s respective rights andobligations hereunder, shall be effective Borrower shall have paid to Bank allBank Expenses incurred by Bank in connection with its entering into this ThirdModification.

 

IN WITNESS WHEREOF, each of the parties hereto has caused its dulyauthorized representative to execute and deliver this Third Modification as ofthe date first set forth above.

 
| **BORROWER:**              | **BANK:**                       |
|----------------------------|---------------------------------|
|                       |                            |
| **BROADVISION, INC.,**     | **SILICON VALLEY BANK,**        |
| **a Delaware corporation** | **a California-chartered bank** |
|                       |                            |
| By:                        |                            |   | By: |   |   |
| Name:                      |                            |   | Name: |   |   |
| Title:                     |                            |   | Title: |   |   |
|                            |                                 |  |  |  |  |  |  |  |  |

 

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**ATTACHMENT NO. 1**

 

**REVISEDFORM OF**

 

**EXHIBITC**

 

COMPLIANCE CERTIFICATE

 
| TO:    |   | SILICON  VALLEY BANK                                                                                                                                                                                                                 |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| FROM:  |   | BROADVISION, INC.                                                                                                                                                                                                                    |
| DATED: |   |                                        |

 

The undersignedauthorized officer of Broadvision, Inc. (“Borrower”) certifies that under theterms and conditions of the Amended and Restated Loan and Security Agreementdated as of March 31, 2002 between Borrower and Bank (as amended from time totime, the “Agreement”), (i) Borrower is in complete compliance for theperiod ending on the date first set forth above with all required covenantsexcept as noted below and (ii) all representations and warranties in theAgreement are true and correct in all material respects on this date.  Attached are the required documentssupporting the certification.  TheOfficer certifies that these are prepared in accordance with Generally AcceptedAccounting Principles (GAAP) consistently applied from one period to the nextexcept as explained in an accompanying letter or footnotes.  The Officer acknowledges that no borrowingsmay be requested at any time or date of determination that Borrower is not incompliance with any of the terms of the Agreement, and that compliance isdetermined not just at the date this certificate is delivered.

 

**Please indicate compliance status bycircling 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 |
| 3.  Schedule of A/R + A/P Agings             |   | Quarterly within 45  days                                                                                                |   |       |   | Yes          |   | No |
| 4.  Deferred Revenue Schedule                |   | Quarterly within 45  days                                                                                                |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
| **Financial Covenants**                           |   | **Required**                                                                                                             |   | **Actual** |   | **Complies** |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
| 1.  Minimum unrestricted balance sheet cash  |   | (i)             $55,000,000 through 9/30/03                  |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
|                                              |   | (ii)          $50,000,000 through 12/31/03                                  |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
|                                              |   | (iii)       $45,000,000 thereafter                                                         |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
| 2.  Minimum Net Income                       |   | (i)             <$500,000> for quarter ending  6/30/03 |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
|                                              |   | (ii)          $1.00 for each quarter thereafter                             |   |       |   | Yes          |   | No |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
| **Deposit Covenant**                              |   | **Required**                                                                                                             |   | **Actual** |   | **Complies** |
|                                              |   |                                                                                                                     |   |       |   |         |   |   |
| Deposits with Bank and its Affiliates             |   | An amount equal to at least $40,000,000 of Borrower’s Unrestricted  Cash, net of all borrowings under the Agreement |   |       |   | Yes          |   | No |

 

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| 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 |
|                                                   |              |   |
|                                                   |              | Date: |   |
| SIGNATURE                                              |              |   |
|                                                   |              | Compliance Status: | Yes | No |
| TITLE                                                  |              |   |
|                                                   |              |   |   |   |
| DATE                                                   |              |   |   |   |
|                                                        |                   |  |  |  |  |  |  |  |  |  |

 

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