Exhibit103AmendmentThreetoCreditAgreement










EXHIBIT 10.3


AMENDMENT NUMBER THREE TO CREDIT AGREEMENT




This Amendment Number Three to Credit Agreement (this “Amendment”) is entered into as of September 16, 2014, by and among, on the one hand, the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns  in  such  capacity,  “Agent”)  and  CALLIDUS SOFTWARE, INC.,  a  Delaware  corporation (“Borrower”), on the other hand, in light of the following:


A.         Borrower, Agent and Lenders are parties to that certain Credit Agreement, dated as of
May 13, 2014 (as amended and modified, from time to time, the “Credit Agreement”).


B.         Borrower intends to acquire Clicktools Ltd., a company organized under the laws of England and Wales (“Clicktools”) pursuant that certain Agreement Relating to the Sale and Purchase of all the Issued Share Capital of Clicktools Limited, dated as of September 16, 2014, by and among certain parsons signatory to the same as vendors, Dorset Acquisition Corp., as purchaser, and Borrower, as Parent (the “Clicktools Purchase Agreement”).


C.         Borrower, Agent and Lenders desire to amend the Credit Agreement as provided for and on the conditions herein.


NOW, THEREFORE, the parties hereby amend and supplement the  Credit Agreement as follows:


1.         DEFINITIONS.  All initially capitalized terms used in this Amendment shall have the meanings given to them in the Credit Agreement unless specifically defined herein.


2.         AMENDMENTS.


2.1        The definition of “Immaterial Subsidiary” set forth in Schedule 1.1 to the Credit
Agreement is hereby amended to read as follows:


“Immaterial Subsidiary” means (I) Clicktools for the period commencing on the closing of the Clicktools Acquisition and ending on March 31, 2015 and (II) at any time, each Subsidiary of Borrower (including Clicktools after March 31,
2015) which is  designated in  a  written notice by  Borrower to  Agent as  an “Immaterial Subsidiary,” (a) for which revenue for the most recently ended fiscal quarter is less than 3% of the aggregate revenue for Borrower and its Subsidiaries for such fiscal quarter, (b) for which revenue for the most recently ended fiscal quarter (when aggregated with revenue for all other Immaterial Subsidiaries for such fiscal quarter) is less than 5% of the aggregate revenue for Borrower and its Subsidiaries for such fiscal quarter, (c) for which the fair market value or net book value of the consolidated assets as of the last day of the most recently ended fiscal quarter is less than 3% of the fair market value or net book value of the consolidated assets of Borrower and its Subsidiaries as of such date, (d) for which the fair market value or net book value of the consolidated assets as of the last day of the most recently ended fiscal quarter (when aggregated with the fair market value or net book value of the consolidated assets for all other Immaterial
Subsidiaries) is less than 5% of the fair market value or net book value of the consolidated assets of Borrower and its Subsidiaries as of such date, and (e) that does not conduct operations material to the business of the Loan Parties, and (f) that does not own any intellectual property used in the business of the Loan Parties.  As of the Closing Date, the Immaterial Subsidiaries are as set forth on Schedule I-1.


2.2        The  following  definitions  are  hereby  added  to  Schedule  1.1  to  the  Credit
Agreement in the appropriate alphabetical order:


“Clicktools” means Clicktools Limited, a company organized under the laws of England and Wales.


“Clicktools Acquisition” means the acquisition by Dorset Acquisition Corp. of all outstanding capital stock of Clicktools pursuant to the terms of the Clicktools Purchase Agreement.


“Clicktools Purchase Agreement” means that certain Agreement Relating to the Sale and Purchase of all the Issued Share Capital of Clicktools Limited, dated as of September 16, 2014, by and among certain parsons signatory to the ssame as vendors and Dorset Acquisition Corp., as purchaser.


“Third Amendment” means that certain Amendment Number Three to
Credit Agreement, dated as of September 16, 2014.


3.         CONSENT TO ACQUISITION.   The execution and delivery by Borrower of the Clicktools Purchase Agreement and the consummation of the Clicktools Acquisition would violate certain of the terms and provisions of the Loan Documents, including, without limitation, Sections 6.3(a) and 6.9 of the Credit Agreement.   Borrower has requested that the Lender Group consent to the Clicktools Acquisition, and the Lender Group as of the effective date of the Third Amendment consents to such Clicktools Acquisition so long as at the time of the consummation of the Clicktools Acquisition: (i) no Default or Event of Default exists and (ii) Borrower has Availability plus Qualified Cash in an amount equal to or greater than $15,000,000.   The foregoing consent shall be effective only in this specific instance and for the specific purpose for which it is given, and this consent shall not entitle Borrower to any other consent or waiver in any similar or other circumstances. The foregoing consent shall be limited precisely as written and shall not be deemed to (a) be a waiver or modification of any other term or condition of the Credit Agreement or any documents related thereto, or (b) prejudice any right or remedy which the Lender Group may now have or may have in the future under or in connection with the Credit Agreement or any documents related thereto.


4.         REPRESENTATIONS AND WARRANTIES.  Borrower hereby affirms to Agent, for the benefit of the Lender Group, that, giving effect to this Amendment, all of its representations and warranties set forth in the Agreement are true, complete and accurate in all material respects as of the date hereof (except those which specifically relate to an earlier date).


5.         NO DEFAULTS.  Borrower hereby affirms to the Lender Group that, giving effect to this Amendment, no Event of Default has occurred and is continuing as of the date hereof.


6.         CONDITIONS PRECEDENT.   The effectiveness of this Amendment is expressly conditioned on receipt by Agent of a copy of this Amendment duly executed by Borrower, Lenders and Agent.
7.         CONDITION SUBSEQUENT.   On  or  before November 15, 2014, Borrower shall deliver to Agent a pro forma financial model reflecting the effects of the Clicktools Acquisition in form and substance satisfactory to Agent.   Failure to fulfill such conditions subsequent shall constitute an Event of Default under Section 8.2(a) of the Credit Agreement.


8.         COSTS AND EXPENSES. Borrower shall pay to Agent all of Agent’s documented out- of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of their counsel, which counsel may include any local counsel deemed necessary, search fees, filing and recording fees, documentation fees, appraisal fees, travel expenses, and other reasonable fees) arising in connection with the preparation, execution, and delivery of this Amendment and all related documents.


9.         COUNTERPARTS; EFFECTIVENESS.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be deemed to be an original. All such counterparts, taken together, shall constitute but one and the  same Amendment.   This Amendment shall become effective upon the  execution of  a counterpart of this Amendment by each of the parties hereto and satisfaction of the conditions set forth in Section 6 hereof.  Delivery of an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.


10.       FURTHER  ASSURANCES.    Borrower  shall  execute  and  deliver  all  agreements, documents and instruments, in form and substance reasonably satisfactory to Agent, and take all actions as Agent may reasonably request from time to time to perfect and maintain the perfection and priority of the security interests of Agent in the Collateral and to consummate fully the transactions contemplated under this Amendment and the other Loan Documents.


11.       EFFECT ON LOAN DOCUMENTS.


11.1      The  Credit  Agreement,  as  amended  hereby,  and  each  of  the  other  Loan Documents, as amended as of the date hereof, shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects.  The execution, delivery, and performance of this Amendment shall not operate, except as expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement or any other Loan Document.  Except for the amendments to the Credit Agreement expressly set forth herein, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect.  The consents, waivers and modifications set forth herein are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any future waiver of covenants or any other provision of the Credit Agreement will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by any Loan Party remains in the sole and absolute discretion of the Agent and the Lenders.


11.2      Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.


11.3      To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Credit Agreement, after giving effect  to  this  Amendment,  such  terms  and  conditions  are  hereby  deemed  modified  or  amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby.


11.4      This Amendment is a Loan Document.


11.5      Headings and numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Amendment.


11.6      Neither  this  Amendment  nor  any  uncertainty  or  ambiguity  herein  shall  be construed against Agent, any member of the Lender Group, the Bank Product Providers or any Loan Party, whether under any rule of construction or otherwise.  This Amendment has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.


11.7      The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.


11.8      Unless the context of this Amendment clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”.  The words “hereof”, “herein”, “hereby”, “hereunder”, and similar terms in this Amendment refer to this Amendment as a whole and not to any particular provision of this Amendment.   Section, subsection, clause, schedule, and exhibit references herein are to this Amendment unless otherwise specified.  Any reference in this Amendment to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).   The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights.  Any reference herein or in any other Loan Document to the satisfaction or repayment in full of the Obligations shall mean the repayment in full in cash or immediately available funds (or, in the case of Letters of Credit or Bank Products, providing Letter  of  Credit Collateralization  or  Bank Product Collateralization,  as  applicable) of  all Obligations other  than  unasserted contingent indemnification Obligations and  other  than  any  Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and that are not required by the provisions of the Credit Agreement to be repaid or cash collateralized.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.


12.       ENTIRE AGREEMENT.  This Amendment, and the terms and provisions hereof, the Credit Agreement and the other Loan Documents constitute the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous amendments or understandings with respect to the subject matter  hereof, whether express or implied, oral or written.


13.       REAFFIRMATION OF OBLIGATIONS.   Borrower hereby (a) acknowledges and reaffirms its obligations owing to Agent, the Bank Product Providers, and each other member of the
Lender Group under each Loan Document to which it is a party, and (b) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect.  Borrower hereby (i) further ratifies and reaffirms the validity and enforceability of all of the Liens and security interests heretofore granted, pursuant to and in connection with the Guaranty and Security Agreement or any other Loan Document, to Agent, on behalf and for the benefit of the Lender Group and the Bank Product Providers, as collateral security for the obligations under the Loan Documents in accordance with their respective terms, and (ii) acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof (including, without limitation, from after giving effect to this Amendment).


14.       RATIFICATION.  Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby.  All Obligations owing by Borrower are unconditionally owing by Borrower to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction of any kind, nature or description whatsoever.


15.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE.  THIS AMENDMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF  LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.


16.       SEVERABILITY.  In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.






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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.








BORROWER:                        CALLIDUS SOFTWARE, INC.
 a Delaware corporation
By: /s/ Bob L. Corey 
Name: Bob L. Corey
Title: SVP, CFO
         
















































































































 




WELLS FARGO BANK, NATIONAL   ASSOCIATION,
           as Agent and a Lender


         By: /s/ Lendell Thompson 
Name: Lendell Thompson
Title: Managing Director