Document:

LOAN MODIFICATION AGREEMENT

EXHIBIT 10.1

 

LOAN MODIFICATION AGREEMENT

 

This Loan Modification

Agreement is entered into as of April 15, 2002, by and between SENTO

CORPORATION, and SENTO TECHNICAL SERVICES CORPORATION (jointly and severally

the “Borrower”) and Silicon Valley 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, among other documents, an Amended and Restated Loan and

Security Agreement, dated December 22, 1999, as may be amended from time to

time, (the “Loan Agreement”).  The Loan

Agreement provided for, among other things, a Committed Revolving Line in the

original principal amount of Two Million Dollars ($2,000,000) and a Committed

Equipment Line in the original principal amount of One Hundred Thousand Dollars

($100,000).  Pursuant to a Loan

Modification Agreement dated April 28, 2000, the Committed Revolving Line was

increased to Three Million Dollars ($3,000,000) and a Term Loan Commitment was

incorporated, in the original principal amount of Five Hundred Thousand Dollars

($500,000). Additionally, pursuant to a Loan Modification Agreement dated

November 7, 2000, the Term Loan Commitment was increased to Two Million Dollars

($2,000,000). Defined terms used but not otherwise defined herein shall have

the same meanings as set forth in the Loan Agreement.

 

Hereinafter, all indebtedness

owing by Borrower to Bank 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.

 

Hereinafter, the

above-described security documents and guaranties, together with all other

documents securing repayment of the Indebtedness shall be referred to as the

“Security Documents”.  Hereinafter, the

Security Documents, 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.

 

A.            Modification(s)

to Loan Agreement.

 

1.                                       Sub-letter (a)

under Section 2.1.1 entitled “Revolving Advances” is hereby amended to read as

follows: 

 

(a)           Through the month

ending October 31, 2002, Bank will make Advances not exceeding the lesser of

(A) the Committed Revolving Line or (B) (i) the Borrowing Base, minus (ii) the

outstanding amount of the Term Loan Commitment and the outstanding amount of

the Committed Equipment Line. Beginning with the month ending November 30,

2002, Bank will make Advances not exceeding the lesser of (A) the Committed

Revolving Line or (B) the Borrowing Base. 

Amounts borrowed under this Section may be repaid and reborrowed during

the term of this Agreement.

 

2.                                       Section 6.5

entitled “Primary Accounts” is hereby amended to read as follows:

 

Borrower will maintain with Bank its primary depository and operating

accounts and at least 50% of all investment account balances of Borrower.

 

3.                                       Section 6.6

entitled “Financial Covenants” is hereby amended in its entirety to read as

follows:

 

Borrower will maintain as of the last day of each month (unless

otherwise noted):

 

 

(i)                                     Adjusted Quick

Ratio.  A ratio of Quick Assets to

Current Liabilities minus Deferred Revenue of at least 1.50 to 1.00.

 

(ii)                                  Debt Service

Coverage.  Borrower will maintain, as of

the last day of each quarter, a Debt Service Coverage Ratio of not less than

1.50 to 1.00, provided, however, the Debt Service Coverage covenant shall not

be tested for the quarter ending June 30, 2002. For purposes of this covenant,

“Debt Service Coverage Ratio” means the sum of quarterly net income before

taxes, amortization, depreciation and interest expense divided by the sum of

25% of current maturities of long-term debt (“CMLTD”) plus interest for the

quarter.

 

(iii)                               Tangible Net Worth.  Beginning with the month ending April 30,

2002 and through the month ending August 31, 2002, a Tangible Net Worth of at

least $4,500,000, provided, however, the Tangible Net Worth covenant shall not

be tested for the month ending September 30, 2002 and thereafter.

 

(iv)                              Profitability.  Borrower shall not incur a loss (as defined

below) for any two consecutive months, and shall not incur an aggregate loss

for any fiscal quarter, provided, however, the Profitability covenant shall not

be tested for the month ending April 30, 2002 through the month ending June 30,

2002.  For purposes of this covenant,

“loss” means net income after taxes of less than $0.00, as reported on

Borrower’s consolidated financial statement.

 

4.                                       The following

defined terms under Section 13.1 entitled “Definitions” are hereby amended to

read as follows:

 

Sub-letter (d) under defined term “Eligible Accounts” is hereby amended

to read as follows:

 

(d) Accounts from an Account Debtor, including affiliates, whose total

obligations to Borrower exceed 25% of all Accounts for the amounts that exceed

that percentage, except for Intuit, Inc. and Network Associates (US), whose

accounts shall not exceed 50% of all Accounts, unless Bank approves in writing.

 

“Eligible Foreign Accounts” are Accounts for which the account debtor

does not have its principal place of business in the United States but are: (1)

covered by credit insurance satisfactory to Bank, less any deductible; or (2)

supported by letter(s) of credit acceptable to Bank; or (3) that Bank approves

in writing, which as of the date hereof consists of Network Associates Europe,

subject to the limitations applicable to all “Eligible Accounts.”

 

“Revolving Maturity Date” is April 14, 2003.

 

“Tangible Net Worth” is, on any date, (a) the consolidated total assets

of Borrower and its Subsidiaries, minus (b) any amounts attributable to

(i) goodwill, (ii) intangible items such as unamortized debt discount and

expense, Patents, trade and service marks and names, Copyrights and research

and development expenses except prepaid expenses, and including as intangible

items inter-company receivables from foreign Subsidiaries and any investments

by Borrower in foreign Subsidiaries, (iii) reserves not already deducted from

assets, and (iv) Total Liabilities plus (c) Subordinated Debt.

 

2

 

B.            Waiver-of Financial Covenant Default(s)

 

1.                                        Bank hereby waives Borrower’s existing default

under the Loan Agreement by virtue of Borrower’s failure to comply with the

Debt Service Coverage covenant as of quarter ended March 30, 2002. Bank’s

waiver of Borrower’s compliance of this covenant shall apply only to the

foregoing period. Accordingly, Borrower shall be in compliance with this

covenant, as amended herein.

 

Bank’s

agreement to waive the above-described default (1) in no way shall be deemed an

agreement by the Bank to waive Borrower’s compliance with the above-described

covenant as of all other dates and (2) shall not limit or impair the Bank’s

right to demand strict performance of this covenant as of all other dates and

(3) shall not limit or impair the Bank’s right to demand strict performance of

all other covenants as of any date.

 

4.             CONSISTENT CHANGES.  The Existing Loan Documents are hereby

amended wherever necessary to reflect the changes described above.

 

5.             NO DEFENSES OF BORROWER.  Borrower agrees that, as of the date hereof,

it has no defenses against the obligations to pay any amounts under the

Indebtedness.

 

6.             PAYMENT OF LOAN FEE.  Borrower shall pay Bank a fee in the amount

of Fifteen Thousand Dollars ($15,000.00) (“Loan Fee”) plus all out-of-pocket

expenses.

 

7.             CONTINUING VALIDITY.  Borrower understands and agrees that in

modifying the existing Indebtedness, Bank is relying upon Borrower’s

representations, warranties, and agreements, as set forth in the Existing Loan

Documents.  Except as expressly modified

pursuant to this Loan Modification Agreement, the terms of the Existing Loan

Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the

existing Indebtedness pursuant to this Loan Modification Agreement in no way

shall obligate Bank to make any future modifications to the Indebtedness.  Nothing in this Loan Modification Agreement

shall constitute a satisfaction of the Indebtedness.  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. 

Unless expressly released herein, no maker, endorser, or guarantor will

be released by virtue of this Loan Modification Agreement.  The terms of this paragraph apply not only

to this Loan Modification Agreement, but also to all subsequent loan

modification agreements.

 

8.             CONDITIONS.  The effectiveness of this Loan Modification

Agreement is conditioned upon payment of the Loan Fee.

 

3

 

This Loan

Modification Agreement is executed as of the date first written above.

 

	

  BORROWER:

  	

  BANK:

  
	

   

  	

   

  
	

  SENTO CORPORATION

  	

  SILICON VALLEY BANK

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
								

 

 

SENTO

TECHNICAL SERVICES CORPORATION

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
				

 

4

SILICON VALLEY BANK

 

PRO FORMA INVOICE FOR LOAN CHARGES

 

	

   

  	

   

  	

   

  	

   

  
	

  BORROWER:

  	

   

  	

  SENTO

  CORPORATION

  	

   

  
	

   

  	

   

  	

  SENTO

  TECHNICAL SERVICES CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

  LOAN

  OFFICER:

  	

   

  	

  Ron C.

  Sherman

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  DATE:

  	

   

  	

  April 15,

  2002

  	

   

  

 

	

   

  	

   

  	

  Loan Fee

  	

  $

  	

  15,000.00

  	

   

  
	

   

  	

   

  	

  Documentation

  Fee

  	

  $

  	

  750.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  TOTAL FEE

  DUE

  	

  $

  	

  15,750.00

  	

   

  

 

Please indicate the method of

payment:

 

{ } A check for the total amount is attached.

 

{ } Debit

DDA#                         for

the total amount.

 

 

	

   

  	

   

  
	

  Borrower

  	

  (Date)

  
			

 

 

	

   

  	

   

  
	

  Silicon

  Valley Bank

  	

  (Date)

  
	

  Account

  Officer’s Signature

  	

   

  
			

 

 

COMPLIANCE CERTIFICATE

 

TO:                                                                         SILICON VALLEY BANK

3003

Tasman Drive

Santa

Clara, CA 95054

 

FROM:                                                      SENTO

CORPORATION

SENTO TECHNICAL SERVICES CORPORATION

 

The undersigned authorized officer of SENTO CORPORATION, and SENTO

TECHNICAL SERVICES CORPORATION (jointly and severally the “Borrower”) certifies

that under the terms and conditions of the Loan and Security Agreement between

Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for

the period ending

                      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. Attached are the required documents supporting the certification.

The Officer certifies that these are prepared in accordance with Generally

Accepted Accounting Principles (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

  Covenant

  	

   

  	

  Required

  	

   

  	

   

  	

   

  	

  Complies

  
	

  Interim consolidated financial statements + CC

  	

   

  	

  Monthly within 30 days

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  10-Q, 10-K

  	

   

  	

  Within 5 days after filing with SEC

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  A/R, A/P & BBC

  	

   

  	

  Monthly within 20 days

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  A/R Audit

  	

   

  	

  Annually

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Financial

  Covenant

  	

   

  	

  Required

  	

   

  	

  Actual

  	

   

  	

  Complies

  
	

  Maintain on a Monthly Basis:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Minimum Quick Ratio (Adjusted)

  	

   

  	

  1.50:1.00

  	

   

  	

   

  	

  :1.00

  	

   

  	

  Yes

  	

  No

  
	

  Profitability

  	

   

  	

  $

  	

  0

  	

  *

  	

   

  	

  $

  	

   

  	

  Yes

  	

  No

  
	

  Minimum Tangible Net Worth

  	

   

  	

  $

  	

  4,500,000

  	

  **

  	

   

  	

  $

  	

   

  	

  Yes

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Maintain on a Quarterly Basis:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Debt Service Coverage Ratio***

  	

   

  	

  1.50:1.00

  	

   

  	

   

  	

  :1.00

  	

   

  	

  Yes

  	

  No

  

 

*Borrower

shall not incur a loss for any two consecutive months, and shall not incur an

aggregate loss for any fiscal quarter, provided, however, the Profitability

covenant shall not be tested for the month ending April 30, 2002 through the

month ending June 30, 2002, For purposes of this covenant, “loss” shall mean

net income after taxes of less than $0.00, as reported on Borrower’s

consolidated financial statements.

**Tangible Net Worth to be

tested for the months ending April 30, 2002 through August 31, 2002.

***The

Debt Service Coverage covenant shall not be tested for the quarter ending June

30, 2002.

Borrower only has deposit accounts located at the

following institutions:

 

 

	

  Comments

  Regarding Exceptions: See

  Attached.

  	

  BANK USE ONLY

  
	

   

  	

  Received by:

  	

   

  
	

  Sincerely,

  	

   

  	

  AUTHORIZED SIGNER

  
	

   

  	

  Date:

  	

   

  
	

   

  	

   

  	

   

  
	

  BORROWER:

  	

  Verified:

  	

   

  
	

   

  	

   

  	

  AUTHORIZED SIGNER

  
	

  SENTO

  CORPORATION

  	

  Date:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Compliance

  Status:

  	

  Yes     No

  
	 
	

  By:

  	

   

  	

   

  	 

	 
	

  Name:

  	

   

  	

   

  	 

	 
	

  Title:

  	

   

  	

   

  	 

											

 

SENTO TECHNICAL SERVICES CORPORATION

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  
					

 

 

BORROWING BASE CERTIFICATE

COLLATERAL

SCHEDULE

 

	

  Borrower:

  	

   

  	

  Sento Corporation

  	

   

  	

  Lender:

  	

  Silicon Valley Bank

  
	

   

  	

   

  	

  Sento Technical Services

  Corporation

  	

   

  	

   

  	

   

  

 

Commitment Amount:         $300,000,000

 

ACCOUNTS RECEIVABLE

 

	

  1.

  	

  Accounts Receivable Book Value as of

  	

  $

  
	

  2.

  	

  Additions (please explain on reverse)

  	

  $

  
	

  3.

  	

  TOTAL ACCOUNTS RECEIVABLE

  	

  $

  
	

   

  	

   

  	

   

  
	

  ACCOUNTS RECEIVABLE

  DEDUCTIONS (without duplication)

  	

   

  
	

   

  	

  a.

  	

  Amounts over

  90 days due

  	

  $

  	

   

  
	

   

  	

  b.

  	

  Balance of 50% over 90 day

  accounts

  	

  $

  	

   

  
	

   

  	

  c.

  	

  Excess 25% Concentration

  Limit*

  	

  $

  	

   

  
	

   

  	

  d.

  	

  Foreign Accounts**

  	

  $

  	

   

  
	

   

  	

  e.

  	

  Governmental Accounts

  	

  $

  	

   

  
	

   

  	

  f.

  	

  Contra Accounts

  	

  $

  	

   

  
	

   

  	

  g.

  	

  Promotion or Demo Accounts

  	

  $

  	

   

  
	

   

  	

  h.

  	

  Intercompany/Employee

  Accounts

  	

  $

  	

   

  
	

   

  	

  i.

  	

  Other (please explain on

  reverse)

  	

  $

  	

   

  
	

  4.

  	

   

  	

  TOTAL ACCOUNTS RECEIVABLE

  DEDUCTION

  	

  $

  
	

  5.

  	

   

  	

  Eligible Accounts (#3 minus

  #4)

  	

  $

  
	

  6.

  	

  LOAN VALUE OF ACCOUNTS (80% of #5)

  	

  $

  
	

  “Intuit, Inc. and Network

  Associates (US) accounts shall not exceed 50%

  	

   

  
	

  “Network Associates Europe.

  	

   

  
	

   

  	

   

  
	

  BALANCE

  	

   

  
	

  7.

  	

   

  	

  Maximum Loan Amount

  	

  $

  
	

  8.

  	

   

  	

  Total Funds Available Lesser of #6 or #7

  	

  $

  
	

  9.

  	

   

  	

  Present balance owing on Line of Credit

  	

  $

  
	

  10.

  	

   

  	

  Outstanding under Sublimits ( ) Term Loan

  Commitment

  	

  $

  
	

  RESERVE POSITION (#8 minus

  #9 and #10)

  	

  $

  
						

 

The undersigned represents and warrants that the foregoing

is true, complete and correct, and that the information reflected in this

Borrowing Base Certificate complies with the representations and warranties set

forth in the Amended and Restated Loan and Security Agreement between the

undersigned and Silicon Valley Bank.

 

COMMENTS:

 

 

 

 

	

  SENTO CORPORATION

  	

  SENTO TECHNICAL SERVICES CORPORATION

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

   

  	

   

  	

   

  
												

 

	

   

  	

  BANK USE ONLY

  
	

   

  	

   

  
	

   

  	

  Rec’d By:

  	

   

  
	

   

  	

   

  	

  Auth. Signer

  
	

   

  	

  Date:

  	

   

  
	

   

  	

   

  
	

   

  	

  Verified

  	

   

  
	

   

  	

   

  	

  Auth. Signer

  
	

   

  	

  Date:LOAN MODIFICATION AGREEMENT

EXHIBIT 10.2

 

LOAN MODIFICATION AGREEMENT

 

This Loan

Modification Agreement is entered into as of June 27, 2002, effective as of

March 30, 2002, by and between SENTO CORPORATION, and SENTO TECHNICAL SERVICES

CORPORATION (jointly and severally the “Borrower”) and Silicon Valley 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, among other

documents, an Amended and Restated Loan and Security Agreement, dated December

22, 1999, as may be amended from time to time, (the “Loan Agreement”).  The Loan Agreement provided for, among other

things, a Committed Revolving Line in the original principal amount of Two Million

Dollars ($2,000,000) and a Committed Equipment Line in the original principal

amount of One Hundred Thousand Dollars ($100,000).  Pursuant to a Loan Modification Agreement dated April 28, 2000,

the Committed Revolving Line was increased to Three Million Dollars

($3,000,000) and a Term Loan Commitment was incorporated, in the original

principal amount of Five Hundred Thousand Dollars ($500,000). Additionally,

pursuant to a Loan Modification Agreement dated November 7, 2000, the Term Loan

Commitment was increased to Two Million Dollars ($2,000,000). Defined terms

used but not otherwise defined herein shall have the same meanings as set forth

in the Loan Agreement.

 

Hereinafter, all indebtedness

owing by Borrower to Bank 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.

 

Hereinafter, the

above-described security documents and guaranties, together with all other

documents securing repayment of the Indebtedness shall be referred to as the

“Security Documents”. Hereinafter, the Security Documents, 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.

 

A.            Modification(s)

to Loan Agreement.

 

1.                                       Section

6.6 entitled “Financial Covenants” is hereby amended in part to read as

follows:

 

Borrower will maintain as of the last day of each month (unless

otherwise noted):

 

(i)                                  Adjusted Quick Ratio.

Effective as of the month ended March 30, 2002 through the month ending July

31, 2002, a ratio of Quick Assets to Current Liabilities minus Deferred Revenue

and debentures of at least 1.50 to 1.00; for the month ending August 31, 2002,

and thereafter, Borrower will maintain a ratio of Quick Assets to Current

Liabilities minus Deferred Revenue of at least 1.50 to 1.00.

 

2.                                       The

following defined term under Section 13.1 entitled “Definitions” is hereby

incorporated to read as follows:

 

“Current Liabilities” are the aggregate amount of Borrower’s Total

Liabilities which mature within one (1) year.

 

4.             CONSISTENT CHANGES.  The Existing  Loan  Documents are hereby

amended wherever necessary to reflect the changes described above.

 

5.             NO DEFENSES OF BORROWER. Borrower

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

to pay any amounts under the Indebtedness.

 

 

6.            CONTINUING VALIDITY. 

Borrower understands and agrees that 

in  modifying the existing Indebtedness,

Bank is relying upon Borrower’s representations, warranties, and agreements, as

set forth in the Existing Loan Documents. Except as expressly modified pursuant

to this Loan Modification Agreement, the terms of the Existing Loan Documents

remain unchanged and in full force and effect. Bank’s agreement to modifications

to the existing Indebtedness pursuant to this Loan Modification Agreement in no

way shall obligate Bank to make any future modifications to the Indebtedness.

Nothing in this Loan Modification Agreement shall constitute a satisfaction of

the Indebtedness.  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. Unless expressly released herein, no maker, endorser, or guarantor will

be released by virtue of this Loan Modification Agreement. The terms of this

paragraph apply not only to this Loan Modification Agreement, but also to all

subsequent loan modification agreements. 

 

This Loan

Modification Agreement is executed as of the date first written above.

 

	

  BORROWER:

  	

  BANK:

  
	

   

  	

   

  
	

  SENTO CORPORATION

  	

  SILICON VALLEY BANK

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
															

 

 

SENTO

TECHNICAL SERVICES CORPORATION

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
					

 

 

 

SILICON VALLEY BANK

 

PRO FORMA INVOICE FOR LOAN CHARGES

 

	

   

  	

   

  	

   

  	

   

  
	

  BORROWER:

  	

   

  	

  SENTO CORPORATION

  	

   

  
	

   

  	

   

  	

  SENTO TECHNICAL SERVICES CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

  LOAN OFFICER:

  	

   

  	

  Ron C. Sherman

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  DATE:

  	

   

  	

  June 27, 2002

  	

   

  

 

	

   

  	

   

  	

  Documentation Fee

  	

  $

  	

  250.00

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  TOTAL FEE DUE

  	

  $

  	

  250.00

  	

   

  

 

Please indicate the method of

payment:

 

{ }  A check for the total

amount is attached.

 

{ } Debit

DDA#                        for

the total amount.

 

{ } Loan proceeds

 

	

   

  	

   

  
	

  Borrower

  	

  (Date)

  
			

 

 

	

   

  	

   

  
	

  Silicon

  Valley Bank

  	

  (Date)

  
	

  Account

  Officer’s Signature

  	

   

  
			

 

 

COMPLIANCE CERTIFICATE

 

	

  TO:

  	

   

  	

  SILICON VALLEY BANK

  	

   

  
	

   

  	

   

  	

  3003 Tasman Drive

  	

   

  
	

   

  	

   

  	

  Santa Clara, CA 95054

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  FROM:

  	

   

  	

  SENTO

  CORPORATION

  	

   

  
	

   

  	

   

  	

  SENTO TECHNICAL SERVICES

  CORPORATION

  	

   

  

 

 

The undersigned authorized officer of SENTO CORPORATION, and SENTO

TECHNICAL SERVICES CORPORATION (jointly and severally the “Borrower”) certifies

that under the terms and conditions of the Loan and Security Agreement between

Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for

the period ending                           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. Attached are the required documents supporting the certification.

The Officer certifies that these are prepared in accordance with Generally

Accepted Accounting Principles (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

  Covenant

  	

   

  	

  Required

  	

   

  	

   

  	

   

  	

  Complies

  
	

  Interim consolidated financial statements + CC

  	

   

  	

  Monthly within 30 days

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  10-Q, 10-K

  	

   

  	

  Within 5 days after filing with SEC

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  A/R, A/P & BBC

  	

   

  	

  Monthly within 20 days

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

  A/R Audit

  	

   

  	

  Annually

  	

   

  	

   

  	

   

  	

  Yes

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Financial

  Covenant

  	

   

  	

  Required

  	

   

  	

  Actual

  	

   

  	

  Complies

  
	

  Maintain on a Monthly Basis:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Minimum Quick Ratio (Adjusted)*

  	

   

  	

  1.50:1.00

  	

   

  	

   

  	

  :1.00

  	

   

  	

  Yes

  	

  No

  
	

  Profitability

  	

   

  	

  $

  	

  0

  	

  *

  	

   

  	

  $

  	

   

  	

  Yes

  	

  No

  
	

  Minimum Tangible Net Worth

  	

   

  	

  $

  	

  4,500,000

  	

  ***

  	

   

  	

  $

  	

   

  	

  Yes

  	

  No

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Maintain on a Quarterly Basis:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Debt Service Coverage Ratio****

  	

   

  	

  1.50:1.00

  	

   

  	

   

  	

  :1.00

  	

   

  	

  Yes

  	

  No

  

 

*Effective

as of the month ended March 30, 2002 through the month ending July 31, 2002, a

ratio of Quick Assets to Current Liabilities monus Deferred Revenue and

debentures of at least 1.50 to 1.00; for the month ending August 31, 2002, and

thereafter, Borrower will maintain a ratio of Quick Assets to Current

Liabilities minus Deferred  Revenue of at

least 1.50 to 1.00.

**Borrower

shall not incur a loss for any two consecutive months, and shall not incur an

aggregate loss for any fiscal quarter, provided, however, the Profitability

covenant shall not be tested for the month ending April 30, 2002 through the

month ending June 30, 2002, For purposes of this covenant, “loss” shall mean

net income after taxes of less than $0.00, as reported on Borrower’s

consolidated financial statements.

***Tangible Net Worth to be

tested for the months ending April 30, 2002 through August 31, 2002.

****The

Debt Service Coverage covenant shall not be tested for the quarter ending June

30, 2002.  

Borrower

only has deposit accounts located at the following

institutions:                                         

 

 

	

  Comments

  Regarding Exceptions: See

  Attached.

  	

  BANK USE ONLY

  
	

   

  	

  Received by:

  	

   

  
	

  Sincerely,

  	

   

  	

  AUTHORIZED SIGNER

  
	

   

  	

  Date:

  	

   

  
	

   

  	

   

  	

   

  
	

  BORROWER:

  	

  Verified:

  	

   

  
	

   

  	

   

  	

  AUTHORIZED SIGNER

  
	

  SENTO

  CORPORATION

  	

  Date:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Complaince

  Status:

  	

  Yes     No

  
	 
	

  By:

  	

   

  	

   

  	 

	 
	

  Name:

  	

   

  	

   

  	 

	 
	

  Title:

  	

   

  	

   

  	 

											

 

SENTO TECHNICAL SERVICES CORPORATION

 

	

  By:

  	

   

  	

   

  
	

  Name:

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]