Document:

exhibit10-1.htm

AMENDMENT NO. 2

TO

LOAN AND SECURITY AGREEMENT

 

     THIS AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of November 4, 2010 and is entered into by and among UNIFY CORPORATION., a Delaware corporation, (referred to as the “Borrower”), each other Person identified as a “Guarantor” hereto from time to time, and HERCULES TECHNOLOGY II, L.P., a Delaware limited partnership (“Hercules”). Capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).

 

RECITALS

 

     A. Borrower and Lender have entered into that certain Loan and Security Agreement dated as of June 29, 2010 and that certain Amendment No. 1 to Loan and Security Agreement dated as of October 12, 2010 (as may be amended, restated, or otherwise modified, the “Loan Agreement”), pursuant to which Lender has agreed to extend and make available to Borrower certain advances of money.

 

     B. Borrower and Lender have agreed to amend the Loan Agreement upon the terms and conditions more fully set forth herein.

 

AGREEMENT

 

     NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows:

 

     1. AMENDMENTS.

 

     1.1 SECTION 1 DEFINITIONS. The following definitions in Section 1 of the Loan Agreement are hereby amended and restated in their entirety as follows:

 

“ “Revolving Interest Rate” means for any day, the per annum interest rate equal to the greater of (i) nine and one-half percent (9.50%) and (ii) the LIBOR Rate, plus seven and one-half percent (7.50%); provided that if Borrower’s Consolidated Total Leverage Ratio is less than 2.50:1.00 for three consecutive months, Revolving Interest Rate means for any day, the per annum interest rate equal to the greater of (i) nine and one-quarter percent (9.25%) and (ii) the LIBOR Rate, plus seven and one-quarter percent (7.25%).”

 

“ “Term Loan Cash Interest Rate” means for any day, the per annum interest rate equal to the greater of (i) ten and one-half percent (10.50%) and (ii) the LIBOR Rate, plus eight and one-half percent (8.50%); provided that if Borrower’s Consolidated Total Leverage Ratio is less than 2.50:1.00 for three consecutive months, Term Loan Cash Interest Rate means for any day, the per annum interest rate equal to the greater of (i) ten and one-quarter percent (10.25%) and (ii) the LIBOR Rate, plus eight and one-quarter percent (8.25%).”

 

     1.2 SECTION 9.21 STOCK OPTIONS. Section 9.21 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“9.21 Stock Options. Borrower shall not issue options or other rights (including restricted stock, “phantom stock” or securities convertible or exchangeable for shares of capital stock) under its 2001 Stock Option Plan, 2002 Director Restricted Stock Plan or any incentive equity plan approved by the Borrower's stockholders after the Closing Date for the purchase or acquisition from the Borrower of more than 650,000 shares of its Common Stock or other Equity Interests (net of any forfeitures and cancellations), as such number of shares may be increased or decreased to reflect stock splits, reverse stock splits or stock dividends, in any twelve (12) month period, with such first twelve (12) month period to commence on the Closing Date. Such shares shall not include a grant of up to 400,000 option shares issued on a one-time basis to Borrower’s Chief Executive Officer no later than December 31, 2010.”

 

 

     1.3 SCHEDULE 9.18 Schedule 9.18 of the Loan Agreement is hereby replaced with the updated Schedule 9.18 attached hereto as Exhibit A.

 

     2. BORROWER’S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that:

 

     (a) immediately upon giving effect to this Amendment (i) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Event of Default has occurred and is continuing with respect to which Borrower has not been notified in writing by Lender;

 

     (b) Borrower has the corporate power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

 

     (c) the certificate of incorporation, bylaws and other organizational documents of Borrower delivered to Lender on the Closing Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

 

     (d) the execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized by all necessary corporate action on the part of Borrower;

 

     (e) this Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and

 

     (f) as of the date hereof, it has no defenses against the obligations to pay any amounts under the Obligations. Borrower acknowledges that Lender has acted in good faith and has conducted in a commercially reasonable manner its relationships with Borrower in connection with this Amendment and in connection with the Loan Documents.

 

     Borrower understands and acknowledges that Lender is entering into this Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate.

 

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     3. LIMITATION. The amendments set forth in this Amendment shall be limited precisely as written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Lender may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect.

 

     4. EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of all the following conditions precedent:

 

     4.1 Amendment. Borrower and Lender shall have duly executed and delivered this Amendment to Lender.

 

     4.2 Amendment Fee. Borrower shall have paid to Lender with respect to this Amendment, a fully earned, non-refundable loan amendment fee of $100,000.

 

     5. COUNTERPARTS. This Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Amendment.

 

     6. INTEGRATION. This Amendment and any documents executed in connection herewith or pursuant hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Amendment; except that any financing statements or other agreements or instruments filed by Lender with respect to Borrower shall remain in full force and effect.

 

     7. GOVERNING LAW; VENUE. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and Lender each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California.

 

[signature page follows]

 

 

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     IN WITNESS WHEREOF, the parties have duly authorized and caused this Amendment to be executed as of the date first written above.

 

BORROWER:

 

	UNIFY CORPORATION 	 
	 	 
	By: 	/s/ Todd E. Wille	 
	Name:  	Todd E. Wille	 
	Title:	President and CEO	 

GUARANTORS:

 

	UNIFY INTERNATIONAL (US)	 
	CORPORATION	 
	 	 
	By: 	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title:	Chief Financial Officer	 

	AXS-ONE INC. 	 
	 	 
	By: 	/s/ Todd E. Wille	 
	Name:  	Todd E. Wille	 
	Title:	President and CEO	 

	UNIFY ACQUISITION CORP.	 
	 	 
	By: 	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title:	Chief Financial Officer	 

 

	STRATEGIC OFFICE SOLUTIONS, INC.	 
	 	 
	By:	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title: 	Chief Financial Officer	 

 

 

	GUPTA TECHNOLOGIES, GMBH	 
	 	 
	By:	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title: 	Chief Financial Officer	 

 

CIPHERSOFT INC.

 

	By:	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title:	Chief Financial Officer	 

REALEASE LLC

 

	By:	/s/ Steven Bonham	 
	Name:  	Steven Bonham	 
	Title:	Chief Financial Officer	 

UNIFY CORPORATION FRANCE S.A.

 

	By: 	/s/ Todd E. Wille	 
	Name:  	Todd E. Wille	 
	Title:	Director	 

 

 

LENDER:

 

HERCULES TECHNOLOGY II, L.P.

a Delaware limited partnership

 

By: Hercules Technology SBIC

Management, LLC, its General Partner

 

By: Hercules Technology Growth Capital Inc.,

its Manager

 

	By: 	/s/ K. Nicholas Martisch	 
	Name:  	K. Nicholas Martitsch	 
	Title:	Associate General Counsel	 

 

 

Schedules and Exhibits Omittedf8k110410ex10i_southchina.htm

 

Exhibit 10.1

 

 

SOUTHERN CHINA LIVESTOCK, INC.

 

November 4, 2010

 

 

Mr. Liu Juxi

Pin Bldg 8, Rongmen Rd., Suite 701 

Nanchang, Jiangxi, PRC

 

Re: Southern China Livestock, Inc. Board of Directors 

 

Dear Mr. Liu Juxi:

 

Southern China Livestock, Inc., a Delaware corporation (the “Company”), is pleased to advise you that you have been elected as a director of the Company, subject to your acceptance and agreement to serve as a member of our Board of Directors (the “Board”). Directors are elected for a period of one year and until their successors are elected and qualified. At each annual meeting of stockholders, we elect directors to serve for the following year. The Board is responsible for managing our business and affairs.

 

This Agreement shall set forth the terms of your service as a director, keeping in mind that, as a director of a Delaware corporation, you have the responsibilities of a director under the Delaware General Corporation Law.

 

1.          Acceptance; Board and Committee Service. You hereby accept your election as a director of the Company. You agree to serve on the audit and compensation committees, and, if the Company designates a nominating committee, you agree, if you are appointed, to serve on that committee. You confirm to us that you are an independent director as defined in the Nasdaq rules and regulations.

 

2.          Services. 

 

(a) The Board will have four regular meetings each year, one of which may be held in the People’s Republic of China. Special meetings may be called from time to time to the extent that they are deemed necessary. In addition, we expect that the independent directors will have separate meetings, which may be held on the same day as a board meeting.

 

(b) The audit committee will have four regular meetings, one to review the financial statements for each of the first three fiscal quarters and a fourth to review the audited financial statements for the fiscal year. At these meetings, the audit committee will meet with representatives of our independent registered accounting firm (the “auditors”) and, if the audit committee deems necessary or desirable, the chief financial officer, to review the financial statements together with any questions raised by the auditors’ review of our disclosure and internal controls. The audit committee will also work with the auditors in connection with the implementation of internal controls. Additional meetings of the audit committee may be held.

 

Board of Directors Offer Letter

  

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(c) The compensation committee is responsible for administering any stock option or other equity-based incentive plans and for determining the compensation of the chief executive officer and other executive officers. We expect that the compensation committee will meet twice a year.

 

(d) A copy of the charters for the audit and compensation committee and our code of ethics have previously been provided to you.

 

3.         Attendance. Meetings for each year shall be scheduled at the beginning of the year and shall be reasonably acceptable to all directors. If you are unable to attend a meeting in person, you may participate by conference call. In addition, you shall be available to consult with the other members of the Board as necessary via telephone, electronic mail or other forms of correspondence. In addition, you will review our financial statements and annual and quarterly reports prior to the audit committee meetings. We anticipate that your participation by means other than personal attendance, including review of our financial statements and annual and quarterly reports, as described herein shall be, on the average during the year, not more than ten hours per month.

 

4.          Services for Others. While we recognize that you may serve as a director of other companies, you understand and agree that you are and will be subject to our policy that restricts you from using or disclosing any material non-public information concerning our company or from using or disclosing any of our trade secrets or other proprietary information. Similarly, you agree that you will not use or disclose, in the performance of your duties as a director, any trade secrets or proprietary information of any other company. You agree to execute our standard non-disclosure agreement.

 

5.          Blackout Period. You understand that we have a policy pursuant to which no officer, director or key executive may engage in transactions in our stock during the period commencing two weeks prior to the end of a fiscal quarter and ending the day after the financial information for the quarter or year has been publicly released. As a member of the audit committee, if you have information concerning our financial results at any time, you may not engage in transactions in our securities until the information is publicly disclosed.

 

6.         Compensation. As an independent director and member of the audit, compensation and, if appointed, nominating, committees, you will receive an annual fee of $8,000, payable quarterly.

 

7.          Compensation for Subsequent Years. Your compensation for subsequent years shall be determined by the Board or the compensation committee, provided that the compensation for any year shall not be less than the compensation for the immediately prior year.

 

Board of Directors Offer Letter

  

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8.         Reimbursement of Expenses. You will be reimbursed for all reasonable expenses incurred in connection with the performance of your services as a director and committee member and/or chairman, including your travel, lodging and related expenses. If the Board or any committee has more than one meeting in China, you may attend that meeting by conference call unless you are otherwise in China.

 

9.         Certain Representations.

(a) You represent and agree that you are accepting the shares of common stock being issued to you pursuant to this Agreement for your own account and not with a view to or for sale of distribution thereof. You understand that the securities are restricted securities and you understand the meaning of the term “restricted securities.” You further represent that you were not solicited by publication of any advertisement in connection with the receipt of the Shares and that you have consulted tax counsel as needed regarding the Shares.

 

(b) You further represent that, during the past five years:

 

(i)    No petition has been filed under the federal bankruptcy laws or any state insolvency law by or against, or a receiver, fiscal agent or similar officer has been appointed by a court for your business or property, or any partnership in which you were a general partner at or within two years before the time of such filing, or any corporation or business association of which you were an executive officer at or within two years before the time of such filing;

 

(ii)  You have not been convicted in a criminal proceeding and are not the subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(iii)  You have not been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining you from, or otherwise limiting, the following activities:

 

(A) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 

(B) Engaging in any type of business practice; or

 

Board of Directors Offer Letter

  

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(C) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

 

(D) You have not been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting, for more than 60 days, your right to engage in any activity described in Section 1 0(b)(iii)(A) of this Agreement, or to be associated with persons engaged in any such activity; or

 

(iv) You have not been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated.

 

(v) You have not been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

 

(c) Stock Ownership. Except as set forth on the signature page of this Agreement, you do not own any shares of any class or series of our capital stock or any options or warrants to purchase our capital stock or any securities convertible into our capital stock.

 

10.       Independent Contractor. You understand that, as a director, you will be an independent contractor and not an employee, and, unless the Board expressly grants you such authorization, you shall have no authority to bind us or to act as our agent.

 

11.      Entire Agreement; Amendment; Waiver. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. This Agreement may be modified or amended, and no provision of this Agreement may be waived, except by a writing that expressly refers to this Agreements, states that it is an amendment, modification or waiver and is signed by both parties, in the case of an amendment or modification or the party granting the waiver in the case of a waiver. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement.

 

The Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.

 

 

Board of Directors Offer Letter

  

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Sincerely,

 

Southern China Livestock Inc.

 

 

By: /s/ Pan Luping                               

Pan Luping

Chief Executive Officer

 

AGREED AND ACCE TED:

 

/s/ Liu Juxi                                      

Liu Juxi

 

 

Shares of common stock, warrants, options or convertible securities owned as of the date of this Agreement: _________

 

 

 

 

 

 

Board of Directors Offer Letter

 

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