EXHIBIT 10.16
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
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This First Amendment to Loan and Security Agreement is entered into as
of May 6, 2002 (the "Amendment"), by and between COMERICA BANK - CALIFORNIA
("Bank") and PERSISTENCE SOFTWARE, INC. ("Borrower").
RECITALS
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Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of March 6, 2002 (the "Agreement"). The parties desire to
amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The following defined term in Section 1.1 of the Agreement is hereby
amended to read as follows:
"Term Maturity Date" means November 1, 2003.
2. Section 2.3(a)(i) of the Agreement is hereby amended in its entirety
to read as follows:
(i) ADVANCES. Except as set forth in Section 2.3(b),
the Advances shall bear interest, on the outstanding Daily Balance
thereof, at a rate equal to one percent (1.0%) above the Prime Rate.
3. Section 6.9 of the Agreement is hereby amended in its entirety to
read as follows:
6.9 TANGIBLE NET WORTH. On a consolidated basis, Borrower
shall maintain a Tangible Net Worth of at least the following amounts:
(i) for the quarter ending June 30, 2002, $4,000,000 plus the
Additional TNW Amount as of the date of measurement, if any
(collectively, the "Q2 Amount"), (ii) for the quarter ending September
30, 2002, the greater of (A) the Q2 Amount plus the Additional TNW
Amount as of the date of measurement, if any, and (B) $4,500,000 (the
greater of which is the "Q3 Amount"), and (iii) thereafter, the greater
of (A) the Q3 Amount plus the Additional TNW Amount as of the date of
measurement, if any, and (B) $5,000,000. As used herein, "Additional
TNW Amount" means an amount equal to (i) 50% of Borrower's net income
from the Closing Date through the date of measurement plus (ii) 75% of
any proceeds received by Borrower from the sale or issuance of its
equity or debt securities from the Closing Date through the date of
measurement. This covenant shall be measured as of the last day of each
quarter, provided that, at any time that the aggregate amount of the
outstanding Advances plus the aggregate undrawn face amount of all
outstanding Letters of Credit is in excess of $200,000, this covenant
shall be measured as of the last day of each month.
4. EXHIBIT D to the Agreement is hereby amended and replaced in its
entirety by EXHIBIT D attached hereto.
5. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of the
Agreement and all instruments, documents and agreements entered into in
connection with the Agreement.
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6. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
7. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
8. As a condition to the effectiveness of this Amendment, Bank shall
have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
(b) an extension fee equal to $1,000 which shall be
nonrefundable as of the date of this Amendment plus an amount equal to all Bank
Expenses incurred through the date of this Amendment; and
(c) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
PERSISTENCE SOFTWARE, INC.
By:
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Title:
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COMERICA BANK - CALIFORNIA
By:
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Title:
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EXHIBIT D
COMPLIANCE CERTIFICATE
TO: COMERICA BANK - CALIFORNIA
FROM: PERSISTENCE SOFTWARE, INC.
The undersigned authorized officer of PERSISTENCE SOFTWARE, INC. hereby
certifies that in accordance with the terms and conditions of the Amended and
Restated 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 of Borrower stated in the Agreement are true and
correct as of the date hereof. Attached herewith are the required documents
supporting the above certification. The Officer further certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and
are consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
- ------------------ -------- ----------
Financial statements Quarterly within 45 days (monthly w/i 20 days Yes No
if Line exposure > $200,000)
Annual (CPA Audited) FYE within 90 days Yes No
10K and 10Q When filed Yes No
A/R Audit Semi-Annual Yes No
A/R & A/P Agings, Borrowing
Base Cert. Monthly within 15 days if Line exposure > Yes No
$200,000
IP Report Quarterly within 45 days Yes No
Total amount of Borrower's
cash and investments Amount: $________ Yes No
Total amount of Borrower's
cash and investments
maintained with Bank Amount: $________ Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
- ------------------ -------- ------ ----------
Maintain on a Quarterly / Monthly* Basis:
Minimum Quick Ratio 2.00:1.00 _____:1.00 Yes No
Minimum Tangible Net Worth $4,000,000** $________ Yes No
* These covenants shall be measured as of the last day of each quarter,
provided that, at any time that the aggregate amount of the outstanding
Advances plus the aggregate undrawn face amount of all outstanding
Letters of Credit is in excess of $200,000, this covenant shall be
measured as of the last day of each month.
** On a consolidated basis, Borrower shall maintain a Tangible Net
Worth of at least the following amounts (i) for the quarter ending June
30, 2002, $4,000,000 plus the Additional TNW Amount as of the date of
measurement, if any, (ii) for the quarter ending September 30, 2002,
the greater of (A) $4,500,000 and (B) $4,000,000 plus the Additional
TNW Amount as of the date of measurement, if any, and (iii) thereafter,
the greater of (A) $5,000,000 and (B) $4,000,000 plus the Additional
TNW Amount as of the date of measurement, if any. As used herein,
"Additional TNW Amount" means an amount equal to (i) 50% of Borrower's
net income from the Closing Date through the date of measurement plus
(ii) 75% of any proceeds received by Borrower from the sale or issuance
of its equity securities from the Closing Date through the date of
measurement.
COMMENTS REGARDING EXCEPTIONS: See Attached. -----------------------------------
- BANK USE ONLY -
Sincerely, - Received by: -
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- ------------------------------------------ - AUTHORIZED SIGNER -
SIGNATURE - Date: -
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- ------------------------------------------ - -
TITLE - Verified: -
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- ------------------------------------------ - AUTHORIZED SIGNER -
DATE - -
- Date: -
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- Compliance Status Yes No -
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