FIFTH AMENDMENT
TO
LOAN AND SECURITY
AGREEMENT
THIS FIFTH AMENDMENT to Loan and Security
Agreement (this “Amendment”) is entered into this 27
day of February 2009, by and between Silicon Valley Bank
(“Bank”) and ST. BERNARD SOFTWARE, INC., a Delaware
corporation (“Borrower”) whose address is 15015 Avenue
of Science, San Diego, CA 92128.
Recitals
A. Bank
and Borrower have entered into that certain Loan and Security
Agreement dated as of May 11, 2007 as amended by that certain First
Amendment to Loan and Security Agreement dated as of July 9, 2007,
that certain Second Amendment to Loan and Security Agreement dated
as of August 13, 2007, that certain Third Amendment to Loan and
Security Agreement dated as of January 25, 2008 and that certain
Fourth Amendment to Loan and Security Agreement dated as of July
__, 2008 (as the same may from time to time be further amended,
modified, supplemented or restated, the “Loan
Agreement”).
B. Bank
has extended credit to Borrower for the purposes permitted in the
Loan Agreement.
C. Borrower
has requested that Bank amend the Loan Agreement to (i) extend the
maturity date and (ii) make certain other revisions to the Loan
Agreement as more fully set forth herein.
D. Bank
has agreed to so amend certain provisions of the Loan Agreement,
but only to the extent, in accordance with the terms, subject to
the conditions and in reliance upon the representations and
warranties set forth below.
Agreement
Now,
Therefore , in
consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
1.
Definitions. Capitalized terms used but not
defined in this Amendment shall have the meanings given to them in
the Loan Agreement.
2.
Amendments to Loan Agreement .
2.1
Section 2.3(a) (Interest Rate). Section 2.3(a)
is amended in its entirety and replaced with the
following:
“(a)
Interest Rate . Subject to Section 2.3(b), the
amounts outstanding under the Revolving Line shall accrue interest
at a per annum rate equal to the greater of (i) three and one half
percentage points (3.50%) above the Prime Rate or (ii) seven and
one half percent (7.50%), which interest shall be payable
monthly.”
2.2
Section 6.9(a) (Tangible Net Worth). Section
6.9(a) is amended in its entirety and replaced with the
following:
“(a)
Tangible Net Worth . A Tangible Net Worth not
less than negative Seventeen Million Dollars ($17,00,000) at all
times, increasing quarterly by fifty percent (50%) of Net Income
and monthly by fifty percent (50%) of issuances of equity after
January 31, 2009 and the principal amount of Subordinated Debt
received after January 31, 2009.”
2.3
Section 13 (Definitions). The following terms
and their respective definitions set forth in Section 13.1
are amended in their entirety and replaced with the
following:
“ Borrowing Base ” means (i)
seventy percent (70%) of Eligible Accounts and (ii) the lesser of
(a) sixty percent (60%) of Advanced Billing Accounts or (b) Six
Hundred Thousand Dollars ($600,000), as determined by Bank from
Borrower’s Transaction Report submitted at the end of the
most recently ended month; provided, however, that Bank may, with
notice to Borrower, decrease the foregoing percentage in its good
faith business judgment based on events, conditions, contingencies,
or risks which, as determined by Bank, may adversely affect
Collateral.
“Revolving Line Maturity
Date” is May 15,
2010.
2.4
Section 13 (Definitions). Subsection (c) of the
defined term “Eligible Accounts” set forth in
Section 13.1 is amended in its entirety and replaced with
the following:
“(c) Accounts
that the Account Debtor has not paid within ninety (90) days of
invoice date except as approved in writing by
Bank;”
2.5 Exhibit
C to the Agreement is hereby replaced with Exhibit C attached
hereto.
2.6 On
May 16, 2009, Borrower shall pay to Bank an amendment fee in the
amount of Twenty Thousand Dollars ($20,000).
3. Limitation
of Amendments.
3.1 The
amendments set forth in Section 2 , above, are effective for
the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) be a consent to any
amendment, waiver or modification of any other term or condition of
any Loan Document, or (b) otherwise prejudice any right or remedy
which Bank may now have or may have in the future under or in
connection with any Loan Document.
3.2 This
Amendment shall be construed in connection with and as part of the
Loan Documents and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and
confirmed and shall remain in full force and effect.
4.
Representations and Warranties. To induce Bank
to enter into this Amendment, Borrower hereby represents and
warrants to Bank as follows:
4.1 Immediately
after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and
complete in all material respects as of the
