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Exhibit 10.16
[FLEET LOGO]
September 21, 1999
Xx. Xxxx Xxxxxxx
Treasurer and Chief Financial Officer
Aspen Technology, Inc.
Ten Canal Park
Cambridge, MA 02141
Dear Xxxx:
Reference is hereby made to the Further Amended and Restated Revolving Credit
Agreement dated February 15, 1996 and the First Amendment to Further Amended
and Restated Revolving Credit Agreement (collectively referred to as the
"Agreement"), by and among Aspen Technology, Inc. (Aspen) and its wholly owned
subsidiaries Process Modeling Investment Corporation, Industrial Systems, Inc.,
and Aspen Tech, Inc. (formerly Setpoint, Inc.) and successor in interest to
Dynamic Matrix Control Corporation (Aspen and such subsidiaries being
hereinafter collectively referred to as the "Borrowers"), as joint and several
borrowers, and Fleet National Bank, successor to Fleet Bank of Massachusetts,
N.A. ("Fleet" or the "Bank").
You have informed the Bank that for the periods ended March 31, 1999 and June
30, 1999 the Borrower was in violation of Consolidated EBTA (Section 7.2),
Leverage Ratio (Section 7.3) and Interest Coverage Ratio (Section 7.5). The
Bank hereby waives the violations cited above for the periods ended March 31,
1999 and June 30, 1999.
In addition, the financial covenants have been amended as shown below and
become effective with the quarter ending September 30, 1999 and thereafter,
unless otherwise indicated. The definitions used in this letter are the same as
those in the Revolving Credit Agreement.
- Consolidated EBTA (Section 7.2): no longer required
- Leverage Ratio (Section 7.3): no longer required
- Quick Ratio (Section 7.4): Must be greater or equal to 2.00:1.00. The
definition of Quick Ratio will be cash, short-term marketable securities and
current accounts receivables and eligible installment receivables divided by
current liabilities which includes borrowings and letters of credit issued
under the revolver less current deferred revenues and deferred taxes.
- Interest Coverage Ratio (Section 7.5): no longer required
- Tangible Net worth (TNW): A minimum of $110,000,000. Tangible Net Worth is
defined as Stockholders Equity less Intangibles and Capitalized Software.
Effective with the receipt of this letter, we will secure the obligations of
Aspen Technology, Inc. with marketable securities currently managed by Fleet
Investment Advisors. Advance rates for loans and letters of credit secured by
marketable securities are shown below. The attached Deposit Pledge Agreement
should be completed, signed and returned to us along with this letter.
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Types of Securities Advance Rate
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U.S. Treasury Obligations (bills, notes & bonds) 90%
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Investment Grade Commercial Paper 80%
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Federal Government or Quasi-Government Agency 80%
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Securities, to include those issued by GNMA, FNMA,
or FHLMC
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Municipal Bonds 80%
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Investment Grade Bonds (Xxxxx'x Aaa down through
Baa3; S&P AAA down through BBB-) 70%
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In granting the waivers and amendments as outlined above, there is a one-time
fee of $10,000 payable upon signed receipt of this letter.
Upon receipt of your acceptance of this waiver and amendment letter, these
terms shall become effective. This letter waives and amends only the sections
referenced above and should not be considered a waiver or amendment of any
other terms of the Agreement. In addition, the statements, representations and
warranties made in the Agreement continue to be correct as of the date hereof
and the Borrower is in compliance with all terms of the Agreement. Except as
expressly affected hereby, the Agreement remains in full force and effect as
heretofore.
The Borrower represents and warrants that the execution of this waiver and
amendment letter has been duly authorized by the Borrower by all necessary
corporate and other action and that the execution will not conflict with,
violate the provisions of, or cause a default or constitute an event which,
with the passage of time or giving of notice or both, could cause a default on
the part of the Borrower under its charter documents or by-laws or under any
contract, agreement, law, rule, order, ordinance, franchise, instrument or
other document, or result in the imposition of any lien or encumbrance on any
property or asset of the Borrower. In addition, the statements, representations
and warranties made in the Agreement continue to be correct as of the date
hereof and the Borrower is in compliance with all terms of the Agreement.
Except as expressly affected hereby, the Agreement remains in full force and
effect as heretofore.
Sincerely,
Fleet National Bank
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx Agreed and Accepted: /s/ Xxxx X. Xxxxxxx
Vice President -------------------
High Technology Division by: Xxxx X. Xxxxxxx
title: Sr. V.P. & CFO
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FLEET BANK LOGO DEPOSIT PLEDGE AGREEMENT
THIS AGREEMENT is made as of October 18, 1999,
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by and between Aspen Technology, Inc. (the "Pledgor")
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10 Canal Park
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Cambridge, MA 02141
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and Fleet Bank of Massachusetts, National Association (the "Bank"), 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
In order to induce the Bank to enter into the agreement described below,
Pledgor, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby assigns to the Bank and grants to the
Bank a security interest in, and exclusive control over Collateral as described
below in an amount of not less than $30,000,000. The Collateral is pledged to
secure performance of all obligations, direct or indirect absolute or
contingent, now existing or hereafter arising of every kind and description
(the "Obligations"), pursuant to the See bottom of page dated
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between Pledgor and the Bank (the "Agreement").
COLLATERAL: 1) Securities set forth in Exhibit A attached hereto:
/X/ in Account No. 0001479670 maintained with Bank or with the
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following institution: ;
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/ / recorded on the books and records of the Bank, its Nassau
and London branches or its International Banking Facility.
The Pledgor and the Bank agree that the above pledge, and security interest
granted herewith, are subject to all of the following terms and conditions.
1. COLLATERAL. The Collateral shall remain in the control or possession
of the Bank and shall constitute continuing collateral security for the full
payment and performance of the Obligations. The Pledgor agrees that so long as
any of the obligations remains outstanding no action of any kind whatsoever may
be taken by Pledgor or any other person with respect to any portion of the
Collateral without the Bank's written consent. The Bank is hereby authorized
and appointed as agent and attorney-in-fact of the Pledgor, which appointment
is coupled with an interest and shall be irrevocable so long as any of the
Obligations remains outstanding, to sign and deliver such documents,
indorsements and instruments and to take all such other actions in the name of
the Pledgor as the Bank may deem necessary or advisable to perfect or
preserve its security interest in and lien on the Collateral. In the event that
any of the Obligations shall be secured by the pledge of deposits placed with
another financial institution or with the Bank's London or Nassau branch, the
Pledgor agrees to execute and deliver a notice and acknowledgement of
assignment of deposits with respect to such Collateral in form and substance
satisfactory to the Bank.
2. WAIVERS BY XXXXXXX. The Pledgor waives notice of acceptance hereof,
notice of any action taken or omitted by the Bank in reliance hereon, notice of
default with respect to any of the Obligations and, to the fullest extent it
may effectively do so under applicable law, all defenses which might at any
time be available to a guarantor or surety of Obligations of the Borrower.
3. PLEDGE UNCONDITIONAL. This agreement is the direct, unconditional,
absolute and primary obligation of the Pledgor, and no invalidity,
irregularity or unenforceability of all or any part of the Obligations or of
any security therefor shall affect, impair or be a defense to this Agreement.
This Agreement and the Collateral are given to secure payment, and not merely
collection of the Obligations. The Bank shall not be required to seek to
enforce any of its rights under this Agreement as a condition to exercise or to
enforce its rights hereunder nor shall any failure to seek to enforce any such
rights affect, impair or be a defense to the Bank's rights hereunder.
4. DEFAULTS AND REMEDIES. Each of the following shall constitute a
default hereunder: any failure by the Pledgor to pay, perform or observe any
obligations on its part hereunder, the service upon the Bank, its International
Banking Facility, its Nassau branch or its London branch, or upon any other
financial institution in which the Collateral is located, of any summons naming
the Bank or such facility or branch as trustee for the Pledgor or the Borrower,
or of any similar writ or process of attachment relating to any deposit or
property of the Pledgor. Upon the occurrence of any default hereunder, the Bank
may apply any Collateral to the satisfaction of any or all of the Obligations
and pursue any additional rights or remedies available to it hereunder, or
under the Agreement or applicable law.
*Further Amended and Restated Revolving Credit Agreement dated February 15,
1996, the First Amendment dated 12/31/96 and Letter Amendments dated 12/24/98
and 9/21/99.
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5. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants to
the Bank that except for the securities interest granted to the Bank hereunder,
the Collateral is and shall remain free from any adverse lien, security interest
or encumbrances in favor of others: [if a corporation] it is duly organized,
validly existing and in good standing under the laws of Delaware and is duly
qualified to do business as foreign corporation and in good standing under the
laws of each other jurisdiction in which its business conducted or properties
owned requires such qualification; it has full power to enter into and perform
this Agreement and has taken a necessary corporate or other action to authorize
the execution, delivery and performance of this Agreement; this Agreement
constitutes the legal, valid and binding obligations of the Pledgor, enforceable
in accordance with its terms, subject to bankruptcy, insolvency or other similar
laws affecting the rights of creditors generally, the execution, delivery and
performance of this Agreement will not violate any provision of any existing
law, treaty or regulation applicable to the Pledgor or (as applicable) of its
Certificate of Incorporation, Articles of Organization and By-Laws, Articles of
Partnership trust agreement or other governing documents, or of any order or
decree of any court, arbitrator or governmental agency or of any contractual
undertaking to which it is a party or by which it may be bound; no consents,
licenses, approvals of authorizations of, exemptions by or registrations or
declarations with, any governmental authority are required with respect to this
Agreement.
6. COSTS. The Pledgor agrees to reimburse the Bank for any out-of-pocket
costs or expenses (including without limitation reasonable fees and
disbursements of counsel) incurred by the Bank in connection with the
preservation or enforcement of its rights or remedies under this Agreement or
any agreement between Borrower and the Bank.
7. INTERPRETATION, ETC. This Agreement is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No delay on the
part of the Bank in exercising any of its options, powers or rights, or partial
or single exercise thereof, shall constitute a waiver thereof. Except as
expressly provided herein, no waiver of any of its rights and no modification or
amendment of this Agreement shall be deemed to be made by the Bank unless the
same shall be in writing, duly signed on behalf of the Bank, each such waiver
[if any] shall apply only with respect to the specific instance involved and
shall in no way impair the rights of the Bank or the obligations of the Pledgor
to the Bank in any other respect or at any other time. The Collateral this
Agreement and the rights and obligations of the Bank and of the Pledgor
hereunder shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts. This Agreement is binding upon the Pledgor, its
successors and assigns and shall inure to the benefit of the Bank and its
respective successors or assigns including [without limitation] any other holder
at any time of the Note or any of them. The headings contained herein are for
convenience only and shall not affect the construction hereof. If any provision
hereof is prohibited or unenforceable in any jurisdiction, the same shall not
affect the remaining provisions hereof nor affect the validity or enforceability
of such provision in any other jurisdiction.
6. SUBMISSION TO JURISDICTION. Pledgor irrevocably submits to the
non-exclusive jurisdiction of any state or federal court sitting in Boston,
Massachusetts over any suit, action or proceeding arising out of or relating to
this Agreement or the Collateral. Pledgor irrevocably waives, to the fullest
extent it may effectively do so under applicable law, its right to a trial by
jury, and any objection which it may have or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Pledgor agrees, to the fullest extent it
may effectively do so under applicable law that a final judgment in any such
suit, action or proceeding brought in such court shall be conclusive and binding
upon Pledgor and may be enforced in the courts of the United States of America
and the Commonwealth of Massachusetts for any other courts to the jurisdiction
of which the Pledgor is or may be subject) by a suit upon such judgment,
provided that service process is effected on Pledgor as permitted by law.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed under seal and delivered as of the date first above written.
/s/ Aspen Technology, Inc.
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By: /s/ Xxxx X. Xxxxxxx
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Agreed and Accepted:
FLEET BANK OF MASSACHUSETTS, Xxxx Xxxxxxx, SVP & CFO
NATIONAL ASSOCIATION --------------------------
(Print name & Title)
By:
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(Print Name & Title)
