EXHIBIT 10.49
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement (this "Loan Modification Agreement")
dated as of January 15, 2004, and effective as of January 2, 2003, by and
between SILICON VALLEY BANK, a California-chartered bank, with its principal
place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a
loan production office located at One Newton Executive Park, Suite 200, 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, doing business under the name
"Silicon Valley East" ("Bank") and MOLDFLOW CORPORATION, a Delaware corporation
with its chief executive office located at 000 Xxxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000 ("Borrower").
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of November 13, 2001,
evidenced by, among other documents, a certain Loan Agreement dated as of
November 13, 2001, between Borrower and Bank, as amended by certain Loan
Modification Agreements dated June 11, 2001, June 26, 2001, December 6, 2002,
and June 25, 2003 (as amended, the "Loan Agreement"). Capitalized terms used but
not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
Hereinafter, the Loan Agreement, together with all other documents evidencing
the Obligations shall be referred to as the "Existing Loan Documents".
2. DESCRIPTION OF CHANGE IN TERMS.
A. Modifications to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the following
provision appearing as 2.1.1 (a) thereof:
"2.1.1 REVOLVING ADVANCES.
(a) Bank shall make Advances not exceeding (i) the
Committed Line or the Borrowing Base, whichever is less,
minus (ii) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of
Credit), minus (iii) the FX Reserve, and minus (iv) the
aggregate outstanding Advances hereunder (including any
Cash Management Services). Amounts borrowed under this
Section may be repaid and reborrowed during the term of
this Agreement."
and inserting in lieu thereof the following:
"2.1.1 REVOLVING ADVANCES.
(a) Bank shall make Advances not exceeding: (i)
the lessor of: (A) the Committed Line or, (B) the
aggregate of (1) the Borrowing Base, plus (2) Permitted
Overadvance, minus (ii) the amount of all outstanding
Letters of Credit (including drawn but unreimbursed
Letters of Credit), minus (iii) the FX Reserve, and
minus (iv) the aggregate outstanding Advances hereunder
(including any Cash Management Services). Amounts
borrowed under this Section may be repaid and reborrowed
during the term of this Agreement."
2. The Loan Agreement shall be amended by deleting the following
provision appearing as Section 2.1.2(a) thereof:
"2.1.2 LETTERS OF CREDIT SUBLIMIT.
(a) Bank shall issue or have issued Letters of
Credit for Borrower's account not exceeding (i) the
lesser of the Committed Line or the Borrowing Base,
minus (ii) the outstanding principal balance of any
Advances (including any Cash Management Services), minus
(iii) the amount of all Letters of Credit (including
drawn but unreimbursed Letters of Credit), plus an
amount equal to any Letter of Credit Reserves. The face
amount of outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed Five Million Dollars
($5,000,000.00). Borrower's Letter of Credit
reimbursement obligation shall be secured by cash on
terms acceptable to Bank on and after (i) the Maturity
Date if the term of this Agreement is not extended by
Bank, or (ii) the occurrence of an Event of Default
hereunder. All Letters of Credit shall be, in form and
substance, acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank's
form of standard Application and Letter of Credit
Agreement. Borrower agrees to execute any further
documentation in connection with the Letters of Credit
as Bank may reasonably request"
and inserting in lieu thereof the following:
"2.1.2 LETTERS OF CREDIT SUBLIMIT.
(a) Bank shall issue or have issued Letters of
Credit for Borrower's account not exceeding the lesser
of: (i) (A) the Committed Line or, (B) the aggregate of
(1) the Borrowing Base, plus (2) Permitted Overadvance,
minus (ii) the outstanding principal balance of any
Advances (including any Cash Management Services), minus
(iii) the amount of all Letters of Credit (including
drawn but unreimbursed Letters of Credit), plus an
amount equal to any Letter of Credit Reserves. The face
amount of outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed Five Million Dollars
($5,000,000.00 ). Borrower's Letter of Credit
reimbursement obligation shall be secured by cash on
terms acceptable to Bank on and after (i) the Maturity
Date if the term of this Agreement is not extended by
Bank, or (ii) the occurrence of an Event of Default
hereunder. All Letters of Credit shall be, in form and
substance, acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank's
form of standard Application and Letter of Credit
Agreement. Borrower agrees to execute any further
documentation in connection with the Letters of Credit
as Bank may reasonably request."
3. The Loan Agreement shall be amended by deleting the following
provision appearing as Section 2.2 thereof:
"2.2 OVERADVANCES. If Borrower's Obligations under
Section 2.1.1, 2.1.2, 2.1.3, and 2.1.4 exceed the lesser of
either (i) the Committed Line or (ii) the Borrowing Base,
Borrower must immediately pay in cash to Bank the excess."
and inserting in lieu thereof the following:
"2.2 OVERADVANCES. If Borrower's Obligations under
Section 2.1.1, 2.1.2, 2.1.3, and 2.1.4 exceed the lesser of:
(i) the Committed Line or (ii) the aggregate of (A) the
Borrowing Base, plus (B) the Permitted Overadvance, Borrower
must immediately pay in cash to Bank the excess. By way of
example, in the event the Borrower has Advances of One Million
One Hundred Thousand Dollars ($1,100,000.00), the Borrowing
Base must be equal to or greater than One Hundred Thousand
Dollars ($100,000.00)."
4. The Loan Agreement is amended by deleting the following
provisions appearing as Section 5.2 (a) and (b) thereof:
"5.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower shall deliver to Bank: (i) no later
than thirty (30) days after the last day of each
quarter, and if there are Advances outstanding then no
later than thirty (30) days after the last day of each
month, a company prepared consolidated balance sheet and
income statement covering Borrower's consolidated
operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon
as available, but no later than one hundred and twenty
(120) days after the last day of Borrower's fiscal year,
audited consolidated financial statements prepared under
GAAP, consistently applied, together with an unqualified
opinion on the financial statements from an independent
certified public accounting firm reasonably acceptable
to Bank; (iii) within five (5) days of filing, copies of
all statements, reports and notices made available to
Borrower's security holders and all reports on Form
10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission; (iv) a prompt report of any legal
actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to
Borrower or any Subsidiary of Five Hundred Thousand
Dollars ($500,000.00) or more, in the aggregate; and (v)
or other financial information reasonably requested by
Bank.
(b) Borrower shall deliver to Bank a Borrowing
Base Certificate signed by a Responsible Officer in the
form of EXHIBIT B, with aged listings of accounts
receivable (by invoice date): (i) within twenty-five
(25) days of the last day of each month in which
Advances were outstanding, and (ii) within twenty-five
(25) days of the last day of each quarter.
and inserting in lieu thereof the following:
"5.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower shall deliver to Bank: (i) no later
than thirty (30) days after the last day of each
quarter, and if there are Advances outstanding then no
later than thirty (30) days after the last day of each
month, a company prepared consolidated balance sheet and
income statement covering Borrower's consolidated
operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon
as available, but no later than one hundred and twenty
(120) days after the last day of Borrower's fiscal year,
audited consolidated financial statements prepared under
GAAP, consistently applied, together with an unqualified
opinion on the financial statements from an independent
certified public accounting firm reasonably acceptable
to Bank; (iii) a prompt report of any legal actions
pending or threatened against Borrower or any Subsidiary
that could result in damages or costs to Borrower or any
Subsidiary of Five Hundred Thousand Dollars
($500,000.00) or more, in the aggregate; and (iv) or
other financial information reasonably requested by
Bank.
(b) Borrower shall deliver to Bank a Borrowing
Base Certificate signed by a Responsible Officer in the
form of Exhibit C, with aged listing of accounts
receivable (by invoice date): (i) within twenty-five
(25) days of the last day of each month in which
Advances were outstanding, and (ii) within forty-five
(45) days of the last day of each quarter in which
Credit Extensions (other than Advances) were
outstanding."
5. The Loan Agreement shall be amended by deleting the following,
appearing as Section 5.6 thereof, in its entirety:
"5.6 PRIMARY ACCOUNTS. Borrower shall maintain its
primary operating accounts with the Bank. The
outstanding balance of Borrower's investment/securities
account, held at the Bank, shall as of the date of this
Agreement equal Ten Million Dollars ($10,000,000.00) in
cash and marketable securities. In addition to the
foregoing requirement, in the event that Bank offers
competitive rates of return, Borrower shall use its best
efforts to deposit, beginning with the date which is six
(6) months after the Closing Date, an additional
aggregate amount of Five Million Dollars ($5,000,000.00)
in investment and securities accounts with Bank. Such
amounts are initial balances only and Borrower and Bank
agree that such amounts may decrease from time to time
on changes in market value or transfers of cash in
accordance with this Agreement."
and inserting in lieu thereof the following:
"5.6 PRIMARY ACCOUNTS. Borrower shall maintain its
primary operating accounts with the Bank. The
outstanding balance of Borrower's investment/securities
account, held at the Bank, shall as of the date of this
Agreement, equal Ten Million Dollars ($10,000,000.00)
in cash and marketable securities. In addition to the
foregoing requirement, in the event that Bank offers
competitive rates of return, Borrower shall use its
reasonable best efforts to deposit additional funds in
investment and securities accounts with Bank. Such
amounts are initial balances only and Borrower and Bank
agree that such amounts may decrease from time to time
on changes in market value or transfers of cash in
accordance with this Agreement."
6. The Loan Agreement shall be amended by deleting the following,
appearing as Section 6.3 thereof, in its entirety:
"6.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate,
with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person other than
(i) mergers, consolidations, capital contributions,
acquisitions, or other like transactions between Parent
and any Subsidiary or between Subsidiaries, (ii)
acquisitions by Borrower of all or substantially all of
the capital stock or property of another Person (each
instance of the above defined as a "Transaction");
provided, however, that (A) each Transaction does not
decrease Borrower's cash and cash equivalents by more
than Seven Million Five Hundred Thousand Dollars
($7,500,000.00); (B) the aggregate Transactions in any
fiscal year do not decrease Borrower's cash and cash
equivalents by more than Fifteen Million Dollars
($15,000,000.00); (C) each Transaction will not result,
whether solely as a result of the passage of time, or
otherwise, in the occurrence of an Event of Default; and
(D) Borrower is the surviving entity."
and inserting in lieu thereof the following:
"6.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate,
with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person other than
(i) mergers, consolidations, capital contributions,
acquisitions, or other like transactions between Parent
and any Subsidiary or between Subsidiaries, (ii)
acquisitions by Borrower of all or substantially all of
the capital stock or property of another Person (each
instance of the above defined as a "Transaction");
provided, however, that (A) each Transaction does not
decrease Borrower's cash and cash equivalents by more
than Fourteen Million Dollars ($14,000,000.00); (B) the
aggregate Transactions in any fiscal year do not
decrease Borrower's cash and cash equivalents by more
than Twenty Million Dollars ($20,000,000.00); (C) each
Transaction will not result, whether solely as a result
of the passage of time, or otherwise, in the occurrence
of an Event of Default; and (D) Borrower is the
surviving entity."
7. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 13.1 thereof:
""Maturity Date" means January 3, 2003."
and inserting in lieu thereof the following:
""Maturity Date" means December 2, 2004."
8. The Loan Agreement shall be amended by inserting the
following definition to appear alphabetically in Section 13.1
thereof:
""Permitted Overadvance" is an Advance or Advances under
the Committed Line of up to One Million Dollars
($1,000,000.00).
9. The Compliance Certificate appearing as EXHIBIT C to the Loan
Agreement is hereby replaced with the Compliance Certificate
attached as EXHIBIT A hereto.
3. FEES. Borrower shall pay to Bank a modification fee equal to Twelve Thousand
Five Hundred Dollars ($12,500.00), which fee shall be due on the date hereof
and shall be deemed fully earned as of the date hereof. The Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of the Existing Loan Documents, and confirms
that the indebtedness includes, without limitation, the Obligations.
6. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.
7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, 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 Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this Loan Modification Agreement.
8. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
[The remainder of this page is intentionally left blank]
This Loan Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.
BORROWER: BANK:
MOLDFLOW CORPORATION SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ Xxxxxxx X. XxxXxxxxxx By: /s/ Xxxx Xxxxxxxxx
________________________________ __________________________________
Name: Xxxxxxx X. XxxXxxxxxx Name: Xxxx Xxxxxxxxx
_______________________________ _________________________________
Title: Executive Vice President Title:
______________________________ ________________________________
SILICON VALLEY BANK
By:___________________________________
Name:_________________________________
Title:________________________________
(signed in Santa Xxxxx County,
California)
EXHIBIT A
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: MOLDFLOW CORPORATION
The undersigned authorized officer of Moldflow Corporation certifies that
under the terms and conditions of the Loan 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 financial statements with CC Quarterly within 30 days Yes No
Monthly if Advances outstanding
Annual (CPA Audited) FYE within 120 days Yes No
BBC with A/R Agings Monthly within 25 in which Advances Yes No
outstanding Quarterly within 45 days
in which Credit Extension (other than
Advances) outstanding
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
Maintain on a Quarterly Basis:
Minimum Liquidity $30,000,000.00 $ ____________ Yes No
Maximum Net Loss: ($* ) ($____________) $ ____________ Yes No
*(i) $500,000.00 for the Borrower's fiscal quarter ending 12/27/03 and for
each quarter thereafter.
COMMENTS REGARDING EXCEPTIONS: See Attached.
Sincerely,
_____________________________
SIGNATURE
_____________________________
TITLE
_____________________________
DATE
BANK USE ONLY
Received by: ____________________________
AUTHORIZED SIGNER
Date: ___________________________________
Verified: _______________________________
AUTHORIZED SIGNER
Date: ___________________________________
