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EXHIBIT 10.14
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of August 6, 1997, by
and between International Integration Incorporated ("Borrower") whose address is
000 Xxxx Xxxxxx Xxxxxxxxx, XX 00000 and Silicon Valley Bank, a
California-chartered bank ("Lender"), with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan production office
located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, doing business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated August 8, 1995 in the original
principal amount of Two Million and 00/100 Dollars ($2,000,000.00) (the "Working
Capital Line") and being executed concurrently herewith, a Promissory Note in
the original principal amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00) (the "Equipment Line"). The Working Capital Line and the Equipment
Line shall collectively be referred to as the "Notes". The Notes, together with
other promissory notes from Borrower to Lender, are governed by the terms of a
Letter Agreement, dated August 8, 1995, between Borrower and Lender, as such
agreement may be amended from time to time (the "Loan Agreement"). Capitalized
terms used but not otherwise defined herein shall have the same meaning as in
the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL: Repayment of the Indebtedness is secured by a
Commercial Security Agreement, dated August 8, 1995. In addition, Borrower has
agreed not to further encumber or pledge any of its Intellectual Property,
pursuant to that certain Negative Pledge Agreement dated August 8, 1995.
Hereinafter, the above-described security documents, together with all other
documents securing repayment of the Indebtedness shall be referred to as the
"Security Documents". Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Indebtedness shall be referred to as
the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO NOTE.
1. Payable in one payment of all outstanding principal plus all
accrued unpaid interest on August 5, 1998. In addition,
Borrower will pay regular monthly payments of all accrued
unpaid interest due as of each payment date beginning
September 5, 1997, and all subsequent interest payments shall
be due on the same day of each month thereafter.
2. Notwithstanding anything to the contrary contained in the
paragraph entitled "Variable Interest Rate" upon Borrower's
completion of a successful Initial Public Offering ("IPO"),
the interest rate to be applied to the unpaid principal
balance of the Note shall decrease to Lender's current Index
then in effect. Such interest rate change shall be effective
as of the first day of the month following Lender's receipt of
evidence indicating Borrower has met the above described
criteria.
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B. MODIFICATION(S) TO LOAN AGREEMENT.
1. The paragraph beginning with the words "Funds shall be
advanced under the Working Capital Line" is hereby amended to
read as follows:
Funds shall be advanced under the Working Capital Line
according to a Borrowing Base formula, as determined by
Lender, as defined as follows: The lesser of (a) $2,000,000.00
minus (i) the face amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) minus
(ii) the Foreign Exchange Reserve and (iii) minus the Merchant
Services Sublimit, or (b) the sum of (i) Seventy-five percent
(75%) of eligible accounts receivable minus (ii) the face
amount of all outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit) and minus (iii) the
Foreign Exchange Reserve). Eligible accounts receivable shall
include, but not be limited to, those billed accounts
outstanding less than 90 days from the date of invoice,
including foreign accounts receivable (approved by Lender on a
case-by-case basis), but shall exclude all government, contra,
and intercompany accounts; and exclude accounts wherein 50% or
more of the account is outstanding more than 90 days from the
date of invoice. Any account which alone exceeds 30% of total
accounts will be ineligible to the extend said account exceeds
30% of total accounts (higher concentrations may be approved
by Lender, on a case-by-case basis). Also exclude any credit
balances which are aged past 90 days. Also ineligible are any
accounts which Lender in its sole judgment excludes for valid
credit reasons.
2. Notwithstanding anything to the contrary contained in the
paragraph beginning with the words "Borrowings under the
Working Capital Line" upon Borrower's completion of a
successful Initial Public Offering ("IPO"), the interest rate
to be applied to the unpaid principal balance of the Note
shall decrease to Lender's current Index then in effect. Such
interest rate change shall be effective as of the first day of
the month following Lender's receipt of evidence indicating
Borrower has met the above described criteria.
3. The following paragraph entitled "Cash Management Services
Sublimit" is hereby incorporated into the Loan Agreement:
Borrower may utilize up to an aggregate amount not to exceed
$1,000,000.00 for Cash Management Services provided by Lender,
which services may include merchant services, PC-ACH, direct
deposit of payroll, corporate credit card, and other related
check cashing services as defined in that certain Cash
Management Services Agreement provided to Borrower in
connection herewith (a "Cash Management Service", or the "Cash
Management Services"). All amounts actually paid by Lender in
respect of a Cash Management Service or Cash Management
Services shall, when paid, constitute an advance under the
Working Capital Line.
4. The following paragraph entitled "Cash Flow Coverage" is
hereby incorporated into the Section entitled "Affirmative
Covenants" in the Loan Agreement:
Cash Flow Coverage - (Tested Quarterly) Maintain a minimum
Cash Flow Coverage of 1.75 to 1.00.
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Cash Flow Coverage is defined as earnings before interest
taxes depreciation and amortization divided by current
maturities long term debt plus interest expense.
5. PAYMENT OF LOAN FEES. Borrower shall pay Lender a fee in the amount of Ten
Thousand and 00/100 Dollars ($10,000.00) for the Working Capital Line, plus all
out-of-pocket expenses (the "Loan Fee").
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
7. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Lender 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.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this Loan Modification Agreement. The terms of this Paragraph apply not only
to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.
9. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
11. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee and Lender's receipt of the Equipment
Line promissory note fully executed by Borrower.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER:
INTERNATIONAL INTEGRATION INCORPORATED
By: /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
Name: XXXXXXXX X. XXXXXX
---------------------------------------
Title: CFO
--------------------------------------
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LENDER:
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ X. X. XXXXXXX
-----------------------------------------
Name: X. X. XXXXXXX
---------------------------------------
Title: SENIOR V.P.
--------------------------------------
SILICON VALLEY BANK
By: /s/ XXX X. XXXXX
-----------------------------------------
Name: XXX X. XXXXX
---------------------------------------
Title: ASST. VICE PRESIDENT
--------------------------------------
(Signed at Santa Xxxxx County, CA)
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LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of August 7, 1996, by and
between International Integration Incorporated ("Borrower") whose address is 000
Xxxx Xxxxxx Xxxxxxxxx, XX 00000 and Silicon Valley Bank, a California-chartered
bank ("Lender"), with its principal place of business at 0000 Xxxxxx Xxxxx,
Xxxxx Xxxxx, XX 00000 and with a loan production office located at Wellesley
Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, doing business
under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated August 8, 1995 in the original
principal amount of Two Million and 00/100 Dollars ($2,000,000.00) (the
"Note"). The Note, together with other promissory notes from Borrower to Lender,
is governed by the terms of a Letter Agreement, dated August 8, 1995, between
Borrower and Lender, as such agreement may be amended from time to time (the
"Loan Agreement"). Capitalized terms used but not otherwise defined herein shall
have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL: Repayment of the Indebtedness is secured by a
Commercial Security Agreement, dated August 8, 1995 (the "Security Agreement").
In addition, Borrower has agreed not to further encumber or pledge any of its
Intellectual Property, pursuant to that certain Negative Pledge Agreement dated
August 8, 1995.
Hereinafter, the above-described security documents, together with all other
documents securing payment of the Note (and other notes executed by Borrower in
favor of Lender) shall be referred to as the "Security Documents". Hereinafter,
the Security Documents, together with all other documents evidencing or securing
the Indebtedness shall be referred to as the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO NOTE.
1. Payable in one payment of all outstanding principal plus all
accrued unpaid interest on August 6, 1997. In addition,
Borrower will pay regular monthly payments of all accrued
unpaid interest due as of each payment date beginning
September 6, 1996, and all subsequent interest payments shall
be due on the same day of each month thereafter.
2. The interest rate to be applied to the unpaid principal
balance of the Note is hereby decreased, effective as of the
date hereof, to one-half (.5000%) percentage point over
Lender's current Index.
B. MODIFICATION(S) TO LOAN AGREEMENT.
1. The paragraph beginning with the words "Funds shall be
advanced under the Working Capital Line" is hereby amended to
read as follows:
Funds shall be advanced under the Working Capital Line
according to a Borrowing Base formula, as determined by Lender
on a monthly basis, as defined as follows: The lesser of (a)
$2,000,000.00 minus (i) the face amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of
Credit) and minus (ii) the Foreign Exchange Reserve or (b)
Seventy-five percent (75%) of eligible accounts
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receivable minus (i) the face amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of
Credit) and minus (ii) the Foreign Exchange Reserve). Eligible
accounts receivable shall include, but not be limited to,
those billed accounts outstanding less than 90 days from the
date of invoice, including foreign accounts receivable,
(approved by Lender on a case-by-case basis), but shall
exclude all government, contra, and intercompany accounts; and
exclude accounts wherein 50% or more of the account is
outstanding more than 90 days from the date of invoice. Any
account which alone exceeds 30% (higher concentrations may be
approved by Lender, on a case-by-case basis) of total accounts
will be ineligible to the extend said account exceeds 30% of
total accounts. Also exclude any credit balances which are
aged past 90 days. Also ineligible are any accounts which
Lender in its sole judgment excludes for valid credit reasons.
2. The paragraph entitled "Tangible Capital Base" is hereby
amended to read as follows:
TANGIBLE CAPITAL BASE - (Tested Monthly) Maintain a minimum
Tangible Capital Base (TCB) of $2,800,000,.00 increasing by
80% of quarterly profits and 70% of equity proceeds as of the
quarter ending September 30, 1996, and quarterly thereafter.
TCB is defined as Stockholders' Equity plus Subordinated Debt
(debt which is formally subordinated to the Lender) less
intangibles (including but not limited to Goodwill,
Capitalized Software and Excess Purchase Costs).
3. The paragraph entitled "Liquidity" is hereby amended in part,
to read as follows:
"Quick Ratio" is defined as the sum of cash and account
receivables (net of those unbilled) divided by current
liabilities exclusive of deferred revenues.
4. For calculation purposes of the Profitability covenant, net
profit is exclusive of capitalized software costs.
4. PAYMENT OF LOAN FEE. Borrower shall pay Lender a fee in the amount of
Seventeen Thousand Five Hundred and 00/100 Dollars ($17,500.00) plus all
out-of-pocket expenses (the "Loan Fee").
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Lender 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.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this Loan Modification Agreement. The terms of this Paragraph apply not only
to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.
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8 JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
9. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
10. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER:
INTERNATIONAL INTEGRATION, INCORPORATED
By: /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
Name: XXXXXXXX X. XXXXXX
---------------------------------------
Title: CHIEF FINANCIAL OFFICER
--------------------------------------
LENDER:
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ XXXX X. XXXXX
-----------------------------------------
Name: XXXX X. XXXXX
---------------------------------------
Title: VICE PRESIDENT
--------------------------------------
SILICON VALLEY BANK
By: /s/ XXXXXXXXX XXXX
-----------------------------------------
Name: XXXXXXXXX XXXX
---------------------------------------
Title: VICE PRESIDENT
--------------------------------------
(Signed at Santa Xxxxx County, CA)
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LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of August 28, 1997, by
and between International Integration Incorporated ("Borrower") whose address is
000 Xxxx Xxxxxx Xxxxxxxxx, XX 00000 and Silicon Valley Bank, a
California-chartered bank ("Lender"), with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan production office
located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, doing business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated August 8, 1995 in the original
principal amount of Two Million and 00/100 Dollars ($2,000,000.00) (the "Working
Capital Line") and a Promissory Note dated August 6, 1997, in the original
principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
"Equipment Line"). The Working Capital Line and the Equipment Line shall
collectively be referred to as the "Notes". The Notes, together with other
promissory notes from Borrower to Lender, are governed by the terms of a Letter
Agreement, dated August 8, 1995, between Borrower and Lender, as such agreement
may be amended from time to time (the "Loan Agreement"). Capitalized terms used
but not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL: Repayment of the Indebtedness is secured by a
Commercial Security Agreement, dated August 8, 1995. In addition, Borrower has
agreed not to further encumber or pledge any of its Intellectual Property,
pursuant to that certain Negative Pledge Agreement dated August 8, 1995.
Hereinafter, the above-described security documents, together with all other
documents securing repayment of the Indebtedness shall be referred to as the
"Security Documents". Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Indebtedness shall be referred to as
the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO LOAN AGREEMENT.
Notwithstanding anything to the contrary contained in the paragraph
entitled "Affirmative Covenants" Lender shall allow Borrower to
provide its 1996 audited fiscal year end financial statements no
later than October 31, 1997.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
6. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Lender 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.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is
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expressly released by Lender in writing. No maker, endorser, or guarantor will
be released by virtue of this Loan Modification Agreement. The terms of this
Paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.
7. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
8. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER:
INTERNATIONAL INTEGRATION INCORPORATED
By: /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
Name: XXXXXXXX X. XXXXXX
---------------------------------------
Title: 7/4/97
--------------------------------------
LENDER:
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ XXXX X. XXXXX
-----------------------------------------
Name: XXXX X. XXXXX
---------------------------------------
Title: VICE PRESIDENT
--------------------------------------
SILICON VALLEY BANK
By: /s/ XXXXXXX X. XXXXXX
-----------------------------------------
Name: XXXXXXX X. XXXXXX
---------------------------------------
Title: LOAN DOCS OFFICER
--------------------------------------
(Signed at Santa Xxxxx County, CA)
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