Exhibit 10.20
THIRD LOAN MODIFICATION
AGREEMENT
This Third Loan Modification
Agreement (this “Loan Modification Agreement” )
is entered into as of January 26, 2009 and is effective as of
the Third Loan Modification Effective Date, by and between
SILICON VALLEY BANK, a California corporation with its
principal place of business at 3003 Tasman Drive, Santa Clara,
California 95054 and with a loan production office located at One
Newton Executive Park, Suite 200, 2221 Washington Street,
Newton, Massachusetts 02462 ( “Bank” ), and
IBASIS, INC., a Delaware corporation with offices at 20
Second Avenue, Burlington, Massachusetts 01803 (
“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 October 2, 2007,
evidenced by, among other documents, a certain Second Amended and
Restated Loan and Security Agreement dated as of October 2,
2007, between Borrower and Bank, as modified by a certain First
Loan Modification Agreement dated as of April 28, 2008, and as
further modified by a certain Second Loan Modification Agreement,
dated as of October 9, 2008 (as amended, the “Loan
Agreement” ). Capitalized terms used but not otherwise
defined herein shall have the same meaning given such terms in the
Loan Agreement.
2.
DESCRIPTION OF
COLLATERAL . Repayment of
the Obligations is secured by the Collateral as described in the
Loan Agreement and the Intellectual Property Security Agreement
dated December 30, 2002 granted by Borrower in favor of Bank,
as amended and ratified (as so amended and ratified, the
“IP Agreement” ).
Hereinafter, the Loan Agreement and the IP
Agreement, together with all other documents evidencing or securing
the Obligations shall be referred to as the “Existing Loan
Documents” .
3.
DESCRIPTION OF CHANGE IN
TERMS .
A.
Modifications to Loan
Agreement.
I.
The Loan Agreement shall be amended
by deleting the following definitions appearing in
Section 13.1 thereof:
““KGCS”
means KPN Global Carrier Services,
B.V., a private limited liability company organized under the laws
of The Netherlands.
“LIBOR
Rate” means, for
each Interest Period in respect of LIBOR Advances comprising part
of the same Advances, an interest rate per annum (rounded
upward to the nearest 1/100th of one percent (0.01%)) equal to
LIBOR for such Interest Period divided by one (1)
minus the Reserve Requirement for such Interest
Period.
“Liquidity” is, on any date of measurement, Borrower’s
unrestricted cash at Bank plus the Availability
Amount.
“Prime
Rate” is
Bank’s most recently announced “prime rate”, even
if it is not Bank’s lowest rate.
“Revolving Line”
is an Advance or Advances
in an aggregate amount of up to $50,000,000 outstanding at any
time.
“Revolving Line Maturity
Date” is
October 1, 2009.”
and inserting in lieu thereof the
following:
““KPN,
B.V.” means KPN
Global Carrier Services, B.V., a private limited liability company
organized under the laws of The Netherlands.
“LIBOR
Rate” means, for
each Interest Period in respect of LIBOR Advances comprising part
of the same Advances, an interest rate per annum (rounded
upward to the nearest 1/100th of one percent (0.01%)) equal to the
greater of (i) LIBOR for such Interest Period divided
by one (1) minus the Reserve Requirement
for such Interest Period; and (ii) two percent
(2.00%).
“Liquidity” is, on any date of measurement, Borrower’s
unrestricted cash at Bank plus the Availability Amount
minus the First Loan Modification Advance Amount.
“Prime
Rate” is the
greater of (i) four and one-quarter of one percent (4.25%) or
(ii) Bank’s most recently announced “prime
rate”, even if it is not Bank’s lowest rate.
“Revolving
Line” is an Advance
or Advances in an aggregate amount of up to $35,000,000 outstanding
at any time.
“Revolving Line Maturity
Date” is
September 30, 2010.”
II.
The Loan Agreement shall be amended
by inserting the following definitions in the appropriate
alphabetical order in Section 13.1 thereof:
“Capital
Expenditure” and
“Capital Expenditures” are, for any period, with
respect to any Person, the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability) by
such Person and its Subsidiaries during such period for the
acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that, in
conformity with GAAP, are included in “additions to property,
plant or equipment” or comparable items reflected in the
consolidated financial statements of such Person and its
Subsidiaries.
“Third Loan Modification
Agreement” is that
certain Third Loan Modification Agreement, by and between Borrower
and Bank, executed as of the Third Loan Modification Effective
Date.
“Third Loan Modification
Effective Date” is
the date indicated on the signature page to the Third Loan
Modification Agreement.”
III.
The Loan Agreement shall be amended
by deleting the following definitions appearing in
Section 13.1 thereof:
““LTM
EBITDA” means, for
any Person as of any date of measurement, EBITDA for the prior 12
consecutive months ending on such date of measurement; provided,
that for any month prior to the Effective Date used in calculating
LTM EBITDA of the Borrower, LTM EBITDA of the Borrower shall be
calculated for each such month as the EBITDA of the Borrower and
its Subsidiaries, on a consolidated basis plus the EBITDA of
KGCS for such month.
“Total Funded
Debt” means, at any
date of measurement, the outstanding aggregate principal amount of
all Advances to Borrower.
“Total Funded Debt
Ratio” means, at
any date of measurement, the ratio of Total Funded Debt on such
date to LTM EBITDA on such date.”
IV.
The Loan Agreement shall be amended
by deleting the following, appearing in
Section 2.4(b) thereof, in its entirety:
“(b)
Performance Pricing
. Each of the Prime Rate Margin and
the LIBOR Rate Margin shall be adjusted quarterly and shall be
applied on and after the first day of each such fiscal quarter as
follows: for any fiscal quarter, as of the first day of each such
fiscal quarter: (i) if the Total Funded Debt Ratio for the
immediately preceding fiscal quarter is less than 1.50:1.00, then
the Prime Rate Margin for such fiscal quarter shall be 1.00% and
the LIBOR Rate Margin for such fiscal quarter shall be 3.25%, and
(ii) if the Total Funded Debt Ratio for the immediately
preceding fiscal quarter is equal to or greater than 1.50:1.00,
then the Prime Rate Margin for such fiscal quarter shall be 1.50%
and the LIBOR Rate Margin for such fiscal quarter shall be 3.75%;
provided , however , that for the fiscal
quarter beginning on April 1, 2009 and thereafter, for any
fiscal quarter in which Borrower maintains Liquidity equal to or
greater than $20,000,000 for the entire fiscal quarter, the
above-listed Prime Rate Margins and LIBOR Margins shall each be
reduced by 0.50%.”
and inserting in lieu thereof the
following:
“(b)
Performance Pricing
. The margin applicable to the Prime
Rate (the “Prime Rate Margin” ) and the margin
applicable to the LIBOR Rate (the “LIBOR Rate
Margin” ) shall be adjusted quarterly and shall he
applied on and after the first day of each such fiscal quarter as
follows: for any fiscal quarter, as of the first day of each such
fiscal quarter: (i) if the Borrower’s EBITDA
minus Capital Expenditures for the immediately preceding
fiscal quarter is less than Five Million Dollars ($5,000,000), then
the Prime Rate Margin for such fiscal quarter shall be 1.50% and
the LIBOR Rate Margin for such fiscal quarter shall be 3.75%, and
(ii) if the Borrower’s EBITDA minus Capital
Expenditures for the immediately preceding fiscal quarter is
greater than or equal to Five Million Dollars ($5,000,000), then
the Prime Rate Margin for such fiscal quarter shall be 1.00% and
the LIBOR Rate Margin for such fiscal quarter shall be 3.25%.
Performance Pricing in effect as of January 1, 2009 will be in
accordance with clause (i) hereof.”
V.
The Loan Modification Agreement
shall be amended by deleting the following, appearing in
Section 2.5(d) thereof, in its entirety:
“(d)
Unused Revolving Line Facility
Fee . A fee (the
“Unused Revolving Line Facility Fee” ), which
fee shall be paid quarterly, in arrears, on the last day of each
fiscal quarter, calculated as follows: (i) if the Total Funded
Debt Ratio for the fiscal quarter for which the Unused Revolving
Line Facility Fee is due is less than 1.50:1.00, the Unused
Revolving Line Facility Fee for such fiscal quarter shall be 0.375%
per annum of the average unused portion of the Revolving Line for
such quarter, as determined by Bank; and (ii) if the Total
Funded Debt Ratio for the fiscal quarter for which the Unused
Revolving Line Facility Fee is due is greater than or equal to
1.50:1.00, the Unused Revolving Line Facility Fee for such fiscal
quarter shall be 0.625% per annum of the average unused portion of
the Revolving Line for such quarter, as determined by Bank.
Borrower shall not be entitled to any credit, rebate or repayment
of any Unused Revolving Line Facility Fee previously earned by Bank
pursuant to this Section 2.5(d) notwithstanding any
suspension or termination of Bank’s obligation to make
Advances hereunder; and”
and inserting in lieu thereof the
following:
“(d)
Unused Revolving Line Facility
Fee. A fee (the
“Unused Revoving Line Facility Fee” ), which fee
shall be paid quarterly, in arrears, on the last day of each fiscal
quarter, calculated as follows: (i) if the Borrower’s
EBITDA minus Capital Expenditures for the for the fiscal
quarter in which the Unused Revolving Line Facility Fee is due is
less than Five Million Dollars ($5,000,000), the Unused Revolving
Line Facility Fee for such fiscal quarter shall be 0.625% per annum
of the average unused portion of the Revolving Line for such
quarter, as determined by Bank; and (ii) if the
Borrower’s EBITDA minus Capital Expenditures for the
for the fiscal quarter in which the Unused Revolving Line Facility
Fee is due is greater than or equal to Five Million Dollars
($5,000,000), the Unused Revolving Line Facility Fee for such
fiscal quarter shall be 0.375% per annum of the average unused
portion of the Revolving Line for such quarter, as determined by
Bank. Borrower shall not be entitled to any credit, rebate or
repayment of any Unused Revolving Line Facility Fee previously
earned by Bank pursuant to this
Section 2.5(d) notwithstanding any suspension or
termination of Bank’s obligation to make Advances hereunder;
and”
VI.
The Loan Modification Agreement
shall be amended by deleting the following, appearing in Section
4.1(c) thereof, in its entirety:
“If such termination is at
Borrower’s election or at Bank’s election due to the
occurrence and continuance of an Event of Default, Borrower shall
pay to Bank, in addition to the payment of any other expenses or
fees then-owing, a termination fee in an amount equal to
(i) for any termination within six (6) months of the
Effective Date, one percent (1%) of $50,000,000, and (ii) for
any termination during the period from six (6) months after
the Effective Date up to but not including the first anniversary of
the Effective Date, one-half of one percent (0.50%) of $50,000,000,
provided that no termination fee shall be charged if (i) the
credit facility hereunder is replaced with a new facility from
Silicon Valley Bank, (ii) the credit facility hereunder is
terminated for any reason after the first anniversary of the
Effective Date, or (iii) the credit facility hereunder is
terminated by Borrower solely as a result of Bank’s
determination to no longer offer LIBOR Advances pursuant to the
provisions of Sections 3.6(b) or 3.7(d).”
and inserting in lieu thereof the
following:
“If such termination is at
Borrower’s election or at Bank’s election due to the
occurrence and continuance of an Event of Default any time prior to
the first anniversary of the Third Loan Modification Effective
Date, Borrower shall pay to Bank, in addition to the payment of any
other expenses or fees then-owing, a termination fee in an amount
equal to one percent (1.00%) of $35,000,000; provided that no
termination fee shall be charged if (i) the credit facility
hereunder is replaced with a new facility from Bank or its
successors or assigns, (ii) the credit facility hereunder is
terminated for any reason on or after the first anniversary of the
Effective Date, or (iii) the credit facility hereunder is
terminated by Borrower solely as a result of Bank’s
determination to no longer offer LIBOR Advances pursuant to the
provisions of Sections 3.6(b) or 3.7(d).”
VII.
The Loan Modification Agreement
shall be amended by deleting the following, appearing in Section
6.2(a)(iii) thereof, in its entirety:
“(iii) within five
(5) days after the filing of quarterly financial statements
with the SEC, a Compliance Certificate signed by a Responsible
Officer, certifying that as of the end of such quarter, Borrower
was in full compliance with all of the terms and conditions of this
Agreement, and setting forth calculations showing compliance with
the financial covenants set forth in this Agreement and such other
information as Bank shall reasonably request, including, without
limitation, a statement that at the end of such quarter there were
no held checks;”
and inserting in lieu thereof the
following:
“(iii) (A) within five
(5) days after the filing of quarterly financial statements
with the SEC and (B) within twenty five (25) days after the
end of each month that is not the last month of any fiscal quarter
of the Borrower, a Compliance Certificate signed by a Responsible
Officer, certifying that as of the end of such month or quarter, as
applicable, Borrower was in full compliance with all of the terms
and conditions of this Agreement, and setting forth calculations
showing compliance with the financial covenants set forth in this
Agreement, as applicable and such other information as Bank shall
reasonably request, including, without limitation, a statement that
at the end of such month or quarter, as applicable there were no
held checks;”
VIII.
The Loan Modification Agreement
shall be amended by deleting the following, appearing in Section
6.2(a)(iv) thereof, in its entirety:
“(iv) as soon as
available, and in any event within forty-five (45) days after the
end of each fiscal quarter of Borrower and its Subsidiaries
(including, without limitation, each fiscal quarter ending
December 31 of each fiscal year), consolidated and
consolidating quarterly unaudited financial statements of the
Borrower and its Subsidiaries;”
and inserting in lieu thereof the
following:
“(iv) as soon as
available, and in any event within the earlier to occur of
(A) forty-five (45) days after the end of each fiscal quarter
of Borrower and its Subsidiaries (including, without limitation,
each fiscal quarter ending December 31 of each fiscal year),
and (B) five (5) days after filing with the SEC,
consolidated and consolidating quarterly unaudited financial
statements of the Borrower and its Subsidiaries;”
IX.
The Loan Modification Agreement
shall he amended by deleting the following, appearing in
Section 6.2(a)(vi) thereof, in its entirety:
“(vi) within sixty (60)
days after the end of each fiscal year of Borrower, annual
operating budgets (including income statements, balance sheets and
cash flow statements, by month) for the upcoming fiscal year of
Borrower, as approved by Borrower’s board of directors,
together with any related business forecasts used in the
preparation of such annual financial projections;”
and inserting in lieu thereof the
following:
“(vi) within sixty (60)
days after the end of each fiscal year of Borrower, and promptly
upon any revisions or updates thereof, annual operating budgets
(including income statements, balance sheets and cash flow
statements, by month) for the upcoming fiscal year of Borrower, as
approved by Borrower’s
board of directors, together with
any related business forecasts used in the preparation of such
annual financial projections;”
X.
The Loan Modification Agreement
shall be amended by deleting the following, appearing in
Section 6.2(a)(ix) thereof, in its entirety:
“(ix) Notwithstanding
anything in this clause (a) to the contrary, if
Borrower’s unrestricted cash and Cash Equivalents at Bank
and/or the Availability Amount under the Revolving Line is less
than $15,000,000 at any time, Bank shall have the right, but not
the obligation, to require accounts receivable aging reports and
unbilled revenue reports as of the 15 th and the 30 th of
each month.”
and inserting in lieu thereof the
following:
“(ix)
Notwithstanding anything in this
clause (a) to the contrary, (i) if Borrower’s
unrestricted cash and Cash Equivalents at Bank plus the
Availability Amount under the Revolving Line minus the First Loan
Modification Advance Amount is less than $20,000,000, Borrower
shall provide Bank with mid-month accounts receivable aging
reports, unbilled revenue reports and cash receipt journals, and
(ii) in any event, at any time, Borrower shall provide Bank
the foregoing reports described in clause (i) hereof and such
other
