Exhibit 10.17
THIRD LOAN MODIFICATION AGREEMENT
This Third Loan Modification Agreement (this "Loan Modification Agreement")
is entered into as of September - 9, 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 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000 ("Bank") and KANBAY
INTERNATIONAL, INC, (successor to Kanbay LLC), a Delaware Corporation ("Kanbay
International"), with its principal place of business at 0000 Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, KANBAY INCORPORATED, an Illinois Corporation
("Kanbay Inc."), with its Principal place of business at 0000 Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, Xx 00000, KANBAY EUROPE LTD a Company formed under the laws
of the United Kingdom ("Kanbay Europe"), with its principal place of business at
Compass House, Vision Park, Histon, Cambridge, UK XXX 0XX, XXXXXX XXXXXXXXX PTY.
LTD., a company formed under the laws of Australia ("Kanbay Australia"), with
its principal place of business at 000 Xxxxxxxxxx Xxxx. Xxxxxxx, Xxxxxxxx 0000,
Xxxxxxxxx, MEGATEC PTY. LTD., a Company formed under the laws of Australia
("Megatec"), with its principal place of business at 000 Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxx 0000, Xxxxxxxxx and KANBAY HK LTD., a company formed under the
laws of Hong Kong ("Kanbay HK"), with its principal place of business at 12th
Floor Xxxx Xxxx Hong Bldg., Suite 1201, 00 Xxxx Xxx Xxxxxx, Xxxxxx Xxx, Xxxx
Xxxx (Kanbay International, Kanbay Inc., Kanbay Europe, Kanbay Australia,
Megatec and Kanbay HK being sometimes herein called collectively the "Borrowers"
and each individually a "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 loan arrangement dated as of April 19, 2000,
evidenced by, among other documents, a certain Loan and Security Agreement dated
as of April 19, 2000, between Kanbay LLC, a Delaware limited liability company
("Kanbay LLC"), Kanbay Inc, Kanbay Europe, Kanbay Australia, Megatec, Kanbay HK
and Bank, as corrected and conformed by a certain Correction Agreement dated as
of May 1, 2000, as amended by a certain Loan Modification Agreement dated as of
March 30, 2001, and as further amended by a certain Loan Modification Agreement
dated as of April 20, 2002 (as amended, the "Loan Agreement"). Capitalized terms
used but not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the "Security Documents").
Hereinafter, the Security Documents, 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.
1. The Loan Agreement shall be amended by deleting the
following text appearing in Section 2.1.1 thereof, entitled
"Letters of Credit".
"Bank will issue or have issued Letters of Credit for
Borrower's a not exceeding (i) the lesser of the
Committed A/R Revolving Line or the Borrowing Base
minus (ii) the outstanding principal Balance of the
Advances made under the Committed A/R Revolving Line,
but the face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit and
any letter of Credit Reserve) may not exceed
$250,000.00".
and inserting in lieu thereof the following:
"Bank will issue or have issued Letters of Credit for
Borrower's account not exceeding (i) the lesser of the
Committed A/R Revolving Line or the Borrowing Base
minus (ii) the outstanding principal balance of the
Advances made under the
Committed A/R Revolving Line, but the face amount of
outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit
Reserve) may not exceed $3,500,000.00".
2. The Loan Agreement shall be amended by deleting the
following text appearing in Section 2.3 thereof, entitled
"Revolving Line Interest Rates, Payments":
"Advances made under the Committed A/R Revolving Line
accrue interest on the outstanding principal balance at
a per annum rate of one percentage point above the
Prime Rate."
and inserting in lieu thereof the following:
"Advances made under the Committed A/R Revolving Line
accrue interest on the outstanding principal balance at
a per annum rate equal to the aggregate of the Prime
Rate, and one half of one percent (0.5%)."
3. The Loan Agreement shall be amended by deleting the
following definitions appearing in Section 13.1 thereof:
""Committed A/R Revolving Line" is an aggregate Credit
Extension of up to a total of $3,000,000.00.
"Prime Rate" is Bank's most recently announced "prime
rate", even if it is not Bank's lowest rate.
"Revolving Maturity Date" is April 19, 2003."
and inserting in lieu thereof the following:
""Committed A/R Revolving Line" is an aggregate Credit
Extension of up to a total of $7,500,000.00.
"Prime Rate " is the greater of: (a) 4.0% and
(b) Bank's most recently announced "prime rate", even
if it is not Bank's lowest rate.
"Revolving Maturity Date" is April 30, 2004".
4. Notwithstanding anything in the Loan Agreement to the
contrary, Borrower shall deliver the financial statements
required pursuant to Section 6.2(a)(i), as soon as available
but no later than thirty (30) days after the last day of
each: (a) quarter, and (b) month during which may Credit
Extension is requested or outstanding.
5. Notwithstanding anything in the Loan Agreement to the
contrary, Borrower shall deliver the Compliance Certificate
required pursuant in Section 6.2(C), within thirty (30) days
after the last day of each: (a) quarter, and (b) month
during which any Credit Extension is requested or
outstanding.
6. Notwithstanding anything in the Loan Agreement to the
contrary, the Quick Ratio covenant set forth in
Section 6.7(a) and the EBITDA covenant set forth in Section
6.7(c) shall be tested as of the last day of each:
(a) quarter and (b) month during which any Credit Extension
is requested or outstanding.
7. Bank and Borrower agree that Committed Guaranteed Revolving
Line has been terminated.
B. WAIVERS.
1. Bank hereby waives Borrower's existing defaults under the Loan
Agreement by virtue of Borrower's failure to comply with the
financial reporting requirements set forth is Section 6.2(a)(i)
thereof as of the months ending March 31, 2003, April 30, 2003,
and May 30, 2003. Bank's waiver of Borrower's compliance of said
affirmative covenant shall apply only to the foregoing specific
periods.
4. FEES. The Borrower shall also reimburse Bank for all legal fees and
expenses incurred in connection with this amendment to the Existing Loan
Documents.
5. RATIFICATION OF STOCK PLEDGE AGREEMENT. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and conditions of a certain Stock
Pledge Agreement dated as of April 19, 2000 between Borrower and Bank, and
acknowledges, confirms and agrees that said Stock Pledge Agreement shall remain
in full force and effect.
6. ADDITIONAL COVENANTS. Borrower shall not, without providing the Bank with
thirty (30) days subsequent written notice: (i) change its jurisdiction of
organization, or (ii) change its organizational structure or type, (iii) change
its legal name, or (iv) change any organizational number (if any) assigned by
its jurisdiction of organization.
7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
8. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifics, confirms and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
9. 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 there under.
10. 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.
11. 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:
KANBAY INTERNATIONAL, INC. KANBAY AUSTRALIA PTY. LTD.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxx
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Title: VP & CFO Title: Director
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KANBAY INCORPORATED MEGATEC PTY. LTD.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxx
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Title: Director Title: Director
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KANBAY EUROPE LTD. KANBAY HK LTD.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxx
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Title: Director Title: Director
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BANK:
SILICON VALLEY BANK
By: /s/ Authorized Party
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Name: Authorized Party
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Title: Authorized Party
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