EXHIBIT 99.1
FIRST LOAN MODIFICATION AGREEMENT
This First Loan Modification Agreement (this "Loan Modification
Agreement") is entered into as of April 28, 2008, by and between SILICON VALLEY
BANK, a California corporation 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 ("Bank"), and IBASIS, INC., a Delaware corporation with
offices at 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, 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
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 (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 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:
" "Borrowing Base" is, as of any date of determination, equal to
(a) 80% of Eligible Domestic Accounts plus (b) 70% of Eligible
Foreign Accounts, as determined by Bank from Borrower's most
recent Borrowing Base Certificate, provided, however, that Bank
may decrease the foregoing percentages in its good faith business
judgment and upon five (5) Business Days' notice to the Borrower,
based on the results of an audit of the Collateral.
"Permitted Indebtedness" clause (g) thereof: in addition to all
other Permitted Indebtedness, indebtedness in the maximum amount
of $10,000,000 in the aggregate, comprised of (i) promissory note
payable to KPN, B.V. in the amount of up to $9,000,000 plus (ii)
up to $1,000,000 of other indebtedness.
"Revolving Line" is an Advance or Advances in an aggregate amount
of up to $35,000,000 outstanding at any time."
and inserting in lieu thereof the following:
" "Borrowing Base" is, as of any date of determination, equal to
(a) 80% of Eligible Domestic Accounts plus (b) 70% of Eligible
Foreign Accounts, as determined by Bank from Borrower's most
recent Borrowing Base Certificate, plus (c) (i) for the period
beginning on the First Loan Modification Execution Date through
May 31, 2008, $15,000,000, (ii) for the period beginning June 1,
2008 through August 31, 2008, $11,250,000, (iii) for the period
beginning September 1, 2008 through November 30, 2008,
$7,500,000, (iv) for the period Beginning December 1, 2008
through February 28, 2009, $3,750,000 and (v) thereafter, $0;
provided, however, that Bank may decrease the foregoing
percentages in its good faith business judgment and upon five (5)
Business Days' notice to the Borrower, based on the results of an
audit of the Collateral.
"Permitted Indebtedness" clause (g) thereof: in addition to all
other Permitted Indebtedness, indebtedness in the maximum amount
of $16,000,000 in the aggregate, which may include a promissory
note payable to KPN, B.V. in the amount of up to $16,000,000.
"Revolving Line" is an Advance or Advances in an aggregate amount
of up to $50,000,000 outstanding at any time."
II. The Loan Agreement shall be amended by inserting the following
definitions appearing alphabetically in Section 13.1 thereof:
" "Cash Flow" means, for any Person during any period of
measurement, EBITDA less income tax expenses actually paid during
such period, less unfunded capital expenditures, less dividends
and distributions.
"First Loan Modification Advance Amount" means an additional
Advance or Advances in the amount of up to $15,000,000 pursuant
to clause (c) of the definition of "Borrowing Base".
"First Loan Modification Agreement" means that certain First Loan
Modification Agreement by and between Silicon Valley Bank and
iBasis, Inc.
"First Loan Modification Execution Date" means April 28, 2008.
"First Loan Modification Additional Interest Rate Margin" means
1.25%."
III. The Loan Agreement shall be amended by adding the following new
Section 2.4(i):
"(i) First Loan Modification Advance Amount Interest. Interest on
the First Loan Modification Advance Amount shall be computed in
accordance with clauses (a) through (f) of this Section 2.4, as
applicable, plus an additional amount equal to the First Loan
Modification Additional Interest Rate Margin."
IV. The Loan 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 $35,000,000, 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
$35,000,000, 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, 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)."
V. The Loan Agreement shall be amended by adding the following new
Section 6.2(a)(ix)"
"(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 15th and the 30th of each
month."
VI. The Loan Agreement shall be amended by deleting the following,
appearing in section 6.3(c) thereof, in its entirety:
"(c) Collection of Accounts. Borrower shall have the right to
collect all Accounts, unless and until a Default or an Event of
Default has occurred and is continuing. Accounts shall be
deposited by Borrower into a lockbox account, or such other
"blocked account" as Bank may specify, pursuant to a blocked
account agreement in such form as Bank may specify in its good
faith business judgment. Whether or not an Event of Default has
occurred and is continuing, Borrower shall hold all Payments on,
and proceeds of, Accounts in trust for Bank, and Borrower shall
immediately deliver all such payments and proceeds to Bank in
their original form, duly endorsed, to be applied to the
Obligations pursuant to the terms of Section 9.4 hereof,
provided, however, in the event no Default or Event of Default
has occurred and is continuing and Borrower maintains
unrestricted cash and Cash Equivalents at Bank plus the
Availability Amount under the Revolving Line of no less than
$15,000,000, all Payments on, and proceeds of, Accounts shall be
transferred by Bank to an operating account of Borrower
maintained at Bank."
and inserting in lieu thereof the following:
"(c) Collection of Accounts. Borrower shall have the right to
collect all Accounts, unless and until a Default or an Event of
Default has occurred and is continuing. Accounts shall be
deposited by Borrower into a lockbox account, or such other
"blocked account" as Bank may specify, pursuant to a blocked
account agreement in such form as Bank may specify in its good
faith business judgment. Whether or not an Event of Default has
occurred and is continuing, Borrower shall hold all Payments on,
and proceeds of, Accounts in trust for Bank, and Borrower shall
immediately deliver all such payments and proceeds to Bank in
their original form, duly endorsed, to be applied to the
Obligations pursuant to the terms of Section 9.4 hereof,
provided, however, in the event no Default or Event of Default
has occurred and is continuing and Borrower maintains
unrestricted cash and Cash Equivalents at Bank plus the
Availability Amount under the Revolving Line of (a) for the
period beginning on the First Modification Execution Date and
ending on May 30, 2008, no less than $10,000,000; (b) for the
period beginning on May 31, 2008 and ending on August 30, 2008,
no less than $15,000,000; and (c) for the period beginning on
August 31, 2008 and thereafter, $20,000,000, then in each case
all Payments on, and proceeds of, Accounts shall be transferred
by Bank to an operating account of Borrower maintained at Bank."
VII. The Loan Agreement shall be amended by deleting the following,
appearing as Section 6.9(ii) and (iii) thereof, in its entirety:
"(ii) Consolidated EBITDA. Maintain, calculated on a consolidated
basis with each of its Subsidiaries, measured as of the end of
each fiscal quarter, EBITDA of at least $10,000,000.
(iii) Borrower EBITDA. For any fiscal quarter in which
unrestricted cash and Cash Equivalents maintained at Bank plus
the Availability Amount under the Revolving Line is less than
$15,000,0000, Borrower shall maintain, calculated on a
consolidated basis with its Existing Domestic Subsidiaries,
EBITDA of at least (I) for the fiscal quarter ending December 31,
2007 $1.00 and (II) $2,000,000 for each such fiscal quarter
thereafter."
and inserting in lieu thereof the following:
"(ii) Consolidated EBITDA. Maintain, calculated on a consolidated
basis with each of its Subsidiaries, measured as of the end of
each fiscal quarter, EBITDA of at least (a) $7,500,000, with
respect to the fiscal quarters ending March 31, 2008 and June 30,
2008, (b) $9,000,000, with respect to the fiscal quarter ending
September 30, 2008, and (c) $10,000,000, with respect to the
fiscal quarter ending December 31, 2008 and with respect to each
fiscal quarter thereafter.
(iii) Borrower Cash Flow. For any fiscal quarter in which
Borrower's unrestricted cash and Cash Equivalents maintained at
Bank plus the Availability Amount under the Revolving Line is
less than $20,000,000, Borrower shall maintain, calculated on a
consolidated basis with its Existing Domestic Subsidiaries, Cash
Flow of at least (I) for the fiscal quarter ending December 31,
2007, $1.00 and (II) for each such fiscal quarter thereafter,
$2,000,000."
VIII. The Loan Agreement shall be amended by deleting the following,
appearing as Section 7.7, in its entirety:
"Investments; Distributions. (a) Directly or indirectly make any
Investment other than Permitted Investments, or permit any of its
Subsidiaries to do so; or (b) pay any dividends or make any
distribution or payment or redeem, retire or purchase any capital
stock provided that (i) Borrower may convert any of its
convertible securities into other securities pursuant to the
terms of such convertible securities or otherwise in exchange
thereof, (ii) Borrower may pay dividends solely in common stock;
(iii) Borrower may repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements so long as an
Event of Default does not exist at the time of such repurchase
and would not exist after giving effect to such repurchase,
provided such repurchase does not exceed in the aggregate of
$50,000 per fiscal year, so long as (A) Borrower provides Bank
with written notice of the material terms thereof and evidence
satisfactory to Bank that Borrower has obtained the necessary
consents and approvals thereto, including, without limitation,
those of Borrower's board of directors, and (B) an Event of
Default does not exist at the time of such transaction or would
not exist after giving effect thereto; and (iv) a cash dividend
may be paid to the shareholders of the Borrower as contemplated
by the transaction in which, among other things, KPN, B.V.
acquires 51% of the equity of the Borrower."
and inserting in lieu thereof the following:
"Investments; Distributions. (a) Directly or indirectly make any
Investment other than Permitted Investments, or permit any of its
Subsidiaries to do so; or (b) pay any dividends or make any
distribution or payment or redeem, retire or purchase any capital
stock provided that (i) Borrower may convert any of its
convertible securities into other securities pursuant to the
terms of such convertible securities or otherwise in exchange
thereof, (ii) Borrower may pay dividends solely in common stock;
(iii) Borrower may repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements so long as an
Event of Default does not exist at the time of such repurchase
and would not exist after giving effect to such repurchase,
provided such repurchase does not exceed in the aggregate of
$50,000 per fiscal year, so long as (A) Borrower provides Bank
with written notice of the material terms thereof and evidence
satisfactory to Bank that Borrower has obtained the necessary
consents and approvals thereto, including, without limitation,
those of Borrower's board of directors, and (B) an Event of
Default does not exist at the time of such transaction or would
not exist after giving effect thereto; (iv) a cash dividend may
be paid to the shareholders of the Borrower as contemplated by
the transaction in which, among other things, KPN, B.V. acquires
51% of the equity of the Borrower; and (v) Borrower may
repurchase capital stock of Borrower in accordance with a capital
stock repurchase program approved by the board of directors of
Borrower, so long as (A) Borrower provides Bank with written
notice of the material terms thereof and evidence satisfactory to
Bank that Borrower has obtained the necessary consents and
approvals thereto, (B) no Event of Default exists at the time of
such repurchase and no Default would exist after giving effect to
such repurchase (including, without limitation, any Default which
would be substantially likely to exist under Section 6.9 for the
next succeeding financial reporting period), and (C) such
repurchase does not exceed $15,000,000 in the aggregate."
IX. The Compliance Certificate appearing as Exhibit C to the Loan
Agreement is hereby replaced with the Compliance Certificate
attached as Exhibit A hereto.
4. FEES. Borrower shall pay to Bank (i) a supplemental commitment fee equal to
One Hundred Fifty Thousand Dollars ($150,000.00) and (ii) a modification
fee equal to Seventy-Five Thousand Dollars ($75,000.00), each of which fees
shall be due on or before the date hereof and shall be deemed fully earned
as of the date hereof. Borrower shall also reimburse Bank for all legal
fees and expenses incurred in connection with this modification to the Loan
Agreement.
5. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in a
certain Perfection Certificate dated as of October 2, 2007 between Borrower
and Bank, and acknowledges, confirms and agrees the disclosures and
information above Borrower provided to Bank in the Perfection Certificate
has not changed, as of the date hereof.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above. Without limiting the
foregoing, from and after the First Loan Modification Execution Date, each
reference to the phrase "Agreement" in the Loan Agreement or "Loan
Agreement" in any of the other Loan Documents shall mean the Loan Agreement
as modified by this Loan Modification Agreement.
7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all Existing Loan Documents and all
security or other Collateral granted to the Bank, and confirms that the
indebtedness secured thereby includes, without limitation, the Obligations.
8. 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.
9. 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 make 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.
10. RIGHT OF SET-OFF. In consideration of Bank's agreement to enter into this
Loan Modification Agreement, Borrower hereby reaffirms and hereby grants to
Bank, a lien, security interest and right of set off as security for all
Obligations to Bank, whether now existing or hereafter arising upon and
against all deposits, credits, collateral and property, now or hereafter in
the possession, custody, safekeeping or control of Bank or any entity under
the control of Bank (including a Bank subsidiary) or in transit to any of
them. At any time after the occurrence and during the continuance of an
Event of Default, without demand or notice, Bank may set off the same or
any part thereof and apply the same to any liability or obligation of
Borrower even though unmatured and regardless of the adequacy of any other
collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE. The
provisions of Section 11 of the Loan Agreement are hereby incorporated
herein in their entirety.
12. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank.
[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:
IBASIS, INC. SILICON VALLEY BANK
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------- -------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
--------------- ---------------
Title: CFO Title: Senior Vice President
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Each of the undersigned hereby ratifies, confirms and reaffirms, all and
singular, the terms and conditions of each of its Unconditional Guaranty,
Security Agreement, IP Security Agreement (if applicable) and Perfection
Certificate, in each case executed in connection with the Loan Agreement, and
each acknowledges, confirms and agrees that each such document shall remain in
full force and effect and in no way be limited by the execution of this Loan
Modification Agreement, or any other documents, instruments and/or agreements
executed and/or delivered in connection herewith.
IBASIS GLOBAL, INC. IBASIS RETAIL, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------- ---------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
--------------- ---------------
Title: CFO Title: CFO
--- ---
IBASIS SECURITIES CORPORATION KPN INTERNATIONAL NETWORK
SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------- -------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
--------------- ---------------
Title: CFO Title: CFO
--- ---
EXHIBIT A
---------
BORROWING BASE CERTIFICATE
EXHIBIT B
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK Date:
-----------------------
FROM: IBASIS, INC.
The undersigned authorized officer of IBASIS, INC. ("Borrower") certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the "Agreement"), (1) Borrower is in complete compliance for
the period ending _______________ with all required covenants except as noted
below, (2) there are no Events of Default, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed
all required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of
the Agreement, and (5) no Liens have been levied or claims made against Borrower
or any of its Subsidiaries, if any, relating to unpaid employee payroll or
benefits of which Borrower has not previously provided written notification to
Bank. Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned 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. Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.
Please indicate compliance status by circling Yes/No under "Complies" column.
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Reporting Covenant Required Complies
================================================ ================================ ==================
------------------------------------------------ -------------------------------- ------------------
Quarterly consolidated and consolidating Quarterly within 45 days Yes No
financial statements with Compliance Certificate
------------------------------------------------ -------------------------------- ------------------
Annual financial statement (CPA Audited) + XX XXX within 120 days Yes No
------------------------------------------------ -------------------------------- ------------------
10-Q, 10-K and 8-K Within 5 days after filing with Yes No
SEC
------------------------------------------------ -------------------------------- ------------------
A/R & A/P Agings, Borrowing Base and Transaction Monthly within 30 days Yes No
Reports
------------------------------------------------ -------------------------------- ------------------
Other filings with the SEC or any other Within 10 days after filing Yes No
regulatory agency
------------------------------------------------ -------------------------------- ------------------
A/R Agings and unbilled revenue reports (if On the 15th and the 30th of each Yes No
required by month,
Bank) as required
------------------------------------------------ -------------------------------- ------------------
The following Intellectual Property was registered after the Effective Date and since the last
Compliance Certificate was provided to the Bank (if no registrations, state "None")
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Financial Covenant Required Actual Complies
================================================ ============== ============== =================
------------------------------------------------ -------------- -------------- -----------------
Maintain on a Quarterly Basis:
------------------------------------------------ -------------- -------------- -----------------
Minimum Adjusted Quick Ratio _____:1.0 _____:1.0 Yes No
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Minimum Consolidated EBITDA $_______ $_______ Yes No
------------------------------------------------ -------------- -------------- -----------------
Minimum Cash Flow of Borrower (if required) $_____ $_____ Yes No
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The following financial covenant analyses and information set forth in
Schedule 1 attached hereto are true and accurate as of the date of this
Certificate.
The following are the exceptions with respect to the certification above:
(If no exceptions exist, state "No exceptions to note.")
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IBASIS, INC. BANK USE ONLY
By: ______________________ Received by: _____________________
Name:_____________________ AUTHORIZED SIGNER
Title: __________________ Date: ____________________________
Verified: ________________________
AUTHORIZED SIGNER
Date: ____________________________
Compliance Status: Yes No
Schedule 1 to Compliance Certificate
------------------------------------
Financial Covenants of Borrower
-------------------------------
Dated: ____________________
I. Adjusted Quick Ratio (Section 6.9(i))
Required: _____:1.00
Actual:
A. Aggregate value of the unrestricted cash and cash equivalents of Borrower and
its Subsidiaries at Bank $
----- ----------------------------------------------------------------------------- ----------
B. Aggregate value of the net billed accounts receivable of Borrower and its
Subsidiaries $
----- ----------------------------------------------------------------------------- ----------
Aggregate value of the Investments with maturities of fewer than 12 months
C. of Borrower and it Subsidiaries $
----- ----------------------------------------------------------------------------- ----------
D. Quick Assets (the sum of lines A through C) $
----- ----------------------------------------------------------------------------- ----------
E. Aggregate value of Obligations to Bank $
----- ----------------------------------------------------------------------------- ----------
F. Aggregate value of liabilities of Borrower and its Subsidiaries (including
all Indebtedness)
that matures within one (1) $
----- ----------------------------------------------------------------------------- ----------
G. Current Liabilities (the sum of lines E and F) $
----- ----------------------------------------------------------------------------- ----------
H. Aggregate value of all amounts received or invoiced by Borrower in advance
of performance under contracts and not yet recognized as revenue $
----- ----------------------------------------------------------------------------- ----------
I Line G minus line H $
----- ----------------------------------------------------------------------------- ----------
J. Adjusted Quick Ratio (line D divided by line I)
----- ----------------------------------------------------------------------------- ----------
Is line J equal to or greater than ___:1:00?
No, not in compliance Yes, in compliance
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II. Consolidated EBITDA of Borrower and its Subsidiaries(Section 6.9(ii))
Required: at least (a) $7,500,000, with respect to the fiscal quarters ending
March 31, 2008 and June 30, 2008, (b) $9,000,000, with respect to
the fiscal quarter ending September 30, 2008, and (c) $10,000,000,
with respect to the fiscal quarter ending December 31, 2008 and with
respect to each fiscal quarter thereafter
Actual:
A. Net Income $
----- ----------------------------------------------------------------------------- ---------
B. Interest Expense $
----- ----------------------------------------------------------------------------- ---------
C. Depreciation expense (to the extent deducted from Net Income) $
----- ----------------------------------------------------------------------------- ---------
D. Amortization expense (to the extent deducted from Net Income) $
----- ----------------------------------------------------------------------------- ---------
E. Income Tax Expense $
----- ----------------------------------------------------------------------------- ---------
F. Reasonable non-cash items deducted in determining Net Income including, but
not limited to, the value of any stock compensation and adjustments for
purchase accounting $
----- ----------------------------------------------------------------------------- ---------
G. One-time transaction costs relating to the transaction in which, among other
things, KPN, B.V. acquires 51% of the equity of Borrower $
----- ----------------------------------------------------------------------------- ---------
H. Consolidated EBITDA (line A plus line B plus line C plus line D plus line E
plus line F plus line G $
Is line H equal to or greater than the required Consolidated EBITDA?
No, not in compliance Yes, in compliance
------ ------
III. Cash Flow of Borrower and its Existing Domestic Subsidiaries (Section
6.9(iii)) (if applicable)
Required: $
-----------
Actual:
A. EBITDA $
----- ------------------------------------------------------------- ------------
B. Unfunded Capital Expenditures $
----- ------------------------------------------------------------- ------------
C. Income Taxes to the extent paid in Cash $
----- ------------------------------------------------------------- ------------
D. Dividends and Distributions $
----- ------------------------------------------------------------- ------------
F. Cash Flow (line A minus line B minus line C minus line D $
----- ------------------------------------------------------------- ------------
Is line F equal to or greater than $ ?
-------------------
No, not in compliance Yes, in compliance
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