EXHIBIT 10.2
LOAN MODIFICATION AGREEMENT
This LOAN MODIFICATION AGREEMENT is entered into as of December 29, 2000,
by and between SILICON VALLEY BANK, a California-chartered bank with its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with
a loan production office located at One Newton Executive Park, Suite 200, 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, doing business under the name "Silicon
Valley East" ("Bank"), and MATRIXONE, INC., a Delaware corporation with its
principal place of business at Two Executive Drive, Chelmsford, MA 01824
("Borrower").
RECITALS
Borrower has borrowed money from Bank pursuant to certain Existing Loan
Documents, as defined below. In consideration of certain financial
accommodations from Bank, and Borrower's continuing obligations under the
Existing Loan Documents, Borrower and Bank agree as follows:
AGREEMENT
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to,
among other documents, a Loan and Security Agreement dated as of December 29,
1998 between Borrower and Bank, as amended by Loan Modification Agreements
dated as of September 28, 1999, December 28, 1999 and August 18, 2000, providing
for an extension of credit up to a maximum of SEVEN MILLION AND NO/100THS
DOLLARS ($7,000,000) for working capital and equipment finance purposes (the
"Loan Agreement"). Borrower is also indebted to Bank pursuant to, among other
documents, a Export-Import Bank Loan and Security Agreement dated as of January
21, 2000 between Borrower and Bank providing for an extension of credit up to a
maximum of ONE MILLION AND NO/100THS DOLLARS ($1,000,000) (the "EXIM Loan
Agreement").
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred
to as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured
pursuant to the Loan Agreement and the EXIM Loan Agreement. Hereinafter, the
Loan Agreement and the EXIM Loan Agreement, together with all other documents
securing payment of the Indebtedness, shall be referred to as the "Existing Loan
Documents."
3. DESCRIPTION OF CHANGES IN TERMS - LOAN AGREEMENT.
3.1 Modifications to Definitions. Section 1.1 of the Loan Agreement is
hereby amended by substituting the following definitions for those set forth
therein for the same terms:
"Revolving Maturity Date" means December 28, 2001.
3.2 Modifications to Foreign Exchange Sublimit. Section 2.1.3 of the Loan
Agreement is hereby replaced in its entirety with the following:
2.1.3 Foreign Exchange Sublimit. If there is availability under the
Committed Revolving Line and the Borrowing Base, then Borrower may
enter in foreign exchange forward contracts with the Bank under which
Borrower commits to purchase from or sell to Bank a set amount of
foreign currency more than one business day after the contract date
(the "FX Forward Contract"). Bank will subtract 10% of each
outstanding FX Forward Contract from the foreign exchange sublimit
which is a maximum of $1,500,000 (the "FX Reserve"). The total FX
Forward Contracts at any one time may not exceed 10 times the amount
of the FX Reserve. Bank may terminate the FX Forward Contracts if an
Event of Default occurs.
3.3 Modification to Financial Reporting Provisions. Subsection 6.3(ii)
of the Loan Agreement is hereby replaced in its entirety with the following:
(ii) Bank shall have a right from time to time hereafter, upon
reasonable prior notice, but in all events prior to one or more Credit
Extensions, other than FX Forward Contracts, aggregating more than
$500,000 at a time when no Credit Extensions other than FX Forward
Contracts are outstanding, to audit Borrower's Accounts at Borrower's
expense, provided that such audits will be conducted no more often
than once every twelve (12) months unless an Event of Default has
occurred and is continuing.
3.4 Modifications to Financial Covenants. Sections 6.8, 6.9 and 6.10 of
the Loan Agreement are hereby replaced in their entirety with the following:
6.8 Adjusted Quick Ratio. INTENTIONALLY OMITTED
6.9 Tangible Net Worth. Borrower shall maintain, as of the last
calendar day of each fiscal quarter, a Tangible Net Worth of not less
than ONE HUNDRED MILLION Dollars ($100,000,000).
6.10 Liquidity. Borrower shall maintain, as of the last calendar day
of each fiscal quarter, cash on hand and cash equivalents of at least
SEVENTY MILLION Dollars ($70,000,000).
3.4 Modifications to Compliance Certificate. Exhibit D of the Loan
Agreement is hereby replaced in its entirety with Exhibit D to this Agreement.
4. DESCRIPTION OF CHANGES IN TERMS - EXIM LOAN AGREEMENT.
4.1 Modifications to Definitions. Section 13.1 of the EXIM Loan Agreement
is hereby amended by substituting the following definitions for those set forth
therein for the same terms:
"Exim Maturity Date" is December 28, 2001.
5. FACILITY FEE. Borrower shall pay to Bank a Loan Agreement variance fee
of $17,500 and an EXIM Loan Agreement variance fee of $12,500 as well as any
out-of-pocket expenses incurred by the Bank through the date hereof, including
reasonable attorneys' fees and expenses, and after the date hereof, all Bank
Expenses, including reasonable attorneys' fees and expenses, as and when they
become due.
6. CONDITIONS PRECEDENT TO FURTHER ADVANCES. The obligation of Bank to
make further advances to Borrower under these lines is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:
(a) this Loan Modification Agreement duly executed by Borrower;
(b) payment of the fees and Bank Expenses then due specified in
Section 5 hereof; and
(c) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.
7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described in this Loan Modification
Agreement.
8. NO DEFENSES OF BORROWER. Borrower agrees that as of this date, it has
no defenses against any of the obligations to pay any amounts under the
Indebtedness.
9. CONTINUING VALIDITY. Borrower understands and agrees that (i) in
modifying the Existing Loan Documents, Bank is relying upon Borrower's
representations, warranties and agreements, as set forth in the Existing Loan
Documents, (ii) except as expressly modified pursuant to this Loan Modification
Agreement (including the effects of Section 7 hereof), the Existing Loan
Documents remain unchanged and
in full force and effect, (iii) Bank's agreement to modify the Existing Loan
Documents pursuant to this Loan Modification Agreement shall in no way obligate
Bank to make any future modifications to the Existing Loan Documents, (iv) it is
the intention of Bank and Borrower to retain as liable parties all makers and
endorsers of the Existing Loan Documents, unless a party is expressly released
by Bank in writing, (v) no maker, endorser or guarantor will be released by
virtue of this Loan Modification Agreement, and (vi) the terms of this Section 9
apply not only to this Loan Modification Agreement but also to all subsequent
loan modification agreements, if any.
10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. The laws of the
Commonwealth of Massachusetts shall apply to this Agreement. 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 AGREEMENT; PROVIDED,
HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND
VENUE IN SANTA XXXXX COUNTY, CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
11. EFFECTIVENESS. This Agreement shall become effective only when it
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).
IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification
Agreement to be executed as a sealed instrument as of the date first set forth
above.
"Borrower": MATRIXONE, INC. "Bank": SILICON VALLEY BANK, doing business
as SILICON VALLEY EAST
By: /s/ Xxxxxxx "Moe" Xxxxxxxxxx By: /s/ Xxxxxxxx Xxxx
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Xxx Xxxxxxxxxx, CFO Xxxxxxxx Xxxx, SVP
SILICON VALLEY BANK
By: /s/ Xxxxx Xxxxx
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Title: AVP
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(Signed in Santa Xxxxx County, California)
