FIRST LOAN MODIFICATION AGREEMENT
Exhibit 10.14
This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into
as of October 16, 2006, by and among SILICON VALLEY BANK, a California corporation (“SVB”), as
collateral agent (the “Collateral Agent”) for the Lenders and administrative agent (the
“Administrative Agent”) for the Lenders (Collateral Agent and Administrative Agent are
collectively the “Agent”), and the Lenders listed on Schedule 1.1 and otherwise party
hereto, including, without limitation, SVB and JPMORGAN CHASE BANK, N.A. (“JPMorgan”)
(SVB and JPMorgan are, collectively, the “Joint Bookrunners”) and GAIN CAPITAL
HOLDINGS, INC., a Delaware corporation (“Borrower”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to the Lenders, Borrower is
indebted to the Lenders pursuant to a loan arrangement dated as of March 29, 2006,
evidenced by, among other documents, a certain Loan and Security Agreement dated as of
March 29, 2006, between Borrower and the Lenders (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 Agent, for the ratable benefit of the Lenders, 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 inserting the following new Section 2.1.2, appearing immediately after Section 2.1.1 thereof: |
“2.1.2 Revolving Advances.
(a) Availability. Subject to the terms and
conditions of this Agreement, Lenders shall make Advances
not exceeding the Availability Amount. Amounts borrowed
under the Revolving Line may be repaid and, prior to the
Revolving Line Maturity Date, reborrowed, subject to the
applicable terms and conditions precedent herein.
(b) Termination; Repayment. The Revolving Line
terminates on the Revolving Line Maturity Date, when the
principal amount of all Advances, the unpaid interest
thereon, and all other Obligations relating to the Revolving
Line shall be immediately due and payable.”
| 2. | The Loan Agreement shall be amended by deleting the following text appearing in Section 2.3 thereof: |
“(b) Credit Extensions. Each Credit Extension shall
bear interest on the outstanding principal amount thereof from the date
when made, continued or converted until paid in full at a
rate per annum equal to the Prime Rate plus the Prime Rate
Margin or the LIBOR Rate plus the LIBOR Rate Margin, as the
case may be. On and after the expiration of any Interest
Period applicable to any LIBOR Credit Extension outstanding
on the date of occurrence of an Event of Default or
acceleration of the Obligations, the Effective Amount of
such LIBOR Credit Extension shall, during the continuance of
such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Default Rate
(as defined below). Pursuant to the terms hereof, interest on each Credit
Extension shall be paid in arrears on each Interest Payment Date. Interest
shall also be paid on the date of any prepayment of any Credit Extension
pursuant to this Agreement for the portion of any Credit Extension so
prepaid and upon payment (including prepayment) in full thereof. All
accrued but unpaid interest on the Credit Extensions shall be due and
payable on the Term Loan Maturity Date.”
and inserting in lieu thereof the following:
“(b) Interest Rate.
(i) Credit Extensions (other than Advances).
Each Credit Extension (other than Advances) shall bear interest on
the outstanding principal amount thereof from the date when made,
continued or converted until paid in full at a rate per annum equal
to the Prime Rate plus the Prime Rate Margin or the LIBOR Rate plus
the LIBOR Rate Margin, as the case may be. On and after the
expiration of any Interest Period applicable to any LIBOR Credit
Extension outstanding on the date of occurrence of an Event of
Default or acceleration of the Obligations, the Effective Amount of
such LIBOR Credit Extension shall, during the continuance of such
Event of Default or after acceleration, bear interest at a rate per
annum equal to the Default Rate (as defined below). Pursuant to the
terms hereof, interest on each Credit Extension (other than
Advances) shall be paid in arrears on each Interest Payment Date.
Interest shall also be paid on the date of any prepayment of any
Credit Extension (other than Advances) pursuant to this Agreement
for the portion of any Credit Extension (other than Advances) so
prepaid and upon payment (including prepayment) in full thereof.
All accrued but unpaid interest on the Credit Extensions (other
than Advances) shall be due and payable on the Term Loan Maturity
Date.
(ii) Advances. Subject to Section 2.3(c), the
principal amount outstanding under the Revolving Line shall accrue
interest at a floating per annum rate equal to three quarters of
one percentage point (0.75%) above the Prime Rate, which interest
shall be payable monthly in accordance with Section 2.3(g) below.”
| 3. | The Loan Agreement shall be amended by deleting the following text appearing in Section 3.2(b) thereof: |
“the representations and warranties in Section 5 shall be true in all
material respects on the date of the Notice of Borrowing and on the Funding
Date of each Credit Extension;”
and inserting in lieu thereof the following:
“the representations and warranties in Section 5 shall be true in all
material respects on the date of the Payment/Advance Form and/or Notice of
Borrowing and on the Funding Date of each Credit Extension;”
| 4. | The Loan Agreement shall be amended by deleting the following appearing as Section 3.4 thereof: |
“3.4 Procedure for the Borrowing of Credit Extensions.
(a) Subject to the prior satisfaction of all other applicable conditions to
the making of a Credit Extension set forth in this Agreement, each Credit
Extension shall be made upon Borrower’s irrevocable written notice delivered to
Agent in the form of a Notice of Borrowing, each executed by a Responsible
Officer of Borrower or his or her designee or without instructions if the Credit
Extensions are necessary to meet Obligations which have become due. Agent may
rely on any telephone notice given by a person whom Agent believes is a
Responsible Officer or designee. Borrower will indemnify Lenders for any loss
Lenders suffer due to such reliance by Agent. Such Notice of Borrowing must be
received by Agent prior to 11:00 a.m. Eastern time, (i) at least three (3)
Business Days prior to the requested Funding Date, in the case of LIBOR Credit
Extensions, and (ii) at least one (1) Business Day prior to the requested Funding
Date, in the case of Prime Rate Credit Extensions, specifying:
(i) the amount of the Credit Extension, which,
if a LIBOR Credit Extension is requested, shall be in an aggregate minimum
principal amount of $1,000,000 or in any integral multiple of $1,000,000 in
excess thereof;
(ii) the requested Funding Date; and
(iii) whether the Credit Extension is to be comprised of
LIBOR Credit Extensions or Prime Rate Credit Extensions.
(b) The proceeds of all such Credit Extensions will then be made available
to Borrower on the Funding Date by Lenders by transfer to the Designated Deposit
Account and, subsequently, by wire transfer to such other account as Borrower may
instruct in the Notice of Borrowing. No Credit Extensions shall be deemed made to
Borrower, and no interest shall accrue on any such Credit Extension, until the
related funds have been deposited in the Designated Deposit Account.”
and inserting in lieu thereof the following:
“3.4 Procedure for the Borrowing of Credit Extensions.
(a) Subject to the prior satisfaction of all other applicable
conditions to the making of a Credit Extension (other than Advances) set forth in
this Agreement, each Credit Extension (other than an Advance) shall be made upon
Borrower’s irrevocable written notice delivered to Agent in the form of a Notice
of Borrowing, each executed by a Responsible Officer of Borrower or his or her
designee or without instructions if the Credit Extensions (other than Advances)
are necessary to meet Obligations which have become due. Agent may rely on any
telephone notice given by a person whom Agent believes is a Responsible Officer
or designee. Borrower will indemnify Lenders for any loss Lenders suffer due to
such reliance by Agent. Such Notice of Borrowing must be received by Agent prior
to 11:00 a.m. Eastern time, (i) at least three (3) Business Days prior to the
requested Funding Date, in the case of LIBOR Credit Extensions, and (ii) at least
one (1) Business Day prior to the requested Funding Date, in the case of Prime
Rate Credit Extensions, specifying:
(i) the amount of the Credit Extension (other
than Advances), which, if a LIBOR Credit Extension is requested, shall
be in an aggregate minimum principal amount of $1,000,000 or in any
integral multiple of $1,000,000 in excess thereof;
(ii) the requested Funding Date; and
(iii) whether the Credit Extension (other than
Advances) is to be comprised of LIBOR Credit Extensions or Prime Rate
Credit Extensions.
(b) The proceeds of all such Credit Extensions (other than
Advances) will then be made available to Borrower on the Funding Date by
Lenders by transfer to the Designated Deposit Account and, subsequently,
by wire transfer to such other account as Borrower may instruct in the
Notice of Borrowing. No Credit Extensions (other than Advances) shall be
deemed made to Borrower, and no interest shall accrue on any such Credit
Extension (other than Advances), until the related funds have been
deposited in the Designated Deposit Account.
(c) Advances. Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in
this Agreement, to obtain an Advance, Borrower shall notify Agent (which
notice shall be irrevocable) by electronic mail, facsimile, or telephone
by 3:00 p.m. Eastern time on the Funding Date of the Advance. Together
with any such electronic or facsimile notification, Borrower shall
deliver to Agent by electronic mail or facsimile a completed
Payment/Advance Form executed by a Responsible Officer or his or her
designee. Agent may rely on any telephone notice given by a person whom
Agent believes is a Responsible Officer or designee. Lenders shall
credit Advances to the Designated Deposit Account. Agent may make
Advances under this Agreement based on instructions from a Responsible
Officer or his or her designee or without instructions if the Advances
are necessary to meet Obligations which have become due.”
| 5. | The Loan Agreement shall be amended by deleting the following appearing as Section 5.9 thereof: |
“5.9 Use of Proceeds. Borrower shall use the proceeds of the
Credit Extensions solely to fund the Dividend.”
and inserting in lieu thereof the following:
“5.9 Use of Proceeds. Borrower shall use the proceeds of the
Credit Extensions (except for Advances) solely to fund the Dividend, and
Borrower shall use the proceeds of Advances solely as working capital
and not for personal, family, household or agricultural purposes.”
| 6. | The Loan Agreement shall be amended by renumbering Section 6.10 (entitled “Further Assurances”) as Section 6.11.” | ||
| 7. | The Loan Agreement shall be amended by inserting the following new Section 6.10, appearing immediately after Section 6.9 thereof: |
“6.10 Mandatory Paydown. Cause the outstanding Obligations
relating to Advances to be paid down to $0.00, for a period of no less
than seven (7) consecutive days, once during each calendar quarter.”
| 8. | The Loan Agreement shall be amended by deleting the following text appearing in Section 8.2 thereof: |
“(a) Borrower or its Subsidiaries fails or neglects to perform any
obligation in Sections 6.2, 6.6, 6.7, or violates any covenant in Section 7; or”
and inserting in lieu thereof the following
“(a) Borrower or its Subsidiaries fails or neglects to perform any
obligation in Sections 6.2, 6.6, 6.7, or 6.10, or violates any covenant
in Section 7; or”
| 9. | The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof: |
““Credit Extension” is any Term Loan, or any other extension of credit by any Lender for Borrower’s benefit.”
““Prime Rate Credit Extension” means a Credit Extension that bears
interest based at the Prime Rate plus the Prime Rate Margin.”
and inserting in lieu thereof the following:
““Credit Extension” is any Advance, Term Loan, or any other
extension of credit by any Lender for Borrower’s benefit.”
““Prime Rate Credit Extension” means a Credit Extension (other than
an Advance) that bears interest based at the Prime Rate plus the
Prime Rate Margin.”
| 10. | The Loan Agreement shall be amended by inserting the following definitions appearing alphabetically in Section 13.1 thereof: |
““Advance” or “Advances” means an advance (or advances) under the
Revolving Line.”
““Availability Amount” is (a) the Revolving Line minus (b) the
outstanding principal balance of any Advances.”
““Payment/Advance Form” is that certain form attached hereto as
Exhibit E.”
““Revolving Line” is an Advance or Advances in an aggregate amount
of up to Five Million Dollars ($5,000,000.00) outstanding at any
time.”
““Revolving Line Maturity Date” is
October 15, 2007.
| 11. | The Loan Agreement shall be amended by inserting the Payment/Advance Form attached hereto as Exhibit A as Exhibit E to the Loan Agreement. |
| 12. | The Schedule appearing as Schedule 1.1 to the Loan Agreement is hereby replaced with the Schedule attached as Exhibit B hereto. |
4. FEES. Borrower shall reimburse Agent for all reasonable legal fees and
expenses incurred in connection with this amendment to the Existing Loan Documents.
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 March 29, 2006, between Borrower and
Lenders, and acknowledges, confirms and agrees the disclosures and information
Borrower provided to Lenders 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.
7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted to the
Agent, for the ratable benefit of the Lenders, and confirms that the indebtedness
secured thereby includes, without limitation, the Obligations.
8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower now has no offsets, defenses, claims, or counterclaims against Agent or
Lenders with respect to the Obligations, or otherwise, and that if Borrower now has,
or ever did have, any offsets, defenses, claims, or counterclaims against Agent or
Lenders, whether known or unknown, at law or in equity, all of them are hereby
expressly WAIVED and Borrower hereby RELEASES Agent and Lenders from any liability
thereunder.
9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Agent and Lenders are 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. Lenders’
agreement to modifications to the existing Obligations pursuant to this Loan
Modification Agreement in no way shall obligate any Lender 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 Lenders and
Borrower to retain as liable parties all makers of Existing Loan Documents, unless the
party is expressly released by Agent in writing. No maker will be released by virtue
of this Loan Modification Agreement.
10. COUNTERSIGNATURE . This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lenders.
[The remainder of this page is intentionally left blank]
This Loan Modification Agreement is executed as of the date first written above.
| BORROWER: | LENDERS: | |||||||
| GAIN CAPITAL HOLDINGS, INC. | SILICON VALLEY BANK, as Agent and Lender | |||||||
By:
|
/s/ Xxxx Xxxxxx | By: | /s/ Xxxxxxx Xxxxxxx | |||||
| Name: | Xxxxxxx Xxxxxxx | |||||||
| Title: Chief Executive Officer | Title: | SVP | ||||||
| JPMORGAN CHASE BANK, N.A., as LENDER |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
The undersigned, GAIN HOLDINGS, LLC, ratifies, confirms and reaffirms, all and
singular, the terms and conditions of a certain Unconditional Guaranty dated as of March 29, 2006
(the “Guaranty” ) and acknowledges, confirms and agrees that (i) the Guaranty shall remain in full
force and effect and shall 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, and (ii) the Guaranty shall continue to pertain to all Obligations.
| GAIN HOLDINGS, LLC |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Authorized Person | |||
Exhibit A
Loan Payment/Advance Request Form
Loan Payment/Advance Request Form
Deadline for same day processing is Noon E.S.T.
Fax To: Date:
LOAN PAYMENT:
Gain Capital Holdings. Inc.
From Account # |
To Account # | |||||
(Deposit Account #)
|
(Loan Account #) | |||||
| Principal $_______________________ and/or Interest $________________________ | ||||||
Authorized Signature: Phone Number:
Print Name/Title:
Print Name/Title:
LOAN ADVANCE:
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan
advance are for an outgoing wire.
From Account # |
To Account # | |||||
(Loan Account #)
|
(Deposit Account #) | |||||
Amount of Advance $_________________________ |
||||||
All Borrower’s representations and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the request for an
advance, 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.
Authorized Signature: Phone Number:
Print Name/Title:
Print Name/Title:
Outgoing Wire Request:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, E.S.T.
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, E.S.T.
Beneficiary Name:
|
Amount of Wire: $ | |||||
Beneficiary Bank:
|
Account Number: | |||||
City and State: |
||||||
| Beneficiary Bank Transit (ABA) #. | Beneficiary Bank Code (Swift, Sort, Chip, etc.). | |||||
| (For International Wire Only) | ||||||
| Intermediary Bank: | Transit (ABA) #. | |||||
| For Further Credit to: | ||||||
| Special Instruction. | ||||||
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the
terms and conditions set forth in the agreements(s) covering funds transfer service(s), which
agreements(s) were previously received and
executed by me (us).
| Unless otherwise provided for an Advance bearing interest at LIBOR. |
Exhibit B
Schedule 1.1
Lenders and Commitments
| Term Loan Commitment | ||||||||
| Lender | Term Loan Commitment | Percentage | ||||||
Silicon Valley Bank |
$ | 15,000,000.00 | 50.00 | % | ||||
JPMorgan Chase Bank, N.A. |
$ | 15,000,000.00 | 50.00 | % | ||||
TOTAL |
$ | 30,000,000.00 | 100.00 | % | ||||
| Revolving Line Commitment | ||||||||
| Lender | Revolving Line Commitment | Percentage | ||||||
Silicon Valley Bank |
$ | 2,500,000.00 | 50.00 | % | ||||
JPMorgan Chase Bank, N.A. |
$ | 2,500,000.00 | 50.00 | % | ||||
TOTAL |
$ | 5,000,000.00 | 100.00 | % | ||||
