Exhibit 10.1

 

FOURTH LOAN MODIFICATION AGREEMENT

 

This Fourth Loan Modification Agreement (this “Loan Modification Agreement’) is
entered into as of September 30, 2003, by and between SILICON VALLEY BANK, a
California-chartered bank, 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 W Washington Street, Newton,
Massachusetts 02462, doing business under the name “Silicon Valley East”
(“Bank”) and (i) IBASIS, INC., a Delaware corporation with its chief executive
office located at 20 Second Avenue, Burlington, Massachusetts 01803 and (ii)
IBASIS GLOBAL, INC., Delaware corporation with its chief executive office
located at 20 Second Avenue, Burlington, Massachusetts 01803 (jointly and
severally, individually and collectively, “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 December 30, 2002, evidenced by, among other documents, a certain
Loan and Security Agreement dated as of December 30, 2002 between Borrower and
Bank, as amended by a certain First Loan Modification Agreement dated as of
January 30, 2003, a certain Second Loan Modification Agreement entered into as
of February 27, 2003, and a certain Third Loan Modification Agreement dated as
of June, 2003 (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
and certain Intellectual Property Security Agreements each dated December 30,
2002 (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.

 

Modification to Loan Agreement.

 

A.                                   The Loan Agreement shall be amended by
deleting the following text at the end of Section 1(B)of the Schedule thereto:

 

“plus

 

(iii) up to $5,000,000.00 (the “Permitted Overadvance”) for each of the
following seven Business Day periods (each a “Permitted Overadvance Period”):
(a) June 30 through the next six (6) Business Days of each year, (b) September
30 through the next six (6) Business Days of each year, (c) December 31 though
the next six(6) Business Days of each year, and (d) March 31 through the next
six(6) Business Days of each year; provided in each instance the Permitted
Overadvance must be repaid in full on the first (1st) Business Day after the
expiration of each Permitted Overadvance Period.”

 

and inserting lieu thereof the following:

 

“plus

 

(iii) up to $5,000,000.00 (the “Permitted Overadvance”) for the period
commencing September 30, 2003 through October 9, 2003; provided the Permitted
Overadvance must be repaid in full on October 10, 2003.”

 

B.                                     The Loan Agreement shall be amended by
deleting Section 5(a) of the Schedule thereto and inserting in lieu thereof the
following:

 

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“a. Minimum Tangible Net Worth:

 

Borrower shall maintain a Tangible Net Worth of not less than:

 

(A)                              from the date of this Agreement through March
31, 2003 - $33,800,000.00

(B)                                from April 1, 2003 through May 31, 2003 -
$27,100,000.00

(C)                                from June 1, 2003 through June 30, 2003 -
$22,750,000.00

(D)                               from July 1, 2003 through July 31, 2003 -
$22,900,000.00

(E)                                 from August 1, 2003 through August 31, 2003
- $18,000,000.00

(F)                                 from September 1, 2003 through September 30,
2003 - $16,750,000.00

(G)                                from October 1, 2003 through December 31,
2003 - $20,100,000.00

(H)                               from January 1, 2004 through August 31, 2004 -
$19,800,000.00

(I)                                    from September 1, 2004 through November
30, 2004 - $22,300,000.00

(J)                                   from December 1, 2004 and thereafter -
$26,300,000.00”

 

C.                                     The Loan Agreement shall be amended by
deleting Section 5(c) of the Schedule thereto in

its entirety and inserting in lieu thereof the following:

 

“b. Minimum Cash or Excess Availability:

 

Borrower shall at all times maintain $5,000,000.00 in (i) cash deposits
maintained at Silicon, and/or (ii) excess “availability” under this Agreement
(net of Loans, Letters of Credit or other indebtedness under this Agreement), as
determined by Silicon based upon the Credit Limit restrictions set forth in
Section 1 above).”

 

D.                                    The Loan Agreement shall be amended by
deleting Section 5(c) of the Schedule thereto in its entirety and inserting in
lieu thereof the following:

 

“c. Quick Ratio.

 

Borrower shall at all times maintain a ratio of Quick Assets to Current
Liabilities of at least:

 

(A)                              from the date of this Agreement through March
31, 2003 - 0.95 to 1.0

(B)                                from April 1, 2003 through May 31, 2003 -
0.90 to 1.0

(C)                                from June 1, 2003 through June 30, 2003 -
0.80 to 1.0

(D)                               from July 1, 2003 through July 31, 2003 - 0.85
to 1.0

(E)                                 from August 1, 2003 through September 30,
2003 - 0.75 to 1.0

(F)                                 from October 1, 2003 through December 31,
2003 - 0.80 to 1.0

(G)                                from January 1, 2004 through March 31, 2004 -
0.85 to 1.0

(H)                               from April 1, 2004 through June 30, 2004 -
0.90 to 1.0

(I)                                    from July 1, 2004 through September 30,
2004 - 0.95 to 1.0

(J)                                   from October 1, 2004 and thereafter - 1.0
to 1.0”

 

4.                                       FEES. Borrower shall reimburse Bank for
all reasonable legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.

 

5.                                       WAIVER. The Bank hereby waives the
Borrower’s failure to comply with the “Minimum Tangible Net Worth” covenant set
forth in Section 5(a) of the Schedule to the Loan Agreement for the period
ending July 31, 2003. The Bank’s waiver of Borrower’s compliance with the
foregoing covenant shall apply only to the foregoing specified period.

 

6.                                       CONSISTENT CHANGES. The Existing Loan
Documents are hereby amended wherever necessary to reflect the changes described
above.

 

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7.                                       RATIFICATION OF LOAN DOCUMENTS.
Borrower hereby ratifies, 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.

 

8.                                       RATIFICATION OF INTELLECTUAL PROPERTY
SECURITY AGREEMENTS. Borrower hereby ratifies, confirms, and reaffirms, all and
singular, the terms and conditions of the IP Agreements and acknowledges,
confirms and agrees that the IP Agreements contain an accurate and complete
listing of all Intellectual Property.

 

9.                                       RATIFICATION OF PERFECTION CERTIFICATE.
Borrower hereby ratifies, confirms, and reaffirms, all and singular, the terms
and disclosures contained in certain Perfection Certificates delivered to the
Bank on or about December 30, 2002, and acknowledges, confirms and agrees the
disclosures and information provided therein has not changes, as of the date
hereof.

 

10.                                 NO DEFENSES OF BORROWER. Borrower hereby
acknowledges and agrees that Borrower has no offsets, defenses, claims, or
counterclaims against the 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 the Bank, whether known or unknown, at law or in
equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES the
Bank from any liability thereunder.

 

11.                                 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.

 

12.                                 COUNTERSIGNATURE. This Loan Modification
Agreement shall become effective only when it shall have

been executed by Borrower and Bank.

 

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This Loan Modification Agreement is executed as a sealed instrument under the
laws of the Commonwealth of Massachusetts.

 

BORROWER:

 

IBASIS, INC.

 

 

By:

/s/  Ofer Gneezy

 

Name:  Ofer Gneezy

Title:    Chief Executive Officer

 

IBASIS GLOBAL, INC.

 

 

By:

/s/  Richard Tennant

 

Name:  Richard Tennant

Title:    Chief Financial Officer

 

BANK:

 

SILICON VALLEY BANK, d/b/a

SILICON VALLEY EAST

 

 

By:

/s/  Nancy E. Funkhouser

 

Name:  Nancy E. Funkhouser

Title:

  Vice President

 

 

The undersigned ratifies, confirms and reaffirms, all and singular, the terms
and conditions of a certain Unconditional Guaranty dated December 30, 2002 (the
“Guaranty”) and a certain Security Agreement dated December 30, 2002 (the
“Security Agreement”) and acknowledges, confirms and agrees that the Guaranty
and the Security Agreement 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.

 

 

 

IBASIS SECURITIES CORPORATION

 

 

 

 

 

By:

/s/  Ofer Gneezy

 

 

 

 

 

 

Name:

 Ofer Gneezy

 

 

 

 

Title

    Chief Executive Officer

 

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