Exhibit 10.29

 

LOAN MODIFICATION AGREEMENT

 

This Loan Modification Agreement is entered into as of June 18, 2002 by and
between PHARSIGHT, INC. (the “Borrower”) and Silicon Valley Bank (“Bank”).

 

1.             DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations
which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant
to, among other documents, a Loan and Security Agreement, dated June 13, 2001,
as may be amended from time to time, (the “Domestic Loan Agreement”).  The
Domestic Loan Agreement provides for, among other things, a Committed Revolving
Line in the original principal amount of Two Million Five Hundred Thousand
Dollars ($2,500,000) and a Committed Term Loan in the original principal amount
of Three Million Five Hundred Thousand Dollars ($3,500,000). Furthermore,
Borrower is indebted to Bank pursuant to, among other documents, an
Export-Import Bank Loan and Security Agreement, dated June 13, 2001, as may be
amended from time to time (the “EXIM Loan Agreement”).  The EXIM Loan Agreement
provided for, among other things, an EXIM Committed Line in the original
principal amount of One Million Five Hundred Thousand Dollars ($1,500,000).  The
Domestic Loan Agreement and the EXIM Loan Agreement are collectively defined as
the Loan Agreements. Defined terms used but not otherwise defined herein shall
have the same meanings as set forth in the Loan Agreements.

 

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the “Obligations.”

 

2.             DESCRIPTION OF COLLATERAL. Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreements.   Additionally,
repayment of the EXIM Committed Line is guaranteed by the Export-Import Bank of
the United States “EXIM Bank” pursuant to a Master Guarantee Agreement between
EXIM Bank and Bank.

 

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Obligations shall be referred
to as 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.    Modification(s) to Domestic Loan Agreement.

 

1.               Sub letter (e) under Section 6.2 entitled “Financial
Statements, Reports, Certificates” is hereby incorporated to read as follows:

 

(e)          Within 20 days after the last day of each month, Borrower will
deliver to Bank its deferred revenue schedules.

 

2.               Sub letter (e) under Section 6.7 entitled “Maximum Losses” is
hereby amended to read as follows:

 

(e)          Maximum Losses.  Borrower may suffer losses not to exceed the
following: $3,800,000 for the quarter ending June 30, 2002; $3,100,000 for
quarter ending September 30, 2002; $2,000,000 for quarter ending December 31,
2002 and $1,100,000 for quarter ending March 31, 2003.  Commencing June 30,
2003, Borrower will have net losses no more than 20% greater than the projected
accounts in the “street” projections approved by Borrower’s board of directors. 
If Borrower’s projects profitability for any given quarter ended June 30, 2003
or beyond, net income will be at least 80% of the projected amount in the
“street” projections approved by Borrower’s board of directors.

 

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3.               The following defined term under Section 13.1 entitled
“Definitions” is hereby amended to read as follows:

 

“Revolving Maturity Date” is June 13, 2003.

 

B.                                  Modification of EXIM Loan Agreement.

 

1.                    The following defined term under Section 13.1 entitled
“Definitions” is hereby amended to read as follows:

 

“EXIM Maturity Date” is June 13, 2003.

 

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

 

5.             NO DEFENSES OF BORROWER.  Borrower agrees that, as of the date
hereof, it has no defenses against paying any of the Obligations.

 

6.             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 and
endorsers of Existing Loan Documents, unless the party is expressly released by
Bank in writing.  Unless expressly released herein, no maker, endorser, or
guarantor will be released by virtue of this Loan Modification Agreement.  The
terms of this paragraph apply not only to this Loan Modification Agreement, but
also to all subsequent loan modification agreements.

 

                This Loan Modification Agreement is executed as of the date
first written above.

 

BORROWER:

BANK:

 

 

PHARSIGHT, INC.

SILICON VALLEY BANK

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

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SILICON VALLEY BANK

 

 

PRO FORMA INVOICE FOR LOAN CHARGES

 

 

BORROWER:

PHARSIGHT, INC.

 

 

 

 

 

 

LOAN OFFICER:

Ron Kundich

 

 

 

 

 

 

DATE:

June 18, 2002

 

 

 

 

 

 

 

Domestic Loan Fee

$12,500.00

 

 

Exim Loan Fee

22,500.00

 

 

Documentation Fee

250.00

 

 

Exim  Application Fee

100.00

 

 

 

 

 

 

TOTAL FEE DUE

 

$35,350.00

 

 

Please indicate the method of payment:

 

(  )  A check for the total amount is attached.

(  )  Debit DDA# _____________ for the total amount.

(  )  Loan proceeds.

 

 

 

Borrower

(Date)

 

 

 

Silicon Valley Bank

(Date)

Account Officer’s Signature

 

 

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EXHIBIT D

COMPLIANCE CERTIFICATE

 

 

TO:

 

SILICON VALLEY BANK

 

 

 

3003 Tasman Drive

 

 

 

Santa Clara, CA 95054

 

 

 

 

 

FROM:

 

PHARSIGHT CORPORATION

 

 

                The undersigned authorized officer of Pharsight Corporation
(“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is
in complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties in
the Agreement are true and correct in all material respects on this date.
 Attached are the required documents supporting the certification.  The Officer
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the next
except as explained in an accompanying letter or footnotes.  The Officer
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.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

 

Required

 

Complies

 

 

 

 

 

 

 

 

 

Monthly financial statements + CC*

 

Monthly within 30 days

 

Yes

 

No

 

Annual (Audited)

 

FYE within 120 days

 

Yes

 

No

 

10-Q, 10-K and 8-K

 

Within 5 days after filing with SEC

 

Yes

 

No

 

A/R & A/P Agings

 

Monthly within 20 days

 

Yes

 

No

 

Borrowing Base Certificate

 

Monthly within 20 days

 

Yes

 

No

 

Deferred Revenue Schedules

 

Monthly within 20 days

 

Yes

 

No

 

Board Approved Projections

 

Annually within 30 days of fiscal year end

 

Yes

 

No

 

 

* at any time (a) Liquidity is less than the product of 2.5 times the then
aggregate outstanding balance of the Term Loan Advances or (b) Remaining Month’s
Liquidity  is less than 9

 

Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

 

 

 

 

Maintain on a quarterly basis (unless otherwise noted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Liquidity (Monthly)

 

2X Term Loan

 

$_________

 

Yes

 

No

 

Minimum Remaining Months

 

 

 

 

 

 

 

 

 

Liquidity

 

Six (6

)

__________

 

Yes

 

No

 

 

 

 

 

 

 

 

 

 

 

Minimum Quick Ratio (Adjusted)

 

1.00:1.00

 

_____:1.00

 

Yes

 

No

 

 

 

 

 

 

 

 

 

 

 

Quarterly Loss*

 

 

 

 

 

 

 

 

 

$3,800,000 @ 6/30/02

 

___________

 

 

 

Yes

 

No

 

$3,100,000 @ 9/30/02

 

 

 

 

 

 

 

 

 

$2,000,000 @ 12/31/02

 

 

 

 

 

 

 

 

 

$1,100,000 @ 3/31/03

 

 

 

 

 

 

 

 

 

 

  *Commencing 6/30/03, Borrower will have net losses no more than 20% greater
than the projected amounts in the “street” projections approved by Borrower’s
board of directors.  If Borrower projects profitability for any given quarter
ended 6/30/03 or beyond, net income will be at least 80% of the projected amount
in the “street” projections approved by Borrower’s board of directors.

 

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BANK USE ONLY

 

Received By: ____________________

Date: ________________

Reviewed By: ____________________

Compliance Status:  Yes / No

 

Comments Regarding Exceptions:  See Attached.

 

 

Sincerely,

 

 

Pharsight Corporation

 

 

Signature

 

 

Title

 

 

Date