exv10w1



 






Exhibit 10.1









May 6, 2005




Mr. Michael Hill

Chief Financial Officer

Perficient, Inc

1120 S. Capital of Texas Hwy.

Bldg 3, Ste. 220

Austin, TX 78746



Dear Mike:


It is my pleasure to offer this binding commitment on behalf of Silicon Valley Bank in conjunction
with KeyBank National Association (the “Bank”) in providing an increase to the Credit Facilities to
Perficient, Inc. (the “Borrower”) subject to the terms and conditions contained herein. This
letter is not meant to be, nor shall it be construed as, an attempt to define all the terms and
conditions of the Facility. Rather, the following is a summary of the basic business points.




Acquisition Loan:




	 	 	 
	Description

	 	$10,000,000 increase to the existing Acquisition Line of Credit
(“Acquisition Facility”), for a total facility of $13,517,006 (based
on current outstanding balances).
	 
	 	 
	Purpose

	 	To fund corporate acquisitions. Bank will advance up to 50% of the
total Acquisition Value, conditioned upon the acquisition target
being accretive to consolidated earnings within three months of the
final acquisition date. Advances must be accompanied by statement
affirming pro forma covenant compliance.
	 
	 	 
	Interest Rate

	 	The Interest Rate shall be fixed at the time of each advance. The
Interest Rate shall be equal to the average four-year Treasury yield
plus 325 basis points.
	 
	 	 
	Loan Fee

	 	25 basis point fee based upon the incremental increase, payable at
closing of the increase to the Acquisition Facility.
	 
	 	 
	Advance Period

	 	Borrower will have thirteen months to advance on the Credit Facility.
	 
	 	 
	Repayment

	 	Interest only through 13 months from the close of the increase,
followed by a thirty-six month amortization requiring equal monthly
payments of principal and accrued interest.






7000 NORTH MOPAC | SUITE 360 | AUSTIN, TX 78731| 512.372.6750 | SVB.COM




 








 










Revolving Line of Credit:




	 	 	 
	Description

	 	$15,000,000 Revolving Line of Credit (“Operating Line”). This will
replace the existing $9,000,000 line of credit.
	 
	 	 
	Purpose

	 	To provide working capital.
	 
	 	 
	Maturity

	 	Three years from the close of the increase.
	 
	 	 
	Interest Rate

	 	Prime plus 1.25%
	 
	 	 
	Loan Fee

	 	12.5 basis points on the incremental increase of the Operating Line at
the close of the increase. 12.5 basis points on the commitment amount
payable at each anniversary.
	 
	 	 
	Unused Fee

	 	8 basis point unused portion fee will be charged per quarter in arrears
on the average unused portion of the facility (L/C’s will be counted as
outstandings).
	 
	 	 
	Repayment

	 	Interest monthly with all principal and interest due at maturity.
	 
	 	 
	Borrowing Formula

	 	Up to 80% of Eligible Receivables. Eligible Receivables shall include
those domestic accounts outstanding 90 days or less from invoice date,
plus “unbilled” accounts receivable that are fully earned but unbilled
due to billing cycles, provided that those accounts will be billed
within two weeks of completion. Inclusion of “unbilled” accounts
receivable shall not exceed 40% of the aggregate borrowing base.
Eligible Receivables will exclude contra accounts, deferred revenue,
inter-company accounts, unbilled accounts, federal government accounts
for which Bank has not been granted an assignment of claims, foreign
accounts, cross-agings over 50%, and accounts exceeding 25% of total
accounts receivable (IBM will maintain a 40% concentration limit).
Cross-agings and concentrations of Eligible Receivables will also apply
to earned but unbilled accounts.






CONDITIONS PERTAINING TO THE CREDIT FACILITIES



	 	 	 
	Security

	 	First perfected security interest in all accounts, inventory, chattel
paper, equipment, fixtures with a specific filing on general
intangibles, including material patents, trademarks and copyrights, now
owned or hereafter acquired together with all products and proceeds
thereof.
	 
	 	 
	Warrants

	 	None.






7000 NORTH MOPAC | SUITE 360 | AUSTIN, TX 78731| 512.372.6750 | SVB.COM




 








 










	 	 	 
	Financial Covenants

	 	1) Minimum Liquidity Ratio of 0.75x to be maintained at all times. The
ratio will be defined as Cash with Bank plus Eligible Accounts
Receivable less outstandings on the Operating Line, divided by the
outstanding balance on the Acquisition Facility.
	 
	 	 
	

	 	2) Minimum Debt Service Coverage Ratio of 1.50x, applicable when there
are any outstanding obligations on the Acquisition Facility. The ratio
is defined as after tax earnings before interest, depreciation and
amortization, annualized, divided by current maturities of long-term
debt plus interest. The Ratio will be tested monthly and based on a
trailing three months.
	 
	 	 
	

	 	3) A ratio of Total Funded Debt to EBITDA not to exceed 2.5x. The ratio
will be tested quarterly based on trailing 12 months EBITDA:
	 
	 	 
	

	 	EBITDA defined as earnings before interest and taxes plus
depreciation and amortization plus reasonable non-cash charges including
those charges incurred in connection with the refinancing of existing
debt. EBITDA shall exclude one-time extraordinary gains. EBITDA will
include historical results for conforming future acquisitions plus
applicable Pro Forma Adjustments as defined in the June 8, 2004 Loan
Modification. Such pro forma EBITDA adjustments to consolidated EBITDA
for acquisitions to include trailing 12 months EBITDA from a conforming
acquisition. EBITDA from a conforming acquisition to be validated by
receipt and review of financial statements, audited if available, of the
acquired company. This language will be consistent with the existing
term loan agreement.
	 
	 	 
	

	 	Total Funded Debt defined as all obligations to repay borrowed money,
direct or indirect, incurred, assumed, or guaranteed; all capital lease
obligations; all synthetic leases; all obligations, contingent or
otherwise, under any letter of credit; all obligations for the deferred
purchase price of capital assets; and, all obligations under conditional
sales agreements. Funded debt to exclude all operating leases of
Borrower and operating leases of Borrower’s subsidiaries guaranteed by
Borrower.
	 
	 	 
	Other Covenants

	 	In addition to the Affirmative and Negative Covenants specified in
Sections 6 and 7 of the Loan & Security Agreement dated December 5,
2003, as amended (excluding any Financial Covenants specified therein),
Borrower will agree to inform Bank of any material change, including the
cancellation or renewal, in the status of its services agreement with
IBM.
	 
	 	 
	Compensating Balances

	 	Borrower shall agree to maintain 85% of its operating and investment
accounts at or through the Bank.
	 
	 	 
	Financial Reporting

	 	Borrower shall provide Financial Reporting stipulated in Section 6.2 of
the Loan & Security Agreement date December 5, 2003, which includes:
	 
	 	 
	

	 	1) Monthly financial statements, accompanied by a Compliance Certificate
within thirty (30) days after month end.
	

	 	2) Monthly accounts receivable and accounts payable agings, accompanied
by a Borrowing Base Certificate within thirty (30) days after month end.






7000 NORTH MOPAC | SUITE 360 | AUSTIN, TX 78731| 512.372.6750 | SVB.COM




 








 










	 	 	 
	

	 	3) Detailed deferred revenue list within thirty (30) days after month
end.
	

	 	4) Unqualified audited financial statements, within one-hundred twenty
(120) days after its fiscal year end.
	 
	 	 
	Insurance

	 	The Borrower will be required to provide insurance against loss or
damage to equipment and commercial general liability insurance, both
with terms and companies satisfactory to Bank.
	 
	 	 
	Documents

	 	The Bank will provide its standard Loan & Security Agreement and related
documents (collectively, the “Loan Documents”), which shall be conformed
to the specific terms of this proposal.
	 
	 	 
	Other Expenses

	 	Borrower agrees to pay all Bank’s costs associated with the closing of
the Credit Facility, including legal expense, UCC and Intellectual
Property search and filing fees.
	 
	 	 
	Approval

	 	This commitment has been approved by the Bank’s credit committee and no
further approvals are required by the Bank to execute definitive loan
documents related hereto.
	 
	 	 
	Confidentiality

	 	This letter is delivered to you with the understanding that neither it
nor its substance shall be disclosed publicly or privately to any third
person except to those who are in a confidential relationship to you
(such as your legal counsel or potential/existing equity investors), or
where the same is required by law and then, only on a basis that it not
further be disclosed.





If these basic terms and conditions are acceptable, please so indicate by returning an executed
copy of this letter to Silicon Valley Bank, 7000 North Mopac, Ste. 360, Austin, Texas, 78731.



Upon acceptance of this letter, the Bank shall commence preparation of the definitive loan
documents, which shall supersede this letter at Borrower’s expense. This commitment is intended to
create a binding obligation on the part of the Bank to increase Borrower’s Credit Facilities on the
terms set forth above, subject to the negotiation and execution of mutually satisfactory
definitive loan documents. Each of the Bank and the Borrower shall use its reasonable best efforts
to negotiate and execute the definitive loan documents promptly upon acceptance of this letter.




7000 NORTH MOPAC | SUITE 360 | AUSTIN, TX 78731| 512.372.6750 | SVB.COM




 








 









We appreciate the opportunity to make this binding commitment to Perficient, Inc. and look forward
to furthering our mutually rewarding relationship.




With best regards,



	 	 	 
	SILICON VALLEY BANK

	 	KEYBANK NATIONAL ASSOCIATION
	 
	 	 
	 
	 	 
	 

	 	 
	Phillip Wright

	 	Thomas A. Crandell
	Vice President

	 	Senior Vice President





AGREED & ACCEPTED, this ___day of                     , 2005.




	 	 	 
	Perficient, Inc.
	 	 
	 
	 	 
	

	 	 
	 
	 	 
	Michael Hill

Chief Financial Officer
	 	 






7000 NORTH MOPAC | SUITE 360 | AUSTIN, TX 78731| 512.372.6750 | SVB.COM