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Exhibit 10.26
FOOTHILL CAPITAL CORPORATION
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000X
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
March 16, 2001
BA TECHNOLOGY I, LLC
c/o BancAmerica Capital Investors I, L.P.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
GE CAPITAL EQUITY INVESTMENTS, INC.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Letter Agreement re Senior Subordinated Note and Warrant Purchase Agreement
Ladies and Gentlemen:
This Letter Agreement (the "Agreement") is entered into in reference
to, and as an amendment to, that certain Senior Subordinated Note and Warrant
Purchase Agreement, dated as of December 31, 1999 (the "Note Purchase
Agreement"), entered into among BA TECHNOLOGY I, LLC, a Delaware limited
liability company ("BA"), GE CAPITAL EQUITY INVESTMENTS, INC., a Delaware
corporation ("GE"), and INTERACT COMMERCE CORPORATION, a Delaware corporation,
formerly known as SalesLogix Corporation ("Borrower"), and in reference to that
certain Loan and Security Agreement, of even date herewith (the "Loan
Agreement"), between FOOTHILL CAPITAL CORPORATION ("Foothill") and Borrower.
As a condition to entering into the Loan Agreement, Foothill has
required that BA and GE enter into this Agreement, and to induce Foothill to
enter into the Loan Agreement, BA and GE have agreed to enter into this
Agreement.
1. The Borrower, BA, GE and Foothill hereby agree that notwithstanding
any of the terms of the Note Purchase Agreement to the contrary, the definitions
of "Change of Control" and "Senior Indebtedness" in Sections 1.01 and 11.01,
respectively, of the Note Purchase Agreement each shall be deleted in its
entirety and replaced with the following respective definitions:
"Change of Control" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), other
than Permitted Holders, becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 40%, or
more, of the Capital Stock of the Company having the right to vote for
the election of
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BA Technology I, LLC
GE Capital Equity Investments, Inc.
March 16, 2001
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members of the Board of Directors, or (b) a majority of the members
of the Board of Directors do not constitute Continuing Directors, or
(c) the Company ceases to directly own and control 100% of the
outstanding Capital Stock of each of its Subsidiaries extant as of
March 16, 2001, other than by (i) merger of one or more Subsidiaries
into the Company or a Subsidiary of the Company, so long as the Company
is, or owns 100% of the Capital Stock of, the surviving entity (to the
extent permitted under any agreement governing any Senior
Indebtedness), or (ii) sale or transfer to any Person(s) of up to all
of the assets or securities of Enact Incorporated, (to the extent
permitted under any agreement governing any Senior Indebtedness).
"Senior Indebtedness" means the following obligations of the
Company: (a) all principal, interest (including any Post-Petition
Interest) and all other amounts outstanding under or in respect of any
instrument evidencing the obligations of the Company under that Loan
and Security Agreement, dated as of March 16, 2001 by and between the
Company and Foothill Capital Corporation, to the extent that such
obligations do not exceed $21,000,000 and (b) any and all refinancings,
replacements or refundings of any of the amounts referred to in clause
(a) above; provided, however, that the aggregate principal amount of
Senior Indebtedness permitted under clause (a), and any refinancing,
replacement or refunding thereof permitted under clause (b) (including
the maximum amount of the aggregate commitments of the lenders to
extend any revolving credit facility thereunder) shall not exceed at
any time $20,000,000.
2. The Borrower, BA and GE agree that the following definitions are
hereby added to Section 1.01 of the Note Purchase Agreement in appropriate
alphabetical position:
"Continuing Director" means (a) any member of the Board of
Directors who was a director of the Company on March 16, 2001 (the
"Measurement Date"), and (b) any individual who becomes a member of the
Board of Directors after the Measurement Date if such individual was
appointed or nominated for election to the Board of Directors by a
majority of the Continuing Directors, but excluding any such individual
originally proposed for election in opposition to the Board of
Directors in office at the Measurement Date in an actual or threatened
election contest relating to the election of the directors (or
comparable managers) of the Company (as such terms are used in Rule
14a-11 under the Exchange Act) and whose initial assumption of office
resulted from such contest or the settlement thereof.
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GE Capital Equity Investments, Inc.
March 16, 2001
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"Permitted Holder" means any shareholder (and any Affiliate
thereof) of the Company as of March 16, 2001 who has filed a form 13G
or 13D with the Commission relating to such shareholder's ownership
interests in the Company.
3. The Borrower, BA, GE and Foothill agree that with respect to the
Senior Indebtedness held by Foothill, "Senior Payment Default" as defined under
the Note Purchase Agreement shall include any reimbursement or payment made by
charging the Borrower's revolving loan account under the Loan Agreement which
results in advances or loans outstanding in excess of the Borrower's loan
availability under the Loan Agreement.
4. Notwithstanding anything to the contrary in the Note Purchase
Agreement or the Loan Agreement, the Borrower, BA, GE and Foothill agree that:
(a) Upon any Public Offering (as defined in the Note Purchase
Agreement) or private placement of Capital Stock of the Borrower, then, in each
case, all proceeds of such equity issuance that Borrower elects not to apply to
repay the outstanding balance of the Senior Indebtedness shall be applied to
prepay the Notes issued pursuant to the Note Purchase Agreement (the "Notes").
(b) Notwithstanding the provisions of Section 8.14 of the Loan
Agreement, no Event of Default (as defined in the Loan Agreement) thereunder
shall occur upon Borrower's receipt of a Mandatory Redemption Notice (as defined
in the Loan Agreement) delivered as a result of or in connection with a Change
of Control (as defined in the Loan Agreement) or a transaction or event
described in Section 7.3 of the Loan Agreement as in effect on the date hereof,
if Foothill has consented to, or waived its rights under the Loan Documents (as
defined in the Loan Agreement) arising out of, such Change of Control,
transaction or event in accordance with the provisions of the Loan Agreement as
in effect on the date hereof.
(c) Notwithstanding anything to the contrary in the Loan
Agreement or the Note Purchase Agreement, Foothill hereby consents to the
payments described in Section 4(a) and any payments made pursuant to the Note
Purchase Agreement in connection with the delivery of a Mandatory Redemption
Notice described in Section 4(b).
5. The Borrower, BA and GE agree that Section 9.06 (Dispositions of
Assets) of the Note Purchase Agreement shall not prohibit any disposition
permitted under Section 7.4 of the Loan Agreement or which is otherwise
consented to in writing by Foothill, in its discretion; provided, that with
respect to each such asset disposition that is not a Permitted Disposition (as
defined in the Note Purchase Agreement) (a) the proceeds thereof shall be
applied first to the outstanding balance of the Senior Indebtedness if so
requested by Foothill, in its discretion, in accordance with the
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GE Capital Equity Investments, Inc.
March 16, 2001
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provisions of the Loan Agreement and (b) all proceeds thereof not applied to
repay the outstanding balance of the Senior Indebtedness shall be applied to
prepay the Notes. Notwithstanding anything to the contrary in the Loan Agreement
or the Note Purchase Agreement, Foothill hereby consents to the payments in the
preceding clause (b).
6. Notwithstanding anything in the Note Purchase Agreement to the
contrary, the Borrower shall not make any optional prepayments of the Notes
pursuant to Section 10.01 of the Note Purchase Agreement prior to the Maturity
Date (as defined in the Loan Agreement), without the prior written consent of
Foothill.
7. With respect to all references in the Note Purchase Agreement to the
"prior payment in full of the Senior Indebtedness" or to the prior payment of
the Senior Indebtedness having been "duly provided for," including, without
limitation, such references in Sections 11.02, 11.03(a) and 11.08, with respect
to the Senior Indebtedness held by Foothill, payment in full, in immediately
available funds (i.e., cash) shall be required and no other payment or
consideration shall be deemed "payment in full" or "duly provided for" under the
Note Purchase Agreement with respect to the Senior Indebtedness of Foothill.
8. The Borrower and Foothill agree that no amendment shall be made,
directly or indirectly, without the consent of the holders of the Notes:
(a) to the definitions of "Change of Control" or "Permitted
Disposition" as set forth in the Loan Agreement as in effect on the date hereof;
(b) to Section 7.4 or Section 7.8 of the Loan Agreement as in
effect on the date hereof, to the extent such amendment would be adverse to the
holders of the Notes or more restrictive upon the Borrower;
(c) to any Loan Document (as defined in the Loan Agreement)
that would increase the principal amount of the Borrower's obligations under the
Loan Documents to be more than $20,000,000; or
(d) to extend (including any extension by waiver or consent)
beyond November 30, 2004, the Maturity Date of the Borrower's Obligations (each,
as defined in the Loan Agreement) under the Loan Agreement or any other Loan
Document (as defined in the Loan Agreement).
9. BA and GE acknowledge that the royalty payments payable by the
Borrower pursuant to the ACT! License Agreement (as defined in the Loan
Agreement), as in effect on the date hereof, are not "Indebtedness" for any
purpose under the Note Purchase Agreement.
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10. To the extent any provisions of the Loan Agreement or Note Purchase
Agreement conflict with those of this Agreement, the terms of this Agreement
shall control. In the event that any provision of the Loan Agreement, as now in
effect or hereafter amended, conflicts with any provision of Section 10 of the
Note Purchase Agreement, as and to the extent amended by this Agreement, the
provisions of Section 10 of the Note Purchase Agreement as and to the extent so
amended shall govern, and the Loan Agreement shall be so interpreted. Except as
expressly set forth herein, all provisions of the Note Purchase Agreement shall
remain unmodified and shall continue in full force and effect. This Agreement
shall bind and inure to the benefit of Foothill, BA and GE, and their successors
and assigns, including any lender or other financier that may refinance the
indebtedness of Borrower to Foothill and any other holder of the Notes issued
under the Note Purchase Agreement. The provisions in this Agreement are intended
solely to apply to the relative rights of the holders of the Notes and the
holders of Senior Indebtedness (as defined in the Note Purchase Agreement) and
shall not impair the obligations of the Borrower, which are absolute and
unconditional, to pay the principal, interest and other amounts to be paid
pursuant to the Loan Documents (as defined in the Loan Agreement), the Notes and
the Note Purchase Agreement (as amended hereby).
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Please indicate your acceptance and agreement to the foregoing by
execution below.
Very truly yours,
FOOTHILL CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Senior Vice President
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ACCEPTED AND AGREED:
INTERACT COMMERCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Vice President-Finance
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BA TECHNOLOGY I, LLC
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
Manager
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Managing Director
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