Exhibit 99.2
CREDIT AGREEMENT
Dated as of August 15, 2001
among
OPEN MARKET, INC.
as Borrower
and
DIVINE, INC.
as Lender
TABLE OF CONTENTS
PAGE
ARTICLE 1 LOANS..................................................................................................1
1.1 Facility........................................................................................1
1.2 Loans...........................................................................................1
ARTICLE 2 INTEREST...............................................................................................3
2.1 Interest........................................................................................3
2.2 Maximum Interest Rate...........................................................................3
ARTICLE 3 PAYMENTS AND PREPAYMENTS...............................................................................3
3.1 Loans...........................................................................................3
3.2 Termination of Facility.........................................................................3
3.3 Payments by Borrower............................................................................3
3.4 Application and Reversal of Payments............................................................4
3.5 Indemnity for Returned Payments.................................................................4
3.6 Conversion......................................................................................4
ARTICLE 4 TAXES..................................................................................................5
4.1 Taxes...........................................................................................5
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES......................................................5
5.1 Books and Records...............................................................................5
5.2 Financial and other Information.................................................................5
5.3 Notices to Lender...............................................................................5
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.................................................................6
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents............6
6.2 Validity and Priority of Security Interest......................................................6
6.3 Organization and Qualification..................................................................7
6.4 No Violation of Law.............................................................................7
6.5 Regulated Entities..............................................................................7
6.6 Use of Proceeds; Margin Regulations.............................................................7
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.....................................................................7
7.1 Taxes and Other Obligations.....................................................................7
7.2 Legal Existence and Good Standing...............................................................7
7.3 Compliance with Laws............................................................................7
7.4 Transactions Affecting Collateral or Obligations; Preservation of Collateral....................8
7.5 Insurance.......................................................................................8
7.6 Liens...........................................................................................8
7.7 Notice of Involuntary Bankruptcy................................................................8
7.8 Use of Proceeds.................................................................................8
7.9 Further Assurances..............................................................................8
7.10 Limitation on Indebtdness.......................................................................8
7.11 Limitation on Transfers.........................................................................9
7.11 Limitation on Subsidiaries......................................................................9
7.13 Unrestricted Subsidiaries.......................................................................9
ARTICLE 8 CONDITIONS OF LENDING..................................................................................9
8.1 Conditions Precedent to Making of Initial Loans on the Closing Date.............................9
ii
8.2 Conditions Precedent to Each Loan..............................................................10
ARTICLE 9 DEFAULT; REMEDIES.....................................................................................10
9.1 Events of Default..............................................................................10
9.2 Remedies.......................................................................................12
ARTICLE 10 TERM AND TERMINATION.................................................................................13
10.1 Term and Termination...........................................................................13
ARTICLE 11 AMENDMENTS; WAIVERS; SUCCESSORS......................................................................13
11.1 Amendments and Waivers.........................................................................13
ARTICLE 12 [INTENTIONALLY DELETED]..............................................................................13
ARTICLE 13 MISCELLANEOUS........................................................................................13
13.1 No Waivers; Cumulative Remedies................................................................13
13.2 Severability...................................................................................14
13.3 Governing Law; Choice of Forum; Service of Process.............................................14
13.4 WAIVER OF JURY TRIAL...........................................................................14
13.5 [Intentionally Deleted]........................................................................14
13.6 Notices........................................................................................14
13.7 Binding Effect.................................................................................15
13.8 Indemnity of Lender by Borrower................................................................15
13.9 Final Agreement................................................................................15
13.10 Counterparts...................................................................................15
13.11 Captions.......................................................................................15
13.12 Conflicts with Other Loan Documents............................................................15
ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A - FORM OF NOTE
EXHIBIT B - FORM OF NOTICE OF BORROWING
SCHEDULE A-1 - LIENS
iii
CREDIT AGREEMENT
This Credit Agreement, dated as of August 15, 2001 (this
"AGREEMENT"), among divine, inc., a Delaware corporation ("LENDER") and Open
Market, Inc., a Delaware corporation, with offices at Xxx Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "BORROWER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, Lender and a wholly-owned subsidiary of
Lender are entering into the Agreement of Plan of Merger (the "Merger
Agreement") providing for the acquisition of Borrower by Lender;
WHEREAS, Borrower has requested Lender to make available to
Borrower the credit facility described herein, which Borrower will use for the
purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed thereto in ANNEX A
which is attached hereto and incorporated herein; the rules of construction
contained therein shall govern the interpretation of this Agreement, and all
Annexes, Exhibits and Schedules attached hereto are incorporated herein by
reference;
WHEREAS, Lender has agreed to make available to Borrower a
credit facility upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, Lender, and Borrower hereby agree
as follows.
ARTICLE 1
LOANS
1.1 FACILITY. Subject to all of the terms and conditions of
this Agreement, Lender agrees to make available a term loan credit facility of
up to the Maximum Amount during the periods described in such definition to
Borrower during the term of this Agreement.
1.2 LOANS.
(a) (i) AMOUNTS. Subject to the satisfaction of the
conditions precedent set forth in ARTICLE 8, Lender agrees,
upon Borrower's request from time to time on any Business Day
during the period from the Closing Date to the Termination
Date, to make loans (the "Loans") to Borrower in amounts not
to exceed the Available Amount. In connection with the
execution of this Agreement, Borrower is delivering a Notice
of Borrowing (as defined below) to be funded on the date of
this Agreement. The initial funds shall be deposited via wire
transfer of immediately available funds to the account
described on SCHEDULE 1.2 to this Agreement (the "Designated
Account").
(ii) Borrower shall execute and deliver to
Lender a note to evidence the Loans made by Lender. The note
shall be in the principal amount of the Commitment, be dated
the date hereof and be substantially in the form of EXHIBIT A
(the "NOTE"). The Note shall represent the obligation of
Borrower to pay the amount of the Commitment, or, if less, the
aggregate unpaid principal amount of all Loans to Borrower
together with interest thereon as prescribed herein. The
entire unpaid balance of the Loans and all other
non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the
Termination Date.
(b) PROCEDURE FOR BORROWING.
(1) Each Borrowing shall be made upon
Borrower's irrevocable written notice delivered to Lender in the form of a
notice of borrowing in the form of EXHIBIT B hereto ("Notice of Borrowing"),
which must be received by Lender prior to 11:00 a.m. (Chicago time) one Business
Day prior to the requested Funding Date specifying:
(A) the amount of the Borrowing; and
(B) the requested Funding Date, which must be
a Business Day.
(2) In lieu of delivering a Notice of
Borrowing, Borrower may give Lender telephonic notice of such request for
advances to the Designated Account on or before the deadline set forth above.
Lender at all times shall be entitled to rely on such telephonic notice in
making such Loans, regardless of whether any written confirmation is received.
(c) RELIANCE UPON AUTHORITY. Lender is authorized to
transfer the proceeds of any Loans requested hereunder to the
Designated Account. Borrower may designate a replacement
account from time to time by written notice. All such
Designated Accounts must be located in the continental United
States of America and must be reasonably satisfactory to
Lender. Lender is entitled to rely conclusively on any
person's request for Loans on behalf of Borrower, so long as
the proceeds thereof are to be transferred to the Designated
Account.
NO LIABILITY. Lender shall not incur any
liability to Borrower as a result of acting upon any notice
referred to in SECTIONS 1.2(B) and (C), which Lender believes
in good faith to have been given by an officer or other person
duly authorized by Borrower to request Loans on its behalf.
The crediting of Loans to the Designated Account conclusively
establishes the obligation of Borrower to repay such Loans as
provided herein.
2
ARTICLE 2
INTEREST
2.1 INTEREST.
(a) INTEREST RATES. All outstanding Obligations shall
bear interest on the unpaid principal amount thereof
(including, to the extent permitted by law, on interest
thereon not paid when due) from the date made until paid in
full in cash at a rate equal to the Applicable Rate. All
interest charges shall be computed on the basis of a year of
365 days and actual days elapsed. Borrower shall pay to Lender
interest accrued on all Loans on the Termination Date.
(b) DEFAULT RATE. If any Event of Default occurs and
is continuing and Lender in its discretion so elects, then,
while any such Event of Default is continuing, all of the
Obligations shall bear interest at the rate otherwise
applicable thereto, plus two percent (2%) per annum applicable
thereto.
2.2 MAXIMUM INTEREST RATE In no event shall any interest
rate provided for hereunder exceed the maximum rate legally chargeable under
applicable law with respect to loans of the type provided for hereunder (the
"Maximum Rate"). If, in any month, any interest rate, absent such limitation,
would have exceeded the Maximum Rate, then the interest rate for that month
shall be the Maximum Rate, and, if in future months, that interest rate would
otherwise be less than the Maximum Rate, then that interest rate shall remain at
the Maximum Rate until such time as the amount of interest paid hereunder equals
the amount of interest which would have been paid if the same had not been
limited by the Maximum Rate. If a court of competent jurisdiction determines
that Lender has received interest and other charges hereunder in excess of the
Maximum Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest, in the
inverse order of maturity, and if there are no Obligations outstanding, Lender
shall refund to Borrower such excess.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 LOANS. Borrower may prepay the Loans at any time,
subject to the terms of this Agreement. Borrower shall repay the outstanding
principal balance of the Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. Borrower may not reborrow any amounts that are prepaid in
accordance with this SECTION 3.1.
3.2 TERMINATION OF FACILITY. Borrower may terminate this
Agreement upon at least three (3) Business Days' notice to Lender, upon the
payment in full of all outstanding Loans, together with accrued interest
thereon, and the payment in full in cash of all other Obligations then
outstanding.
3.3 PAYMENTS BY BORROWER. All payments to be made by
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by Borrower shall be made to
Lender, at the account designated by Lender,
3
in Dollars and in immediately available funds, no later than 3:00 p.m. (Chicago
time) on the date specified herein.
3.4 APPLICATION AND REVERSAL OF PAYMENTS. All such payments
not relating to principal or interest of specific Loans, or not constituting
payment of specific fees, and all proceeds of Collateral received by Lender,
shall be applied, subject to the provisions of this Agreement, FIRST, to pay any
fees, indemnities or expense reimbursements then due to Lender; SECOND, to pay
interest due in respect of all Loans; and THIRD, to pay or prepay principal of
the Loans. Lender shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion of the
Obligations.
3.5 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
Lender is for any reason compelled to surrender such payment or proceeds to any
Person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any other reason,
then the Obligations or part thereof intended to be satisfied shall be revived
and continued and this Agreement shall continue in full force as if such payment
or proceeds had not been received by such Person and Borrower shall be liable to
pay to Lender, and hereby does indemnify Lender and hold Lender harmless for the
amount of such payment or proceeds surrendered. The provisions of this SECTION
3.5 shall be and remain effective notwithstanding any contrary action which may
have been taken by Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and
irrevocable. The provisions of this SECTION 3.5 shall survive the termination of
this Agreement.
3.6 CONVERSION. (a) Upon termination of the Merger Agreement
pursuant to Sections 8.2(d), 8.3(a) or 8.3(b) thereof (the "Conversion Date"),
all Loans and Obligations shall automatically be converted (the "Conversion")
into the number of shares of Common Stock of Borrower equal to the aggregate
amount of the Loans and Obligations (without duplication) then outstanding,
divided by the Exchange Ratio calculated as of the Conversion Date, as such
Exchange Ratio may have been adjusted pursuant to the terms of the Merger
Agreement.
(b) The Conversion shall be deemed to have been made
immediately before the close of business on the Conversion Date, so that the
rights of Lender under this Agreement and the Security Agreement shall cease at
such time (other than those rights that expressly survive the termination of
this Agreement) and Lender shall be treated for all purposes as having become
the record holder or holders of the Common Stock described in Section 3.6(a) at
such time, and the number of shares of Common Stock to be received by Lender
shall be determined at such time.
(c) Borrower covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issuance upon conversion of the Loans and Obligations as herein provided, such
number of shares of Common Stock as shall be issuable upon the conversion of the
entire Commitment. Borrower covenants that all shares of Common Stock which
shall be so issuable shall be duly and validly issued and fully-paid and
non-assessable.
4
(d) Borrower covenants that if any shares of Common Stock
required to be reserved for issuance upon conversion of the Loans and
Obligations require registration with or approval of any Governmental Authority
under any federal or state law before such shares may be issued upon conversion,
Borrower will, at its expense and as expeditiously as possible, cause such
shares to be duly registered or approved, as the case may be.
(e) The issuance of certificates for shares of Common Stock
upon the Conversion shall be made within one (1) Business Day of the Conversion
Date without charge to Lender for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names of,
or in such names as may be directed by, the holder of this Term Note.
(f) To the extent that the Loans and Obligations are not
converted into shares of Common Stock, such portion shall remain a secured debt
of Borrower payable in accordance with the terms of this Agreement
ARTICLE 4
TAXES
4.1 TAXES
(a) Any and all payments by Borrower to Lender under
this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any
Taxes. In addition, Borrower shall pay all Other Taxes.
(b) Borrower agrees to indemnify and hold harmless
Lender for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by Lender and any
liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally
asserted.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 BOOKS AND RECORDS Borrower shall maintain, at all times,
books, records and accounts which are complete, correct and timely in all
material respects so as to permit the preparation of financial statements in
accordance in all material respects with GAAP applied consistently.
5.2 FINANCIAL AND OTHER INFORMATION. Borrower shall promptly
furnish to Lender, all such financial and other information as Lender shall
reasonably request.
5.3 NOTICES TO LENDER. Borrower shall notify Lender in writing
of the following matters at the following times:
(a) As soon as practicable, after becoming aware of
any Default or Event of Default;
5
(b) As soon as practicable, after becoming aware of
any event or circumstance which is reasonably likely to have a
Material Adverse Effect on Borrower; and
(c) Any change in Borrower's name, state of
organization, locations of Collateral, or form of
organization, or trade names under which Borrower creates
accounts or to which instruments in payment of accounts may be
made payable, in each case at least thirty (30) days prior
thereto.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Borrower warrants and represents to Lender that except as
hereafter disclosed to and accepted by Lender in writing:
6.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS
AGREEMENT AND THE LOAN DOCUMENTS. Borrower and each of its Restricted
Subsidiaries has the corporate power and authority to execute, deliver and
perform this Agreement and the other Loan Documents to which it is a party, to
incur the Obligations, and to grant to Lender Liens upon and security interests
in the Collateral. Borrower and each of its Restricted Subsidiaries have taken
all necessary action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This Agreement
and the other Loan Documents to which the Borrower or any of its Subsidiaries is
a party have been duly executed and delivered by Borrower and such Subsidiaries,
and constitute the legal, valid and binding obligations of Borrower and such
Subsidiaries to the extent a party thereto, enforceable against it in accordance
with their respective terms (subject to equitable principles and the effect of
bankruptcy laws). Borrower's and each of its Restricted Subsidiaries' execution,
delivery, and performance of this Agreement and the other Loan Documents to
which it is a party do not and will not conflict with, or constitute a violation
or breach of, or (other than pursuant to the Loan Documents) result in the
imposition of any Lien upon the property of Borrower or any of its Subsidiaries,
by reason of the terms of (a) any material contract, mortgage, lease, agreement,
indenture, or instrument to which Borrower or any of Borrower's Subsidiaries is
a party or which is binding upon any of Borrower or Borrower's Subsidiaries or
any of their property, (b) any Requirement of Law applicable to Borrower or any
of its Subsidiaries, or (c) the certificate or articles of incorporation or
by-laws or the limited liability company or limited partnership agreement or
other constitutive and organizational documents, as applicable, of Borrower or
any of its Subsidiaries.
6.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions
of this Agreement and the other Loan Documents create legal and valid liens on,
and security interests in, on all the Collateral in favor of Lender, and,
assuming appropriate possessions, filings and recordations are made by Lender,
such Liens constitute perfected and continuing Liens on all the Collateral,
having priority over all other Liens on the Collateral (other than Permitted
Liens), securing all the Obligations, and enforceable against Borrower and all
third parties (subject to equitable principles and the effect of bankruptcy
laws).
6
6.3 ORGANIZATION AND QUALIFICATION. Borrower and each of its
Subsidiaries is duly organized or incorporated and validly existing in good
standing under the laws of the state of its organization or incorporation or
formation and is in good standing in each jurisdiction where the lack of good
standing would have a Material Adverse Effect on Borrower.
6.4 NO VIOLATION OF LAW. Neither Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect on Borrower
6.5 REGULATED ENTITIES. None of Borrower, any Person
controlling Borrower, or any Subsidiary, is an "Investment Company" required to
be registered as such under the Investment Company Act of 1940. Borrower is not
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code
or law, or any other federal or state statute or regulation limiting its ability
to incur indebtedness.
6.6 USE OF PROCEEDS; MARGIN REGULATIONS. Neither Borrower nor
any of its Subsidiaries is engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
6.7 OUTSTANDING LOANS WITH SILICON VALLEY BANK Neither
Borrower nor any of its Subsidiaries has any liabilities, obligations or
indebtedness owed to, or has any loans, obligations or other indebtedness
outstanding with, Silicon Valley Bank other than the indebtedness incurred under
the SVB Financing Agreement.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Borrower covenants to Lender that so long as any of the
Obligations (other than indemnity Obligations not then due) remain outstanding
or this Agreement is in effect:
7.1 TAXES AND OTHER OBLIGATIONS. Borrower shall, and shall
cause each of its Subsidiaries to, (a) file when due all material tax returns
and other material reports which it is required to file; and (b) pay, or provide
for the payment, when due, of all material taxes, fees, assessments and other
governmental charges against it or upon its property, income and franchises,
make all required material withholding and other tax deposits, and establish
adequate reserves for the payment of all such items, and provide to Lender, upon
reasonable request, satisfactory evidence of its timely compliance with the
foregoing, except to the extent the failure of which would not have a Material
Adverse Effect on Borrower.
7.2 LEGAL EXISTENCE AND GOOD STANDING. Borrower shall, and
shall cause each of its Subsidiaries to, maintain their legal existence and
their qualification and good standing in their jurisdictions of incorporation
and in each other jurisdiction where the lack of qualification or good standing
would have a Material Adverse Effect on Borrower.
7.3 COMPLIANCE WITH LAWS. Borrower shall, and shall cause each
of its Subsidiaries to comply in all material respects with all Requirements of
Law.
7
7.4 TRANSACTIONS AFFECTING COLLATERAL OR OBLIGATIONS;
PRESERVATION OF COLLATERAL. Neither Borrower nor any of its Subsidiaries shall
enter into any transaction which would be reasonably expected to have a Material
Adverse Effect on Borrower. Borrower shall, maintain, preserve and protect the
Collateral, and shall, and shall cause each of its Subsidiaries to, refrain from
taking any action that would reasonably be expected to have a Material Adverse
Effect on Borrower.
7.5 INSURANCE. Borrower shall, and shall cause each of its
Subsidiaries to, own, procure and maintain insurance in a manner consistent with
companies similarly situated and with industry practices.
7.6 LIENS. Neither Borrower nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
7.7 NOTICE OF INVOLUNTARY BANKRUPTCY. Borrower shall,
immediately upon learning that an involuntary petition has been filed or an
action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of Borrower or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing, notify Lender that such a petition has been
filed or such action or proceeding has commenced.
7.8 USE OF PROCEEDS. Borrower shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.9 FURTHER ASSURANCES. Borrower shall, and shall cause each
Restricted Subsidiary to, execute and deliver, or cause to be executed and
delivered, to Lender such documents and agreements, and shall take or cause to
be taken such actions, as Lender may, from time to time, reasonably request to
(i) carry out the terms and conditions of this Agreement and the other Loan
Documents and (ii) grant a perfected Lien to Lender on the Collateral of
Borrower and the Restricted Subsidiaries and each of their respective property
as contemplated by the Loan Documents.
7.10 LIMITATION ON INDEBTEDNESS.. Neither Borrower nor any of
its Subsidiaries shall create, incur, issue, assume or suffer to exist any debt,
liabilities or other obligations (including, without limitation, any contingent
obligations) for borrowed money other than (a) the loans made by Silicon Valley
Bank to Borrower under the SVB Financing Agreement, provided, however, that in
no event shall the principal amount of such loans exceed, in the aggregate
outstanding at any time, $3,200,000, and (b) any debt, liabilities or other
obligations of Borrower or any of its Subsidiaries so long as the Borrower
prepays the principal amount of the Loans pursuant to Section 3.1 hereof in an
amount equal to the amount of such debt, liabilities or other obligations.
8
7.11 LIMITATION ON TRANSFERS.. Neither Borrower nor any of its
Subsidiaries shall convey, sell, lease, transfer or otherwise dispose of, any of
its assets or property other than (a) the sale of inventory in the ordinary
course of business and (b) prior to the termination of the Merger Agreement
pursuant to the terms thereof, any conveyance, sale, lease, transfer or
disposition permitted pursuant to the terms of the Merger Agreement; provided,
however, that in no event shall Borrower or any Restricted Subsidiary convey,
sell, transfer or otherwise dispose of any assets or property to any Subsidiary
that is not a Restricted Subsidiary except for transfer of nonmaterial assets
and property for normal operating purposes in the ordinary course of business,
even if such conveyance, sale, transfer or other disposition is otherwise
permitted pursuant to the Merger Agreement.
7.12 LIMITATION ON SUBSIDIARIES. Neither the Borrower nor any
of its Subsidiaries shall own, either directly or indirectly, any Capital Stock
in any Person other than the entities listed on Section 5.2(a) of the Company
Disclosure Schedule (as defined in the Merger Agreement).
7.13 UNRESTRICTED SUBSIDIARIES. Borrower shall use its
commercially reasonable best efforts to cause all Unrestricted Subsidiaries
deemed to be material by Lender to become Restricted Subsidiaries and the fair
market value of all assets and property owned by (a) any Unrestricted Subsidiary
shall not exceed at any time $1,900,000, and (b) all Unrestricted Subsidiaries
in the aggregate, shall not exceed at any time $4,210,000,. Borrower shall pay
all costs associated with causing the Unrestricted Subsidiaries deemed to be
material by Lender to become Restricted Subsidiaries.
ARTICLE 8
CONDITIONS OF LENDING
8.1 CONDITIONS PRECEDENT TO MAKING OF INITIAL LOANS ON THE
CLOSING DATE. The obligation of Lender to make the initial Loan is subject to
the following conditions precedent having been satisfied in a manner reasonably
satisfactory to Lender:
(a) This Agreement and the other Loan Documents shall
have been executed by each party thereto (other than Lender)
and Borrower and its Subsidiaries shall have performed and
complied in all material respects with all covenants,
agreements and conditions contained herein and the other Loan
Documents which are required to be performed or complied with
by Borrower or its Subsidiaries before or on such Closing
Date.
(b) All representations and warranties made hereunder
and in the other Loan Documents shall be true and correct in
all material respects as if made on such date.
(c) No Default or Event of Default shall have
occurred and be continuing.
(d) Lender shall have received an opinion of counsel
for Borrower and its Subsidiaries substantially in the form
attached hereto.
9
(e) Lender shall have received executed copies of
proper financing statements under the UCC of all jurisdictions
that Lender may deem reasonably necessary or desirable in
order to perfect Lender's Liens and all other actions shall
have been completed in order to give Lender first priority
perfected Liens in all Collateral (subject in priority only to
the Liens granted to Silicon Valley Bank).
The acceptance by Borrower of Loans made shall be deemed to be
a representation and warranty made by Borrower to the effect that all of the
conditions precedent to the making of such Loans have been satisfied, with the
same effect as delivery to Lender of a certificate signed by a Responsible
Officer of Borrower, on behalf of Borrower, dated the Closing Date, to such
effect.
8.2 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of
Lender to make each Loan, including the initial Loan shall be subject to the
further conditions precedent that:
(a) on and as of the date of the making of any Loan,
the following statements shall be true, and the acceptance by
Borrower of any Loan shall be deemed to be a statement to the
effect set forth in CLAUSES (I), (II), (III) and (IV) with the
same effect as the delivery to Lender of a certificate signed
by a Responsible Officer of Borrower, on behalf of Borrower,
dated the date of such Loan, stating that:
(i) The representations and warranties
contained in this Agreement and the other Loan
Documents and in the Merger Agreement are true and
correct in all material respects on and as of the
date of such Loan as though made on and as of such
date, other than any such representation or warranty
which relates to a specified prior date, and except
to the extent Lender has been notified in writing by
Borrower that any representation or warranty is not
correct and Lender has explicitly waived, in its sole
discretion, in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is
continuing, or would result from such Loan, which
constitutes a Default or an Event of Default; and
(iii) No event has occurred and is
continuing, or would result from such Loan, which has
had or could have a Material Adverse Effect on
Borrower.
ARTICLE 9
DEFAULT; REMEDIES
9.1 EVENTS OF DEFAULT. It shall constitute an event of
default ("EVENT OF DEFAULT") if any one or more of the following shall occur for
any reason:
10
(a) any failure by Borrower to pay (i) the principal
of any Loan when due or (ii) any other amount hereunder within
five days of the date due, in either case whether upon demand
or otherwise;
(b) any representation or warranty made or deemed
made by Borrower in this Agreement or by Borrower in any of
the other Loan Documents, shall prove to be untrue in any
material respect as of the date on which made, deemed made, or
furnished;
(c) (i) any default shall occur in the observance or
performance of any of the covenants and agreements contained
in the Security Agreement or in Article 7 of this Agreement,
(ii) any default shall occur in the observance or performance
of any of the covenants and agreements contained in SECTION
5.3 and such default shall continue for three (3) Business
Days or more; or (iii) any default shall occur in the
observance or performance of any of the other covenants or
agreements contained in any other Section of this Agreement or
any other Loan Document shall continue for five (5) days or
more;
(d) Borrower shall (i) file a voluntary petition in
bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking
reorganization, arrangement or readjustment of its debts or
for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing, or consent
to, approve of, or acquiesce in, any such petition, action or
proceeding; (ii) apply for or acquiesce in the appointment of
a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any
part of its property; or (iii) make an assignment for the
benefit of creditors;
(e) an involuntary petition shall be filed or an
action or proceeding otherwise commenced seeking
reorganization, arrangement, consolidation or readjustment of
the debts of Borrower or any of its Subsidiaries or for any
other relief under the federal Bankruptcy Code, as amended, or
under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing;
(f) a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for Borrower or
for all or any material part of its property shall be
appointed or a warrant of attachment, execution or similar
process shall be issued against any material part of the
property of Borrower;
(g) Borrower shall file a certificate of dissolution
under applicable state law or shall be liquidated, dissolved
or wound-up or shall commence or have commenced against it any
action or proceeding for dissolution, winding-up or
liquidation;
(h) any Loan Document shall be terminated, revoked or
declared void or invalid or unenforceable or challenged by
Borrower;
11
(i) (A) the Merger Agreement shall be terminated in
accordance with its terms pursuant to Sections 8.3(c), 8.4(a)
or 8.4(b) thereof or (B) (1) the Merger Agreement shall be
terminated in accordance with its terms pursuant to Sections
8.2(a) or 8.2(c) thereof and (2) within twelve (12) months of
such termination, an Alternate Transaction (as such term is
defined in the Merger Agreement) is consummated or Borrower
enters into a definitive agreement to consummate an Alternate
Transaction;
(j) Lender ceases to have a second priority security
interest (or, if no amounts are outstanding to Silicon Valley
Bank under the SVB Financing Agreement, a first priority
security interest) in the Collateral for any reason other than
a release by Lender of its Lien thereon;
(k) the holder of any Permitted Lien on the
Collateral (other than any lien or attachment arising on the
Borrower's account at Fleet National Bank as a result of the
Accrue Software litigation described on Section 5.2(g) of the
Company Disclosure Schedule (but only to the extent such
account contains no more than $200,000) or the exercise by AI
Credit Corporation of its rights to insurance proceeds under
the arrangement described on Section 5.2(v) of the Company
Disclosure Schedule) shall take any action or commence any
proceeding to realize in all or any portion thereof; or
(l) any event of default shall have occurred and be
continuing under the SVB Financing Agreement, and such event
of default shall not be have been cured or waived within the
applicable period of grace.
9.2 REMEDIES.
(a) If an Event of Default exists, Lender may, in its
discretion, do one or more of the following at any time or
times and in any order, without notice to or demand on
Borrower: (i) reduce the Available Amount and/or the Maximum
Amount, and (ii) restrict the amount of or refuse to make
Loans. If an Event of Default exists, Lender may do one or
more of the following, in addition to the actions described in
the preceding sentence, at any time or times and in any order,
without notice to or demand on Borrower: (A) terminate the
Commitments and this Agreement; (B) declare any or all
Obligations to be immediately due and payable; PROVIDED,
HOWEVER, that upon the occurrence of any Event of Default
described in SECTIONS 9.1(D), 9.1(E), 9.1(F), or 9.1(G), the
Commitments shall automatically and immediately expire and all
Obligations shall automatically become immediately due and
payable without notice or demand of any kind; PROVIDED
FURTHER, HOWEVER, that the Lender shall not declare any
Obligations to be immediately due and payable if the Merger
Agreement has not been terminated in accordance with its terms
except with respect to (i) any Event of Default described in
Sections 9.1(d), 9.1(e), 9.1(f) or 9.1(g) (in which event the
Obligations shall automatically become due and payable as
described above) or (ii) any Event of Default described in
Sections 9.1(j), 9.1(k) and 9.1(l) , but only if, in the case
of this clause (ii), in the sole discretion of Lender, the
failure to
12
declare any Obligations to be immediately due and payable
could reasonably result in (A) Lender's loss of a material
right or (B) the impairment of, or a material adverse effect
upon, Lender's Lien or the value of the Collateral; and (C)
pursue its other rights and remedies under the Loan Documents
and applicable law.
(b) If an Event of Default has occurred and is
continuing, Lender shall have all rights and remedies of a
secured party under the Loan Documents and the UCC.
(c) If an Event of Default has occurred and is
continuing, Borrower hereby waives, to the extent permitted by
applicable law, all rights to notice and hearing prior to the
exercise by Lender of Lender's rights to repossess the
Collateral without judicial process or to reply, attach or
levy upon the Collateral without notice or hearing.
ARTICLE 10
TERM AND TERMINATION
10.1 TERM AND TERMINATION. The term of this Agreement
shall end on the Termination Date unless sooner terminated in accordance with
the terms hereof. Lender may immediately terminate this Agreement upon the
occurrence of an Event of Default. Upon the effective date of termination of
this Agreement for any reason whatsoever, all Obligations (including all unpaid
principal, accrued and unpaid interest but excluding indemnity Obligations for
which no claim has arisen) shall become immediately due and payable.
ARTICLE 11
AMENDMENTS; WAIVERS; SUCCESSORS
11.1 AMENDMENTS AND WAIVERS
No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent with respect to any departure by
Borrower therefrom, shall be effective unless the same shall be in writing and
signed by Lender.
ARTICLE 12
[INTENTIONALLY DELETED]
ARTICLE 13
MISCELLANEOUS
13.1 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Lender
to exercise any right, remedy, or option under this Agreement or any present or
future supplement thereto, or in any other agreement between Borrower and
Lender, or delay by Lender in exercising the same, will operate as a waiver
thereof. No waiver by Lender will be effective unless it is in writing, and then
only to the extent specifically stated.
13
13.2 SEVERABILITY. The illegality or unenforceability of
any provision of this Agreement or any Loan Document or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
13.3 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT
OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE
CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE
UCC) OF THE STATE OF ILLINOIS, AND PROVIDED FURTHER THAT ANY
TERM HEREOF DEFINED BY REFERENCE TO THE MERGER AGREEMENT SHALL
BE INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF DELAWARE.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES OF
AMERICA LOCATED IN XXXX COUNTY, ILLINOIS.
13.4 WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY.
13.5 [Intentionally Deleted]
13.6 NOTICES. Except as otherwise provided herein, all
notices, demands and requests that any party is required or elects to give to
any other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including, but not limited to, delivery by overnight
mail and courier service, (b) four (4) days after it shall have been mailed by
United States mail, first class, certified or registered, with postage prepaid,
or (c) in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified at the address
set forth on the signature pages hereto or to such other address as each party
may designate for itself by like notice. Failure or delay in delivering copies
of any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall not
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
14
13.7 BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; PROVIDED, HOWEVER, that no
interest herein may be assigned by Borrower without the prior written consent of
Lender and, prior to the occurrence and continuation of an Event of Default, no
interest herein may be assigned by Lender without the prior written consent of
Borrower. The rights and benefits of Lender hereunder shall inure to any party
acquiring any interest in the Obligations or any part thereof; provided,
however, that no assignment may be made by Lender except in accordance with the
immediately preceding sentence.
13.8 INDEMNITY OF LENDER BY BORROWER. Borrower agrees to
defend, indemnify and hold Lender and each of its officers, directors,
employees, counsel, representatives, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, that Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent resulting from the willful misconduct, bad faith or gross negligence
of such Indemnified Person. The agreements in this Section shall survive payment
of all other Obligations and termination of this Agreement.
13.9 FINAL AGREEMENT. This Agreement and the other Loan
Documents are intended by Borrower and Lender to be the final, complete, and
exclusive expression of the agreement between them. This Agreement supersedes
any and all prior oral or written agreements relating to the subject matter
hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by Borrower and Lender.
13.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
13.11 CAPTIONS. The captions contained in this Agreement are
for convenience of reference only, are without substantive meaning and should
not be construed to modify, enlarge, or restrict any provision.
13.12 CONFLICTS WITH OTHER LOAN DOCUMENTS. Unless otherwise
expressly provided in this Agreement (or in another Loan Document by specific
reference to the applicable provision contained in this Agreement), if any
provision contained in this Agreement conflicts
15
with any provision of any other Loan Document, the provision contained in this
Agreement shall govern and control.
16
IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
BORROWER:
OPEN MARKET, INC.
By: /S/ XXXXXX XXXXXX
Title: VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND TREASURER
Notice Address:
Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: 000-000-0000
Attention: Chief Financial Officer
with the copy (which shall not
constitute notice) to:
Xxxx and Xxxx 1 Freedom
Square 00000 Xxxxxxx Xxxxx,
Xxxxx 0000 Xxxxxx, Xxxxxxxx
00000 Telecopy:
703-654-7000
Attention: Xxxxx Xxxxx Xxxxxxxx
LENDER:
DIVINE, INC.
/s/ Xxxxxx X. Xxxxxxxxxx
By: XXXXXX X. XXXXXXXXXX
Title: CEO
Notice Address:
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 000000
Telecopy: 000-000-0000
Attention: General Counsel
17
with the copy (which shall not
constitute notice) to:
Xxxx, Xxxx & Xxxxx LLC
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy: 000-000-0000
Attention: D. Xxxx XxXxxxxx
18
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the
following respective meanings (unless otherwise defined therein), and all
section references in the following definitions shall refer to sections of the
Agreement:
"ACCOUNT" has the meaning given such term in the UCC.
"AGREEMENT" means the Credit Agreement to which this Annex A
is attached, as from time to time amended, restated, supplemented or otherwise
modified.
"APPLICABLE RATE" means ten percent (10%) per annum.
"AVAILABLE AMOUNT" means (i) the Commitment less (ii) the sum
of (1) the principal amount of all Loans made pursuant to Section 1.2
(regardless of whether such Loans or positions thereof remain outstanding), and
(2)(a) from the Closing Date to but excluding October 1, 2001, $12,000,000, (ii)
from October 1, 2001 to but excluding November 1, 2001, $10,500,000, (iii) from
November 1, 2001 to but excluding December 1, 2001, $9,000,000, (iv) from
December 1, 2001 to but excluding January 1, 2002, $7,500,000, (v) from January
1, 2002 to but excluding February 1, 2002, $5,000,000, (vi) from February 1,
2002 to but excluding March 1, 2002, $2,500,000, and (vii) from March 1, 2002 to
and including the Stated Termination Date, $0. The Available Amount shall not be
reduced by any accrued and unpaid interest on any Loans. In no event shall the
Available Amount exceed the Maximum Amount.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
X.X.X.xx. 101 ET SEQ.).
"BORROWING" means a borrowing hereunder consisting of a Loan
or Loans made or to be made on the same day by Lender to Borrower.
"BUSINESS DAY" means any day that is not a Saturday, Sunday,
or a day on which banks in Chicago, Illinois are required or permitted to be
closed.
"CAPITAL STOCK" shall have the meaning given such term in the
Pledge Agreement.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means collectively the Collateral defined in the
Security Agreement and the Collateral defined in the Pledge Agreement.
"COMMITMENT" means $17,000,000.
A-1
"COMPANY DISCLOSURE SCHEDULES" means the Company Disclosure
Schedule attached to the Merger Agreement.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured, waived, or
otherwise remedied during such time) constitute an Event of Default.
"DESIGNATED ACCOUNT" has the meaning specified in SECTION
1.2(c).
"DOLLAR" and "$" means dollars in the lawful currency of the
United States. Unless otherwise specified, all payments under the Agreements
shall be made in Dollars.
"EVENT OF DEFAULT" has the meaning specified in SECTION 9.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"EXCHANGE RATIO" has the meaning given such term in the Merger
Agreement.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"FISCAL YEAR" means Borrower's fiscal year for financial
accounting purposes.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the Closing Date.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of the date hereof by and among Borrower, Lender and Silicon Valley
Bank, as the same may be amended, modified and supplemented from time to time.
"INTEREST RATE" means the interest rates, including the
Default Rate, set forth in SECTION 2.1.
"LENDER" means divine, inc.
A-2
"LENDER'S LIENS" means the Liens in the Collateral granted to
Lender, pursuant to this Agreement and the other Loan Documents.
"LIEN" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; (b) to the
extent not included under CLAUSE (A), any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception or encumbrance affecting property; and (c) any contingent or other
agreement to provide any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Note, the Security
Agreement, the Pledge Agreement, the Intercreditor Agreement and any other
agreements, instruments, and documents heretofore, now or hereafter evidencing,
securing, guaranteeing or otherwise relating to the Obligations, the Collateral,
or any other aspect of the transactions contemplated by this Agreement. For the
avoidance of doubt, the Merger Agreement is not a Loan Document.
"LOANS" has the meaning specified in SECTION 1.2.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon the Liens granted to Lender in the
Collateral; or (b) a material adverse effect upon the legality, validity,
binding effect or enforceability against Borrower or any material Restricted
Subsidiary of Borrower of any Loan Document to which it is a party; or (c) any
material adverse effect on or change in the business, operations, liabilities
(contingent or otherwise), results of operations or financial performance or
condition of Borrower or any of its Subsidiaries, taken as a whole; provided,
however, that in no event shall any of the following, in and of themselves,
constitute a Material Adverse Effect: (i) any change in or effect on the
business of Borrower or any of its Subsidiaries caused by, relating to or
resulting from, directly or indirectly, the transactions contemplated by the
Merger Agreement or the announcement thereof, known business conditions
(including the state of the Borrower's liquidity and capital resources) or
matters contained in the disclosure schedules to the Merger Agreement or to this
Agreement; (ii) any change in the market price or trading volume of the shares
of Borrower's Common Stock on or after the date of this Agreement; or (iii) any
adverse change, effect or occurrence attributable to the United States or
European economy as a whole, the industries in which Borrower competes or such
other foreign economies where Borrower has material operations or sales.
"MAXIMUM AMOUNT" means (i) from the Closing Date to but
excluding October 1, 2001, $5,000,000, (ii) from October 1, 2001 to but
excluding November 1, 2001, $6,500,000, (iii) from November 1, 2001 to but
excluding December 1, 2001, $8,000,000, (iv) from December 1, 2001 to but
excluding January 1, 2002, $9,500,000, (v) from January 1, 2002 to but excluding
February 1, 2002, $12,000,000, (vi) from February 1, 2002 to but excluding March
1,
A-3
2002, $14,500,000 and (vi) from March 1, 2002 to and including the Stated
Termination Date, $17,000,000.
"MERGER AGREEMENT" means Agreement and Plan of Merger of even
date herewith by and among Borrower, Lender and a wholly-owed subsidiary of
Lender, as it may be from time to time amended, restated, supplemented or
otherwise modified.
"NOTE" has the meaning specified in SECTION 1.2.
"NOTICE OF BORROWING" has the meaning specified in SECTION
1.2(b).
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by Borrower or any
of its Subsidiaries to Lender, arising under or pursuant to this Agreement or
any of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether direct or indirect, absolute or contingent, due
or to become due, primary or secondary, as principal or guarantor, and including
all principal, interest, charges, expenses, fees, attorneys' fees, filing fees
and any other sums chargeable to Borrower or any of its Subsidiaries hereunder
or under any of the other Loan Documents.
"OTHER TAXES" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"PERMITTED LIENS" means liens in existence on the date hereof
and set forth on SCHEDULE A-1.
"PERSON" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any other
entity.
"PLEDGE AGREEMENT" means the Stock Pledge Agreement of even
date herewith by and between the Borrower and Lender, the same may be amended,
modified and supplemented from time to time.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation of a Governmental Authority or
order or determination of an arbitrator or of a Governmental Authority
specifically applicable to or binding upon the Person or any of its property or
to which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means the chief financial officer of
Borrower, or any other officer having substantially the same authority and
responsibility.
"RESTRICTED SUBSIDIARIES" means each Subsidiary that is a
party to the Security Agreement and has granted a Lien in favor of Lender in all
of such Subsidiary's assets and property.
A-4
"SECURITY AGREEMENT" means, collectively, the Security
Agreement of even date herewith among Borrower, the Restricted Subsidiaries and
Lender and the Intellectual Property Security Agreement of even date herewith
among Borrower, the Restricted Subsidiaries and Lender, as the same may be
amended, modified and supplemented from time to time.
"STATED TERMINATION DATE" means June 30, 2002.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock, partnership or
limited liability company interests or other equity interests, is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of Borrower.
"SVB FINANCING AGREEMENT" means the Accounts Receivable
Purchase Agreement dated June 29, 2001, between Borrower, FutureTense, Inc. and
Silicon Valley Bank.
"TAXES" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings in the nature of taxes, and all
liabilities with respect thereto, excluding, in the case of Lender, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
Lender's net income in the jurisdiction (whether federal, state or local and
including any political subdivision thereof) under which Lender is organized or
maintains an office.
"TERMINATION DATE" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date this Agreement is terminated either by
Borrower pursuant to SECTION 3.2 or by Lender pursuant to SECTION 9.2, (iii) the
date of closing of the merger contemplated by the Merger Agreement, (iv) the
Conversion Date, and (v) the date that is three months after the date the Merger
Agreement is terminated pursuant to Sections 8.2(a), 8.2(b) or 8.2(c) thereto,
but in no event later than June 30, 2002.
"UCC" means the Uniform Commercial Code, as in effect from
time to time, of the State of Illinois or of any other state the laws of which
are required as a result thereof to be applied in connection with the issue of
perfection or priority of security interests.
"UNRESTRICTED SUBSIDIARY" means each Subsidiary of Borrower
that is not a Restricted Subsidiary.
ACCOUNTING TERMS. Any accounting term used in the Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations in the
Agreement shall be computed, unless otherwise specifically provided therein, in
accordance with GAAP consistently applied.
INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
A-5
(b) The words "hereof," "herein," "hereunder" and similar
words refer to the Agreement as a whole and not to any particular provision of
the Agreement; and Subsection, Section, Schedule and Exhibit references are to
the Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including," the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and
including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including the Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments, restatements, supplements and
other modifications thereto, but only to the extent such amendments,
restatements, supplements and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of the Agreement and other Loan
Documents are for convenience of reference only and shall not affect the
interpretation of the Agreement.
(f) The Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) The Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to Lender and Borrower,
and are the products of all parties. Accordingly, they shall not be construed
against Lender merely because of Lender's involvement in their preparation
A-6
EXHIBIT A
FORM OF NOTE
NOTE
$17,000,000 August 15, 2001
FOR VALUE RECEIVED, Open Market, Inc., a Delaware corporation (the
"BORROWER") promises to pay to the order of divine, inc., a Delaware corporation
("LENDER"), on the Termination Date (as defined in the Credit Agreement referred
to below), SEVENTEEN MILLION and No/100 DOLLARS ($17,000,000) or such lesser
amount as may then constitute the unpaid aggregate principal amount of the Loans
made by Lender.
Borrower also promises to pay interest on the unpaid principal amount
hereof until paid at the rates, at the times and from the dates which shall be
determined in accordance with the provisions of that certain Credit Agreement,
dated as of the date hereof, among Borrower and Lender (as the same now exists
and may hereafter be amended, restated, supplemented or otherwise modified, the
"CREDIT AGREEMENT"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
have been made and are to be repaid.
This Note and the Loans evidenced hereby are subject to conversion into
Common Shares of Borrower, at the time, and upon the occurrence of certain
events, and upon the conditions, described in Section 3.6 of the Credit
Agreement.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
offices of Lender located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
or at such other place as shall be designated in writing for such purposes in
accordance with the terms of the Credit Agreement. All amounts due under this
Note shall be payable without defense, setoff or counterclaim and, without
limiting the scope of the waiver, nothing contained in either the Merger
Agreement or any agreement related thereto shall entitle either of Borrower to
any right of defense, setoff or counterclaim with respect to Borrower's
Obligations.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day or as otherwise provided in the Credit Agreement and such extension
of time shall be included in the computation of the payment of interest on this
Note.
This Note is subject to prepayment at the option of Borrower as
provided in the Credit Agreement.
This Note is secured by certain assets pursuant to the Security
Agreement, the Pledge Agreement and the other Loan Documents.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAW PROVISIONS OF THE STATE OF ILLINOIS.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Borrower hereby waives presentment, protest, demand and notice of every
kind (except as provided in the Credit Agreement) and, to the full extent
permitted by law, the right to plea any statute of limitations as a defense to
any demand hereunder.
No interest herein may be assigned by Borrower, without the prior
written consent of Lender. The rights and benefits of Lender hereunder shall
inure to any party acquiring any interest in the Obligations or any part
thereof.
[Signature Page Follows]
IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered by their duly authorized officers, as of the day and year and the
place first above written.
OPEN MARKET, INC.
By:
----------------------------------
Name:
-------------------------------
Title:
-------------------------------
EXHIBIT B
NOTICE OF BORROWING
Date: ______________, 2001
To: divine, inc. as Lender under the Credit Agreement dated as of August
15, 2001 (as extended, renewed, amended or restated from time to time,
the "CREDIT AGREEMENT") by and between divine, inc. and Open Market,
Inc.
Ladies and Gentlemen:
The undersigned (the "BORROWER") refers to the Credit Agreement, the
terms defined therein being used herein as therein defined, and hereby gives you
notice irrevocably of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is ________________,
20___.
2. The aggregate amount of the proposed Borrowing is $____________.
The undersigned hereby certify that the conditions precedent
set forth in Section 8.2 of the Credit Agreement will be, both immediately prior
to and immediately following the proposed Borrowing, satisfied with respect to
the proposed Borrowing.
OPEN MARKET, INC.
By:
---------------------------------
Title:
