Exhibit 10.1
FIRST LOAN MODIFICATION AGREEMENT
(DOMESTIC LINE)
This First Loan Modification Agreement (the "Amendment") is entered
into as of March 30, 2001, by and between OPEN MARKET, INC., a Delaware
corporation ("Open Market"), with its chief executive offices located at 0
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 and FUTURETENSE, INC., a Delaware
corporation ("FutureTense"), with its chief executive offices located at 0
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (individually and collectively,
jointly and severally, the "Borrower") and SILICON VALLEY BANK, a
California-chartered bank (hereinafter, "Bank" or "Silicon"), with its principal
place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan
production office located at One Newton Executive Park, Suite 200, 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, doing business under the name "Silicon
Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated February 28, 2001, evidenced by, among other documents, a
certain Loan and Security Agreement between Borrower and Bank dated as of
February 28, 2001 (the "Loan Agreement"). The Loan Agreement established in
favor of the Borrower a revolving line of credit in the maximum principal amount
of Six Million Dollars ($6,000,000.00) (the "Maximum Credit Limit"). Capitalized
terms used but not otherwise defined herein shall have the same meaning as in
the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Obligations".
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement (together with any
other collateral security granted to Bank, the "Security Documents").
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the "Existing
Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the following text
in Section 1 of the Schedule attached thereto:
"An amount not to exceed the lesser of (A) or (B), below (the
"Borrowing Base"):"
and inserting in lieu thereof the following:
"An amount not to exceed the lesser of (A) or (B), below:"
2. The Loan Agreement shall be amended by deleting the following text
appearing as Section 1.I.(B)(i) in the Schedule attached thereto:
" (i) 70% of the amount of Borrower's Eligible Receivables
generated by Open Market, Inc., PLUS 80% of the
Borrower's Eligible Receivables generated by Future
Tense, Inc. (each as
defined in Section 8, above), PLUS 60% of the
Borrower's eligible "domestic maintenance" Receivables
(as determined by Silicon) less than 60 days from due
date (the "Receivables Loans") PROVIDED, HOWEVER, the
aggregate availability under: (x) this Agreement
generated by the Borrower's Eligible Receivables (and
by "domestic maintenance" Receivables) and (y) the
Exim Agreement generated by the Borrower's Exim
Eligible Foreign Accounts (and by "foreign
maintenance" Accounts), which are owed by the
"Xxx.Xxx" entities (as determined by Silicon) shall
not exceed $1,000,000.00; "
and inserting in lieu thereof the following:
" (i) 70% of the amount of Borrower's Eligible Receivables
generated by Open Market, Inc., PLUS 80% of the
Borrower's Eligible Receivables generated by Future
Tense, Inc. (each as defined in Section 8, above),
PLUS 60% of the Borrower's eligible "domestic
maintenance" Receivables (as determined by Silicon)
less than 60 days from due date (the "Receivables
Loans") PROVIDED, HOWEVER, the aggregate availability
under: (x) this Agreement generated by the Borrower's
Eligible Receivables (and by "domestic maintenance"
Receivables) and (y) the Exim Agreement generated by
the Borrower's Exim Eligible Foreign Accounts (and by
"foreign maintenance" Accounts), which are owed by the
"Xxx.Xxx" entities (as determined by Silicon) shall
not exceed $500,000.00 (the resulting amount described
in this Section 1.I.(B)(i) of the Schedule shall be
referred to herein as the "BORROWING BASE");"
3. The Loan Agreement shall be amended by deleting the following text
appearing as Section 1.II in the Schedule attached thereto:
"II. IN ADDITION TO THE BORROWING LIMITATIONS CONTAINED IN THE
DEFINITION OF THE BORROWING BASE AND IN THIS AGREEMENT, THE
MAXIMUM AMOUNT OF LOANS HEREUNDER SHALL BE SUBJECT TO EACH OF
THE FOLLOWING:
(A) Prior to the earlier of: (i) the occurrence of a
Capital Event, or (ii) March 15, 2001, the outstanding
Obligations (including, without limitation, those arising
under this Agreement, the Exim Agreement and the Factoring
Agreement) shall not exceed at any time $4,000,000.00.
(B) The outstanding Obligations (including, without
limitation, those arising under this Agreement, the Exim
Agreement and the Factoring Agreement) shall not exceed at
any time the result of the following: (i) the Borrowing
Base under this Agreement, PLUS (ii) the lesser of: (a)
the EXIM Committed Line as defined in the Exim Agreement,
or (b) the Borrowing Base under the Exim Agreement, MINUS
(iii) $6,000,000.00.
(C) [Intentionally Deleted]
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If at any time Borrower's outstanding Obligations
(including, without limitation, those arising under this
Agreement, the Exim Agreement and the Factoring Agreement)
exceed any limitation described in this Agreement, the
Borrower must immediately pay in cash to Silicon the
excess."
and inserting in lieu thereof the following:
"II. IN ADDITION TO THE BORROWING LIMITATIONS CONTAINED IN THE
DEFINITIONS OF BORROWING BASE AND MAXIMUM CREDIT LIMIT, AND IN
THIS AGREEMENT, THE MAXIMUM AMOUNT OF LOANS HEREUNDER SHALL AT
ALL TIMES BE SUBJECT TO EITHER (A) OR (B) BELOW:
(A) The Borrower shall at all times maintain a minimum
cash balance at Silicon in an amount equal to or greater
than the aggregate of $6,000,000, PLUS an amount equal to
all outstanding Obligations (including, without
limitation, those arising under this Agreement, the Exim
Agreement, the Factoring Agreement, and all letter of
credit exposure);
OR
(B) The Borrower shall at all times maintain a Borrowing
Base (FOR PURPOSES OF THIS CALCULATION IN THIS SECTION
1.II OF THE SCHEDULE, THE BORROWING BASE MAY NOT EXCEED
$12,000,000.00) in an amount no less than Six Million
Dollars ($6,000,000.00) in excess of all outstanding
Obligations (including, without limitation, those arising
under this Agreement, the Exim Agreement, the Factoring
Agreement, and all letter of credit exposure).
If at any time Borrower's outstanding Obligations
(including, without limitation, those arising under this
Agreement, the Exim Agreement, the Factoring Agreement,
and all letter of credit exposure) exceed any limitation
described in this Agreement, the Borrower must immediately
pay in cash to Silicon the excess."
4. The Loan Agreement shall be amended by deleting Section 5.a. in the
Schedule attached thereto entitled "Minimum Tangible Net Worth" and
inserting in lieu thereof the following:
"a. Minimum Tangible Net Worth:
Borrower shall maintain at all times, to be tested as of
the last day of each month, a Tangible Net Worth of not less
than the sum of (i) plus (ii) below:
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(i) (a) $15,000,000.00 from March 15, 2001 until and
including March 31, 2001;
(b) $12,750,000.00 from April 1, 2001 until and including
April 30, 2001;
(c) $10,750,000.00 from May 1, 2001 until and including
June 29, 2001;
(d) $11,000,000.00 at June 30, 2001;
(e) $7,000,000.00 from July 1, 2001 until and including
September 29, 2001;
(f) $8,500,000.00 at September 30, 2001;
(g) $5,500,000.00 from October 1, 2001 until and including
December 30, 2001; and
(h) $8,500,000.00 at December 31, 2001 and thereafter.
(ii) 85% of all consideration received after February 28,
2001 for equity securities and subordinated debt of
the Borrower, subsequent to or in excess of the
$10,000,000 additional capital requirement set forth
in subsection (b) below.
In no event shall the amount of this Minimum Tangible Net
Worth covenant be decreased."
5. The Loan Agreement shall be amended by deleting Section 5.b. in the
Schedule attached thereto entitled "Capital" and inserting in lieu
thereof the following:
"b. Capital:
The Borrower will have received a minimum of
$10,000,000.00 of additional "Capital" on or before March
28, 2001 (the "Capital Event")."
6. The definition of "Collateral" in the Loan Agreement shall be
amended to include, in addition to those items described in the Loan
Agreement, all right, title and interest of Borrower in and to the
following:
"All goods, equipment, inventory, contract rights, trademarks,
servicemarks, trade styles, trade names, patents, patent
applications, leases, license agreements, franchise agreements,
general intangibles, accounts, documents, instruments, chattel
paper, cash, deposit accounts, fixtures, letters of credit,
investment property, and financial assets, whether now owned or
hereafter acquired, wherever located; and
Any copyright rights, copyright applications, copyright
registrations and like protections in each work of
authorship and derivative work, whether published or
unpublished, now owned or later acquired; any patents,
trademarks, service marks and applications therefor; any
trade secret rights, including any rights to unpatented
inventions, know-how, operating manuals, license rights
and agreements and confidential information, now owned or
hereafter acquired; or any claims for damages by way of
any past, present and future infringement of any of the
foregoing; and
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All Borrower's Books relating to the foregoing and any and
all claims, rights and interests in any of the above and
all substitutions for, additions, attachments,
accessories, accessions and improvements to and
replacements, products, proceeds and insurance proceeds of
any or all of the foregoing."
7. The Borrower hereby grants a security interest to Bank in all of its
right, title and interest in the "Collateral" defined in the Loan
Agreement, as amended hereby, to secure all Obligations under the
Loan Agreement, as amended hereby.
8. On or before the execution of this Amendment, the Borrower shall:
(i) transfer all primary operating accounts and cash management
services to the Bank, and (ii) terminate any lock box arrangement
with any other institution and enter into a lock box arrangement
with the Bank on terms satisfactory to the Bank pursuant to which
all amounts payable to the Borrower shall be directed to the Bank.
Any failure by Borrower to perform any requirement of this paragraph
shall be an Event of Default under the Loan Agreement.
9. On or before the execution of this Amendment, all bank and
investment accounts, cash, investment property and securities of
Open Market Securities, Inc., a Massachusetts subsidiary of Open
Market, Inc., shall be maintained and deposited with the Bank on
terms acceptable to Bank as collateral under a certain Security
Agreement granted by Open Market Securities, Inc. to Bank. Any
failure by Borrower to perform any requirement of this paragraph
shall be an Event of Default under the Loan Agreement, as amended
hereby.
4. FEE. The Borrower shall reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Existing Loan Documents.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
7. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Obligations.
8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Bank in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement.
9. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out
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of or by reason of this Loan Modification Agreement; provided, however, that if
for any reason Bank cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
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This Loan Modification Agreement is executed as of the date first
written above.
("BORROWER")
OPEN MARKET, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Title: VP and CFO
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FUTURETENSE, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
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Title: Vice President
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("BANK")
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ Xxxx Atansoff
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Name: Xxxx Atansoff
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Title: Vice President
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SILICON VALLEY BANK
By: N/A
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Name:
---------------------------------
Title:
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(signed in Santa Xxxxx County, California)
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