Exhibit 10.2
ACCOUNTS RECEIVABLE FINANCING AGREEMENT
This ACCOUNTS RECEIVABLE FINANCING AGREEMENT is entered into this 22nd
day of June, 2001 by and between SILICON VALLEY BANK. a California-chartered
bank, with its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000 and with a loan production office located at One Newton
Executive Park, Suite 200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
doing business under the name "Silicon Valley East" (FAX 000-000-0000) ("Bank")
and MERCATOR SOFTWARE, INC., a Delaware corporation with its principal place of
business at 00 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000 (FAX 000-000-0000)
("Borrower") and provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank. The parties agree as follows:
1. Definitions. In this Agreement:
"Accounts" are all existing and later arising accounts, accounts
receivable, contract rights, and other obligations owed Borrower in connection
with its sale or lease of goods (including licensing software and other
technology) or provision of services, all credit insurance, guaranties, other
security and all merchandise returned to or reclaimed by Borrower and Borrower's
Books relating to any of the foregoing.
"Account Balance" is the aggregate outstanding Advances made hereunder.
"Account Debtor" is as defined in the Code and shall include, without
limitation, any person liable on any Financed Receivable, such as, a guarantor
of the Financed Receivable and any issuer of a letter of credit or banker's
acceptance.
"Accounts Receivable" are all Borrower's accounts receivable, chattel
paper, instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances, and rights to payment, and all proceeds
therefrom.
"Adjusted Quick Ratio" is the ratio of (i) Quick Assets to (ii) Current
Liabilities minus Deferred Revenue.
"Adjustments" are all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor for any Financed Receivable.
"Advance" is defined in Section 2.2.
"Advance Rate" is eighty percent (80%), net of any offsets related to
each specific Account Debtor, or such other percentage as Bank establishes under
Section 2.2; provided however, if the Borrower is unable to maintain a Adjusted
Quick Ratio of at least 1.75 to 1.0, then the Advance Rate will be 80% net of
Deferred Revenue and offsets related to each specific Account Debtor.
"Applicable Rate" is a per annum rate equal to the "Prime Rate" plus one
(1.0) percentage point.
"Borrower's Books" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.
"Capitalization Event" is the issuance by Borrower of equity, or
Subordinated Debt with a lender and subject to terms reasonably acceptable to
Bank, resulting in the net proceeds to Borrower of at least Five Million Dollars
($5,000,000.00) in cash.
"Code" is the Uniform Commercial Code as adopted by The Commonwealth of
Massachusetts (presently, Mass. Gen. Laws, Ch. 106), as may be amended and in
effect from time to time, including, if adopted and in effect, the revised
Article 9 of the Uniform Commercial Code in the form or substantially in the
form approved by the American Law Institute and the National Conference of
Commissioners on Uniform State Law and contained in the 1999 Official Text of
the Uniform Commercial Code.
"Collateral" is attached as Exhibit "A".
"Collateral Handling Fee" is defined in Section 3.4.
"Collections" are all funds received by Bank from or on behalf of an
Account Debtor for Financed Receivables.
"Compliance Certificate" is attached as Exhibit "B".
"Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.
"Current Liabilities" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.
"Deferred Revenue" is all amounts received in advance of performance
under contracts and not yet recognized as revenue.
"Early Termination Fee" is defined in Section 4.3.
"EBITDA" means earnings before interest, taxes, depreciation and
amortization in accordance with GAAP.
"Event of Default" is defined in Section 9.
"Facility" is an extension of credit by Bank to Borrower in order to
finance Accounts Receivable with an aggregate Account Balance not exceeding the
Facility Amount.
"Facility Amount" is Ten Million Dollars ($10,000,000.00); provided,
however, the Facility Amount shall be increased to Fifteen Million Dollars
($15,000,000.00) for any period after the occurrence of a Funding Event.
"Facility Fee" is defined in Section 3.3.
"Facility Period" is the period beginning on this date and continuing
until one year from the date of this Agreement, unless the period is terminated
sooner by Bank with notice to Borrower or by Borrower pursuant to Section 4.3.
"Finance Charges" is defined in Section 3.2.
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"Financed Receivables" are all those accounts, receivables, chattel
paper, instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances, and rights to payment, and all proceeds,
including their proceeds (collectively "receivables"), which Bank finances and
makes an Advance. A Financed Receivable stops being a Financed Receivable (but
remains Collateral) when the Advance made for the Financed Receivable has been
finally paid.
"Financed Receivable Balance" is the total outstanding amount, at any
time, of all Financed Receivables.
"Funding Event" means the occurrence of a fiscal quarter which the
Borrower maintains a minimum EBITDA of $1.00.
"GAAP" is generally accepted accounting principles as adopted by the
Financial Accounting Standards Board.
"Good Faith Deposit" is described in Section 3.8.
"Indebtedness" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"Ineligible Receivable" is any Accounts Receivable:
(a) that is unpaid (90) calendar days after the invoice date;
or
(b) that is owed by an Account Debtor that has filed, or has
had filed against it, any bankruptcy case, assignment for
the benefit of creditors, receivership, or Insolvency
Proceeding or who has become insolvent (as defined in the
United States Bankruptcy Code) or who is generally not
paying its debts as they become due; or
(c) for which there has been any breach of warranty or
representation in Section 6 or any breach of any covenant
in this Agreement; or
(d) for which the Account Debtor asserts any discount,
allowance, return, dispute, counterclaim, offset, defense,
right of recoupment, right of return, warranty claim, or
short payment.
(e) for which Bank determines, in its reasonable business
discretion, that collection may be doubtful.
"Insolvency Proceeding" are proceedings by or against any person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
"Invoice Transmittal" shows Accounts Receivable which Bank may finance
and, for each receivable, includes the Account Debtor's, name, address, invoice
amount, invoice date and invoice number and is signed by Borrower's authorized
representative.
"Lockbox" is described in Section 6.3(I).
"Minimum Finance Charge" is a minimum monthly Finance Charge of
$20,000.00 payable to the Bank.
"Obligations" are all advances, liabilities, obligations, covenants and
duties owing, arising, due or payable by Borrower to Bank now or later under
this Agreement or any other document, instrument or agreement, account
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(including those acquired by assignment) primary or secondary, such as all
Advances, Finance Charges, Facility Fee, Early Termination Fee, Collateral
Handling Fee, interest, fees, expenses, professional fees and attorneys' fees,
or other amounts now or hereafter owing by Borrower to Bank.
"Permitted Indebtedness" is: (i) Borrower's indebtedness to Bank under
this Agreement; (ii) indebtedness existing on the Closing Date and shown on the
Schedule entitled "permitted indebtedness"; and (iii) indebtedness to trade
creditors incurred in the ordinary course of business.
"Permitted Liens" are: (i) Liens existing on the Closing Date and shown
on the Schedule entitled "permitted liens" or arising under this Agreement; and
(ii) Liens for taxes, fees, assessments or other government charges or levies,
either not delinquent or being contested in good faith and for which Borrower
maintains adequate reserves on its Books in accordance with GAAP if they have no
priority over Bank's security interest.
"Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
"Prime Rate" is Bank's most recently announced "Prime Rate," even if it
is not Bank's lowest rate.
"Quick Assets" is, on any date, the Borrower's consolidated, unrestricted
cash, cash equivalents, net Accounts Receivable and investments with maturities
of fewer than 12 months determined according to GAAP.
"Reconciliation Day" is the last calendar day of each month.
"Reconciliation Period" is each calendar month.
"Subordinated Debt" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).
"Subsidiary" is for any Person, joint venture, or any other business
entity of which more than 50% of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.
"Total Liabilities" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.
2. Financing of Accounts Receivable.
2.1. Request for Advances. During the Facility Period, Borrower may offer
Accounts Receivable to Bank and request that the Bank finance such Accounts
Receivable, if there is not an Event of Default. Borrower will deliver an
Invoice Transmittal for each Accounts Receivable it offers. Bank may rely on
information on or with the Invoice Transmittal.
2.2. Acceptance of Accounts Receivable. Except as otherwise provided
herein, Bank is obligated to finance any Accounts Receivable which is not an
Ineligible Receivable. Bank may (but is not obligated to) finance any other
Accounts Receivable and as to such other Accounts Receivable, Bank may, in its
discretion, change the percentage of the Advance Rate. Bank may approve any
Account Debtor's credit before agreeing to finance any Accounts Receivable and
shall complete such credit approvals within a reasonable period after the date
of the Invoice Transmittal. When Bank finances an Accounts Receivable, it will
extend credit to Borrower in an amount up to the result of the Advance Rate
multiplied by the face amount of the receivable (the "Advance"). When Bank makes
an Advance, the receivable becomes a "Financed Receivable." All representations
and warranties in Section 6 must be true as of the date of the Invoice
Transmittal and of the Advance and no Event of Default exists would occur as a
result of the Advance. The aggregate amount of all Financed Receivables
outstanding at any time may not exceed the Facility Amount.
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3. Collections, Finance Charges, Remittances and Fees. The Obligations shall
be subject to the following fees and Finance Charges. Fees may, in Bank's
discretion, be charged as an Advance, and shall thereafter accrue fees and
Finance Charges as described below. Bank may, in its discretion, charge fees and
Finance Charges to Borrower's deposit account maintained with Bank.
3.1. Collections. Collections will be credited to the Financed
Receivables Balance, but if there is an Event of Default, Bank may apply
Collections to the Obligations in any order it chooses. If Bank receives a
payment for both a Financed Receivable and a non Financed Receivable, the funds
will first be applied to the Financed Receivable and, if there is not an Event
of Default, the excess will be remitted to the Borrower, subject to Section 3.7.
3.2. Finance Charges. In computing Finance Charges on the Obligations,
all Collections received by Bank shall be deemed applied by Bank on account of
the Obligations three (3) Business Days after receipt of the Collections.
Borrower will pay a finance charge (the "Finance Charge"), which is equal to the
greater of (i) the Applicable Rate multiplied by the number of days in the
Reconciliation Period multiplied by the outstanding average daily Financed
Receivable Balance for that Reconciliation Period, or (ii) the Minimum Finance
Charge, as and when same may be applicable. After an Event of Default,
Obligations accrue interest at two percent (2.0%) above the Applicable Rate
effective immediately before the Event of Default.
3.3. Facility Fee. A fully earned, non-refundable facility fee of
Seventy-Five Thousand Dollars ($75,000.00) is due upon execution of this
Agreement.
3.4. Collateral Handling Fee. On each Reconciliation Day, Borrower will
pay to Bank a collateral handling fee, equal to 0.375% per month of the average
daily Financed Receivable Balance outstanding during the applicable
Reconciliation Period.
3.5. Accounting. After each Reconciliation Period, Bank will provide an
accounting of the transactions for that Reconciliation Period, including the
amount of all Financed Receivables, all Collections, Adjustments, Finance
Charges, Collateral Handling Fee and the Facility Fee. If Borrower does not
object to the accounting in writing within ninety (90) days it is considered
correct. All Finance Charges and other interest and fees are calculated on the
basis of a 360 day year and actual days elapsed.
3.6. Deductions. Bank may deduct fees, Finance Charges and other amounts
due pursuant to this Agreement from any Advances made or Collections received by
Bank.
3.7. Account Collection Services. All Borrower's receivables are to be
paid to the same address/or party and Borrower and Bank must agree on such
address. If Bank collects all receivables and there is not an Event of Default
or an event that with notice or lapse of time will be an Event of Default,
within three (3) days of receipt of those collections, Bank will give Borrower
the receivables collections it receives for receivables other than Financed
Receivables and/or amount in excess of the amount for which Bank has made an
Advance to Borrower, less any amount due to Bank, such as the Finance Charge,
the Facility Fee, other fees and expenses, or otherwise. This Section 3.8 does
not impose any affirmative duty on Bank to do any act other than to turn over
amounts. All receivables and collections are Collateral and if an Event of
Default occurs, Bank need not remit collections of Collateral and may apply them
to the Obligations.
3.8. Good Faith Deposit. Borrower has paid to Bank a Good Faith Deposit
of $25,000.00 to initiate Bank's due diligence review process. Any portion of
the deposit not utilized to pay expenses will be applied to the Facility Fee.
4. Repayment of Obligations.
4.1. Repayment on Maturity. Borrower will repay each Advance on the
earliest of: (a) payment of the Financed Receivable in respect which the Advance
was made, (b) the Financed Receivable becomes an Ineligible Receivable, (c) when
any Adjustment is made to the Financed Receivable (but only to the extent of the
Adjustment
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if the Financed Receivable is not otherwise an Ineligible Receivable), or (d)
the last day of the Facility Period (including any early termination). Each
payment will also include all accrued Finance Charges on the Advance and all
other amounts due hereunder.
4.2. Repayment on Event of Default. When there is an Event of Default,
Borrower will, if Bank demands (or, in an Event of Default under Section 9(B),
immediately without notice or demand from Bank) repay all of the Advances. The
demand may, at Bank's option, include the Advance for each Financed Receivable
then outstanding and all accrued Finance Charges, the Early Termination Fee,
Collateral Handling Fee, reasonable attorneys and professional fees, court costs
and expenses, and any other Obligations.
4.3. Early Termination of Agreement. This Agreement may be terminated
prior to the last day of the Facility Period as follows: (i) by Borrower,
effective three Business Days after written notice of termination is given to
Bank; or (ii) by Bank at any time after the occurrence of an Event of Default,
without notice, effective immediately. If this Agreement is so terminated by
Borrower or by Bank, Borrower shall pay to Bank a termination fee in an amount
equal to Three Hundred Thousand Dollars ($300,000.00) (the "Early Termination
Fee"). The termination fee shall be due and payable on the effective date of
termination and thereafter shall bear interest at a rate equal to the highest
rate applicable to any of the Obligations. Notwithstanding the foregoing, Bank
agrees to waive the Early Termination Fee if Bank agrees to refinance the
Obligations (in its sole and exclusive discretion) prior to the last day of the
Facility Period.
5. Power of Attorney. Borrower irrevocably appoints Bank and its successors
and assigns its attorney-in-fact and authorizes Bank to:
(A) following the occurrence of an Event of Default, sell,
assign, transfer, pledge, compromise, or discharge all or any part
of the Financed Receivables:
(B) following the occurrence of an Event of Default,
demand, collect, xxx, and give releases to any Account Debtor for
monies due and compromise, prosecute, or defend any action, claim,
case or proceeding about the Financed Receivables, including
filing a claim or voting a claim in any bankruptcy case in Bank's
or Borrower's name, as Bank chooses:
(C) following the occurrence of an Event of Default,
prepare, file and sign Borrower's name on any notice, claim,
assignment, demand, draft, or notice of or satisfaction of lien or
mechanics' lien or similar document;
(D) notify all Account Debtors to pay Bank directly;
(E) receive, open, and dispose of mail addressed to
Borrower, provided; however, prior to the occurrence of an Event
of Default, Bank will retain all checks and other drafts (as
appropriate in connection with Financed Receivables) and agrees to
forward all other correspondence to Borrower;
(F) endorse Borrower's name on check or other instruments
(to the extent necessary to pay amounts owed pursuant to this
Agreement);
(G) execute on Borrower's behalf any instruments,
documents, financing statements to perfect Bank's interests in the
Financed Receivables and Collateral and do all acts and things
necessary or expedient, as determined solely and exclusively by
the Bank, to protect, preserve, and otherwise enforce the Bank's
rights and remedies under this Agreement, as directed by the Bank;
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6. Representations, Warranties and Covenants.
6.1. Representations and Warranties. Borrower represents and warrants for
each Financed Receivable:
(A) Borrower is the owner with legal right to sell,
transfer and assign it;
(B) The correct amount is on the Invoice Transmittal and is
not disputed;
(C) Payment is not contingent on any unfulfilled obligation
or contract;
(D) It is based on an actual sale, lease, license, and/or
delivery of goods and/or services rendered, due to Borrower, it is
not past due or in default, has not been previously sold,
assigned, transferred, or pledged and is free of any liens,
security interests and encumbrances;
(E) There are no defenses, offsets, counterclaims or
agreements giving rise to a deduction or discount by the Account
Debtor;
(F) Borrower reasonably believes no Account Debtor is
insolvent or subject to any Insolvency Proceedings;
(G) Borrower has not filed or had filed against it
Insolvency Proceedings and does not anticipate any such filing;
(H) Bank has the right to endorse and/ or require Borrower
to endorse all payments received on Financed Receivables and all
proceeds of Collateral; and
(I) No representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank
contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statement contained in the
certificates or statement not misleading.
6.2. Additional Representations and Warranties. Borrower represents and
warrants as follows:
(A) Borrower is duly existing and in good standing in its
state of formation and qualified and licensed to do business in,
and in good standing in, any state in which the conduct of its
business or its ownership of property requires that it be
qualified and where failure to so qualify would have a material
adverse effect on the Borrower or any Financed Receivable.
Borrower as of the date hereof is qualified to do business in or
has filed for qualification in or is correcting any prior such
filings in each state as set forth on Schedule 6.2(A) hereto. The
execution, delivery and performance of this Agreement has been
duly authorized, and does not conflict with Borrower's
organizational documents or constitute an event of default under
any material agreement by which Borrower is bound. Borrower is not
in default in any material respect under any agreement to which or
by which it is bound however Borrower refers to the breach of
contract action pending against Borrower in Carpet Co-op of
America Association, Inc. and FloorLINK, L.L.C. v. TSI
International Software, Ltd., referred to in Schedule 6.2(C).
(B) Borrower has good title to remaining Collateral,
subject to Permitted Liens. All material inventory is in all
material respects of good and marketable quality, free from
material defects.
(C) There are no actions or proceedings pending or, to
Borrower's knowledge, threatened by or against Borrower or any
Subsidiary except as set forth in Schedule 6.2(c).
(D) All consolidated financial statements for Borrower and
any Subsidiary
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delivered to Bank fairly present in all material respects
Borrower's consolidated financial condition and Borrower's
consolidated results of operations. There has not been any
material adverse change in Borrower's consolidated financial
condition since the date of the most recent financial statements
submitted to Bank.
(E) Borrower, considering all financing available to it is
not insolvent and is able to pay its debts (including trade debts)
as they mature.
(F) No representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank
contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained in the
certificates or statements not misleading.
(G) Borrower is not an "investment company" or a company
"controlled" by an "investment company" under the Investment
Company Act. Borrower is not engaged as one of its important
activities in extending credit for margin stock (under Regulations
T, U and X of the Federal Reserve Board of Governors). Borrower
has complied with the Federal Fair Labor Standards Act in all
material respects. To the best of Borrower's knowledge, Borrower
has not violated any laws, ordinances or rules applicable to it.
None of Borrower's properties or assets has been used by Borrower,
to the best of Borrower's knowledge, by previous persons, in
disposing, producing, storing, treating, or transporting any
hazardous substance other than legally. Borrower has timely filed
all required tax returns and paid, or made adequate provision to
pay, all taxes. Borrower has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are
necessary to continue its business as currently conducted except
where the failure of which would not have a material adverse
effect on Borrower or on any Financed Receivable.
6.3. Affirmative Covenants. Borrower will do all of the following:
(A) Maintain its corporate existence and good standing in
its jurisdiction of incorporation and maintain its qualification
in each jurisdiction necessary to Borrower's business or
operations.
(B) Pay all its taxes including gross payroll, withholding
and sales taxes when due (except those taxes which are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside in
accordance with GAAP) and will deliver satisfactory evidence of
payment if requested.
(C) Provide a written report within ninety (90) days after
the invoice date respecting any Financed Receivable (or as and
when otherwise directed by the Bank), if payment of any Financed
Receivable does not occur by its due date and include the reasons
for the delay.
(D) Give Bank copies of all Forms 10-K, 10-Q and 8-K (or
equivalents) within five (5) days of filing with the Securities
and Exchange Commission, while any Financed Receivable is
outstanding. Within one hundred twenty (120) days after the end of
each fiscal year of Borrower, Borrower shall deliver to Bank the
annual audited financial statements of the Borrower certified by
independent public accountants of recognized standing; which
requirement shall be satisfied by delivery to Bank of Borrower's
annual report on Form 10-K as filed with the Securities and
Exchange Commission.
(E) Borrower shall keep its business and the Collateral
insured for risks and
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in amounts, and with financially sound and reputable insurance
companies in such amounts and covering such risks as are
consistent with sound business practice. All property policies
shall have a lender's loss payable endorsement showing Bank as an
additional loss payee and all liability policies shall show the
Bank as an additional insured and all policies shall provide that
the insurer must give Bank at least twenty (20) days notice before
canceling its policy. At Bank's request, Borrower shall deliver
certified copies of policies and evidence of all premium payments.
Proceeds payable to Borrower under any policy shall, at Bank's
option, be payable to Bank on account of the Obligations;
provided, however, that any insurance proceeds paid for the
purpose of reimbursement of Borrower's legal fees on account of
legal services rendered in connection with a claim shall be
payable to the person rendering such services. Bank hereby
acknowledges that Borrower is not required to maintain accounts
receivable insurance and that the insurance policies (or evidences
thereof) delivered to Bank are, as of the date hereof, acceptable
to Bank.
(F) Execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank's security
interest in the Collateral or to effect the purposes of this
Agreement.
(G) Provide Bank with a Compliance Certificate no later
than 30 days following each quarter end or as reasonably requested
by Bank.
(H) Provide Bank with, as soon as available, but no later
than thirty (30) days following each Reconciliation Period, a
company prepared balance sheet and income statement, prepared
under GAAP, consistently applied, covering Borrower's operations
during the period together with an aged listing of Accounts
Receivable and accounts payable, along with a deferred revenue
report. All of the foregoing shall be in form reasonably
satisfactory to the Bank.
(I) Within three (3) business days transfer and deliver to
Bank all collections Borrower receives for Financed Receivables
(and, as and when required hereunder, for all receivables).
(J) Borrower shall direct each Account Debtor (and each
depository institution where proceeds of Accounts Receivable are
on deposit) to make payments with respect to all receivables to a
lockbox account established with the Bank ("Lockbox") or to wire
transfer payments to a cash collateral account that Bank controls,
as and when directed by the Bank from time to time, at its option
and at the sole and exclusive discretion of the Bank. Until such
Lockbox can be established, the Borrower shall remit all
receivable cash payments and remittances to the Bank at least
weekly (at the close of business on each Friday) along with a
detailed cash receipts journal. It will be considered an immediate
Event of Default if the Lockbox is not set-up and operational
within sixty (60) days from the date of this Agreement unless due
to the fault of Bank.
(K) Borrower will allow Bank to audit Borrower's
Collateral, including, but not limited to, Borrower's Accounts and
Accounts Receivable, at Borrower's expense, no later than ninety
(90) days after the execution of this Agreement and annually
thereafter, upon reasonable notice. Provided, however, if an Event
of Default has occurred, Bank may audit Borrower's Collateral,
including, but not limited to, Borrower's Accounts and Accounts
Receivable at Bank's sole and exclusive discretion and without
notification and authorization from Borrower.
(L) Maintain at all times an Adjusted Quick Ratio of at
least: 1.25 to 1.0 for May, 2001, 1.50 to 1.0 for June, 2001, 1.30
to 1.0 for July, 2001, 1.20 to 1.0 for
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August, 2001, 1.50 to 1.0 for September, 2001 and thereafter,
which Adjusted Quick Ratio will be tested by Bank on a monthly
basis.
(M) Cause the occurrence of a Capitalization Event on or
before September 30, 2001.
(N) Maintain its primary operating and depository accounts
with Bank.
6.4. Negative Covenants, Borrower will not do any of the following
without Bank's prior written consent:
(A) Assign, transfer, sell or grant, or permit any lien or
security interest in (i) any Financed Receivable or (ii) the
remaining Collateral, except for Permitted Liens and except as
permitted in Section 6.4 (B).
(B) Convey, sell, lease, transfer or otherwise dispose of
the Collateral, other than (i) of inventory in the ordinary course
of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower in the
ordinary course of business; or (iii) of worn-out or obsolete
Equipment, up to a maximum aggregate amount of $500,000.00.
Nothing contained in this section is intended to restrict
Borrower's ability to pay trade payable, payroll and other
ordinary and necessary expenses of Borrower, consistent with
Borrower's current practice, all in the ordinary course of
business, and subject to the other terms and conditions of this
Agreement.
(C) Create, incur, assume, or be liable for any
indebtedness, except for Permitted Indebtedness.
(D) Directly or indirectly enter into or permit to exist
any material transaction with any affiliate or subsidiary of
Borrower or make any distributions to any affiliate or subsidiary,
except for transactions that are in the ordinary course of
Borrower's business, upon fair and reasonable terms that are no
less favorable to Borrower than would be obtained in an arm's
length transaction with a nonaffiliated person.
(E) Merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially
all of the capital stock or property of another Person, except
that in all cases intercompany mergers or consolidations shall be
permitted, provided, that if such merger or consolidation involves
Borrower, Borrower is the surviving entity.
(F) Become an "investment company" or a company controlled
by an investment company," under the Investment Company Act of
1940 or undertake as one of its important activities extending
credit to purchase or carry margin stock, or use the proceeds of
any Advance for that purpose; fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with
the Federal Fair Labor Standards Act or violate any other law or
regulation, or permit any of its subsidiaries to do so.
(G) Relocate its principal executive office or add any new
offices or business locations or keep any Collateral in any
additional locations, or (ii) change its state of formation, or
(iii) change its organizational structure, (iv) change its legal
name, or (v) change any organizational number (if any) assigned by
its state of formation, provided, however, no such consent is
required if Borrower gives Bank five (5) days notice after the
occurrence of any of the foregoing.
-10-
(H) Keep any material Collateral in the possession of any
third party bailee (such as at a warehouse) provided, however, no
such consent is required if Borrower gives Bank prior written
notice of such event. In the event that Borrower, after the date
hereof, intends to store or otherwise deliver any Collateral to
such a bailee, then Borrower shall receive the prior written
consent of Bank and such bailee must acknowledge in writing that
the bailee is holding such Collateral for the benefit of Bank.
7. Adjustments. If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like on a Financed Receivable in excess
of 15% of the amount of the such Financed Receivable (an "Adjustment") or if
Borrower breaches any of the representations, warranties or covenants set forth
in Section 6, Borrower will promptly advise Bank. Borrower will resell any
rejected, returned, or recovered personal property for Bank, at Borrower's
expense, and pay proceeds to Bank. While Borrower has returned goods that are
Borrower property, Borrower will segregate and xxxx them "property of Silicon
Valley Bank." Bank has a security interest in the Financed Receivables and until
receipt of payment, has the right to take possession of any rejected, returned,
or recovered personal property.
8. Security Interest. Borrower grants Bank a continuing security interest in
all presently existing and later acquired Collateral to secure all Obligations
and performance of each of Borrower's duties under this Agreement. Any security
interest shall be a first priority security interest in the Collateral. The
Collateral may also be subject to Permitted Liens. Bank may place a "hold" on
any deposit account pledged as Collateral.
9. Events of Default. Any one or more of the following is an Event of
Default.
(A) Borrower fails to pay any amount owed to Bank when due;
(B) Borrower files or has filed against it any Insolvency
Proceedings or any assignment for the benefit of creditors, or
appointment of a receiver or custodian for any of its assets;
(C) Borrower, considering all financing available to it
becomes insolvent and not able to pay its debts (including trade
debts) as they mature;
(D) Any involuntary lien, garnishment, attachment attaches
to the Financed Receivables or any material portion of the
remaining Collateral or the service of process upon Bank seeking
to attach, by mesne or trustee process any funds of Borrower on
deposit with Bank;
(E) Borrower breaches any covenant, agreement, warranty, or
representation is an immediate Event of Default;
(F) Borrower is in default under any document, instrument
or agreement evidencing any debt, obligation or liability in favor
of Bank its affiliates or vendors regardless of whether the debt,
obligation or liability is direct or indirect, primary or
secondary, or fixed or contingent;
(G) An event of default occurs under any guaranty of the
Obligations or any material provision of any guaranty is not valid
or enforceable or a guaranty is repudiated or terminated;
(H) A material default or Event of Default occurs under any
agreement between Borrower and any creditor of Borrower that
signed a subordination agreement with Bank;
(I) Any creditor that has signed a subordination agreement
with Bank
-11-
breaches any terms of the subordination agreement; or
(J) Any of the following occurs: (i) A material impairment
in the perfection or priority of Bank's security interest in the
Collateral located in the United States and not caused by fault of
Bank; (ii) a material adverse change in the business, operations,
or condition (financial or otherwise) of the Borrower occurs; or
(iii) a material impairment of the prospect of repayment of any
portion of the Obligations; or (iv) Bank determines, based upon
information available to it and in its reasonable judgment, that
there is a strong likelihood that Borrower shall fail to comply
with one or more of the financial covenants in Section 6.3 during
the next succeeding financial reporting period.
10. Remedies.
10.1. Remedies Upon Default. When an Event of Default occurs, (1) Bank
may stop financing receivables or extending credit to Borrower; (2) at Bank's
option and on demand, all or a portion of the Obligations (or, for to an Event
of Default described in Section 9(B), automatically and without demand) are due
and payable in full; (3) the Bank may apply to the Obligations any (i) balances
and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or
for the credit or the account of Borrower; (4) Bank may exercise all rights and
remedies under this Agreement and applicable law, including those of a secured
party under the Code, power of attorney rights in Section 5 for the Collateral,
and the right to ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, collect, dispose of, sell, lease, use, and
realize upon all Financed Receivables and Collateral in any commercial manner;
and (5) Bank may make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower shall
assemble the Collateral if Bank requests and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies. Borrower agrees that any notice of sale required to be given to
Borrower is deemed given if at least ten (10) days before the sale may be held.
10.2. Demand Waiver. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guaranties held by Bank on which
Borrower is liable.
10.3. Default Rate. If any amount is not paid when due, the amount bears
interest at the Applicable Rate plus two percent until the earlier of (a)
payment in good funds or (b) entry of a final judgment when the principal amount
of any money judgment will accrue interest at the highest rate allowed by law.
11. Fees, Costs and Expenses. The Borrower will pay on demand all fees,
costs and expenses (including reasonable attorneys' and professionals fees with
costs and expenses) that Bank incurs from: (a) preparing, negotiating,
administering, and enforcing this Agreement or related agreement, including any
amendments, waivers or consents, (b) any litigation or dispute relating to the
Financed Receivables, the Collateral, this Agreement or any other agreement, (c)
enforcing any rights against Borrower or any guarantor, or any Account Debtor,
(d) protecting or enforcing its interest in the Financed Receivables or other
Collateral, (e) collecting the Financed Receivables and the Obligations, and (f)
any bankruptcy case or insolvency proceeding involving Borrower, any Financed
Receivable, the Collateral, any Account Debtor except that any costs, fees, and
expenses relating to the preparation and negotiation of this Agreement shall not
exceed $28,250.00.
12. Choice of Law, Venue and Jury Trial Waiver. This Agreement shall be
construed, governed, and enforced pursuant to the laws (without regard to
conflict of law principles) of The Commonwealth of Massachusetts. Borrower and
Bank each submits to the exclusive jurisdiction of the State and Federal courts
in Suffolk County, Massachusetts.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR
-12-
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
13. Notices. Notices or demands by either party about this Agreement must be
in writing and personally delivered or sent by an overnight delivery service
evidenced by receipt of delivery, by certified mail postage prepaid return
receipt requested, or by FAX to the addresses listed at the beginning of this
Agreement. A party may change notice address by written notice to the other
party.
14. General Provisions.
14.1. Successors and Assigns. This Agreement binds and is for the benefit
of successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights under it without Bank's prior written consent which may
be granted or withheld in Bank's discretion. Bank may, without the consent of or
notice to Borrower, sell, transfer, or grant participation in any part of Bank's
obligations, rights or benefits under this Agreement.
14.2. Indemnification. Borrower will indemnify, defend and hold harmless
Bank and its officers, employees, and agents against: (a) obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) losses or expenses
incurred, or paid by Bank from or consequential to transactions between Bank and
Borrower (including reasonable attorneys fees and expenses), except for losses
caused by Bank's gross negligence or willful misconduct.
14.3. Right of Set-Off. Borrower and any guarantor hereby grant to Bank,
a lien, security interest and right of setoff as security for all Obligations to
Bank, whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Silicon Valley
Bank or in transit to any of them. At any time after the occurrence and during
the continuance of an Event of Default, Bank may set off the same or any part
thereof and apply the same to any liability or obligation of Borrower and any
guarantor even though unmatured and regardless of the adequacy of any other
collateral securing the loan. Bank agrees to provide to Borrower prompt notice
after any such setoff. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR
TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
14.4. Time of Essence. Time is of the essence for performance of all
obligations in this Agreement.
14.5. Severability of Provision. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
14.6. Amendments in Writing, Integration. All amendments to this
Agreement must be in writing. This Agreement is the entire agreement about this
subject matter and supersedes prior negotiations or agreements.
14.7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when executed
and delivered are one Agreement.
14.8. Remedies Cumulative. Bank's rights and remedies under this
Agreement, or any other documents, instruments and agreement by and between
Borrower and Bank are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank's exercise of one right or remedy is
not an election, and Bank's waiver of any Event of Default is not a continuing
waiver. Bank's delay is not a waiver, election, or acquiescence. No waiver
hereunder shall be effective unless signed by Bank and then is only effective
for the specific instance and purpose for which it was given.
-13-
14.9. Survival. All covenants, representations and warranties made in
this Agreement continue in force while any Financed Receivable amount remains
outstanding. Borrower's indemnification obligations survive until all statutes
of limitations for actions that may be brought against Bank have run. Bank's
obligations under Section 14.12 shall survive termination of this Agreement.
14.10. Confidentiality. Bank will use the same degree of care handling
Borrower's confidential information that it uses for its own confidential
information, but may disclose information; (i) to its subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the Agreement; provided, however, Bank shall
use commercially reasonable efforts to obtain from such transferee or purchaser
an agreement to be bound by the terms of this provision, (iii) as required by
law, regulation, subpoena, or other order, (iv) as required in connection with
an examination or audit and (v) as it considers appropriate exercising the
remedies under this Agreement. Confidential information does not include
information that is either: (a) in the public domain or in Bank's possession
when disclosed, or becomes part of the public domain after disclosure to Bank;
or (b) disclosed to Bank by a third party, if Bank does not know that the third
party is prohibited from disclosing the information.
14.11. Other Agreements. This Agreement may not adversely affect Banks
rights under any other document or agreement between Bank and Borrower. If there
is a conflict between this Agreement and any agreement between Borrower and
Bank, Bank may determine in its sole discretion which provision applies.
Borrower acknowledges that any security agreements, liens and/or security
interests securing payment of Borrower's Obligations also secure Borrower's
Obligations under this Agreement and are not adversely affected by this
Agreement. Additionally, (a) any Collateral under other agreements or documents
between Borrower and Bank secures Borrowers Obligations under this Agreement and
(b) a default by Borrower under this Agreement is a default under agreements
between Borrower and Bank.
14.12. Termination of this Agreement. Upon the termination of this
Agreement and provided that no Financed Receivable remains outstanding and
Borrower has completely satisfied all Obligations hereunder, Bank, at Borrower's
expense, shall execute and deliver to Borrower all releases and terminations as
may be necessary or proper to evidence same, including, UCC-3 Termination
Statements.
14.13. Foreign Accounts Receivable. Notwithstanding anything to the
contrary contained herein, Bank agrees that if Borrower enters into a financing
arrangement with a lender to finance Borrower's Accounts Receivable which are
billed to an entity operating outside of the United States or in foreign
currency ("Foreign Accounts Receivable"), Bank will subordinate its security
interest in the Foreign Accounts Receivable to the security interest of such
lender, provided such Foreign Accounts Receivable are not Financed Receivables.
-14-
EXECUTED under seal as of the date first written above.
MERCATOR SOFTWARE, INC.
By /s/ [ILLEGIBLE]
------------------------------------------
Title CHAIRMAN OF THE BOARD, CHIEF
---------------------------------------
EXECUTIVE OFFICER AND PRESIDENT
SILICON VALLEY BANK
By
------------------------------------------
Title
---------------------------------------
-15-
EXECUTED under seal as of the date first written above.
MERCATOR SOFTWARE, INC.
By
------------------------------------------
Title
---------------------------------------
SILICON VALLEY BANK
By /s/ [ILLEGIBLE]
------------------------------------------
Title Senior Vice President
---------------------------------------
-15-
EXHIBIT A
The Collateral consists of all of Borrower's right, title and interest in
and to the following:
All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;
All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, service marks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;
All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;
All copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing; and
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
and accessions to and proceeds thereof.
-00-
Xxxxxxx "X"
[LOGO]
SILICON VALLEY BANK
SPECIALTY FINANCE DIVISION
Compliance Certificate
I, as authorized officer of Mercator Software, Inc. ("Borrower") certify under
the Accounts Receivable Financing Agreement (the "Agreement") between Borrower
and Silicon Valley Bank ("Bank") as follows.
Borrower represents and warrants for each Financed Receivable:
It is the owner with legal right to sell, transfer and assign it;
The correct amount is on the Invoice Transmittal and is not disputed;
Payment is not contingent on any unfulfilled obligation or contract;
It is based on an actual sale, lease, license, and/or delivery of goods
and/or services rendered, due to Borrower, it is not past due or in default, has
not been previously sold, assigned, transferred, or pledged and is free of any
liens, security interests and encumbrances;
There are no defenses, offsets, counterclaims or agreements giving rise
to a deduction or discount by the Account Debtor;
It reasonably believes no Account Debtor is insolvent or subject to any
Insolvency Proceedings;
It has not filed or had filed against it Insolvency Proceedings and does
not anticipate any filing;
Bank has the right to endorse and/ or require Borrower to endorse all
payments received on Financed Receivables and all proceeds of Collateral.
No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statement contained in the certificates or statement not misleading.
Additionally, Borrower represents and warrants as follows:
Borrower is duly existing and in good standing in its state of formation
and qualified and licensed to do business in, and in good standing in, any state
in which the conduct of its business or its ownership of property requires that
it be qualified and where failure to so qualify would have a material adverse
effect on the Borrower or any Financed Receivable, except as may be set forth on
Schedule 6.2(a) to the Agreement. The execution, delivery and performance of
this Agreement has been duly authorized, and does not conflict with Borrower's
organizational documents or constitute an event of default under any material
agreement by which Borrower is bound. Borrower is not in default in any material
respect under any agreement to which or by which it is bound.
Borrower has good title to the Collateral, except for Permitted Liens.
All material inventory is in all material respects of good and marketable
quality, free from material defects.
Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the
-17-
Investment Company Act. Borrower is not engaged as one of its important
activities in extending credit for margin stock (under Regulations T, U and X of
the Federal Reserve Board of Governors). Borrower has complied with the Federal
Fair Labor Standards Act in all material respects. To the best of Borrower's
knowledge, Borrower has not violated any laws, ordinances or rules applicable to
it. None of Borrower's properties or assets has been used by Borrower, to the
best of Borrower's knowledge, by previous persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than legally.
Borrower has timely filed all required tax returns and paid, or made adequate
provision to pay, all taxes. Borrower has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted except where the failure of which would not have a material
adverse effect on Borrower or on any Financed Receivable.
All representations and warranties in the Agreement are true and correct
in all material respects on this date.
Sincerely,
----------------------------------
SIGNATURE
----------------------------------
TITLE
----------------------------------
DATE
-18-
SCHEDULE PERMITTED INDEBTEDENESS
All Indebtedness set forth in Borrower's consolidated financial
statements contained in its Quarterly Report to the Securities and Exchange
Commission for the quarterly period ended March 31, 2001 except as may be noted
below as of June 18, 2001:
Division Liability Type Payee Date of Occurrence Full Liability
-------- -------------- ----- ------------------ --------------
Mercator US Severance Xxxxxxx Xxxxxx Apr 2001 $ 300,000
Mercator US Severance Xxxxx Xxxxxx May 2001 39,933
Mercator US Severance Xxx Xxxxxx Jun 2001 180,000
All Divisions Severance 21% of Workforce April 2001 1,758,198
All Divisions Outplacement 21% of Workforce April 2001 80,180
Mercator US Commission Realtor on Sublease April 2001 846,203
Note: A restructuring charge will be taken in the quarter ending 6/3/01
for approximately $5,700,000 of which $1,758,198, $80,180, and $846,203 are
itemized above in severance, outplacement costs, and realtor's commissions. The
balance of $2,982,586 is comprised of the write-off of leases of which the lease
exposure was footnoted in our 10Q under: Rent Commitments.
Schedule Permitted Liens
1. $3.0 million restricted collateral deposit with Fleet Bank as security
for an outstanding letter of credit.
2. Liens or encumbrances securing indebtedness of up to $375,000.00 in the
aggregate, on any Collateral (other than Financed Receivables) located
outside of the United States.
3. Any lien or encumbrance as permitted under Section 14.13.
4. Purchase money liens securing indebtedness not to exceed $500,000.00 in
the aggregate (i) on equipment acquired or held by Borrower incurred for
financing the acquisition of the equipment or (ii) existing on equipment
when acquired, if the lien is confined to the property and the
improvements and the proceeds of the equipment.
Schedule 6.2 A
Borrower is qualified to do business in the following states:
Connecticut
Florida
Missouri
North Carolina
Xxxxxxxx
Xxxxxxxxxx
Wisconsin
California
South Carolina
Georgia
Borrower has made (or is about to make) application to be qualified to do
business in the following states or is resolving administrative issues which may
have resulted in a lapse/revocation of such qualification:
Arizona
Illinois
Texas
New York
Massachusetts
Schedule 6.2 C
Those proceedings set forth in Item 3 of Borrower's Annual Report, on
Form 10-K, for the fiscal year ended December 31, 2000 and in Item 1 of
Borrower's Quarterly Report on Form 10-Q for the quarterly period ended March
31,2001 and the following, as of May 31, 2001:
1. Caption: Xxxxx Xxxx v. Mercator Software, Inc.
Cause No. 4:01CV00092 RWS
Court: United States District Court
Eastern District of Missouri
Eastern Division
2. Issue: Alleged age discrimination
Caption: Xxxx X. Xxxx x. Xxxxxxxx Software, Inc.
Case #: 0120268
Administrative
Proceeding: State of Connecticut
Commission of Human Rights and Opportunities
Issue: Alleged sex discrimination
3. Captions: Opposition #121,006 before the Trademark Trial and
Appeal Board of the US Patent and Trademark Office
Mercator Software v. Mercata, Inc.
Opposition #120,739 before the Trademark Trial and
Appeal Board of the US Patent and Trademark Office
Mercator Software v. Mercata, Inc. and Design.
*Opposition to CTM (European) Application 1193515 for
MERCATA before the Office of Harmonization in the
Internal Market ("OHIM"), which is a European Community
body which Registers Community trademarks and design
rights within the European Union. *Mercator is currently
in negotiations for a worldwide settlement agreement and
wishes to keep the opposition in place until the matter
can be resolved on a worldwide basis.
1
Schedule 6.2 C
(Continued)
Issue: All of the above deal with Mercator's opposition to the use by
Mercata, Inc. of the xxxx MERCATA for goods and/or services that
are similar to those of Mercator Software, Inc.
4. Several collection matters (by way of collection agencies,
non-litigation) whereby Borrower is seeking payment from customers.
5. Other: Any future action or proceeding, or threatened action or
proceeding, which, if held adversely to Borrower would not (i) have an
effect on, or relate to, any Financed Receivable or (ii) result in
estimated damages in excess of $100,000.00; however, Borrower shall give
prompt notice to Bank of any such action or proceeding.
2
LOCKBOX SERVICE SUBSCRIBER AGREEMENT
SILICON VALLEY BANK ("Bank") and the undersigned company ("Subscriber") agree as
follows:
1. Remittance Banking Service. Commencing June 22, 2001, MERCATOR SOFTWARE,
INC. ("Subscriber") has requested that Silicon Valley Bank ("Bank")
provide Subscriber with the Bank's Lockbox/Remittance Banking Service
facilities (the "Service"), This Service will be provided by the Bank or
its agent ("Agent"), for the deposit of its clients' remittance items.
2. Client Remittances. Clients of Subscriber will be directed to forward
their remittances to Subscriber at a post office address assigned by Bank
or its agent. Bank, or its Agent, shall have unrestricted and exclusive
access to the mail directed to this address. Subscriber agrees it will
not furnish "business reply" mail envelopes to its clients for their
remittances, and any such envelopes mailed to the Bank-designated address
may be refused or returned to sender. Subscriber agrees to notify Bank 30
days in advance of any change in Subscriber's remittance statement and/or
mailing schedule. Bank agrees to forward to Subscriber all mail other
than payments and remittances.
3. Collection of Mail. Bank, or its Agent, will collect mail from the post
office at multiple times each business day.
4. Endorsement of Items. Bank, or its Agent, will endorse, on behalf of
Subscriber, checks and other deposited items that appear to be for
deposit to the credit of Subscriber. Subscriber shall indemnify Bank and
its Agent from any liability that may arise by virtue of Bank's, or its
Agent's, endorsement and negotiation of such checks, except for liability
arising out of Bank's gross negligence or willful misconduct.
5. Subscriber's Account. Bank, or its Agent, will process the checks and
other deposited items and the Bank shall credit the total amount to the
account described below (the "Account"). During the term of this
Agreement, all collected funds held in the Account shall be deemed to be
Subscribers funds for all legal purposes (e.g., attachment, execution and
other forms of legal process). The crediting and collection of items will
be handled under the same terms and conditions as apply to other
commercial deposits. Subscriber acknowledges receipt of a copy of Bank's
account rules and regulations. Subscriber will have access to funds
collected by Service when credited to Subscribers account with Bank.
6. Processing of Items. The processing of checks and other deposited items
will be accomplished in accordance with the various services and options
recited in the attached End-User Set-up Form.
7. Record of Deposited Items. All checks and other deposited items will be
microfilmed by Bank, or its Agent, and the film will be retained by Bank,
or its Agent, for a period not less than one (1) year and a copy of such
records will be forwarded to Subscriber.
8. Restrictive Endorsements. Although Bank, or its Agent, normally forwards,
without processing, checks discovered bearing the typed or handwritten
notation "PAYMENT IN FULL" or other notations ("restrictive
endorsements"), Bank or its Agent, assumes no responsibility for its
failure to do so. Bank, or its Agent, will process in the usual manner
any checks bearing restrictive endorsements where the wording is
imprinted as part of the check or voucher, indicating a general business
practice of the payor. Subscriber will instruct their clients to send all
payments with restrictions such as "paid in full" to a separate location
or person other than the LOCKBOX address or regular payment location so
that the payee can decide whether or not to accept or reject the check,
rather that have the check possibly processed without thought to the
issue.
9. Stock Certificates. Bank, or its Agent, will not be held liable in the
event a stock certificate, bond and/or stock power is received by Bank,
or its Agent, in error; however, Bank, or its Agent, will endeavor to
identify such items and to forward them to Subscriber.
10. Returned Merchandise. Subscriber agrees to instruct its clients not to
send any returned merchandise to the post office address assigned by
Bank, and Subscriber hereby holds Bank, or its Agent, free of liability
in the event such merchandise is received at the address. Bank, or its
Agent, will make all reasonable attempts to forward merchandise received
to Subscriber, at the risk and expense of Subscriber.
11. Commingling. The Bank hereby acknowledges that, of operational necessity,
payments to a given LOCKBOX under the Service must be commingled with
other funds in one or more accounts during the course of processing.
Therefore, no payments that, by virtue of a statutory, regulatory,
contractual or similar restriction, cannot be commingled with other
payments or funds will be accepted under the Service. Subscriber hereby
understands that it will not request the Service if commingling of funds
is not permitted due to regulatory, contractual, or similar restrictions.
Bank, or its Agent will not be responsible for the identification of
these items nor will they accept any responsibility or liability which
may occur as a result of processing such an item in the LOCKBOX.
12. Third Party Secured Creditor. The Subscriber hereby acknowledges that
Bank shall not be obligated to, and Bank shall not, enter into a third
party secured creditor agreement with any creditor of a LOCKBOX
Subscriber with respect to any payments or funds processed through the
LOCKBOX system as part of the Service. Subscriber agrees not to
participate in the Service if required to enter into a third party
secured creditor agreement by another party.
13. Confidentiality. Bank, or its Agent, agrees that all information
concerning the clients of the Subscriber which comes into Bank's, or its
Agent's, possession pursuant to this Agreement will be treated in the
same confidential manner as is information relating to the accounts of
Bank's depositors.
14. Fees. Unless otherwise agreed by Bank. Subscriber shall pay Bank the fees
set forth for this service in Bank's most current Fee Schedule, plus
additional fees for the performance of services beyond the terms of this
Agreement, or resulting from increased expenses incurred by the failure
of Subscriber to furnish, on demand, data in a form acceptable to Bank.
15. Limitations on Bank Liability. In addition to the limitations set forth
in paragraph 8, above, Bank's, or its Agent's, liability will be limited
only to acts resulting from Bank's, or its Agent's, gross negligence or
willful misconduct and shall not exceed Bank's fees and charges to
Subscriber in connection with the Service for the month in which damages
are suffered. Under no circumstances will Bank, or its Agent, be held
liable for any general or consequential damages or damages caused, in
whole or in part, by the action or inaction of Subscriber or any agent or
employee of Subscriber. Bank, or its Agent, will not be liable for any
damage, loss, liability or delay caused by accidents, strikes, fire,
flood, war, riot, equipment breakdown, electrical or mechanical failure,
acts of God, or any cause which is reasonably unavoidable or beyond its
reasonable control. Subscriber agrees that the fees charged by Bank for
the performance of this service shall be deemed to have been established
in contemplation of these limitations on Bank's, or its Agent's,
liability.
16. Indemnification. Subscriber agrees to indemnify Bank, its parent Company,
affiliates, subsidiaries, or its Agent, against any and all damages,
losses or liabilities, including without limitation reasonable attorneys'
fees and court costs, which results, directly or indirectly, in whole or
in part, from any negligence or fraud of Subscriber, its Agent, or any
employee of Subscriber or from any performance by Bank, or its Agent, of
Bank's obligations under this Agreement, except for Bank's gross
negligence or willful misconduct.
17. Subscriber's Records. This Agreement and the performance by Bank, or its
Agent, or its services hereunder shall not relieve Subscriber of any
obligation imposed by law or contract regarding the maintenance of
records or from employing adequate audit, account and review practices as
are customarily followed by similar businesses.
18. Amendment and Termination. Bank may amend the terms of this Agreement
from time to time by giving written notice to Subscriber at the address
set forth below or by sending Subscriber a copy of
the amended Agreement. If Bank raises any fee(s) or deletes any
service(s), it agrees to give Subscriber 30 days' prior notice. Bank may
immediately terminate this Agreement in the event that Subscriber or any
third party disputes the ownership of the Account or of the funds on
deposit in the Account. Otherwise, either party may terminate this
Agreement on 30 days' written notice to the other.
19. Governing Law. This Agreement shall be governed by the laws of the State
of California. Any dispute between the parties to this contract shall be
filed in the Court having the appropriate jurisdiction in the County of
Santa Clara, California.
20. Notices. Notices or demands by either party about this Agreement must be
in writing and personally delivered (evidenced by receipt of delivery) or
sent by an overnight delivery service (evidenced by receipt of delivery),
by certified mail, postage prepaid, return receipt requested to the
addresses listed at the beginning of this Agreement. A party may change
notice address by written notice to the other party.
Depository Account Number:
-------------------
Dated 6/22/01 Dated
------- -------
MERCATOR SOFTWARE, INC. SILICON VALLEY BANK
00 XXXXXXX XX. 0000 Xxxxxx Xxxxx, XX000
---------------------------
XXXXXX, XX 00000 Xxxxx Xxxxx, XX 00000
---------------------------
By /s/ Xxxxxx X. Xxxxx By
------------------------ ------------------------
(authorized signature) (authorized signature)
Title SECRETARY Title
--------------------- ---------------------
18. Amendment and Termination. Bank may amend the terms of this Agreement
from time to time by giving written notice to Subscriber at the address
set forth below or by sending Subscriber a copy of the amended Agreement.
If Bank raises any fee(s) or deletes any service(s), it agrees to give
Subscriber 30 days' prior notice. Bank may immediately terminate this
Agreement in the event that Subscriber or any third party disputes the
ownership of the Account or of the funds on deposit in the Account.
Otherwise, either party may terminate this Agreement on 30 days' written
notice to the other.
19. Governing Law. This Agreement shall be governed by the laws of the State
of California. Any dispute between the parties to this contract shall be
filed in the Court having the appropriate jurisdiction in the County of
Santa Clara, California.
20. Notices. Notices or demands by either party about this Agreement must be
in writing and personally delivered (evidenced by receipt of delivery) or
sent by an overnight delivery service (evidenced by receipt of delivery),
by certified mail, postage prepaid, return receipt requested to the
addresses listed at the beginning of this Agreement. A party may change
notice address by written notice to the other party.
Depository Account Number:
-------------------
Dated Dated 6/25/01
------- -------
MERCATOR SOFTWARE, INC. SILICON VALLEY BANK
0000 Xxxxxx Xxxxx, XX000
---------------------------
Xxxxx Xxxxx, XX 00000
---------------------------
By By /s/ Xxxxx Xxxxx
------------------------ ------------------------
(authorized signature) (authorized signature)
Title Title SVP
--------------------- ---------------------
AMENDMENT TO MAIN LOCKBOX AGREEMENT
MERCATOR SOFTWARE, INC. ("Subscriber") shall hold all payments on, and proceeds
of, Receivables in trust for Silicon Valley Bank ("Bank"), and Subscriber shall
Immediately deliver all such payments and proceeds to Bank in their original
form, duly endorsed in blank, to be applied to the Obligations in such order as
Bank shall determine.
Subscriber hereby agrees to accept a change in the disposition of its lockbox
_______________ proceeds from the current account #_________________ to the Bank
Cash Collateral Account #____________________ beginning immediately. We
understand that Bank may, in its discretion, require that all proceeds of
Collateral be deposited by Subscriber into a lockbox account, or such other
"blocked account" as Bank may specify. Bank or its designee may, at any time,
notify Account Debtors that Receivables have been assigned to Bank
This Amendment Is subject to the terms and conditions of the Lockbox Service
Subscriber Agreement between Subscriber and Bank of even date herewith.
DATED: , 2001
-----------------
Subscriber: Bank:
MERCATOR SOFTWARE, INC. SILICON VALLEY BANK
00 XXXXXXX XX. 0000 Xxxxxx Xxxxx, XX000
---------------------------
XXXXXX, XX 00000 Xxxxx Xxxxx, XX 00000
---------------------------
By /s/ Xxxxxx X. Xxxxx By /s/ Xxxxx Xxxxx
------------------------ ------------------------
(authorized signature) (authorized signature)
Title SECRETARY Title SVP
--------------------- ---------------------
ANTIDILUTION AGREEMENT
THIS ANTIDILUTION AGREEMENT is entered into as of June 22, 2001, by and
between Silicon Valley Bank ("Purchaser") and Mercator Software, Inc., a
Delaware corporation (the "Company").
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant (the "Warrant") pursuant to
which Purchaser has the right to acquire from the Company the Shares of Common
Stock (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company desire
to set forth the adjustment in the number of Shares issuable upon exercise of
the Warrant as a result of a Diluting Issuance (as defined in the Warrant).
C. Capitalized terms used herein shall have the same meaning as set forth
in the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and conditions hereinafter set forth, the parties hereto mutually agree as
follows:
1. Definitions. As used in this Antidilution Agreement, the
following terms have the following respective meanings:
(a) "Option" means any right, option, or warrant to
subscribe for, purchase, or otherwise acquire common stock or Convertible
Securities.
(b) "Convertible Securities" means any evidences of
indebtedness, shares of stock, or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
(c) "Issue" means to grant, issue, sell, or assume,
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all Common Stock
(including reissued shares) Issued (or deemed to be issued pursuant to Section
2) after the date of the Warrant. Additional Common Shares does not include,
however, any Common Stock Issued in a transaction described in Sections 2.1 and
2.2 of the Warrant; any Common Stock Issued upon conversion of Options and
Convertible Securities outstanding as of the date of the Warrant; the Shares; or
Common Stock Issued pursuant to a stock option plan which was approved by the
Board of Directors of the Company as an incentive to, or in a nonfinancing
transaction to employees, officers, directors, or consultants to the Company.
2. Deemed Issuance of Additional Common Shares. The shares of Common
Stock ultimately issuable upon exercise of an Option (including the shares of
Common Stock ultimately issuable upon conversion or exercise of a Convertible
Security issuable pursuant to an Option) are deemed to be Issued when the Option
is Issued. The shares of Common Stock ultimately issuable upon conversion or
exercise of a Convertible Security (other than a Convertible Security Issued
pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of Common Stock issuable is determined without
regard to any future adjustments permitted under the instrument creating the
Options or Convertible Securities.
3. Adjustment of Warrant Price for Diluting Issuances.
3.1 Weighted Average Adjustment. If the Company issues Additional
Common Shares after the date of the Warrant and the consideration per Additional
Common Share (determined pursuant to Section 4) is less than the Warrant Price
in effect immediately before such Issue, the Warrant Price shall be reduced,
concurrently with such Issue, to a price (calculated to the nearest hundredth of
a cent) determined by multiplying the Warrant Price by a fraction:
(a) the numerator of which is the amount of such Common Stock
outstanding immediately before such Issue (or deemed to be outstanding) plus the
amount of Common Stock that the aggregate consideration received by the Company
for the Additional Common Shares would purchase at the Warrant Price in effect
immediately before such Issue, and
(b) the denominator of which is the amount of Common Stock
outstanding immediately before such Issue (or deemed to be outstanding) plus the
number of such Additional Common Shares.
3.2 Adjustment of Number of Shares. Upon each adjustment of the
Warrant Price, the number of Shares issuable upon exercise of the Warrant shall
be increased to equal the quotient obtained by dividing (a) the product
resulting from multiplying (i) the number of Shares issuable upon exercise of
the Warrant and (ii) the Warrant Price, in each case as in effect immediately
before such adjustment, by (b) the adjusted Warrant Price.
3.3 Securities Deemed Outstanding. For the purpose of this Section
3, all securities issuable upon exercise of any outstanding Convertible
Securities or Options, warrants, or other rights to acquire securities of the
Company shall be deemed to be outstanding.
4. Computation of Consideration. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:
(a) Cash shall be valued at the amount of cash received by the
Corporation, excluding amounts paid or payable for accrued interest or accrued
dividends.
(b) Property. Property other than cash shall be computed at the
fair market value thereof at the time of the Issue as determined in good faith
by the Board of Directors of the Company.
(c) Mixed Consideration. The consideration for Additional Common
Shares Issued together with other property of the Company for consideration that
covers both shall be determined in good faith by the Board of Directors.
(d) Options and Convertible Securities. The consideration per
Additional Common Share for Options and Convertible Securities shall be
determined by dividing:
(i) the total amount, if any, received or receivable by the
Company for the Issue of the Options or Convertible Securities, plus the minimum
amount of additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a subsequent
adjustment of such consideration) payable to the Company upon exercise of the
Options or conversion of the Convertible Securities, by
(ii) the maximum amount of Common Stock (as set forth in
the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) ultimately issuable upon the
exercise of such Options or the conversion of such Convertible Securities.
2
5. General.
5.1 Governing Law. This Antidilution Agreement shall be governed
in all respects by the laws of the Commonwealth of Massachusetts as such laws
are applied to agreements between Massachusetts residents entered into and to be
performed entirely within Massachusetts.
5.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, permitted assigns, heirs, executors and administrators of
the parties hereto.
5.3 Entire Agreement. Except as set forth below, this Antidilution
Agreement and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
5.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested, or by
personal delivery (subject to evidence of receipt) or by overnight courier
(subject to evidence of receipt) addressed (a) if to Purchaser at Purchaser's
address as set forth below, or at such other address as Purchaser shall have
furnished to the Company in writing, or (b) if to the Company, at the Company's
address set forth below, or at such other address as the Company shall have
furnished to the Purchaser in writing.
5.5 Waiver. This Antidilution Agreement and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
5.6 Severability. In case any provision of this Antidilution
Agreement shall be invalid, illegal, or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Antidilution Agreement
shall not in any way be affected or impaired thereby.
5.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Antidilution Agreement.
3
5.8 Counterparts. This Antidilution Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
PURCHASER: COMPANY:
SILICON VALLEY BANK MERCATOR SOFTWARE, INC.
By: By: /s/ Xxxxxx X. Xxxxx
------------------------------- -------------------------------
Name: Name: XXXXXX X. XXXXX
Title: Title: SECRETARY
Address: Address: 00 Xxxxxxx Xxxx
-------------------------- Xxxxxx, Xxxxxxxxxxx 00000
0000 Xxxxxx Xxxxx
--------------------------
Xxxxx Xxxxx, XX 00000
--------------------------
4
5.8 Counterparts. This Antidilution Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
PURCHASER: COMPANY:
SILICON VALLEY BANK MERCATOR SOFTWARE, INC.
By: /s/ Xxxxx Xxxxx By:
------------------------------- -------------------------------
Name: Xxxxx Xxxxx Name:
Title: SVP Title:
Address: Address: 00 Xxxxxxx Xxxx
-------------------------- Xxxxxx, Xxxxxxxxxxx 00000
--------------------------
--------------------------
4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of June 22, 2001,
by and between Silicon Valley Bank ("Purchaser") and Mercator Software, Inc., a
Delaware corporation (the "Company").
RECITALS
A. Concurrently with the execution of this Agreement, Purchaser is
acquiring from the Company a Warrant to Purchase Stock (the "Warrants") pursuant
to which Purchaser has rights to acquire from the Company the Shares (as defined
in the Warrant), which Shares when issued shall be shares of the Company's
common stock, $.01 par value per share ("Common Stock").
B. By this Agreement, Purchaser and the Company desire to set forth the
registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants and conditions hereinafter set forth, the parties hereto
mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act"), and
the declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means (i) the Shares,
at any time when the Shares are shares of Common Stock, and (ii) any Common
Stock or other securities of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares. Shares shall cease to be Registrable Securities when
they are eligible to be sold pursuant to Rule 144(k) of the Securities Act.
(c) The terms "Holder" or "Holders" means Purchaser and its
qualifying transferees under subsection 1.9 hereof who hold Registrable
Securities.
(d) The term "SEC" means the Securities and Exchange
Commission.
(e) The terms "Form S-1," "Form S-3" etc. shall mean those
forms with such designations as are required by the SEC and any successor or
replacement forms adopted by the SEC.
1.2 Company Registration.
(a) Registration. For a period of two (2) years after the
Shares are so acquired, the Company shall determine to register any of its
securities, for its own account or the account of any of its shareholders, other
than a registration on Form S-8 or on Form S-4 or on Form S-3 relating solely to
an SEC Rule 145 transaction or relating solely to a merger, recapitalization,
share exchange, consolidation, acquisition or similar transaction, the Company
will:
(i) promptly give to each Holder written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) include in such registration (and
qualifications), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within 30 days after
receipt of such written notice from the Company, by any Holder or Holders,
except as set forth in subsection 1.2(c) below.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving a firm-commitment
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to subsection l.2(a)(i). In such event the right of any
Holder to registration pursuant to this subsection 1.2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form (and not inconsistent with the terms
hereof) with the underwriter or underwriters selected for such underwriting by
the Company.
(c) In the case of any registration of Common Stock by the
Company in a firm-commitment underwriting, if the managing underwriters give
written advice to the Company that marketing factors require a limitation on all
or any part of the number of shares of Common Stock (or other securities
convertible into or exercisable or exchangeable for Common Stock) to be offered
and sold by stockholders of the Company in such offering, there shall be
included in the offering: (i) first, all securities proposed by Company to be
sold for its account; and (ii) second, that number of shares of Common Stock, if
any, requested to be included in such registration statement by Holders and by
other stockholders of the Company having contractual rights to include shares in
such registration, on a pro rata basis based upon the number of shares of Common
Stock each Holder and each such other stockholder beneficially owns, except that
where such a registration is solely for another shareholder, such shareholder
shall be considered before Holder.
1.3 Intentionally Omitted.
1.4 Expenses of Registration. All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, underwriting fees, discounts and commissions, fees and
disbursements of counsel for the Company and expenses of any special audits
incidental to or required by such registration, shall be borne by the Company,
provided however that the Holders shall pay the fees and expenses of their
respective counsel and accountants and underwriting discounts and commissions
and transfer taxes in respect of any such registration or compliance being
registered. All expenses of any registered offering not otherwise borne by the
Company will be borne pro rata among the Holders, any other shareholders of the
Company participating in such offering and the Company.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense
the Company will:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to 90 days (the "Effective
Period"),provided, however, that if, at any
2
time after giving notice pursuant to Section 1.2(a) hereof and prior to the
effective date of any such registration statement, the Company shall determine
for any reason not to register or to delay registration of its securities, the
Company may give written notice of such determination to each Holder who has
requested inclusion of Registrable Securities in such registration statement
and, thereupon the Company (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities and
(ii) in the case of a determination to delay registration, shall be permitted to
delay registering any Registrable Securities for the same period as the delay in
registering other securities included in such registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) If required by law, use its best efforts to register
and qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement provided that all other shareholders of the
Company participating in such offering do the same.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and each Holder shall thereupon forthwith discontinue use of such
prospectus until receipt of notice from the Company that use of such prospectus
may be resumed or receipt of prospectus supplement or amendment so that such
prospectus will not contain such untrue statement or omission.
1.6 Indemnification.
(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act
("controlling person"), with respect to which registration, qualification or
compliance of Registrable Securities has been effected pursuant to this
Registration Rights Agreement, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities
3
Exchange Act of 1934, as amended, and the rules and regulations thereunder
("Exchange Act") or any state securities law applicable to the Company or any
rule or regulation promulgated any such state law and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each person controlling such Holder,
within a reasonable amount of time after incurred for any reasonable legal and
any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 1.6(a) shall not apply
to amounts paid in settlement of any such claim, loss, damage, liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld or delayed); and provided further,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission made in reliance upon and conformity with written
information furnished to the Company by an instrument duly executed by or on
behalf of such Holder specifically for use therein, and provided further that
the indemnity agreement contained in this subsection 1.6(a) shall not apply to
the extent that any such claim, loss, damage or liability arises out of or is
based on the Holder's use of a prospectus after the Company has notified the
Holder under Section 1.4(f).
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers and controlling persons, each
underwriter, if any, of the Company's securities covered by such a registration
statement, and each controlling person of such underwriter, and each other
Holder, each of its officers, directors, partners and controlling persons,
against all claims, losses, expenses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by or on behalf of such
Holder specifically for use therein; provided, however, that the indemnity
agreement contained in this subsection 1.6(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder, (which consent shall
not be unreasonably withheld or delayed); and provided further, that the total
amount for which any Holder shall be liable under this subsection 1.6(b) shall
not in any event exceed the aggregate net proceeds received by such Holder from
the sale of Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this
subsection 1.6 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted in
prejudice to the Indemnifying Party; and provided further, that an Indemnified
Party (together with all other Indemnified Parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would in the unqualified written opinion of counsel to the
4
Holder, be inappropriate due to actual or potential differing interests between
such Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 1.6 is
due in accordance with its terms but for any reason is judicially determined to
be unenforceable against the Indemnifying Party or otherwise unavailable to the
Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company, on the one hand, and the selling Holders, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and such selling
Holders shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement, or omission or alleged omission, of material
fact related to the information supplied by the Company or such selling Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 1.6(d) were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 1.6(d), (i) in
no case shall any Holder be liable or responsible for any amount in excess of
the net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such registration; and (ii) no person adjudged guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not adjudged guilty of
such fraudulent misrepresentation. Any party entitled to contribution shall,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 1.6(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties from whom contribution may be sought shall not, in
the absence of actual prejudice to such party or parties, relieve it or them
from such contribution obligation. No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its
written consent.
1.7 Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.8 Rule 144 Reporting. With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees for a two (2) year period after the Shares are issued to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
5
(c) upon the request of the Holder, so long as a Holder
owns any Registrable Securities, to furnish to such Holder within a reasonable
period of time (but in no event to exceed more than five (5) business days) a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, and of the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements), and
such other reports and documents so filed by the Company as the Holder may
reasonably request in complying with any rule or regulation of the SEC allowing
the Holder to sell any such securities without registration.
1.9 Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2, 1.3 and 1.8 may be assigned to a
transferee or assignee of all of a Holder's Registrable Securities as a block
not sold to the public, provided, that the Company is given written notice by
such Holder at the time of or within a reasonable time after said transfer,
stating the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being assigned.
2. General.
2.1 Waivers and Amendments. With the written consent of the record
or beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all of
the Holders of the Registrable Securities. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing. This Agreement
or any provision hereof may be changed, waived, discharged or terminated only by
a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the Commonwealth of Massachusetts as such laws are
applied to agreements between Massachusetts residents entered into and to be
performed entirely within Massachusetts.
2.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested, or by
personal delivery (subject to evidence of receipt) or by overnight courier
(subject to evidence of receipt) addressed (a) if to Holder, at such Holder's
address(es) as set forth below, or at such other address(es) as such Holder
shall have furnished to the Company in writing, or (b) if to the Company, at the
Company's address set forth below, or at such other address as the Company shall
have furnished to the Holder in writing.
6
2.6 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed by their duly authorized representatives as of the date
first above written.
PURCHASER COMPANY
SILICON VALLEY BANK MERCATOR SOFTWARE, INC.
By: By: /s/ Xxxxxx X. Xxxxx
--------------------------------- ---------------------------------
Name: Name: XXXXXX X. XXXXX
------------------------------- -------------------------------
Title: Title: SECRETARY
------------------------------ ------------------------------
Address: Address: 00 Xxxxxxx Xx.
---------------------------- ----------------------------
WILTON, CONN. 06897
copy to: Silicon Valley Bank
Treasury Department
0000 Xxxxxx Xxxxx, XX-000
Xxxxx Xxxxx, XX 00000
7
2.6 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed by their duly authorized representatives as of the date
first above written.
PURCHASER COMPANY
SILICON VALLEY BANK MERCATOR SOFTWARE, INC.
By: /s/ Xxxxx Xxxxx By:
--------------------------------- ---------------------------------
Name: Xxxxx Xxxxx Name:
------------------------------- -------------------------------
Title: SVP Title:
------------------------------ ------------------------------
Address: Address:
---------------------------- ----------------------------
copy to: Silicon Valley Bank
Treasury Department
0000 Xxxxxx Xxxxx, XX-000
Xxxxx Xxxxx, XX 00000
7
Exhibit 10.23
(continued)
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT AND LAWS OR PURSUANT TO RULE 144 AND EXEMPTIONS UNDER
APPLICABLE STATE SECURITIES LAWS, OR SUBJECT TO SECTIONS 4.3 HEREOF, AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Issuer: Mercator Software, Inc., a Delaware corporation
Number of Shares: 220,000, subject to adjustment
Class of Stock: Common Stock, $.0l par value per share
Exercise Price: $4.00 per share, subject to adjustment
Issue Date: June 22, 2001
Expiration Date: As set forth below
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, this Warrant is issued to SILICON VALLEY
BANK (together with its successors and permitted assigns, the "Holder") by
MERCATOR SOFTWARE, INC., a Delaware corporation (the "Company").
Subject to the terms and conditions hereinafter set forth, the Holder is
entitled upon surrender of this Warrant and the duly executed subscription form
annexed hereto as Appendix 1, at the office of the Company, 00 Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxx 00000, or such other office as the Company shall notify the
Holder of in writing, to purchase from the Company Two Hundred Twenty Thousand
(220,000) fully paid and non-assessable shares (the "Shares") of the Company's
Common Stock, $.01 par value per share (the "Class"), at a purchase price per
Share of Four Dollars ($4.00) (the "Exercise Price"). Until such time as this
Warrant is exercised in full or expires, the Exercise Price and the number
Shares are subject to adjustment from time to time as hereinafter provided. This
Warrant may be exercised in whole or in part at any time and from time to time
until 5:00 PM, Eastern time June 22, 2008 (the "Expiration Date").
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company a check for the aggregate Exercise Price for the Shares
being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as
specified in Section 1.1, Holder may from time to time convert this Warrant, in
whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise issuable
upon exercise of this Warrant minus the aggregate Exercise Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.4.
1.3 Fair Market Value.
1.3.1 If shares of the Class are traded on a nationally
recognized securities exchange or over the counter market, the fair market value
of a Share shall be the price of the last sale of a share of the Class reported
for the business day immediately before Holder delivers its Notice of Exercise
to the Company.
1.3.2 If shares of the Class are not traded on a nationally
recognized securities exchange or over the counter market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment. The foregoing notwithstanding, if Holder advises the Board
of Directors in writing that Holder disagrees with such determination, then the
Company and Holder shall promptly agree upon a reputable investment banking firm
to undertake such valuation. If the valuation of such investment banking firm
is greater than that determined by the Board of Directors, then all fees and
expenses of such investment banking firm shall be paid by the Company. In all
other circumstances, such fees and expenses shall be paid by Holder. The
valuation determined by such investment banking firm shall be conclusive in any
event.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company at its sole expense shall
promptly deliver to Holder (i) certificates for the Shares acquired upon such
exercise, and (ii) if this Warrant has not been fully exercised or converted and
has not expired, a new warrant of like tenor representing the Shares for which
this Warrant is still exercisable.
1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 Repurchase on Sale, Merger, or Consolidation of the Company.
1.6.1. "Acquisition". For the purpose of this Warrant,
"Acquisition" means any sale, assignment, transfer, exclusive license, or other
disposition of all or substantially all of the assets of the Company, or any
acquisition, reorganization, consolidation, or merger of the Company where the
holders of the Company's outstanding voting equity securities immediately prior
to the transaction beneficially own less than 50.1% of the outstanding voting
equity securities of the surviving or successor entity immediately following the
transaction.
-2-
1.6.2. Assumption of Warrant. Upon the closing of any
Acquisition the successor or surviving entity shall assume the obligations of
this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing. The Exercise Price
shall be adjusted accordingly, and the Exercise Price and number and class of
Shares shall continue to be subject to adjustment from time to time in
accordance with the provisions hereof.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Dividends, Splits, Etc. If the Company declares or pays a
dividend on the outstanding shares of the Common Stock (as defined below),
payable in Common Stock, other securities or any type of property (other than
cash dividends), or subdivides the outstanding Common Stock into a greater
amount of Common Stock of the outstanding shares, then upon exercise of this
Warrant, for each Share acquired, Holder shall receive, without cost to Holder,
the total number and kind of securities or property to which Holder would have
been entitled had Holder owned the Shares of record as of the date the dividend
or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, reorganization or other event that
results in a change of the number and/or class of the securities issuable upon
exercise or conversion of this Warrant, Holder shall be entitled to receive,
upon exercise or conversion of this Warrant, the number and kind of securities
and property that Holder would have received for the Shares if this Warrant had
been exercised immediately before such reclassification, exchange, substitution,
reorganization or other event. The Company or its successor shall promptly issue
to Holder a new warrant of like tenor for such new securities or other property.
The new warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Exercise Price and to the
number of securities or property issuable upon exercise of the new warrant. The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, reorganizations or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding shares of
the Class are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Exercise Price shall be proportionately increased
and the number of Shares issuable upon exercise or conversion of this Warrant is
exercisable shall be proportionately decreased.
2.4 No Impairment. The Company shall not, by amendment of the
Certificate of Incorporation (the "Certificate") or its by-laws or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out all of the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder's rights under this
Article against impairment.
-3-
2.5 Adjustments for Dilutive Issuances. In the event of the issuance
(a "Diluting Issuance") by the Company, after the Issue Date of this Warrant, of
Common Stock at a price per share less than the Exercise Price or securities
convertible into Common Stock at a conversion price per share less than the
Exercise Price, then the number of Shares issuable upon exercise of this
Warrant, shall be adjusted as a result of Diluting Issuances in accordance with
that certain Antidilution Agreement dated as of the date of this Warrant, by and
between Holder and the Company. Under no circumstances shall the aggregate
Exercise Price payable by Holder upon exercise of this Warrant increase as a
result of any adjustment arising from a Diluting Issuance.
2.6 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional Share interest
arises upon any exercise or conversion of this Warrant, the Company shall
eliminate such fractional Share interest by paying Holder an amount computed by
multiplying such fractional interest by the Fair Market Value (determined in
accordance with Section 1.3 above) of one Share.
2.7 Certificate as to Adjustments. Upon each adjustment of the
Exercise Price, number of class of Shares or number of shares of Common Stock or
other securities for which the Shares are convertible or exchangeable, the
Company at its expense shall promptly compute such adjustment, and furnish
Holder with a certificate of its chief financial officer setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall
at any time and from time to time (but in no event more than once every six
months), upon written request, furnish Holder with a certificate setting forth
the Exercise Price, number and class of Shares and conversion ratio in effect
upon the date thereof and the series of adjustments leading to such Exercise
Price, number and class of Shares and conversion ratio.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents
and warrants to the Holder as follows:
(a) All Shares which maybe issued upon the due exercise of this
Warrant, and all Common Stock or other securities, if any, issuable upon due
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
(b) The execution and delivery by the Company of this Warrant
and the performance of all obligations of the Company hereunder, including the
issuance to Holder of the right to acquire the Shares, have been duly authorized
by all necessary corporate action on the part of the Company, and this Warrant
Agreement is not inconsistent with the Certificate and/or the Company's by-laws,
does not, to the best of the Company's knowledge, contravene any law or
governmental rule, regulation or order applicable to it, does not and will not
contravene any provision of, or constitute a default under, any material
indenture, mortgage, contract or other instrument to which it is a party or by
which it is bound, and constitutes a legal, valid and binding
-4-
agreement of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws, judicial decisions or principles of equity
relating to or affecting the enforcement of creditors' rights generally
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
(c) The authorized capital stock of the Company consists of
195,000,000 shares, consisting of 190,000,000 shares of common stock, $.0l par
value per share ("Common Stock"), and 5,000,000 shares of preferred stock, $.01
par value per share, of which 5,000,000 shares have been designated Convertible
Preferred Stock. Schedule 3.1(c) sets forth all of the outstanding shares of
common stock and preferred stock and outstanding options, warrants, convertible
securities, convertible debentures, and rights to acquire, subscribe for, and/or
purchase any Common Stock, preferred stock and/or other capital stock of the
Company or any securities or debentures convertible into or exchangeable for
Common Stock, preferred stock and/or other capital stock of the Company.
(d) The Company covenants that it shall at all times cause to be
reserved and kept available out of its authorized and unissued shares such
number of shares of its Common Stock and other securities as will be sufficient
to permit the exercise in full of this Warrant.
3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon any of its capital stock,
whether in cash, property, stock, or other securities and whether or not a
regular cash dividend; (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or
series or other rights; (c) to effect any reclassification or recapitalization
of any of its securities; (d) to merge or consolidate with or into any other
corporation, or sell, lease, license, or convey all or substantially all of its
assets, or to liquidate, dissolve or wind up, then, in connection with each such
event, the Company shall give Holder (1) at least 20 days prior written notice
of the date on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of securities
of the Company shall be entitled to receive such dividend, distribution or
rights) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of securities
of the Company will be entitled to exchange their securities of the Company for
securities or other property deliverable upon the occurrence of such event).
3.3 Information Rights. So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within one-hundred and twenty (120) days after
the end of each fiscal year of the Company, the annual audited financial
statements of the Company certified by independent public accountants of
recognized standing and (c) such other financial statements required under and
in accordance with any loan documents between Holder and the Company or if there
are no such requirements (or if the subject loan(s) no longer are outstanding),
then within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements. Subclauses
-5-
(b) and (c) shall be satisfied by delivery to Holder of the Company's Annual
Report on Form 10-K and Quarterly Reports on Form l0-Q.
3.4 Registration Under Securities Act of 1933, as amended. The
shares of Common Stock issuable upon conversion of the Shares shall have certain
registration rights as set forth in that certain Registration Rights Agreement
of even date herewith between Holder and the Company (the "Registration Rights
Agreement"). The Company represents and warrants to Holder that the Company's
execution, delivery and performance of the Registration Rights Agreement (a) has
been duly authorized by all necessary corporate action of the Company's Board of
Directors and shareholders, (b) will not violate the Certificate or the
Company's by-laws, each as amended, (c) will not violate or cause a breach or
default (or an event which with the passage of time or the giving of notice or
both, would constitute a breach or default) under any material agreement,
instrument, mortgage, deed of trust or other arrangement to which the Company is
a party or by which it or any of its assets is subject or bound, and (d) does
not require the approval, consent or waiver of or by any shareholder,
registration rights holder or other third party which approval, consent or
waiver has not been obtained as of the date of issuance of this Warrant.
ARTICLE 4. MISCELLANEOUS.
4.1 Automatic Conversion upon Expiration. In the event that, upon
the Expiration Date, the fair market value of one Share (or other security
issuable upon the exercise hereof) as determined in accordance with Section 1.4
above is greater than the Exercise Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Section 1.2 above as to all Shares (or such other securities) for
which it shall not previously have been exercised or converted, and the Company
shall promptly deliver a certificate representing the Shares (or such other
securities) issued upon such conversion to the Holder.
4.2 Legends. This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT AND LAWS, OR PURSUANT TO RULE 144 AND
EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAWS, OR, SUBJECT TO
SECTION 4.3 OF THAT CERTAIN WARRANT ISSUED ON JUNE 22, 2001, BY THE
CORPORATION TO SILICON VALLEY BANK, AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Holder represents to the Corporation that it is acquiring the Warrant
and will acquire the Shares for its own account and not as a nominee for any
other party and not with a view to any public distribution thereof, subject to
any requirement of law that the disposition of such securities
-6-
shall at all times be within the control of the owner thereof. The acquisition
of any Shares, upon exercise of a Warrant shall constitute the Holder's
reaffirmation of such representation. The Holder further represents to the
Corporation that it is an "accredited investor" as defined in Regulation D of
The Securities Act of 1933. The Holder understands that the Warrants and the
Shares have not been registered under said Securities Act and may only be sold
or otherwise disposed of in compliance with said Securities Act. The Holder by
its acceptance of such security further understands that such security may bear
a legend as contemplated by this Section 4.2.
4.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares (and the securities, if any, issued and issuable upon conversion of
the Shares) may not be transferred or assigned in whole or in part without
compliance with applicable federal and state securities laws by the transferor
and the transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company). The Company shall not require
Holder to provide an opinion of counsel if the transfer is to Silicon Valley
Bancshares (Holder's parent company) or any other affiliate of Holder or if (a)
there is no material question as to the availability of current information as
referenced in Rule 144(c), (b) Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, (c) the selling broker represents that it
has complied with Rule 144(f), and (d) the Company is provided with a copy of
Holder's notice of proposed sale.
4.4 Transfer Procedure. Following its receipt of this executed
Warrant, Silicon Valley Bank will transfer same in whole or in part to its
parent corporation, Silicon Valley Bancshares, and thereafter Holder and/or
Silicon Valley Bancshares may, subject to Section 4.3 above, transfer all or
part of this Warrant and/or the Shares (or the securities, if any, issued and
issuable upon conversion of the Shares) at any time and from time to time to The
Silicon Valley Bank Foundation or any other transferee by giving the Company
notice of the portion of the Warrant being transferred setting forth the name,
address and taxpayer identification number of the transferee and surrendering
this Warrant to the Company for reissuance to the transferee(s) (and Holder if
applicable); provided, that at all times, Holder shall not, without the prior
written consent of the Company, transfer this Warrant (or any part hereof), any
Shares, or any securities issued or issuable upon conversion of the Shares, to
any person who directly competes with the Company, unless such transfer is in
connection with an Acquisition of the Company by any such person.
4.5 Notices. All notices and other communications from the Company
to the Holder, or vice versa, shall be deemed delivered and effective when given
personally (subject to evidence of receipt) or mailed by first-class registered
or certified mail, postage prepaid, return receipt, or sent via reputable
overnight courier service, fee prepaid (subject to evidence of receipt), at such
address as may have been furnished to the Company or the Holder, as the case may
be, in writing by the Company or such holder from time to time, but in all
cases, unless instructed in writing otherwise, the Company shall deliver a copy
of all notices to Holder to Silicon Valley Bank, Treasury Department, 0000
Xxxxxx Xxxxx, XX-000, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
-7-
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Survival of Representations, Warranties and Agreements. All
representations and warranties of the Company contained herein shall survive the
date of this Warrant, the exercise or conversion of this Warrant (or any part
hereof) and/or the termination or expiration of rights hereunder. All agreements
of the Company and the Holder contained herein shall survive indefinitely until,
by their respective terms, they are no longer operative.
-8-
4.9 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law.
"COMPANY"
MERCATOR SOFTWARE, INC.
By: /s/ Xxx X. Xxxx
-----------------------------------------
Name: Xxx X. Xxxx
---------------------------------------
(Print)
Title: Chairman of the Board, President
and Chief Executive Officer
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: /s/ XXXXXX XXXXX
---------------------------------------
(Print)
Title: Secretary
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ________ shares of the
__________________stock of ________________ pursuant to Section 1.1 of the
attached Warrant, and tenders herewith payment of the Exercise Price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in Section 1.2 of the attached Warrant. This
conversion is exercised with respect to _________ of shares of
the _______________________ Stock of __________________.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
--------------------------------------------------
(Name)
--------------------------------------------------
--------------------------------------------------
(Address)
3. The undersigned represents to Mercator Software, Inc. ("Company") that
it is acquiring the Shares for its own account and not as a nominee for any
other party and not with a view to any public distribution thereof, subject to
any requirement of law that the disposition of such securities shall at all
times be within the control of the owner thereof. The undersigned further
represents to the Company that it is an "accredited investor" as defined in
Regulation D of The Securities Act of 1933. The undersigned understands that the
Shares have not been registered under said Securities Act and may only be sold
or otherwise disposed of in compliance with said Securities Act. The undersigned
by its acceptance of such security further understands that such security may
bear a legend as contemplated by Section 4.2 of that certain Warrant issued on
_______, 2001, by the Company to Silicon Valley Bank.
------------------------------
(Signature)
--------------------------
(Date)
Schedule 3.1(c) - Capitalization
Outstanding Capital Stock as of June 14, 2001:
30,379,092 common shares, $0.01 par
No convertible preferred, $0.01 par
Outstanding options, warrants, convertible securities, convertible debentures,
and rights to acquire, subscribe for, and/or purchase any Common Stock,
preferred stock and/or other capital stock of the Borrower or any securities or
debentures convertible into or exchangeable for Common Stock, preferred stock
and/or other capital stock of the Borrower:
As of 6/14/01:
_ Four warrants remaining which are exercisable into 63,810 shares, and
expire in June 2002
_ 10,410,697 options available and/or granted under Employee & Director
Stock Purchase Plans (Note: These have not been excercised.)
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 22nd day of June, 2001 by and between MERCATOR SOFTWARE, INC., a
Delaware corporation with its principal place of business at 00 Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxx 00000 ("Grantor"), and SILICON VALLEY BANK, a California
banking corporation ("Lender").
RECITALS
A. Lender has agreed to make advances of money and to extend certain
financial accommodations to Grantor (the "Loan") pursuant to a certain Accounts
Receivable Financing Agreement of even date herewith, between Grantor and
Lender, as amended from time to time (as amended, the "Loan Agreement"). The
Loan is secured pursuant to the terms of the Loan Agreement. Lender is willing
to enter into certain financial accommodations with Borrower, but only upon the
condition, among others, that Grantor shall grant to Lender a security interest
in certain Copyrights, Trademarks, Patents, and Mask Works to secure the
obligations of Grantor under the Loan Agreement. Defined terms used but not
defined herein shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Lender a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral
(as defined therein).
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness"), including, without limitation, under the Loan Agreement,
Grantor hereby grants a security interest in all of Grantor's right, title and
interest in, to and under its intellectual property collateral (all of which
shall collectively be called the "Intellectual Property Collateral"), including,
without limitation, the following:
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or
not the same also constitutes a trade secret, now or hereafter existing,
created, acquired or held, including without limitation those set forth on
EXHIBIT A attached hereto (collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Grantor now or
hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same, including
without limitation the patents and patent applications set forth on
EXHIBIT B attached hereto (collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Grantor connected
with and symbolized by such trademarks, including without limitation those
set forth on EXHIBIT C attached hereto (collectively, the "Trademarks");
(f) All mask works or similar rights available for the protection of
semiconductor chips, now owned or hereafter acquired, including, without
limitation those set forth on EXHIBIT D attached hereto (collectively, the
"Mask Works");
(g) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not
the obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(h) All licenses or other rights to use any of the Copyrights, Patents,
Trademarks, or Mask Works and all license fees and royalties arising from
such use to the extent permitted by such license or rights; and
(i) All amendments, extensions, renewals and extensions of any of the
Copyrights, Trademarks, Patents, or Mask Works; and
(j) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.
3. Covenants and Warranties. Grantor represents, warrants, covenants and
agrees as follows:
(a) Other than with respect to components on portions of software which
Grantor has licensed from third parties, Grantor is now the sole owner of
the Intellectual Property Collateral, except for non-exclusive licenses
granted by Grantor to its customers in the ordinary course of business.
(b) Performance of this IP Agreement does not conflict with or result
in a breach of any intellectual property agreement to which Grantor is
bound, except to the extent that certain intellectual property agreements
prohibit the assignment of the rights thereunder to a third party without
the licensor's or other party's consent and this IP Agreement constitutes
a security interest.
(c) During the term of this IP Agreement, Grantor will not transfer or
otherwise encumber any interest in the Intellectual Property Collateral,
except for non-exclusive licenses granted by Grantor in the ordinary
course of business or as set forth in this IP Agreement;
(d) To its knowledge, each of the Patents is valid and enforceable, and
no part of the Intellectual Property Collateral has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any
part of the Intellectual Property Collateral violates the rights of any
third party;
(e) Grantor shall promptly advise Lender of any material adverse change
in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Grantor in or to any Trademark, Patent,
Copyright, or Mask Work specified in this IP Agreement;
(f) Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents, Copyrights, and Mask Works,
(ii) use reasonable efforts to detect infringements of the Trademarks,
Patents, Copyrights, and Mask Works and promptly advise Lender in writing
of material infringements detected and (iii) not allow any Trademarks,
Patents, Copyrights, or Mask Works to be abandoned, forfeited or dedicated
to the public without the written consent of Lender, which shall not be
unreasonably withheld, unless Grantor determines that reasonable business
practices suggest that abandonment is appropriate.
(g) Grantor shall promptly register the most recent version of any of
Grantor's Copyrights, if not so already registered, and shall, from time
to time, execute and file such other instruments, and take such further
actions as Lender may reasonably request from time to time to perfect or
continue the perfection of Lender's interest in the Intellectual Property
Collateral;
(h) This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this IP Agreement will create at the
time Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of Lender a valid and perfected first priority
security interest in the Intellectual Property
-2-
Collateral in the United States securing the payment and performance of
the obligations evidenced by the Loan Agreement upon making the filings
referred to in clause (i) below;
(i) To its knowledge, except for, and upon, the filing with the United
States Patent and Trademark office with respect to the Patents and
Trademarks and the Register of Copyrights with respect to the Copyrights
and Mask Works necessary to perfect the security interests created
hereunder and except as has been already made or obtained, no
authorization, approval or other action by, and no notice to or filing
with, any U.S. governmental authority or U.S. regulatory body is required
either (i) for the grant by Grantor of the security interest granted
hereby or for the execution, delivery or performance of this IP Agreement
by Grantor in the U.S. or (ii) for the perfection in the United States or
the exercise by Lender of its rights and remedies thereunder;
(j) All information heretofore, herein or hereafter supplied to Lender
by or on behalf of Grantor with respect to the Intellectual Property
Collateral is accurate and complete in all material respects.
(k) Grantor shall not enter into any agreement that would materially
impair or conflict with Grantor's obligations hereunder without Lender's
prior written consent, which consent shall not be unreasonably withheld.
Grantor shall not permit the inclusion in any material contract to which
it becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Grantor's rights and
interest in any property included within the definition of the
Intellectual property Collateral acquired under such contracts, except
that certain contracts may contain anti-assignment provisions that could
in effect prohibit the creation of a security interest in such contracts.
(l) Upon any executive officer of Grantor obtaining actual knowledge
thereof, Grantor will promptly notify Lender in writing of any event that
materially adversely affects the value of any material Intellectual
Property Collateral, the ability of Grantor to dispose of any material
Intellectual Property Collateral of the rights and remedies of Lender in
relation thereto, including the levy of any legal process against any of
the Intellectual Property Collateral.
4. Lender's Rights. Lender shall have the right, but not the obligation,
to take, at Grantor's sole expense, any actions that Grantor is required under
this IP Agreement to take but which Grantor fails to take, after fifteen (15)
days' notice to Grantor. Grantor shall reimburse and indemnify Lender for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of
its rights under this section 4.
5. Inspection Rights. Grantor hereby grants to Lender and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Grantor, any of Grantee's plants and
facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than once in every six (6)
months; provided, however, nothing herein shall entitle Lender access to
Grantor's trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will, subject to any prior licenses,
encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademarks Office and the Register of Copyrights,
and take all such action as may reasonably be deemed necessary or advisable, or
as requested by Lender, to perfect Lender's security interest in all Copyrights,
Patents, Trademarks, and Mask Works and otherwise to carry out the intent and
purposes of this IP Agreement, or for assuring and confirming to Lender the
grant or perfection of a security interest in all Intellectual Property
Collateral.
(b) Grantor hereby irrevocably appoints Lender as Grantor's
attorney-in-fact, with fill authority in the place and stead of Grantor and in
the name of Grantor, Lender or otherwise, from time to time in Lender's
-3-
discretion, upon Grantor's failure or inability to do so, to take any action and
to execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this IP Agreement, including:
(i) To modify, in its sole discretion, this IP Agreement
without first obtaining Grantor's approval of or signature to such
modification by amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D
hereof, as appropriate, to include reference to any right, title or
interest in any Copyrights, Patents, Trademarks or Mask Works acquired by
Grantor after the execution hereof or so delete any reference to any
right, title or interest in any Copyrights, Patents, Trademarks, or Mask
Works in which Grantor no longer has or claims any right, title or
interest; and
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of Grantor where
permitted by law.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:
(a) An Event of Default occurs under the Loan Agreement; or any
document from Grantor to Lender; or
(b) Grantor breaches any warranty or agreement made by Grantor in
this IP Agreement.
8. Remedies. Upon the occurrence and continuance of an Event of Default,
Lender shall have the right to exercise all the remedies of a secured party
under the Massachusetts Uniform Commercial Code, including without limitation
the right to require Grantor to assemble the Intellectual Property Collateral
and any tangible property in which Lender has a security interest and to make it
available to Lender at a place designated by Lender. Lender shall have a
nonexclusive, royalty free license to use the Copyrights, Patents, Trademarks,
and Mask Works to the extent reasonably necessary to permit Lender to exercise
its rights and remedies upon the occurrence of an Event of Default. Grantor will
pay any expenses (including reasonable attorney's fees) incurred by Lender in
connection with the exercise of any of Lender's rights hereunder, including
without limitation any expense incurred in disposing of the Intellectual
Property Collateral. All of Lender's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless Lender
and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this IP Agreement, and (b) all losses or
expenses in any way suffered, incurred, or paid by Lender as a result of or in
anyway arising out of, following or consequential to transactions between Lender
and Grantor, whether under this IP Agreement or otherwise (including without
limitation, reasonable attorneys fees and reasonable expenses), except for
losses arising from or out of Lender's gross negligence or willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all of
the obligations seemed hereunder, Lender shall execute and deliver to Grantor
all deeds, assignments, and other instruments as may be necessary or proper to
reinvest in Grantor full title to the property assigned hereunder, free and
clear of all liens granted hereunder (including duly executed UCC-3 termination
statements under the Code), subject to any disposition thereof which may have
been made by Lender pursuant hereto. In the case of United States patents,
trademarks or copyrights, Lender shall execute and deliver to Grantor a release
in the form attached hereto as Exhibit E.
11. Course of Dealing, No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
12. Attorney's Fees. If any action relating to this IP Agreement is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.
13. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
-4-
14. Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. Law and Jurisdiction. This IP Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
GRANTOR 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 OF OR BY REASON OF THIS
AGREEMENT.
GRANTOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
16. Confidentiality. In handling any confidential information, Lender
shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Lender's
subsidiaries or affiliates in connection with their present or prospective
business relations with Borrower; (ii) to prospective transferees or purchasers
of any interest in the Loans provided, however, Lender shall use commercially
reasonable efforts to obtain from such transferee or purchaser an agreement to
be bound by the terms of this provision; (iii) as required by law, regulation,
subpoena, or other judicial order, (iv) as required in connection with Lender's
examination or audit; and (v) at Lender considers appropriate in exercising
remedies under this Agreement. Confidential information does not include
information that either: (a) is in the public domain or in Lender's possession
when disclosed to Lender, or becomes part of the public domain after disclosure
to Lender; or(b) is diclosed to Lender by a third party, if Lender does not know
that the third party is prohibited from disclosing the information.
EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts on the day and year first written above.
GRANTOR:
MERCATOR SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: XXXXXX X. XXXXX
------------------------------------
Title: Secretary
-----------------------------------
-5-
Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated 6/22, 200l.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
------------------------------
COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
----------- ------ --------
(see Attached)
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
-------------------------------------------
FIRST DATE
COPYRIGHT APPLICATION DATE OF DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
----------- ------ ------ -------- ------------
(see Attached)
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
--------------------------------------------------------------------------------
DATE AND
RECORDATION
NUMBER OF IP
AGREEMENT WITH
OWNER OR ORIGINAL
GRANTOR IF
AUTHOR OR OWNER
FIRST DATE OF COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE OF OF IS DIFFERENT DIFFERENT ROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR GRANTOR
----------- -------- ------------ ------------ -------------
Grantor's two (2) main products are "Mercator Commerce Broker" and "Mercator
Enterprise Broker". In addition to the registered copyrights listed in Schedules
A and B, Grantor has rights to unregistered copyrights in substantial portions
of all of its products, including the following: MERCATOR, TRADING PARTNER, KEY
MASTER, ON CALL*EDI, MERCATOR INTEGRATION BROKER, MERCATOR COMMERCE BROKER,
MERCATOR ENTERPRISE BROKER, MERCATOR TRADING PARTNER PC, MERCATOR ASN COMPLETE,
MERCATOR WEB BROKER, MERCATOR DESKTOP and MERCATOR TRADING PARTNER.
-6-
Page 1 of 2
Exhibit A (Including Schedules A and B)
To Silicon Valley Bank/Mercator Agreement
Mercator, Inc.
Copyright Report for Registered Copyrights and Pending Applications
---------------------------------------------------------------------------------------------------------------------------------
XXXX FILING ISSUE
---------------------------------------------------------------------------------------------------------------------------------
CLIENT MATTER COUNTRY ATTY STATUS NAME DATE SERIAL NO DATE REG NO
---------------------------------------------------------------------------------------------------------------------------------
00992 C0033B United States GSW Registered KEY/MASTER DATA 1979/06/01 TX3 378-405 1992/09/04 TX3 378-405
INPUT SOFTWARE
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx GSW Registered KEY/MASTER 1992/09/08 TX3 377-402 1992/09/08 TX3 377/402
RELEASE 5.0
---------------------------------------------------------------------------------------------------------------------------------
00992 C0033D United States GSW Registered KEY/MASTER 1992/09/04 TX3 376-852 1992/09/04 TX3 376-852
RELEASE 5.1
---------------------------------------------------------------------------------------------------------------------------------
00992 C0033E United States GSW Registered KEY/MASTER DATA 1979/06/01 TX3-382-262 1992/09/16 XX0-000-000
XXXXX SOFTWARE
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx GSW Registered Trading Partner 1995/01/26 TX3 996-760 1995/01/26 TX3 996-760
Mainframe - Original
Version
---------------------------------------------------------------------------------------------------------------------------------
00992 C0065B United States GSW Registered Trading Partner 1995/01/26 TX3 996-761 1995/01/26 TX3 996-761
Mainframe - Version
2.4
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx GSW Registered Trading Partner P.C. 1995/01/26 TX3 994-254 1995/01/26 TX3 994-254
- Original Version
---------------------------------------------------------------------------------------------------------------------------------
St. Xxxx Xxxxxxx Xxxxxxxx Reens LLC
Page 2 of 2
Exhibit A (Including Schedules A and B)
To Silicon Valley Bank/Mercator Agreement
Mercator, Inc.
Copyright Report for Registered Copyrights and Pending Applications
---------------------------------------------------------------------------------------------------------------------------------
XXXX FILING ISSUE
---------------------------------------------------------------------------------------------------------------------------------
CLIENT MATTER COUNTRY ATTY STATUS NAME DATE SERIAL NO DATE REG NO
---------------------------------------------------------------------------------------------------------------------------------
00992 C0066B United States GSW Registered Trading Partner P.C. 1995/01/26 TX3 980-888 1995/01/26 TX3 980-888
- Version 4.3
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx GSW Registered ONCALL * EDI 1995/01/03 TX3 984-430 1995/01/03 TX3 984-430
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx XXX Xxxxxxx XXXXXXXX
---------------------------------------------------------------------------------------------------------------------------------
00000 X0000X Xxxxxx Xxxxxx GSW Registered HUB BROKERAGE 2000 TXu-912-660 2000/03/13 TXu-912-660
SYSTEM Version 1.0
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx XXX Xxxxxxxxxx XX KIT Version 1.0 2000 TXu-912-661 2000/03/13 TXu-912-661
---------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx GSW Registered HUB ENCRYPTION 1999 TXu-912-662 2000/03/13 TXu-912-662
SOFTWARE Version
1.0
---------------------------------------------------------------------------------------------------------------------------------
St Xxxx Xxxxxxx Xxxxxxxx Reens LLC
Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated June 22, 2001.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
NONE
-7-
Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated June 22, 2001.
EXHIBIT "C"
TRADEMARKS
TRADEMARK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
(see Attached)
-8-
Page 1 of 3
Exhibit C
To Silicon Valley Bank/Mercator Agreement
Mercator, Inc.
U.S. Trademark Report for Issued Rsgistrations and Pending Applications
------------------------------------------------------------------------------------------------------------------------------------
XXXX FILING ISSUE
------------------------------------------------------------------------------------------------------------------------------------
CLIENT MATTER COUNTRY ATTY CLASS STATUS NAME DATE SERIAL NO DATE REG NO
------------------------------------------------------------------------------------------------------------------------------------
00992 T0001A United States GSW TMK Registered TSI (BLOCK LETTERS) 1986/04/02 73/591,175 1990/11/13 1,622,107
------------------------------------------------------------------------------------------------------------------------------------
00992 T0015A United States GSW TMK Registered KEY/MASTER 1975/09/ll 73/062,738 1976/12/14 1,054,242
------------------------------------------------------------------------------------------------------------------------------------
00992 TOO20A United States GSW TMK Registered TASK/MASTER 1971/01/20 72/381,499 1972/10/24 945,062
------------------------------------------------------------------------------------------------------------------------------------
00992 TOO29A United States GSW TMK Registered TRADING PARTNER 1989/12/18 74/011,828 1991/10/15 1,660,560
------------------------------------------------------------------------------------------------------------------------------------
00992 T0030B United States GSW TMK Registered EASYPATH 1993/03/19 74/369,22O 1994/08/02 1,847,603
------------------------------------------------------------------------------------------------------------------------------------
00992 T0031A United States GSW TMK Registered EASYLOGIC 1990/05/18 74/060,535 1991/05/14 1,644,296
------------------------------------------------------------------------------------------------------------------------------------
00992 T0032A United States GSW TMK Registered TRANSLATE 1986/11/14 73/630,402 1988/02/09 1,475,704
------------------------------------------------------------------------------------------------------------------------------------
O0992 T0055A United States GSW TMK Registered TRADING PARTNER 1989/12/11 74/009,319 1990/10/02 1,615,543
------------------------------------------------------------------------------------------------------------------------------------
00992 X0000X Xxxxxx Xxxxxx XXX XXX Xxxxxxxxxx XXXXXXXX (Xxxxx 9) l991/12/13 74/229,939 1994/04/05 1,829,798
------------------------------------------------------------------------------------------------------------------------------------
00992 T0060B United States GSW TMK Registered MERCATOR (Class 9) 1998/06/04 75/496,348 1999/09/28 2,281,097
------------------------------------------------------------------------------------------------------------------------------------
St Xxxx Xxxxxxx Xxxxxxxx Reens LLC
Page 2 of 3
Exhibit C
To Silicon Valley Bank/Mercator Agreement
Mercator, Inc.
U.S. Trademark Report for Issued Registrations and Pending Applications
------------------------------------------------------------------------------------------------------------------------------------
XXXX FILING ISSUE
------------------------------------------------------------------------------------------------------------------------------------
CLIENT MATTER COUNTRY ATTY CLASS STATUS NAME DATE SERIAL NO DATE REG NO
------------------------------------------------------------------------------------------------------------------------------------
00992 T0060C United States GSW TSM Registered MERCATOR (Class 42) 1998/07/06 75/513,974 1999/08/31 2,274,277
------------------------------------------------------------------------------------------------------------------------------------
00992 T0060D United States GSW TSM Registered MERCATOR (Class 41) 1998/07/08 75/515,072 1999/08/31 2,274,290
------------------------------------------------------------------------------------------------------------------------------------
00992 T0079A United States GSW TMK Registered TSI SOFT and Design 1996/08/19 75/152,032 1999/02/02 2,221,935
------------------------------------------------------------------------------------------------------------------------------------
00992 T0079C United States GSW TSM Pending TSI SOFT and Design 1997/10/27 75/379,849
------------------------------------------------------------------------------------------------------------------------------------
00992 T0086A United States GSW TSM Registered BUSINESSLINK 1997/07/28 75/332,021 1998/10/06 2,192,582
------------------------------------------------------------------------------------------------------------------------------------
00992 T0135A United States GSW TMK Suspended M-SHAPED PAPER 2000/01/13 75/896,267
AIRPLANE DESIGN
------------------------------------------------------------------------------------------------------------------------------------
00992 T0135B United States GSW TSM Allowed M-SHAPED PAPER 2000/01/13 75/896,266
AIRPLANE DESIGN
------------------------------------------------------------------------------------------------------------------------------------
00992 T0135C United States GSW TSM Allowed M-SHAPED PAPER 2000/01/13 75/896,265
AIRPLANE DESIGN
------------------------------------------------------------------------------------------------------------------------------------
00992 T0136A United States GSW TMK Suspended THE E-BUSINESS 2000/02/15 75/919,983
TRANSFORMATION
COMPANY
------------------------------------------------------------------------------------------------------------------------------------
00992 T0136B United States GSW TSM SUSPENDED THE E-BUSINESS 2000/02/156 75/919,982
TRANSFORMATION
COMPANY
------------------------------------------------------------------------------------------------------------------------------------
St Xxxx Xxxxxxx Xxxxxxxx Reens LLC
Page 3 of 3
Exhibit C
To Silicon Valley Bank/Mercator Agreement
Mercator, Inc.
U.S. Trademark Report for Issued Rsgistrations and Pending Applications
------------------------------------------------------------------------------------------------------------------------------------
XXXX FILING ISSUE
------------------------------------------------------------------------------------------------------------------------------------
CLIENT MATTER COUNTRY ATTY CLASS STATUS NAME DATE SERIAL NO DATE REG NO
------------------------------------------------------------------------------------------------------------------------------------
00992 T0136C United States GSW TSM Suspended THE E-BUSINESS 2000/02/15 75/919,981
TRANSFORMATION
COMPANY
------------------------------------------------------------------------------------------------------------------------------------
00992 T0156A United States GSW TMK Published MYMERCATOR 2000/06/07 76/064,783
------------------------------------------------------------------------------------------------------------------------------------
00992 T0156B United States GSW TSM Published MYMERCATOR 2000/06/07 76/064,784
------------------------------------------------------------------------------------------------------------------------------------
00992 T0156C United States GSW TSM Published MYMERCATOR 2000/06/07 76/064,782
------------------------------------------------------------------------------------------------------------------------------------
00992 T0162A United States GSW TMK Published XXXXXXXXXX.XXX 2000/06/07 76/064,781
------------------------------------------------------------------------------------------------------------------------------------
00992 T0162B United States GSW TSM Published XXXXXXXXXX.XXX 2000/06/07 76/064,780
------------------------------------------------------------------------------------------------------------------------------------
00992 T0162C United States GSW TSM Published XXXXXXXXXX.XXX 2000/06/07 76/064,779
------------------------------------------------------------------------------------------------------------------------------------
00992 T0163A United States GSW TMK Suspended JBUSINESS 1998/02/25 75/439,911
------------------------------------------------------------------------------------------------------------------------------------
00992 T0164A United States GSW TMK Registered NOVERA EPIC 1996/11/14 75/197,621 1998/06/23 2,168,474
------------------------------------------------------------------------------------------------------------------------------------
00992 T0166A United States GSW TMK Registered NOVERA 1996/06/13 75,118,134 1997/09/12 2,120,543
------------------------------------------------------------------------------------------------------------------------------------
St Xxxx Xxxxxxx Xxxxxxxx Reens LLC
Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated 6/22, 2001.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
NONE
640210.3
-9-
Trademark Applications
Continuation of Item 4A
--------------------------------------------------------------------------------
Xxxx Filing Date Applications
--------------------------------------------------------------------------------
TSI Soft and Design 10/27/97 75/379,849
--------------------------------------------------------------------------------
M-Shaped Paper Airplane Design 1/13/00 75/896,267
--------------------------------------------------------------------------------
M-Shaped Paper Airplane Design 1/13/00 75/896,266
--------------------------------------------------------------------------------
M-Shaped Paper Airplane Design 1/13/00 75/896,265
--------------------------------------------------------------------------------
The E-Business Transformation Company 2/15/00 75/919,983
--------------------------------------------------------------------------------
The E-Business Transformation Company 2/15/00 75/919,982
--------------------------------------------------------------------------------
The E-Business Transformation Company 2/15/00 75/919,981
--------------------------------------------------------------------------------
Mymercator 6/7/00 76/064,783
--------------------------------------------------------------------------------
Mymercator 6/7/00 76/064,784
--------------------------------------------------------------------------------
Mymercator 6/7/00 76,064,782
--------------------------------------------------------------------------------
Xxxxxxxxxx.xxx 6/7/00 76/064,781
--------------------------------------------------------------------------------
Xxxxxxxxxx.xxx 6/7/00 76/064,780
--------------------------------------------------------------------------------
Xxxxxxxxxx.xxx 6/7/00 76/064,779
--------------------------------------------------------------------------------
Jbusiness 2/25/98 75/439,911
--------------------------------------------------------------------------------
2
Form PTO-1594 RECORDATION FORM COVER SHEET U.S. DEPARTMENT OF COMMERCE
(Rev. 03/01) TRADEMARKS ONLY U.S. Patent and Trademark Office
OMB No. 0651-0027 (exp. 5/31/2002)
Tab settings
--------------------------------------------------------------------------------
To the honorable Commissioner of Patents and Trademarks: Please record the
attached original documents or copy thereof.
--------------------------------------------------------------------------------
1. Name of conveying party(ies):
Mercator Software, Inc.
|_| Individual(s) |_| Association
|_| General Partnership |_| Limited Partnership
|X| Corporation-State
|_| Other
---------------------------------------------------------------
Additional name(s) of conveying party(ies) attached? Yes |_| No |X|
--------------------------------------------------------------------------------
2. Name and address of receiving party(ies)
Name: Silicon Valley Bank
-------------------------------------------------------------------
Internal
Address:
----------------------------------------------------------------
Street Address: 00 Xxxxxxx Xxxxxx
---------------------------------------------------------
City: Wellesley State: MA Zip: 02481
---------------------------- ------- --------------
|_| Individual(s) citizenship
-------------------------------------------
|_| Association
---------------------------------------------------------
|_| General Partnership
-------------------------------------------------
|_| Limited Partnership
-------------------------------------------------
|X| Corporation-State
---------------------------------------------------
|_| Other
---------------------------------------------------------------
If assignee is not domiciled in the United States, a domestic
representative designation is attached: |_| Yes |_| No
(Designations must be a separate document from assignment) Additional name(s)
& address(es) attached? Yes |_| No |X|
--------------------------------------------------------------------------------
3. Nature of conveyance:
|_| Assignment |_| Merger
|X| Security Agreement |_| Change of Name
|_| Other
---------------------------------------------------------------
Execution Date:
-----------------------------------------------------
--------------------------------------------------------------------------------
4. Application number(s) or registration number(s):
A. Trademark Application No.(s) B. Trademark Registration No.(s)
Additional number(s) attached |X| Yes |_| No
--------------------------------------------------------------------------------
5. Name and address of party to whom correspondence concerning document should
be mailed:
Name: Xxxxxxxxxxx X. Xxxxxxxxx
----------------------------------------------------------------------
Internal Address:
----------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Street Address: 0000 Xxxxxxxxx Xxxxx, Xxx.,
------------------------------------------------------------
Suite 505
----------------------------------------------------------------------------
City: Arlington State: VA Zip: 22202
------------------------------- ------- --------------
--------------------------------------------------------------------------------
6. Total number of applications and
registrations involved:............................................. 30
-----
--------------------------------------------------------------------------------
7. Total fee (37 CFR 3.41)......................................$ 765.00
------------
|X| Enclosed
|_| Authorized to be charged to deposit account
--------------------------------------------------------------------------------
8. Deposit account number:
-------------------------------------------------------------------------
(Attach duplicate copy of this page if paying by deposit account)
--------------------------------------------------------------------------------
DO NOT USE THIS SPACE
--------------------------------------------------------------------------------
9. Statement and signature.
To the best of my knowledge and belief, the foregoing information is true and
correct and any attached copy is a true copy of the original document.
Xxxxxxxxxxx X. Xxxxxxxxx /s/ Xxxxxxxxxxx X. Xxxxxxxxx 6/29/01
------------------------ ---------------------------- ---------
Name of Person Signing Signature Date
Total number of pages including cover sheet, attachments, and document: 17
--
--------------------------------------------------------------------------------
Mail documents to be recorded with required cover sheet information to:
Commissioner of Patent & Trademarks, Box Assignments
Washington, D.C. 20231
1
Fees are effective through June 30, 2002. After that date, check the Copyright
Office Website at xxx.xxx.xxx/xxxxxxxxx or call (000) 000-0000 for current fee
information.
Do not write above this line.
--------------------------------------------------------------------------------
DOCUMENT COVER SHEET
For Recordation of Documents
UNITED STATES COPYRIGHT OFFICE
--------------------------------------------------------------------------------
DATE OF RECORDATION
(Assigned by Copyright Office)
Month Day Year
--------------------------------------------------------------------------------
Volume Page
-------------------------------- ---------------------------------
--------------------------------------------------------------------------------
Volume Page
-------------------------------- ---------------------------------
--------------------------------------------------------------------------------
FUNDS RECEIVED
-----------------------------------------------------------------
FOR OFFICE USE ONLY
--------------------------------------------------------------------------------
To the Register of Copyrights:
Please record the accompanying original document or copy thereof.
--------------------------------------------------------------------------------
1 Name of the party or parties to the document spelled as they appear in the
document (List up to the first three)
Mercator Software, Inc.
--------------------------------------------------------------------------
Silicon Valley Bank
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------------
2 Date of execution and/or effective date of the accompanying document
6 22 01
-----------------------------------
(month) (day) (year)
--------------------------------------------------------------------------------
3 Completeness of document
|X| Document is complete by its own terms.
|_| Document is not complete. Record "as is."
--------------------------------------------------------------------------------
4 Description of document
|_| Transfer of Copyright
|X| Security Interest
|_| Change of Name of Owner
|_| Termination of Transfer(s) [Section 304]
|_| Shareware
|_| Life, Identity, Death Statement [Section 302]
|_| Transfer of Mask Works
|_| Other
----------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------------
5 Title of first work as given in the document
TX3 378-405 Key/Master Data
-----------------------------------
Input Software
-----------------------------------
6 Total number of titles in document 12
---------------------------------------
--------------------------------------------------------------------------------
7 Amount of fee calculated $ 80.00
-------------------------------------------------
8 Fee enclosed
|_| Check
|_| Money Order
|X| Fee authorized to be charged to:
Copyright Office
Deposit Account number DA 076317
---------------------------------------------------
Account name Specialized Patent Services
---------------------------------
--------------------------------------------------------------------------------
9 Affirmation: I hereby affirm to the Copyright Office that the information
given on this form is a true and correct representation of the
accompanying document. This affirmation will not suffice as a
certification of a photocopy signature on the document.
(Affirmation must be signed even if you are also signing Space 10.)
/s/ Xxxxxxxxxxx X. Xxxxxxxxx
--------------------------------------------------------------------------
Signature
6/29/01
--------------------------------------------------------------------------
Date
000-000-0000 000-000-0000
--------------------------------------------------------------------------
Phone Number Fax Number
10 Certification: Complete this certification in addition to the Affirmation
if a photocopy of the original signed document is substituted for a
document bearing the actual signature.
NOTE: This space may not be used for an official certification.
I certify under penalty of perjury under the laws of the United States of
America that the accompanying document is a true copy of the original
document.
--------------------------------------------------------------------------
Signature
--------------------------------------------------------------------------
Duly Authorized Agent of:
--------------------------------------------------------------------------
Date
--------------------------------------------------------------------------------
Recordation will be mailed in window envelope to this address:
--------------------------------------------------------------------------------
Name
Xxxxxxxxxxx X. Xxxxxxxxx
--------------------------------------------------------------------------------
Number/Street/Apt
0000 Xxxxxxxxx Xxxxx, Xxx., Xxxxx 000
--------------------------------------------------------------------------------
City/State/ZIP
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
YOU MUST:
--------------------------------------------------------------------------------
o Complete all necessary spaces
o Sign your Cover Sheet in Space 9
--------------------------------------------------------------------------------
SEND ALL 3 ELEMENTS TOGETHER:
--------------------------------------------------------------------------------
1. Two copies of the Document Cover Sheet
2. Check/money order payable to Register of Copyrights
3. Document
--------------------------------------------------------------------------------
MAIL TO:
--------------------------------------------------------------------------------
Library of Congress, Copyright Office
Documents Recordation Section, LM-462
000 Xxxxxxxxxxxx Xxxxxx,
X.X. Xxxxxxxxxx, X.X. 00000-0000
The recordation fee for the Document Cover Sheet is $50 and $15 for each group
of 10 additional titles as of July 1, 1999.
*Knowingly and willfully falsifying material facts on this form may result in
criminal liability. 18 U.S.C.ss.1001.
June 1999--20,000
WEB REV: June 1999 [RECYCLE LOGO] PRINTED ON RECYCLED PAPER
U.S. GOVERNMENT PRINTING OFFICE 0000-000-000/56
Trademark Registrations
Continuation of Item 4B
--------------------------------------------------------------------------------
Xxxx Filing Date Registrations
--------------------------------------------------------------------------------
TSI (Block Letter) 04/02/86 1,622,107
--------------------------------------------------------------------------------
Key/Master 09/11/75 1,054,242
--------------------------------------------------------------------------------
Task/Master 1/20/71 946,062
--------------------------------------------------------------------------------
Trading Partner 12/18/89 1,660,560
--------------------------------------------------------------------------------
Easypath 3/19/93 1,847,603
--------------------------------------------------------------------------------
Easylogic 5/18/90 1,644,296
--------------------------------------------------------------------------------
Translate 11/14/86 1,475,704
--------------------------------------------------------------------------------
Trading Partner 12/11/89 1,615,543
--------------------------------------------------------------------------------
Mercator (Class 9) 12/13/91 1,829,798
--------------------------------------------------------------------------------
Mercator (Class 9) 6/4/98 2,281,097
--------------------------------------------------------------------------------
Mercator (Class 42) 7/6/98 2,274,277
--------------------------------------------------------------------------------
Mercator (Class 41) 7/8/98 2,274,290
--------------------------------------------------------------------------------
TSI Soft and Design 8/19/96 2,221,935
--------------------------------------------------------------------------------
Businesslink 7/28/97 2,193,582
--------------------------------------------------------------------------------
Novera EPIC 11/14/96 2,168,474
--------------------------------------------------------------------------------
Novera 6/13/96 2,120,543
--------------------------------------------------------------------------------
3
The date stamp on this card signifies receipt by the United States Patent &
Trademark Office of the following documents related to: United States Trademark
Application 75/379,849 and others.
1. Trademark Assignment Recordation Form -- 30 Trademarks
2. Trademark Intellectual Property Security Agreement
3. Check in the amount of $765.00
Docket No. 56120/436-WFM OIPE JC165
Conveying Party: Mercator Software, Inc. JUN 29 2001
Receiving Party: Silicon Valley Bank PATENT & TRADEMARK OFFICE
--------------------------------------------------------------------------------
The date stamp on this card signifies receipt by the United States Copyright
Office of the following documents related to: United States Copy Registration
TX3 378-405 and others.
1. Copyright Document Cover Sheet -- 12 Copyrights
2. Intellectual Property Copyright Security Agreement
Docket No. 56120-436, WFM RECEIVED
Conveying Party: Mercator Software, Inc.
Receiving Party: Silicon Valley Bank JUL - 2 2001
COPYRIGHT OFFICE
PUBLIC OFFICE
PERFECTION CERTIFICATE
OF
MERCATOR SOFTWARE, INC.
The undersigned, the Secretary of Mercator Software, Inc., a Delaware
corporation (the "Company"), hereby certifies with reference to the Accounts
Receivable Financing Agreement dated as of 6/22/01 between the Company and
SILICON VALLEY BANK (the "Bank") (terms defined therein being used herein as
therein defined), to the Bank as follows:
1. Names.
(a) The exact corporate name of the Company as it appears in its
certificate of incorporation, as amended to date, is as follows:
Mercator Software, Inc.
(b) Set forth below is each other corporate name the Company has had since
its organization, together with the date of the relevant change:
TSI International Ltd. -- 3/25/85
TSI International Software Ltd. -- 9/9/93
Mercator Software, Inc. -- 4/3/00
(c) Set forth below is a description of each change by the Company of its
identity or corporate structure in any way within the past five years together
with the date of the relevant change:
SEE ATTACHMENT 1
(d) The following is a list of all other names (including trade names or
similar appellations) used by the Company or any of its divisions or other
business units at any time during the past five years together with the dates
such names were used:
SEE ANSWERS TO 1 (a), (b) and (c)
(e) The following is a list of all subsidiaries of the Company (whether
wholly owned, or where the Company has a controlling or majority interest):
SEE ATTACHMENT 2
(f) The State of formation/incorporation of the company is as follows:
Delaware
(g) The Company's taxpayer identification number is: 00-0000000
----------
2. Current Locations.
(a) The chief executive office of the Company is located at the following
address:
Mailing Address City State
--------------- ---- -----
00 Xxxxxxx Xxxx Xxxxxx XX
(b) The following are all the locations where the Company maintains any
books or records relating to any Accounts:
Mailing
Name Address City State
---- ------- ---- -----
Mercator Software Inc. 00 Xxxxxxx Xxxx Xxxxxx XX
Xxxxxx Record Center 000 Xxxxxxxxx Xxxx. Xxxxxxxxx XX
(c) The following are all the locations where Equipment and/or Inventory
of the company is located:
Mailing
Name Address City State
---- ------- ---- -----
Mercator Software, Inc. 00 Xxxxxxx Xxxx Xxxxxx XX 00000
Mercator Software, Inc. 0000 Xxxxxxxx Xxxxx, Xxxxx 000X, Xxxxxxxxxxx, XX 00000
Mercator Software, Inc. 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Mercator Software, Inc. 0000 Xxxxx Xxxxxxx Xxx., Xxxxx 000, Xxxx Xxxxx, XX 00000
Mercator Software, Inc. 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000
Mercator Software, Inc. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
Miscellaneous office equipment in various US and Canadian locations.
(d) Other persons or entities who have possession or control
(warehousemen, bailee) other than Company:
None
3. Prior Locations. Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by the Company at any time during the past five
years:
SEE ATTACHMENT 3
4. No Unusual Transactions. Except as set forth in Schedule 4, all
Accounts have been originated by the Company and all Equipment has been acquired
by the Company in the ordinary course of its business.
The undersigned hereby acknowledges and agrees that the Bank is relying on
the representations and warranties made herein in connection with a loan
transaction or transactions to be entered into between the undersigned and the
Bank.
IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of June,
2001.
MERCATOR SOFTWARE, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
(duly authorized)
Name: /s/ XXXXXX XXXXX
---------------------------
Secretary
640294.1
ATTACHMENT 1
Company Identity and Corporate Structure:
TSI International Software Ltd. - 9/1/93
Mercator Software France SARL - 5/98
SCP Solutions Europe (Holland) - 1/99
TSI Software GmbH - 3/5/99
Braid Group Ltd. (Bermuda) - 3/18/99
Note: Has since been dissolved
Novera - Acquired 9/30/99 - Inactive
TSI International Software (UK)
Note: Merged into Mercator UK [Listed below as
TSI Software Ltd.(UK)]
TSI Software Ltd. (UK)
Braid, Inc. (US) - Inactive
TSI Software Ltd. (Hong Kong)
Braid Systems PTY (Australia)
TSI Software PTE (Singapore)
Mercator Software, Inc. - 4/3/00
MCTR Software AB (Sweden) - 2000
ATTACHMENT 2
List of Subsidiaries:
Novera Software, Inc. (US) - Inactive
Mercator International GmbH (Germany)
Mercator Software France SARL
SCP Solutions Europe (Holland)
Mercator Software Ltd. (UK)
o Braid, Inc. (US) - Inactive
MCTR Software AB (Sweden)
Mercator Software (HK)
o Braid Systems PTY (Australia)
o Mercator Software PTE (Singapore)
ATTACHMENT 3
Prior locations within the past five years:
1. Mercator Software, Inc.
00 Xxxxxxx Xxxx.
Xxxxxx, XX 00000
2. Mercator Software, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000X
Xxxxxxxxxxx, XX 00000
(Current Address)
0000 Xxxxxxxx Xxxx, Xxxxx X000
Xxxxxxxxxxx, XX 00000
3. Mercator Software, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
4. Mercator Software, Inc.
0000 Xxxxx Xxxxxxx Xxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
5. Mercator Software, Inc.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
6. Mercator Software, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
