EXHIBIT 10.12
FOURTH LOAN MODIFICATION AGREEMENT
(EXIM LINE)
This Fourth Loan Modification Agreement (Exim Line) is entered into as
of February 28, 2001, by and between OPEN MARKET, INC., a Delaware corporation
("Open Market"), with its chief executive offices located at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and FUTURETENSE, INC., a Delaware corporation
("FutureTense"), with its chief executive offices located at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (jointly and severally, the "Borrower") and
SILICON VALLEY BANK, a California-chartered bank ("Bank"), with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and with a loan
production office located at One Newton Executive Park, Suite 200, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, doing business under the name "Silicon
Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated as of September 26, 1997, evidenced by, among other documents,
(i) a certain Export-Import Bank Loan and Security Agreement between Open
Market, Folio Corporation ("Folio") and Bank dated September 26, 1997, as
amended by a First Loan Modification Agreement (Exim Line) dated December 30,
1998, a Second Loan Modification Agreement (Exim Line) dated October 22, 1999,
an Assumption Agreement by FutureTense, Inc. dated December 12, 2000, a Third
Loan Modification Agreement (Exim Line) between Borrower and Bank dated December
12, 2000, as further amended hereby (as amended, the "Loan Agreement" or the
"Exim Agreement"), (ii) a certain Revolving Promissory Note (Export-Import Line)
dated February 28, 2001 in the maximum principal amount of Six Million Dollars
($6,000,000.00) (the "Note"), and (iii) a certain Borrower Agreement dated
February 28, 2001 (the "Borrower Agreement"). Capitalized terms used but not
otherwise defined herein shall have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Obligations".
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement (together with any
other collateral security granted to Bank, the "Security Documents").
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the "Existing
Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the following text
appearing as recital paragraph (A) on Page 1 thereof:
"Borrower and Bank are parties to that certain Loan and Security
Agreement dated September 26, 1997 originally entered into by
and between Open Market, Folio Corporation ("Folio") and Bank,
as amended by a certain First Loan Modification Agreement dated
March 20, 1998, a certain Second Loan Modification Agreement
dated December 30, 1998, a certain Third Loan Modification
Agreement dated October 22, 1999, a certain Assumption Agreement
by FutureTense, Inc. dated December 12, 2000, and a certain
Fourth Loan Modification Agreement dated December 12, 2000, as
may be further amended from time to time (as amended, the
"Domestic Agreement"), together with related documents."
and inserting in lieu thereof the following:
"Borrower and Bank are parties to that certain Loan and Security
Agreement dated February 28, 2001, as may be amended from time
to time (the "Domestic Agreement"), together with related
documents."
2. The Loan Agreement shall be amended by incorporating into the
definition of "Exim Eligible Foreign Accounts" in Section 1.1 the
following text to appear immediately after paragraph (q) thereof:
"(r) Accounts derived from foreign maintenance agreements."
3. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""Exim Loan Documents" means, collectively, this Exim Agreement,
the Domestic Loan Documents, any note or notes executed by
Borrower, and any other agreement entered into between Borrower
and Bank in connection with this Exim Agreement, all as amended
or extended from time to time."
and inserting in lieu thereof the following:
""Exim Loan Documents" means, collectively, this Exim Agreement,
the Domestic Loan Documents, the Factoring Agreement, any note
or notes executed by Borrower, and any other agreement entered
into between Borrower and Bank in connection with this Exim
Agreement, all as amended or extended from time to time."
4. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
""Exim Maturity Date" means the earliest of (i) the Maturity
Date under the Domestic Loan Documents, or (ii) January 15,
2001."
and inserting in lieu thereof the following:
""Exim Maturity Date" means the earliest of (i) the Maturity
Date under the Domestic Loan Documents, or (ii) February 28,
2002."
5. The Loan Agreement shall be amended by deleting the following text
appearing as the last sentence of the first paragraph of Section 2.1.1
thereof:
"For purposes of this Exim Agreement, "Borrowing Base" shall
mean an amount equal to ninety percent (90%) of the Exim
Eligible Foreign Accounts."
and inserting in lieu thereof the following:
"For purposes of this Exim Agreement, "Borrowing Base" shall
mean an amount equal to: (i) ninety percent (90%) of Exim
Eligible Foreign
Accounts generated by Open Market, PLUS (ii) ninety percent
(90%) of Exim Eligible Foreign Accounts generated by
FutureTense, PLUS (iii) sixty percent (60%) of Borrower's
eligible "foreign maintenance" Accounts (as determined by Bank)
less than sixty (60) days from due date PROVIDED, HOWEVER, the
aggregate availability under this Exim Agreement generated by
the Borrower's Exim Eligible Foreign Accounts (and by "foreign
maintenance accounts") and under the Domestic Agreement
generated by the Borrower's Eligible Receivables (and by
"domestic maintenance accounts") which are owed by the "▇▇▇.▇▇▇"
entities (as determined by Bank) shall not exceed $1,000,000.00.
IN ADDITION TO THE BORROWING LIMITATIONS CONTAINED IN THE
DEFINITIONS OF THE BORROWING BASE AND EXIM COMMITTED LINE AND IN
THIS EXIM AGREEMENT, THE MAXIMUM AMOUNT OF ADVANCES HEREUNDER
SHALL BE SUBJECT TO EACH OF THE FOLLOWING:
(A) Prior to the earlier of: (i) the occurrence of a
Capital Event (as defined in the Domestic Agreement), or
(ii) March 15, 2001, the outstanding Obligations
(including, without limitation, those arising under this
Exim Agreement, the Domestic Agreement and the Factoring
Agreement) shall not exceed at any time $4,000,000.00.
(B) The outstanding Obligations (including, without
limitation, those arising under this Exim Agreement, the
Domestic Agreement and the Factoring Agreement) shall not
exceed at any time the result of the following: (i) the
Borrowing Base under the Domestic Agreement, PLUS (ii) the
lesser of: (a) the EXIM Committed Line, or (b) the
Borrowing Base under this Exim Agreement, MINUS (iii)
$6,000,000.00.
(C) [Intentionally Deleted]
6. The Loan Agreement shall be amended by deleting in its entirety the
following text appearing as paragraph (a) of Section 2.3 thereof:
"(a) INTEREST RATE. Except as specified to the contrary in any
Loan Document, any Advances under this Exim Agreement shall bear
interest, on the average daily balance thereof, at a per annum
rate equal to the aggregate of the Prime Rate, PLUS One Percent
(1.0%)."
and inserting in lieu thereof the following:
"(a) INTEREST RATE. Except as specified to the contrary in any
Loan Document, any Advances under this Exim Agreement shall bear
interest, on the average daily balance thereof, at a per annum
rate equal to the aggregate of the Prime Rate, PLUS Two Percent
(2.0%)."
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7. The Loan Agreement shall be amended by incorporating into Section 2.5
entitled "Fees" the following text to appear immediately after
paragraph (c) thereof:
"(d) UNUSED LINE FEE. In the event, in any calendar month (or
portion thereof at the beginning and end of the term hereof),
the average daily principal balance of the Advances outstanding
during the month is less than the amount of the Exim Committed
Line, Borrower shall pay Bank an unused line fee in an amount
equal to 0.50% per annum on the difference between the amount of
the Exim Committed Line and the average daily principal balance
of the Advances outstanding during the month, which unused line
fee shall be computed and paid monthly, in arrears, on the first
day of the following month.
(e) PREPAYMENT FEE. If the Obligations are voluntarily or
involuntarily prepaid or if this Exim Agreement is otherwise
terminated prior to its maturity, the Borrower shall pay to Bank
a termination fee in the amount equal to 1% of the Exim
Committed Line, provided that no such termination fee shall be
charged if the credit facility hereunder is replaced with a new
facility from another division of the Bank. The termination fee
shall be due and payable upon prepayment by the Borrower in the
case of voluntary prepayments or upon demand by Bank in the
event of involuntary prepayment, and if not paid immediately
shall bear interest at a rate equal to the highest rate
applicable to any of the Obligations."
8. The Collateral under the Exim Agreement shall been amended to include,
without limitation, the Collateral under the Domestic Agreement, as
amended of even date.
9. The Bank may place a "hold" on any deposit account, operating account
and any other account pledged as Collateral upon and during the
continuance of an Event of Default.
10. It is expressly acknowledged and agreed that the security interest
created in this Exim Agreement in all of the Collateral (with the
exception of Exim Eligible Foreign Accounts, but only to the extent
any Advances are actually made by the Bank to the Borrower based upon
such Exim Eligible Foreign Accounts), is subject to and subordinate to
the security interest granted to the Bank in the Domestic Agreement
with respect to the Collateral.
11. The Borrower acknowledges, confirms and agrees that its
representations, warranties and covenants with respect to the Domestic
Loan Documents under Sections 5.1, 6.1, 7.1 of this Exim Agreement
(including, without limitation, the financial covenants and reporting
requirements appearing in the Schedule to the Domestic Agreement), and
all such other representations, warranties and covenants with respect
to the Domestic Loan Documents appearing in the Exim Agreement, remain
in full force and effect. The Borrower acknowledges, confirms and
agrees that it shall continue to comply with all such representations,
warranties and covenants described in the foregoing sentence
notwithstanding
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any termination of the Domestic Loan Documents or the repayment of all
obligations under the Domestic Loan Documents.
12. The Loan Agreement shall be amended by deleting in its entirety the
following text appearing as Section 8.2 thereof:
"8.2 COVENANT DEFAULT; CROSS DEFAULT. If Borrower fails or
neglects to perform, keep, or observe any material term,
provision, condition, covenant, or agreement contained in this
Exim Agreement, in any of the Domestic Loan Documents, the
Borrower Agreement or the Exim Loan Documents, or an Event of
Default occurs under any of the Domestic Loan Documents or the
Borrower Agreement; or"
and inserting in lieu thereof the following:
"8.2 COVENANT DEFAULT; CROSS DEFAULT. If Borrower fails or
neglects to perform, keep, or observe any material term,
provision, condition, covenant, or agreement contained in this
Exim Agreement, in any of the Domestic Loan Documents, the
Borrower Agreement or the Exim Loan Documents, or an Event of
Default occurs under any of the Domestic Loan Documents or the
Borrower Agreement, or any default under a certain Accounts
Receivable Purchase Agreement between Bank, Open Market, Inc.
and Folio Corporation dated December 27, 2000 (the "Factoring
Agreement"); or"
13. Any Event of Default under the Domestic Agreement, including, without
limitation, those described in Section 7 thereof, shall be an Event of
Default under the Exim Agreement, notwithstanding any termination of
the Domestic Loan Documents and the repayment of all obligations under
the Domestic Loan Documents.
14. In addition to the rights and remedies of Bank described in the Exim
Agreement, the rights and remedies of Bank under the Exim Agreement
shall include all rights and remedies under the Domestic Agreement,
including, without limitation, those described in Section 7 thereof,
notwithstanding any termination of the Domestic Loan Documents and the
repayment of all obligations under the Domestic Loan Documents.
15. The Exim Agreement, as amended hereby, and all acts and transactions
thereunder and all rights and obligations of Bank and Borrower shall
be governed by the laws of the Commonwealth of Massachusetts, except
that, with respect to Borrower's general, special, operating or other
deposit accounts with the Bank, the Exim Agreement and all rights and
remedies of Bank relating to such accounts shall be governed by the
laws of the State of California.
16. FutureTense hereby acknowledges and confirms its grant of a security
interest to Bank in all of its right, title and interest in the
"Collateral" defined in the Loan Agreement, as amended, and hereby
affirmatively grants a security interest in such Collateral to the
Bank to secure all Obligations under the Loan Agreement, as amended
hereby.
17. On or before the date of this Amendment, the Borrower shall: (i)
transfer all primary operating accounts and cash management services
to the Bank, and (ii) terminate any lock box arrangement with any
other institution and enter into a
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lock box arrangement with the Bank on terms satisfactory to the Bank
pursuant to which all amounts payable to the Borrower shall be
directed to the Bank. Any failure by Borrower to perform any
requirement of this paragraph shall be an Event of Default under the
Loan Agreement, as amended hereby.
18. On or before the date of this Amendment, all bank and investment
accounts, cash, investment property and securities of Open Market
Securities, Inc., a Massachusetts subsidiary of Open Market, Inc.,
shall be maintained and deposited with the Bank on terms acceptable to
Bank as collateral under a certain Security Agreement granted by Open
Market Securities, Inc. to Bank. Any failure by Borrower to perform
any requirement of this paragraph shall be an Event of Default under
the Loan Agreement, as amended hereby.
4. FEE. Borrower shall pay to Bank a fee for the modification of the
export-import line equal to Ninety Thousand Dollars ($90,000.00), which fee
shall be due on the date hereof and shall be deemed fully earned as of the date
hereof. The Borrower shall also reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Existing Loan Documents.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
7. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Obligations.
8. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Bank in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement.
9. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Bank cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa ▇▇▇▇▇ County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
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This Loan Modification Agreement is executed as of the date first
written above.
("BORROWER")
OPEN MARKET, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Chief Financial Officer
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FUTURETENSE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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("BANK")
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title:
---------------------------------
SILICON VALLEY BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title:
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(signed in Santa ▇▇▇▇▇ County,
California)
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