EXHIBIT 10.1
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement (this "Loan Modification
Agreement") is entered into as of March 16, 2005, 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 ("Bank") and INTERNET COMMERCE CORPORATION, a Delaware
corporation with its principal place of business at 0000 Xxxxxxxxx Xxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 ("Borrower").
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank,
Borrower is indebted to Bank pursuant to a loan arrangement dated as of
May 30, 2003, evidenced by, among other documents, a certain Accounts
Receivable Financing Agreement dated May 30, 2003 between Borrower and
Bank, as amended by a certain First Loan Modification Agreement dated
October 22, 2003, as further amended by a certain Second Loan
Modification Agreement dated August 31, 2004, and as further amended by
a certain Third Loan Modification Agreement dated December 31, 2004 (as
amended from time to time, the "Loan Agreement"). Capitalized terms
used but not otherwise defined herein shall have the same meaning as in
the Loan Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by
the Collateral as described in the Loan Agreement and the Intellectual
Property Collateral as described in a certain Intellectual Property
Security Agreement dated as of May 30, 2003 (the "IP Security
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.
Modifications to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the
following definition appearing in Section 1 thereof:
" "APPLICABLE RATE" is a per annum rate
equal to the Prime Rate plus 0.35%."
and inserting in lieu thereof the following:
" "APPLICABLE RATE" is a per annum rate
equal to the Prime Rate plus 0.25%;
provided, however, for any Reconciliation
Period in which Borrower's Adjusted Quick
Ratio is less than 1.25 to 1.0 at any time,
the Applicable Rate shall be a per annum
rate equal to the Prime Rate plus 0.75% for
such Reconciliation Period."
2. The Loan Agreement shall be amended by deleting the
following definition appearing in Section 1 thereof:
" "FACILITY PERIOD" is the period beginning
on this date and continuing until February
12, 2005, unless the period is terminated
sooner by Bank with notice to Borrower or by
Borrower pursuant to Section 4.3."
and inserting in lieu thereof the following:
1
" "FACILITY PERIOD" is the period beginning
on this date and continuing until March 16,
2006, unless the period is terminated sooner
by Bank with notice to Borrower or by
Borrower pursuant to Section 4.3."
3. The Loan Agreement shall be amended by deleting the
following definition appearing in Section 1 thereof:
" "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."
and inserting in lieu thereof the following:
" "QUICK ASSETS" is, on any date, the
Borrower's consolidated, unrestricted cash,
cash equivalents, and net accounts
receivable determined according to GAAP."
4. The Loan Agreement shall be amended by deleting the
following, appearing as Section 3.4 thereof:
"3.4 COLLATERAL HANDLING FEE. On each
Reconciliation Day, Borrower will pay to
Bank a collateral handling fee, equal to
0.20% per month of the average daily
Financed Receivable Balance outstanding
during the applicable Reconciliation Period.
After an Event of Default, the Collateral
Handling Fee will increase an additional
0.30% effective immediately before the Event
of Default."
and inserting in lieu thereof the following:
"3.4 COLLATERAL HANDLING FEE. On each
Reconciliation Day, Borrower will pay to
Bank a collateral handling fee, equal to
0.15% per month of the average daily
Financed Receivable Balance outstanding
during the applicable Reconciliation Period;
provided, however, for any Reconciliation
Period in which Borrower's Adjusted Quick
Ratio is less than 1.25 to 1.0 at any time,
the Collateral Handling Fee shall be equal
to 0.35% per month of the average daily
Financed Receivable Balance outstanding
during such Reconciliation Period. After an
Event of Default, the Collateral Handling
Fee will increase an additional 0.30%
effective immediately before the Event of
Default."
5. The Loan Agreement shall be amended by deleting the
following, appearing as Section 6.3(H) thereof:
" (H) Provide Bank with, as soon as
available, but no later than twenty (20)
days following each Reconciliation Period,
an aged listing of accounts receivables and
accounts payable, along with a Deferred
Revenue report. All of the foregoing shall
be in form and substance reasonably
satisfactory to the Bank."
and inserting in lieu thereof the following:
" (H) Provide Bank with, as soon as
available, but no later than thirty (30)
days following each Reconciliation Period,
an aged listing of accounts receivables and
accounts payable, along with a Deferred
Revenue report. All of
2
the foregoing shall be in form and substance
reasonably satisfactory to the Bank."
4. FEES. Borrower shall pay to Bank a modification fee of Ten Thousand
Dollars ($10,000.00), which fee shall be due on the date hereof and
shall be deemed fully earned as of the date hereof. Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection
with this amendment to the Existing Loan Documents.
5. RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT. Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms
and conditions of the IP Security Agreement, and acknowledges, confirms
and agrees that the IP Security Agreement contains an accurate and
complete listing of all Intellectual Property Collateral as defined
therein.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
7. 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.
8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against
Bank with respect to the Obligations, or otherwise, and that if
Borrower now has, or ever did have, any offsets, defenses, claims, or
counterclaims against Bank, whether known or unknown, at law or in
equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES Bank from any liability thereunder.
9. 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
of Existing Loan Documents, unless the party is expressly released by
Bank in writing. No maker will be released by virtue of this Loan
Modification Agreement.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.
[The remainder of this page is intentionally left blank]
3
This Loan Modification Agreement is executed as a sealed instrument
under the laws of the Commonwealth of Massachusetts as of the date first written
above.
BORROWER: BANK:
INTERNET COMMERCE CORPORATION SILICON VALLEY BANK
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------ -----------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxxx Xxxxxxxx
---------------------------------------- ---------------------------------------
Title: CFO Title: Senior Vice President
-------------------------------------- --------------------------------------
4
