Exhibit 10.36
THIRD LOAN MODIFICATION AGREEMENT
This Third Loan Modification Agreement (this "Loan Modification
Agreement") is entered into as of June 28, 2002, by and between SILICON VALLEY
BANK, a California-chartered bank, with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and with a loan production office
located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462, doing business under the name "Silicon Valley East"
("Bank") and MERCATOR SOFTWARE, INC., a Delaware corporation with its principal
place of business at 45 Danbury Road, Wilton, Connecticut 06897("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 June 22, 2001,
evidenced by, among other documents, a certain Accounts Receivable Financing
Agreement dated as of June 22, 2001, as amended by a certain Accounts Receivable
Financing Modification Agreement dated as of September 18, 2001, as further
amended by a certain Second Loan Modification Agreement dated as of November 29,
2001 (the "Loan Agreement"). Capitalized terms used but not otherwise defined
herein shall have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness and obligations owing by Borrower to Bank shall be
referred to as the "Obligations".
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by
the Collateral as described in the Loan Agreement and in a certain Intellectual
Property Security Agreement dated June 22, 2001 (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 adding the following
definition in Section 1 thereof:
"Letter of Credit" means a letter of credit or
similar undertaking issued by Bank pursuant to
Section 3A."
2. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1 thereof:
"Current Liabilities" are the aggregate amount of
Borrower's Total Liabilities which mature within one
(1) year."
and inserting in lieu thereof the following:
"Current Liabilities" are the aggregate amount of
Borrower's (i) Total Liabilities which mature within
one (1) year and (ii) the face amount of any Letters
of Credit issued hereunder (other than those Letters
of Credit which have been collateralized by cash
pursuant to Section 3A.2)."
3. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1 thereof:
"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
(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"
and inserting in lieu thereof the following:
"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 (including those acquired by
assignment) primary or secondary, such as all
Advances, reimbursement obligations with respect to
Letters of Credit, 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"
4. The Loan Agreement shall be amended by adding the following
Section as new Section 3A therein:
"3A Letters of Credit.
3A.1 At the request of Borrower, Bank may, in its
commercially reasonable discretion, issue or have
issued Letters of Credit for Borrower's account,
provided, however, the face amount of all outstanding
Letters of Credit (including drawn but unreimbursed
Letters of Credit) may not exceed the lesser of: (i)
$4,000,000 or (ii) an amount such that the Borrower
is not in compliance with the covenant set forth in
Section 6.3 (Q) herein. All Letters of Credit shall
be, in form and substance, acceptable to Bank in its
sole discretion, shall be payable in United States
Dollars, and shall be subject to the terms and
conditions of Bank's form of standard Application and
Letter of Credit Agreement. Borrower agrees to
execute any further documentation in connection with
the Letters of Credit as Bank may reasonably request.
3A.2 On the last day of the Facility Period or after
the occurrence of an Event of Default, all Letters of
Credit shall be secured by cash on terms commercially
reasonable to the Bank, not to exceed 105% of the
face amount of such Letters of Credit.
3A.3 The obligation of Borrower to immediately
reimburse Bank for drawings made under Letters of
Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and such
Letters of Credit, under all circumstances
whatsoever. Borrower shall indemnify, defend,
protect, and hold Bank harmless from any loss, cost,
expense or liability, including, without limitation,
reasonable attorneys' fees, arising out of or in
connection with any Letters of Credit."
5. The Loan Agreement shall be amended by adding the following
text at the end of Section 6.3 (L):
"Notwithstanding the foregoing, Borrower shall
maintain an Adjusted Quick Ratio of 1.30 to 1.0 for
June, 2002 and 1.25 to 1.0 for July, 2002."
6. The Loan Agreement shall be amended by adding the following
section as new Section 6.3 (P):
>
"(P) Maintain all of Borrower's domestic depository
accounts, domestic operating accounts and domestic
securities accounts with Bank, except that Borrower
may open and maintain other domestic depository
accounts provided the aggregate balance of those
accounts is less than $200,000. Notwithstanding the
foregoing, provided that Borrower uses reasonable
efforts to promptly transfer such funds when
available, Borrower may maintain a concentration
account which may temporarily exceed a balance of
$200,000 until such funds are available for transfer
to Borrower's domestic accounts maintained with
Bank."
7. The Loan Agreement shall be amended by adding the following
section as new Section 6.3 (Q):
"(Q) Maintain, at all times, a ratio of (i) the face
amount of its domestic Accounts which are not
Ineligible Receivables, minus the outstanding face
amount of all Financed Receivables to (ii) the face
amount of any outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit),
equal to or greater than 1.6 to 1.0."
4. FEES. Borrower shall pay to Bank a modification fee equal to Two
Thousand Five Hundred Dollars ($2,500.00), 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 reasonable 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, except as disclosed on Exhibit A hereto, the IP Security Agreement
contains an accurate and complete listing of all Intellectual Property
Collateral as defined in said Intellectual Property Security Agreement.
6. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies,
confirms and reaffirms, all and singular, the terms and disclosures contained in
a certain Perfection Certificate dated as of June 22, 2001 between Borrower and
Bank, and acknowledges, confirms and agrees that, except as disclosed on Exhibit
B hereto, the disclosures and information Borrower provided to Bank in the
Perfection Certificate has not changed, as of the date hereof.
7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
8. 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.
9. 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.
10. 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,
subject, however, to the disclosures set forth on Exhibit C hereto. 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 modify 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.
>
11. COUNTERSIGNATURE. This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.
[signature page follows]
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.
MERCATOR SOFTWARE, INC.
By /s/ Kenneth J. Hall
Title EVP, CFO and Treasurer
SILICON VALLEY BANK
By /s/ David Reich
Title Senior Vice President
>
EXHIBIT A
Perfection Certificate Update
2. (c)
Delete from locations where Equipment and or Inventory of the Company is
located:
1. 25 Corporate Drive, Burlington, MA 01803
2. 11491 Sunset Hills Road, Suite 300, Reston VA 20190
3. 275 Madison Avenue, 24th Floor, New York, NY 10016
Add to locations where Equipment and or Inventory of the Company is located:
1. 711 Third Avenue, Suite 900, New York, NY 10017
2. 11720 Sunrise Valley Drive, Suite 200, Reston, VA 20191
Attachment 3
Add to Prior locations with the past five years:
1. 25 Corporate Drive, Burlington, MA 01803
2. 11491 Sunset Hills Road, Suite 300, Reston, VA 20190
3. 275 Madison Avenue, 24th Floor, New York, NY 10016
>
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Matter Report Exhibit B
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OPEN Matters; CLIENTS: Inclusive -- 00992; MATTERS: All;
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BILL
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CLIENT MATTER COUNTRY ATTY CLASS STATUS NAME
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00992 T0001A United States GSW TMK Registered TSI (BLOCK LETTERS)
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00992 T0015A United States GSW TMK Registered KEY/MASTER
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00992 T0020A United States GSW TMK Registered TASK/MASTER
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00992 T0029A United States GSW TMK Registered TRADING PARTNER
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00992 T0030B United States GSW TMK Registered EASYPATH
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00992 T0031A United States GSW TMK Registered EASYLOGIC
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00992 T0032A United States GSW TMK Registered TRANSLATE
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00992 T0055A United States GSW TMK Registered TRADING PARTNER
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00992 T0060A United States GSW TMK Registered MERCATOR (Class 9)
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00992 T0060B United States GSW TMK Registered MERCATOR (Class 9)
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00992 T0060C United States GSW TSM Registered MERCATOR (Class 42)
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00992 T0060D United States GSW TSM Registered MERCATOR (Class 41)
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00992 T0079A United States GSW TMK Registered TSI SOFT and Design
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00992 T0079C United States GSW TSM Suspended TSI SOFT and Design
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00992 T0086A United States GSW TSM Registered BUSINESSLINK
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Matter Report Exhibit B
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OPEN Matters; CLIENTS: Inclusive -- 00992; MATTERS: All;
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FILING ISSUE EXPIRE
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CLIENT DATE SERIAL NO DATE REG NO DATE
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00992 1986/04/02 73/591,175 1990/11/13 1,622,107 2010/11/13
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00992 1975/09/11 73/062,738 1976/12/14 1,054,242 2006/12/14
- ----------------------------------------------------------------------------------------------
00992 1971/01/20 72/381,499 1972/10/24 946,062 2002/10/24
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00992 1989/12/18 74/011,828 1991/10/15 1,660,560 2011/10/15
- ----------------------------------------------------------------------------------------------
00992 1993/03/19 74/369,220 1994/08/02 1,847,603 2004/08/02
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00992 1990/05/18 74/060,535 1991/05/14 1,644,296 2011/05/14
- ----------------------------------------------------------------------------------------------
00992 1986/11/14 73/630,402 1988/02/09 1,475,704 2008/02/09
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00992 1989/12/11 74/009,319 1990/10/02 1,615,543 2010/10/02
- ----------------------------------------------------------------------------------------------
00992 1991/12/13 74/229,939 1994/04/05 1,829,798 2004/04/05
- ----------------------------------------------------------------------------------------------
00992 1998/06/04 75/496,348 1999/09/28 2,281,097 2009/09/28
- ----------------------------------------------------------------------------------------------
00992 1998/07/06 75/513,974 1999/08/31 2,274,277 2009/08/31
- ----------------------------------------------------------------------------------------------
00992 1998/07/08 75/515,072 1999/08/31 2,274,290 2009/08/31
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00992 1996/08/19 75/152,032 1999/02/02 2,221,935 2009/02/02
- ----------------------------------------------------------------------------------------------
00992 1997/10/27 75/379,849
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00992 1997/07/28 75/332,021 1998/10/06 2,193,582 2008/10/06
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>
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Matter Report Exhibit B
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OPEN Matters; CLIENTS: Inclusive -- 00992; MATTERS: All;
- ----------------------------------------------------------------------------------------------
BILL
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CLIENT MATTER COUNTRY ATTY CLASS STATUS NAME
- ----------------------------------------------------------------------------------------------
00992 T0135A United States GSW TMK Suspended M-SHAPED PAPER AIRPLANE DESIGN
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00992 T0135B United States GSW TSM Registered M-SHAPED PAPER AIRPLANE DESIGN
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00992 T0135C United States GSW TSM Registered M-SHAPED PAPER AIRPLANE DESIGN
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00992 T0136A United States GSW TMK Pending THE E-BUSINESS TRANSFORMATION COMPANY
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00992 T0136B United States GSW TSM Pending THE E-BUSINESS TRANSFORMATION COMPANY
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00992 T0136C United States GSW TSM Pending THE E-BUSINESS TRANSFORMATION COMPANY
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00992 T0156D United States GSW TSM Pending MYMERCATOR
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00992 T0162D United States GSW TSM Pending MYMERCATOR.COM
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00992 T0164A United States GSW TMK Registered NOVERA EPIC
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00992 T0166A United States GSW TMK Registered NOVERA
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00992 T0209A United States GSW TMK Allowed INTEGRATION BROKER
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00992 T0209B United States GSW TSM Published INTEGRATION BROKER
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00992 T0209C United States GSW TSM Published INTEGRATION BROKER
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Matter Report Exhibit B
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OPEN Matters; CLIENTS: Inclusive -- 00992; MATTERS: All;
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FILING ISSUE EXPIRE
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CLIENT DATE SERIAL NO DATE REG NO DATE
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00992 2000/01/13 75/896,267
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00992 2000/01/13 75/896,266 2001/10/30 2,503,016 2011/10/30
- ----------------------------------------------------------------------------------------------
00992 2000/01/13 75/896,265 2001/10/16 2,499,048 2011/10/16
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00992 2000/02/15 75/919,983
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00992 2000/02/15 75/919,982
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00992 2000/02/15 75/919,981
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00992 2001/12/18 76/349,584
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00992 2001/12/18 76/349,585
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00992 1996/11/14 75/197,621 1998/06/23 2,168,474 2008/06/23
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00992 1996/06/13 75/118,134 1997/09/12 2,120,543 2007/09/12
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00992 2001/09/10 76/310,869
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00992 2001/09/10 76/310,870
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00992 2001/09/10 76/310,871
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>
EXHIBIT C
Compliance Certificates previously furnished to Silicon Valley Bank dated as
follows:
June 30, 2001
September 18, 2001
September 30, 2001
December 31, 2001
March 31, 2002
June 30, 2002