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EXHIBIT 10.10
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of May 10, 1999, by
and between Fort Point Partners, Inc. ("Borrower") and Silicon Valley Bank
("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement, dated May 11, 1998, as may be
amended from time to time, (the "Loan Agreement"). The Loan Agreement provided
for, among other things, a Committed Revolving Line in the original principal
amount of One Million Dollars ($1,000,000). Defined terms used but not
otherwise defined herein shall have the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement
1. Subparagraph (a) in Section 2.1.1 entitled "Revolving Advances"
shall now read as:
(a) Bank will make Advances not exceeding (i) the Committed
Revolving Line or the Borrowing Base, whichever is less, minus
(ii) the amount of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit). Amounts borrowed under
this Section may be repaid and reborrowed during the term of this
Agreement.
2. The following shall be included as Section 2.1.2 entitled
"Letters of Credit":
Letters of Credit. Subject to the terms and conditions of this
Agreement, Bank agrees to issue or cause to be issued Letters of Credit for the
account of Borrower in an aggregate face amount not to exceed (i) the lesser of
the Committed Revolving Line or the Borrowing Base minus (ii) the then
outstanding principal balance of the Note; provided that the face amount of
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) shall not in any case exceed Three Hundred Thousand Dollars ($300,000).
Each such Letter of Credit shall have an expiry date no later than one hundred
eighty (180) days after the Revolving Maturity Date of the Committed Revolving
Line, provided that Borrower's Letter of Credit reimbursement obligation shall
be secured by cash on terms acceptable to Bank at any time after the Revolving
Maturity Date if the term of the Agreement is not extended by Bank. All such
Letters of Credit shall be, in form and substance, acceptable to Bank in its
sole discretion and shall be subject to the terms and conditions of Bank's form
of application and Letter of Credit agreement.
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Borrower shall indemnify, defend 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.
Borrower may request that Bank issue a Letter of Credit payable
in a currency other than United States Dollars. If a demand for
payment is made under any such Letter of Credit, Bank shall treat
such demand as an Advance to Borrower of the equivalent of the
amount thereof (plus cable charges) in United States currency at
the then prevailing rate of exchange in San Francisco,
California, for sales of that other currency for cable transfer
to the country of which it is the currency.
Upon the issuance of any Letter of Credit payable in a currency
other than United States Dollars, Bank shall create a reserve
(the "Letter of Credit Reserve") under the Committed Line for
Letters of Credit against fluctuations in currency exchange
rates, in an amount equal to ten percent (10%) of the face amount
of such Letter of Credit. The amount of such reserve may be
amended by Bank from time to time to account for fluctuations in
the exchange rate. The availability of funds under the Committed
Revolving Line shall be reduced by the amount of such reserve for
so long as such Letter of Credit remains outstanding.
3. Notwithstanding anything to the contrary contained in Section 6.2
entitled "Financial Statements, Reports, Certificates", Borrower
shall submit its audited fiscal year end financial statements
within 120 days of year end, beginning with the year ending
December 31, 1999.
4. Section 6.7 entitled "Financial Covenants" is hereby deleted in
its entirety and replaced with the following:
Borrower will maintain as of the last day of each month:
(i) Quick Ratio. A ratio of Quick Assets to Current Liabilities
of at least 1.40 to 1.00.
(ii) Debt/Tangible Net Worth Ratio. A ratio of Total Liabilities
less Subordinated Debt to Tangible Net Worth plus Subordinated
Debt of not more than 1.50 to 1.00.
(iii) Profitability. Borrower will be profitable each quarter,
except that Borrower may suffer a one fiscal quarterly loss per
fiscal year.
5. In Section 13 entitled "Definitions", the subsection (d) of the
definition of "Eligible Accounts" shall now read as:
(d) Accounts for an account debtor, including Affiliates, whose
total obligations to Borrower exceeded 25% of all Accounts, for
the amounts that exceed that percentage, unless the Bank approves
in writing.
6. Section 13 entitled "Definitions" is hereby amended as follows:
"Committed Revolving Line" is an Advance of up to $1,250,000.
"Revolving Maturity Date" is May 10, 2000.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
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5. PAYMENT OF LOAN FEE. Borrower shall pay to Bank a fee in the amount of Six
Thousand Two Hundred Fifty Dollars ($6,250) (the "Loan Fee").
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, 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 Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. 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. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
FORT POINT PARTNERS, INC. SILICON VALLEY BANK
*By: /s/ JAMES ROCHE By: /s/ FRANCISCO TERRIZZANO
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*Name: JAMES ROCHE Name: Francisco Terrizzano
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*Title: CEO Title: VP
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