EXHIBIT 10.51
FIRST AMENDMENT TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "Amendment") is entered into as of November 26, 2003, by and
between SILICON VALLEY BANK, a California-chartered bank (the "Bank"), and
CRITICAL PATH, INC., a California corporation (the "Borrower"), in reliance on
the following:
RECITALS
A. On or about July 18, 2003, the Borrower and the Bank entered
into that certain Amended and Restated Loan and Security Agreement pursuant to
which the Bank made available to the Borrower a revolving credit facility (the
"Senior Debt Facility") in the principal amount of up to Fifteen Million Dollars
($15,000,000.00). The Amended and Restated Loan and Security Agreement, along
with all other documents entered into by or on behalf of the Borrower in
connection therewith, are hereinafter referred to as the "Senior Loan
Documents", and each capitalized term used in this Amendment shall have the
meaning accorded to it in the Senior Loan Documents unless it is otherwise
defined herein.
B. The Borrower has entered into that certain Convertible Note
Purchase and Exchange Agreement, dated as of November 18, 2003, among the
Borrower, General Atlantic Partners 74, L.P. ("GAP 74"), GAP Coinvestment
Partners II, L.P. ("GAP Coinvestment"), GapStar, LLC ("GapStar") and GAPCO GmbH
& Co. KG ("GAPCO" and, together with GAP 74, GAP Coinvestment and GapStar, the
"Investors"), and the other entities listed on the signature pages thereto
(collectively with the notes and other documents to be executed and delivered by
the Borrower in connection therewith, as amended in accordance with the terms of
the Subordination Agreement defined below, the "Junior Debt Documents"),
pursuant to which the Borrower will issue to such Investors convertible notes in
the aggregate principal amount of Ten Million Dollars ($10,000,000) (the "Junior
Debt") and will grant to the Investors a security interest in certain of the
Collateral on November 26, 2003. The Bank is willing to consent to the
Borrower's entering into the Junior Debt Documents, issuing the convertible
notes thereunder to the Investors and granting a security interest in certain of
the Collateral to the Investors, but only upon the terms hereof.
AGREEMENT
NOW, THEREFORE, in reliance upon the foregoing and in consideration of
the mutual covenants set forth herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1 Consent to Junior Debt Documents. The Bank hereby
consents to each of the Borrower's and the Borrower's direct and indirect
subsidiaries' (including but not limited to its subsidiary Compass Holding
Corp.): (i) incurring indebtedness and guarantees of indebtedness under the
Junior Debt Documents; (ii) granting to the Investors a security interest in
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its assets and property, all as more fully set forth in the Junior Debt
Documents (it being acknowledged by the Bank that such security interest shall
constitute a "Permitted Lien" under the Senior Loan Documents to the extent that
such security interest is subordinate to the Bank's lien upon the Collateral as
provided in the Subordination Agreement); and (iii) entering into and performing
their obligations under the Junior Debt Documents; provided, however, that the
Bank's consent to the foregoing is expressly predicated upon the terms of the
Junior Debt Documents as of the date of this Amendment and does not constitute,
nor is it intended to constitute, a consent to any subsequent modifications to
the Junior Debt Documents. The Bank also hereby consents to the changes in the
Borrower's capital structure, the conversion of all or any portion of the Junior
Debt into equity interests of the Borrower or another entity (as contemplated by
the convertible notes referred to above) at any time and the consummation of all
other transactions contemplated by the Junior Debt Documents pursuant to their
respective terms as of the date hereof.
2 No Amendment of Junior Debt Documents. The Borrower
agrees that it shall not enter into, nor consent to, any amendment of the Junior
Debt Documents that is likely to result in a material adverse change to the
Bank's rights and remedies under the Senior Debt Documents or the Subordination
Agreement without first obtaining the Bank's consent thereto.
3 Reduction of the Credit Limit. On and after the
effective date of this Amendment, the Bank shall reduce the Credit Limit from
Fifteen Million Dollars ($15,000,000.00) to Five Million Dollars ($5,000,000.00)
(the "New Credit Limit") and shall also reduce the Letter of Credit Sublimit
from Six Million Dollars ($6,000,000.00) to Two Million Eight Hundred Thousand
Dollars ($2,800,000.00).
4 Reaffirmation of Obligations. The Borrower reaffirms
to the Bank that, as of the date hereof, the outstanding principal amount of all
Loans under the Senior Loan Documents (including the face amount of all Letters
of Credit outstanding under the Letter of Credit Sublimit) is Seven Million Four
Hundred Thousand and No/100 Dollars ($7,400,000.00). The Borrower acknowledges
that the Senior Loan Documents fully and accurately reflect and constitute the
valid and enforceable Obligations of the Borrower to the Bank, and the Borrower
remains fully obligated to perform all covenants thereunder and has no defenses
to or offsets against such Obligations.
5 Conditions to Effectiveness. The following conditions
must be satisfied in full, or waived in writing by the Bank, before this
Amendment shall be effective and the Bank shall become obligated hereunder.
5.1 Execution and Delivery of Documents. The
Borrower shall have executed and delivered to the Bank this Amendment, and the
Bank shall have received any and all other instruments and documents, fully
executed and in form and substance acceptable to the Bank, as are contemplated
hereby or otherwise reasonably requested by the Bank, including the
Subordination Agreement with the Investors.
5.2 Payment of Fees and Expenses. The Borrower
shall have paid to the Bank all fees due and owing under the Senior Loan
Documents as amended hereby, as well as a sum sufficient to reimburse the Bank
for all costs and expenses incurred by the Bank in
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entering into this Amendment, the Subordination Agreement and any and all other
documents and instruments contemplated hereby or thereby (including but not
limited to all attorneys' fees and expenses.)
5.3 Payment of Principal Accrued Interest. The
Borrower shall have paid to the Bank all outstanding principal amounts under the
Senior Loan Documents in excess of the New Credit Limit, plus all accrued
interest thereon that is due and owing, on or before the date on which this
Amendment becomes effective.
5.4 Representations and Warranties; No Default.
The representations and warranties of the Borrower as set forth in the Senior
Loan Documents shall be true and correct in all material respects as of the date
on which this Amendment becomes effective, and no Event of Default shall have
occurred and be continuing as of such date without having been cured.
6 Continued Full Force and Effect. Except to the extent
expressly amended hereby, all of the terms and provisions of the Senior Loan
Documents shall remain in full force and effect, and the lien in favor of the
Bank in the Collateral shall be and remain a fully perfected senior lien upon
all of the Collateral pursuant to the terms of the Senior Loan Documents, it
being the intent of the parties that nothing herein shall affect or impair the
Bank's rights or remedies under the Senior Loan Documents or its lien upon the
Collateral. Henceforth, the term "Loan Documents" shall be deemed to mean the
Senior Loan Documents as modified and supplemented by the terms of this
Amendment, and any default of the Borrower hereunder shall constitute an Event
of Default under the Senior Loan Documents.
7 General Provisions.
7.1 Choice of Law and Venue. This Amendment
shall be governed by and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law, and any
action or proceeding arising out of this Agreement shall be commenced in the
Superior Court of the State of California for the County of Santa Clara, or in
the District Court of the United States in the Northern District of California.
7.2 WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
ON THE ONE HAND, AND THE BANK, ON THE OTHER HAND, WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AMENDMENT, THE LOAN AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AMENDMENT. EACH PARTY HAS
REVIEWED THIS WAIVER WITH ITS COUNSEL AND UNDERSTANDS THE RAMIFICATIONS THEREOF.
7.3 Entire Agreement. This Amendment and the
Loan Agreement together constitute the entire agreement and understanding
between the parties hereto with respect to the transactions contemplated
hereunder and thereunder and supersede all prior
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negotiations, understandings and agreements between the parties with respect to
such transactions.
7.4 Counterparts. This Amendment may be executed
and delivered in any number of counterparts, each of which shall be an original
and all of which together shall constitute one and the same agreement.
7.5 Time of the Essence. Time is of the essence
in the performance by each party of its obligations hereunder and the
satisfaction of all conditions specified herein.
IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized representative to execute this Amendment as of the date first set
forth above.
BORROWER: BANK:
CRITICAL PATH, INC. SILICON VALLEY BANK,
a California corporation a California-chartered bank
CRITICAL PATH, INC. SILICON VALLEY BANK,
a California corporation a California-chartered bank
By: /s/ Michael J. Zukerman By: /s/ Brian Harrison
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Name: Michael J. Zukerman Name: Brian Harrison
Title: SVP and General Counsel Title: Vice President
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