Credit Agreement [Amendment No. 1] - Internet Capital Group inc., Internet Capital Group Operations Inc., PNC NA, Bank of America NA, Comerica Bank-California, Imperial Bank and Progress Bank
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of October 27, 1999 (this "Amendment"), to the
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Credit Agreement, dated as of April 30, 1999 (the "Credit Agreement"), among
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INTERNET CAPITAL GROUP, INC., a Delaware corporation ("ICG"), INTERNET CAPITAL
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GROUP OPERATIONS, INC., a Delaware corporation ("ICG Operations" and together
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with ICG, each a "Borrower" and collectively the "Borrowers"), the BANKS (as
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defined therein) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent
for the Banks (the "Agent").
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RECITALS
The Borrowers have advised the Agent and the Banks that they will make an
investment of an aggregate of $50,000,000 (the "eMerge Investment") in eMerge
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Interactive, Inc., a Delaware corporation ("eMerge"), pursuant to the Stock
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Purchase Agreement, dated as of October 27, 1999 (the "Securities Purchase
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Agreement"), by and among ICG, eMerge and J Technologies, LLC, $27,000,000 of
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which shall be paid in cash and $23,000,000 shall be in the form of a
subordinated note due November __, 2000, payable to eMerge (the "eMerge Note").
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The Borrowers have further advised the Agent and the Banks that in return for
the eMerge Investment, the Borrowers shall receive (i) 4,555,556 shares of
Series D Preferred Stock, par value $.01 per share of eMerge, of which (x)
2,555,556 shares (the "eMerge Preferred Stock") will be pledged to eMerge as
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collateral security for the eMerge Note and (y) 2,000,000 shares will be pledged
to the Agent on behalf of the Banks in accordance with the terms of the Loan
Documents (the "Bank Preferred Stock") (the Bank Preferred Stock, together with
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the eMerge Preferred Stock to the extent such eMerge Pledged Stock is, at the
time of determination, then subject to the provisions of Section 6 of this
Amendment, being collectively referred to herein as the "Pledged Preferred
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Stock"), (ii) one million shares of eMerge Common Stock, par value $.01 per
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share, all of which shares shall be pledged to the Agent on behalf of the Banks
in accordance with the terms of the Loan Documents (the "Bank Pledged Common"
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and together with the Pledged Preferred Stock, the "eMerge Pledged Collateral"),
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and (iii) a warrant (the "eMerge Warrant") entitling ICG to purchase 911,111
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shares of eMerge Common Stock, par value $.01 per share (subject to adjustment
as provided in the eMerge Warrant). In connection with the eMerge Investment,
the Borrowers have requested the Agent and the Banks to agree to amend and waive
certain provisions of the Credit Agreement as set forth in this Amendment. The
Agent and the Banks parties hereto are willing to agree to such amendments and
waivers, but only on the terms and subject to the conditions set forth in this
Amendment.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers and the Agent and the Banks parties hereto hereby
agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
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Credit Agreement are used herein as therein.
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2. Amendments.
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(a) Section 1.1 of the Credit Agreement is hereby amended by adding the
following new definitions thereto in the appropriate alphabetical order:
"Amendment No. 1" shall mean Amendment No. 1, dated as of October __,
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1999, to the Credit Agreement.
"Bank Pledged Common" shall have the meaning ascribed thereto in the
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recitals to Amendment No. 1.
"Bank Preferred Stock" shall have the meaning ascribed thereto in the
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recitals to Amendment No. 1.
"eMerge" shall mean eMerge Interactive, Inc., a Delaware corporation.
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"eMerge Investment" shall have the meaning ascribed thereto in the
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recitals to Amendment No. 1.
"eMerge Note" shall have the meaning ascribed thereto in the recitals
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to Amendment No. 1.
"eMerge Pledged Collateral" shall have the meaning ascribed thereto in
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the recitals to Amendment No. 1.
"eMerge Preferred Stock" shall have the meaning ascribed thereto in
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the recitals to Amendment No. 1.
"eMerge Warrant" shall have the meaning ascribed thereto in the
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recitals to Amendment No. 1.
"Pledged Preferred Stock" shall have the meaning ascribed thereto in
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the recitals to Amendment No. 1.
"Stock Purchase Agreement" shall have the meaning ascribed thereto in
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the recitals to Amendment No. 1.
"Supplemental Closing Date" shall have the meaning ascribed to such
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term in Section 3 hereof.
(b) Section 1.1 of the Credit Agreement is hereby amended by amending the
definition of "Borrowing Base" by deleting the last sentence thereof and
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replacing it with the following:
"Notwithstanding anything to the contrary contained herein, when
determining the Borrowing Base, (i) no more than $25,000,000 of the Borrowing
Base shall be attributed to Pledged Collateral issued by any individual
Investment Entity other than eMerge and (ii) no more than $50,000,000 of the
Borrowing Base shall be attributed to eMerge Pledged Collateral issued by
eMerge; provided, however, that in no event shall any advance be made
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hereunder based on the value of the eMerge Preferred Stock which exceeds the
amount then paid by or on behalf of ICG pursuant to the eMerge Note."
(c) Section 7.1.15 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and substituting in lieu thereof a new Section
7.1.15 to read as follows:
"7.1.15 Investments.
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The Borrowers may make Investments in other Persons in addition
to Investments existing on the Closing Date and disclosed in Schedules 1.1(A-1),
1.1(A-2) and 1.1(A-3) attached hereto; provided, however, that (a) the Borrowers
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may only invest a maximum of $25,000,000 in Cash and Cash Equivalents per
calendar year in any Investment Entity other than eMerge, (b) the Borrowers may
only invest a maximum of (x) an aggregate of $75,000,000 in Cash and Cash
Equivalents in eMerge for calendar years 1999 and 2000, and (y) $25,000,000 in
Cash and Cash Equivalents in eMerge in any calendar year subsequent to 2000 and
(c) the Borrowers will promptly, and in any event within five (5) Business Days
of the making of any such Investment provide to the Agent and the Banks an
updated Annex A to the Letter Agreement reflecting any such additional
Investment."
(d) Section 7.2.1 of the Credit Agreement is hereby amended by amending
clause (v) thereof by adding a new sentence at the end thereof as follows:
"For purposes of this clause (v) the aggregate principal amount of
the eMerge Note outstanding shall be considered to be part of the
$100,000,000.00 amount referred to hereinabove; but shall not be
deemed to be Subordinated Debt issued to Persons who are not Company
Insiders."
(e) Section 7.2.3 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and substituting in lieu thereof a new Section
7.2.3 to read as follows:
"7.2.3 Guaranties.
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Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for (a)
subject to Section 7.2.3(b) hereof, Guaranties of Indebtedness in existence as
of the date hereof and listed on Schedule 7.2.3, (b) Guaranties of Indebtedness
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incurred after the date hereof (provided, however, that notwithstanding anything
to the contrary contained herein, (x) subject to subparagraph (y) hereof, in no
event shall the aggregate amount of such Guaranties of Indebtedness permitted
under clauses (a) and (b) of this Section 7.2.3 exceed $8,000,000 at any one
time outstanding for the Loan Parties and their respective Subsidiaries and (y)
in no event shall the aggregate amount of any Guaranty of Indebtedness relating
to the eMerge Investment exceed $23,000,000 at any one time outstanding for the
Loan Parties and their respective
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Subsidiaries) and (c) Guaranties of Indebtedness of the Loan Parties otherwise
permitted hereunder."
(f) The Credit Agreement is hereby amended by deleting Schedules 1.1(P)
and 7.2.1 to the Credit Agreement and substituting in lieu thereof Schedules
1.1(P) and 7.2.1 to this Amendment.
3. Effectiveness. The effectiveness of this Amendment, is subject to the
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satisfaction of the following conditions precedent (the date of such
satisfaction being herein referred to as the "Supplemental Closing Date"):
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(a) Amendment Documents. The Agent shall have received:
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(i) this Amendment, executed and delivered by a duly authorized
officer of each of the Borrowers, with a counterpart for each Bank,
and
(ii) a Common Stock Warrant Power, substantially in the form of
the Warrant Power set forth on Exhibit A to this Amendment (the
"Warrant Power"), executed and delivered by a duly authorized officer
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of each of the Borrowers, with a counterpart or a conformed copy for
each Bank.
Collectively, the documents referenced in clauses (i) through (ii) of
this Section 3(a) are referred to herein as the "Amendment Documents".
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(b) Related Agreements. The Borrowers shall have delivered to the
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Agent, with a copy for each Bank, true and correct copies, certified as to
authenticity by the Borrowers, of the Stock Purchase Agreement.
(c) Concurrent Transaction. The eMerge Investment shall have been,
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or concurrently herewith shall be, consummated in accordance with the terms
of the Stock Purchase Agreement and the other Material Contracts relating
to the eMerge Investment, for such total consideration as set forth in the
Material Contracts relating to the eMerge Investment, in each case without
any material amendment, modification or waiver thereof except with the
consent of the Required Banks, which consent shall not be unreasonably
withheld, and the Agent shall have received evidence satisfactory to it to
that effect.
(d) Borrowing Base Certificate. On or prior to the Supplemental
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Closing Date, the Agent and the Banks shall have received and the Agent and
the Banks shall be satisfied (both as to form and substance) with a pro
forma Borrowing Base Certificate in the form set forth in Exhibit 1.1(B) to
the Credit Agreement which shall be prepared as of a date prior to the
Supplemental Closing Date.
(e) Collateral Assignment of Contract Rights. The Collateral
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Assignment of Contract Rights is hereby amended by supplementing Schedule A
thereto by adding to such Schedule A the material set forth on Schedule A
to this Amendment.
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(f) Proceedings of the Borrower. The Agent shall have received, with
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a counterpart for each Bank, a copy of the resolutions, in form and
substance satisfactory to the Agent, of each of the Borrowers authorizing
the execution, delivery and performance of this Amendment and the other
Amendment Documents to which it is a party, certified by the Secretary or
an Assistant Secretary of each of the Borrowers as of the Supplemental
Closing Date, which certificate shall be in form and substance satisfactory
to the Agent and shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded.
(g) Borrower Incumbency Certificate. The Agent shall have received,
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with a counterpart for each Bank, a certificate of each of the Borrowers,
dated the Supplemental Closing Date, as to the incumbency and signature of
the officers of each of the Borrowers executing this Amendment or the other
Amendment Documents to which each of the Borrowers is a party, satisfactory
in form and substance to the Agent, executed by an Authorized Officer of
each of the Borrowers.
(h) Representations and Warranties. Each of the representations and
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warranties made by each of the Borrowers and the other Loan Parties in or
pursuant to the Loan Documents shall be true and correct in all material
respects on and as of the Supplemental Closing Date as if made on and as of
Supplemental Closing Date (and after giving effect to the amendments
provided for in this Amendment) (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such
specific date).
(i) No Default. No Potential Default or Event of Default shall have
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occurred and be continuing on the Supplemental Closing Date or after giving
effect to the amendments provided for in this Amendment.
(j) Additional Matters. All corporate and other proceedings, and all
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documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, the other Loan Documents and
the eMerge Documents shall be satisfactory in form and substance to the
Agent, and the Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
4. Representations and Warranties. To induce the Agent and the Banks to
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enter into this Amendment, the Borrowers hereby represent and warrant to the
Agent and the Banks that, after giving effect to the amendments provided for
herein, the representations and warranties contained in the Credit Agreement and
the other Loan Documents will be true and correct in all material respects as if
made on and as of the date hereof and that no Potential Default or Event of
Default will have occurred and be continuing (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date).
5. Consent and Acknowledgement. The Agent and the Banks hereby consent to
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and acknowledge that for purposes of the Credit Agreement the eMerge Investment
when consummated by the Borrowers will (i) not be deemed a transaction with an
Affiliate prohibited
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under Section 7.2.8 and (ii) not violate Section 7.2.15, in the event that under
the eMerge Note eMerge exercises its option to require prepayment on the eMerge
Note in an amount not to exceed $5,000,000 before May 1, 2000.
6. Covenants and Agreements. The Agent and the Banks agree that the
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delivery requirements of Sections 7.1.18 and 7.1.19 shall be waived as they
relate to the Borrowers' obligations to deliver Consents, Certificates and
Powers relating to the eMerge Preferred Stock and in lieu thereof the Borrowers
hereby covenant and agree that each Borrower shall cause the Consents,
Certificates and Powers relating to the eMerge Preferred Stock to be delivered
to the Agent promptly (and in any event within sixty (60) days) after the
obligations evidenced by the eMerge Note shall have been satisfied, either in
whole or in part, to such extent.
7. No Other Amendments. Except as expressly amended hereby, the Credit
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Agreement, the Notes and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms, without any waiver, amendment
or modification of any provision thereof.
8. Counterparts. This Amendment may be executed by one or more of the
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parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
9. Expenses. The Borrowers agree to pay and reimburse the Agent for all
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of the out-of-pocket costs and expenses incurred by the Agent in connection with
the preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and disbursements of Buchanan Ingersoll
Professional Corporation, counsel to the Agent.
9. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
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INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
INTERNET CAPITAL GROUP, INC.
By: /s/ John N. Nickolas
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Name: John N. Nickolas
Title: Managing Director
INTERNET CAPITAL GROUP OPERATIONS, INC.
By: /s/ John N. Nickolas
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Name: John N. Nickolas
Title: Managing Director
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /s/ John T. Freyhof
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Name: John T. Freyhof
Title: Vice President
BANK OF AMERICA, N.A., formerly known as
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Jouni Korhonen
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Name: Jouni Korhonen
Title: Principal
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COMERICA BANK-CALIFORNIA
By: /s/ Alan Jepsen
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Name: Alan Jepsen
Title: Vice President
IMPERIAL BANK
By: /s/ April L. Young
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Name:
Title:
PROGRESS BANK
By: /s/ Liz A. Lambert
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Name: Liz A. Lambert
Title: Vice President
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SCHEDULE 1.1 (P)
TO AMENDMENT NO. 1
PERMITTED LIENS
Lien securing ICG's obligations to pay eMerge the indebtedness evidenced by the
eMerge Note.
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SCHEDULE 7.2.1
TO AMENDMENT NO. 1
PERMITTED INDEBTEDNESS
PrivaSeek, Inc.
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(1) Note secured by Stock Pledge Agreement dated as of December 28, 1998
(the "PrivaSeek Note"), made by Internet Capital Group, Inc.
(successor in interest to Internet Capital Group, LCC) in favor of
PrivaSeek, Inc., in the principal amount of $1,713,364.06. The
PrivaSeek Note was secured by a pledge of 691,244 shares of Series A
Preferred Stock of PrivaSeek, Inc. purchased by ICG as of the closing
date of the Investment Agreement dated as of December 24, 1998 by and
among PrivaSeek, Inc. and the Purchasers named therein and Excite,
Inc. As of the Closing Date of the Agreement, the principal amount
outstanding under the PrivaSeek Note was $856,682.03, of which ICG is
obligated to pay $642,511.53, due and payable in accordance with the
terms of the Note on June 27, 1999. The remainder of the principal
amount outstanding on the note ($214,170.50) is payable by an
affiliate of Comcast Corp.
eMerge Interactive, Inc.
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(1) Note dated as of November __, 1999 (the "eMerge Note"), made by
Internet Capital Group, Inc. in favor of eMerge Interactive, Inc., in
the principal amount of $23,000,000. The eMerge Note is secured by a
pledge of 2,555,556 shares of Series D Preferred Stock of eMerge
Interactive, Inc. purchased by ICG pursuant to the terms of that
certain Stock Purchase Agreement, dated as of October 27, 1999, by and
among eMerge Interactive, Inc. and ICG.
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EXHIBIT A
TO AMENDMENT NO. 1
COMMON STOCK WARRANT
POWER
For Value Received, the undersigned Holder of the attached Warrant
hereby sells, assigns and transfers to the transferee whose name and address are
set forth below all of the rights of the undersigned under the within Warrant
(to the extent of the portion of the within Warrant being transferred hereby,
which portion is __________________).
Name of Transferee: _______________________________________
State of Organization (if applicable):______________________
Federal Tax Identification or
Social Security Number:__________________________________
Address: __________________________________________________
If this transfer is not a transfer of the Warrant in full, then the
undersigned hereby requests that, as provided in the within Warrant, a new
warrant of like tenor respecting the balance of the Exercise Quantity not being
transferred pursuant hereto be issued in the name of and delivered to, the
undersigned. The undersigned does hereby irrevocably constitute and appoint
__________________________________ attorney to register the foregoing transfer
on the books of the Company maintained for that purpose, with full power of
substitution in the premises.
Dated:_______________________ _________________________________________
(Name of Registered Holder - Please Print)
By_______________________________________
(Signature of Registered Holder or
of Duly Authorized Signatory)
Title_______________________________
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SCHEDULE A
TO AMENDMENT NO. 1
MATERIAL CONTRACTS
eMerge Interactive, Inc.
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Securities Purchase Agreement dated as of October 27, 1999 among eMerge
Interactive, Inc., J Technologies, LLC and Internet Capital Group, Inc.
Stockholders Agreement among eMerge Interactive, Inc., Internet Capital Group,
Inc. and the stockholders listed on the signature pages thereto.
Registration Rights Agreement among eMerge Interactive, Inc., Internet Capital
Group, Inc. and the stockholders listed on the signature pages thereto
Pledge Agreement between Internet Capital Group, Inc. and eMerge Interactive,
Inc.
Lockup Agreement between Internet Capital Group and Adams, Harkness & Hill, Inc.