SECOND AMENDMENT TO ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Second Amendment to Accounts Receivable Purchase Agreement (this
"Modification Agreement") is entered into as of December 28th, 2004 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 Xxxxxx Executive Park, Suite 200, 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, doing business under the name
"Silicon Valley East" ("Buyer"), and COMTEX NEWS NETWORK, INC., a Delaware
corporation with its chief executive office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and administrative offices at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000 ("Seller").
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLI ATIONS. Among other
indebtedness and obligations which may be owing by Seller to Buyer, Seller is
indebted to Buyer pursuant to a financing arrangement dated as of December 18,
2003 evidenced by, among other documents, a certain Accounts Receivable Purchase
Agreement dated December 18, 2003, as amended by a certain First Amendment to
Accounts Receivable Purchase Agreement (the "First Amendment") dated August 23,
2004 (as amended, the "Purchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the same meaning as in the Purchase
Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Purchase Agreement (together with any other
collateral security granted to Buyer, the "Security Documents").
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the "Existing
Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modifications to the Purchase Agreement.
1. The Purchase Agreement shall be amended by deleting
the following definitions appearing in Section 1
thereof
"1.6 "Applicable Rate" is a per annum rate equal
to the Prime Rate plus two and one half percent (2.50%).
1.39 "Term" the period from the Closing Date through
December ____, 2004."
and inserting in lieu thereof the following:
"1.6 "Applicable Rate" is a per annum rate equal to the Prime
Rate plus one and one half percent (1.50%).
1.39 "Term" is the period ending on December 27, 2005."
2. The Purchase Agreement shall be amended by deleting
the following, appearing as Section 6.2(w)(iii) thereof
"(iii) as soon as available, but no later than one
hundred twenty (120) days after the end of
Seller's fiscal year, audited consolidated
financial statements prepared under GAAP,
consistently applied, together with an unqualified
opinion on the financial statements from an
independent certified public accounting firm
acceptable to Buyer, together with a compliance
certificate described in (v) below;"
and inserting in lieu thereof the following:
"(iii) as soon as available, but no later than one
hundred fifty (150) days after the end of Seller's
fiscal year, audited consolidated financial
statements prepared under GAAP, consistently
applied, together with an unqualified opinion on
the financial statements from an independent
certified public accounting firm acceptable to
Buyer, together with a compliance certificate
described in (v) below;"
3. The Purchase Agreement shall be amended by deleting the following,
appearing as Section 6.2(z):
"(z) Seller shall at all times maintain
$300,000.00 in (i) unrestricted cash deposits
maintained at Buyer, and/or (ii) excess
'availability to request Advances' under this
Agreement (net of outstanding Advances). As used
herein, "availability to request Advances" shall
be determined by Buyer in its sole discretion, and
calculated based upon 80.0% of the face amount of
Seller's Receivables deemed acceptable to Buyer
for inclusion in such calculation."
and inserting in lieu thereof the following;
"(z) Seller shall at all times maintain
$300,000.00 in unrestricted cash deposits
maintained at Buyer."
B. Modification to the First Amendment. The First Amendment shall
be amended by deleting the following text appearing in Section
3 thereof
"D. Notwithstanding the terms of the Purchase Agreement,
the Applicable Rate with respect to Purchased
Receivables based on Royalty Receivables shall be
equal to the Prime Rate plus three and one-half
percent (3.50%); and
E. The aggregate gross face amount of all Purchased
Receivables based on Royalty Receivables shall not
exceed $200,000, and, accordingly, the aggregate
amount of all Advances made based on Royalty
Receivables shall not exceed $100,000."
and inserting in lieu thereof the following:
"D. Notwithstanding the terms of the Purchase Agreement,
the Applicable Rate with respect to Purchased
Receivables based on Royalty Receivables shall be
equal to the Prime Rate plus two and one-half percent
(2.50%);
E. The aggregate gross face amount of all Purchased
Receivables based on Royalty Receivables shall not
exceed $300,000, and, accordingly, the aggregate
amount of all Advances made based on Royalty
Receivables shall not exceed $150,000; and
F. Seller shall provide Buyer with, as soon as
available, but no later than thirty (30) days after
the last day of each month, a listing of Royalty
Receivables."
4. FEES. Seller shall pay to Buyer 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. Seller shall also
reimburse Buyer for all legal fees and expenses incurred in connection
with this amendment to the Existing Documents.
5. CONSISTENT CHANGES. The Existing Documents are hereby amended wherever
necessary to reflect the changes described above.
6. RATIFICATION OF DOCUMENTS. Seller hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral
granted to the Buyer, and confirms that the indebtedness secured
thereby includes, without limitation, the Obligations,
7. NO DEFENSES OF SELLER. Seller hereby acknowledges and agrees that
Seller has no offsets, defenses, claims, or counterclaims against
Buyer with respect to the Obligations, or otherwise, and that if
Seller now has, or ever did have, any offsets, defenses, claims, or
counterclaims against Buyer, whether known or unknown, at law or in
equity, all of them are hereby expressly WAIVED and Seller hereby
RELEASES Buyer from any liability thereunder.
8. CONTINUING VALIDITY. Seller understands and agrees that in modifying
the existing Obligations, Buyer is relying upon Seller's
representations, warranties, and agreements, as set forth in the
Existing Documents. Except as expressly modified pursuant to this
Modification Agreement, the terms of the Existing Documents remain
unchanged and in full force and effect. Buyer's agreement to
modifications to the existing Obligations pursuant to this
Modification Agreement in no way shall obligate Buyer to make any
future modifications to the Obligations. Nothing in this Modification
Agreement shall constitute a satisfaction of the Obligations. It is
the intention of Buyer and Seller to retain as liable parties all
makers of Existing Documents, unless the party is expressly released
by Buyer in writing. No maker will be released by virtue of this
Modification Agreement.
9. COUNTERSIGNATURE. This Modification Agreement shall become effective
only when it shall have been executed by Seller and Buyer.
This Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.
SELLER: BUYER:
COMTEX NEWS NETWORK, INC. SILICON VALLEY BANK
By: /s/ X.X. Xxxxxxx By: /s/ Xxxx X. Xxxx
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Name: X.X. Xxxxxxx Name: Xxxx X. Xxxx
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Title: CEO Title: Vice President
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