SECOND LOAN MODIFICATION AGREEMENT
SECOND
LOAN MODIFICATION AGREEMENT
This
Second Loan Modification Agreement (this “Loan Modification Agreement’) is
entered into as of December 8, 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”
(“Bank”) and VOXWARE,
INC., a
Delaware corporation with its chief executive office located at 000 Xxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000 (“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 December
29, 2003, evidenced by, among other documents, a certain Loan and Security
Agreement dated as of December 29, 2003, between Borrower and Bank, as amended
by a First Loan Modification Agreement dated as of May 28, 2004, by and between
Borrower and Bank (as amended, the “Loan Agreement”). Capitalized terms used but
not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
2. DESCRIPTION
OF COLLATERAL.
Repayment of the Obligations is secured by the Collateral as described in the
Loan Agreement and the Intellectual Property Collateral as described in a
certain Intellectual Property Security Agreement dated December 29, 2003 between
Borrower and Bank (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.
A. Modifications
to Loan Agreement.
|
1. |
The
Borrower hereby acknowledges, confirms and agrees that no additional
Credit Extensions shall be made to the Borrower under the Term
Loan. |
|
2. |
The
Loan Agreement shall be amended by deleting the following provision
appearing in Section 6.2(a)(iii) thereof: |
"(iii)
within five (5) days of filing, copies of all statements, reports and notices
made available to Borrower’s security holders or to any holders of Subordinated
Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission;"
and
inserting in lieu thereof the following:
"(iii)
within five (5) days of filing, Borrower will provide to Bank copies of or
electronic notice of links to all statements, reports and notices made available
to Borrower’s security holders or to any holders of Subordinated Debt and all
reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission;"
|
3. |
The
Loan Agreement shall be amended by inserting the following to appear as
Section 6.2(b) thereof: |
"(b)
Within thirty (30) days after the last day of each month, Borrower shall deliver
to Bank with the monthly financial statements a Compliance Certificate signed by
a Responsible Officer in the form of Exhibit
C."
|
4. |
The
Loan Agreement shall be amended by deleting the following provision
entitled "Inventory; Returns" appearing in Section 6.3
thereof: |
"6.3 Inventory;
Returns.
Borrower shall keep all Inventory in good and marketable
condition, free from material defects. Returns and allowances between Borrower
and its account debtors shall follow Borrower’s customary practices as they
exist at the Closing Date. Borrower must promptly notify Bank of all returns,
recoveries, disputes and claims that involve more than Fifty Thousand Dollars
($50,000.00)."
and
inserting in lieu thereof the following:
"6.3Inventory;
Returns.
Borrower shall keep all Inventory in good and marketable condition, free from
material defects. Returns and allowances between Borrower and its account
debtors shall follow Borrower’s customary practices as they exist at the Closing
Date. Borrower must promptly notify Bank of all returns, recoveries, disputes
and claims that involve more than One Hundred Fifty Thousand Dollars
($150,000.00)."
|
5. |
The
Loan Agreement shall be amended by deleting the following definition
appearing in Section 13.1 thereof: |
"Prime
Rate" is the
greater of: (i) Bank's most recently announced "prime rate," even if it is not
Bank's lowest rate, and (ii) four percent (4.0%).
and
inserting in lieu thereof the following:
"Prime
Rate" is the
greater of: (i) Bank's most recently announced "prime rate," even if it is not
Bank's lowest rate, and (ii) four and one-half of one percent
(4.50%).
|
6. |
The
Loan Agreement shall be amended by deleting the following definition
appearing in Section 13.1 thereof: |
"Revolving
Line" is an
Advance or Advances of up to Five Hundred Thousand Dollars
($500,000.00).
and
inserting in lieu thereof the following:
"Revolving
Line" is an
Advance or Advances in an amount not to exceed Two Million Dollars
($2,000,000.00), minus the principal amount outstanding under the Term
Loan.
|
7. |
The
Loan Agreement shall be amended by deleting the following definition
appearing in Section 13.1 thereof: |
"Revolving
Maturity Date" is
December 28, 2004.
and
inserting in lieu thereof the following:
"Revolving
Maturity Date" is
December 27, 2005.
|
8. |
The
Compliance Certificate appearing as Exhibit
C to
the Loan Agreement is hereby replaced with the Compliance Certificate
attached as Exhibit
A
hereto. |
4. FEES.
Borrower shall pay to Bank a modification fee equal to One Thousand Two Hundred
Dollars ($1,200.00), 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 a certain Intellectual Property Security Agreement dated as of
December 29, 2003, between Borrower and Bank, and acknowledges, confirms and
agrees that said Intellectual Property Security Agreement contains an accurate
and complete listing, in all material respects, of all Intellectual Property
Collateral as defined in said Intellectual Property Security Agreement, and
shall remain in full force and effect.
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 December 29, 2003, between Borrower and Bank, and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in the Perfection Certificate has not changed in any material respect, 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 hereby acknowledges and agrees that Borrower has no offsets, defenses,
claims, or counterclaims against Bank with respect to the Obligations, or
otherwise, and that if Borrower now has, or ever did have, any offsets,
defenses, claims, or counterclaims against Bank, whether known or unknown, at
law or in equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES Bank from any liability thereunder.
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. 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 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 (provided, however, in no event shall this Loan
Modification Agreement become effective until signed by an officer of Bank in
California).
[The
remainder of this page is intentionally left blank]
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.
|
BORROWER: |
BANK: |
|
VOXWARE,
INC. |
SILICON
VALLEY BANK,
doing business as
SILICON
VALLEY EAST |
|
By:
/s/ Xxxx
Commons
|
By:
/s/ Xxxxxxxxx X.
Xxxxxxxx
|
|
Name:
Xxxx Commons |
Name:
Xxxxxxxx X. Xxxxxxxx |
|
Title:
CFO |
Title:
Vice President |
|
SILICON
VALLEY BANK | |
|
By:
/s/ Xxxxx
Xxxxxxxx
| |
|
Name:
Xxxxx Xxxxxxxx | |
|
Title:
Operations Supervisor | |
|
(signed in Santa Xxxxx County, California) |
The
undersigned, EDISON VENTURE FUND V, L.P. ratifies, confirms and reaffirms, all
and singular, the terms and conditions of a certain Unlimited Guaranty dated
December29, 2003 (the “Guaranty”) and acknowledges, confirms and agrees that the
Guaranty shall remain in full force and effect and shall in no way be limited by
the execution of this Loan Modification Agreement, or any other documents,
instruments and/or agreements executed and/or delivered in connection
herewith.
|
EDISON
VENTURE FUND V, L.P. | |
|
By:
Edison Partners V, L.P., its general partner | |
|
/s/
Xxxxxx X.
Allegra
| |
The
undersigned, CROSS ATLANTIC TECHNOLOGY FUND II, L.P. ratifies, confirms and
reaffirms, all and singular, the terms and conditions of a certain Unlimited
Guaranty dated December 29, 2003 (the “Guaranty”) and acknowledges, confirms and
agrees that the Guaranty shall remain in full force and effect and shall in no
way be limited by the execution of this Loan Modification Agreement, or any
other documents, instruments and/or agreements executed and/or delivered in
connection herewith.
|
CROSS
ATLANTIC TECHNOLOGY FUND II, L.P. | |
|
By:
XATF Management II, L.P., its general partner | |
|
By:
Cross Atlantic Capital Partners III, Inc., its general
parter | |
|
/s/
Xxxxx
Xxxxxxx |
The
undersigned, VERBEX ACQUISITION CORPORATION, a Delaware corporation
(“Guarantor”) hereby: (i) ratifies, confirms and reaffirms, all and singular,
the terms and conditions of (A) a certain Unlimited Guaranty of the obligations
of Borrower to Bank dated January 27, 2004 (the “Guaranty”), (B) a certain
Security Agreement by Guarantor in favor of Bank dated January 27, 2004 (the
“Security Agreement”);(ii) acknowledges, confirms and agrees that the Guaranty,
and Security Agreement shall remain in full force and effect and shall in no way
be limited by the execution of this Loan Modification Agreement or any other
documents, instruments and/or agreements executed and/or delivered in connection
herewith; and (iii) acknowledges, confirms and agrees that the obligations of
Borrower to Bank under the Guaranty include, without limitation, all Obligations
of Borrower to Bank under the Loan Agreement, as amended by this Loan
Modification Agreement.
|
VERBEX
ACQUISITION CORPORATION | |
|
/s/
Xxxx
Commons
|
EXHIBIT
C
COMPLIANCE
CERTIFICATE
TO: SILICON
VALLEY BANK
FROM: VOXWARE,
INC.
The
undersigned authorized officer of Voxware, Inc., certifies that under the terms
and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (i) Borrower is in complete compliance for the period ending
_______________ with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date. Attached are the required documents supporting
the certification. The Officer certifies that these are prepared in accordance
with Generally Accepted Accounting Principles (GAAP) consistently applied from
one period to the next except as explained in an accompanying letter or
footnotes. The Officer acknowledges that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date
this certificate is delivered.
Please
indicate compliance status by circling Yes/No under “Complies”
column.
|
Reporting
Covenant |
Required |
Complies |
|
Interim
financial statements with CC |
Monthly
within 30 days |
Yes
No |
|
Annual
(CPA Audited) |
FYE
within 120 days |
Yes
No |
The
following Intellectual Property was registered after the Closing Date (if blank,
read “None”)
____________________________________________________________________________
____________________________________________________________________________
Comments
Regarding Exceptions:
See Attached.
Sincerely,
_____________________________
SIGNATURE
_____________________________
TITLE
_____________________________
DATE |
BANK
USE ONLY
Received
by: _____________________
AUTHORIZED
SIGNER
Date:
_________________________
Verified:
________________________
AUTHORIZED
SIGNER
Date:
______________________
Compliance
Status: Yes
No
|
56120/796
863409.2
