1
EXHIBIT 10.6.5
[Franklin Letterhead]
October 7, 1998
Xx. Xxxxxxxx X. Xxxxx, President
Voice Powered Technology, Inc.
00000 Xxxxxxx Xxxx.
Suite 508
Tarzana, Cal. 91356
RE: Post Petition Financing Agreement
Loan and Security Agreement
Dear Xx. Xxxxx:
This Letter Agreement is provided to document our understanding
regarding Xxxxxxxx'x guarantee of purchase orders placed by Voice Powered
Technology, Inc. to its suppliers of finished goods, GSS or Wa Shing ("the
Suppliers"), and to preserve all the rights and remedies reserved under a
certain Loan and Security Agreement by and between Voice Powered Technology,
Inc. ("VPTI") and Franklin Electronic Publishers, Inc. ("Franklin") dated as of
September 22, 1997, authorized under a certain Emergency Motion approving loan
agreement, granting partial relief from the automatic stay and compromising
controversies, filed October 1, 1997 in Case No. LA97-4692VZ (in re: Voice
Powered Technology, Inc., Debtor). Under the terms and conditions of the
aforesaid documents (including the right to modify and amend said Loan and
Security Agreement), Xxxxxxxx reserves the right to guarantee the payment to
VPTI's Suppliers of shipments pursuant to purchase orders for the manufacture
and purchase of products produced in the ordinary course of business (the
"Supply Orders") which are supported by firm orders of sale to existing
customers (the "Customer Orders") under such terms and conditions as Franklin
shall deem acceptable for such purpose. Xxxxxxxx reserves the right to reject,
limit, and/or request reduction in the quantity of products produced which shall
be considered collateral of the purchase order guarantee and impose or request
such limitations, modifications or changes as Franklin shall deem prudent to
preserve its position as guarantor of the Supplier Orders and may demand that
sufficient and adequate documentation be rendered acknowledging and perfecting
the understanding of any agreement entered into under this document. Shipment
under purchase orders which are guaranteed by Xxxxxxxx shall, to the extent of
the amount of such outstanding guarantee, be deducted from the amount otherwise
borrowable of any account receivable derived from shipments of such finished
goods for the purpose of determining or requesting a loan or advance under the
terms of the Loan and Security Agreement. Xxxxxxxx reserves all rights and
remedies provided under law and/or equity including rights and remedies provided
and/or reserved under said Loan and Security Agreement. Any guarantee by
Xxxxxxxx hereunder shall be an obligation of VPTI
2
[XXXXXXXX XXXXXXXXXX]
under the Loan and Security Agreement. To the extent that Xxxxxxxx is called
upon to make payment under this reimbursement obligation, said payment shall be
an Obligation of VPTI as defined under the Loan and Security Agreement and
Xxxxxxxx shall be entitled to all the rights provided thereunder. Xxxxxxxx'x
agreement to the terms of this letter Agreement shall not obligate Xxxxxxxx to
enter into any guarantee arrangement which is unsatisfactory or unsuitable to
Xxxxxxxx nor give rise to any rights and remedies to VPTI for Xxxxxxxx'x failure
to enter into any guarantee obligation that it deems unfit. Xxxxxxxx reserves
the right to terminate this Letter Agreement at any time with or without prior
notice of termination.
Intending to be legally bound by the terms of the understanding provided
above, the parties hereto have executed this document as provided below.
Very truly yours,
FRANKLIN ELECTRONIC PUBLISHERS, INC.
BY: /s/ XXXXXXX X. XXXXXX
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
GJW/xxx
ACCEPTED AND AGREED TO:
VOICE POWERED TECHNOLOGY, INC.
BY: /s/ XXXXXXXX X. XXXXX
-------------------------
Xxxxxxxx X. Xxxxx
ITS: President
DATE: 10/7/97
cc: Xx. Xxxxxxx X. Xxxxxxx, Executive Vice President
Xx. Xxxxxxx X. Xxxx, Vice President, Finance
Franklin Electronic Publishers, Inc.
Xxxx X. Xxxxxxxx, Esq.
Pachulski Strange Xxxxx & Xxxxx P.C.
Xxxxxxx Xxxxxxxx, Esq.
Xxxxxx Xxxxx, Esq.
Xxxxxxxx Diamant & Xxxxx
