EXHIBIT 10.1
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement (this "Loan Modification
Agreement') is entered into as of January 20, 2006, but effective as of December
26, 2005, 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 Newton Executive Park,
Suite 200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("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 certain
First Loan Modification Agreement dated as of May 28, 2004, by and between
Borrower and Bank, as amended by a certain Second Loan Modification Agreement
dated as of December 8, 2004, by and between Borrower and Bank, and as further
amended by a certain Third Loan Modification Agreement dated as of November 9,
2005, 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 (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 Loan Agreement shall be amended by deleting Section
2.1.1(a) thereof in its entirety and inserting in lieu
thereof the following:
" (a) REVOLVING LINE AVAILABILITY. Bank shall
make Advances not exceeding the following ("Revolving
Line Availability"): (i) the Revolving Line, minus (ii)
the aggregate outstanding balance of all outstanding
Letters of Credit (including drawn but unreimbursed
Letters of Credit), plus an amount equal to any Letter
of Credit Reserves, minus (iii) the FX Reserve, and
minus (iv) the aggregate outstanding Advances hereunder
(including any Cash Management Services). Amounts
borrowed under this Section may be repaid and reborrowed
during the term of this Agreement."
2. The Loan Agreement shall be amended by inserting the
following new provisions to appear as Section 2.1.1A,
2.1.1B, and 2.1.1C thereof:
"2.1.1A LETTERS OF CREDIT SUBLIMIT.
(a) Bank shall issue or have issued Letters
of Credit for Borrower's account not exceeding Revolving
Line Availability. The face amount of outstanding
Letters of Credit (including drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve) may
not exceed One Hundred Thousand Dollars ($100,000.00),
inclusive of Credit Extensions relating to Sections
2.1.1B and 2.1.1C. Borrower's Letter of Credit
reimbursement obligation shall be secured by cash on
terms acceptable to Bank on and after (i) the Revolving
Maturity Date, or (ii) the termination of the Revolving
Line by Borrower, or (iii) the occurrence of an Event of
Default hereunder.
All Letters of Credit shall be in form and substance
acceptable to Bank in its sole discretion, and shall be
subject to the terms and conditions of Bank's standard
Application and Letter of Credit Agreement ("Letter of
Credit Application"). Borrower agrees to execute any
further documentation in connection with the Letters of
Credit as Bank may reasonably request.
(b) The obligation of Borrower to
immediately reimburse Bank for drawings made under
Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and such
Letters of Credit, and the Letter of Credit Application.
Borrower shall indemnify, defend, protect, and hold Bank
harmless from any loss, cost, expense or liability,
including, without limitation, reasonable attorneys'
fees, arising out of or in connection with any Letters
of Credit.
(c) Borrower may request that Bank issue a
Letter of Credit payable in a currency other than United
States Dollars. If a demand for payment is made under
any such Letter of Credit, Bank shall treat such demand
as an Advance to Borrower of the equivalent of the
amount thereof (plus fees and charges in connection
therewith such as wire, cable, SWIFT or similar charges)
in United States currency at the then prevailing rate of
exchange in San Francisco, California, for sales of that
other currency for transfer to the country of which it
is the currency.
(d) Upon the issuance of any Letter of
Credit payable in a currency other than United States
Dollars, Bank shall create a reserve under the Revolving
Line for protection against fluctuations in currency
exchange rates, in an amount equal to ten percent (10%)
of the face amount of such Letter of Credit (the "Letter
of Credit Reserve"). The amount of the Letter of Credit
Reserve may be amended by Bank from time to time to
account for fluctuations in the exchange rate. The
availability of funds under the Revolving Line shall be
reduced by the amount of the Letter of Credit Reserve
for as long as such Letter of Credit remains
outstanding.
2.1.1B FOREIGN EXCHANGE SUBLIMIT. Borrower may enter
into foreign exchange forward contracts with Bank under
which Borrower commits to purchase from or sell to Bank
a set amount of foreign currency more than one (1)
Business Day after the contract date (the "FX Forward
Contract"). Bank shall subtract 10% of each outstanding
FX Forward Contract (the "FX Reserve") from the foreign
exchange sublimit, which sublimit is a maximum of One
Hundred Thousand Dollars ($100,000.00), inclusive of
Credit Extensions relating to Sections 2.1.1A and
2.1.1C. The total FX Forward Contracts at any one time
may not exceed ten (10) times the amount of the FX
Reserve. Bank may terminate the FX Forward Contracts if
an Event of Default occurs. The Obligations of Borrower
relating to this Section may not exceed Revolving Line
Availability.
2.1.1C CASH MANAGEMENT SERVICES SUBLIMIT. Borrower may
request and utilize the Bank's cash management services
(the "Cash Management Services"), which may include
merchant services, direct deposit of payroll, business
credit card, and check cashing services identified in
the various cash management services agreements related
to such Cash Management Services. The maximum amount of
Obligations relating to Cash Management Services shall
not exceed One Hundred Thousand Dollars ($100,000.00)
(the "Cash Management Services Sublimit"), inclusive of
Credit Extensions relating to Sections 2.1.1A and
2.1.1B. The aggregate amounts utilized under the Cash
Management Services Sublimit shall at all times reduce
the amount otherwise available for Credit Extensions
under the Revolving Line. Any amounts Bank pays on
behalf of Borrower or any amounts that are not paid by
Borrower to Bank for any Cash Management Services will
be treated as Advances under the Revolving Line and will
accrue interest at the interest rate applicable to
Advances."
3. The Loan Agreement shall be amended by inserting the
following new provision to appear as Section 2.1.5
thereof:
"2.1.5 OVERADVANCES. If, at any time, Borrower's
aggregate Obligations under Section 2.1.1, 2.1.1A,
2.1.1B, and 2.1.1C exceed the Revolving Line, Borrower
must immediately pay in cash to Bank such excess
4. The Loan Agreement shall be amended by inserting the
following definition appearing in Section 13.1 thereof:
""REVOLVING LINE MATURITY DATE" is December 27, 2005."
and inserting in lieu thereof :
""REVOLVING LINE MATURITY DATE" is December 26, 2006."
5. The Loan Agreement shall be amended by inserting the
following definitions to appear alphabetically in
Section 13.1 thereof:
""CASH MANAGEMENT SERVICES" is defined in Section
2.1.1C."
""CASH MANAGEMENT SERVICES SUBLIMIT" is defined in
Section 2.1.1C."
""FX FORWARD CONTRACT" is defined in Section 2.1.1B."
""FX RESERVE" is defined in Section 2.1.1B"
""LETTER OF CREDIT" means a standby letter of credit
issued by Bank or another institution based upon an
application, guarantee, indemnity or similar agreement
on the part of Bank as set forth in Section 2.1.1A."
""LETTER OF CREDIT APPLICATION" is defined in Section
2.1.1A."
""LETTER OF CREDIT RESERVE" has the meaning set forth in
Section 2.1.1A."
""REVOLVING LINE AVAILABILITY" is defined in Section
2.1.1."
4. FEES. Borrower shall pay to Bank a modification fee equal to One
Thousand Dollars ($1,000.00), 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.
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
By: /s/ Xxxx Commons By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxx Commons Name: Xxxxxx X. Xxxxxx
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Title: CFO Title: Vice President
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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
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.
EDISON VENTURE FUND V, L.P.
By: Edison Partners V, L.P., its general
partner
/s/ Xxxx Xxxxxxxxx
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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
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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
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