Exhibit 99.2
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
(EXIM PROGRAM)
BORROWER: VERSO TECHNOLOGIES, INC.
PROVO PREPAID (DELAWARE) CORP.
XXXXXXXX.XXX SOFTWARE, INC.
DATE: MARCH 15, 2005
THIS AMENDMENT TO LOAN DOCUMENTS (EXIM PROGRAM) is entered into between
Silicon Valley Bank ("Silicon") and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement (Exim Program)
between them, dated February 12, 2003 (as otherwise amended, if at all, the
"Loan Agreement"), as follows, effective as of the date hereof; provided,
however, that prior to any of the following modifications going into effect,
Silicon must obtain the finalized, written approval from Exim Bank regarding
such modifications. (Capitalized terms used but not defined in this Amendment
shall have the meanings set forth in the Loan Agreement.)
1. MODIFIED CREDIT LIMIT. Section 1 of the Schedule to Loan and Security
Agreement (Exim Program) is hereby amended in its entirety to read as follows:
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of a
total of $10,000,000 at any one time
outstanding (the "Maximum Credit
Limit"); or the sum of (a) and (b)
below:
(a) 85% (an "Advance Rate") of the
amount of Eligible Receivables (as
defined in Section 8 above), plus
(b) 65% (an "Advance Rate") of the
value of Borrower's Eligible
Inventory (as defined in Section 8
above).
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
Notwithstanding the foregoing, the
Maximum Credit Limit shall be
$7,500,000; provided, however, if at
September 30, 2005, the Borrower
achieves actual year to date net income
on a consolidated basis equal to at
least 95% of the projected amount of
year to date net income on a
consolidated basis for such period as
set forth in the Borrower's Fiscal Year
2005 projections (a copy of which has
previously been provided to Silicon)
(the "YTD Net Income Requirement"),
then in such instance the Maximum
Credit Limit shall increase to
$10,000,000.
Notwithstanding the foregoing, the
total outstanding Obligations under
this Loan Agreement and under the
Non-Exim Agreement (as defined below)
shall not at any time exceed
$10,000,000 (the "Overall Credit
Limit"); provided, however, until the
Borrower has satisfied the YTD Net
Income Requirement, if ever, the
Overall Credit Limit shall be
$7,500,000.
Moreover, Borrower shall at all times
ensure that the outstanding principal
balance of the Credit Accommodations
(as defined in the Exim Borrower
Agreement, as defined below) that is
supported by Export-Related Inventory
does not exceed sixty percent (60%) of
the sum of the total outstanding
principal balance of the Disbursements
(as defined in the Exim Borrower
Agreement) and the undrawn face amount
of all outstanding Commercial Letters
of Credit (as defined in the Exim
Borrower Agreement).
Additionally, Loans made pursuant to
subclause (b) above will be made based
upon Borrower's export sales as a
percentage of its total sales, which
percentage will be updated by Borrower
on a monthly basis, as determined by
Borrower's sales during the preceding
six months. Silicon will conduct
quarterly examinations, at a minimum,
of Borrower's books and
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
records to verify Borrower's reporting
of its export sales as a percentage of
total sales.
Borrower shall provide Silicon with a
copy of the applicable sales
contract/purchase order in support of
each Loan being requested prior to each
Loan, if any, being made hereunder.
Silicon may, from time to time, modify
the Advance Rates, in its good faith
business judgment, upon notice to the
Borrower, based on changes in
collection experience with respect to
Receivables, its evaluation of the
Inventory or other issues or factors
relating to the Receivables, Inventory
or other Collateral.
Loans will be made to each Borrower
based on the Eligible Receivables and
Eligible Inventory of each Borrower,
subject to the Maximum Credit Limit set
forth above for all Loans to all
Borrowers combined.
LETTER OF CREDIT SUBLIMIT
(Section 1.5): $2,500,000; provided, however, that the
total Letter of Credit Sublimit and the
Foreign Exchange Contract Sublimit
shall not, at any time, exceed
$2,500,000 in the aggregate under this
Agreement and the Non-Exim Agreement.
FOREIGN EXCHANGE CONTRACT
SUBLIMIT $1,000,000; provided, however, that the
total Letter of Credit Sublimit and
Foreign Exchange Contract Sublimit
shall not, at any time, exceed
$1,000,000 in the aggregate under this
Agreement and the Non-Exim Agreement.
Borrower may enter into foreign
exchange forward contracts with
Silicon, on its standard forms, under
which Borrower commits to purchase from
or sell to Silicon a set amount of
foreign currency more than one business
day after the contract date (the "FX
Forward Contracts"); provided that (1)
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
at the time the FX Forward Contract is
entered into Borrower has Loans
available to it under this Agreement in
an amount at least equal to 10% of the
amount of the FX Forward Contract; and
(2) the total FX Forward Contracts at
any one time outstanding may not exceed
10 times the amount of the Foreign
Exchange Contract Sublimit set forth
above; and (3) the total Letter of
Credit Sublimit and the Foreign
Exchange Contract Sublimit shall not,
at any time, exceed $1,000,000. Silicon
shall have the right to withhold, from
the Loans otherwise available to
Borrower under this Agreement, a
reserve (which shall be in addition to
all other reserves) in an amount equal
to 10% of the total FX Forward
Contracts from time to time
outstanding, and in the event at any
time there are insufficient Loans
available to Borrower for such reserve,
Borrower shall deposit and maintain
with Silicon cash collateral in an
amount at all times equal to such
deficiency, which shall be held as
Collateral for all purposes of this
Agreement. Silicon may, in its
discretion, terminate the FX Forward
Contracts at any time that an Event of
Default occurs and is continuing.
Borrower shall execute all standard
form applications and agreements of
Silicon in connection with the FX
Forward Contracts, and without limiting
any of the terms of such applications
and agreements, Borrower shall pay all
standard fees and charges of Silicon in
connection with the FX Forward
Contracts.
2. MODIFIED INTEREST RATE. The Interest Rate set forth in Section 2 of the
Schedule to the Loan Agreement (Exim Program) is hereby amended in its entirety
to read as follows:
INTEREST RATE (Section 1.2): A rate equal to the "Prime Rate" in
effect from time to time, plus 2.0% per
annum; provided, however, that the
foregoing interest rate shall be
reduced to a rate equal to the "Prime
Rate" in effect from time to time, plus
1.50% per annum as set forth below if
Borrower achieves EBITDA (as
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
defined below) in excess of $0.00 for
two consecutive fiscal quarters ending
after the date of this Agreement and
for so long as Borrower maintains
EBITDA in excess of $0.00 for each
fiscal quarter ending thereafter. If
Borrower does not maintain EBITDA in
excess of $0.00, the interest rate will
be increased to a rate equal to the
"Prime Rate" in effect from time to
time plus 2.0% per annum.
For purposes hereof, "EBITDA" means, on
a consolidated basis, Borrower's
earnings before interest, taxes,
depreciation and other non-cash
amortization expenses and other
non-cash expenses, determined in
accordance with generally accepted
accounting principles, consistently
applied.
Changes in the interest rate based on
the Borrower's EBITDA as provided above
shall go into effect as of the first
day of the month following the month in
which Borrower's financial statements
are received, reviewed and approved by
Silicon. If, based on the Borrower's
EBITDA as shown in Borrower's financial
statements there is to be an increase
in the interest rate, the interest rate
increase may be put into effect by
Silicon as of the first day of the
month closest to the date on which the
financial statements are due, even if
the delivery of the financial
statements is delayed. Notwithstanding
the foregoing, in no event shall an
interest rate reduction go into effect
if, at the date it is to go into
effect, a Default or Event of Default
has occurred and is continuing.
Interest shall be calculated on the
basis of a 360-day year for the actual
number of days elapsed. "Prime Rate"
means the rate announced from time to
time by Silicon as its "prime rate;"
provided that the "Prime Rate" in
effect on any day shall not be less
than 4.25% per annum; it is a base rate
upon which other rates charged by
Silicon are based, and it is not
necessarily the best rate available at
Silicon. The interest rate
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
applicable to the Obligations shall
change on each date there is a change
in the Prime Rate.
3. MODIFIED COLLATERAL MONITORING FEE. The Collateral Monitoring Fee set
forth in Section 3 of the Schedule to the Loan Agreement (Exim Program) is
hereby amended in its entirety to read as follows:
Collateral Monitoring Fee: $1,000, per month, payable in arrears
(prorated for any partial month at the
beginning and at termination of this
Agreement).
4. MODIFIED MATURITY DATE. Section 4 of the Schedule to Loan and Security
Agreement (Exim Program) is hereby amended to read as follows:
4. MATURITY DATE
(Section 6.1): March ____, 2006 [364 days from the
date of this Amendment].
5. CONSENTS. Silicon previously executed, under the Non-Exim Agreement, the
following consents: (i) Consent dated February 4, 2005 with respect to the
Securities Transaction as defined therein and (ii) Limited Waiver and Amendment
to Loan Documents dated February 23, 2005 with respect to the Jacksonville
Technology Associates, Inc. Purchase Transaction as defined therein
(collectively, the "Consents"). Silicon hereby consents, under the Loan
Agreement, to the aforementioned transactions on the terms provided for in the
Consents.
6. PROVO PREPAID (DELAWARE) CORP. AND XXXXXXX (DELAWARE) CORP. Borrower
represents and warrants that each of Provo Prepaid (Delaware) Corp. and Xxxxxxx
(Delaware) Corp. is (i) a wholly-owned subsidiary of Verso Technologies, Inc.,
and (ii) is and will remain throughout the term of the Loan Agreement, inactive
with assets having an aggregate value of no more than $0.00. Borrower covenants
and agrees that while the Loan Agreement is in effect, Borrower shall not
transfer any assets or Collateral to either Provo Prepaid (Delaware) Corp. or
Xxxxxxx (Delaware) Corp.
7. FEES. In consideration for Silicon entering into this Agreement,
Borrower shall pay Silicon a fee in the amount of $100,000 as follows: (i)
$75,000, payable concurrently herewith and (ii) $25,000, payable if and when the
Borrower satisfies the YTD Net Income Requirement, which fees shall be
non-refundable and in addition to all interest and other fees payable to Silicon
under the Loan Documents. Silicon is authorized to charge said fees to
Borrower's loan account.
8. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
9. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and Borrower, and the
other written documents and agreements between Silicon and Borrower set forth in
full all of the
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
representations and agreements of the parties with respect to the subject matter
hereof and supersede all prior discussions, representations, agreements and
understandings between the parties with respect to the subject hereof. Except as
herein expressly amended, all of the terms and provisions of the Loan Agreement,
and all other documents and agreements between Silicon and Borrower shall
continue in full force and effect and the same are hereby ratified and
confirmed.
BORROWER: SILICON:
VERSO TECHNOLOGIES, INC. SILICON VALLEY BANK
BY /s/ Xxxxxx X. Xxxxxxx BY /s/ Xxxxx Bendolis
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PRESIDENT OR VICE PRESIDENT TITLE Relationship Manager
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BY /s/ Xxxxx Xxxx
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SECRETARY OR ASS'T SECRETARY
BORROWER: BORROWER:
PROVO PREPAID (DELAWARE) CORP. (FKA XXXXXXXX.XXX SOFTWARE, INC.
NACT TELECOMMUNICATIONS, INC.)
BY /s/ Xxxxxx X. Xxxxxxx BY /s/ Xxxxxx X. Xxxxxxx
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PRESIDENT OR VICE PRESIDENT PRESIDENT OR VICE PRESIDENT
BY /s/ Xxxxx Xxxx BY /s/ Xxxxx Xxxx
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SECRETARY OR ASS'T SECRETARY SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS (EXIM)
CONSENT
The undersigned acknowledges that its consent to the foregoing Agreement is
not required, but the undersigned nevertheless does hereby consent to the
foregoing Agreement and to the documents and agreements referred to therein and
to all future modifications and amendments thereto, and any termination thereof,
and to any and all other present and future documents and agreements between or
among the foregoing parties. Nothing herein shall in any way limit any of the
terms or provisions of the Cross-Corporate Continuing Guaranty of the
undersigned, all of which are hereby ratified and affirmed.
CLARENT CANADA LTD. XXXXXXX (DELAWARE) CORP. (FKA
MCK COMMUNICATIONS, INC.)
BY /s/ Xxxxxx X. Xxxxxxx BY /s/ Xxxxxx X. Xxxxxxx
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TITLE Director TITLE Director
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