Exhibit 10.117
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: VERSO TECHNOLOGIES, INC.
PROVO PREPAID (DELAWARE) CORP.
XXXXXXXX.XXX SOFTWARE, INC.
XXXXXXX (DELAWARE) CORP.
DATE: MARCH 24, 2006
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley
Bank ("Silicon") and the borrower named above ("Borrower").
Reference is hereby made to that certain Loan and Security Agreement
between Borrower and Silicon dated December 14, 2001 (as otherwise amended, if
at all, the "Loan Agreement"). Notwithstanding the Maturity Date of March 17,
2006, since Obligations have remained outstanding, in accordance with Section
6.3 of the Loan Agreement, the Loan Agreement has continued in full force and
effect. The Parties agree to amend the Loan Agreement, as follows, effective as
of the date hereof. (Capitalized terms used but not defined in this Amendment
shall have the meanings set forth in the Loan Agreement.)
1. MODIFIED INTEREST PROVISION. Section 9.1 of the Loan Agreement is
hereby amended to read as follows:
9.1 INTEREST COMPUTATION. In computing interest on the Obligations,
all checks and other items of payment received by Silicon (including
proceeds of Receivables and payment of the Obligations in full)
shall be deemed applied by Silicon on account of the Obligations two
Business Days after receipt by Silicon of immediately available
funds (except with respect to wire transfers which shall be deemed
applied by Silicon on account of the Obligations the same Business
Day as deemed received by Silicon), and, for purposes of the
foregoing, any such funds received after 12:00 Noon on any day shall
be deemed received on the next Business Day. Silicon shall not,
however, be required to credit Borrower's account for the amount of
any item of payment which is unsatisfactory to Silicon in its sole
discretion, and Silicon may charge Borrower's loan account for the
amount of any item of payment which is returned to Silicon unpaid.
2. MODIFIED FOREIGN EXCHANGE CONTRACT SUBLIMIT. The Foreign Exchange
Contract Sublimit set forth in Section 1 of the Schedule to Loan and Security
Agreement is hereby amended to read as follows:
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
FOREIGN EXCHANGE
CONTRACT SUBLIMIT: $500,000. The Foreign Exchange Contract
Sublimit set forth in this Agreement is in
addition to the Foreign Exchange Contract
Sublimit set forth in the Exim Agreement.
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
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)
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
Foreign Exchange Contract Sublimit shall
not, at any time, exceed $500,000. 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.
3. MODIFIED INTEREST RATE. The Interest Rate set forth in Section 2 of the
Schedule to the Loan Agreement is hereby amended in its entirety to read as
follows:
INTEREST RATE (Section 1.2):
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
A rate equal to the "Prime Rate" in effect
from time to time, plus 2.25% 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 1.75% per annum as set
forth below if Borrower achieves EBITDA (as
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 2.25%
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
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
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
applicable to the Obligations shall change
on each date there is a change in the Prime
Rate.
4. MODIFIED COLLATERAL MONITORING FEE. The Collateral Monitoring Fee set
forth in Section 3 of the Schedule to the Loan Agreement is hereby amended in
its entirety to read as follows:
Collateral Monitoring Fee: $1,250, per month, payable in arrears
(prorated for any partial month at the
beginning and at termination of this
Agreement).
5. MODIFIED UNUSED LINE FEE. The Unused Line Fee set forth in Section 3 of
the Schedule to Loan and Security Agreement is hereby amended in its entirety to
read as follows:
Unused Line Fee: In the event, in any calendar month (or
portion thereof at the beginning and end of
the term hereof), the average daily
principal balance of the Non-Exim Loans and
Exim Loans, in the aggregate, outstanding
during the month is less than the amount of
the Overall Credit Limit, Borrower shall pay
Silicon an unused line fee in an amount
equal to 0.375% per annum on the difference
between the amount of the Overall Credit
Limit and the average daily principal
balance of the Non-Exim Loans and Exim
Loans, in the aggregate, outstanding during
the month, which unused line fee shall be
computed and paid monthly, in arrears, on
the first day of the following month.
6. MODIFIED MATURITY DATE. Section 4 of the Schedule to Loan and Security
Agreement is hereby amended to read as follows:
4. MATURITY DATE
(Section 6.1): March 23, 2007 [364 days from the date of
this Amendment].
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
7. MODIFIED MINIMUM TANGIBLE NET WORTH FINANCIAL COVENANT. The Minimum
Tangible Net Worth Financial Covenant set forth in Section 5 of the Schedule to
Loan Agreement is hereby amended and restated in its entirety to read as
follows:
MINIMUM TANGIBLE
NET WORTH: Borrower shall maintain a Tangible Net Worth
of not less than the following:
For the month ending February 28, 2006:
$11,000,000;
For the month ending March 31, 2006:
$12,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending April 30, 2006:
$9,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending May 31, 2006:
$7,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending June 30, 2006:
$9,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending July 31, 2006:
$6,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending August 31, 2006:
$4,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending September 30, 2006:
$6,000,000 plus 65% of all consideration
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending October 31, 2006:
$2,500,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending November 30, 2006:
$1,500,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending December 31, 2006:
$3,500,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending January 31, 2007:
$400,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower;
For the month ending February 28, 2007:
<$1,500,000> plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower; and
For the month ending March 31, 2007:
$1,000,000 plus 65% of all consideration
received after March 1, 2006 for equity
securities and subordinated debt of the
Borrower.
Increases in the Minimum Tangible Net Worth
Covenant based on consideration received for
equity securities and subordinated debt of
the Borrower shall be effective as of the
end of the month in which such consideration
is received, and shall continue effective
thereafter.
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
8. 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.
9. FEES. In consideration for Silicon entering into this Agreement,
Borrower shall concurrently pay Silicon a fee in the amount of $20,000, which
fee 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 fee to Borrower's loan account.
10. 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.
11. 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 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/ Xxxxx Xxxx BY /s/ Xxxxx Xxxxxxxx
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PRESIDENT OR VICE PRESIDENT
TITLE Relationship Manager - VP
BY /s/ Xxxxxx X. Xxxxxxx
------------------------------
SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
BORROWER: BORROWER:
PROVO PREPAID (DELAWARE) CORP. (FKA NACT XXXXXXXX.XXX SOFTWARE, INC.
TELECOMMUNICATIONS, INC.)
BY /s/ Xxxxxx X. Xxxxxxx BY /s/ Xxxxxx X. Xxxxxxx
--------------------------------- --------------------------------
PRESIDENT OR VICE PRESIDENT PRESIDENT OR VICE PRESIDENT
BY /s/ Xxxxxx Xxxxxxx BY /s/ Xxxxxx Xxxxxxx
--------------------------------- --------------------------------
SECRETARY OR ASS'T SECRETARY SECRETARY OR ASS'T SECRETARY
BORROWER:
XXXXXXX (DELAWARE) CORP. (FKA
MCK COMMUNICATIONS, INC.)
BY /s/ Xxxxxx X. Xxxxxxx
---------------------------------
PRESIDENT OR VICE PRESIDENT
BY /s/ Xxxxxx Xxxxxxx
---------------------------------
SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
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.
VERSO CANADA LTD.
BY /s/ Xxxxxx X. Xxxxxxx
---------------------------------
TITLE Vice President
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