SECOND AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
SECOND
AMENDMENT
THIS SECOND AMENDMENT TO REVOLVING
LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into
this 11th day of August, 2010, by and between (i) WorldGate Communications,
Inc., a Delaware corporation, WorldGate Service, Inc., a Delaware corporation,
WorldGate Finance, Inc., a Delaware corporation, Ojo Services LLC, a
Pennsylvania limited liability company, and Ojo Video Phones LLC, a Pennsylvania
limited liability company (jointly and severally, the “Borrower”), and (ii) WGI
Investor LLC, a Delaware limited liability company (“Lender”).
Recitals
A. Lender
and Borrower have entered into that certain Revolving Loan and Security
Agreement dated as of October 28, 2009 and amended as of March 9, 2010 (as may
be further amended, modified, supplemented or restated, the “Loan
Agreement”). Lender has extended credit to Borrower for the
purposes permitted in the Loan Agreement.
B. Borrower
has requested that Lender amend the Loan Agreement to increase the maximum
principal amount available under the Loan Agreement.
C. In
partial consideration for the amendments set forth herein, Borrower will grant
to Lender a warrant to purchase up to 8,000,000 shares of Borrower’s common
stock.
D. Lender
is willing to so amend certain provisions of the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance
upon the representations and warranties set forth below.
Agreement
Now,
Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
1. Definitions. Capitalized
terms used but not defined in this Amendment shall have the meanings given to
them in the Loan Agreement.
2. Amendments to Loan
Agreement. The Loan Agreement is hereby amended as
follows:
2.1 The
definition of “Maximum
Principal Amount” under the Loan Agreement is hereby amended to be “seven
million dollars ($7,000,000)”.
3. Replacement Promissory
Note. Borrower shall execute and deliver to Lender a Revolving
Promissory Note in the form attached as Exhibit A to this
Amendment to replace the Note executed by Borrower pursuant to the original Loan
Agreement. Such replacement note shall constitute the Note described
in the Loan Agreement, as amended hereby.
4. Limitation
of Amendments.
4.1 The
amendments set forth above are effective for the purposes set forth herein and
shall be limited precisely as written and shall not be deemed to (a) be a
consent to any amendment, waiver or modification of any other term or condition
of any Loan Document, or (b) otherwise prejudice any right or remedy which
Lender may now have or may have in the future under or in connection with any
Loan Document.
4.2 This
Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.
5. Representations and
Warranties. To induce Lender to enter into this Amendment,
Borrower hereby represents and warrants to Lender as follows:
5.1 Immediately
after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred
and is continuing;
5.2 Borrower
has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Loan Agreement, as amended by this
Amendment;
5.3 The
organizational documents of Borrower delivered to Lender on or before the date
of this Amendment remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and
effect;
5.4 The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized;
5.5 The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (a) any law or regulation binding
on or affecting Borrower, (b) any contractual restriction with a Person
binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding
on Borrower, or (d) the organizational documents of
Borrower;
2
5.6 The
execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
either Borrower, except as already has been obtained or made; and
5.7 This
Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’
rights.
6. Counterparts. This
Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
7. Effectiveness. This
Amendment shall be deemed effective upon (a) the due execution and delivery to
Lender of this Amendment by each party hereto and (b) Borrower’s execution
and delivery to Lender of the Note in the form attached hereto as Exhibit
A, duly executed and delivered by the Borrower.
[Signature
page follows.]
3
IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the date first above
written.
|
BORROWER:
|
LENDER:
|
|||
|
WORLDGATE
COMMUNICATIONS, INC.
|
WGI
INVESTOR LLC
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
By:
|
Prasescient,
LLC, its Manager
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
|
|
|
General
Counsel and Secretary
|
Name:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
|
||
|
Title:
|
Manager
|
|||
|
WORLDGATE
SERVICE, INC.
|
||||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|||
|
General
Counsel and Secretary
|
||||
|
WORLDGATE
FINANCE, INC.
|
||||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|||
|
General
Counsel and Secretary
|
||||
|
OJO
SERVICE LLC
|
||||
|
By:
|
WorldGate
Communications, Inc., its sole member
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|||
|
General
Counsel and Secretary
|
||||
|
OJO
VIDEO PHONES LLC
|
||||
|
By:
|
WorldGate
Communications, Inc., its sole member
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|||
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|||
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|||
|
General
Counsel and Secretary
|
||||
EXHIBIT
A
Form
of Promissory Note
REVOLVING PROMISSORY
NOTE
|
Up
to $7,000,000
|
October
28, 2009
|
FOR VALUE
RECEIVED, WORLDGATE
COMMUNICATIONS, INC., a Delaware corporation, WORLDGATE SERVICE, INC., a
Delaware corporation, WORLDGATE
FINANCE, INC., a Delaware corporation, OJO SERVICE LLC, a
Pennsylvania limited liability company, and OJO VIDEO PHONES LLC, a
Pennsylvania limited liability company (jointly and severally, the “Borrower”), hereby absolutely,
irrevocably, unconditionally and jointly and severally promises to pay to the
order of WGI INVESTOR
LLC, a Delaware limited liability company (“Lender”), in United States
dollars and in immediately available funds, the principal sum of SEVEN MILLION DOLLARS
($7,000,000), or such lesser amount as may be advanced by Lender to the
Borrower from time to time in accordance with that certain Revolving Loan and
Security Agreement dated as of October 28, 2009, as amended, between the
Borrower and Lender (as it may be amended, modified, extended or restated from
time to time, the “Loan
Agreement”), together with interest thereon, as provided in the Loan
Agreement. Notwithstanding the foregoing, the aggregate principal
amount outstanding under this Revolving Promissory Note (this “Note”) shall not exceed seven
million dollars ($7,000,000). This Note is subject to all of the
terms and conditions set forth in, and such terms and conditions are hereby
incorporated herein by reference to, the Loan Agreement. All
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Loan Agreement. In the event of any conflict between the
provisions of this Note and the Loan Agreement, the provisions of the Loan
Agreement shall prevail.
The
obligations of the Borrower evidenced by this Note are secured as set forth in
the Loan Agreement.
Except as
otherwise provided in the Loan Documents, all outstanding principal and interest
with respect to Loan Advances shall be due and payable in full in cash on the
Maturity Date. The daily unpaid principal balance outstanding under
this Note shall bear interest at the rate(s) set forth in the Loan
Agreement. The Loan Advances may be prepaid in whole or in part at
any time without premium or penalty and amounts repaid may be re-borrowed in
accordance with the provisions of the Loan Agreement.
Upon the
occurrence of an Event of Default, Lender shall have, and shall be entitled to
exercise, all of the rights and remedies set forth in the Loan
Documents.
All
payments in respect of amounts outstanding under this Note shall be paid in
immediately available funds to the account(s) specified by Lender from time to
time. Any payment due in respect of this Note which falls due on a
day other than a Business Day shall be made on the next Business
Day.
The
Borrower hereby waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note. No release of any
security for the payment of this Note or extension of time for payment of this
Note, and no alteration, amendment or waiver of any provision of this Note made
by agreement between Lender and any other Person shall release, discharge,
modify, change or affect the liability of the Borrower under this
Note.
Each
right, power and remedy of Lender under this Note, the Loan Agreement, any other
Loan Document, or under applicable laws shall be cumulative and concurrent, and
the exercise of any one or more of them shall not preclude the simultaneous or
later exercise by Lender of any or all such other rights, powers or
remedies. No failure or delay by Lender to insist upon the strict
performance of any one or more provisions of this Note, the Loan Agreement, any
other Loan Document, or to exercise any right, power or remedy consequent upon
an Event of Default shall constitute a waiver thereof, or preclude Lender from
exercising any such right, power or remedy. No modification, change,
waiver or amendment of this Note shall be deemed to be made unless in writing
signed by the Borrower and Lender. This Note shall inure to the benefit of and
be binding upon the Borrower and Lender and their respective successors and
assigns; provided that except as set forth in the Loan Agreement, the Borrower
shall have no right to assign any of its rights or delegate any of its
obligations under this Note and provided further there shall be no restrictions
of any nature on Lender’s right to assign this Note or its rights
hereunder. The invalidity, illegality or unenforceability of any
provision of this Note shall not affect or impair the validity, legality or
enforceability of any other provision. This Note shall be deemed to
be made in, and shall be governed by the laws of, the State of Delaware (without
regard to its conflicts of laws principles).
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, this
Revolving Promissory Note has been duly executed by the undersigned as of the
day and year first above written.
|
BORROWER:
|
|
|
WORLDGATE
COMMUNICATIONS, INC.
|
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|
General
Counsel and Secretary
|
|
|
WORLDGATE
SERVICE, INC.
|
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|
General
Counsel and Secretary
|
|
|
WORLDGATE
FINANCE, INC.
|
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|
General
Counsel and Secretary
|
|
|
OJO
SERVICE LLC
|
|
|
By:
|
WorldGate
Communications, Inc., its sole member
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|
General
Counsel and Secretary
|
|
|
OJO
VIDEO PHONES LLC
|
|
|
By:
|
WorldGate
Communications, Inc., its sole member
|
|
By:
|
|
|
Name:
|
▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
Title:
|
Senior
Vice President, Legal and Regulatory,
|
|
General
Counsel and
Secretary
|
|