EXHIBIT 10.1
WAIVER AND
THIRD LOAN MODIFICATION AGREEMENT
This Waiver and Third Loan Modification Agreement (this "Modification
Agreement") is entered into as of August 31, 2006, by and between CONCURRENT
COMPUTER CORPORATION ("Borrower") whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and SILICON VALLEY BANK ("Lender") whose address is ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and with a loan production office at 3353
Peachtree Road, NE, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
---------------------------------------
be owing by Borrower to Lender, Borrower is indebted to Lender pursuant to,
among other documents, a Loan and Security Agreement, dated December 23, 2004,
as may be amended from time to time (the "Loan Agreement"), which provides for,
among other things, a Committed Line in the original principal amount of Ten
Million Dollars ($10,000,000) (the "Revolving Facility") and a term loan in the
original principal amount of Three Million Dollars ($3,000,000) (the "Term
Loan"). Hereinafter, all indebtedness owing by Borrower to Lender, including
the Term Loan and all amounts outstanding under the Revolving Facility shall be
referred to as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness
--------------------------------------------
is secured by (a) the Collateral as described in the Loan Agreement; (b) a
Pledge Agreement dated as of December 23, 2004, as amended from time to time
(the "Pledge Agreement") between Borrower and Lender; (c) a Guaranty dated as of
April 6, 2006, executed by Everstream Holdings, Inc., Everstream, Inc. and EHI
Patent Co. LLC; and (d) a Secured Agreement dated as of April 6, 2006 executed
by Everstream Holdings, Inc., Everstream, Inc. and EHI Patent Co. LLC.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS. The Loan Agreement is hereby amended by
----------------------------------
deleting Section 6.7 thereof in its entirety and by substituting therefore a new
Section 6. 7 to read as follows:
6.7 FINANCIAL COVENANTS.
Borrower will maintain:
(a) ADJUSTED QUICK RATIO. An Adjusted Quick Ratio of not less
than 1.50 to 1.00 as of the last date of each month.
(b) TANGIBLE NET WORTH. A Tangible Net Worth of at least equal to
the sum of (i) $13,000,000 as of the last day of the fiscal quarter of
Borrower ending September 30, 2006 and $10,000,000 as of the last day of
each fiscal quarter thereafter plus (ii) an amount equal to fifty percent
(50%) of (A) Borrower's positive net income for any quarter ending after
the Closing Date; (B) the principal amount of Subordinated Debt incurred by
Borrower after the Closing Date; and (C) the proceeds, net of commission
and expenses, received by Borrower from the issuance of shares of its
capital stock after the Closing Date.
4. WAIVER. Subject to the terms and conditions set forth herein, Lender
------
waives any Event of Default arising out of the failure of Borrower to maintain
the Tangible Net Worth required by Section 6.7(b) of the Loan Agreement for the
fiscal quarter ending June 30, 2006.
5. COVENANT. Borrower agrees that within fifteen (15) business days of the
--------
date hereof, it shall cause Everstream Holdings, Inc. ("Everstream") to execute
and deliver to Lender, in form and substance satisfactory to Lender and its
counsel, a Pledge Agreement pledging to Lender as security for the Obligations
all of the issued and outstanding equity interests of the Subsidiaries of
Everstream, free and clear of all Liens, together with original stock
certificates and stock powers, signed in blank, for all shares of corporate
stock included in such equity interests.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
------------------
necessary to reflect the changes described above.
7. PAYMENT OF EXPENSES. Borrower shall reimburse Lender for all of its
---------------------
reasonable out-of-pocket expenses, including fees and expenses of counsel,
incurred in connection with the transactions contemplated by this Modification
Agreement.
8. NO DEFENSES OF BORROWER. Borrower agrees that it has no defenses against
--------------------------
the obligations to pay any amounts under the Indebtedness.
9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying
--------------------
the existing Indebtedness, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Modification Agreement, the terms of the
Existing Loan Documents remain unchanged and in full force and effect. Lender's
agreement to modifications to the existing Indebtedness pursuant to this
Modification Agreement in no way shall obligate Lender to make any future
modifications to the Indebtedness. Nothing in this Modification Agreement shall
constitute a satisfaction of the Indebtedness. It is the intention of Lender
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Lender in writing. No
maker, endorser, or guarantor will be released by virtue of this Modification
Agreement. The terms of this paragraph apply not only to this Modification
Agreement, but also to all subsequent loan modification agreements.
10. CONDITIONS. This Modification Agreement shall be deemed effective upon
----------
(a) the due execution and delivery to Bank of this Modification Agreement by
each party hereto, (b) Borrower's payment of an amendment fee in an amount equal
to $3,500, (c) Bank's receipt of the Acknowledgment of Amendment and
Reaffirmation of Guaranty substantially in the form attached hereto as Schedule
1, duly executed and delivered by each Guarantor, and (d) Borrower's payment of
all outstanding legal fees and expenses.
This Modification Agreement is executed under seal as of the date first
written above.
BORROWER: LENDER:
CONCURRENT COMPUTER CORPORATION SILICON VALLEY BANK
By: By:
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
[CORPORATE SEAL]
SCHEDULE 1
GUARANTOR ACKNOWLEDGMENT
AND REAFFIRMATION
SECTION 1. Each Guarantor hereby acknowledges and confirms that it has
reviewed and approved the terms and conditions of the Waiver and Third Loan
Modification Agreement dated as of even date herewith (the "Modification
Agreement").
SECTION 2. Each Guarantor hereby consents to the Modification Agreement
and agrees that the Guaranty dated as of April 6, 2006 (the "Guaranty") relating
to the Obligations of Borrower under the Loan Agreement shall continue in full
force and effect, shall be valid and enforceable and shall not be impaired or
otherwise affected by the execution of the Modification Agreement or any other
document or instrument delivered in connection herewith.
SECTION 3. Each Guarantor hereby agrees that the Security Agreement
dated as of April 6, 2006 (the "Security Agreement") securing the Obligations of
Borrower under the Loan Agreement and the obligations of the Guarantors under
the Guaranty shall continue in full force and effect, shall be valid and
enforceable and shall not be impaired or otherwise affected by the execution of
the Modification Agreement or any other document or instrument delivered in
connection herewith.
SECTION 4. Each Guarantor represents and warrants that, after giving
effect to the Modification Agreement, all representations and warranties
contained in the Guaranty and the Security Agreement are true, accurate and
complete as if made the date hereof.
Dated as of August 31, 2006
GUARANTOR EVERSTREAM HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
[CORPORATE SEAL]
EVERSTREAM, INC.
By:
-----------------------------------
Name:
Title:
[CORPORATE SEAL]
EHI PATENT CO. LLC
By:
-----------------------------------
Name:
Title: