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Loan Modification, Consent And Forbearance Agreement

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LOAN MODIFICATION, CONSENT AND FORBEARANCE AGREEMENT


This Loan Modification, Consent and Forbearance Agreement is entered into as of August 20, 1998, by and among Versatility, Inc. and Versatility (UK) Ltd. (collectively, "Borrower"), Oracle Corporation, a Delaware Corporation ("Acquiror"), and Silicon Valley Bank ("Bank") a California-chartered bank doing business under the name "Silicon Valley East".


1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other documents, a Loan and Security Agreement, dated October 29, 1997, as may be amended from time to time, (the "Loan Agreement"). The Loan Agreement provided for, among other things, a Committed Revolving Line in the original principal amount of Five Million Dollars ($5,000,000) (the "Revolving Facility"). The Loan Agreement has been modified pursuant to, among other documents, a Loan Modification Agreement dated April 28, 1998, and effective as of April 30, 1998 (the "April 1998 Loan Modification Agreement"), pursuant to which, among other things, no further Advances were allowed under the Committed Revolving Line. Furthermore, pursuant to, among other documents, the April 1998 Loan Modification Agreement, Bank agreed to, among other things, waive and forbear from exercising its remedies available to it as a result of Borrower's defaults under the Loan Agreement prior to April 30, 1998 and to forbear from exercising its remedies available to it as a result of Borrower's defaults of Sections 6.7 and 6.8 under the Loan Agreement, after April 30, 1998.


Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as the "Indebtedness."


2. DESCRIPTION OF EXISTING COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is secured by the Collateral as described in the Loan Agreement and by the Intellectual Property Collateral as described in that certain Intellectual Property Security Agreement dated April 30, 1998, by and between Versatility, Inc. and Borrower.


Hereinafter, the above-described security documents and guaranties, together with all other documents securing payment of the Indebtedness shall be referred to as the "Security Documents." Hereinafter, the Security Documents, together with all other documents evidencing securing or pertaining to the Indebtedness shall be referred to as the "Existing Loan Documents."


3. DESCRIPTION OF EXISTING WARRANT TO PURCHASE STOCK AGREEMENT. Versatility, Inc. and Bank are parties to that certain Warrant to Purchase Stock agreement, dated April 30, 1998 (the "Warrant Agreement").


4. FORBEARANCE.


A. Bank agrees to continue to forbear from exercising it remedies
available to it as a result of Borrower's default under the Loan
Agreement prior to April 30, 1998 and to forbear from exercising its
remedies available to it as a result of Borrower's existing defaults
of Sections 6.8, 6.9, 6.10, 6.11 and 6.15 under the Loan Agreement,
(the foregoing being referred to as "Existing Defaults") or any future
breaches under the Existing Loan Documents, as modified by this Loan
Modification, Consent and Forbearance Agreement (as so modified, the
"Loan Documents") until the earlier of (a) December 31, 1998 or (b)
the consummation of the merger and related transactions (the "Merger")
as described in that certain Agreement and Plan of Merger, dated
August____, 1998, by and among Acquiror, AQX Acquisition Corporation
and Versatility, Inc. (the "Merger Agreement"). Notwithstanding the
foregoing, the Forbearance Period will terminate upon (a) Borrower's
filing with any bankruptcy court of competent jurisdiction or becoming
the subject of any petition under the Bankruptcy Code, (b) Borrower's
filing or becoming the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or
state act or law relating to bankruptcy, insolvency, or other relief
for debtors, (c) Borrower's seeking, consenting to, or acquiescing in


the appointment of any trustee, receiver, conservator or liquidation,
(d) Borrower's becoming the subject of any order, judgment or decree
entered by any court of competent jurisdiction approving a petition
filed against Borrower for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief
under any present or future federal or state act or law relating to
bankruptcy, insolvency, or relief for debtors, or (e) termination of
the Merger Agreement prior to the consummation of the Merger according
to the terms and conditions of Merger Agreement ("Merger Closing").


B. Upon termination of the Forbearance Period, Bank may, at its option,
exercise its rights under the Loan Documents, and under applicable
law; provided, however, that Bank shall notify Acquiror, Acquiror's
counsel, Borrower, and Borrower's counsel (as listed on Exhibit "A")
in writing ten (10) days prior to (a) its acceleration of any amounts
due to Bank, (b) Bank's taking any other action to collect any cash
amounts or realize the benefit of any security interest in Borrower's
assets or (c) the exercise by Bank of any other rights under the Loan
Documents. Bank understands that it is a condition to Acquiror's
obligation to close the Merger that Bank not undertake any of the
actions described in the preceding sentence.


C. As consideration for Bank's agreement to forbear on exercising its
remedies, Borrower hereby renounces and waives all rights that are
waivable under Article 9 of the Code of any jurisdiction in which any
Collateral may now or hereafter be located. Without limiting the
generality of the foregoing, Borrower hereby (a) renounces any right
to receive notice of any disposition by Bank of the Collateral
pursuant to Section 9-504(3) of the Code upon termination of the
Forbearance Period, whether such disposition is by public or private
sale under the Code or otherwise, and (b) waives any rights relating
to compulsory disposition of the Collateral pursuant to Sections 9-504
and 9-505 of the Code.


D. In addition, Borrower hereby agrees that if it shall (a) file with any
bankruptcy court of competent jurisdiction or be the subject of any
petition under the Bankruptcy Code, (b) file or be the subject of any
petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insol
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