FIFTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT
This
Fifth Amendment to Loan and Security Agreement (this
“Amendment”) is entered into as of June 30, 2008, by
and between COMERICA BANK (“Bank”) and SCIENTIFIC
LEARNING CORPORATION (“Borrower”).
RECITALS
Borrower
and Bank are parties to that certain Loan and Security Agreement
dated as of January 15, 2004, as amended from time to time
including by that certain First Amendment to Loan and Security
Agreement dated as of September 29, 2004, that certain Second
Amendment to Loan and Security Agreement dated as of December 2,
2005, that certain Third Amendment to Loan and Security Agreement
dated as of September 5, 2006 and that certain Fourth Amendment to
Loan and Security Agreement dated as of June 5, 2007 (the
“Agreement”). The parties desire to amend the Agreement
in accordance with the terms of this Amendment.
NOW,
THEREFORE, the parties agree as follows:
1.
The following defined
terms in Section 1.1 of the Agreement hereby are added, amended or
restated as follows:
“Net
Worth” means the sum of the capital stock, partnership
interest or limited liability company interest of Borrower as
determined in accordance with GAAP.
“Revolving
Maturity Date” means July 1, 2009.
2. The
number “1.50” in Section 6.8 of the Agreement is hereby
replaced with the number “1.25”.
3. Section
6.9 of the Agreement is hereby amended and restated in its entirety
to read as follows:
“6.9
Measured as of (i) the last day of each month if at least One
Million Dollars ($1,000,000) of Advances are outstanding or (ii)
the last day of each quarter if less than One Million Dollars
($1,000,000) of Advances are outstanding, a Net Worth greater than
or equal to One Million Dollars ($1,000,000).”
4. Exhibit
D to the Agreement is hereby replaced with Exhibit D attached
hereto.
5. Until
such time as Bank completes an audit of the Collateral to
Bank’s satisfaction Borrower shall not be permitted to
request and Bank shall not make Credit Extensions to Borrower in
excess of Two Million Five Hundred Thousand Dollars
($2,500,000).
6.
No course of dealing on
the part of Bank or its officers, nor any failure or delay in the
exercise of any right by Bank, shall operate as a waiver thereof,
and any single or partial exercise of any such right shall not
preclude any later exercise of any such right. Bank’s failure
at any time to require strict performance by Borrower of any
provision shall not affect any right of Bank thereafter to demand
strict compliance and performance. Any suspension or waiver of a
right must be in writing signed by an officer of Bank.
7.
Unless otherwise defined,
all initially capitalized terms in this Amendment shall be as
defined in the Agreement. The Agreement, as amended hereby, shall
be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a
waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date
hereof.
8. Borrower
represents and warrants that the Representations and Warranties
contained in the Agreement as qualified by the Schedule are true
and correct as of the date of this Amendment, and that no Event of
Default has occurred and is continuing.
-1-
9. As
a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the
following:
(a) this
Amendment, duly executed by Borrower;
(b) a
Certificate of the Secretary of Borrower with respect to incumbency
and resolutions authorizing the execution and delivery of this
Amendment;
(c) a
signed Acknowledgement in the form attached hereto as Annex
A;
(d) an
amendment fee in the amount of $2,500, which may be debited from
any of Borrower’s accounts;
(e) an
renewal fee in the amount of $6,500, which may be debited from any
of Borrower’s accounts;
(f) all
reasonable Bank Expenses incurred through the date of this
Amendment, which may be debited from any of Borrower’s
accounts; and
(g) such
other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
10. This
Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one instrument.
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
|
|
|
|
|
|
|
SCIENTIFIC LEARNING
CORPORATION
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
COMERICA BANK
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
Title:
|
|
|
|
|
[Signature Page to Fifth Amendment to Loan &
Security Agreement]
ANNEX A
COMERICA BANK MERGER ACKNOWLEDGMENT
The
undersigned is a party to certain documents, instruments and/or
agreements (collectively, the “Documents”) with or
between the undersigned and Comerica Bank, a Michigan banking
corporation (the “Merged Bank”). The Merged Bank has
been, or will be, merged with and into Comerica Bank, a Texas
banking association (the “Surviving Bank”). The
undersigned hereby acknowledges and agrees that any reference in
the Documents to Comerica Bank, a Michigan banking corporation,
shall mean Comerica Bank, a Texas banking association, as successor
by merger to the Merged Bank.
|
|
|
|
|
|
|
|
|
June 30, 2008
|
|
SCIENTIFIC LEARNING
CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
Title (if applicable)
|
|
|
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
EXHIBIT D
COMPLIANCE CERTIFICATE
|
|
|
|
TO:
|
COMERICA BANK
|
|
|
|
|
FROM:
|
SCIENTIFIC LEARNING
CORPORATION
|
The
undersigned authorized officer of SCIENTIFIC LEARNING CORPORATION
hereby certifies that in accordance with the terms and conditions
of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (i) Borrower is in compliance for the
period ending _______________ with all required covenants except as
noted below and (ii) all representations and warranties of Borrower
stated in the Agreement are true and correct in
