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EXHIBIT 99.2
SILICON VALLEY BANK
LIMITED WAIVER AND
AMENDMENT TO LOAN DOCUMENTS
BORROWER: VERSO TECHNOLOGIES, INC.
PROVO PREPAID (DELAWARE) CORP.
TELEMATE.NET SOFTWARE, INC.
NEEDHAM (DELAWARE) CORP.
DATE: JULY 25,
2005
THIS
LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS is entered into
between Silicon Valley Bank ("Silicon") and
the borrower named above
("Borrower").
The
Parties agree to amend the Loan and Security Agreement between
them,
dated December 14, 2001 (as otherwise
amended, if at all, 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.)
Reference
is hereby made to the Verso Technologies, Inc. ("Verso") 7.50%
Convertible Debentures Due November 22,
2005 (the "November 2005 Debentures").
Borrower has advised Silicon that Verso
intends to restructure the payment of
the November 2005 Debentures to be as
follows: (i) $1,125,000, in the aggregate,
upon the execution of the restructuring
agreement between Verso and each of the
holders of the November 2005 Debentures;
(ii) $225,000, in the aggregate, on
each of August 1, 2005, September 1, 2005
and October 1, 2005, (iii) $450,000,
in the aggregate, on November 22, 2005 and
(iv) $225,000, in the aggregate, on
each of January 1, 2006, February 1, 2006,
March 1, 2006, April 1, 2006, May 1,
2006, June 1, 2006, July 1, 2006, August 1,
2006, September 1, 2006 and October
1, 2006 (the "Restructured Payments").
Borrower has also advised Silicon that
the interest rate on the November 2005
Debentures will increase from 7.50% to
12% per annum after November 22, 2005 (the
"Modified Interest Rate," which
together with the Restructured Payments is
hereinafter referred to as the
"Transaction").
The
Borrower is prohibited from entering into the Transaction pursuant
to
the terms of Sections 5.5(iii) and 5.5(iv)
of the Loan Agreement, absent
compliance with the terms thereof.
NOW,
THEREFOR, the parties hereto agree as follows:
1. LIMITED
WAIVER AND CONSENT RE TRANSACTION. Silicon and Borrower agree
that (a) the prohibitions set forth in
Sections 5.5(iii) and 5.5(iv) of the Loan
Agreement are hereby
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SILICON VALLEY BANK
LIMITED WAIVER AND AMENDMENT
waived with respect to the Transaction only
and (b) Silicon hereby consents to
the Transaction in accordance with the
terms previously disclosed to Silicon. It
is understood by the parties hereto,
however, that such waiver and consent do
not constitute a waiver of any other
provision or term of the Loan Agreement or
any related document or a consent to any
other matter, nor an agreement to waive
in the future this covenant or any other
provision or term of the Loan Agreement
or any related document or to consent to
any other matter.
2.
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):
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 (i) 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 and (ii)
maintains a minimum Modified Quick Ratio of at
least 1.50 to 1.0. If Borrower does not maintain
EBITDA in excess of $0.00, or does not maintain a
Modified Quick Ratio of at least 1.50 to 1.0, 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.
For purposes hereof, "Modified Quick Ratio" means
(a) Borrower's cash and cash equivalents (each
maintained at Silicon) plus Borrower's Eligible
Receivables divided by (b) Borrower's current
liabilities (as defined herein) less deferred
revenues.
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SILICON VALLEY B
