Document:

Second Amendment to Credit Agreement

 Exhibit 10.4 
 SECOND AMENDMENT TO CREDIT AGREEMENT 
 THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made this 17th day of March, 2008 and is effective as of the 31st day of December, 2007 by and among (1) VERTICAL COMMUNICATIONS, INC., a Delaware corporation
(“VCI”), VERTICAL COMMUNICATIONS ACQUISITION CORP., a Delaware corporation (“VCAC”)
VODAVI TECHNOLOGY, INC., a Delaware corporation (“Vodavi”) and VODAVI COMMUNICATIONS SYSTEMS,
INC., an Arizona corporation (“Vodavi Comm”, and collectively with VCI, VCAC and Vodavi, the “Borrowers” and each a
“Borrower”), (2) COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, as “Investment
Manager”, and (v) NEIPF, L.P., as “Lender”. 
 WHEREAS, Borrowers have obtained from Lender a loan facility for working capital purposes pursuant to the terms and conditions of (i) a Credit Agreement dated as of October 18, 2006, by and among the VCI, VCAC, Investment
Manager and Lender and certain other signatories thereto, (ii) a Joinder Agreement by Vodavi in favor of Investment Manager and Lender dated December 4, 2006, (iii) a Joinder Agreement by Vodavi Comm in favor of Investment Manager and
Lender dated May 29, 2007, and (iv) a First Amendment to Credit Agreement among Borrowers, Investment Manager and Lender (such Credit Agreement, and Joinder Agreements and First Amendment, collectively, the “Credit
Agreement”; and 
 WHEREAS, Borrowers have requested that Investment Manager and Lender amend certain
provisions of the Credit Agreement, and Investment Manager and Lender are willing to agree to such amendments upon the terms and conditions set forth herein. 
 NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements contained in the Credit Agreement, the other Loan Documents and in this Agreement and intending to be legally bound
hereby, covenant and agree as follows: 
 1. CAPITALIZED TERMS. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Credit Agreement, as amended hereby. 
 2. AMENDMENTS TO CREDIT
AGREEMENT. 
 2.1 Sections 6.3(a), (b) and (c) of the Credit Agreement is hereby deleted in their
entirety and replaced with the following: 
 “(a) Liquidity. As of the last day of the calendar months ending March 31,
2008, April 30, 2008, May 31, 2008 and June 30, 2008, Borrowers shall maintain cash, Cash Equivalents or available borrowing capacity without restriction (other than under this Agreement) of not less than the amount
indicated below (including Borrowers and each of their Subsidiaries on a consolidated basis as of the date of calculation). 
  

				
	 March 31, 2008
	  	$	5,000,000
		
	 April 30, 2008
	  	$	4,781,977
		
	 May 31, 2008
	  	$	4,233,665
		
	 June 30, 2008
	  	$	4,145,267

 As of the last day of the calendar month ending July 31, 2008 and as of the last day of each
calendar month thereafter, Borrowers shall maintain cash, Cash Equivalents or available borrowing capacity without restriction (other than under this Agreement) of not less than $4,000,000 (including Borrowers and each of their Subsidiaries on a
consolidated basis as of the date of calculation). Notwithstanding the foregoing, once Borrowers’ EBITDA for any trailing twelve month period is $1 or greater as certified in writing to Investment Manager and Lender by Borrowers’ chief
financial officer or chief accountant, this Liquidity covenant will be automatically terminated and of no further force or effect. 
 (b)
Minimum EBITDA. For each of the trailing three month periods ending March 31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008, Borrowers shall not permit EBITDA to be less than the amount indicated
below. 
  

				
	 March 31, 2008
	  	-$	3,665,195
		
	 June 30, 2008
	  	-$	3,230,843
		
	 September 30, 2008
	  	-$	1,783,532
		
	 December 31, 2008
	  	 $	101,453

 Beginning with the trailing three month period ended March 31, 2009, and for each trailing
three month period measured on a calendar quarterly basis thereafter, Borrowers shall not permit EBITDA to be less than $1 as measured in such relevant three month period (including Borrowers and each of their Subsidiaries on a consolidated basis as
of the date of calculation). Notwithstanding the foregoing, once Borrowers’ EBITDA for any trailing twelve month period is $1 or greater as certified in writing to Investment Manager and Lender by Borrowers’ chief financial officer or
chief accountant, this Minimum EBITDA covenant will be automatically terminated and of no further force or effect. 
 (c) Minimum
Revenues. For each of the trailing three month periods ending March 31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008, Borrowers shall not permit total consolidated Revenues to be less than the
amount indicated below. 
  

				
	 March 31, 2008
	  	$	13,236,750
		
	 June 30, 2008
	  	$	13,508,550
		
	 September 30, 2008
	  	$	13,847,850
		
	 December 31, 2008
	  	$	15,583,311

 Beginning with the trailing twelve month period ended March 31, 2009, Borrowers shall not
permit total consolidated Revenues for the twelve month period so ended to be less than $62,418,290 (including Borrowers and each of their Subsidiaries on a consolidated basis as of the date of calculation). For every trailing twelve month period
measured on a 

  

 2 

 calendar quarterly basis thereafter, Borrowers shall not permit total consolidated Revenues to be less than two percent
(2%) greater than in the same trailing twelve month period from the immediately preceding twelve month period (including Borrowers and each of their Subsidiaries on a consolidated basis as of the date of calculation). Notwithstanding the
foregoing, once Borrowers’ EBITDA for any trailing twelve month period is $1 or greater as certified in writing to Investment Manager and Lender by Borrowers’ chief financial officer or chief accountant, this Minimum Revenues covenant will
be automatically terminated and of no further force or effect. 
 3. REPRESENTATIONS, WARRANTIES AND
COVENANTS. Each Borrower represents, warrants and covenants to Investment Manager and Lender that: 
 (a) the
execution, delivery and performance by such Borrower of this Agreement have been duly authorized by all necessary corporate action and this Agreement is a legal, valid and binding obligation of such Borrower enforceable against such Borrower in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally and general principles of equity; 
 (b) each of the representations and warranties contained in the Credit Agreement is true and correct in all material respects on and as of the
date hereof as if made on the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date and except as set forth on the replacement Disclosure Schedules attached hereto; 
 (c) after giving effect to this Agreement, no Event of Default currently exists or shall result from the consummation of the transactions
contemplated hereby; and 
 (d) neither the execution, delivery and performance of this Agreement nor the consummation of the
transactions contemplated hereby or referenced herein does or shall contravene, result in a breach of, or violate (i) any provision of such Borrower’s Certificate of Incorporation or Bylaws, (ii) any law or regulation, or any order or
decree of any court or government instrumentality, or (iii) any indenture, mortgage, deed of trust, lease, agreement or other instrument to which such Borrower is a party or by which such Borrower or any of its property is bound. 
 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT. The effectiveness of this Agreement is
subject to Borrowers’ satisfaction of the following conditions in a manner satisfactory to Investment Manager: 
 4.1 Silicon
Valley Bank shall have entered into any amendment of its credit facility with Borrowers, waiving any existing defaults under such credit facility and amending financial covenants contained therein, on terms and conditions satisfactory to Investment
Manager and Lender; 
 4.2 VCI shall have received $5,250,000 in gross proceeds pursuant to the terms of that certain Securities
Purchase Agreement among VCI and certain investors a party thereto, providing for, among other things, the purchase and sale of up to $7,500,000 in convertible promissory notes; 
  

 3 

 4.3 Investors party to the Securities Purchase Agreement referenced in Section 4.2 above
shall have entered into a subordination agreement with Investment Manager and Lender, pursuant to which such investors agree to subordinate payment of the convertible promissory notes received pursuant to such Securities Purchase Agreement to the
prior payment of indebtedness under the Credit Agreement; 
 4.4 Investment Manager shall have received this Agreement, duly executed
by all parties thereto; and 
 4.5 Borrowers shall have satisfied all fees and expenses as required pursuant to Section 6 of this
Agreement and under Section 1.6 of the Credit Agreement. 
 5. REFERENCE TO AND EFFECT
UPON THE CREDIT AGREEMENT. 
 5.1 Borrowers agree, acknowledge and
affirm that the Collateral securing the Obligations under the Credit Agreement and the other Loan Documents, and Investment Manager’s and Lender’s rights thereunder (as applicable) and hereunder shall continue to be secured in all respects
as provided therein and herein. 
 5.2 Each Borrower agrees, acknowledges and affirms that its liabilities and obligations under the
Credit Agreement and the other Loan Documents shall, except as expressly modified by this Agreement, remain in full force and effect, and shall not be released, impaired, diminished or in any other way modified or amended as a result of the
execution and delivery of this Agreement. 
 5.3 Each Borrower hereby represents and warrants, as of the date hereof, that there are
no known claims, causes of action, suits, debts, liens, obligations, liabilities, demands, losses, costs and expenses (including attorneys’ fees) of any kind, character or nature whatsoever, fixed or contingent, which such Borrower may have or
claim to have against Investment Manager or Lender under the Credit Agreement, which may arise out of or be connected with any act of commission or omission of Investment Manager or Lender, existing or occurring on or prior to the date of this
Agreement. 
 5.4 Each Borrower hereby releases, waives and forever discharges and relieves Investment Manager and Lender and all
their parents, subsidiaries and affiliates and the officers, directors, agents, attorneys and employees of each (hereinafter “‘Releasees”) from any and all claims, liabilities, demands, actions, suits, covenants, costs,
offsets and defenses of any nature and kind whatsoever, whether at law or equity of otherwise, whether known or unknown (collectively “Claims”), which such Borrower ever had, now has, or which may arise out of or have been
caused by any act of commission or omission of Investment Manager or Lender, existing or occurring on or prior to the date of this Agreement, against or related to Releasees. 
 5.5 Borrowers hereby agree, jointly and severally, to indemnify, defend, and hold harmless Releasees from and against any and all Claims which any
of Releasees may incur as a direct or indirect consequence of or in relation to any and all acts or omission of any Borrower, other than any such claim that results from the gross negligence or willful misconduct of any Releasee. Should Releasees
incur any such indemnifiable Claims, or defense of or response to any Claims or demand related thereto, the amount thereof, including costs, expenses and 
  

 4 

 
attorneys’ fees, shall be added to the amounts due under the Credit Agreement and the other Loan Documents, as amended hereby, and shall be secured by
any and all liens created under the Credit Agreement and the other Loan Documents. This indemnity shall survive payment of the amounts due under the Credit Agreement and the other Loan Documents to Investment Manager and Lender and/or the
termination, release or discharge of any Borrower. This indemnity shall not limit Investment Manager’s and Lender’s other rights of indemnification, subrogation or assignment, whether explicit, implied, legal or equitable. 
 5.6 The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of Investment Manager
or Lender under the Credit Agreement or any other Loan Document, nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document, except as specifically set forth herein. 
 6. COSTS AND EXPENSES. Borrowers agree to reimburse Investment Manager for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors in connection with this Agreement and the subject matter related thereto. 
 7. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.

 8. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. 
  

 5 

 [SIGNATURE PAGE TO SECOND AMENDMENT TO 
 CREDIT AGREEMENT] 
 IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above written. 
  

			
	BORROWERS:
	
	VERTICAL COMMUNICATIONS, INC.
		
	By:	 	 /s/ Ken Clinebell

	Name:	 	Ken Clinebell
	Title:	 	CFO
	
	VERTICAL COMMUNICATIONS ACQUISITION CORP.
		
	By:	 	 /s/ Ken Clinebell

	Name:	 	Ken Clinebell
	Title:	 	CFO
	
	VODAVI TECHNOLOGY, INC.
		
	By:	 	 /s/ Ken Clinebell

	Name:	 	Ken Clinebell
	Title:	 	CFO
	
	VODAVI COMMUNICATIONS SYSTEMS, INC.
		
	By:	 	 /s/ Ken Clinebell

	Name:	 	Ken Clinebell
	Title:	 	CFO

 [SIGNATUE PAGE TO SECOND AMENDMENT TO 
 CREDIT AGREEMENT] 
 WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above written. 
  

			
	BORROWERS:
	
	VERTICAL COMMUNICATIONS, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	VERTICAL COMMUNICATIONS ACQUISITION CORP.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	VODAVI TECHNOLOGY, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	VODAVI COMMUNICATIONS SYTEMS, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	INVESTMENT MANAGER:
	
	COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT
		
	By:	 	 /s/ Jason Crist

	Name:	 	Jason Crist
	Title:	 	Managing Director
	Address:	 	5425 Wisconsin Avenue
		 	Suite 700
		 	Chevy Chase, Maryland 20815
		 	ATTN: Jason Crist
		 	Fax: (240) 482-0401

			
	 LENDER:

	
	 NEIPF, L.P.

	
	By: COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, as its authorized signatory
		
	 By:
	 	 /s/ Jason Crist

	 Name:
	 	Jason Crist
	 Title:
	 	Managing Director
	 Address:
	 	5425 Wisconsin Avenue
		 	Suite 700
		 	Chevy Chase, Maryland 20815
		 	ATTN: Jason Crist
		 	Fax: (240) 482-0401Second Loan Modification Agreement

 Exhibit 10.5 
 SECOND LOAN MODIFICATION AGREEMENT 
 This
Second Loan Modification Agreement (this “Loan Modification Agreement’) is made this 17th day of March, 2008, by and between SILICON
VALLEY BANK, a California-chartered bank, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462 (“Bank”) and VERTICAL COMMUNICATIONS, INC., a Delaware corporation with its principal place of business at One Memorial Drive, Cambridge, Massachusetts 02142, VERTICAL COMMUNICATIONS ACQUISITION CORP., a
Delaware corporation with its principal place of business at One Memorial Drive, Cambridge, Massachusetts 02142, VODAVI TECHNOLOGY, INC., a Delaware corporation with its principal place of business at One Memorial Drive, Cambridge, Massachusetts
02142 and VODAVI COMMUNICATIONS SYSTEMS, INC., an Arizona corporation with its principal place of business at One Memorial Drive, Cambridge, Massachusetts 02142 (singly and collectively, jointly and severally, “Borrower”).

 1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower
is indebted to Bank pursuant to a loan arrangement dated as of May 25, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of May 25, 2007 between Borrower and Bank, as amended by a certain Loan
Modification Agreement dated October 15, 2007 and made effective as of September 30, 2007 (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan
Agreement. 
 2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by: (i) the Collateral as described in the Loan Agreement and
(ii) the Intellectual Property Collateral as described in certain Intellectual Property Security Agreements each dated May 25, 2007 (singly and collectively, the “IP Agreement”) by Borrower in favor of Bank (together with any
other collateral security granted to Bank, the “Security Documents”). 
 Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”. 
 3. DESCRIPTION OF CHANGE IN TERMS/MODIFICATIONS
TO LOAN AGREEMENT. 
 A. Section 5 of the Schedule to the Loan Agreement is hereby amended by deleting the following text appearing
therein in its entirety: 
 ““Section 5 FINANCIAL COVENANTS 
 (Section 5.1): Borrower, together with its subsidiaries on a consolidated basis, shall comply with each of the following covenants. 
 Compliance shall be determined as of the end of each month, except as otherwise specifically provided below: 
  

	 	a.	Minimum Revenue: 

 (i) For the six-month period ended
March 31, 2007, Borrower shall have achieved Revenue of not less than $30,000,000; 
 (ii) For the trailing three-month periods ending
December 31,2007, March 31,2008 and June 30,2008, Borrower shall achieve Revenue of not less than $20,506,436, $20,371,880 and $22,746,847, respectively; and 
 (iii) Beginning with the trailing twelve-month period ending June 30,2008, Borrower shall achieve Revenue of not less than $80,000,000 for the
twelve month period so ended (including Borrower and each of its Subsidiaries on a consolidated basis 

 
as of the date of calculation). For every trailing twelve-month period measured on a calendar quarterly basis thereafter, Borrower shall not permit total
consolidated Revenue to be less than 2% greater than in the same trailing twelve-month period from the immediately preceding twelve-month period (including Borrower and each of its Subsidiaries on a consolidated basis as of the date of calculation).

  

	 	b.	Minimum Cash or Excess Availability (Unrestricted Liquidity): 

 Borrower shall, as of the last day of each month, maintain Unrestricted Liquidity in excess of $5,000,000; provided, however, such $5,000,000 requirement shall be reduced to $4,100,000 with respect to the November 30, 2007 test date,
$3,600,000 with respect to the December 31, 2007 test date, $4,200,000 with respect to the January 31, 2008 test date, $4,400,000 with respect to the February 29, 2008 test date, $4,400,000 with respect to the April 30,2008 test
date, $4,600,000 with respect to the May 31, 2008 test date and $4,100,000 with respect to the June 30,2008 test date; provided, further, however, Borrower’s failure to comply with the Unrestricted Liquidity covenant as of any test
date shall be deemed waived by Bank in the event Borrower receives net cash proceeds from the issuance of equity securities of Borrower of at least $5,000,000 within forty-five (45) days of such test date. 
  

	 	c.	Minimum EBITDA: 

 (i) For the six-month period ended
March 31, 2007, Borrower shall not permit its EBITDA losses to be greater than $2,000,000; 
 (ii) For the trailing three-month periods
ending December 31,2007, March 31, 2008 and June 30, 2008, Borrower shall not permit its EBITDA as measured in such relevant three-month period to be less than ($920,976), ($604,872) and $1,128,831, respectively; and 

(iii) For the trailing three-month period ending September 30, 2008 and for each trailing three-month period ending at each quarter end
thereafter, Borrower shall not permit its EBITDA as measured in such relevant three-month period to be less than $1.00. 
 Definitions. For
purposes of the foregoing financial covenants, the following term shall have the following meaning: 
 “EBITDA” shall mean,
consistent with the Borrower’s internal management reporting system as of the date of this Agreement, for any given period for Borrower, earnings before interest, taxes, depreciation and amortization determined on a pro-forma basis that
excludes the effect of non-cash stock options compensation expense, accrued but not paid liquidated damages referred to in clause (ii) of the definition of “Restricted Payment” (as set forth in the Credit Agreement entered into in
connection with the NEIPF Facility, as in effect as of the date of this Agreement) and certain other extraordinary profit and loss items agreed upon between Borrower and Silicon; provided that if such items are not agreed upon by Silicon in its sole
discretion they shall not be excluded from EBITDA. 
 “Revenue” shall mean, consistent with Borrower’s internal management
reporting system as of the date of this Agreement, the pro-forma sales of products and services, which is equal to revenue determined in accordance with GAAP, plus current period invoiced amounts that are deferred under GAAP for systems sales
associated with long-term customer contractual obligations, minus the current period revenue recognition of prior period systems sales. 

 “Unrestricted Liquidity” shall mean (i) unrestricted cash deposits, plus (ii) excess
“availability” under this Agreement (net of all Loans, Letters of Credit or other indebtedness under this Agreement), as determined by Silicon based upon the Credit Limit restrictions set forth in Section 1 above).” 

and substituting the following text therefor: 
 “Section 5 FINANCIAL COVENANTS 
 (Section 5.1): Borrower, together with its
subsidiaries on a consolidated basis, shall comply with each of the following covenants. 
 Compliance shall be determined as of the end of
each month, except as otherwise specifically provided below: 
  

	 	a.	Minimum Revenue: 

 (i) For the trailing three-month period
ending March 31, 2008, Borrower shall achieve Revenue of not less than $13,236,750; 
 (ii) For the trailing three-month period ending
June 30, 2008, Borrower shall achieve Revenue of not less than $$13,508,550; 
 (iii) For the trailing three-month period ending
September 30,2008, Borrower shall achieve Revenue of not less than $13,847,850; 
 (iv) For the trailing three-month period ending
December 31, 2008, Borrower shall achieve Revenue of not less than $15,583,311; 
 (v) Beginning with the trailing twelve-month period
ending March 31, 2009, Borrower shall achieve Revenue of not less than $62,418,290 for the twelve month period so ended. For every trailing twelve-month period measured on a calendar quarterly basis thereafter, Borrower shall not permit total
consolidated Revenue to be less than 2% greater than in the same trailing twelve-month period from the immediately preceding twelve-month period. 
  

	 	b.	Minimum Cash or Excess Availability (Unrestricted Liquidity): 

 Borrower shall, as of the last day of the calendar months ending March 31, 2008, April 30, 2008, May 31, 2008 and June 30, 2008, maintain Unrestricted Liquidity in excess of the amounts indicated below:

  

				
	 March 31,2008
	  	$	5,000,000
	 April 30, 2008
	  	$	4,781,977
	 May 31,2008
	  	$	4,233,665
	 June 30, 2008
	  	$	4,145,267

 As of the last day of the calendar month ending July 31, 2008 and as of the last day of each
calendar month thereafter, Borrower shall maintain Unrestricted Liquidity in excess of $4,000,000. 
  

	 	c.	Minimum EBITDA: 

 (i) For the trailing three month period ending March 31, 2008, Borrower shall not permit its EBITDA
losses to be greater than ($3,665,195); 
 (ii) For the trailing three month period ending June 30, 2008, Borrower shall not permit its
EBITDA losses to be greater than ($3,230,843); 
 (iii) For the trailing three month period ending September 30, 2008, Borrower shall
not permit its EBITDA losses to be greater than ($1,783,532); 
 (iv) For the trailing three month period ending December 31, 2008,
Borrower shall not permit its EBITDA to be less than $101,453; and 
 (v) Beginning with the trailing three month period ended March 31,
2009, and for each trailing three month period measured on a calendar quarterly basis thereafter, Borrower shall not permit its EBITDA to be less than $1 as measured in such relevant three month period. 
 Definitions. For purposes of the foregoing financial covenants, the following term shall have the following meaning: 
 “EBITDA” shall mean, consistent with the Borrower’s internal management reporting system as of the date of this Agreement, for any given
period for Borrower, earnings before interest, taxes, depreciation and amortization determined on a pro-forma basis that excludes the effect of non-cash stock options compensation expense, accrued but not paid liquidated damages referred to in
clause (ii) of the definition of “Restricted Payment” (as set forth in the Credit Agreement entered into in connection with the NEIPF Facility, as in effect as of the date of this Agreement) and certain other extraordinary profit and
loss items agreed upon between Borrower and Silicon; provided that if such items are not agreed upon by Silicon in its sole discretion they shall not be excluded from EBITDA. 
 “Revenue” shall mean, consistent with Borrower’s internal management reporting system as of the date of this Agreement, the pro-forma sales
of products and services, which is equal to revenue determined in accordance with GAAP, plus current period invoiced amounts that are deferred under GAAP for systems sales associated with long-term customer contractual obligations, minus the current
period revenue recognition of prior period systems sales. 
 “Unrestricted Liquidity” shall mean (i) unrestricted cash
deposits, plus (ii) excess “availability” under this Agreement (net of all Loans, Letters of Credit or other indebtedness under this Agreement), as determined by Silicon based upon the Credit Limit restrictions set forth in
Section 1 above).” 
 4. WAIVERS. Bank hereby waives Borrower’s failure to comply with (i) the minimum Revenue requirement set
forth in Section 5(a) of the Schedule to the Loan Agreement as of December 31, 2007, (ii) the minimum EBITDA requirement set forth in Section 5(c) of the Schedule to the Loan Agreement as of 
 December 31, 2007 and (iii) the minimum Unrestricted Liquidity requirement set forth in Section 5(b) of the Schedule to the Loan Agreement as of
January 31, 2008 and February 29, 2008. The Bank’s waiver of Borrower’s compliance with said foregoing affirmative covenants shall apply only to the foregoing specific periods and shall not constitute a continuing waiver.

 5. PRECONDITIONS TO EFFECTIVENESS. The effectiveness of this Agreement is subject to Borrower’s satisfaction of the following conditions in a
manner satisfactory to Bank: 
 (a) COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, as “Investment Manager”, and (v) NEIPF,
L.P., as a lender, shall have entered into an amendment of its credit facility with Borrower, waiving any existing defaults under such credit facility and amending financial covenants contained therein, on terms and conditions satisfactory to Bank;

 (b) Vertical Communications, Inc. shall have received $5,250,000 in gross proceeds pursuant to the terms
of that certain Securities Purchase Agreement among Vertical Communications, Inc. and certain investors party thereto, providing for, among other things, the purchase and sale of up to $7,500,000 in convertible promissory notes; 
 (c) Investors party to the Securities Purchase Agreement referenced in Section 5(b) above shall have entered into a subordination agreement with
Bank, pursuant to which such investors agree to subordinate payment of the convertible promissory notes received pursuant to such Securities Purchase Agreement to the prior payment of indebtedness under the Loan Agreement; 
 (d) Bank shall have received this Loan Modification Agreement, duly executed by all parties hereto; and 
 (e) Borrower shall have satisfied all fees and expenses as required pursuant to Section 6 of this Loan Modification Agreement. 
 6. FEES. Borrower shall pay to Bank on the date hereof a fully-earned, non-refundable modification/waiver fee of Fifteen Thousand Dollars ($15,000.00). Borrower
shall also reimburse Bank for all legal fees and expenses previously incurred in connection with its loan arrangement with Borrower and all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 7. RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions IP Agreement, and acknowledges, confirms and agrees that the IP Agreement contains an accurate and complete listing of all Intellectual Property Collateral as defined the IP Agreement. 
 8. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain
Perfection Certificates each dated as of May 25, 2007 between Borrower and Bank, and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in the Perfection Certificates has not changed, as of the
date hereof. Borrower hereby further confirms that no Borrower has amended its certificate of incorporation or bylaws since the May 25, 2007 closing of the Loan Agreement. 
 9. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above. 
 10. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured
thereby includes, without limitation, the Obligations. 
 11. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no
offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or
in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder. 
 12. CONTINUING VALIDITY.
Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this
Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall
obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the 

 
Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly
released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement. 
 13. JURISDICTION/VENUE. Borrower accepts for
itself and in connection with its properties, unconditionally, the exclusive jurisdiction of any state or federal court of competent jurisdiction in the Commonwealth of Massachusetts in any action, suit, or proceeding of any kind against it which
arises out of or by reason of this Loan Modification Agreement; provided, however, that if for any reason Bank cannot avail itself of the courts of the Commonwealth of Massachusetts, then venue shall lie in Santa Clara County, California.
NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE THE BANK’S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY. 
 14. COUNTERSIGNATURE. This Loan Modification
Agreement shall become effective only when it shall have been executed by Borrower and Bank. 
 [signature page follows] 

 This Loan Modification Agreement is executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first written above. 
  

									
	BORROWER:	 		 	BANK:
			
	VERTICAL COMMUNICATIONS, INC.	 		 	SILICON VALLEY BANK
					
	By:	 	 /s/ Ken Clinbell
	 		 	By:	 	  

	Name:	 	Ken Clinbell	 		 	Name:	 	  

	Title:	 	CFO	 		 	Title:	 	  

  

			
	VERTICAL COMMUNICATIONS ACQUISITION CORP.
		
	By:	 	 /s/ Ken Clinbell

	Name:	 	Ken Clinbell
	Title:	 	CFO

  

			
	VODAVI TECHNOLOGY, INC.
		
	By:	 	 /s/ Ken Clinbell

	Name:	 	Ken Clinbell
	Title:	 	CFO

  

			
	VODAVI COMMUNICATIONS SYSTEMS, INC.
		
	By:	 	 /s/ Ken Clinbell

	Name:	 	Ken Clinbell
	Title:	 	CFO

 This Loan Modification Agreement is executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first written above. 
  

									
	BORROWER:	 		 	BANK:
			
	VERTICAL COMMUNICATIONS, INC.	 		 	SILICON VALLEY BANK
					
	By:	 	  
	 		 	By:	 	 /s/ Jay T. Tracey

	Name:	 	  
	 		 	Name:	 	Jay T. Tracey
	Title:	 	  
	 		 	Title:	 	Vice President

  

			
	VERTICAL COMMUNICATIONS ACQUISITION CORP.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	VODAVI TECHNOLOGY, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

			
	VODAVI COMMUNICATIONS SYSTEMS, INC.
		
	By:	 	  

	Name:	 	  

	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]