Document:

Exhibit 10.3

SECOND LOAN MODIFICATION AGREEMENT

     
This Second Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of February 13, 2008, but effective as of
December 27, 2007, by and between SILICON VALLEY
BANK, a California corporation, with its principal place
of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at 100 Matsonford Road, Building 5, Suite 555, Radnor,
Pennsylvania 19087 (“Bank”) and VOXWARE,
INC., a Delaware corporation with its chief executive
office located at 168 Franklin Corner Road, Lawrenceville, New Jersey 08648
(“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 January 3, 2007, but effective as of December 29,
2006, evidenced by, among other documents, a certain Amended and Restated Loan
and Security Agreement dated as of January 3, 2007, but effective as of December
29, 2006, by and between Borrower and Bank, and as amended by a certain First
Loan Modification Agreement dated as of February 2, 2007, by and between
Borrower and Bank (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 the Collateral as described in the
Loan Agreement and the Intellectual Property Collateral as described in a
certain Intellectual Property Security Agreement dated as of December 29, 2003
(as amended, the "IP Security Agreement") (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.

		A.	Modifications to Loan
      Agreement.
	 
		 	1	The Loan Agreement shall be amended by
      inserting the following new provision to appear as Section 2.1.6
      thereof:
	      	         	         	
		 	 	"2.1.6 Equipment
      Advances.
	 
		 	 	     
      (a)     
      Availability. Subject to
      the terms and conditions of this Agreement, during the Draw Period, Bank
      shall make advances (each, an “Equipment
      Advance” and, collectively, “Equipment Advances”) not exceeding the
      Equipment Line. Equipment Advances may only be used to finance Eligible
      Equipment purchased within ninety (90) days (determined based upon the
      applicable invoice date of such Eligible Equipment) before the date of
      each Equipment Advance, and no Equipment Advance may exceed one hundred
      percent (100%) of the total invoice for Eligible Equipment, excluding
      taxes, shipping, warranty charges, freight discounts and installation
      expenses relating to such Eligible Equipment. Notwithstanding the
      foregoing, the initial Equipment Advance (the "Initial Equipment Advance") hereunder may
      be used to reimburse Borrower for Eligible Equipment purchased on or after
      September 30, 2007, provided that, the Initial Equipment Advance is: (i)
      requested within twenty (20) days after the Effective Date, and (ii) in an
      amount not to exceed One Hundred Thousand Dollars ($100,000), in the
      aggregate. Unless otherwise agreed to by Bank, not more than twenty-five
      (25%) of the proceeds of the Equipment Line shall be used to finance Other
      Equipment. Each Equipment Advance, with the exception of three (3)
      Equipment Advances, must be in an amount equal to at least One Hundred
      Thousand Dollars ($100,000). After repayment, no Equipment Advance may be
      reborrowed.

			 	      (b)      Repayment. In addition to the
      monthly payments of interest, as set forth in Section 2.3(a)(iii) below,
      the principal amount of each Equipment Advance is payable in thirty-six
      (36) consecutive equal monthly payments of principal beginning on the
      first Payment Date of the month following the Funding Date of such
      Equipment Advance and shall continue on each Payment Date thereafter. The
      final payment due on the applicable Equipment Maturity Date shall include
      all outstanding principal and all accrued unpaid interest.
	      	         	         	
			 	      (c)      Prepayment Upon an Event of Loss. Borrower shall bear the risk of any loss, theft, destruction, or
      damage of or to the Financed Equipment. If, during the term of this
      Agreement, any item of Financed Equipment becomes obsolete or is lost,
      stolen, destroyed, damaged beyond repair, rendered permanently unfit for
      use, or seized by a governmental authority for any reason for a period
      equal to at least the remainder of the term of this Agreement (an
      “Event of Loss”), then, if no Event of Default has occurred or is
      continuing, within ten (10) days following such Event of Loss, at
      Borrower’s option, Borrower shall (i) pay to Bank on account of the
      Obligations all accrued interest to the date of the prepayment, plus all
      outstanding principal owing with respect to the Financed Equipment subject
      to the Event of Loss; or (ii) repair or replace any Financed Equipment
      subject to an Event of Loss provided the repaired or replaced Financed
      Equipment is of equal or like value to the Financed Equipment subject to
      an Event of Loss and provided further that Bank has a first priority
      perfected security interest in such repaired or replaced Financed
      Equipment."
			 
			2	The Loan Agreement shall be
      amended by deleting the following provision appearing as Section 2.3(a)
      thereof: 
			 
			 	"     (a)      Interest Rate. 
			 
			 	           
      (i)     
      Advances. Subject to Section 2.3(b), the principal amount
      outstanding under the Revolving Line shall accrue interest at a floating
      per annum rate equal to the one and three-quarters of one percentage
      points (1.75%) above the Prime Rate (which shall be reduced to one-half of
      one percentage point (.50%) above the Prime Rate, beginning on the first
      Payment Date following the occurrence of the Profitability Event), which
      interest shall be payable monthly in accordance with Section 2.3(f)
      below.
			 
			 	           
      (ii)     
      Term Loan. Subject to Section 2.3(b), the principal amount
      outstanding under the Term Loan shall accrue interest at a floating per
      annum rate equal to two and one-quarter of one percentage points (2.25%)
      above the Prime Rate, which interest shall be payable monthly in
      accordance with Section 2.3(f) below."
			 	
			 	and inserting in lieu thereof the
      following: 
			 
			 	"     (a)      Interest Rate. 
			 
			 	           
      (i)     
      Advances. Subject to Section 2.3(b), the principal amount
      outstanding under the Revolving Line shall accrue interest at a floating
      per annum rate equal to the one and three-quarters of one percentage
      points (1.75%) above the Prime Rate (which shall be reduced to one-half of
      one percentage point (.50%) above the Prime Rate, beginning on the first
      Payment Date following the occurrence of the Profitability Event), which
      interest shall be payable monthly in accordance with Section 2.3(f) below.
      Commencing on the 2008 Closing Date and subject to Section 2.3(b), the
      principal amount outstanding under the Revolving Line shall accrue
      interest at a floating per annum rate equal to the one-half of one
      percentage point (0.50%) above the Prime Rate, which interest shall be
      payable monthly in accordance with Section 2.3(f)
  below.

				
                 
      (ii)     
      Term Loan. Subject to Section 2.3(b), the principal amount
      outstanding under the Term Loan shall accrue interest at a floating per
      annum rate equal to two and one-quarter of one percentage points (2.25%)
      above the Prime Rate, which interest shall be payable monthly in
      accordance with Section 2.3(f) below. Commencing on the 2008 Closing Date
      and subject to Section 2.3(b), the principal amount outstanding under the
      Term Loan shall accrue interest at a floating per annum rate equal one and
      three-quarters of one percentage points (1.75%) above the Prime Rate,
      which interest shall be payable monthly in accordance with Section 2.3(f)
      below. 

                 
      (iii)     
      Equipment Line. Subject to Section 2.3(b), at Borrower's election, the
      principal amount outstanding for each Equipment Advance shall accrue
      interest at either: (i) the greater of (x) a floating per annum rate equal
      to one percentage point (1.0%) above the Prime Rate, or (y) six and
      three-quarters of one percent (6.75%), or (ii) a fixed per annum rate
      equal to eight and one-quarter of one percent (8.25%), determined by Bank
      as of the applicable Funding Date, which interest shall be payable monthly
      in accordance with Section 2.3(f)."

	      	         	         	
			3	The Loan Agreement shall be
      amended by deleting the following appearing as Section 3.4
    thereof:
				 
				
      "3.4     
      Procedures for Borrowing.
      Subject to the prior satisfaction of
      all other applicable conditions to the making of an Advance set forth in
      this Agreement, to obtain an Advance (other than Advances under Sections
      2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be
      irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon
      Eastern time on the Funding Date of the Advance. Together with any such
      electronic or facsimile notification, Borrower must promptly deliver to
      Bank by electronic mail or facsimile a completed Transaction Report
      executed by a Responsible Officer or his or her designee. Bank may rely on
      any telephone notice given by a person whom Bank believes is a Responsible
      Officer or designee. Bank shall credit Advances to the Designated Deposit
      Account. Bank may make Advances under this Agreement based on instructions
      from a Responsible Officer or his or her designee or without instructions
      if the Advances are necessary to meet Obligations which have become due."
      

      and inserting in lieu thereof the
      following: 

      "3.4     
      Procedures for Borrowing.

            (a)      Advances. Subject to the prior
      satisfaction of all other applicable conditions to the making of an
      Advance set forth in this Agreement, to obtain an Advance (other than
      Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which
      notice shall be irrevocable) by electronic mail, facsimile, or telephone
      by 12:00 noon Eastern time on the Funding Date of the Advance. Together
      with any such electronic or facsimile notification, Borrower must promptly
      deliver to Bank by electronic mail or facsimile a completed Transaction
      Report executed by a Responsible Officer or his or her designee. Bank may
      rely on any telephone notice given by a person whom Bank believes is a
      Responsible Officer or designee. Bank shall credit Advances to the
      Designated Deposit Account. Bank may make Advances under this Agreement
      based on instructions from a Responsible Officer or his or her designee or
      without instructions if the Advances are necessary to meet Obligations
      which have become due."

			 	      (b)      Equipment Advances. To obtain an
      Equipment Advance, Borrower must notify Bank (which notice shall be
      irrevocable) by facsimile no later than 12:00 noon Eastern time five (5)
      Business Day before the day on which the Equipment Advance is to be made.
      A Payment/Advance Form must be: (i) signed by a Responsible Officer or
      designee, (ii) specify Borrower's election of either a Fixed Equipment
      Advance or a Floating Equipment Advance, (iii) include a copy of the
      invoice for the Equipment being financed, together with a UCC Financing
      Statement authorization covering the Financed Equipment described on
      Exhibit A, and (iv) such additional information as Bank may
      reasonably request at least five (5) Business Days before the proposed
      Funding Date. If Borrower satisfies the conditions of each Equipment
      Advance, Bank shall disburse such Equipment Advance by transfer to the
      Designated Deposit Account."
	      	         	         	
			4	The Loan Agreement shall be
      amended by deleting the following appearing as Section 6.7(b)
      thereof:
			 
			 	"     (b)      Minimum Quarterly Net Loss/Net Income. Borrower’s quarterly: (i) net losses shall not exceed: (A) Six
      Hundred Thousand Dollars ($600,000.00) for the quarter ending March 31,
      2007; (B) One Million Dollars ($1,000,000.00) for the quarter ending June
      30, 2007; and (C) Five Hundred Thousand Dollars ($500,000.00) for the
      quarter ending September 30, 2007, and (ii) net income shall be at least
      One Dollar ($1.00) for the Borrower’s quarter ending December 31, 2007 and
      as of the last day of each quarter thereafter. "
			 
			 	and inserting in lieu thereof the
      following: 
			 
			 	"     (b)      Minimum Cumulative Net Loss/Net Income. Borrower’s quarterly: net losses (tested in arrears) shall not
      exceed: (A) ($750,000.00) for the quarter ending December 31, 2007; (B)
      ($650,000.00) for the quarter ending March 31, 2008, which amount shall be
      increased at the end of each quarter thereafter by One Hundred Thousand
      Dollars ($100,000) of cumulative Net Income after March 31,
    2008."
			 
			5	The Loan Agreement shall be
      amended by deleting the following definitions appearing in Section 13.1
      thereof:
			 
			 	""Borrowing Base" is seventy-five
      percent (75.0%) of Eligible Accounts, as determined by Bank from
      Borrower’s most recent Borrowing Base Certificate (provided however, if
      Borrower is unable, at any time, to either: (i) maintain an Adjusted Quick
      Ratio of at least 1.50 to 1.0, or (ii) (a) maintain an Adjusted Quick
      Ratio of at least 1.15 to 1.0, and (b) at all times maintain unrestricted
      and unencumbered cash, in accounts with the Bank in amount of at least Two
      Million Dollars ($2,000,000.00), then the Borrowing Base will be
      seventy-five percent (75.0%) of Eligible Accounts, net of any offsets
      related to each specific Account Debtor, including, without limitation,
      Deferred Revenue), minus if Borrower's Adjusted Quick Ratio is less than
      1.25 to 1.0, at any time, the outstanding Obligations under the Term Loan;
      provided, however, that Bank may decrease the foregoing percentages in its
      good faith business judgment, based on events, conditions, contingencies,
      or risks which, as determined by Bank, may adversely affect
      Collateral.
			 
			 	"Credit Extension" is any
      Advance, Letter of Credit, Term Loan, FX Forward Contract, amounts
      utilized for Cash Management Services, or any other extensions of credit
      by Bank for Borrower's benefit.
			 
			 	"Revolving Line Maturity Date" is
      December 28, 2007."
			 
			 	and inserting in lieu thereof the
      following:

			 	""Borrowing Base is eighty percent
      (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most
      recent Borrowing Base Certificate (provided however, if Borrower is
      unable, at any time, to either: (i) maintain an Adjusted Quick Ratio of at
      least 1.50 to 1.0, or (ii) (a) maintain an Adjusted Quick Ratio of at
      least 1.15 to 1.0, and (b) at all times maintain unrestricted and
      unencumbered cash, in accounts with the Bank in amount of at least Two
      Million Dollars ($2,000,000.00), then the Borrowing Base will be eighty
      percent (80.0%) of Eligible Accounts, net of any offsets related to each
      specific Account Debtor, including, without limitation, Deferred Revenue),
      minus if Borrower's Adjusted Quick Ratio is less than 1.25 to 1.0, at any
      time, the outstanding Obligations under the Term Loan; provided, however,
      that Bank may decrease the foregoing percentages in its good faith
      business judgment, based on events, conditions, contingencies, or risks
      which, as determined by Bank, may adversely affect
Collateral.
	      	         	         	
			 	"Credit Extension" is any
      Advance, Equipment Advance, Letter of Credit, Term Loan, FX Forward
      Contract, amounts utilized for Cash Management Services, or any other
      extensions of credit by Bank for Borrower's benefit.
			 
			 	"Revolving Line Maturity Date" is
      February 11, 2009 [DATE WHICH IS 364 FROM THE 2008 CLOSING
    DATE]."
			 
			6	The Loan Agreement shall be
      amended by inserting the following new definitions to appear
      alphabetically in Section 13.1 thereof:
			 
			 	""2008 Closing Date" is February
      13, 2008."
			 
			 	"Draw Period" is the period of
      time from the 2008 Closing Date through the earliest to occur of (a) May
      31, 2008, or (b) an Event of Default.
			 
			 	"Eligible Equipment" is (a)
      general purpose computer equipment, office equipment, test and laboratory
      equipment, furnishings, subject to the limitations set forth herein, and
      (b) Other Equipment that complies with all of Borrower’s representations
      and warranties to Bank and which is acceptable to Bank in all respects and
      in which Bank has a first priority Lien.
			 
			 	"Equipment Advance" or
      "Equipment Advances" is defined in Section 2.1.6 (a).
			 
			 	"Equipment Line" is an Equipment
      Advance or Equipment Advances in an aggregate amount of up to Six Hundred
      Thousand Dollars ($600,000) outstanding at any time.
			 
			 	"Equipment Maturity Date" is, for
      each Equipment Advance, the date which is thirty-five (35) months after
      the first Payment Date with respect to such Equipment
Advance.
			 
			 	"Event of Loss" is defined in
      Section 2.1.6(c).
			 
			 	"Financed Equipment" is all
      present and future Eligible Equipment in which Borrower has any interest,
      the purchase of which is financed by an Equipment Advance.
			 
			 	"Initial Equipment Advance" is
      defined in Section 2.1.6(a).
			 
			 	"Net Income" means, for any
      period as at any date of determination, the net profit (or loss), after
      provision for taxes, excluding non-cash stock compensation expenses, for
      such period taken as a single accounting
period."

			 	"Other
      Equipment" is leasehold improvements, transferable
      software licenses, and soft costs approved by Bank, including taxes,
      shipping, warranty charges, freight discounts and installation expenses.
      "
	      	         	         	
			7	The Compliance Certificate appearing as
      Exhibit C to the Loan
      Agreement is hereby replaced with the Compliance Certificate attached as
      Exhibit A hereto.

4.   
FEES. Borrower shall pay
to Bank a modification fee equal to Thirteen Thousand Five Hundred Dollars
($13,500.00), which fee shall be due on the date hereof and shall be deemed
fully earned as of the date hereof. Borrower shall also reimburse Bank for all
legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

5.   
RATIFICATION OF INTELLECTUAL PROPERTY SECURITY
AGREEMENT. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of the IP Security
Agreement and acknowledges, confirms and agrees that said IP Security Agreement
contains an accurate and complete listing of all Intellectual Property
Collateral as defined in said IP Security Agreement, and shall remain in full
force and effect. 

6.   
RATIFICATION OF PERFECTION
CERTIFICATE. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and disclosures contained in a certain
Perfection Certificate dated as of May 24, 2006, between Borrower and Bank, and
acknowledges, confirms and agrees the disclosures and information above Borrower
provided to Bank in the Perfection Certificate has not changed, as of the date
hereof.

7.   
CONSISTENT CHANGES. The
Existing Loan Documents are hereby amended wherever necessary to reflect the
changes described above. 

8.   
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. 

9.   
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. 

10.   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. 

11.   COUNTERSIGNATURE. This Loan Modification
Agreement shall become effective only when it shall have been executed by
Borrower and Bank.

     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:  	  
		 
	VOXWARE, INC.  	SILICON VALLEY BANK  
				 
	By: 
    	/s/ Scott
      Yetter  	By: 
    	/s/ Ryan
      Ravenscroft  
				 
	Name:     	Scott
      Yetter  	Name:     	Ryan
      Ravenscroft  
				 
	Title:  	CEO 
    	Title:  	VP 
    

     The
undersigned, VERBEX ACQUISITION
CORPORATION, a Delaware corporation
(“Guarantor”) hereby: (i) ratifies, confirms and reaffirms, all and singular,
the terms and conditions of (A) a certain Unlimited Guaranty of the obligations
of Borrower to Bank dated January 27, 2004 (the “Guaranty”), (B) a certain
Security Agreement by Guarantor in favor of Bank dated January 27, 2004 (the
“Security Agreement”);(ii) acknowledges, confirms and agrees that the Guaranty,
and Security Agreement shall remain in full force and effect and shall in no way
be limited by the execution of this Loan Modification Agreement or any other
documents, instruments and/or agreements executed and/or delivered in connection
herewith; and (iii) acknowledges, confirms and agrees that the obligations of
Borrower to Bank under the Guaranty include, without limitation, all Obligations
of Borrower to Bank under the Loan Agreement, as amended by this Loan
Modification Agreement. 

	VERBEX ACQUISITION CORPORATION  
	  
	          By:  	/s/ Scott
      Yetter  
		 
	          Name:     	Scott
      Yetter  

	COMPLIANCE CERTIFICATE
	TO:	SILICON VALLEY
      BANK		Date: 
      	
	FROM: 
      	VOXWARE,
      INC.		 

The undersigned authorized officer of
Voxware, Inc. (“Borrower”) certifies that under the terms and conditions of the
Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1)
Borrower is in complete compliance for the period ending _______________ with
all required covenants except as noted below, (2) there are no Events of
Default, (3) all representations and warranties in the Agreement are true and
correct in all material respects on this date except as noted below; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, (4)
Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement,
and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank. Attached are the
required documents supporting the certification. The undersigned certifies that
these are prepared in accordance with generally GAAP consistently applied from
one period to the next except as explained in an accompanying letter or
footnotes. The undersigned acknowledges that no borrowings may be requested at
any time or date of determination that Borrower is not in compliance with any of
the terms of the Agreement, and that compliance is determined not just at the
date this certificate is delivered. Capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Agreement. 

Please indicate compliance status by
circling Yes/No under “Complies” column. 

	Reporting Covenant	Required	Complies
	 
	Monthly
      financial statements with
Compliance Certificate	Monthly
      within 30 days	Yes  No
	Annual
      financial statement (CPA Audited) + CC	FYE
      within 120 days	Yes  No
	10-Q,
      10-K and 8-K	Within 5
      days after filing with SEC	Yes  No
	Borrowing
      Base Certificate A/R Agings	Monthly
      within 30 days	Yes  No
	Audit	Annually
      and within 45 days of Effective
Date	Yes  No
	Board
      approved projections	Annually	Yes  No
	The following Intellectual Property was registered after the
      Effective Date (if no registrations, state
      “None”)
_______________________________________________________________________
 

	Financial
      Covenant	Required	Actual	Complies
	Minimum Cash
      Balances	$2,500,000.00	$	Yes 
    No
	Minimum Cumulative
      Net Loss/Net Income	$______*	$	Yes 
    No

	Adjusted Quick Ratio**		Actual
	Minimum Adjusted
      Quick Ratio		

* As set forth in Section 6.7(b) of the
Agreement 

** Note, this is not a financial
covenant.

     The following financial covenant
analyses and information set forth in Schedule 1 attached hereto are true and
accurate as of the date of this Certificate. 

     The following are the exceptions
with respect to the certification above: (If no exceptions exist, state “No
exceptions to note.”)

Voxware, Inc.

	By:  	 

	Name:  	 

	Title:  	 

BANK USE ONLY 

	Received by:  	 
		AUTHORIZED SIGNER  
      

	Date:  	 

	Verified:  	 
		AUTHORIZED SIGNER  
      

	Date:  	 

Compliance Status:    
Yes   No

Schedule 1 to Compliance
Certificate 

Financial Covenants of
Borrower 

Dated: ____________________

In the event of a conflict between this
Schedule and the Loan Agreement, the terms of the Loan Agreement shall control.

I.
Section 6.9(a) Minimum Cash
Balance.

	      	Borrower shall
      maintain:  	(a)
      $2,500,000.00 in unrestricted and unencumbered cash in accounts with SVB,
      plus
		  	(b) the
      aggregate of the Availability Amount, plus
		  	(c) prior to
      the occurrence of an Event of Default, $500,000.00
		  
		  	Total
      $____________________
		  
		_______ No, not in compliance	_______ Yes, in
      compliance

II Section 6.9(b) Minimum Cumulative Net
Loss/Net Income.

		Borrower’s quarterly: (i) net losses shall not exceed: 
    
	      	           
    	
      (a) Six Hundred Thousand Dollars ($650,000.00) for the
      quarter ending December 31, 2007

      Actual net losses: __________________

      (b) Five Hundred Fifty Thousand
      Dollars ($550,000.00) for the quarter ending March 31, 2008; 

      Actual net losses:___________________

      (c) Such amount shall be increased
      at the end of each quarter thereafter by One Hundred Thousand Dollars
      ($100,000) of cumulative Net Income after March 31, 2008:

			 
			
      Quarter ending
	 	Actual net
      losses/Net Income
			
      ___________________

      ___________________

      ___________________
		
      __________________________

      __________________________

      __________________________

	      	_______ No, not in compliance	_______ Yes, in
      compliance

III. ADJUSTED QUICK RATIO

	A.	Aggregate value
      of the unrestricted cash of Borrower	$_______
	B.	Aggregate value
      of the net billed accounts receivable of Borrower	$_______
	C.	Quick Assets
      (the sum of lines A and B)	$_______
	D.	Aggregate value
      of Obligations to Bank	$_______
	E.	Aggregate value
      of liabilities of Borrower (including all Indebtedness) that matures
      within one (1) year and current portion of Subordinated Debt permitted by
      Bank to be paid by Borrower	$_______
	F	Aggregate value
      of (i) the current portion of Subordinated Debt and Deferred Revenue and
      (ii) accrued bonuses due to employees	
	G.	Quick
      Liabilities (the sum of lines D, E minus F)	$_______
	G.	Adjusted Quick
      Ratio (line C divided by line G)	________f8k021108ex10a_celcius.htm

    Exhibit
10.1

    CONVERTIBLE
NOTE

    

    THIS NOTE
HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THE NOTE MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE
HARBOR THEREFROM.

     

    
      	 No.
      03-2008  	
              US
      $50,000

            

    

    
 

    CELSIUS
HOLDINGS, INC.

    

    8%
UNSECURED CONVERTIBLE NOTE

    

    THIS Note
is one of a duly authorized issue US $50,000.00 of CELSIUS HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Nevada ("Celsius") designated as its 8%
Unsecured Note.

    

           FOR
VALUE RECEIVED, Celsius promises to pay to Richard W. McGee, the registered
holder hereof (the "Holder"), the principal sum of
Fifty Thousand United States Dollars (US $50,000) on March 15, 2008 (the "Maturity
Date").  This note shall bear eight (8) percent simple interest
through the Maturity Date and is payable on the Maturity Date. In an Event of a
Default, interest will accrue on unpaid balance, if any, at the then current
statutory interest provided under Florida law. The principal payment of this
Note and interest are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the address last appearing on the Note Register of Celsius as
designated in writing by the Holder from time to time. Celsius will pay the
principal, less any amounts required by law to be deducted, to the registered
holder of this Note and addressed to such holder at the last address appearing
on the Note Register at such time payment is made. The forwarding of such check
shall constitute a payment of principal hereunder and shall satisfy and
discharge the liability for principal on this Note to the extent of the sum
represented by such check plus any amounts so deducted.

    

           This
Note is subject to the following additional provisions:

    

           1.     Celsius
shall be entitled to withhold from all payments of principal of this Note, and
any post-Maturity interest due on, this Note any amounts required to be withheld
under the applicable provisions of the United States income tax laws or other
applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.

    

           2.     This
Note has been issued subject to investment representations of the original
purchaser hereof and may be transferred or exchanged only in compliance with the
Securities Act of 1933,
as amended (the "Act"),
and other applicable state and foreign securities laws. In the event of any
proposed transfer of this Note, Celsius may require, prior to issuance of a new
Note in the name of such other person, that it receive reasonable transfer
documentation including legal opinions that the issuance of the Note in such
other name does not and will not cause a violation of the Act or any applicable
state or foreign securities laws. Prior to due presentment for transfer of this
Note, Celsius and any agent of Celsius may treat the person in whose name this
Note is duly registered on Celsius' Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note be overdue, and neither Celsius nor any such agent
shall be affected by notice to the contrary.

    

           3.     No
recourse shall be had for the payment of the principal of, or the interest on,
this Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of Celsius or any successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
 

           4.     The
Holder of the Note, by acceptance hereof, agrees that this Note is being
acquired for investment and that such Holder will not offer, sell or otherwise
dispose of this Note except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky or foreign laws or similar
laws relating to the sale of securities.

    

           5.     This
Note shall be governed by and construed in accordance with the laws of the State
of Florida. Each of the parties consents to the jurisdiction of the state and
federal courts sitting in Palm Beach County, Florida and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum non coveniens, to the bringing of any such proceeding in such
jurisdiction.

    

           6.     The
following shall constitute an "Event of
Default":

    

    
      	
              (a)  

            	
              Celsius
      shall default in the payment of principal on this Note and same shall
      continue for a period of five (5) days; or

            
	 	 

    

    
      	
              (b)  

            	
              Any
      of the representations or warranties made by Celsius herein or other
      written statements heretofore or hereafter furnished by Celsius in
      connection with the execution and delivery of this Note or the Agreement
      shall be false or misleading in any material respect at the time made;
      or

            
	 	 

    

    
      	
              (c)  

            	
              Celsius
      shall fail to perform or observe, in any material respect, any other
      covenant, term, provision, condition, agreement or obligation of this Note
      and such failure shall continue uncured for a period of thirty (30) days
      after written notice from the Holder of such failure;
or

            
	 	 

    

    
      	
              (d)  

            	
              Celsius
      shall (1) admit in writing its inability to pay its debts generally as
      they mature; (2) make an assignment for the benefit of creditors or
      commence proceedings for its dissolution; or (3) apply for or consent to
      the appointment of a trustee, liquidator or receiver for its or for a
      substantial part of its property or business; or

            
	 	 

    

    
      	
              (e)  

            	
              A
      trustee, liquidator or receiver shall be appointed for Celsius or for a
      substantial part of its property or business without its consent and shall
      not be discharged within ninety (90) days after such appointment;
      or

            
	 	 

    

    
      	
              (f)  

            	
              Any
      governmental agency or any court of competent jurisdiction at the instance
      of any governmental agency shall assume custody or control of the whole or
      any substantial portion of the properties or assets of the Celsius and
      shall not be dismissed within ninety (90) days thereafter;
    or

            
	 	 

    

    
      	
              (g)  

            	
              Bankruptcy,
      reorganization, insolvency or liquidation proceedings or other proceedings
      for relief under any bankruptcy law or any law for the relief of debtors
      shall be instituted by or against Celsius and, if instituted against
      Celsius, shall not be dismissed within ninety  (90) days after
      such institution or Celsius shall by any action or answer approve of,
      consent to, or acquiesce in any such proceedings or admit the material
      allegations of, or default in answering a petition filed in any such
      proceeding; or

            

    

    

    Then, or
at any time thereafter, and in each and every such case, unless such Event of
Default shall have been waived in writing by the Holder (which waiver shall not
be deemed to be a waiver of any subsequent default) at the option of the Holder
and in the Holder's sole discretion, the Holder may consider the Redemption
Amount of this Note immediately due and payable within five (5) days of notice,
without presentment, demand, protest or notice of any kinds, all of which are
hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately
enforce any and all of the Holder's rights and remedies provided herein or any
other rights or remedies afforded by law.

    

           7. At the option of the
Holder, this Note may be converted in whole into common shares of Celsius
Holdings, Inc. (“Common Shares”), calculated to the nearest share, at any time
and from time to time on any Business Day (the “Conversion Day”) by issuing an
irrevocable written instruction to convert the note into Common Shares. The
number of Common Shares into which this Note may be converted is equal to the
higher of, 490,196 shares, or the number of shares from the calculation of
taking the outstanding principal and interest divided by the Conversion Price.
The “Conversion Price” shall be equal to the 60% of the closing price for the
trading day prior to the Conversion Day, but in no event less than $0.096 (nine
and six tenth cents).

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

           8.     Nothing
contained in this Note shall be construed as conferring upon the Holder the
right to vote or to receive dividends or to consent or receive notice as a
shareholder in respect of any meeting of shareholders or any rights whatsoever
as a shareholder of Celsius, unless and to the extent converted in accordance
with the terms hereof.

    

           IN
WITNESS WHEREOF, Celsius has caused this instrument to be duly executed by an
officer thereunto duly authorized.

    

    Dated:
February 14, 2008

    

    CELSIUS
HOLDINGS, INC.

    a Nevada
Corporation

    

    By:  /s/ Steven C. Haley                                           

          Stephen
C. Haley , 

        
Chief Executive Officer

    
3

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