EXHIBIT 10.10
FIRST LOAN MODIFICATION AGREEMENT
This First Loan Modification Agreement is entered into as of November 13,
2004, by and between ODIMO INCORPORATED., a corporation organized and in good
standing in the State of Delaware ("Company"), XXXXXXX.XXX, INC., a corporation
organized and in good standing in the State Delaware and D.I.A. MARKETING, INC.,
a corporation organized and in good standing in the State of Florida (together
with the Company individually and collectively "Borrower"), each of whose
address is 00000 XX 0xx Xx., Xxxxxxx, Xxxxxxx 00000, and Silicon Valley Bank
("Lender") whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and
having a loan production office at 0000 Xxxxxxxxx Xxxx, XX, X-00, Xxxxxxx,
Xxxxxxx 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Loan and Security Agreement, dated July 31, 2004, (as may be
amended from time to time, the "Loan Agreement"). The Loan Agreement provides
for, among other things, a Committed Line in the original principal amount of
Twelve Million Dollars ($12,000,000) (the "Revolving Facility"). Hereinafter,
all indebtedness owing by Borrower to Lender shall be referred to as the
"Indebtedness." All capitalized terms used in this Agreement but no otherwise
defined herein shall have the respective meaning given to such terms in the Loan
Agreement.
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement and an Intellectual
Property Security Agreement dated July 31, 2004. Additionally, repayment of the
Indebtedness is guaranteed by SOFTBANK CAPITAL ADVISORS FUND LP, SOFTBANK
CAPITAL LP, and SOFTBANK CAPITAL PARTNERS LP (collectively, the "Guarantor")
pursuant to Unconditional Guaranty Agreements dated July 31, 2004 (collectively,
the "Guaranty").
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS. Borrower has requested and Lender has agreed
to amend the Loan Agreement as provided in this Agreement.
(i) Section 2.1.1(a) of the Loan Agreement is hereby amended and restated
in its entirety as follows:
(a) Bank will make Advances not exceeding (i) the lesser of (A) the
Committed Revolving Line or (B) the Borrowing Base plus the Non Formula
Amount, minus (ii) all amounts for services utilized under the Business
Credit Card Services Sublimit and minus (iii) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit). Amounts borrowed under this Section may be repaid and reborrowed
during the term of this Agreement. All advances shall be evidenced by the
Revolving Promissory Note and shall be repaid in accordance with the terms
of this Agreement.
(ii) The following definition in Section 13.1 of the Loan Agreement is
amended and restated as follows:
"COMMITTED REVOLVING LINE" means (a) from September 1st through
December 31st of each year, Advances of up to Twelve Million Dollars
($12,000,000) and (b) from January 1st to August 31st of each year,
Advances of up to Seven Million Dollars ($7,000,000); provided, however,
that from and after the occurrence of Liquidity Event the "Committed
Revolving Line" means (x) from September 1st through December 31st of each
year, Advances up to Eight Million Dollars ($8,000,000) and (y) from
January 1st through August 31st of each year, Advances of up to
Five Million Dollars ($5,000,000). Notwithstanding the above, from
November 13, 2004 through December 31, 2004, the "Committed Revolving
Line" means Fifteen Million Dollars ($15,000,000).
(iii) The following definition is added to Section 13.1 of the Loan
Agreement:
"NON FORMULA AMOUNT" means (a) from November 13, 2004 through
December 31, 2004, Three Million Dollars ($3,000,000) and (b) from and
after January 1, 2004, Zero Dollars ($0.00).
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of Five
Thousand Dollars ($5,000.00) (the "Loan Fee") plus all out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that it has no defenses against the obligations to pay any amounts
under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Lender 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. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Lender and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Lender in writing. No maker, endorser,
or guarantor will be released by virtue of this Loan Modification Agreement. The
terms of this paragraph apply not only to this Loan Modification Agreement, but
also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon the following:
1. Borrower's payment of the Loan Fee;
2. Lender receives an Amended and Restated Revolving Promissory Note
issued and delivered by Borrower in the form of Exhibit A attached hereto and
incorporated herein by this reference payable to the order of Lender in the
maximum principal amount of Fifteen Million Dollars ($15,000,000) (which Amended
and Restated Revolving Promissory Note is sometimes referred to herein as the
"Replacement Promissory Note"); and
3. Borrower's delivery to Lender of such other documents deemed necessary
by Lender.
9. REPLACEMENT PROMISSORY NOTE.
(a) Borrower shall execute and deliver to Lender on the date hereof the
Replacement Promissory Note in substitution for and not satisfaction of, the
issued and outstanding Revolving Promissory Note and the Replacement Promissory
Note shall be the "Revolving Promissory Note" for all purposes of the Loan
Documents. The Replacement Promissory Note shall not operate as a novation of
the Obligations of Borrower, or nullify, discharge, or release any such
Obligations or the continuing contractual relationship of the Borrower in
accordance with the provisions of the Loan Documents. All references in the Loan
Documents to the "Revolving Promissory Note" shall be deemed to refer to the
Replacement Promissory Note.
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This Loan Modification Agreement is executed as of the date first written above.
BORROWER:
ODIMO INCORPORATED
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: CEO
XXXXXXX.XXX, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: President
D.I.A. MARKETING, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: President
LENDER:
SILICON VALLEY BANK
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title:
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