EXHIBIT 10.7
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: WIRELESS, INC.
0000 XXXXX XXXX XXXXX
XXXXX XXXXX, XXXXXXXXXX 00000-0000
DATE: FEBRUARY 23, 2000
THIS 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 February 27, 1999 (as amended, 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.)
1. AMENDMENT TO SCHEDULE. The Schedule to the Loan Agreement is hereby
deleted and replaced with the Schedule attached hereto.
2. MODIFICATION TO AUDIT FEE. The sentence in Section 5.4 of the Loan
Agreement that currently reads as follows:
The foregoing inspections and audits shall be at Borrower's expense
and the charge therefor shall be $500 per person per day (or such
higher amount as shall represent Silicon's then current standard
charge for the same), plus reasonable out of pocket expenses.
is hereby amended to read as follows:
The foregoing inspections and audits shall be at Borrower's expense
and the charge therefor shall be $600 per person per day (or such
higher amount as shall represent Silicon's then current standard
charge for the same), plus reasonable out of pocket expenses.
3. MODIFICATION TO EARLY TERMINATION FEE. The sentence in Section 6.2 of
the Loan Agreement that currently reads as follows:
If this Agreement is terminated by Borrower or by Silicon under this
Section 6.2, Borrower shall pay to Silicon a termination fee in an
amount equal to two percent (2.0%) of the Maximum Credit Limit.
is hereby amended to read as follows:
If this Agreement is terminated by Borrower or by Silicon under this
Section 6.2, Borrower shall pay to Silicon a termination fee in an
amount equal to one percent (1.0%) of the Maximum Credit Limit,
provided that
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no termination fee shall be charged if the credit facility hereunder
is replaced with a new facility from another division of Silicon
Valley Bank or if the Obligations are indefeasibly paid in full from
the proceeds of Borrower's initial public offering of its equity
securities.
4. FEE. Borrower shall pay to Silicon a fee of $20,000 in connection with
this Amendment, and one percent (1.0%) of the amount of increase in the Maximum
Credit Limit, if any, as set forth in the Schedule to Loan and Security
Agreement of even date herewith, which fee(s) are in addition to all other
amounts payable under the Loan Agreement and which are not refundable.
5. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
6. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and Borrower, and the
other written documents and agreements between Silicon and Borrower set forth in
full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous
discussions, representations, agreements and understandings between the
parties with respect to the subject hereof. Except as herein expressly amended,
all of the terms and provisions of the Loan Agreement, and all other documents
and agreements between Silicon and Borrower shall continue in full force and
effect and the same are hereby ratified and confirmed.
BORROWER: SILICON:
WIRELESS, INC. SILICON VALLEY BANK
BY /s/ Xxxxxxx X. Xxxxxx BY /s/ Xxxx Xxxxx
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PRESIDENT OR VICE PRESIDENT TITLE SVP
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BY /s/ Xxxxxxx Xxx
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SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: WIRELESS, INC.
ADDRESS: 0000 XXXXX XXXX XXXXX
XXXXX XXXXX, XXXXXXXXXX 00000-0000
DATE: FEBRUARY 23, 2000
This Schedule forms an integral part of the Loan and Security Agreement between
Silicon Valley Bank and the above-borrower dated February 27, 1999 and as
amended from time to time.
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1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: (i) $2,000,000 at any
one time outstanding (the "Maximum Credit Limit"); or (ii)
80% of the amount of Borrower's Eligible Receivables (as
defined in Section 8 above).
Upon Silicon's receipt of evidence, satisfactory to Silicon
in its sole discretion, of Borrower's satisfaction of either
of the following conditions, the Maximum Credit Limit shall
be increased from $2,000,000 to $5,000,000:
(i) Borrower's receipt of at least $10,000,000 in net cash
proceeds from (a) the issuance, after the date hereof,
of its equity securities (other than an initial public
offering) or (b) the issuance, after the date hereof,
of subordinated debt (which subordinated debt shall be
subordinated to the Obligations in form satisfactory to
Silicon in its discretion); or
(ii) Borrower's receipt by May 31, 2000 of at least
$50,000,000 in net cash proceeds from Borrower's
initial public offering of its equity securities.
LETTER OF CREDIT SUBLIMIT
(Section 1.5): $500,000
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2. INTEREST.
INTEREST RATE
(Section 1.2): A rate equal to the "Prime Rate" in effect from time to
time, plus 2.50% per annum. Interest shall be calculated on
the basis of a 360-day year for the actual number of days
elapsed. "Prime Rate" means the rate announced from time to
time by Silicon as its "prime rate;" it is a base rate upon
which other rates charged by Silicon are based, and it is
not necessarily the best rate available at Silicon. The
interest rate
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applicable to the Obligations shall change on each date
there is a change in the Prime Rate.
MINIMUM MONTHLY
INTEREST
(Section 1.2): N/A.
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3. FEES (Section 1.4):
Loan Fee: See Amendment to Loan Documents of even date herewith.
Collateral Monitoring
Fee: $1,000 per calendar month, payable in arrears (prorated for
any partial calendar month at the beginning and at
termination of this Agreement).
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4. MATURITY DATE
(Section 6.1) February 23, 2001, subject to early termination as provided
in Section 6.2 above.
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5. FINANCIAL COVENANTS
(Section 5.1): Borrower shall comply with the following covenant.
Compliance shall be determined as of the end of each month.
MINIMUM TANGIBLE
NET WORTH: Commencing with the Borrower's financial statements dated as
of February 29, 2000, Borrower shall maintain a Tangible Net
Worth of not less than $15,000,000.
DEFINITIONS.
For purposes of the foregoing financial covenant, the
following terms shall have the following meanings:
"Liabilities" shall have the meaning ascribed thereto by
generally accepted accounting principles.
"Tangible Net Worth" shall mean the excess of total assets
over total liabilities, determined in accordance with
generally accepted accounting principles, with the following
adjustments:
(A) there shall be excluded from assets: (i) notes,
accounts receivable and other obligations owing to the
Borrower from its officers or other Affiliates, and (ii)
all assets which would be classified as intangible
assets under generally accepted accounting principles,
including without limitation goodwill, licenses,
patents, trademarks, trade names, copyrights,
capitalized software and organizational costs, licenses
and franchises
(B) there shall be excluded from liabilities: all
indebtedness which is subordinated to the Obligations
under a subordination agreement in form specified by
Silicon or by language in the instrument evidencing the
indebtedness which is acceptable to Silicon in its
discretion.
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6. REPORTING.
(Section 5.3):
Borrower shall provide Silicon with the following:
1. Monthly Receivable agings, aged by invoice date, within
fifteen days after the end of each month.
2. Monthly accounts payable agings, aged by invoice date,
and outstanding or held check registers, if any, within
fifteen days after the end of each month.
3. Monthly reconciliations of Receivable agings (aged by
invoice date), transaction reports, and general ledger,
within fifteen days after the end of each month.
4. Monthly perpetual inventory reports for the Inventory
valued on a first-in, first-out basis at the lower of
cost or market (in accordance with generally accepted
accounting principles) or such other inventory reports
as are reasonably requested by Silicon, all within
fifteen days after the end of each month.
5. Monthly unaudited financial statements, as soon as
available, and in any event within thirty days after
the end of each month.
6. Monthly Compliance Certificates, within thirty days
after the end of each month, in such form as Silicon
shall reasonably specify, signed by the Chief Financial
Officer of Borrower, certifying that as of the end of
such month Borrower was in full compliance with all of
the terms and conditions of this Agreement, and setting
forth calculations showing compliance with the
financial covenants set forth in this Agreement and
such other information as Silicon shall reasonably
request, including, without limitation, a statement
that at the end of such month there were no held
checks.
7. Quarterly unaudited financial statements, as soon as
available, and in any event within forty-five days
after the end of each fiscal quarter of Borrower.
8. Annual operating budgets (including income statements,
balance sheets and cash flow statements, by month) for
the upcoming fiscal year of Borrower within thirty days
prior to the end of each fiscal year of Borrower.
9. Annual financial statements, as soon as available, and
in any event within 120 days following the end of
Borrower's fiscal year, certified by independent
certified public accountants acceptable to Silicon.
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7. COMPENSATION
(Section 5.5): Without Silicon's prior written consent, Borrower shall
not pay total compensation, including salaries,
withdrawals, fees, bonuses, commissions, drawing
accounts and other payments, whether directly or
indirectly, in money or otherwise, during any fiscal
year to all of Borrower's executives, officers and
directors (or any relative thereof) as a group in excess
of 115% of the total amount thereof in the prior fiscal
year.
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8. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): None.
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): None.
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): None.
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): None.
MATERIAL ADVERSE
LITIGATION (Section 3.10): None.
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9. OTHER COVENANTS
(Section 5.1): Borrower shall at all times comply with all of the
following additional covenants:
(1) BANKING RELATIONSHIP. Borrower shall at all
times maintain its primary banking relationship
with Silicon.
(2) SUBORDINATION OF INSIDE DEBT. All present and
future indebtedness of the Borrower to its
officers, directors and shareholders ("Inside
Debt") shall, at all times, be subordinated to
the Obligations pursuant to a subordination
agreement on Silicon's standard form. Borrower
represents and warrants that there is no Inside
Debt presently outstanding, except for the
following: $1,000,000 in favor of AMT Venture
Partners, Ltd. Prior to incurring any Inside
Debt in the future, Borrower shall cause the
person to whom such Inside Debt will be owed to
execute and deliver to Silicon a subordination
agreement on Silicon's standard form.
(3) OCTOBER 1998 WARRANTS. Pursuant to the terms set
forth in that certain Warrant to Purchase Stock
(the "October 0000 Xxxxxxx") and related
documents executed October 16, 1998, Borrower
has provided Silicon with five-year warrants, to
purchase 48,000 shares of Series D preferred
stock of the Borrower, at $1.25 per share (which
Borrower represents and warrants is the last
price at which Borrower issued and sold its
Series D preferred stock). Borrower agrees to
cause the October 0000 Xxxxxxx and all related
documents to continue in full force and effect
for so long as this Agreement remains in effect.
(4) SEPTEMBER 1999 WARRANTS. Pursuant to the terms
set forth in that certain Warrant to Purchase
Stock (the "September 0000 Xxxxxxx") and related
documents executed September 13, 1999, Borrower
has provided Silicon with five-year warrants, to
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purchase 20,000 shares of Series E preferred
stock of the Borrower, at $2.50 per share.
Borrower agrees to cause the September 0000
Xxxxxxx and all related documents to continue in
full force and effect for so long as this
Agreement remains in effect.
(5) INVESTOR COMMON STOCK WARRANT. Pursuant to the
terms of that certain Waiver and Amendment
Agreement dated October 8, 1999 (the "October
Amendment"), upon the conversion by the holder
of the Bank Series E Warrant (as defined in the
October Amendment), Borrower shall issue
Silicon a New Warrant (as defined in the October
Amendment). Borrower agrees to cause the October
Amendment to continue in full force and effect
for so long as this Agreement remains in effect.
(6) ADDITIONAL WARRANTS. If Borrower's initial
public offering of its equity securities is not
completed by May 31, 2000, or such initial
public offering fails to result in the
Borrower's receipt of at least $50,000,000 in
net cash proceeds therefrom, Borrower shall
immediately provide Silicon with five-year
warrants (the "Warrants") to purchase 37,500
shares of common stock of Borrower, on the terms
set forth in Silicon's standard form of Warrant
to Purchase Stock and related documents, at a
price per share equal to $4.00 per share. In
addition, concurrently therewith, Borrower and
Silicon shall enter into an Anti-Dilution
Agreement and Registration Rights Agreement on
Silicon's standard forms. The aforementioned
warrants shall consist of the terms and
provisions of Silicon's standard form Warrant to
Purchase Stock and related documents, with such
changes therein as Silicon may agree to.
Borrower: Silicon:
WIRELESS, INC. SILICON VALLEY BANK
By By /s/ Xxxx Xxxxx
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President or Vice President Title SVP
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By /s/ Xxxxxxx Xxx
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Secretary or Ass't Secretary
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