AMENDMENT TO LOAN AND SECURITY AGREEMENT
NETRIX CORPORATION ("BORROWER")
This AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") dated as
of this ___ day of April, 1999, between Coast Business Credit, a division of
Southern Pacific Bank ("Coast"), and Borrower, is made in reference to the
following facts:
A. Borrower previously entered into a Loan and Security Agreement with
Coast dated November 18, 1997 ("Loan Agreement") and related
documents connected therewith (as each may be amended, supplemented,
replaced or modified from time to time, the "Loan Documents"). Terms
used herein, unless otherwise defined herein, shall have the
meanings set forth in the Loan Agreement.
B. Borrower has caused an Event of Default under Section 8.1 of the
Loan Agreement as a result of, among other reasons, the failure of
Borrower to comply with the Tangible Net Worth requirements under
the Loan Agreement.
C. Borrower has requested that Coast waive the Event of Default, modify
the Tangible Net Worth requirements under the Loan Agreement, and
extend the Maturity Date.
D. Coast is willing to amend the Loan Agreement and waive the Event of
Default on the terms and subject to the conditions set forth in this
Amendment.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereof, the parties do hereby agree as follows, effective as of the
date set forth above.
1. LIMITED WAIVER. Subject to terms and conditions of this Amendment,
Coast hereby waives the Event of Default under Section 8.1 of the Loan Agreement
due to the failure of borrower to maintain a Tangible Net Worth of not less than
$13,500,000 for the months of October 1998, November 1998 and December 1998.
The foregoing waiver is a one-time waiver only and not a continuing
waiver, and shall apply only to the matters and time periods specifically set
forth in this Amendment. Without limiting the generality of the foregoing, this
waiver shall not apply to any future failure by Borrower to comply with the
terms of the Loan Agreement referenced above or any other term therein.
2. TANGIBLE NET WORTH. This first paragraph of Section 8.1 of the Schedule
is hereby amended in full and restated as follows:
"TANGIBLE NET WORTH: As of the calendar quarter ending March 31,
1999, Borrower's Tangible Net Worth shall not be less than $9,800,000 and
as of the calendar quarter ending June 30, 1999 and thereafter, Borrower's
Tangible Net Worth shall be not less than $9,000,000. Compliance with the
Tangible Net Worth requirements under this Section 8.1 shall be determined
on a quarterly basis. Coast reserves the right to increase, in its
discretion, the Tangible Net Worth amounts required under this Section 8.1
upon Borrower receiving additional capital contributions."
3. TERMINATION FEE. Section 9.2 of the Schedule is hereby amended in full
and restated as follows:
"An amount equal to three percent (3%) of the Maximum Dollar Amount
or Increased Maximum, as applicable (as defined in the Schedule), if
termination occurs before the Maturity Date."
4. MATURITY DATE. Section 9.2 under Section 9 of the Schedule is hereby
amended in full and restated as follows:
"May 31, 2001, subject to automatic renewal as provided in Section
9.1 of the Agreement, and early termination as provided in Section 9.2 of
the Agreement."
5. CONDITIONS. The effectiveness of this Amendment is subject to
Borrower's execution and delivery to Coast a warrant in form and substance
satisfactory to Coast for 50,000 shares of common stock of Borrower with an
exercise price of $2 per share and an exercise period of five years.
6. REAFFIRMATION. Except as modified by the terms herein, the Loan
Agreement and the other Loan Documents remain in full force and effect. If there
is any conflict between the terms and provisions of this Amendment and the terms
and provisions of the Loan Agreement or the other Loan Documents, the terms and
provisions of this Amendment shall govern.
7. ACCOMMODATION FEES. In addition to all other fees and charges, Borrower
hereby agrees to pay coast an accommodation fee of $10,000, fully earned and
payable on the date hereof.
8. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9. GOVERNING LAW. This Amendment shall be governed by and construed
according to the laws of the State of California.
10. ATTORNEYS' FEES; COSTS. Borrower agrees to pay, on demand, all
attorneys' fees and costs incurred in connection with the negotiation,
documentation and execution of this Amendment. If any legal action or proceeding
shall be commenced at any time by any party to this Amendment in connection with
its interpretation or enforcement, the prevailing party or parties in such
action or proceeding shall be entitled to reimbursement of its reasonable
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attorneys' fees and costs in connection therewith, in addition to al other
relief to which the prevailing party or parties may be entitled.
11. JURY TRIAL WAIVER. BORROWER AND COAST EACH WAIVE ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING INSTITUTED BY EITHER OR THEM AGAINST THE
OTHER WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THE LOAN DOCUMENTS, THIS
AMENDMENT, THE OBLIGATIONS, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY
BORROWER OR COAST, OR, IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR
RELATES TO THE RELATIONSHIP BETWEEN BORROWER AND COAST.
"Borrower" "Coast"
NETRIX CORPORATION COAST BUSINESS CREDIT, A DIVISION
OF SOUTHERN PACIFIC BANK
By: /s/ By: /s/
_______________________ _______________________________
Name: _____________________ Name: _____________________________
Title: ______________________ Title: ______________________________
