Exhibit 10.2
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER(S): MOBILITY ELECTRONICS, INC.
PORTSMITH, INC.
MAGMA, INC.
ADDRESS: 00000 X. XXXXXXXXX XXXXX
XXXXXXXXXX, XXXXXXX 00000-0000
DATE: AS OF MARCH 31, 2003
THIS AMENDMENT TO LOAN DOCUMENTS (THIS "AMENDMENT") is entered into
between SILICON VALLEY BANK ("Bank"), whose address is 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000, and the borrower(s) named above (individually and
collectively, and jointly and severally, the "Borrower"), whose address is set
forth above.
Bank and Borrower agree to amend the Loan and Security Agreement
between them, dated as of September 27, 2002 (as amended, restated,
supplemented, or otherwise modified from time to time, the "Loan Agreement"), as
set forth herein, 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 (as amended by this Amendment). Bank and Borrower acknowledge that the
Asset Based Terms are currently in effect.
1. LIMITED WAIVER. Bank and Borrower hereby agree that any
failure of Parent (on a consolidated basis) to maintain the minimum Tangible Net
Worth required under Section 5.2 of the Schedule to Loan Agreement solely for
one or more of the months ended January 31, 2003 and/or February 28, 2003
(collectively, the "Designated Default") hereby is waived. It is understood,
however, that the foregoing waiver of the Designated Default does not constitute
a waiver of the aforementioned covenant with respect to any other date or time
period, or of any other provision or term of the Loan Agreement or any related
document, nor an agreement to waive in the future such covenant with respect to
any other date or time period or any other provision or term of the Loan
Agreement or any related document.
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
2. AMENDMENTS TO LOAN AGREEMENT.
(a) Section 5.2 of the Schedule to Loan Agreement, which
currently reads as follows:
"
5.2 ASSET BASED TERMS
IN EFFECT. During all periods in which the Asset
Based Terms are in effect, Parent (on a
consolidated basis) shall comply with
the following covenant as of the end of
each month:
Minimum Tangible
Net Worth: Parent (on a consolidated basis) shall
maintain a Tangible Net Worth of not
less than $10,500,000 (the "Minimum
Tangible Net Worth"), as of the end of
each month, provided that, at the end of
each fiscal quarter of the Borrower,
commencing with the fiscal quarter
ending March 31, 2003, the Minimum
Tangible Net Worth requirement shall be
increased by 100% of the net income of
the Parent (on a consolidated basis) for
such fiscal quarter, but the Minimum
Tangible Net Worth requirement shall not
increase to greater than $17,000,000.
Said increased Minimum Tangible Net
Worth requirement shall be effective as
of the end of such fiscal quarter, and
shall continue in effect thereafter. In
no event shall the Minimum Tangible Net
Worth requirement be decreased.
"
, hereby is amended and restated in its entirety to read as follows:
"
5.2 ASSET BASED TERMS
IN EFFECT. During all periods in which the Asset
Based Terms are in effect, Parent (on a
consolidated basis) shall comply with
the following covenant as of the end of
each month:
Minimum Tangible
Net Worth: Parent (on a consolidated basis) shall
maintain a Tangible Net Worth of not
less than the below-defined Applicable
TNW Base Amount, as of the end of each
month. As used herein, the term
"Applicable TNW Base Amount" means:
(a) with respect to the month
ending March 31, 2003, $8,900,000;
(b) with respect to the month
ending April 30, 2003, $8,200,000;
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
(c) with respect to the month
ending May 31, 2003, $8,200,000;
(d) with respect to the month
ending June 30, 2003, $8,200,000;
(e) with respect to the month
ending July 31, 2003, $8,600,000;
(f) with respect to the month
ending August 31, 2003, $8,600,000;
(g) with respect to the month
ending September 30, 2003,
$8,600,000;
(h) with respect to the month
ending October 31, 2003,
$9,300,000;
(i) with respect to the month
ending November 30, 2003,
$9,300,000;
(j) with respect to the month
ending December 31, 2003,
$9,300,000; and
(k) with respect to each month
thereafter, such amounts for
succeeding months as are
established by Bank in its good
faith business judgment based on
the Additional Projections (defined
below).
Borrower hereby agrees to deliver to
Bank, no later than December 31, 2003
(which is the end of Borrower's Fiscal
Year 2003), a set of annual financial
projections with respect to the
projected financial condition of
Borrower for each month in the following
fiscal year and in such form and
containing such items as the Bank shall
determine are appropriate or needed by
Bank in order for Bank to establish
financial covenant levels for such
following fiscal year), and with the
further understanding that such
projections, individually and in their
totality, must also otherwise be
acceptable to Bank in its discretion
(the "Additional Projections"). Borrower
hereby acknowledges and agrees that: (x)
the information in the Additional
Projections as required above is to be
used by the Bank in order to establish
certain financial covenant levels for
later periods during the term of this
Agreement; (y) such a process introduces
uncertainty as to the amounts required
for Borrower's financial covenant
compliance in the future; and (z)
regardless of any such uncertainty,
however,
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
Borrower knowingly and without
reservation agrees to the foregoing
procedure and fully understands that
Events of Default may arise from
Borrower's non-compliance with such
later-established amounts.
Maximum Monthly
Net Loss (After Tax): Parent (on a consolidated basis) shall
not have a net loss (after tax) of more
than $1,250,000 in any month (commencing
with the month ending March 31, 2003).
"
(b) The portion of the definition of "Tangible Net Worth", as
set forth in Section 5.3 of the Schedule to Loan Agreement, that currently reads
as follows:
"(B) there shall be excluded from liabilities: all
indebtedness which is subordinated to the Obligations
under a subordination agreement in form specified by Bank
or by language in the instrument evidencing the
indebtedness which Bank agrees in writing is acceptable to
Bank in its good faith business judgment."
, hereby is amended and restated in its entirety to read as follows:
"(B) there shall be excluded from liabilities: (1) all
indebtedness which is subordinated to the Obligations
under a subordination agreement in form specified by Bank
or by language in the instrument evidencing the
indebtedness which Bank agrees in writing is acceptable to
Bank in its good faith business judgment; and (2) all
applicable earn-out obligations of Parent (if any) owing
under Section 2.7 of that certain Agreement and Plan of
Merger, dated as of February 20, 2002, among Portsmith,
Inc., the "Stockholders" identified therein, Parent, and
the "Merger Sub" identified therein (a true, correct, and
complete copy of which was previously delivered by
Borrower to Bank)."
3. FEES. In consideration for Bank entering into this Amendment,
Borrower shall pay Bank a fee of $5,000 concurrently with the execution and
delivery of this Amendment, which fee shall be non-refundable and in addition to
all interest and other fees payable to Bank under the Loan Documents. Bank is
authorized to charge said fees to Borrower's loan account.
4. REPRESENTATIONS TRUE. Borrower represents and warrants to Bank
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
5. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any
prior written amendments to the Loan Agreement signed by Bank and Borrower, and
the other Loan Documents set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Except as expressly
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
amended herein (or as amended and restated in the Loan Documents as expressly
contemplated herein), all of the terms and provisions of the Loan Agreement and
all other Loan Documents shall continue in full force and effect and the same
are hereby ratified and confirmed.
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same document.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of an original executed counterpart of this
Amendment. The foregoing shall apply to each other Loan Document mutatis
mutandis.
Borrower: Bank:
MOBILITY ELECTRONICS, INC. SILICON VALLEY BANK
By_______________________________ By__________________________________
President or Vice President Title_______________________________
Borrower: Borrower:
PORTSMITH, INC. MAGMA, INC.
By_______________________________ By_________________________________
President or Vice President President or Vice President
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SILICON VALLEY BANK AMENDMENT TO LOAN DOCUMENTS
CONSENT
The undersigned acknowledges that the undersigned's consent to the
foregoing Amendment is not required, but the undersigned nevertheless does
hereby consent to the foregoing Amendment and to the documents and agreements
referred to therein and to all future modifications and amendments thereto, and
any termination thereof, and to any and all other present and future documents
and agreements between or among the foregoing parties. Nothing herein shall in
any way limit any of the terms or provisions of the guaranty, security
agreement, or any other Loan Document of the undersigned, all of which are
hereby ratified and affirmed.
Borrower: Borrower:
Cutting Edge Software, Inc. iGo Direct Corporation, a Delaware
corporation formerly known as IGOC
Acquisition, Inc. and
successor-by-merger to iGo Corporation
By_______________________________
President or Vice President
By_________________________________
President or Vice President
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