Exhibit 10.16
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Second Amendment to Second Amended and Restated Loan and Security
Agreement ("Amendment") is made and entered into as of September _, 2002, by and
among InPhonic, Inc. ("InPhonic"), SimIpc Acquisition Corp. ("SimIpc" and
together with Inphonic, the "Borrowers"), and Comerica Bank - California,
("Bank").
Recitals
A. Borrowers and Bank have entered into that certain Second
Amended and Restated Loan and Security Agreement dated as of March 1, 2002, as
amended by that certain First Amendment to Second Amended and Restated Loan and
Security Agreement dated as of July 2, 2002 (as the same may from time to time
be modified, amended, supplemented, restated or superseded, the "Loan
Agreement") pursuant to which Bank has agreed to extend and make available to
Borrower certain advances of money.
B. Borrowers desire that Bank amend the Loan Agreement upon the
terms and conditions more folly set forth herein.
C. Subject to the representations and warranties of Borrowers
herein and upon the terms and conditions set forth in this Amendment, Bank is
willing to so amend the Loan Agreement.
D. This Amendment, the Loan Agreement and the other Loan
Documents (as defined in the Loan Agreement), together with all other documents
entered into or delivered pursuant to any of the foregoing, in each case as
originally executed or as the same may from time to time be modified, amended,
supplemented, restated or superseded are hereinafter collectively referred to as
the "Loan Documents."
Agreement
Now, Therefore, in consideration of the foregoing recitals and the
mutual covenants herein set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound, Borrowers and Bank hereby agree to amend the Loan Agreement as
follows:
1. Definitions. Unless otherwise defined herein, all
terms defined in the Loan Agreement have the same meaning when used herein.
2. Amendments to Loan Agreement.
2.1. Section 2.1(b)(i) of the Loan Agreement is
hereby amended by deleting it in its entirety and replacing it
with the following:
"Subject to and upon the terms and conditions of this
Agreement, Borrowers may request Advances in an aggregate
outstanding amount not to exceed the amount of the Committed
Revolving Line at any one time. Amounts borrowed pursuant to
this Section 2. 1 (b) may be repaid and reborrowed at any time
prior to the Revolving Maturity Date, at which time all
Advances under this Section 2. 1 (b), together with all
accrued and unpaid interest thereon, shall be immediately due
and payable. Borrowers may prepay any Advances without penalty
or premium."
2.2 Section 2.1(b)(iii) of the Loan Agreement is
hereby amended by deleting it in its entirety.
2.3 Section 5.3 of the Loan Agreement is hereby
amended by deleting the second, third and fourth sentences
contained therein.
2.4 Section 6.2(f) of the Loan Agreement is
hereby amended by deleting it in its entirety and replacing it
with the following:
"(f) within 30 days of any changes to the
Intellectual Property Collateral and within 30 days of the
last day of each fiscal year, a report signed by Borrowers, in
form reasonably acceptable to Bank, listing any applications
or registrations that Borrowers have made or filed in respect
of any Patents, Copyrights or Trademarks and the status of any
outstanding applications or registrations, as well as any
change in Borrowers' Intellectual Property Collateral,
including but not limited to any subsequent ownership right of
any Borrower in or to any Trademark, Patent or Copyright not
specified in Exhibits A, B, and C of the Intellectual Property
Security Agreements delivered to Bank by Borrowers in
connection with this Agreement."
2.5 Paragraph (a) of Section 6.2 (relating to
the Borrowing Base Certificate) is deleted in its entirety and
replaced with the word "Reserved".
2.6 Section 6.7(a) is hereby amended by deleting
the reference to "at least 2 times its outstandings" and
replacing it with "at least 1.5 times its outstandings".
2.7 Exhibit A (DEFINITIONS) of the Loan
agreement is hereby amended as follows:
2.7.1 The following definitions are
deleted in their entirety. "Borrowing Base, "Current Assets",
"Current Liabilities", "Eligible Accounts", "Eligible Foreign
Accounts", "Non-Formula Amount", "Quick Assets", "Tangible Net
Worth" and "Total Liabilities".
2.7.2 In the definition of "Committed
Revolving Line", the reference to "$3,000,000" is deleted and
replaced with "$4,000,000";
2.7.3 In the definition of "Equipment
Line", the reference to "$1,500,000" is deleted and replaced
with "$367,175.37";
2.8 Exhibit D (BORROWING BASE CERTIFICATE) of
the Loan Agreement is hereby deleted and replaced with the
word "Reserved".
2.9 Exhibit E (COMPLIANCE CERTIFICATE) of the
Loan Agreement is hereby deleted and replaced with the
Compliance Certificate attached hereto as Annex I.
3. Cancellation of Availability of Equipment Advances.
Borrowers acknowledge and agree that the outstanding principal balance of
Equipment Advances as of the date hereof is $367,175.37, and that no other
Equipment Advances will be made by Bank.
4. Ratification and Reaffirmation of Liens. Borrowers
hereby ratify and reaffirm the validity and enforceability of all of the liens
and security interests heretofore granted pursuant to the Loan Documents, as
collateral security for the Obligations, and acknowledge that all of such liens
and security interests, and all Collateral heretofore pledged as security for
the Obligations, continues to be and remains Collateral for the Obligations from
and after the date hereof.
5. Representations And Warranties. Each Borrower
represents and warrants that its representations and warranties in the Loan
Documents continue to be true and complete in all material respects as of the
date hereof after giving effect to this Amendment (except to the extent such
specifically relate to another date) and that the execution, delivery and
performance of this Amendment are duly authorized, do not require the consent or
approval of any governmental body or regulatory authority and are not in
contravention of or in conflict with any law or regulation or any term or
provision of any other agreement entered into by such Borrower.
6. Full Force And Effect; Entire Agreement. Except to
the extent expressly provided in this Amendment, the terms and conditions of the
Loan Agreement and the other Loan Documents shall remain in full force and
effect. This Amendment and the other Loan Documents constitute and contain the
entire agreement of the parties hereto and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof. The parties hereto further agree that the Loan Documents comprise the
entire agreement of the parties thereto and supersede any and all prior
agreements, negotiations, correspondence, understandings and other
communications between the parties thereto, whether written or oral respecting
the extension of credit by Bank to Borrowers and/or their affiliates.
7. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts taken together shall constitute but one and the same
instrument.
8. Conditions Precedent to Effectiveness. The effectiveness of
this Amendment is conditioned upon receipt by Bank of (a) this Amendment, (b) a
fully-executed corporate resolution in form and substance acceptable to Bank,
(c) an additional warrant to purchase stock in the form attached hereto as Annex
II, (d) a fully-earned, non-refundable loan restructuring fee in the amount of
$2,500, and (e) any other documents which Bank may require to carry out the
terms hereof
In Witness Whereof, each of the parties hereto has caused this
Amendment to be executed and delivered by its duly authorized officer as of the
date first written above.
Borrowers:
InPhonic, Inc.
By: /s/ Xxxxx X. Xxxxxxxxx
______________________
Name:
Title:
SimIpc Acquisition Corp.
By: /s/ Xxxxx X. Xxxxxxxxx
______________________
Name.
Title:
Bank:
Comerica Bank-California
By: /s/ Xxxxxxx Steel
______________________
Name:
Title:
ANNEX I
Exhibit E
COMPLIANCE CERTIFICATE
TO: Comerica Bank - California
FROM: InPhonic, Inc./SimIpc Acquisition Corp.
The undersigned authorized officer of Borrowers hereby certify that in
accordance with the terms and conditions of the Second Amended and Restated Loan
and Security Agreement between Borrowers and Bank (as amended, the "Agreement"),
(i) Borrowers are in complete compliance for the period ending ________________
with all required __________, including without limitation Section 6.7 except as
noted below and (ii) all representations and warranties ______________ stated in
the Agreement are true and correct in all material respects as of the date
hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies" column.
Reporting Covenant Required Complies
------------------ -------- --------
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
10K and 10Q (as applicable) Yes No
IP Report Annual within 30 days and within 30 days of any Yes No
change
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Cash coverage ratio: 1:50:1.00 _____:1.00 Yes No
-----------------------------------------------
Comments Regarding Exceptions: See Attached. BANK USE ONLY
Received by:___________________________________
AUTHORIZED SIGNER
Sincerely,
Date:_________________________________________
______________________________________ Verified:______________________________________
SIGNATURE AUTHROIZED SIGNER
______________________________________ Date:__________________________________________
TITLE
Compliance Status Yes No
______________________________________ -----------------------------------------------
DATE
ANNEX H
[Warrant to Purchase Stock]
