Exhibit 10.13
SECOND LOAN MODIFICATION AGREEMENT
This Second Loan Modification Agreement is entered into as of January
7, 2005, 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, 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) Section 2.8 of the Loan Agreement is hereby amended and restated
in its entirety as follows.
2.8 FACILITY FEE. A fully earned, nonrefundable annual fee
(the "Facility Fee") in an amount equal to Seventy Three Thousand Five
Hundred Dollars ($73,500), payable on the Closing Date for the first
twelve months and on the first anniversary of the Closing Date for the
second twelve months; provided, however, that if the Applicable
Committed Revolving Line Amount changes at any time then the Facility
Fee shall be pro-rated accordingly. The parties hereto hereby
acknowledge that the increase in the Facility Fee for the first year of
the Revolving
Facility pursuant to that certain Second Loan Modification Agreement
among the parties hereto dated as of January 7, 2005 (which increase
was in the amount of $7,875) shall be paid by Borrower to Bank
simultaneously with Borrower's execution and delivery to Bank of such
Second Loan Modification 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 Ten Million Dollars ($10,000,000); 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).
(iii) The definition of "Non Formula Amount" is hereby deleted from
Section 13.1 of the Loan Agreement.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. PAYMENT OF FACILITY FEE. Borrower shall pay to Lender the incremental
increase in the Facility Fee for the first year of the Revolving Facility as a
result of the increase in the Committed Revolving Line pursuant to this Second
Loan Modification Agreement, which increase is in the amount of Seven Thousand
Eight Hundred Seventy Five Dollars ($7,875.00) (the "Supplemental Facility
Fee").
6. PAYMENT OF LOAN FEE. In connection with the agreements contained herein,
Borrower shall pay to Lender a loan fee in the amount of Five Thousand Dollars
($5,000) (the "Loan Fee"), plus all out-of-pocket expenses.
7. 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.
8. 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.
9. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon the following:
1. Borrower's payment of the Supplemental Facility Fee;
2. Borrower's payment of the Loan Fee;
3. Lender receives a Second 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 Twelve Million Dollars
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($12,000,000) (which Second Amended and Restated Revolving Promissory Note is
sometimes referred to herein as the "Replacement Promissory Note"); and
4. Borrower's delivery to Lender of such other documents deemed
necessary by Lender.
10. 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:
Title:
XXXXXXX.XXX, INC.
By: /s/ XXXX XXXXXX
-----------------
Name:
Title:
D.I.A. MARKETING, INC.
By: /s/ XXXX XXXXXX
-----------------
Name:
Title:
LENDER:
SILICON VALLEY BANK
By: /s/ XXXX XXXXXXXX
-----------------
Name:
Title:
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