Silicon Valley Bank Limited Forbearance and Amendment to Loan Documents
Exhibit
10.5
Silicon
Valley Bank
Limited
Forbearance and Amendment to Loan Documents
Borrower: |
Entrada
Networks, Inc. |
Rixon
Networks, Inc. (fka Entrada Networks-AJ, Inc.) | |
Sync
Research, Inc. | |
Xxxxxx
Xxxxx Networks, Inc. | |
Microtek
Systems, Inc. | |
Date: April
5, 2005
THIS
LIMITED FORBEARANCE AND 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
December 14, 2004 (as otherwise amended, if at all, the “Loan Agreement”), as
follows, effective as of March 31, 2005. (Capitalized terms used but not defined
in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. Limited
Forbearance re Compliance Regarding Monthly Financial Statement Reporting
Requirement. Reference
is hereby made to the reporting requirements set forth in Section 6.2(a)(i) of
the Loan Agreement (the “Monthly Financial Statement Reporting Requirement”).
Borrower has failed to comply with the Monthly Financial Statement Reporting
Requirement by failing to provide its financial statements for the month ending
February 28, 2005 in the manner prescribed by the Monthly Financial Statement
Reporting Requirement (the “Reporting Default”). Borrower hereby acknowledges
the foregoing Reporting Default. Silicon hereby agrees to forbear from
exercising its rights and remedies arising from the Reporting Default until the
earlier of the following (the “Forbearance Period”): (i) April 15, 2005 or (ii)
the occurrence of an Event of Default (other than the Reporting Default) under
the Loan Agreement. It is understood by the parties hereto, however, that such
forbearance does not constitute a waiver or forbearance of any other default
under, or any other provision or term of, the Loan Agreement or any related
document, nor an agreement by Silicon to waive or forbear from exercising its
rights and remedies in the future regarding the Reporting Default or any other
defaults under, or any other provision or term of, the Loan
Agreement.
2. Modified
Maximum Advances. Section
2.1.1(b) of the Loan Agreement is hereby amended to read as
follows:
(b) Maximum
Advances. The
aggregate face amount of all Financed Receivables outstanding at any time may
not exceed the Facility Amount, and Bank shall have no obligation to make
Advances in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate
at any time outstanding.
3. Modified
Applicable Rate. The
Applicable Rate set forth in Section 13.1 of the Loan Agreement is hereby
amended to read as follows:
“Applicable
Rate” is a per
annum rate equal to the Prime Rate plus eight percent (8.0%).
4. Modified
Facility Amount. The
Facility Amount set forth in Section 13.1 of the Loan Agreement is hereby
amended to read as follows:
“Facility
Amount”
is Six
Hundred Twenty-Five Thousand Dollars ($625,000).
5. Modified
Maturity Date. The
Maturity Date set forth in Section 13.1 of the Loan Agreement is hereby amended
to read as follows:
“Maturity
Date”
is April 30,
2005.
6. Fee.
In
consideration for Silicon entering into this Amendment, Borrower shall
concurrently pay Silicon a fee in the amount of $1,000, which shall be
non-refundable and in addition to all interest and other fees payable to Silicon
under the Loan Documents. Silicon is authorized to charge said fee to Borrower’s
loan account.
7. 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.
8. 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 discussions, representations, agreements and
under-standings 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:
ENTRADA
NETWORKS, INC.
By
/s/ Xxxxxx X. X. Xxxxxx
President
By
/s/ Xxxxxxxx Xxxxx
Ass't
Secretary |
Silicon:
SILICON
VALLEY BANK
By
/s/ Xxxxxxx Xxxxxx
Title
Senior Vice President
|
Borrower:
RIXON
NETWORKS, INC.
By
/s/ Xxxxxx X. X. Xxxxxx
President
By
/s/ Xxxxxxxx Xxxxx
Ass't
Secretary |
Borrower:
SYNC
RESEARCH, INC.
By
/s/ Xxxxxx X. X. Xxxxxx
President
By
/s/ Xxxxxxxx Xxxxx
Ass't
Secretary |
Borrower:
XXXXXX
XXXXX NETWORKS, INC.
By
/s/ Xxxxxx X. X. Xxxxxx
President
By
/s/ Xxxxxxxx Xxxxx
Ass't
Secretary |
Borrower:
MICROTEK
SYSTEMS, INC.
By
/s/ Xxxxxx X. X. Xxxxxx
President
By
/s/ Xxxxxxxx Xxxxx
Ass't
Secretary |
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