EXHIBIT 10.24
AMENDMENT
TO
SECURITY AGREEMENT AND ANCILLARY AGREEMENTS
This AMENDMENT (this "AMENDMENT"), dated as of October 26, 2004, is entered
into by and among ELINEAR, INC., a Delaware corporation (the "COMPANY"), NETVIEW
TECHNOLOGIES, INC. ("NETVIEW"), NETBRIDGE TECHNOLOGIES, INC. ("NETBRIDGE" and,
together with the Company and Netview, the "CREDIT PARTIES") and LAURUS MASTER
FUND, LTD., a Cayman Islands company ("LAURUS"), for the purpose of amending the
terms of (i) the Secured Convertible Minimum Borrowing Note, dated February 23,
2004 (as amended, modified or supplemented from time to time, the "MINIMUM
BORROWING NOTE") issued by the Company pursuant to the Security Agreement
referred to below, (ii) the Secured Revolving Note, dated February 23, 2004 (as
amended, modified or supplemented from time to time, the "REVOLVING NOTE")
issued by the Company pursuant to the Security Agreement referred to below, and
(iii) the Minimum Borrowing Note Registration Rights Agreement by and between
the Company and Laurus, dated as of February 23, 2004 (as amended, modified or
supplemented from time to time, the "REGISTRATION RIGHTS AGREEMENT" and,
together with the Minimum Borrowing Note and the Revolving Note, the "REVOLVING
LOAN DOCUMENTS"). Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Security Agreement, dated as of
February 23, 2004, by and between the Credit Parties and Laurus (the "SECURITY
AGREEMENT").
WHEREAS, the Company and Laurus have agreed to make certain changes to
the Revolving Loan Documents as set forth herein, and in connection
therewith, the Company has agreed to issue an additional common stock
purchase warrant to Laurus to purchase up to 150,000 shares of the Common
Stock of the Company (the "NEW WARRANT");
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Section 2.2 of the Minimum Borrowing Note is hereby amended by
deleting the reference to "$2.91" contained therein and inserting a reference to
"$1.00" in lieu thereof. Laurus hereby waives any default that may have
occurred pursuant to Section 4.5 of the Minimum Borrowing Note as a result of
the Company's failure to pay any fees under the Registration Rights Agreement.
2. Section 2.1 of the Revolving Note is hereby amended by deleting the
reference to "$2.91" contained therein and inserting a reference to "$1.00" in
lieu thereof. Laurus hereby waives any default that may have occurred pursuant
to Section 3.5 of the Revolving Note as a result of the Company's failure to pay
any fees under the Registration Rights Agreement prior to the date hereof.
3. Laurus hereby waives any fees that have been incurred by the Company
under Section 2(b)(ii) of the Registration Rights Agreement prior to the date
hereof and affirms that such event did not result in, nor is it as of the date
hereof, an event of default under Section 18 of the Security Agreement.
4. The definition of "Filing Date" set forth in the Registration Rights
Agreement is hereby amended by deleting said definition in its entirety and
inserting the following new definition in lieu thereof:
"Filing Date" means, with respect to (1) the Registration Statement
which is required to be filed with respect to the Loans made on the initial
funding date as evidenced by a Minimum Borrowing Note, November 22, 2004,
and (2) each $2,000,000 tranche of Loans funded after the initial funding
date, the date which is thirty (30) days after such funding of such
additional $2,000,000 of Loans evidenced by a Minimum Borrowing Note.
5. The Company and Laurus agree that the definition of "Warrants"
contained in Section 1 of the Registration Rights Agreement shall mean and
include the New Warrant.
6. This Amendment to each of the Revolving Loan Documents shall be
effective as of the date hereof following (i) the execution of same by each
Credit Party and Laurus and (ii) the issuance by the Company to Laurus of the
New Warrant.
7. Except as specifically set forth in this Amendment, there are no
other amendments to the Revolving Loan Documents, and all of the other forms,
terms and provisions of the Revolving Loan Documents remain in full force and
effect.
8. The Company hereby represents and warrants to Laurus that as of the
date hereof, giving effect to this Amendment and as modified by the waiver
letter dated the date hereof by and between Laurus and the Company, all
representations, warranties and covenants made by Company in connection with the
Security Agreement and the Revolving Loan Documents are true, correct and
complete and all of Company's and its Subsidiaries' covenant requirements have
been met.
9. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. Each party shall be responsible
for their respective costs, including legal fees incurred, in connection with
this Amendment.
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IN WITNESS WHEREOF, each Credit Party and Laurus has caused this Amendment
to the Revolving Loan Documents to be signed in its name effective as of this
20th day of October, 2004.
ELINEAR, INC.
By: ELINEAR, INC.
--------------
Name:
Title:
NETVIEW TECHNOLOGIES, INC.
By: NETVIEW TECHNOLOGIES, INC.
--------------------------
Name:
Title:
NETBRIDGE TECHNOLOGIES, INC.
By: NETBRIDGE TECHNOLOGIES, INC.
----------------------------
Name:
Title:
LAURUS MASTER FUND, LTD.
By: LAURUS MASTER FUND, LTD.
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Name:
Title:
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