LOAN MODIFICATION AGREEMENT
Exhibit 10.9
This Loan Modification Agreement is entered into as of June 21, 2005, by and between A Smart
Move L.L.C. (the “Borrower”) and Silicon Valley Bank (“Bank”).
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations which may be owing by
Borrower to Bank, Borrower is indebted to Bank pursuant to, among other documents, a Loan and
Security Agreement, dated April 26, 2005 (as may be amended, restated, or otherwise modified from
time to time, the “Loan Agreement”). The Loan Agreement provides for, among other things, a
Committed Equipment Line in the original principal amount of One Million Five Hundred Thousand
Dollars ($1,500,000). Defined terms used but not otherwise defined herein shall have the same
meanings as set forth in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as the “Obligations.”
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as
described in the Loan Agreement.
Hereinafter, the above-described security documents and guaranties, together with all other
documents securing repayment of the Obligations shall be referred to as the “Security Documents”.
Hereinafter, the Security Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.
3. DESCRIPTION OF CHANGE IN TERMS.
A. | Modification(s) to Loan Agreement. |
1. | Paragraph “(a)” of Section 6.2 entitled “Financial Statements, Reports, Certificates” is hereby amended to read as follows: |
Borrower will deliver to Bank: (i) as soon as available, but no later than
30 days after the last day of each month, a company prepared consolidated
balance sheet and income statement covering Borrower’s consolidated
operations during the period certified by a Responsible Officer and in a
form acceptable to Bank; (ii) as soon as available, but no later than 120
days after the last day of Borrower’s fiscal year, audited consolidated
financial statements prepared under GAAP, consistently applied, together
with an unqualified opinion on the financial statements from an independent
certified public accounting firm reasonably acceptable to Bank (provided,
however, Borrower shall deliver to Bank as soon as available but not later
than 45 days after the last day of fiscal year ending December 31, 2005,
compiled consolidated financial statements prepared under GAAP, consistently
applied); (iii) within 5 days of filing, copies of all statements, reports
and notices made available to Borrower’s security holders or to any holders
of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed with
the Securities and Exchange Commission; (iv) a prompt report of any legal
actions pending or threatened against Borrower or any Subsidiary that could
result in damages or costs to Borrower or any Subsidiary of $100,000 or
more; (v) budgets, sales projections, operating plans or other financial
information Bank reasonably requests; and (vi) prompt notice of any material
change in the composition of the Intellectual Property, including any
subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not shown in any intellectual property security agreement between
Borrower and Bank or knowledge of an event that materially adversely affects
the value of the Intellectual Property
2. | Sub-section “(ii)” under Section 6.7 entitled “Financial Covenants” is hereby amended to read as follows: |
(ii) Profitability/Maximum EBITDA Loss. A minimum net profit (and maximum
net loss) calculated as EBITDA measured monthly on a rolling 3-month basis,
as follows: ($450,000) for the ending June 30, 2005; ($300,000) for the
months ending July 31, 2005 and August 31, 2005; $0.00 beginning with the
month ending September 30, 2005; and $250,000 for the month ending December
31, 2005 and each month ending thereafter.
B. | Waiver of Financial Covenant Default(s) |
1. | Bank hereby waives Borrower’s existing default under the Loan Agreement by virtue of Borrower’s failure to comply with the Profitability/Maximum EBITDA Loss covenant for the month ended April 30, 2005 and the month ended May 31, 2005 (anticipated). Bank’s waiver of Borrower’s compliance of this covenant shall apply only to the foregoing periods. Accordingly, for the month ending June 30, 2005, Borrower shall be in compliance with this covenant, as amended herein. |
Bank’s agreement to waive the above-described default (1) in no way shall be
deemed an agreement by the Bank to waive Borrower’s compliance with the
above-described covenant as of all other dates and (2) shall not limit or
impair the Bank’s right to demand strict performance of this covenant as of
all other dates and (3) shall not limit or impair the Bank’s right to demand
strict performance of all other covenants as of any date.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary
to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing below) agrees
that, as of the date hereof, it has no defenses against paying any of the Obligations.
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Bank 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. Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to
make any future modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. Unless expressly released herein, 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.
This Loan Modification Agreement is executed as of the date first written above.
BORROWER: | BANK: | |||||||
A SMART MOVE L.L.C. | SILICON VALLEY BANK | |||||||
By:
|
/s/ Xxxxx Xxxxxx | By: | /s/ Xxxxx Xxxxxxxx | |||||
Name:
|
Xxxxx Xxxxxx | Name: | Xxxxx Xxxxxxxx | |||||
Title:
|
Manager | Title: | Senior Vice President | |||||
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SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: |
A Smart Move L.L.C. | |||||||
LOAN OFFICER: |
Xxxxx Xxxxxxxx | |||||||
DATE: |
June 21, 2005 | |||||||
Documentation Fee | $ | 250.00 | ||||||
TOTAL FEE DUE | $ | 250.00 | ||||||
Please indicate the method of payment:
{ } A check for the total amount is attached.
{ } Debit DDA # for the total amount.
{ } Loan proceeds
Borrower
|
(Date) | |||
Silicon Valley Bank
|
(Date) | |||
Account Officer’s Signature |