EXHIBIT 10.19
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: NOVATEL WIRELESS, INC.
DATE: NOVEMBER 21, 2002
THIS 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 November 29, 2001 (as otherwise amended, if at all, the "Loan Agreement"),
as follows, effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment shall have the meanings set forth in the Loan
Agreement.)
1. MODIFIED AUDIT FEES. That certain sentence in Section 5.4 of the Loan
Agreement that currently reads as follows:
"The foregoing inspections and audits shall be at Borrower's
expense and the charge therefor shall be $700 per person per day
(or such higher amount as shall represent Silicon's then current
standard charge for the same), plus reasonable out of pocket
expenses."
is hereby amended to read as follows:
"The foregoing inspections and audits shall be at Borrower's
expense and the charge therefor shall be $750 per person per day
(or such higher amount as shall represent Silicon's then current
standard charge for the same), plus reasonable out of pocket
expenses."
2. MODIFIED CREDIT LIMIT. Section 1 of the Schedule to Loan and Security
Agreement entitled "1. CREDIT LIMIT" is hereby amended in its entirety to read
as follows:
1. CREDIT LIMIT
(Section 1.1): An amount equal to the sum of (a)
and (b) and (c) below:
(a) An amount not to exceed the
lesser of: (i) $5,000,000 at any one
time outstanding (the "Maximum
Credit Limit"); or (ii) 65% of the
amount of Borrower's Eligible
Receivables (as defined in Section 8
above);
plus
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(b) STANDBY LETTER OF CREDIT.
Silicon previously issued for the
account of Borrower a Standby Letter
of Credit in the amount of $50,000
(the "Standby Letter of Credit"),
which Standby Letter of Credit is
secured by a certificate of deposit
pledged to Silicon on Silicon's
standard form documentation;
plus
(c) BUSINESS CREDIT CARD SERVICES.
Borrower is party to certain
standard form applications and
agreements of Silicon in connection
with Silicon's business credit card
services contemplated therein
("Business Credit Card Services"),
with a credit limit thereon of
$50,000 (or such higher amount as
Silicon may agree to in writing, the
"Business CC Limit"), and, without
limiting any of the terms of such
applications and agreements,
Borrower will pay all standard fees
and charges of Silicon in connection
with the Business Credit Card
Services. All amounts that Silicon
pays or expends in respect of any
Business Credit Card Services shall
constitute Obligations hereunder.
Borrower hereby agrees to indemnify,
save, and hold Silicon harmless from
any loss, cost, expense, or
liability, including payments made
by Silicon, expenses, and reasonable
attorneys' fees incurred by Silicon
arising out of or in connection with
any Business Credit Card Services.
Borrower's Obligations arising out
of or in connection with the
Business Credit Card Services (the
"Business CC Obligations") shall be
fully cash-secured (including,
without limitation, cash security in
the form of one or more certificates
of deposit) pursuant to Silicon's
standard form pledge documentation
(such cash security, the "Business
CC Cash Collateral"; it being
understood and agreed that the
Business CC Cash Collateral
constitutes additional Collateral).
Borrower hereby covenants and agrees
that the amount of cash collateral
pledged to Silicon as the Business
CC Cash Collateral shall at all
times be at least the then extant
Business CC Limit plus all interest,
fees and costs due or to become due
in connection with the Business CC.
For purposes of this Agreement, the
Business CC Obligations constitute
Obligations and
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shall count toward the Credit Limit
under this Agreement.
LETTER OF CREDIT SUBLIMIT
(Section 1.5): $400,000.
FOREIGN EXCHANGE
CONTRACT SUBLIMIT: $400,000. Borrower may enter into
foreign exchange forward contracts
with Silicon, on its standard forms,
under which Borrower commits to
purchase from or sell to Silicon a
set amount of foreign currency more
than one business day after the
contract date (the "FX Forward
Contracts"); provided that (1) at
the time the FX Forward Contract is
entered into Borrower has Loans
available to it under this Agreement
in an amount at least equal to 10%
of the amount of the FX Forward
Contract; and (2) the total FX
Forward Contracts at any one time
outstanding may not exceed 10 times
the amount of the Foreign Exchange
Contract Sublimit set forth above.
Silicon shall have the right to
withhold, from the Loans otherwise
available to Borrower under this
Agreement, a reserve (which shall be
in addition to all other reserves)
in an amount equal to 10% of the
total FX Forward Contracts from time
to time outstanding, and in the
event at any time there are
insufficient Loans available to
Borrower for such reserve, Borrower
shall deposit and maintain with
Silicon cash collateral in an amount
at all times equal to such
deficiency, which shall be held as
Collateral for all purposes of this
Agreement. Silicon may, in its
discretion, terminate the FX Forward
Contracts at any time that an Event
of Default occurs and is continuing.
Borrower shall execute all standard
form applications and agreements of
Silicon in connection with the FX
Forward Contracts, and without
limiting any of the terms of such
applications and agreements,
Borrower shall pay all standard fees
and charges of Silicon in connection
with the FX Forward Contracts.
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3. MODIFIED INTEREST RATE. Section 2 of the Schedule to Loan and
Security Agreement is hereby amended by modifying the words which presently read
"A rate equal to the `Prime Rate' in effect from time to time, plus 2.0% per
annum, provided that the interest rate in effect each month shall not be less
than 7.0% per annum." to read as follows:
A rate equal to the `Prime Rate' in effect from time to time,
plus 2.75% per annum, provided that the interest rate in effect
each month shall not be less than 7.0% per annum.
4. MODIFIED MATURITY DATE. Section 4 of the Schedule to Loan and
Security Agreement is hereby amended in its entirety to read as follows:
4. MATURITY DATE
(Section 6.1): November 28, 2003.
5. ADDITION OF MINIMUM CASH LIQUIDITY COVENANT. The following Minimum
Cash Liquidity Covenant is hereby added in Section 5 of the Schedule to Loan and
Security Agreement and shall read as follows:
MINIMUM CASH
LIQUIDITY: In addition to the Standby Letter of
Credit and the Business CC Cash
Collateral, Borrower shall at all
times maintain a minimum of Loans
available to Borrower under this
Agreement plus unrestricted cash in
accounts maintained at Silicon in an
amount of not less than $500,000;
provided, however, that the amount
of unrestricted cash in accounts
maintained at Silicon shall not at
any time be less than $350,000.
6. DELETION OF MINIMUM QUICK RATIO AND MINIMUM TANGIBLE NET WORTH
FINANCIAL COVENANTS. The Minimum Quick Ratio and Minimum Tangible Net Worth
Financial Covenants set forth in Section 5 of the Schedule to Loan and Security
Agreement are hereby deleted.
7. DEPOSIT REQUIREMENT. Paragraph (1) of Section 9 of the Schedule to
Loan and Security Agreement is hereby amended to read as follows:
(1) BANKING RELATIONSHIP. Borrower shall at all times maintain
its primary banking relationship with Silicon. Without
limiting the generality of the foregoing, Borrower shall,
at all times, maintain not less than 80% of its total cash
(including without limitation Borrower's deposit accounts
and operating accounts) on deposit with Silicon.
8. FEE. As consideration for Silicon entering into this Amendment,
Borrower shall concurrently pay Silicon a fee in the amount of $50,000, which
shall be non-refundable and in
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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.
9. 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.
10. 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 understandings 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: SILICON:
NOVATEL WIRELESS, INC. SILICON VALLEY BANK
BY /S/ XXXX XXXXX BY /S/ XXXXXX XXXXXXXX
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CHAIRMAN AND CEO VICE PRESIDENT
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BY /S/ XXXXXX X. XXXXXXX
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SR. V.P. AND CFO & SECRETARY
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