EXHIBIT 10.2
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (the "Amendment")
is entered into as of April 27, 2006 (the "Amendment Date"), by and among BRIDGE
BANK NATIONAL ASSOCIATION, AS AGENT AND LENDER ("Bank"), AGILITY CAPITAL, LLC,
AS LENDER ("Agility"), RAPTOR NETWORKS TECHNOLOGY, INC., A COLORADO CORPORATION
("Raptor Colorado"), and RAPTOR NETWORKS TECHNOLOGY INC., A CALIFORNIA
CORPORATION ("Raptor California") (Raptor Colorado and Raptor California are
referred to herein individually as a "Borrower" and collectively as the
"Borrowers").
RECITALS
Raptor Colorado, Bank as Agent and Bank and Agility as Lenders are
parties to a Loan and Security Agreement of even date (the "Agreement"). Raptor
California desires to be added as a Borrower under the Agreement. Each of the
parties hereto desires to amend the Agreement in accordance with the terms of
this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Raptor California is hereby deemed a Borrower under the Agreement.
Each reference to "Borrower" in the Agreement shall mean and refer to each of
Raptor Colorado and Raptor California, both individually and collectively.
Without limiting the generality of the foregoing, each of Raptor Colorado and
Raptor California grants Bank a security interest in the Collateral, as
described on Exhibit A hereto, to secure performance and payment of all
Obligations under the Agreement.
2. The following terms are added to Section 1.1:
"Maturity Date" means the Revolving Maturity Date.
"Pro Rata Share" means 50%.
3. Notwithstanding Section 2.1.1(a): the first tranche at all times may
not exceed the lesser of the Borrowing Base or the Revolving Line. The second
tranche of $250,000 and the third tranche of $500,000 of Advances may be made
regardless of the Borrowing Base, as long as the conditions set forth in the
definition of Revolving Line are satisfied.
4. Borrowers shall pay a processing fee equal to 0.50% of the gross
amount of each invoice financed under the Agreement.
5. A new Article 14 is hereby added to the Agreement to read as
follows:
14. CO-BORROWERS.
14.1 CO-BORROWERS. Borrowers are jointly and
severally liable for the Obligations and Bank may proceed against one
Borrower to enforce the Obligations without waiving its right to
proceed against the other Borrower. This Agreement and the Loan
Documents are a primary and original obligation of each Borrower and
shall remain in effect notwithstanding future changes in conditions,
including any change of law or any invalidity or irregularity in the
creation or acquisition of any Obligations or in the execution or
delivery of any agreement between Bank and any Borrower. Each Borrower
shall be liable for existing and future Obligations as fully as if all
of the Credit Extensions were advanced to such Borrower. Bank may rely
on any certificate or representation made by any Borrower as made on
behalf of, and binding on, all Borrowers, including without limitation
Advance Request Forms and Compliance Certificates. Each Borrower
appoints each other Borrower as its agent with all necessary power and
authority to give and receive notices, certificates or demands for and
on behalf of both Borrowers, to act as disbursing agent for receipt of
any Advances on behalf of each Borrower and to apply to Bank on behalf
of each Borrower for Advances, any waivers and any consents. This
authorization cannot be revoked, and Bank need not inquire as to one
Borrower's authority to act for or on behalf of another Borrower.
14.2 SUBROGATION AND SIMILAR RIGHTS. Notwithstanding
any other provision of this Agreement or any other Loan Document, each
Borrower irrevocably waives, until all obligations are paid in full and
Bank has no further obligation to make Credit Extensions to Borrower,
all rights that it may have at law or in equity (including, without
limitation, any law subrogating the Borrower to the rights of Bank
under the Loan Documents) to seek contribution, indemnification, or any
other form of reimbursement from any other Borrower, or any other
Person now or hereafter primarily or secondarily liable for any of the
Obligations, for any payment made by the Borrower with respect to the
Obligations in connection with the Loan Documents or otherwise and all
rights that it might have to benefit from, or to participate in, any
security for the Obligations as a result of any payment made by the
Borrower with respect to the Obligations in connection with the Loan
Documents or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section
shall be null and void. If any payment is made to a Borrower in
contravention of this Section, such Borrower shall hold such payment in
trust for Bank and such payment shall be promptly delivered to Bank for
application to the Obligations, whether matured or unmatured.
14.3 WAIVERS OF NOTICE. Each Borrower waives, to the
extent permitted by law, notice of acceptance hereof; notice of the
existence, creation or acquisition of any of the Obligations; notice of
an Event of Default except as set forth herein; notice of the amount of
the Obligations outstanding at any time; notice of any adverse change
in the financial condition of any other Borrower or of any other fact
that might increase the Borrower's risk; presentment for payment;
demand; protest and notice thereof as to any instrument; and all other
notices and demands to which the Borrower would otherwise be entitled
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by virtue of being a co-borrower or a surety. Each Borrower waives any
defense arising from any defense of any other Borrower, or by reason of
the cessation from any cause whatsoever of the liability of any other
Borrower. Bank's failure at any time to require strict performance by
any Borrower of any provision of the Loan Documents shall not waive,
alter or diminish any right of Bank thereafter to demand strict
compliance and performance therewith. Each Borrower also waives any
defense arising from any act or omission of Bank that changes the scope
of the Borrower's risks hereunder. Each Borrower hereby waives any
right to assert against Bank any defense (legal or equitable), setoff,
counterclaim, or claims that such Borrower individually may now or
hereafter have against another Borrower or any other Person liable to
Bank with respect to the Obligations in any manner or whatsoever.
14.4 SUBROGATION DEFENSES. Until all Obligations are
paid in full and Bank has no further obligation to make Credit
Extensions to Borrower, each Borrower hereby waives any defense based
on impairment or destruction of its subrogation or other rights against
any other Borrower and waives all benefits which might otherwise be
available to it under California Civil Code Sections 2809, 2810, 2819,
2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of
Civil Procedure Sections 580a, 580b, 580d and 726, as those statutory
provisions are now in effect and hereafter amended, and under any other
similar statutes now and hereafter in effect.
14.5 RIGHT TO SETTLE, RELEASE.
(a) The liability of Borrowers hereunder
shall not be diminished by (i) any agreement, understanding or
representation that any of the Obligations is or was to be guaranteed
by another Person or secured by other property, or (ii) any release or
unenforceability, whether partial or total, of rights, if any, which
Bank may now or hereafter have against any other Person, including
another Borrower, or property with respect to any of the Obligations.
(b) Without notice to any given Borrower and
without affecting the liability of any given Borrower hereunder, Bank
may (i) compromise, settle, renew, extend the time for payment, change
the manner or terms of payment, discharge the performance of, decline
to enforce, or release all or any of the Obligations with respect to
any other Borrower by written agreement with such other Borrower, (ii)
grant other indulgences to another Borrower in respect of the
Obligations, (iii) modify in any manner any documents relating to the
Obligations with respect to any other Borrower by written agreement
with such other Borrower, (iv) release, surrender or exchange any
deposits or other property securing the Obligations, whether pledged by
a Borrower or any other Person, or (v) compromise, settle, renew, or
extend the time for payment, discharge the performance of, decline to
enforce, or release all or any obligations of any guarantor, endorser
or other Person who is now or may hereafter be liable with respect to
any of the Obligations.
14.6 SUBORDINATION. All indebtedness of a Borrower
now or hereafter arising held by another Borrower, except as disclosed
in the attached Schedule, is subordinated to the Obligations and the
Borrower holding the indebtedness shall take all actions reasonably
requested by Bank to effect, to enforce and to give notice of such
subordination.
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6. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrowers ratify and reaffirm the continuing effectiveness of the
Agreement and all instruments, documents and agreements entered into in
connection with the Agreement.
7. Each Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as to such Borrower
as of the date of this Amendment, and that no Event of Default has occurred and
is continuing.
8. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
9. As a condition to the effectiveness of this Amendment, Agent shall
have received, in form and substance satisfactory to Agent, the following:
(a) this Amendment, duly executed by Borrowers;
(b) an amount equal to the expenses incurred by Agent and
Lenders incurred in connection with this Amendment; and
(c) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
RAPTOR NETWORKS TECHNOLOGY, INC.,
A COLORADO CORPORATION
By: /s/ XXX XXX XXXXX
-----------------------------------
Title: CFO
--------------------------------
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RAPTOR NETWORKS TECHNOLOGY INC.,
A CALIFORNIA CORPORATION
By: /s/ XXX XXX XXXXX
-----------------------------------
Title: CFO
--------------------------------
BRIDGE BANK NATIONAL ASSOCIATION,
AS AGENT
By: /s/ XXX XXXXXXX
-----------------------------------
Title: Senior Vice President
--------------------------------
BRIDGE BANK NATIONAL ASSOCIATION,
AS LENDER
By: /s/ XXX XXXXXXX
-----------------------------------
Title: Senior Vice President
--------------------------------
AGILITY CAPITAL LLC, AS LENDER
By: /s/ XXXXXX XXXXX
-----------------------------------
Title: Principal
--------------------------------
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EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
TO LOAN AND SECURITY AGREEMENT
All personal property of Borrower (herein referred to as "Borrower" or
"Debtor") whether presently existing or hereafter created or acquired, and
wherever located, including, but not limited to:
(a) all accounts (including health-care-insurance receivables), chattel
paper (including tangible and electronic chattel paper), deposit accounts,
documents (including negotiable documents), equipment (including all accessions
and additions thereto), general intangibles (including patents, copyrights,
trademarks, goodwill, payment intangibles and software), goods (including
fixtures), instruments (including promissory notes), inventory (including all
goods held for sale or lease or to be furnished under a contract of service, and
including returns and repossessions), investment property (including securities
and securities entitlements), limited partnership interests, limited liability
company units, letter of credit rights, money, and all of Debtor's books and
records with respect to any of the foregoing, and the computers and equipment
containing said books and records; and
(b) any and all cash proceeds and/or noncash proceeds of any of the
foregoing, including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to payment. All terms
above have the meanings given to them in the California Uniform Commercial Code,
as amended or supplemented from time to time, including revised Division 9 of
the Uniform Commercial Code-Secured Transactions.
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