Exhibit 10.10
Silicon Valley Bank
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Amendment to Loan Documents
Borrower: Entrada Networks, Inc,
Rixon Networks, Inc. (fka Entrada Networks-AJ, Inc.)
Sync Research, Inc.
Xxxxxx Xxxxx Networks, Inc.
Date: October 29, 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 February 20, 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 Credit Limit. Section 1 of the Schedule, entitled "Credit
Limit", is hereby amended to read as follows:
"1. CREDIT LIMIT
(Section 1.1): An amount equal to the sum of 1 and 2 below:
1. Revolving Loans. An amount not to exceed
the lesser of: (i) $2,000,000 at any one
time outstanding (the "Maximum Credit
Limit") or (ii) 65% of the amount of the
Eligible Receivables (as defined in Section
8 above) of Rixon Networks, Inc. only.
Loans, if any, will be made to each Borrower based on the
Eligible Receivables of each Borrower, subject to the
Maximum Credit Limit set forth above for all Loans to all
Borrowers combined. Notwithstanding the foregoing, Borrower
agrees and understands that, absent further written
amendment hereto, Loans, if any, at this time will only be
made to Rixon Networks, Inc. based on the Eligible
Receivables of Rixon Networks, Inc.
plus
2. Cash Secured Letter of Credit No. 1.
$300,000. Silicon previously issued for the
account of Borrower a Standby Letter of
Credit in the amount of $300,000 (the
"Standby Letter of Credit No. 1"), which
Standby Letter of Credit is secured by a
certificate of deposit pledged to Silicon on
Silicon's standard form documentation."
2. Modified Minimum Monthly Interest. The Minimum Monthly Interest set
forth in that portion of the Schedule to Loan and Security Agreement entitled
"2. INTEREST." is hereby amended to read as follows:
"Minimum Monthly
Interest (Section 2.1): $3,000."
3. Modified Maturity Date. Section 4 of the Schedule to Loan and
Security Agreement is hereby amended to read as follows:
"4. Maturity date
(Section 6.1): October 31, 2003."
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4. Modified Tangible Net Worth Financial Covenant. The Minimum Tangible
Net Worth Financial Covenant set forth in that portion of the Schedule to Loan
and Security Agreement entitled "5. FINANCIAL COVENANTS (Section 5.1)" is hereby
amended to read as follows:
"Minimum Tangible
Net Worth: For each month ending after the date hereof,
Borrower shall, on a consolidated basis,
maintain a Tangible Net Worth of not less
than $3,750,000 plus 50% of the Borrower's
net income in each fiscal quarter ending
after the date hereof. Increases in the
Minimum Tangible Net Worth Covenant based on
net income shall be effective on the last
day of the fiscal quarter in which said net
income is realized, and shall continue
effective thereafter. In no event shall the
Minimum Tangible Net Worth Covenant be
decreased."
5. Deposit Requirement. Borrower covenants and agrees that it 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 85% of its total cash and investments on deposit with Silicon.
6. Modification Regarding Interest Computation. The first sentence of
Section 9.1 of the Loan Agreement which currently reads as follows:
"In computing interest on the Obligations, all checks, wire
transfers and other items of payment received by Silicon (including
proceeds of Receivables and payment of the Obligations in full)
shall be deemed applied by Silicon on account of the Obligations two
Business Days after receipt by Silicon of immediately available
funds, and, for purposes of the foregoing, any such funds received
after 12:00 Noon on any day shall be deemed received on the next
Business Day."
is hereby amended to read as follows:
"In computing interest on the Obligations, all checks, wire
transfers and other items of payment received by Silicon (including
proceeds of Receivables and payment of the Obligations in full)
shall be deemed applied by Silicon on account of the Obligations
three Business Days after receipt by Silicon of immediately
available funds, and, for purposes of the foregoing, any such funds
received after 12:00 Noon on any day shall be deemed received on the
next Business Day."
7. Fee. In consideration for Silicon entering into this Amendment,
Borrower shall concurrently pay Silicon a fee in the amount of $20,000.00, 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.
8. 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.
9. 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.
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Borrower: Silicon:
ENTRADA NETWORKS, INC. SILICON VALLEY BANK
By /s/ Xxxxxx X. X. Xxxxxx By /s/ Xxxxxx Xxxxxxxx
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President & CEO Title Vice President
By /s/ Xxxxxxxx Xxxxx
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CFO
Borrower: Borrower:
RIXON NETWORKS, INC. SYNC RESEARCH, INC.
By /s/ Xxxxxx X. X. Xxxxxx By /s/ Xxxxxx X. X. Xxxxxx
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President President
By /s/ Xxxxxxxx Xxxxx By /s/ Xxxxxxxx Xxxxx
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CFO CFO
Borrower:
XXXXXX XXXXX NETWORKS, INC.
By /s/ Xxxxxx X. X. Xxxxxx
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President
By /s/ Xxxxxxxx Xxxxx
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CFO
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