Exhibit 10.1
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this " Agreement ") is entered into this
19th day of February 2009, by and between SILICON VALLEY BANK ("
Bank ") and SOCKET MOBILE, INC., a Delaware corporation ("
Borrower "), whose address is 39700 Eureka Drive, Newark,
California 94560.
RECITALS
A . Bank and Borrower have entered into that certain
Second Amended and Restated Loan and Security Agreement dated as of
December 24, 2008 (as the same has and may continue to be from time
to time further amended, modified, supplemented or restated, the "
Loan Agreement ").
B . Bank has extended credit to Borrower for the purposes
permitted in the Loan Agreement.
C . Borrower has requested that Bank (i) extend the
Maturity Date, and (ii) amend certain other provisions of the Loan
Agreement.
D . Although Bank is under no obligation to do so, Bank
is willing to (i) extend the Maturity Date and (ii) amend certain
provisions of the Loan Agreement, all on the terms and conditions
set forth in this Agreement, so long as Borrower complies with the
terms, covenants and conditions set forth in this Agreement in a
timely manner.
AGREEMENT
NOW , THEREFORE , in consideration of the
foregoing recitals and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, and intending
to be legally bound, the parties hereto agree as follows:
1 . Definitions . Capitalized terms used but not
defined in this Agreement, including its preamble and recitals,
shall have the meanings given to them in the Loan Agreement.
2 . Amendments to Loan Agreement .
2.1 Section 2.1.1 (Financing of Accounts) . Section 2.1.1(b)
of the Loan Agreement is hereby amended in its entirety and
replaced with the following:
(b)
Maximum Advances. The aggregate outstanding amount of all Advances,
outstanding at any time may not exceed One Million Five Hundred
Thousand Dollars ($1,500,000). Notwithstanding any other term or
provision of this Agreement, the aggregate amount of Advances
hereunder together with the aggregate amount of loan advances under
the EXIM Agreement shall not at any event exceed Two Million Five
Hundred Thousand Dollars ($2,500,000).
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2.2 Section 2.2 (Collections, Finance Charges, Remittances and
Fees) . Section 2.2.4(b) of the Loan Agreement is hereby
amended in its entirety and replaced with the following:
2.2.4 Collateral Handling Fee . At all times that the
Adjusted Quick Ratio is less than 1.25 to 1.00, Borrower will pay
to Bank a collateral handling fee equal to seven tenths of one
percent (0.70%) per month of the Financed Receivable Balance for
each Financed Receivable outstanding based upon a 360 day year (the
" Collateral Handling Fee "). This fee is charged on a daily
basis which is equal to the Collateral Handling Fee divided by 30,
multiplied by the number of days each such Financed Receivable is
outstanding, multiplied by the outstanding Financed Receivable
Balance. The Collateral Handling Fee is payable when the Advance
made based on such Financed Receivable is payable in accordance
with Section 2.3 hereof. In computing Collateral Handling Fees
under this Agreement, all Collections received by Bank shall be
deemed applied by Bank on account of Obligations three (3) Business
Days after receipt of the Collections. After an Event of Default,
the Collateral Handling Fee will increase an additional 0.50%
effective immediately upon such Event of Default.
2.3 Section 6.7 (Financial Covenants) . Commencing with the
monthly reporting period for the month ending as of March 31, 2009,
Section 6.6(a) of the Loan Agreement is hereby amended in its
entirety and replaced with the following:
(a)
Adjusted Quick Ratio. Commencing with the month ending as of March
31, 2009, an Adjusted Quick Ratio of not less than (i) 0.75 to 1.00
for the month ending March 31, 2009, (ii) 0.90 to 1.00 for the
months ending April 30, 2009 and May 31, 2009 and (iii) 1.00 to
1.00 for the month ending June 30, 2009 and for each month
thereafter.
2.4 Section 13 (Definitions) .
(a)
The following definitions set forth in Section 13.1 of the Loan
Agreement are hereby amended in their entirety and replaced with
the following:
"
Availability " means, as the date of determination, an
amount equal to One Million Five Hundred Thousand Dollars
($1,500,000) minus all outstanding Credit Extensions.
"
Facility Amount " is One Million Eight Hundred Seventy-Five
Thousand Dollars ($1,875,000).
"
Maturity Date " is March 24, 2010.
"
Total Liabilities " is on any day, obligations that should,
under GAAP, be classified as liabilities on Borrower's consolidated
balance sheet, including all Indebtedness, but excluding all other
Subordinated Debt.
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(b)
The following terms and their respective definitions are hereby
added in alphabetical order to Section 13.1 of the Loan
Agreement:
"
Adjusted Quick Ratio " is a ratio of Quick Assets to Current
Liabilities minus Deferred
Revenue.
"
Credit Extension " is any Advance or any other extension of
credit by Bank for Borrower's benefit.
"
Quick Assets " is, on any date, Borrower's unrestricted cash
and Cash Equivalents maintained with Bank, plus net Eligible
Accounts paid within ninety (90) days of invoice date, determined
according to GAAP.
2.5 Compliance Certificate . Exhibit B of the Loan Agreement
is replaced in its entirety with Exhibit B attached hereto. From
and after the date of this Agreement, all references in the Loan
Agreement, to the Compliance Certificate shall be deemed to refer
to Exhibit B attached hereto.
3. Limitation of Amendments .
3.1 The amendments set forth in Section 2 ,
above, are effective for the purposes set forth herein and shall be
limited precisely as written and shall not be deemed to (a) be a
consent to any amendment, waiver or modification of any other term
or condition of any Loan Document, or (b) otherwise prejudice any
right or remedy which Bank may now have or may have in the future
under or in connection with any Loan Document.
3.2 This Agreement shall be construed in connection with and
as part of the Loan Documents and all terms, conditions,
representations, warranties, covenants and agreements set forth in
the Loan Documents, except as herein amended, are hereby ratified
and confirmed
