Exhibit
10.1
BUSINESS
FINANCING MODIFICATION AGREEMENT
This
Business Financing Modification Agreement is entered into as of March 20, 2017, by and between Socket Mobile, Inc. (the “Borrower”)
and Western Alliance Bank, an Arizona corporation (“Lender”).
1. DESCRIPTION
OF EXISTING INDEBTEDNESS: Among other
indebtedness which may
be owing by Borrower
to Lender, Borrower is indebted
to Lender
pursuant to, among other
documents, a
Business Financing Agreement, dated February
27, 2014, by and
between Borrower and
Lender, as
may be amended from
time to time (the “Business Financing Agreement”).
Capitalized terms used
without definition herein
shall have
the meanings assigned
to them in the Business
Financing Agreement.
Hereinafter,
all indebtedness owing by Borrower to Lender
shall be referred to as the “Indebtedness” and the Business Financing
Agreement and any and all other documents executed by Borrower in favor of Lender
shall be referred to as the “Existing Documents.”
| 2. | DESCRIPTION
OF CHANGE IN TERMS. |
| A. | Modification
to Business Financing Agreement: |
| (i) | Section
1.3 of the Business Financing Agreement is
hereby amended to read as follows: |
1.3
Due Diligence. Lender may audit Borrower’s Receivables and any and all records pertaining to the Collateral, at Lender’s
sole discretion and at Borrowers expense, provided, an audit must be completed at least once every twelve months. Lender may at
any time and from time to time contact Account Debtors and other persons obligated or knowledgeable in respect of Receivables
to confirm the Receivable Amount of such Receivables, to determine whether Receivables constitute Eligible Receivables, and for
any other purpose in connection with this Agreement. If any of the Collateral or Borrower's books or records pertaining to the
Collateral are in the possession of a third party, Borrower authorizes that third party to permit Lender or its agents to have
access to perform inspections or audits thereof and to respond to Lender's requests for information concerning such Collateral
and records.
| (ii) | Sections
2.2(a) and 2.2(d) of the
Business Financing Agreement are
hereby amended to read as follows: |
| (a) | Domestic
Facility Fee.
Borrower
shall pay the Domestic Facility Fee to Lender
promptly upon the execution of the Business Financing Modification Agreement dated
March 20, 2017 and on February 27
of each year thereafter. |
(d) [Intentionally
Omitted].
| (iii) | The
following defined terms in Section 12.1
entitled “Definitions” are hereby
amended to read as follows: |
“Cash
Management Sublimit” means $150,000.00.
“Domestic
Facility Fee”
means a fee equal to 0.50% of the Domestic Credit
Limit due upon the execution of the Business
Financing Modification Agreement dated
March 20, 2017 and on February 27 of each year thereafter, so long as any Advances
are outstanding or available hereunder.
“Maturity
Date” means (i) for Advances under the Domestic Line of Credit, February 27, 2019, and
(ii) for Advances under the EXIM
Line of Credit, February 27, 2018, or such earlier date as Lender shall have declared
the Obligations immediately due and payable pursuant
to Section 7.2.
“Prime
Rate” means the greater of 3.50% per year or the Prime Rate published in the Money Rates section of the Western
Edition of The Wall Street Journal, or such other rate of interest publicly announced from time to time by Lender as its Prime
Rate. Lender may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect
at the opening of business on the day specified in the public announcement of a change in the Prime Rate.
“Subfacility
Maximum” means $200,000.00.
| (iv) | The
defined term “Maintenance
Fee” is hereby deleted in its entirety. |
3.
CONSISTENT CHANGES. The Existing Documents
are each hereby amended wherever necessary to reflect the changes described above.
4.
PAYMENT OF FACILITY FEES AND
DUE DILIGENCE FEE. Borrower shall
pay Lender the Domestic Facility Fee
in the amount of $10,000.00 as amended hereof, the EXIM Facility Fee in the amount of $5,000.00, and
the Due Diligence Fee in the amount of $600.00, plus
all out-of-pocket expenses.
5.
NO DEFENSES OF BORROWER/GENERAL RELEASE.
Borrower agrees that, as of this date, it has no defenses against the obligations
to pay any amounts under the Indebtedness. Each of Borrower and Guarantor (each,
a “Releasing Party”) acknowledges
that Lender would not enter into
this Business Financing Modification Agreement without Releasing Party’s assurance
that it has no claims against Lender or
any of Lender’s officers, directors, employees or agents.
Except for the obligations arising hereafter under this Business Financing
Modification Agreement, each Releasing Party releases Lender,
and each of Lender’s and entity’s
officers, directors and employees from any known or unknown claims that Releasing
Party now has against Lender of any nature,
including any claims that Releasing Party, its successors, counsel, and advisors may in the
future discover they would have now had
if they had known facts not now
known to them, whether founded in contract,
in tort or pursuant to any other theory of liability,
including but not limited to any claims arising out of or related to the Agreement
or the transactions contemplated thereby. Releasing Party waives the
provisions of California Civil Code section
1542, which states:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The
provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents,
employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit
of Lender and its agents, employees, officers, directors, assigns and successors in interest. The provisions of this section shall
survive payment in full of the Obligations, full performance of all the terms of this Business Financing Modification Agreement
and the Agreement, and/or Lender’s actions to exercise any remedy available under the Agreement or otherwise.
6. CONTINUING
VALIDITY. Borrower understands and agrees that in modifying the existing
Indebtedness, Lender is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Documents. Except
as expressly modified pursuant to this Business Financing Modification
Agreement, the terms of the Existing Documents remain unchanged and in full
force and effect. Lender’s agreement to modifications
to the existing Indebtedness
pursuant to this Business Financing Modification Agreement in no way shall obligate Lender to
make any future modifications to the Indebtedness. Nothing
in this Business Financing Modification Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Lender
and Borrower to retain as liable parties all makers
and endorsers of Existing Documents, unless the party is expressly
released by Lender in writing. No maker, endorser,
or guarantor will be released by virtue of
this Business Financing Modification Agreement. The terms of this paragraph apply not only
to this Business Financing Modification Agreement, but also to any subsequent
Business Financing modification agreements.
7.
CONDITIONS. The
effectiveness of this Business Financing Modification Agreement
is conditioned upon payment of the Domestic Facility Fee, the EXIM Facility
Fee and the Due Diligence Fee.
8.
NOTICE OF FINAL AGREEMENT. BY SIGNING
THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES,
(B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE
OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
9.
COUNTERSIGNATURE.
This Business Financing Modification Agreement
shall become effective only when executed
by Lender and Borrower.
| BORROWER: |
LENDER: |
| |
|
SOCKET
MOBILE, INC.
|
WESTERN
ALLIANCE BANK,
an Arizona corporation |
By /s/ David W. Dunlap
Name: David W. Dunlap
Title: CFO |
By /s/ Darin
Cunningham
Name:Darin
Cunningham
Title: Relationship Manager |
