Exhibit 10.1

 

SEVENTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

THIS SEVENTH AMENDMENT to Loan and Security Agreement (this “Amendment”) is
entered into this 29th day of August, 2008, by and between Silicon Valley Bank
(“Bank”) and XPLORE TECHNOLOGIES CORPORATION OF AMERICA, a Delaware corporation
(“Borrower”) whose address is 14000 Summit Drive, Suite 900, Austin, Texas
78728.

 

RECITALS

 

A.                                    BANK AND BORROWER HAVE ENTERED INTO THAT
CERTAIN LOAN AND SECURITY AGREEMENT DATED AS OF SEPTEMBER 15, 2005, AS AMENDED
BY THAT CERTAIN FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT BY AND BETWEEN
BANK AND BORROWER DATED AS OF NOVEMBER 28, 2005, THAT CERTAIN LETTER AMENDING
LOAN AND SECURITY AGREEMENT BY AND BETWEEN BANK AND BORROWER DATED AS OF
MARCH 30, 2006, THAT CERTAIN SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT BY
AND BETWEEN BANK AND BORROWER DATED AS OF MAY 15, 2006, THAT CERTAIN THIRD
AMENDMENT TO LOAN AND SECURITY AGREEMENT BY AND BETWEEN BANK AND BORROWER DATED
AS OF FEBRUARY 28, 2007, THAT CERTAIN FOURTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT BY AND BETWEEN BANK AND BORROWER DATED AS OF MARCH 28, 2008, THAT
CERTAIN FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT BY AND BETWEEN BANK AND
BORROWER DATED AS OF MAY 27, 2008 AND THAT CERTAIN SIXTH AMENDMENT TO LOAN AND
SECURITY AGREEMENT BY AND BETWEEN BANK AND BORROWER DATED AS OF AUGUST 6, 2008
(AS THE SAME MAY FROM TIME TO TIME BE 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 AMEND THE
LOAN AGREEMENT TO (I) RESET THE FINANCIAL COVENANTS, (II) WAIVE CERTAIN COVENANT
VIOLATIONS, AND (III) MAKE CERTAIN OTHER REVISIONS TO THE LOAN AGREEMENT AS MORE
FULLY SET FORTH HEREIN.

 

D.                                    BANK HAS AGREED TO SO AMEND CERTAIN
PROVISIONS OF THE LOAN AGREEMENT, BUT ONLY TO THE EXTENT, IN ACCORDANCE WITH THE
TERMS, SUBJECT TO THE CONDITIONS AND IN RELIANCE UPON THE REPRESENTATIONS AND
WARRANTIES SET FORTH BELOW.

 

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 Amendment shall have the meanings given to them in the Loan
Agreement.

 

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2.                                      Amendments to Loan Agreement.

 

2.1                               Schedule Section 5 (FINANCIAL COVENANTS
(Section 5.1)).  The paragraphs regarding Minimum Tangible Net Worth and
Subordinated Debt prior to the “Definitions” portion of Section 5 of the
Schedule to the Loan Agreement are hereby amended and restated to read as
follows:

 

                                                “Minimum Tangible Net Worth. 
Borrower shall maintain a minimum Tangible Net Worth of not less than Seven
Hundred Fifty Thousand Dollars ($750,000) for the measuring periods ending
August 31, 2008 and September 30, 2008.  Thereafter, Borrower and Bank agree to
reset the minimum Tangible Net Worth covenant, effective beginning with the
measuring period ending October 31, 2008, based on a final revised forecast to
be delivered by Borrower to Bank no later than October 5, 2008.

 

                                                Subordinated Debt.  Borrower
shall have received (a) at least One Million Dollars ($1,000,000) in proceeds
from the issuance of Subordinated Debt no later than September 5, 2008, and
(b) at least Two Million Dollars ($2,000,000) (exclusive of the One Million
Dollars ($1,000,000) required in clause (a) above) in proceeds from the issuance
of Subordinated Debt no later than September 30, 2008.  If Borrower fails to
receive a total of at least Three Million Dollars ($3,000,000) in proceeds from
the issuance of Subordinated Debt by September 30, 2008, in addition to all
other rights and remedies available to Bank hereunder, Borrower shall pay to
Bank a fee equal to Ten Thousand Dollars ($10,000).”

 

3.                                      Waiver.  Bank hereby waives Borrower’s
default under Section 5 of the Schedule to the Loan Agreement with respect to
the Tangible Net Worth requirement solely for the measuring period ending
July 31, 2008.

 

4.                                      Limitation of Amendments.

 

4.1                               The amendments set forth in Section 2 and the
waiver set forth in Section 3, 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.

 

4.2                               This Amendment 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 and shall
remain in full force and effect.

 

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5.                                      Representations and Warranties.  To
induce Bank to enter into this Amendment, Borrower hereby represents and
warrants to Bank as follows:

 

5.1                               Immediately after giving effect to this
Amendment (a) the representations and warranties contained in the Loan Documents
are true, accurate and complete in all material respects as of the date hereof
(except to the extent such representations and warranties relate to an earlier
date, in which case they are true and correct as of such date), and (b) no Event
of Default has occurred and is continuing;

 

5.2                               Borrower has the power and authority to
execute and deliver this Amendment and to perform its obligations under the Loan
Agreement, as amended by this Amendment;

 

5.3                               The organizational documents of Borrower
delivered to Bank with the Sixth Amendment to Loan and Security Agreement remain
true, accurate and complete and have not been amended, supplemented or restated
and are and continue to be in full force and effect;

 

5.4                               The execution and delivery by Borrower of this
Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, have been duly authorized;

 

5.5                               The execution and delivery by Borrower of this
Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, do not and will not contravene (a) any
law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree
of any court or other governmental or public body or authority, or subdivision
thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 

5.6                               The execution and delivery by Borrower of this
Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, do not require any order, consent,
approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority,
or subdivision thereof, binding on either Borrower, except as already has been
obtained or made; and

 

5.7                               This Amendment has been duly executed and
delivered by Borrower and is the binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to
or affecting creditors’ rights.

 

6.                                      Counterparts.  This Amendment may be
executed in any number of counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.

 

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7.                                      Effectiveness.  This Amendment shall be
deemed effective upon (a) the due execution and delivery to Bank of this
Amendment by each party hereto, and (b) Borrower’s payment of an amendment fee
in an amount equal to Two Thousand Five Hundred Dollars ($2,500).

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK

BORROWER

 

 

Silicon Valley Bank

XPLORE TECHNOLOGIES
CORPORATION OF AMERICA

 

 

By:

/s/ Regina Perkins

 

By:

/s/ Michael J. Rapisand

Name:

Regina Perkins

 

Name:

Michael J. Rapisand

Title:

Relationship Manager

 

Title:

Chief Financial Officer

 

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