Exhibit 10.13

 

Silicon Valley Bank

 

Amendment to Loan Documents

 

Borrower:   Netopia, Inc. Date:   As of December 29, 2004

 

THIS AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is entered into between
Silicon Valley Bank (“Silicon”) and the borrower named above (“Borrower”).

 

Silicon and Borrower agree to amend the Loan and Security Agreement between
them, dated June 27, 2002 (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. Limited Waiver. Bank and Borrower hereby agree that the failure of Borrower
to comply with the Tangible Net Worth financial covenant required under Section
5 of the Schedule to Loan Agreement (as in effect immediately prior to the
effectiveness of this Amendment) solely for the month ended October 31, 2004
(the “Designated Default”) hereby is waived. It is understood, however, that the
foregoing waiver of the Designated Default does not constitute a waiver of the
aforementioned covenant with respect to any other date or time period, or of any
other provision or term of the Loan Agreement or any other Loan Document, nor an
agreement to waive in the future such covenant with respect to any other date or
time period or any other provision or term of the Loan Agreement or any other
Loan Document.

 

2. Amendments to Loan Agreement.

 

(a) Modification of Letter of Credit Sublimit. The portion of Section 1 of the
Schedule to Loan Agreement that currently reads as follows:

 

Letter of Credit Sublimit

(Section 1.6): $2,000,000.

 

, hereby is amended and restated in its entirety to read as follows:

 

Letter of Credit Sublimit

(Section 1.6): $5,000,000.

 

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Silicon Valley Bank    Amendment to Loan Documents

 

(b) Modification of Tangible Net Worth Financial Covenant in Section 5 of the
Schedule to the Loan Agreement. From and after the date hereof, the portion of
the Minimum Tangible Net Worth covenant set forth in Section 5 (entitled
“Financial Covenants”) of the Schedule to Loan Agreement that currently reads as
follows:

 

“Minimum Tangible

Net Worth:

   Borrower shall maintain a Tangible Net Worth of not less than the following
(unless reset as provided for below):      For each month ending after the June
2004 Amendment Date through the month ending November 30, 2004: $34,000,000 plus
50% of the Borrower’s net income in each fiscal quarter ending after the June
2004 Amendment Date (commencing with the fiscal quarter ending September 30,
2004). 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.      On or before November
30, 2004, the Minimum Tangible Net Worth Financial Covenant will be reset for
each month after such date by Silicon based on Borrower’s projected financial
statements for such period, such projected financial statements to have been
approved by the Borrower’s Board of Directors and accepted jointly by Borrower
and by Silicon in their respective discretion, which projected financial
statements Borrower hereby covenants and agrees to deliver to Silicon no later
than October 31, 2004.”

, hereby is amended and restated in its entirety to read as follows:

“Minimum Tangible

Net Worth:

   Borrower shall maintain a Tangible Net Worth of not less than the following
(unless reset as provided for below):      For each month ending after October
31, 2004 through the month ending June 30, 2005: the TNW Base Amount (as defined
below) plus 50% of the Borrower’s net income in each fiscal quarter ending after
September 30, 2004. Increases in the

 

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Silicon Valley Bank    Amendment to Loan Documents

 

    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.    

As used herein, the term “TNW Base Amount” means, as of any date of
determination:

 

(a) $27,300,000 for each of November 2004 and December 2004;

 

(b) $23,000,000 for each of January 2005, February 2005, and March 2005;

 

(c) $19,000,000 for each of April 2005, May 2005, and June 2005; and

 

(d) $19,000,000 for each month thereafter; unless on or before July 31, 2005,
the Minimum Tangible Net Worth Covenant shall be reset for July 2005 and each
month thereafter based on Borrower’s projected financial statements for such
period, such projected financial statements to have been approved by the
Borrower’s Board of Directors and accepted jointly by Borrower and by Silicon in
their respective discretion, which projected financial statements Borrower
hereby covenants and agrees to deliver to Silicon no later than June 30, 2005.”

 

3. Fee. In consideration for Silicon entering into this Amendment, Borrower
shall pay Silicon a fee in the amount of $10,000, which shall be fully-earned
and due and payable concurrently with the execution and delivery of this
Amendment. Such fee shall be in addition to all interest and other fees payable
to Silicon under the Loan Documents. Silicon is authorized to charge such fee to
Borrower’s loan account.

 

4. 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.

 

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Silicon Valley Bank    Amendment to Loan Documents

 

5. 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.

 

[remainder of page intentionally left blank; signature page follows]

 

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Silicon Valley Bank    Amendment to Loan Documents

 

6. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same document. Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Amendment.

 

Borrower:

 

NETOPIA, INC.

 

Silicon:

 

SILICON VALLEY BANK

By:

 

/s/ Mark H. Perry

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By:

 

/s/ P. J. O’Donnell

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Interim Senior Vice President and CFO

 

Title:

 

VP and Relationship Manager

By:

 

/s/ David A. Kadish

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Secretary

       

 

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