Silicon Valley Bank

Limited Waiver and

Amendment to Loan Documents

 

Borrower:             Network Computing Devices, Inc.

Date:                      March 4, 2002

 

THIS LIMITED WAIVER AND 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
October 29, 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.             Waiver of Default.  Silicon and Borrower agree
that the Borrower’s existing defaults under the Loan o the Borrower’s failure to
comply with the Minimum Tangible Net Worth Financial Covenant set forth in
Section 5 of the Schedule to Loan and Security Agreement entitled “5.  FINANCIAL
COVENANTS (Section 5.1),” for the reporting periods ending November 30, 2001 and
December 31, 2001 are hereby waived.  It is understood by the parties hereto,
however, that such waiver does not constitute a waiver of any other provision or
term of the Loan Agreement or any related document nor an agreement to waive in
the future this covenant or any other provision or term of the Loan Agreement or
any related document.

 

                2.             Modified Credit Limit.  That portion of the
Credit Limit set forth in Section 1 of the Schedule to Loan and Security
Agreement that currently reads as follows:

 

An amount not to exceed the lesser of:  (i) $5,000,000 at any one time
outstanding (the “Maximum Credit Limit”); or (ii) 60% of the amount of
Borrower’s Eligible Receivables (as defined in Section 8 above).

 

is hereby amended to read as follows:

 

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An amount not to exceed the lesser of:  (i) $2,000,000 at any one time
outstanding (the “Maximum Credit Limit”); or (ii) 50% of the amount of
Borrower’s Eligible Receivables (as defined in Section 8 above).

 

                                3.             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)” which currently reads as follows:

 

Minimum TangibleNet Worth:

Borrower shall maintain a Tangible Net Worth of not less than the following
amounts as of the end of each month during the following periods:

 

 

 

 

Dates

Tangible Net Worth

 

October 1, 2001 to and including December 31, 2001

$4,500,000

 

 

 

 

January 1, 2002 to and including June 30, 2002

$4,000,000

 

 

 

 

After June 30, 2002

$4,500,000

 

is hereby amended to read as follows:

 

 

 

Minimum Tangible Net Worth:

Borrower shall maintain a Tangible Net Worth of not less than the following
amounts as of the end of each month during the following periods:

 

 

 

 

 

January 1. 2002 through and including May 31, 2002:  $2,500,000;

 

 

 

June 1, 2002 through and including June 30, 2002:  $3,750,000; and

 

 

 

After June 30, 2002:  $4,500,000.

 

 

                                4.             Fee.  In consideration for
Silicon entering into this Amendment, Borrower shall concurrently pay Silicon a
fee in the amount of $15,000, 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.

 

 

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                                5.             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.

 

                                6.             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. 

 

 

Borrower:

Silicon:

 

 

 

 

 NETWORK COMPUTING DEVICES, INC.

SILICON VALLEY BANK

 

 

 

 

By

Michael A. Garner

 

By

Arlene Soriano

 

President or Vice President

 

 

 

 

Title

VP Market Manager

By

Rudolph G. Morin

 

 

 

 

Secretary or Ass’t Secretary

 

 

 

 

 

 

 

 

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