Document:

Exhibit 10.1

 

FIFTEENTH AMENDMENT TO CONSOLIDATED PROMISSORY
NOTE

 

THIS FIFTEENTH AMENDMENT
TO CONSOLIDATED PROMISSORY NOTE (the “Fifteenth Amendment”) is made and entered into as of the 23th day
of August 2016 by Discovery Energy Corp. a Nevada corporation f/k/a “Santos Resource Corp.” (herein called “Maker”),
and Liberty Petroleum Corporation, an Arizona corporation (herein called “Payee”).

 

RECITALS:

 

WHEREAS, Maker executed
in favor of Payee a Promissory Note (the “Note”) dated September 26, 2013 for a principal amount of $542,294; and

 

WHEREAS,
pursuant to a series of amendments on the Note, First through  Fourteenth
(for purposes of the remainder of this Fifteenth Amendment, the term "Note" shall mean the Note as heretofore amended
by said first 14 amendments), the principal amount of the Note and accrued interest on this Note were to become due and payable
on the 20th day of September 2016; and

 

WHEREAS, in connection
with the execution of this Fifteenth Amendment, Maker made a payment to Payee in the amount of $100,000 to reduce the principal
amount of the Note so that, by their execution of this Fifteenth Amendment, the parties agree and acknowledge that the principal
amount of the Note is $487,724 as of the date of this Fifteenth Amendment, taking into account interest that had accrued on the
Note through the 5th day of May 2016 and that had been added to the outstanding principal amount; and

 

WHEREAS, Maker wishes
to receive an extension of the Note, and the Payee is willing to so extend the Note; and

 

WHEREAS, the parties
hereto desire to amend the Note upon the terms, provisions and conditions set forth herein;

 

AGREEMENT:

 

NOW, THEREFORE, in
consideration of the mutual promises herein, the parties hereto hereby agree as follows (all undefined, capitalized terms used
herein shall have the meanings assigned to such term in the Note):

 

		1.	Amendment to the Note. In
                                         consideration of the mutual promises herein, the Note shall be amended so that: the outstanding
                                         principal of this Note ($487,724) and all interest that accrues on this Note after the
                                         5th day of May 2016 shall become due and payable in a single balloon payment on the 31st
                                         day of October 2016, notwithstanding anything else provided for in the Note. Moreover,
                                         notwithstanding anything else provided for in the Note, on or before the 31st day
                                         of October 2016, this Note can be paid in its entirety by Maker’s (a) payment to
                                         Payee of a cash amount equal to the sum of $200,000.00, plus the amount of interest
                                         that accrues on this Note after the 5th day of May 2016, and (b) issuance
                                         of 1,150,895 restricted shares of Maker's common stock, which number of shares was determined
                                         by dividing $287,724 by a per-share price of $0.25.

 

		2.	Miscellaneous. Except as otherwise expressly provided herein, the Note is not amended, modified
or affected by this Fifteenth Amendment. Except as expressly set forth herein, all of the terms, conditions, covenants, representations,
warranties and all other provisions of the Note are herein ratified and confirmed and shall remain in full force and effect. On
and after the date on which this Fifteenth Amendment becomes effective, the terms, “Note,” “herein,” “hereunder”
and terms of like import, when used herein or in the Note shall, except where the context otherwise requires, refer to the Note,
as amended by this Fifteenth Amendment. This Fifteenth Amendment may be executed in counterparts, and it shall not be necessary
that the signatures of all parties hereto be contained on any one counterpart hereof, each counterpart shall be deemed an original
but all of which together shall constitute one and the same instrument. This Fifteenth Amendment shall be deemed fully executed
and delivered when duly signed by the signatories and delivered via “PDF” or facsimile transmission.

 

    	 

     

    

 

IN WITNESS WHEREOF, the undersigned have
set their hands hereunto as the first date written above.

 

	DISCOVERY ENERGY CORP.,	LIBERTY PETROLEUM CORPORATION,
	Nevada corporation	an Arizona corporations
	 	 
	 	 
	 /s/
    Keith J. McKenzie                        	 /s/ Lane
    Franks                                     
	Keith J. McKenzie,	Lane Franks,
	Chief Executive Officer	President

 

 

    	 	2EX-10.22

 Exhibit 10.22 

SIXTH AMENDMENT 
 TO

 LOAN AND SECURITY AGREEMENT 

THIS SIXTH AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this 23rd day of August, 2016, by and between SILICON VALLEY BANK (“Bank”) and INFOSONICS CORPORATION, a Maryland corporation (“Borrower”). 

RECITALS 

A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of March 27, 2014 (as the same may from
time to time be further amended, modified, supplemented or restated, including without limitation by that certain First Amendment to Loan and Security Agreement dated as of December 5, 2014, that certain Second Amendment to Loan and Security
Agreement dated as of May 26, 2015, that certain Third Amendment to Loan and Security Agreement dated as of August 4, 2015, that certain Fourth Amendment to Loan and Security Agreement dated as of October 26, 2015 and that certain
Fifth Amendment to Loan and Security Agreement dated as of May 20, 2016, collectively, 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 make certain 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. 

2. Amendments to Loan Agreement. 

2.1 Section 2.1.1 (Financing of Accounts). Section 2.1.1(b) of the Loan Agreement hereby is amended and restated in its entirety
to read as follows: 
 “(b) Maximum Advances. The aggregate amount of Advances outstanding at any time may not
exceed Three Million Dollars ($3,000,000).” 
 2.2 Section 2.4 (Facility Fee). Section 2.4 of the Loan Agreement hereby
is amended and restated in its entirety to read as follows: 
 “2.2 Facility Fee. A fully earned,
non-refundable facility fee of Ten Thousand Dollars ($10,000) is due on September 27, 2016, and on September 27, 2017 (the “Facility Fee”).” 

 2.3 Section 6.7 (Financial Covenants). Effective as of July 31, 2016, Section 6.7
of the Loan Agreement hereby is amended and restated in its entirety to read as follows: 
 “6.7 Financial
Covenants. Maintain at all times: 
 (a) EBITDA. EBITDA, tested as of the end of each fiscal quarter of Borrower,
of not less than, (i) with respect to the quarter ending December 31, 2016, One Dollar ($1.00) and (ii) with respect to each quarter thereafter, an amount to be determined by Bank based upon Borrower’s board of directors-approved
2017 financial projections and budget (the “Board Approved Plan”). Borrower shall deliver the Board Approved Plan to Bank by no later than November 30, 2016. 

(b) Adjusted Quick Ratio. An Adjusted Quick Ratio of at least (i) 1.00 to 1.00, tested as of the end of each
month, and (ii) 1.30 to 1.00, tested as of the end of each fiscal quarter of Borrower.” 
 2.4 Section 13 (Definitions).
Effective as of July 31, 2016, the following definitions set forth in Section 13.1 of the Loan Agreement hereby are added, or amended and restated, as follows: 

“EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted
in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense, plus (e) non-cash stock compensation. 

“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in
accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower [and its Subsidiaries], including, without limitation or duplication,
all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the
interest portion of any deferred payment obligation (including leases of all types). 
 “Net Income” means,
as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single
accounting period. 
 “Quick Assets” is, on any date, Borrower’s consolidated, unrestricted cash and
Cash Equivalents maintained with Bank (which shall not equal less than Five Hundred Thousand Dollars ($500,000) in the aggregate as of the end of each fiscal quarter of Borrower), net accounts receivable aged less than one hundred twenty
(120) days from invoice date, and investments with Bank with maturities of fewer than twelve (12) months determined according to GAAP. 

2.5 Section 13 (Definitions). Effective as of July 31, 2016, the following definition set forth in Section 13.1 of the Loan Agreement
hereby is deleted: 
 “Tangible Net Worth” 

2.6 Exhibit B to the Loan Agreement hereby is replaced with Exhibit B attached hereto. 

 3. Limitation of Amendments. 

3.1 The amendment set forth in Section 2, above, is 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 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. 

4. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as
follows: 
 4.1 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; 
 4.2 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; 
 4.3 The organizational documents of
Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 

4.4 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; 
 4.5 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; 

4.6 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 
 4.7 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. 
 5. Integration. This
Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about
the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents. 

 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. 
 7. Effectiveness. This Amendment shall
be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) the due execution and delivery to Bank of updated Borrowing Resolutions of Borrower, (c) Borrower’s payment of a
non-refundable amendment fee equal to Five Thousand Dollars ($5,000), which may be debited from any of Borrower’s accounts with Bank and (d) Borrower’s payment of all Bank Expenses incurred through the date of this Amendment, which
may be debited from any of Borrower’s accounts with Bank. 
 [Balance of Page Intentionally Left
Blank] 

 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	 		 	INFOSONICS CORPORATION	 	
						
	By:	 	 /s/ Kadie Sobel
	 		 	By:	 	 /s/ Vernon A. LoForti
	 	
	Name:	 	Kadie Sobel	 		 	Name:	 	Vernon A. LoForti	 	
	Title:	 	Director	 		 	Title:	 	Vice President, CFO and Secretary	 	

 [Signature Page to Sixth Amendment to Loan and Security Agreement]

 EXHIBIT B 

SILICON VALLEY BANK 
 SPECIALTY FINANCE
DIVISION 
 Compliance Certificate 

I, an authorized officer of INFOSONICS CORPORATION (“Borrower”) certify solely in my capacity as such officer, and not as an
individual, that under the Loan and Security Agreement (as amended, the “Agreement”) between Borrower and Silicon Valley Bank (“Bank”) as follows for the period ending
                                         
                (all capitalized terms used herein shall have the meaning set forth in this Agreement): 

Borrower represents and warrants for each Financed Receivable: 

Each Financed Receivable is an Eligible Account; 

Borrower is the owner with legal right to sell, transfer, assign and encumber such Financed Receivable; 

The correct amount is on the Invoice Transmittal and is not disputed; 

Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date;

 Each Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due
or in default, has not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than Permitted Liens; 

There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount; 

Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; 

Borrower has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing; 

Bank has the right to endorse and/ or require Borrower to endorse all payments received on Financed Receivables and all proceeds of
Collateral. 
 No representation, warranty or other statement of Borrower in any certificate or written statement given to Bank contains any
untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 

Additionally, Borrower represents and warrants as follows: 

Borrower and each Subsidiary is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and
in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to cause a Material Adverse Change. The execution,
delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s organizational documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not
in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material Adverse Change. 

Borrower has good title to the Collateral, free of Liens except Permitted Liens. All inventory is in all material respects of good and
marketable quality, free from material defects. 
 Borrower is not an “investment company” or a company “controlled” by
an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Borrower has complied in all material respects with the 

 
Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous
substance other than legally. Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its business as currently conducted
except where the failure to obtain or make such consents, declarations, notices or filings would not reasonably be expected to cause a Material Adverse Change. 

Borrower is in compliance with the Financial Covenant(s) set forth in Section 6.7 of this Agreement. Attached are the required documents
supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. 

The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with
any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. 
 Financial Covenant

  

									
	 	 	 Required
	  	 Actual
	  	 Compliance

	 EBITIDA
	 	$1.00 for the quarter ending 12/31/16*	  	$            	  	Yes	  	No
	 Adjusted Quick Ratio
	 	 (i) 1.00 to 1.00, measured monthly and
 (ii)
1.30 to 1.00, measured quarterly**
	  		  	Yes	  	No

  

	*	and to be determined by Bank thereafter in accordance with Section 6.7(a), tested quarterly 

	**	and Borrower must maintain unrestricted cash and Cash Equivalents with Bank of not less than $500,000 as of the end of each fiscal quarter 

All other representations and warranties in this Agreement are true and correct in all material respects on this date, and Borrower represents
that there is no existing Event of Default. 
  

	
	Sincerely,
	
	  

	
	  

	Signature
	
	  

	Title
	
	  

	Date

 BORROWING RESOLUTIONS 

CORPORATE BORROWING CERTIFICATE 
  

					
	BORROWER:	 	InfoSonics Corporation	  	                                    
DATE: August 23, 2016
	BANK:	 	Silicon Valley Bank	  	

 I hereby certify as follows, as of the date set forth above: 

1. I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below. 

2. Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Maryland. 

3. Attached hereto are true, correct and complete copies of Borrower’s Articles/Certificate of Incorporation (including amendments), as filed with the
Secretary of State of the state in which Borrower is incorporated as set forth above. Such Articles/Certificate of Incorporation have not been amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of the date
hereof. 
 4. The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or
pursuant to a unanimous written consent or other authorized corporate action). Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and Silicon Valley
Bank (“Bank”) may rely on them until Bank receives written notice of revocation from Borrower. 

RESOLVED, that any one of the following officers or employees of Borrower, whose names, titles and
signatures are below, may act on behalf of Borrower: 
  

							
	 Name
	  	 Title
	  	 Signature
	  	 Authorized
to Add
or
Remove
Signatories

				
	Vernon A. LoForti	  	VP, CFO and Secretary	  	/s/ Vernon A. LoForti	  	x
				
	Joseph Ram	  	President & CEO	  	/s/ Joseph Ram	  	x
				
	  
	  	  
	  	  
	  	 ̈
				
	  
	  	  
	  	  
	  	 ̈

 RESOLVED FURTHER, that any one of the persons designated above
with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower. 

 RESOLVED FURTHER, that such individuals may,
on behalf of Borrower: 
 Borrow Money. Borrow money from Bank. 

Execute Loan Documents. Execute any loan documents Bank requires. 

Grant Security. Grant Bank a security interest in any of Borrower’s assets. 

Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an
interest and receive cash or otherwise use the proceeds. 
 Apply for Letters of Credit. Apply for letters of credit from Bank. 

Enter Derivative Transactions. Execute spot or forward foreign exchange contracts, interest rate swap agreements, or other derivative
transactions. 
 Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or
agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effect these resolutions. 

RESOLVED FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto
are ratified. 
 5. The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names. 

 

			
	By:	 	     /s/ Vernon A. LoForti

	Name:	 	  Vernon A. LoForti
	Title:	 	Vice President, CFO and Secretary

 *** If the Secretary, Assistant Secretary or other certifying officer executing above is
designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower. 

I, the President and CEO of Borrower, hereby certify as to paragraphs 1 through 5 above, as of the date set forth above. 

 

			
	By:	 	     /s/ Joseph Ram

	Name:	 	  Joseph Ram
	Title:	 	President and CEO

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