EIP MICROWAVE, INC.. 1996 FORM 10-KSB
EXHIBIT 10(f)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of November 15, 1996,
by and between EIP Microwave, Inc. ("Borrower") whose address is 0000 XxXxxxxxxx
Xxxxx, Xxxxxxxx, XX 00000, and Silicon Valley Bank ("Silicon") whose address is
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Silicon, Borrower is indebted to Silicon pursuant to,
among other documents, a Loan and Security Agreement, dated March 10, 1992
(including the Schedule thereto), as may be amended from time to time (the "Loan
Agreement"). The Loan Agreement provided for, among other things, a Credit
Limit in the original principal amount of Five Hundred Thousand and 00/100
Dollars ($500,000.00) (the "A/R Facility"). Defined terms used but not
otherwise defined herein shall have the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Silicon shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES: Repayment of the indebtedness is
secured by the Collateral as described in the Loan Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents." Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. The following modifications pertain to the Schedule to the Loan
Agreement:
a. Modification to Credit Limit.
The first paragraph of the section entitled "Credit Limit
(Section 1.1)" is hereby amended in its entirety to read as
follows:
An amount not to exceed the lesser of: (i) $185,000.00 at
any one time outstanding; or (ii) 60% of the Net Amount
of Borrower's accounts, which Silicon in its discretion
deems eligible for borrowing.
b. Extension of Maturity Date.
The Maturity Date as set forth in the section entitled
"Maturity Date (Section 5.1)" is hereby deleted and
replaced, effective as of the date hereof, with
"January 15, 1997."
c. Modification of the Financial Covenants.
The Debt to Tangible Net Worth Ratio and the Profitability
covenants as set forth in "Financial Covenants
(Section 4.1)" are hereby amended to read as follows:
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DEBT TO TANGIBLE NET WORTH RATIO. Borrower shall maintain,
on a monthly basis, beginning with the month ended
September 30, 1996, a ratio of total liabilities to tangible
net worth of not more than 1.50 to 1.00.
PROFITABILITY. Borrower shall be profitable (after taxes)
on a quarterly basis with an allowance for losses (subject
to an infusion of capital of not less than $600,000.00 no
later than December 31, 1996), provided such losses do not
exceed $120,000.00 for the quarter ending December 31, 1996
and $90,000.00 for the quarter ending March 31, 1997.
2. Notwithstanding anything to the contrary contained in the section
entitled "1.1 Loans", Silicon shall no longer make further Loans
to Borrower, as pertaining to the A/R Facility.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay Silicon a fee in the amount of
Three Hundred and 00/100 Dollars ($300.00) (the "Loan Fee") plus all out-of-
pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that it has no defenses against the obligations to pay any amounts
under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness,
Silicon is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Silicon's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Silicon to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Silicon and Borrower
to retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Silicon in writing. No maker,
endorser, or guarantor will be released by virtue of this Loan Modification
Agreement. The terms of this paragraph apply not only to this Loan
Modification Agreement, but also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: SILICON :
EIP MICROWAVE, INC. SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxxxxxxx X. Xxxxxxx
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Title: President Title: Vice President
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