EXHIBIT 10.32
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of June 22, 2000, by
and between Applied Imaging Corp. and Applied Imaging International Limited
(collectively, the "Borrower") and Silicon Valley Bank ("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
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be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement, dated September 9, 1999, as may
be amended from time to time, (the "Loan Agreement"). The Loan Agreement
provided for, among other things, a Term Loan in the original principal amount
of Two Million Dollars ($2,000,000). 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 Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
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secured by the Collateral as described in the Loan Agreement. Additionally,
Borrower has agreed with Bank not to mortgage, pledge, hypothecate, or otherwise
encumber any of its Intellectual Property, pursuant to a Negative Pledge
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.
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A. Modification(s) to Loan Agreement
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1. The following Section 2.1.2 entitled Revolving Advances" is
hereby incorporated to read as follows:
2.1.2 Revolving Advances.
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(a) Bank will make Advances not exceeding the Committed
Revolving Line. Amounts borrowed under this Section may be repaid
and reborrowed during the term of this Agreement.
(b) To obtain an Advance, Borrower must notify Bank by
facsimile or telephone by 3:00 p.m. Pacific time on the Business
Day the Advance is to be made. Borrower must promptly confirm the
notification by delivering to Bank the Payment/Advance Form. Bank
will credit Advances to Borrower's deposit account. Bank may make
Advances under this Agreement based on instructions from a
Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations
which have become due. Bank may rely on any telephone notice
given by a person whom Bank believes is a Responsible Officer or
designee. Borrower will indemnify Bank for any loss Bank suffers
due to that reliance.
(c) The Committed Revolving Line terminates on the Revolving
Maturity Date, when all Advances are immediately payable.
2. Sub letter (a) under Section 2.2 entitled "Interest Rate,
Payments" is hereby amended in part to provide that Advances
accrue interest on the outstanding principal balance at a per
annum rate of 1.75 percentage points above the Prime Rate.
Interest due on the Advances is payable on the 21st day of each
month.
3. Sub-section (ii) "Tangible Net Worth" of Section 6.7 entitled
"Financial Covenants" is hereby amended to read as follows:
Tangible Net Worth of at least $3,500,000 for the 1st and 2nd
month of each fiscal quarter and $4,000,000 for the 3rd month of
each fiscal quarter.
4. Sub-section (iv) "Profitability" of Section 6.7 entitled
"Financial Covenants" is hereby amended in part to provide for
losses not to exceed $1,400,000 for the fiscal quarter ended
March 31, 2000; and $575,000 for the quarter ending September 30,
2000.
5. The following defined terms under Section 13.1 entitled
"Definitions" are hereby amended and/or incorporated to read as
follows:
"Advance" or "Advances" is a loan advance (or advances) under the
Committed Revolving Line.
"Committed Revolving Line" is a Credit Extension of up to
$500,000.
"Revolving Maturity Date" is June 21, 2001.
Sub-section (ii) "Tangible Net Worth" of the defined term "Tier 1
Pricing Guideline" is hereby amended in part to provide for
Tangible Net Worth of at least $3,500,000 for the 1st and 2nd
month of each fiscal quarter and $4,000,000 for the 3rd month of
each fiscal quarter.
Sub-section (iv) "Profitability" of the defined term "Tier 1
Pricing Guideline" is hereby amended in part to provide for
losses not to exceed $1,400,000 for the fiscal quarter ended
March 31, 2000; and $575,000 for the quarter ending September 30,
2000.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
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wherever necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Five
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Thousand Dollars ($5,000) ("Loan Fee") plus all out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
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below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
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below) understands and agrees that in modifying the existing Indebtedness, Bank
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. Bank's agreement to
modifications to the existing Indebtedness pursuant to this
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Loan Modification Agreement in no way shall obligate Bank 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 Bank
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Bank 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
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conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
APPLIED IMAGING CORP. SILICON VALLEY BANK
By: By:
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Name: Name:
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Title: Title:
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APPLIED IMAGING INTERNATIONAL LIMITED
By:
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Name:
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Title:
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3
EXHIBIT C
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
FROM: APPLIED IMAGING CORP.
The undersigned authorized officer of Applied Imaging Corp. ("Borrower")
certifies that under the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the "Agreement"), (i) Borrower is in complete
compliance for the period ending _______________ with all required covenants
except as noted below and (ii) all representations and warranties in the
Agreement are true and correct in all material respects on this date. Attached
are the required documents supporting the certification. The Officer certifies
that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) consistently applied from one period to the next except as
explained in an accompanying letter or footnotes. The Officer 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.
Please indicate compliance status by circling Yes/No under "Complies" column.
Reporting Covenant Required Complies
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Monthly financial statements + CC Monthly within 20 days Yes No
Annual (Audited) FYE within 90 days Yes No
10-Q, 10-K and 8-K Within 5 days after filing with SEC Yes No
Financial Covenant Required Actual Complies
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Tier 1 Pricing Guideline
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Maintain on a Monthly Basis:
Minimum Tangible Net Worth $3,500,000* $______ Yes No
Maximum Debt/Tangible Net Worth** 2.00:1.00 ________:1.00 Yes No
Minimum Liquidity Coverage* Yes No
* For the 1st and 2nd months of each fiscal quarter and $4,000,000 for the 3rd month of each fiscal quarter.
Profitability: Quarterly $_________ Yes No
Losses not to exceed: $1,400,000 for the fiscal quarter ending Yes No
March 31, 2000; $500,000 for the fiscal
quarter ending June 30, 2000; $575,000 for
the fiscal quarter ending September 30,
2000; $250,000 for the fiscal quarter
ending December 31, 2000; $100,000 for the
fiscal quarter ending March 31, 2001; and
$100,000 for the fiscal quarter ending
June 30, 2001.
Tier 2 Pricing Guideline (to be maintained for Tier 2 Pricing)
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Maintain on a Monthly Basis:
Minimum Tangible Net Worth $5,000,000 $_______ Yes No
Maximum Debt/Tangible Net Worth** 1.75:1.00
Decreasing to 1.50
beginning 4/30/2000
and thereafter _____:1.00 Yes No
Minimum Liquidity Coverage* Yes No
Profitability: Quarterly $_______ Yes No
Losses not to exceed: $800,000 for the fiscal quarter ending Yes No
March 31, 2000; $500,000 for the fiscal
quarter ending June 30, 2000; $500,000 for
the fiscal quarter ending September 30,
2000; and $250,000 for the fiscal quarter
ending December 31, 2000.
* Cash and cash equivalents plus 50% of accounts receivable in which the
account debtors primary office is located in the United States of not less than
the greater of either (a) 2 times the outstanding Credit Extension under the
Term Loan, or (b) 6 months of the Average Monthly Cash Losses, as determined as
determined during the most recent 3 month period (for calculation purposes,
Average Monthly Cash Losses means the average monthly change in cash from
operations in accordance with GAAP). At such time as Borrower maintains 2
consecutive fiscal quarters of a 3 month minimum Debt Service Coverage of 1.50
to 1.00, the Liquidity Coverage, above shall be replaced by a minimum Debt
Service Coverage ratio requirement of 1.50 to 1.00. For calculation purposes,
Debt Service Coverage is defined as the sum of earnings after tax plus interest
and non-cash expenses, divided by the sum of current portion of long term debt
plus interest.
**exclude deferred revenue from Total Liabilities
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BANK USE ONLY
Received by:
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AUTHORIZED SIGNER
Date:
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Verified:
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AUTHORIZED SIGNER
Date:
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Compliance Status: Yes No
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Comments Regarding Exceptions: See Attached.
Sincerely,
Applied Imaging Corp.
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Signature
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Title
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Date
2
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: Applied Imaging, Inc.
Applied Imaging International Ltd.
LOAN OFFICER: Xxxxxxx Xxxxxxx
DATE: June 14, 2000
Loan Fee $5,000.00
Documentation Fee 700.00
Less Fee Paid 5,000.00
TOTAL FEE DUE $ 700.00
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Please indicate the method of payment:
{_} A check for the total amount is attached.
{X} Debit DDA # 3300120647 for the total amount.
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Borrower (Date)
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Borrower (Date)
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Silicon Valley Bank (Date)
Account Officer's Signature
