EXHIBIT 10.9
[COMERICA STATIONARY]
This seventh Modification to Loan & Security Agreement (this
"Modification") is entered into by and between ASANTE TECHNOLOGIES, INC.
("Borrower") and COMERICA BANK-CALIFORNIA ("Bank") as of this 22nd day of
January, 1997, at San Jose, California.
RECITALS
A. Bank and Borrower have previously entered into or are
concurrently herewith entering into a Loan & Security Agreement (Accounts &
Inventory) (the "Agreement") dated July 20, 1993.
B. Borrower has requested, and Bank has agreed, to modify the
Agreement as set forth below.
AGREEMENT
For good and valuable consideration, the parties agree as set forth
below:
INCORPORATION BY REFERENCE. The Agreement as modified hereby and the
Recitals are incorporated herein by this reference.
SECTION 2.2 Except as hereinbelow provided, the Credit all bear
interest, on the Daily Balance owing, at a rate of Zero
(0.00%) percentage points per annum above the Base Rate (the
"Rate"). The Credit shall bear interest, from and after the
occurrence of an Event of Default and without constituting a
waiver of any such Event of Default on the Daily Balance
owing, at a rate five (5) percentage points per annum above
the Rate. All interest chargeable under this Agreement that
is based upon a per annum calculation shall be computed on
the basis of a three hundred sixty (360) day year for actual
days elapsed.
The Base Rate as of the date of this Modification is Eight
and One Quarter (8.25%) per annum. In the event that the
Base Rate announced is, from time to time hereafter,
changed, adjustment in the Rate shall be made and based on
the Base Rate in effect on the date of such change. The
Rate, as adjusted, shall apply to the Credit until the Base
Rate is adjusted again. The minimum interest payable by the
Borrower under this Agreement shall in no event be less than
N/A per month. All interest payable by the Borrower under
the Credit shall be due and payable on the first day of each
calendar month during the term of this Agreement and Bank
may, at its option, elect to treat such interest and any and
all Bank Expenses as advances under the Credit, which
amounts shall thereupon constitute Obligations and shall
thereafter accrue interest at the rate applicable to the
Credit under the terms of the Agreement.
SECTION 3.1 This Agreement shall remain in full force and effect until
January 31, 1998, or until terminated by notice by Borrower.
Notice of such termination by Borrower shall be effectuated
by mailing of a registered or certified letter not less than
thirty (30) days prior to the effective date of such
termination, addressed to the Bank at the address set forth
herein and the termination shall be effective as of the date
so fixed in such notice. Notwithstanding the foregoing,
should Borrower be in default of one or more of the
provisions of this Agreement, Bank may terminate this
Agreement at any time without notice. Notwithstanding the
foregoing, should either Bank or Borrower become insolvent
or unable to meet its debts as they mature, or fail,
suspend, or go out of business, the other party shall have
the right to terminate this Agreement at any time without
notice. On the date of termination all Obligations shall
become immediately due and payable without notice or demand;
no notice of termination by Borrower shall be effective
until Borrower shall have paid all Obligations to Bank in
full. Notwithstanding termination, until all obligations
have been fully satisfied, Bank shall retain its security
interest in all existing Collateral and Collateral arising
thereafter, and Borrower shall continue to perform all of
its Obligations.
SECTION 6.17 Borrower shall maintain the following financial ratios and
covenants on a consolidated and non-consolidated basis:
(b) A Tangible Effective Net Worth in an amount not less
than $25,000,000.00 (the Tangible Effective Net Worth
floor is set at $25,000,000.00 beginning 09/28/96 and
will increase by 75% of NPAT (quarterly) and 100% of
any new equity raised.
(d) A quick ratio of cash plus securities plus Receivables
to Current Liabilities of 1.25:1.00.
(e) A ratio of Total Liabilities (less debt subordinated to
Bank) to Tangible Net Worth of less than 0.75:1.00.
(h) Borrower is to be profitable on an operating and after-
tax basis, measured quarterly and annually. Borrower
will be allowed two consecutive loss quarters per year
not to exceed $1,000,000.00 in aggregate.
(i) Company is allowed to consummate any merger or
acquisition that involves a $5,000,000.00 or less cash
investment or a $10,000,000.00 or less Asante stock
investment provided no covenant violations results.
LEGAL EFFECT. Except as specifically set forth in this Modification,
all of the terms and conditions of the Agreement remain in full force and
effect.
INTEGRATION. This is an integrated Modification and supersedes all
prior negotiations and agreements regarding the subject matter hereof. All
amendments hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set
forth above.
ASANTE TECHNOLOGIES, INC. COMERICA BANK-CALIFORNIA
By: XXXXXX XXXXXXXXX By: XXXX XXXX XXXX
Xxxxxx Xxxxxxxxx Xxxx Xxxx Xxxx
Title: Vice President Vice President
