ELEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND WAIVER OF DEFAULTS
Exhibit
10.01
ELEVENTH
AMENDMENT TO CREDIT AND SECURITY AGREEMENT
AND
WAIVER OF DEFAULTS
This
Amendment, dated as of April 17, 2006, is made by and among SANZ INC., formerly
known as Storage Area Networks, Inc., a Colorado corporation (“SANZ” or a
“Borrower”), SOLUNET STORAGE, INC., a Delaware corporation (“Solunet” or a
“Borrower”), and XXXXX FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting
through its XXXXX FARGO BUSINESS CREDIT operating division.
Recitals
The
Borrowers and the Lender are parties to a Credit and Security Agreement dated
as
of May 31, 2001, as amended by (i) the First Amendment to Credit and Security
Agreement and Waiver of Defaults dated as of January 17, 2002; (ii) the Second
Amendment to Credit and Security Agreement dated as of July 1, 2002; (iii)
the
Third Amendment to Credit and Security Agreement dated as of August 15, 2002;
(iv) the Fourth Amendment to Credit and Security Agreement and Waiver of
Defaults dated as of March 31, 2003; (v) the Fifth Amendment to Credit and
Security Agreement and Waiver of Defaults dated as of September 22, 2003; (vi)
the Sixth Amendment to Credit and Security Agreement dated as of February 12,
2004; (vii) the Seventh Amendment to Credit and Security Agreement and Waiver
of
Defaults dated as of September 3, 2004; (viii) the Eighth Amendment to Credit
and Security Agreement and Waiver of Defaults dated as of October 29, 2004;
(ix)
the Ninth Amendment to Credit and Security Agreement and Waiver of Defaults
dated as of March 29, 2005; and (x) the Tenth Amendment to Credit and Security
Agreement and Waiver of Defaults dated as of November 11, 2005 (as so amended,
the “Credit Agreement”). Capitalized terms used in these recitals have the
meanings given to them in the Credit Agreement unless otherwise
specified.
The
Borrowers have requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:
1. Defined
Terms.
Capitalized terms used in this Amendment which are defined in the Credit
Agreement shall have the same meanings as defined therein, unless otherwise
defined herein. In addition, Section 1.1 of the Credit Agreement is amended
by
adding or amending as the case may be, the following definitions:
“Book
Net
Worth” means the aggregate of the common and preferred stockholders’ equity in
the Borrower, determined in accordance with GAAP, and calculated without regard
to (i) any change in the valuation of goodwill made in accordance with FASB
Accounting Standard 142, and (ii) any non-cash effects of accounting for stock
based compensation in accordance with FASB pronouncement SFAS
123(r).
“Cash
Flow” means for a given period, the sum of (i) Net Income and (ii) depreciation
and amortization, each as determined for such period in accordance with
GAAP.
“Eligible
Accounts” means all unpaid Accounts, net of any credits, except the following
shall not in any event be deemed Eligible Accounts:
(xii) Accounts
owed by an account debtor, other than the U.S. Department of Defense (U.S.
Department of Navy, U.S. Marine Corp., Defense Logistic Agency, etc.) and All
Points Logistics, regardless of whether otherwise eligible, to the extent that
the aggregate balance of such Accounts exceeds 15% of the aggregate of all
Accounts;
(xviv) Accounts
owed by All Points Logistics, regardless of whether otherwise eligible, to
the
extent that the aggregate balance of such Accounts exceeds 20% of the aggregate
amount of all Accounts.
“Interest
Rate Margin” means, effective as of January 1, 2006, five percent (5.0%),
provided, however, that, if no Event of Default then exists:
(i) if
the
Borrower’s Cash Flow for the three months ending March 31, 2006 is equal to or
greater than $0, then the Interest Rate Margin shall equal four percent
(4.0%);
(ii) if
the
Borrower’s Cash Flow for the six months ending June 30, 2006 is equal to or
greater than $0, then the Interest Rate Margin shall equal four percent
(4.0%);
(iii) if
the
Borrower’s Cash Flow for the nine months ending September 30, 2006 is (a) equal
to or greater than $1,467,830, then the Interest Rate Margin shall equal three
percent (3.0%) and (b) equal to or greater than $0 but less than $1,467,830,
then the Interest Rate Margin shall equal four percent (4.0%); and
(iv) if
the
Borrower’s Cash Flow for the twelve months ending December 31, 2006 is (a) equal
to or greater than $2,794,162, then the Interest Rate Margin shall equal one
and
one half percent (1.5%), (b) equal to or greater than $2,394,162 but less than
$2,794,162, then the Interest Rate Margin shall equal two percent (2.0%), (c)
equal to or greater than $1,467,830 but less than $2,394,162, then the Interest
Rate Margin shall equal three percent (3.0%), and (d) equal to or greater than
$0 but less than $1,467,830, then the Interest Rate Margin shall equal four
percent (4.0%).
-2-
Any
increase in the Interest Rate Margin shall be effective on the first day of
the
month in which the Lender receives the Borrower’s monthly financial statements.
Any decrease in the Interest Rate Margin shall be effective on the first day
of
the month following the month in which the Lender receives the Borrower’s
monthly financial statements. If the Lender does not receive the Borrower’s
monthly financial statements on the date that they are due, then the Interest
Rate Margin shall equal five percent (5.0%), and shall be effective on the
first
day of that month.
If
at any
time the Interest Rate Margin has been decreased and any of the Borrower’s
financial statements show that the Borrower was not entitled to such decrease,
then the Interest Rate Margin shall be increased to the Interest Rate Margin
to
which the Borrower is entitled, such increase to be effective retroactively
to
the date of such decrease. If at any time the Interest Rate Margin has been
decreased and an Event of Default occurs, then the Interest Rate Margin shall
equal five percent (5.0%), and shall be effective on the first day of the month
in which the Event of Default occurs.
“Net
Income” means fiscal year-to-date before-tax net income from continuing
operations, as determined in accordance with GAAP, but excluding (i) any
extraordinary gains as determined in accordance with GAAP, (ii) any change
in
the valuation of goodwill made in accordance with FASB Accounting Standard
142,
and (iii) any non-cash effects of accounting for stock based compensation in
accordance with FASB pronouncement SFAS 123(r).
2. Section
6.12.
Section
6.12 of the Credit Agreement is amended and restated in its entirety to read
as
follows:
“Section
6.12 Minimum
Net Income.
The
Borrower will maintain, during each period described below, its Net Income,
determined as at the end of each quarter, at an amount not less than the amount
set forth opposite such period (numbers appearing between “( )” are
negative):
|
Period
|
Minimum
Net Income
|
|
|
Three
months ending March 31, 2006
|
($600,000)
|
|
|
Six
months ending June 30, 2006
|
($935,759)
|
|
|
Nine
months ending September 30, 2006
|
$350,000
|
|
|
Twelve
months ending December 31, 2006
|
$1,000,000
|
If
quarterly Net Income, determined as at the end of each quarter is negative,
then
the Borrower shall provide the Lender evidence, in form and substance acceptable
to the Lender in its sole discretion, that it has received a cash infusion
(in
the form of equity or Subordinated Debt) in an amount equal to or greater than
the absolute value of the negative quarterly Net Income, such cash infusion
to
be made no later than 30 days after the monthly financial statements for such
quarter are due to the Lender, provided, however, that:
-3-
(a) if
year-to-date Net Income, determined as at the end of such quarter, is positive,
no such cash infusion shall be required, and
(b) if
quarterly Net Income and year-to-date Net Income, determined as at the end
of
such quarter, are both negative, then the Borrower shall provide the Lender
evidence, in form and substance acceptable to the Lender in its sole discretion,
that it has received a cash infusion (in the form of equity or Subordinated
Debt) in an amount equal to or greater than the lesser of:
(i)
the
absolute value of the negative quarterly Net Income, and
(ii)
the
absolute value of the negative year-to-date Net Income
such
cash
infusion to be made no later than 30 days after the monthly financial statements
for such quarter are due to the Lender, provided, further, however, that if
the
Borrower shall provide the Lender evidence, in form and substance acceptable
to
the Lender in its sole discretion, that it has received prior cash infusions
(in
the form of equity or Subordinated Debt) for such fiscal year in an amount
equal
to or greater than the absolute value of the negative year-to-date Net Income,
no additional cash infusion shall be required.
If
the
Borrower shall provide the Lender evidence, in form and substance acceptable
to
the Lender in its sole discretion, that it has received the cash infusion (in
the form of equity or Subordinated Debt) in the amounts and in the time periods
required pursuant to this Section 6.12, then (i) any default under this Section
6.12 for such quarter shall be deemed to have been automatically waived by
the
Lender and (ii) any default under Section 6.13 due solely to such negative
quarterly Net Income for such quarter shall be deemed to have been automatically
waived by the Lender.”
3. Section
6.13.
Section
6.13 of the Credit Agreement is amended and restated in its entirety to read
as
follows:
“Section
6.13 Minimum
Book Net Worth Plus Subordinated Debt.
The
Borrower will maintain, during each period described below, its Book Net Worth
plus Subordinated Debt, determined as at the end of each month, at an amount
not
less than the amount set forth opposite such period:
-4-
|
Period
|
Minimum
Book Net Worth Plus Subordinated Debt
|
|
|
March
31, 2006
|
$19,497,403
|
|
|
April
30, 2006
|
$19,354,065
|
|
|
May
31, 2006
|
$19,051,863
|
|
|
June
30, 2006
|
$19,704,162
|
|
|
July
31, 2006
|
$19,992,421
|
|
|
August
31, 2006
|
$20,000,157
|
|
|
September
30, 2006
|
$21,229,921
|
|
|
October
31, 2006
|
$21,457,194
|
|
|
November
30, 2006
|
$21,459,894
|
|
|
December
31, 2006 and each month thereafter
|
$22,119,921”
|
4. Section
6.14.
Section
6.14 of the Credit Agreement is amended and restated in its entirety to read
as
follows:
“Section
6.14 Minimum
Average Availability.
The
Borrower will maintain during each month, determined as at the end of each
month, average Availability (which calculation will be based on a trailing
three-month average) during the month of not less than $500,000, which amount
may be adjusted at the sole discretion of the Lender.”
5. Section
6.15.
Section
6.15 of the Credit Agreement is amended and restated in its entirety to read
as
follows:
“Section
6.15 New
Covenants.
On or
before November 30, 2006, the Borrower and the Lender shall agree on new
covenant levels for Sections 6.12, 6.13, 6.14, 7.4(c) and 7.10 for periods
after
such date. The new covenant levels will be based on the Borrower’s projections
for such periods and shall be no less stringent than the present levels, but
if
the Borrower and the Lender do not agree, the Lender may designate the required
amounts in its sole discretion and the failure by the Borrower to maintain
the
designated amounts shall constitute an Event of Default.”
6. Section
7.4(c).
Section
7.4(c) of the Credit Agreement is amended and restated in its entirety to read
as follows:
“(c) SANZ
will
not make any payments to Solunet other than payments reimbursing Solunet for
corporate operating expenses in the ordinary course of business, such as
payroll, lease and rent expenses, utilities, etc., which payments shall not
exceed $9,000,000 in the aggregate during SANZ’s fiscal year ending December 31,
2006, and shall be zero during any fiscal year thereafter. Before SANZ makes
any
payment to Solunet otherwise permitted under this Section 7.4(c), and
immediately after making any such payment, SANZ Availability shall not be less
than $250,000 and SANZ shall have positive Book Net Worth plus Subordinated
Debt.”
-5-
7. Section
7.10.
Section
7.10 of the Credit Agreement is amended and restated in its entirety to read
as
follows:
“Section
7.10 Capital
Expenditures.
The
Borrower will not incur or contract to incur Capital Expenditures of more than
$1,600,000 in the aggregate during any fiscal year.”
8. Exhibit
B.
Exhibit
B of the Credit Agreement is amended and restated in its entirety and replaced
with Exhibit B attached hereto.
9. No
Other Changes.
Except
as explicitly amended by this Amendment, all of the terms and conditions of
the
Credit Agreement shall remain in full force and effect and shall apply to any
advance thereunder.
10. Waiver
of Defaults.
The
Borrowers are in default under Section 7.17 Salaries
as a
result of bonuses paid to the Chief Executive Officer and the Chief Financial
Officer in March of 2006 (the “Existing Defaults”). Upon the terms and subject
to the conditions set forth in this Amendment, the Lender hereby waives the
Existing Defaults. This waiver shall be effective only in this specific instance
and for the specific purpose for which it is given, and this waiver shall not
entitle the Borrower to any other or further waiver in any similar or other
circumstances.
11. Conditions
Precedent.
This
Amendment, and the waiver set forth in Paragraph 10 hereof, shall be effective
when the Lender shall have received an executed original hereof, together with
each of the following, each in substance and form acceptable to the Lender
in
its sole discretion:
(a) The
Acknowledgment and Agreement of Guarantor and the Acknowledgment and Agreement
of Subordinated Creditor set forth at the end of this Amendment, duly executed
by the Guarantor and the Subordinated Creditor.
(b) Such
other matters as the Lender may require.
12. Representations
and Warranties.
Each
Borrower hereby represents and warrants to the Lender as follows:
(a) Each
Borrower has all requisite power and authority to execute this Amendment and
to
perform all of its obligations hereunder, and this Amendment has been duly
executed and delivered by each Borrower and constitutes the legal, valid and
binding obligation of each Borrower, enforceable in accordance with its
terms.
-6-
(b) The
execution, delivery and performance by each Borrower of this Amendment has
been
duly authorized by all necessary corporate action and does not (i) require
any authorization, consent or approval by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
(ii) violate any provision of any law, rule or regulation or of any order,
writ, injunction or decree presently in effect, having applicability to either
Borrower, or the articles of incorporation or by-laws of either Borrower, or
(iii) result in a breach of or constitute a default under any indenture or
loan or credit agreement or any other agreement, lease or instrument to which
either Borrower is a party or by which either Borrower or its properties may
be
bound or affected.
(c) All
of
the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as
of
such date, except to the extent that such representations and warranties relate
solely to an earlier date.
13. References.
All
references in the Credit Agreement to “this Agreement” shall be deemed to refer
to the Credit Agreement as amended hereby; and any and all references in the
Security Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.
14. No
Other Waiver.
Except
as set forth in Paragraph 10 hereof, the execution of this Amendment and
acceptance of any documents related hereto shall not be deemed to be a waiver
of
any Default or Event of Default under the Credit Agreement or breach, default
or
event of default under any Security Document or other document held by the
Lender, whether or not known to the Lender and whether or not existing on the
date of this Amendment.
15. Release.
Each
Borrower, and the Guarantor by signing the Acknowledgment and Agreement of
Guarantor set forth below, and the Subordinated Creditor by signing the
Acknowledgment and Agreement of Subordinated Creditor set forth below, each
hereby absolutely and unconditionally releases and forever discharges the
Lender, and any and all participants, parent corporations, subsidiary
corporations, affiliated corporations, insurers, indemnitors, successors and
assigns thereof, together with all of the present and former directors,
officers, agents and employees of any of the foregoing, from any and all claims,
demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law
or
otherwise, which such Borrower or such Guarantor or such Subordinated Creditor
has had, now has or has made claim to have against any such person for or by
reason of any act, omission, matter, cause or thing whatsoever arising from
the
beginning of time to and including the date of this Amendment, whether such
claims, demands and causes of action are matured or unmatured or known or
unknown.
16. Costs
and Expenses.
Each
Borrower hereby reaffirms its agreement under the Credit Agreement to pay or
reimburse the Lender on demand for all costs and expenses incurred by the Lender
in connection with the Loan Documents, including without limitation all
reasonable fees and disbursements of legal counsel. Without limiting the
generality of the foregoing, each Borrower specifically agrees to pay all fees
and disbursements of counsel to the Lender for the services performed by such
counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto. Each Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization by such Borrower, make a loan to such Borrower under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any
such
fees, disbursements, costs and expenses.
-7-
17. Joint
and Several Liability.
All
obligations of SANZ and Solunet under this Amendment shall be joint and several.
All references to the term “Borrower” herein shall refer to each of them
separately and to both or all of them jointly and each such Person shall be
bound both severally and jointly with the other. Each of SANZ and Solunet is
responsible for all of the Borrower obligations under this Amendment. Notices
from the Lender to either Borrower shall constitute notice to both. Directions,
instructions, representations, warranties or covenants made by either Borrower
to the Lender shall be binding on both.
18. Miscellaneous.
This
Amendment and the Acknowledgment and Agreement of Guarantor and the
Acknowledgment and Agreement of Subordinated Creditor may be executed in any
number of counterparts, each of which when so executed and delivered shall
be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.
[The
remainder of this page intentionally left blank.]
-8-
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first written above.
|
XXXXX
FARGO BANK, NATIONAL ASSOCIATION,
acting through its XXXXX FARGO BUSINESS CREDIT operating
division
|
SANZ INC. | |||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: |
Xxxx Xxxxxxx |
|||
|
By:
|
/s/
Xxxx X. Xxxxxxx-Xxxxxx
|
Its: |
President
|
|
| Name: |
Xxxx X. Xxxxxxx-Xxxxxx |
|||
| Its: | Vice President | |||
|
|
SOLUNET STORAGE, INC. | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: |
Xxxxxx X. Xxxxx |
|||
|
|
|
Its: |
Chief
Financial Officer
|
|
ACKNOWLEDGMENT
AND AGREEMENT OF GUARANTOR
The
undersigned, a guarantor of the indebtedness of SANZ Inc., formerly known as
Storage Area Networks, Inc., (“SANZ”) to Xxxxx Fargo Bank, National Association
(the “Lender”), acting through its Xxxxx Fargo Business Credit operating
division, pursuant to a separate Guaranty dated as of May 31, 2001 (the
“Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
agrees and acknowledges that the Guaranty extends to the obligations of Solunet
to the Lender to the same extent, in the same manner and on the same terms
as to
SANZ; (iii) consents to the terms (including without limitation the release
set
forth in Paragraph 15 of the Amendment) and execution thereof;
(iv) reaffirms its obligations to the Lender pursuant to the terms of its
Guaranty; and (v) acknowledges that the Lender may amend, restate, extend,
renew or otherwise modify the Credit Agreement and any indebtedness or agreement
of the Borrower, or enter into any agreement or extend additional or other
credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under its
Guaranty for all of the Borrower’s present and future indebtedness to the
Lender.
|
|
SAN HOLDINGS, INC. | |||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: |
Xxxx Xxxxxxx |
|||
|
|
|
Its: |
President
|
|
ACKNOWLEDGMENT
AND AGREEMENT OF SUBORDINATED CREDITOR
The
undersigned, a subordinated creditor of SANZ Inc., formerly known as Storage
Area Networks, Inc., (the “Borrower”) to Xxxxx Fargo Bank, National Association
(the “Lender”), acting through its Xxxxx Fargo Business Credit operating
division, pursuant to a Subordination Agreement dated as of January 17, 2002
(the “Subordination Agreement”), hereby (i) acknowledges receipt of the
foregoing Amendment; (ii) consents to the terms (including without
limitation the release set forth in Paragraph 15 of the Amendment) and execution
thereof; (iii) reaffirms its obligations to the Lender pursuant to the
terms of its Subordination Agreement; and (iv) acknowledges that the Lender
may amend, restate, extend, renew or otherwise modify the Loan Documents and
any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit accommodations, without notifying or obtaining the
consent of the undersigned and without impairing the obligations of the
undersigned under its Subordination Agreement.
|
|
SAN HOLDINGS, INC. | |||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: |
Xxxx Xxxxxxx |
|||
|
|
|
Its: |
President
|
|
Exhibit
B
to Credit and Security Agreement
COMPLIANCE
CERTIFICATE
To: Xxxx
Xxxxxxx-Xxxxxx
Xxxxx
Fargo Business Credit
Date: __________________,
200__
Subject: SANZ
Inc.
and Solunet Storage, Inc.
Financial
Statements
In
accordance with our Credit and Security Agreement dated as of May 31, 2001
(as
amended, the “Credit Agreement”), attached are the financial statements of SANZ
Inc. and Solunet Storage, Inc. (together, the “Borrower”) as of and for
________________, 200__ (the “Reporting Date”) and the year-to-date period then
ended (the “Current Financials”). All terms used in this certificate have the
meanings given in the Credit Agreement.
I
certify
that the Current Financials have been prepared in accordance with GAAP, subject
to year-end audit adjustments, and fairly present the Borrower’s financial
condition and the results of its operations as of the date thereof.
Events
of
Default. (Check one):
o
The undersigned does
not have knowledge of the occurrence of a Default or Event of Default under
the
Credit Agreement.
o
The undersigned has knowledge of the
occurrence of a Default or Event of Default under the Credit Agreement and
attached hereto is a statement of the facts with respect to
thereto.
I
hereby
certify to the Lender as follows:
o
The Reporting Date does not xxxx the end
of one of the Borrower’s fiscal quarters, hence I am completing only paragraph
__ below.
o
The Reporting Date marks the end of one
of the Borrower’s fiscal quarters, hence I am completing all paragraphs below
except paragraph ___.
o
The Reporting Date marks the end of the
Borrower’s fiscal year, hence I am completing all paragraphs below.
Financial
Covenants.
I
further
hereby certify as follows:
1. Minimum
Net Income.
Pursuant to Section 6.12 of the Credit Agreement, as of the Reporting Date
the Borrower’s Net Income was $____________ which o satisfies
o does
not satisfy the requirement that such amount be not less than
$_____________ on the Reporting Date as set forth in table below:
|
Period
|
Minimum
Net Income
|
|
|
Three
months ending March 31, 2006
|
($600,000)
|
|
|
Six
months ending June 30, 2006
|
($935,759)
|
|
|
Nine
months ending September 30, 2006
|
$350,000
|
|
|
Twelve
months ending December 31, 2006
|
$1,000,000
|
2. Minimum
Cash Infusion.
Pursuant to Section 6.12 of the Credit Agreement, as of the Reporting Date
the
Borrower has received a cash infusion in the amount of $____________
which o satisfies
o does
not
satisfy the requirement that such amount be not less than $_____________ on
the
Reporting Date as calculated pursuant to that Section.
3. Minimum
Book Net Worth Plus Subordinated Debt.
Pursuant to Section 6.13 of the Credit Agreement, as of the Reporting Date,
the Borrower’s Book Net Worth plus Subordinated Debt was $____________ which
o satisfies
o does
not
satisfy the requirement that such amount be not less than $_____________ on
the
Reporting Date as set forth in table below:
|
Period
|
Minimum
Book Net Worth Plus Subordinated Debt
|
|
|
March
31, 2006
|
$19,497,403
|
|
|
April
30, 2006
|
$19,354,065
|
|
|
May
31, 2006
|
$19,051,863
|
|
|
June
30, 2006
|
$19,704,162
|
|
|
July
31, 2006
|
$19,992,421
|
|
|
August
31, 2006
|
$20,000,157
|
|
|
September
30, 2006
|
$21,229,921
|
|
|
October
31, 2006
|
$21,457,194
|
|
|
November
30, 2006
|
$21,459,894
|
|
|
December
31, 2006 and each month thereafter
|
$22,119,921
|
4. Minimum
Average Availability.
Pursuant to Section 6.14 of the Credit Agreement, the Borrower’s average
Availability (which calculation will be based on a trailing three-month average)
for the month ending on the Reporting Date was $____________, which o satisfies
o does
not satisfy the requirement that such amount be not less than $500,000 during
such period, which amount may be adjusted at the sole discretion of the
Lender.
5. Payments
from SANZ Inc. to Solunet Storage, Inc.
Pursuant to Section 7.4(c) of the Credit Agreement, SANZ Inc. has made the
following payments to Solunet Storage, Inc. since the last Reporting Date,
and
as of the Reporting Date, the Borrower o is
o is
not in compliance with Section 7.4(c) of the Credit Agreement concerning
payments from SANZ Inc. to Solunet Storage, Inc.
[Borrower
to list each payment, the SANZ Availability and SANZ’s Book Net Worth after each
payment]
6. Capital
Expenditures.
Pursuant to Section 7.10 of the Credit Agreement, for the year-to-date
period ending on the Reporting Date, the Borrower has expended or contracted
to
expend during the _____________ year ended ______________, 20___, for Capital
Expenditures, $__________________ in the aggregate, which osatisfies
o does
not satisfy the requirement that such expenditures not exceed $1,600,000 in
the
aggregate during such year.
7. Salaries.
As of
the Reporting Date, the Borrower o is
o is
not in compliance with Section 7.17 of the Credit Agreement concerning
salaries.
Attached
hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.
|
|
SANZ
INC.
SOLUNET STORAGE, INC.
|
|||
| By: | ||||
| Its: |
Chief Financial Officer |
|||
