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EXHIBIT 10.17
[GRAPHIC OMITTED] SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWERS: EMULEX CORPORATION
0000 XXXXXX XXXXXXXXX
XXXXX XXXX, XXXXXXXXXX 00000
INTERCONNECTIONS, INC.
00000 XXXXXXX XXX, X.X.
XXXXXXX, XXXXXXXXXX 00000-0000
EMULEX EUROPE LIMITED
MULBERRY BUSINESS PARK, XXXXXXXXX XXXX
XXXXXXXXX, XXXXXXXXX
XXXXXX XXXXXXX XX00 0XX
DATED: SEPTEMBER 18, 1997
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrowers named above (jointly and severally referred
to as the "Borrower").
The Parties hereby agree to amend the Amended and Restated Loan and
Security Agreement between them, dated September 18, 1996 (as amended or
modified from time to time, the "Loan Agreement"), as follows, effective as of
the date hereof.
1. REVISED SECTION 1.1. Section 1.1 of the Loan Agreement is hereby
amended to read as follows:
"1.1 LOANS. * Silicon will make loans to the Borrower (the "Loans") in
amounts up to the amount (the "Credit Limit") shown on the Schedule to
this Agreement (the "Schedule"), provided no Event of Default and no
event which, with notice or passage of time or both, would constitute
an Event of Default has occurred. The Borrower is responsible for
monitoring the total amount of Loans and other Obligations outstanding
from time to time, and Borrower shall not permit the same, at any time,
to exceed the Credit Limit. If at any time the total of all outstanding
Loans and all other Obligations exceeds the Credit Limit, the Borrower
shall immediately pay the amount of the excess to Silicon, without
notice or demand.
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* SUBJECT TO THE TERMS AND CONDITIONS HEREOF, "
2. REVISED CREDIT LIMIT. The section of the Schedule to Loan Agreement
entitled "Credit Limit (Section 1.1)" that now reads as follows:
"An amount not to exceed * the lesser of: (i) $7,000,000 at any one
time outstanding; OR (ii) 75% of the Net Amount of Borrower's accounts,
which Silicon in its ** discretion deems eligible for borrowing,
provided, however, that the minimum amount of a Loan shall be
$100,000." * (ON AN AGGREGATE AND CONSOLIDATED BASIS FOR EMULEX
CORPORATION, A CALIFORNIA CORPORATION ("EMULEX"), INTERCONNECTIONS,
INC. AND EMULEX EUROPE LIMITED)
** REASONABLE",
is hereby amended to read as follows:
"An amount not to exceed * the lesser of: (i) $10,000,000 at any one
time outstanding; OR (ii) 75% of the Net Amount of Borrower's accounts,
which Silicon in its ** discretion deems eligible for borrowing,
provided, however, that the minimum amount of a Loan shall be
$100,000." * (ON AN AGGREGATE AND CONSOLIDATED BASIS FOR EMULEX
CORPORATION, A CALIFORNIA CORPORATION ("EMULEX"), INTERCONNECTIONS,
INC. AND EMULEX EUROPE LIMITED)
** REASONABLE"
3. REVISED MATURITY DATE. The Maturity Date as set forth in section 5.1
of the Schedule to Loan Agreement is hereby amended to be "SEPTEMBER 17, 1998".
4. REVISED FINANCIAL COVENANTS. The section of the Schedule to Loan
Agreement entitled "Financial Covenants (Section 4.1)" is hereby amended to read
as follows:
"FINANCIAL COVENANTS
(Section 4.1): Borrower shall cause Parent to comply
with all of the following covenants on a
consolidated basis. Compliance shall be
determined as of the end of each quarter,
except as otherwise specifically provided
below:
QUICK ASSET RATIO: Parent shall maintain a ratio of "Quick
Assets" to current liabilities of not less than
1.00 to 1.
TANGIBLE NET WORTH: Parent shall maintain a tangible net worth of
not less than $23,000,000.
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DEBT TO TANGIBLE
NET WORTH RATIO: Parent shall maintain a ratio of total
liabilities to tangible net worth of not more
than 1.00 to 1.
PROFITABILITY During the Parent's 1998 fiscal year, the
quarterly losses (after taxes) that the Parent
may incur shall not exceed $1,000,000, in the
aggregate, in such fiscal year, and Parent
shall not incur an annual loss (after taxes)
for the 1998 fiscal year.
DEFINITIONS: "Current assets," and "current liabilities"
shall have the meanings ascribed to them in
accordance with generally accepted accounting
principles. "Tangible net worth" means the
excess of total assets over total liabilities,
determined in accordance with generally
accepted accounting principles, excluding
however all assets which would be classified as
intangible assets under generally accepted
accounting principles, including without
limitation goodwill, licenses, patents,
trademarks, trade names, copyrights,
capitalized software and organizational costs,
licenses and franchises. "Quick Assets" means
cash on hand or on deposit in banks, readily
marketable securities issued by the United
States, readily marketable commercial paper
rated "A-1" by Standard & Poor's Corporation
(or a similar rating by a similar rating
organization), cash equivalents, certificates
of deposit and banker's acceptances, and
accounts receivable (net of allowance for
doubtful accounts).
DEFERRED REVENUES: For purposes of the above quick asset ratio
deferred revenues shall not be counted as
current liabilities. For purposes of the above
debt to tangible net worth ratio, deferred
revenues shall not be counted in determining
total liabilities but shall be counted in
determining tangible net worth for purposes of
such ratio. For all other purposes deferred
revenues shall be counted as liabilities in
accordance with generally accepted accounting
principles.
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing
covenants do not include indebtedness which is
subordinated to the indebtedness to Silicon
under a subordination agreement in form
specified by Silicon or by language in the
instrument evidencing the indebtedness which is
acceptable to Silicon."
5. REVISED SECTION 4.5. Section 4.5 of the Loan Agreement is hereby
amended to read as follows:
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"4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times,
and upon one business day notice, Silicon, or its agents, shall have
the right to inspect the Collateral, and the right to audit and copy
the Borrower's accounting books and records and Borrower's books and
records relating to the Collateral. Silicon shall take reasonable steps
to keep confidential all information obtained in any such inspection or
audit, but Silicon shall have the right to disclose any such
information to its auditors, regulatory agencies, and attorneys, and
pursuant to any subpoena or other legal process. The foregoing audits
shall be at Silicon's expense, except that the Borrower shall reimburse
Silicon for its reasonable costs for annual accounts receivable audits,
and Silicon may debit Borrower's deposit accounts with Silicon for the
cost of such annual accounts receivable audits (in which event Silicon
shall send notification thereof to the Borrower)*. Notwithstanding the
foregoing, after the occurrence of an Event of Default all audits shall
be at the Borrower's expense.
* PROVIDED THAT IT IS AGREED THAT THE PER AUDIT CHARGE OF ANY SUCH
AUDIT TO BE CHARGED TO THE BORROWER SHALL NOT EXCEED $2,000, PROVIDED,
FURTHER, THAT SILICON AGREES TO SEND SUCH NOTIFICATION TO THE BORROWER
SUBSTANTIALLY CONCURRENTLY WITH ANY SUCH DEBIT OF BORROWER'S DEPOSIT
ACCOUNTS"
6. CERTAIN BORROWER REPORTING. Paragraph 2 of the section of the
Schedule to the Loan Agreement entitled "Other Covenants (Section 4.1)" is
hereby amended to read as follows:
"2. MONTHLY BORROWING BASE CERTIFICATE AND LISTING. Within 30 days
after the end of each month, Borrower shall provide Silicon with a
Borrowing Base Certificate in such form as Silicon shall specify, and
an aged listing of Borrower's accounts receivable."
7. FEE. Borrower shall pay to Silicon a fee in the amount of $50,000 in
connection with this Amendment, which shall be in addition to all interest and
all other amounts payable hereunder and which shall not be refundable.
8. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and the Borrower, and
the other written documents and agreements between Silicon and the Borrower set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect
to the subject hereof. Except as herein expressly amended, all of the terms and
provisions of the Loan Agreement, and all other documents and agreements between
Silicon and the Borrower shall continue in full force and effect and the same
are hereby ratified and confirmed.
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BORROWER: SILICON:
EMULEX CORPORATION SILICON VALLEY BANK
BY /S/ XXXX X. XXXXXX BY /S/ XXXXXXX X. XXXXX
PRESIDENT OR VICE PRESIDENT TITLE: VICE PRESIDENT
BY /S/ XXXXXXX X. XXXXXXXXXX
SECRETARY OR ASS'T SECRETARY
BORROWER: BORROWER:
INTERCONNECTIONS, INC. EMULEX EUROPE LIMITED
BY /S/ XXXX X. XXXXXX BY /S/ XXXX X. XXXXXX
PRESIDENT OR VICE PRESIDENT PRESIDENT OR VICE PRESIDENT
BY /S/ XXXXXXX X. XXXXXXXXXX BY /S/ XXXXXXX X. XXXXXXXXXX
SECRETARY OR ASS'T SECRETARY SECRETARY OR ASS'T SECRETARY
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GUARANTORS' CONSENT
The undersigned, guarantors, acknowledge that their consent to the foregoing
Amendment is not required, but the undersigned nevertheless do hereby consent to
the foregoing Amendment and to the documents and agreements referred to therein
and to all future modifications and amendments thereto, and to any and all other
present and future documents and agreements between or among the foregoing
parties. Nothing herein shall in any way limit any of the terms or provisions of
the Continuing Guaranty executed by the undersigned in favor of Silicon, which
is hereby ratified and affirmed and shall continue in full force and effect.
Further, Computer Array Development, Inc. and Highspeed Communications, Inc., as
prior guarantors, have been deleted as guarantors as such corporations have been
dissolved.
Guarantor Signature: Emulex Corporation, a Delaware corporation
By /s/ Xxxx X. Xxxxxx
Title: President
Guarantor Signature: Emulex Caribe, Inc.
By /s/ Xxxx X. Xxxxxx
Title: President
Guarantor Signature: InterConnections, Inc., a California corporation
(formerly known as Digital House, Ltd.)
By /s/ Xxxx X. Xxxxxx
Title: President
Guarantor Signature: Emulex Foreign Sales Corporation
By /s/ Xxxx X. Xxxxxx
Title: President
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