Exhibit 10.1
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into effective as of
December __, 2004, by and between Synthetech, Inc. (the "Borrower") and Silicon
Valley Bank ("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to,
among other documents, a Loan and Security Agreement, dated December 31, 2003,
as may be amended from time to time, (the "Loan Agreement"). The Loan Agreement
provided for, among other things, a Committed Revolving Line in the original
principal amount of One Million Dollars ($1,000,000). 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 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. Sub-section (ii) of Section 6.7 is hereby amended by
deleting the existing subsection and replacing it
with the following:
"(ii) TANGIBLE NET WORTH. A Tangible Net Worth of at
least $18,000,000 plus 50% of all equity or capital
contributed to Borrower and 50% of all positive net
income each quarterly period from and after the
quarter ending December 31, 2004."
2. The definition of Revolving Maturity Date in Section
14.1 is amended by deleting the existing definition
and replacing it with the following:
""REVOLVING MATURITY DATE" is December 23, 2005."
3. Exhibit D to the Agreement is hereby deleted and
replaced with the form of Exhibit D attached to this
Loan Modification Agreement.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrowers shall pay to Bank a fully earned,
non-refundable loan fee of $5,000 plus all out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor
signing 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
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
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
conditioned upon Borrower's payment of the Bank's out-of-pocket expenses and
loan fee.
This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: BANK:
SYNTHETECH, INC. SILICON VALLEY BANK
By: By:
----------------------------------- -------------------------------------
Name: Name:
--------------------------------- -----------------------------------
Title: Title:
-------------------------------- ----------------------------------
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EXHIBIT D
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
FROM: SYNTHETECH, INC.
0000 Xxxxxxxxxx Xxx
Xxxxxx, XX 00000
The undersigned authorized officer of Synthetech, Inc. ("Borrower")
certifies in his capacity as such officer 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
------------------ -------- --------
10Q + CC Quarterly within 5 days of SEC filing Yes No
10K + CC Annually, within 5 days of SEC filing Yes No
Xxxxxx Xxxxxxx statement Monthly within 30 days Yes No
*Monthly financial statements + CC Monthly within 45 days Yes No
**A/R & A/P Agings Monthly within 20 days Yes No
**A/R Audit and Collateral Exam Initial and Annually Yes No
**Borrowing Base Certificate Monthly within 20 days Yes No
**Inventory Report Monthly within 45 days Yes No
* Monthly financial statements and Compliance Certificates will be required
beginning when Borrower has obtained an Advance under the Committed Revolving
Line and continues each month thereafter. **These will be required in the event
the outstanding Advances under the Committed Revolving Line exceed $500,000 or
if Borrower fails to comply with the Agreement or upon occurrence of an Event of
Default.
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
Maintain on a Quarterly Basis, changing to monthly if monthly financial statements are required
above:
Minimum Quick Ratio 1.50:1.00 _____:1.00 Yes No
Minimum Tangible Net Worth $18,000,000* $_________ Yes No
* Plus 50% of all equity or capital contributed to Borrower and 50% of all
positive net income from and after the quarter ending December 31, 2004.
3
Have there been updates to Borrower's intellectual property, if appropriate?
Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached.
BORROWER:
SYNTHETECH, INC.
By:___________________________________
Title:________________________________
Date:_________________________________
BANK:
________________________________________
SILICON VALLEY BANK BANK USE ONLY
Received by:____________________________
By:___________________________________ AUTHORIZED SIGNER
Title:________________________________ Date:___________________________________
Date:_________________________________ Verified:_______________________________
AUTHORIZED SIGNER
Date:___________________________________
Compliance Status: Yes No
________________________________________
4
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: SYNTHETECH, INC.
LOAN OFFICER: XXX XXXXXXX
DATE: DECEMBER __, 2004
TERM LOAN FEE $5,000.00
COSTS ESTIMATE (GOOD
STANDING CERTIFICATE) 11.00
------------
SUBTOTAL $5,011.00
LESS DEPOSIT -$5,000.00
------------
TOTAL FEE DUE $11.00
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-------------------------------------
LEGAL FEE FOR PROFESSIONAL SERVICES
RENDERED BY FARLEIGH, WADA & XXXX $675.00
COSTS ESTIMATE (INCLUDING UCC
SEARCHES) 30.00
----------
TOTAL $705.00
-------------------------------------
{ } DEBIT DDA # __________________ FOR THE TOTAL AMOUNT.
BORROWER: SYNTHETECH, INC.
__________________________________________
(AUTHORIZED SIGNER)
_______________________________ __________
SILICON VALLEY BANK (DATE)
ACCOUNT OFFICER'S SIGNATURE
