EXHIBIT 10.15e
SILICON VALLEY BANK
AMENDMENT TO LOAN AND SECURITY
AGREEMENT
BORROWER: SYNC RESEARCH, INC.
ADDRESS: 00 XXXXXX
XXXXXX, XXXXXXXXXX 00000
DATED: OCTOBER 31, 1999
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend, effective as of the date hereof, the Loan
and Security Agreement between them, dated September 18, 1991, as amended by
that Extension Agreement dated August 3, 1992, by that Amendment to Loan
Agreement dated October 20, 1992, by that Amendment to Loan Agreement dated
August 23, 1993, by that Amendment to Loan Agreement dated February 10, 1994, by
that Amendment to Loan Agreement dated July 18, 1994, by that Amendment to Loan
Agreement dated September 20, 1994, by that Amendment to Loan and Security
Agreement dated August 31, 1995, by that Amendment to Loan and Security
Agreement (the "October 1995 Amendment") dated October 5, 1995, by that
Amendment to Loan Agreement dated July 3, 1996, by that Amendment to Loan and
Security Agreement dated October 6, 1996, by that Amendment to Loan and Security
Agreement dated June 10, 1997, by that Amendment to Loan and Security Agreement
dated as of December 3, 1997, and by that Amendment to Loan and Security
Agreement dated April 14, 1999 (as so amended and as otherwise amended from time
to time being referred to herein as the "Loan Agreement"), as follows.
(Capitalized terms used but not defined in this Agreement, shall have the
meanings set forth in the Loan Agreement.)
1. REVISED CREDIT LIMIT. That section of the Schedule to Loan Agreement
entitled "Credit Limit (Section 1.1)" is hereby amended in its entirety to read
as follows:
"CREDIT LIMIT
(Section 1.1): An amount not to exceed (i) $2,000,000
at any one time outstanding or (ii) 80%
of the Net Amount of Borrower's
accounts, which Silicon in its
discretion deems eligible for borrowing.
"Net Amount" of an account means the
gross amount of the account, minus all
applicable sales, use, excise and other
similar taxes and minus all discounts,
credits and allowances of any nature
granted or claimed.
Without limiting the fact that the
determination of which accounts are
eligible for borrowing is a matter of
Silicon's discretion, the following will
not be deemed eligible for
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SILICON VALLEY BANK AMENDMENT TO LOAN AND SECURITY AGREEMENT
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borrowing: accounts outstanding for
more than 90 days from the invoice date,
accounts subject to any contingencies,
accounts owing from any government
agency (unless Borrower completes such
assignment of claims documentation and
other documentation that Silicon
determines is necessary or desirable to
perfect and protect the interest of
Silicon therein), accounts owing from an
account debtor outside the United States
(unless pre-approved by Silicon in its
discretion, or backed by a letter of
credit satisfactory to Silicon, or FCIA
insured satisfactory to Silicon),
accounts owing from one account debtor
to the extent they exceed 25% of the
total eligible accounts outstanding,
accounts owing from an affiliate of
Borrower, and accounts owing from an
account debtor to whom Borrower is or
may be liable for goods purchased from
such account debtor or otherwise. In
addition, if more than 50% of the
accounts owing from an account debtor
are outstanding more than 90 days from
the invoice date or are otherwise not
eligible accounts, then all accounts
owing from that account debtor will be
deemed ineligible for borrowing.
STANDBY LETTER OF CREDIT In addition to the Loans available to
the Borrower as set forth above, Silicon
has issued a standby letter of credit in
the amount of $300,000 that is cash
collateralized on a separate basis
pursuant to standard Silicon
documentation and such standby letter of
credit obligations are not considered a
sublimit of the Credit Limit set forth
above."
2. REVISED FINANCIAL COVENANTS. That section of the Schedule to Loan
Agreement entitled "Credit Limit (Section 1.1)" is hereby amended in its
entirety to read as follows:
"FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the
following covenants. Compliance shall be
determined as of the end of each month,
except as otherwise specifically
provided below:
LIQUIDITY COVENANT Borrower shall maintain cash on hand,
cash equivalents and marketable
securities in an amount not less than
$6,000,000, with the understanding that
at least $2,000,000 thereof shall be on
deposit with Silicon at all times.
DEBT TO NET WORTH RATIO: Borrower shall maintain a ratio of total
liabilities to tangible net worth of not
more than 1.00 to 1.
PROFITABILITY: Borrower shall not incur a loss (after
taxes) for the fiscal quarter ending
December 31, 1999 in excess of
$1,000,000; and Borrower shall not incur
a loss (after taxes) for the fiscal
quarter ending March 31, 2000 in excess
of $1,000,000. Alternatively, Borrower
shall also be deemed to comply with this
covenant if Borrower does not incur a
loss (after taxes) in excess of
$2,000,000 for the two quarter
cumulative period ending March 31, 2000.
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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, 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),
certificates of deposit and banker's
acceptances, and accounts receivable
(net of allowance for doubtful
accounts).
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."
3. REPORTING. Paragraph 2 of that section of the Schedule to Loan
Agreement entitled "Other Covenants (Section 4.1)" is hereby amended in its
entirety to read as follows:
"2. MONTHLY BORROWING BASE CERTIFICATE AND LISTING. Within 20 days of
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."
4. FEE. Borrower shall pay to Silicon a facility fee in the amount of
$1,000 concurrently, which shall be in addition to all interest and all other
amounts payable under the Loan Agreement, and which shall not be refundable.
5. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
6. 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, as so amended, 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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SYNC RESEARCH, INC. SILICON VALLEY BANK
By /s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxx Xxxxxxx
PRESIDENT OR VICE PRESIDENT
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Title VICE PRESIDENT
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By /s/ Xxxxxxx X. Xxxxxx
SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK
CERTIFIED RESOLUTION
BORROWER: SYNC RESEARCH, INC., A CORPORATION
ORGANIZED UNDER THE LAWS OF THE
STATE OF DELAWARE
ADDRESS: 12 XXXXXX
XXXXXX, XXXXXXXXXX 00000
DATE: OCTOBER 31, 1999
I, the undersigned, Secretary or Assistant Secretary of the above-named
borrower, a corporation organized under the laws of the state set forth above,
do hereby certify that the following is a full, true and correct copy of
resolutions duly and regularly adopted by the Board of Directors of said
corporation as required by law, and by the by-laws of said corporation, and that
said resolutions are still in full force and effect and have not been in any way
modified, repealed, rescinded, amended or revoked.
RESOLVED, that this corporation borrow from Silicon Valley Bank
("Silicon"), from time to time, such sum or sums of money as, in the
judgment of the officer or officers hereinafter authorized hereby, this
corporation may require.
RESOLVED FURTHER, that any officer of this corporation be, and he or she is
hereby authorized, directed and empowered, in the name of this corporation,
to execute and deliver to Silicon, and Silicon is requested to accept, the
loan agreements, security agreements, notes, financing statements, and
other documents and instruments providing for such loans and evidencing
and/or securing such loans, with interest thereon, and said authorized
officers are authorized from time to time to execute renewals, extensions
and/or amendments of said loan agreements, security agreements, and other
documents and instruments.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized, directed and empowered, as security for any and all
indebtedness of this corporation to Silicon, whether arising pursuant to
this resolution or otherwise, to grant, transfer, pledge, mortgage, assign,
or otherwise hypothecate to Silicon, or deed in trust for its benefit, any
property of any and every kind, belonging to this corporation, including,
but not limited to, any and all real property, accounts, inventory,
equipment, general intangibles, instruments, documents, chattel paper,
notes, money, deposit accounts, furniture, fixtures, goods, and other
property of every kind, and to execute and deliver to Silicon any and all
grants, transfers, trust receipts, loan or credit agreements, pledge
agreements, mortgages, deeds of trust, financing statements, security
agreements and other hypothecation agreements, which said instruments and
the note or notes and other instruments referred to in the preceding
paragraph may contain such provisions, covenants, recitals and agreements
as Silicon may require and said authorized officers may approve, and the
execution thereof by said authorized officers shall be conclusive evidence
of such approval.
RESOLVED FURTHER, that Silicon may conclusively rely upon a certified copy
of these resolutions and a certificate of the Secretary or Ass't Secretary
of this corporation as to the officers of this corporation and their
offices and signatures, and continue to conclusively rely on such certified
copy of these resolutions and said certificate for all past, present and
future transactions until written notice of any change hereto or thereto is
given to Silicon by this corporation by certified mail, return receipt
requested.
The undersigned further hereby certifies that the following persons are the
duly elected and acting officers of the corporation named above as borrower and
that the following are their actual signatures:
NAMES OFFICE(S) ACTUAL SIGNATURES
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Xxxxxxx X. Xxxxxx President & Ceo x /s/ Xxxxxxx X. Xxxxxx
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IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary or
Assistant Secretary on the date set forth above.
/s/ Xxxxxxx X. Xxxxxx
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Secretary or Assistant Secretary
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