FOURTH LOAN MODIFICATION AGREEMENT
Exhibit 10.1
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement (this “Loan Modification Agreement”)
is entered into as of July 15, 2009, by and among (a) SILICON VALLEY BANK, a
California corporation, with its principal place of business at 0000 Xxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx 00000 (“Bank”) and (b) FINISAR CORPORATION, a Delaware
corporation, with its chief executive office located at 0000 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000 (“Finisar”) and OPTIUM CORPORATION, a Delaware
corporation, with its principal place of business at 000 Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxxxx 00000 (“Optium”) (hereinafter,
Finisar and Optium are
jointly and severally, individually and collectively, referred to as “Borrower”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank
pursuant to a loan arrangement
dated as of March 14, 2008, evidenced by, among other documents, a certain Loan and
Security Agreement dated as
of March 14, 2008, among Borrower and Bank, as affected by a certain Joinder
Agreement dated as of October 30,
2008, as amended by a certain First Loan Modification Agreement dated as of October
30, 2008, as further amended
by a certain Second Loan Modification Agreement dated as of February 6, 2009, and
as further amended by a certain
Third Loan Modification Agreement dated as of June 10, 2009 (as amended and
affected, the “Loan Agreement”).
Capitalized terms used but not otherwise defined herein shall have the same meaning
as in the Loan Agreement.
2.
DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by
the Collateral as
described in the Loan Agreement (together with any other collateral security
granted to Bank, the “Security
Documents”). Hereinafter, the Security Documents, together with all other documents
evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.
3. DESCRIPTION OF CHANGE IN TERMS.
| A. | Modifications to Loan Agreement. |
| 1 | The effectiveness of this Loan Modification Agreement is expressly conditioned upon Borrower’s receipt of net cash proceeds of at least Forty Million Two Hundred Fifty Thousand Dollars ($40,250,000.00) in connection with the sale of Borrower’s “Network Tools” division. | ||
| 2 | The Loan Agreement shall be amended by deleting the following, appearing as Section 2.2 thereof: |
“2.2 Overadvances; Further Limitation.
(a) If, at any time, the sum of (i) the outstanding
principal amount
of any Advances (including any amounts used for Cash
Management Services),
plus (ii) the face amount of any outstanding Letters
of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of
Credit Reserve), plus (iii) the FX
Reserve, exceeds the lesser of either the Revolving
Line or the Borrowing Base,
Borrower shall immediately pay to Bank in cash such
excess.
(b) In order to have Credit Extensions made pursuant
to Sections
2.1.1, 2.1.2, 2.1.3 and 2.1.4 outstanding that exceed
Twenty-Five Million Dollars
($25,000,000.00) in the aggregate, Borrower shall
provide evidence to Bank,
upon Bank’s request, that it has unrestricted cash (as
set forth on its most recent
balance sheet delivered pursuant to Section 6.2) in an
amount equal to at least the
sum of (i) Fifty Million Dollars ($50,000,000.00) plus
(ii) the aggregate amount
of Credit Extensions made pursuant to Sections 2.1.1,
2.1.2, 2.1.3 and 2.1.4
outstanding at such time. Borrower shall be required
to comply with this
provision at all times that the aggregate amount of
Credit Extensions outstanding
exceeds Twenty-Five Million Dollars ($25,000,000.00). With respect to each
request of a Credit Extension that, when made, would result in the aggregate
principal amount of Credit Extensions made pursuant to Sections 2.1.1, 2.1.2,
2.1.3 and 2.1.4 outstanding exceeding Twenty-Five Million Dollars
($25,000,000.00), Borrower shall deliver to Bank evidence of Borrower’s
compliance with this provision (after giving effect to such Credit Extension)
as a condition precedent to such Credit Extension. If at any time the
aggregate amount of Credit Extensions outstanding exceeds the amount
permitted by this Section 2.2(b), then Borrower shall immediately pay to Bank
in cash such excess.”
| and inserting in lieu thereof the following: |
“2.2 Overadvances. If, at any time, the sum of (i) the outstanding
principal amount of any Advances (including any amounts used for Cash
Management Services), plus (ii) the face amount of any outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve), plus (iii) the FX Reserve, exceeds the lesser of either the
Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank
in cash such excess.”
| 3 | The Loan Agreement shall be amended by deleting the following appearing as Section 6.7 thereof: |
“6.7 Financial Covenants
Borrower shall maintain at all times, to be tested as of the last day of
each month, unless otherwise noted:
(a) Adjusted Quick Ratio.
(i)
Quarterly Adjusted Quick Ratio. An
Adjusted Quick Ratio of at least (A) 1.10 to 1.00 as of Xxxxx
00, 0000, (X) 1.15 to 1.00 as of July 31, 2009 and October 31,
2009, and (C) 1.25 to 1.00 as of January 31, 2010 and as of
the last day of each of Borrower’s fiscal quarters thereafter
(it being understood that the last day of each of Borrower’s
fiscal quarters occurs in January, April, July and October).
(ii)
Intraquarterly Adjusted Quick Ratio.
An Adjusted Quick Ratio of at least (A) 0.95 to 1.00 as May
31, 2009 and June 30, 2009, and (B) 1.00 to 1.00 as of August
31, 2009 and as of the last day of each of the first two
months in each of Borrower’s fiscal quarters thereafter (it
being understood that the first two months in each of
Borrower’s fiscal quarters are February, March, May, June,
August September, November and December).
(b) EBITDA. As of the last day of each of Borrower’s
fiscal quarters, Borrower shall have EBITDA for the six-month
period
ending on the last day of such quarter of at least (i) Fifteen
Million
Dollars ($15,000,000.00) for the quarter ending April 30, 2009,
(ii)
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for
the
quarter ending July 31, 2009, (iii) Fifteen Million Dollars
($15,000,000.00) for the quarter ending October 31, 2009, and (iv)
Twenty Million Dollars ($20,000,000.00) for the quarter ending
on January 31, 2010 and as of the last day of each quarter
thereafter.”
| and inserting in lieu thereof the following: |
“6.7 Financial Covenants
Borrower shall maintain at all times, to be tested as of the last day of
each month, unless otherwise noted:
(a) Adjusted Quick Ratio.
(i) Quarterly Adjusted Quick Ratio. An
Adjusted Quick Ratio of at least (A) 1.10 to 1.00 as of
Xxxxx 00, 0000, (X) 1.15 to 1.00 as of July 31, 2009,
October 31, 2009, January 31, 2010 and April 30, 2010,
and (C) 1.25 to 1.00 as of July 31, 2010 and as of the
last day of each of Borrower’s fiscal quarters thereafter
(it being understood that the last day of each of
Borrower’s fiscal quarters occurs in January, April, July
and October).
(ii) Intraquarterly Adjusted Quick
Ratio. An Adjusted Quick Ratio of at least (A) 0.95 to
1.00 as May 31, 2009, June 30, 2009, August 31, 2009, and
September 30, 2009, and (B) 1.00 to 1.00 as of November 30,
2009 and as of the last day of each of the first two months
in each of Borrower’s fiscal quarters thereafter (it being
understood that the first two months in each of Borrower’s
fiscal quarters are February, March, May, June, August
September, November and December).
(b) EBITDA. As of the last day of each of Borrower’s
fiscal quarters, Borrower shall have EBITDA for the six-month
period
ending on the last day of such quarter of at least (i) Fifteen
Million
Dollars ($15,000,000.00) for the quarter ending April 30, 2009,
(ii)
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for
the
quarter ending July 31, 2009, and (iii) Fifteen Million Dollars
($15,000,000.00) for the quarter ending October 31, 2009 and as of
the last day of each quarter thereafter.”
| 4 | The Loan Agreement shall be amended by deleting the following, appearing as Section 7.7 thereof: |
“7.7
Distributions; Investments. (a) Pay any dividends or make
any distribution or payment or redeem, retire or purchase any capital stock
other than Permitted Distributions; or (b) directly or indirectly acquire or
own any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so.”
| and inserting in lieu thereof the following: |
“7.7 Distributions; Investments. (a) Pay any dividends or make
any distribution or payment or redeem, retire or purchase any capital stock
other than Permitted Distributions; provided that Borrower may redeem certain
of its convertible notes so long as (i) an Event of Default does not exist at
the time of such redemption and would not exist after giving effect to such
redemption, and
(ii) the aggregate amount of cash used by Borrower in connection with such
redemption does not exceed Fifty Million Dollars ($50,000,000.00); or (b)
directly or indirectly acquire or own any Person, or make any Investment in
any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so.”
| 5 | The Loan Agreement shall be amended by deleting the following text, appearing in the definition of Eligible Accounts in Section 13.1 thereof: |
“(a) Accounts that the Account Debtor has not paid within ninety
(90) days of invoice date regardless of invoice payment period terms;
(b) Accounts owing from an Account Debtor, fifty percent (50%)
or more of whose Accounts have not been paid within ninety (90) days of
invoice
date;
(c) Accounts owing from an Account Debtor which does not have
its principal place of business in the United States, unless such
Accounts are
otherwise Eligible Accounts and covered in full by credit insurance
satisfactory to
Bank;
| and inserting in lieu thereof the following: |
“(a) Accounts that the Account Debtor has not paid within ninety
(90) days (or, for Accounts for which the Account Debtor is Ericsson or one
of its affiliates, one hundred (100) days) of invoice date regardless of
invoice payment period terms;
(b) Accounts owing from an Account Debtor, fifty percent (50%)
or more of whose Accounts have not been paid within ninety (90) days
(or, for
Accounts for which the Account Debtor is Ericsson or one of its
affiliates, one
hundred (100) days) of invoice date;
(c) Accounts owing from an Account Debtor which does not have
its principal place of business in the United States, unless such
Accounts are (i)
otherwise Eligible Accounts, (ii) covered in full by credit insurance
satisfactory to
Bank, and (iii) approved by Bank in writing in Bank’s sole and absolute
discretion
on a case-by-case basis (it being understood Bank has approved Ericsson,
Huawei
and Jabil Circuit);
| 6 | The Loan Agreement shall be amended by deleting the following definitions, appearing in Section 13.1 thereof: |
““Eligible Foreign Accounts” are Accounts that would be Eligible
Accounts but for the fact that the Account Debtor’s principal place of
business is not in the United States that are approved by Bank in writing in
Bank’s sole and absolute discretion on a case-by-case basis.”
““LIBOR Rate” means, for each Interest Period in respect of LIBOR Credit
Extensions comprising part of the same Credit Extensions, an interest rate per
annum (rounded upward to the nearest l/16th of one percent (0.0625%)) equal to
LIBOR for such Interest Period divided by one (1) minus the Reserve
Requirement for such Interest Period.”
““LIBOR Rate Margin” is three percent (3.0%).”
““Prime Rate” is Bank’s most recently announced “prime rate,” even
if it is not Bank’s lowest rate.”
““Prime Rate Margin” is one-half of one percent (0.50%).”
““Revolving Line” is an Advance or Advances in an aggregate amount of
up to Forty-Five Million Dollars ($45,000,000.00) outstanding at any
time.”
| and inserting in lieu thereof the following: |
““Eligible Foreign Accounts” are Accounts that (a) would be Eligible
Accounts but for the fact that the Account Debtor’s principal place of
business is not in the United States, (b) are approved by Bank in
writing in Bank’s sole and absolute discretion on a case-by-case basis,
and (c) are not covered in full by credit insurance satisfactory to
Bank.”
““LIBOR Rate” means, for each Interest Period in respect of LIBOR
Credit Extensions comprising part of the same Credit Extensions, an
interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) equal to the greater of (a) one and one-half percent
(1.50%), and (b) LIBOR for such Interest Period divided by one (1)
minus the Reserve Requirement for such Interest Period.”
““LIBOR Rate Margin” is three and one-half percent (3.50%).”
““Prime Rate” is the greater of (a) four percent (4.0%), and (b)
Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest
rate.”
““Prime Rate Margin” is one percent (1.0%).”
““Revolving Line” is an Advance or Advances in an aggregate amount of
up to Twenty-Five Million Dollars ($25,000,000.00) outstanding at any
time.”
| 7 | The Borrowing Base Certificate appearing as Exhibit E to the Loan Agreement is hereby replaced with the Borrowing Base Certificate attached hereto as Schedule 1. |
4. FEES. Borrower shall pay to Bank a modification fee equal to Ten Thousand Dollars
($10,000.00), which
fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof.
Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection with this Loan Modification
Agreement.
5. RATIFICATION OF PERFECTION CERTIFICATES.
(a) Finisar hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained
in a certain Perfection Certificate dated as of July 15, 2009 between Finisar and Bank, and
acknowledges, confirms
and agrees that the disclosures and information Finisar provided to Bank in the Perfection
Certificate have not
changed, as of the date hereof.
(b) Optium hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained
in a certain Perfection Certificate dated as of July 15, 2009 between Optium and Bank, and
acknowledges, confirms
and agrees that the disclosures and information Optium provided to Bank in the Perfection
Certificate have not
changed, as of the date hereof.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to
reflect the changes described above.
7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms
and conditions of all security or other collateral granted to the Bank, and confirms
that the indebtedness secured
thereby includes, without limitation, the Obligations.
8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no
offsets, defenses, claims, or counterclaims against Bank with respect to the
Obligations, or otherwise, and that if
Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims
against Bank, whether known or
unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower
hereby RELEASES Bank
from any liability thereunder.
9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations,
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
Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank
to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement shall
constitute a satisfaction of the
Obligations. It is the intention of Bank and Borrower to retain as liable parties all
makers of Existing Loan
Documents, unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this
Loan Modification Agreement.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall
have been executed by Borrower and Bank.
[The remainder of this page is intentionally left blank]
This Loan Modification Agreement is executed as a sealed instrument
under the laws of the State of California as of the date first written
above.
| BORROWER: | BANK: | |||||||||
| FINISAR CORPORATION | SILICON VALLEY BANK | |||||||||
By:
|
/s/ X. X. Xxxxxxx | By: | /s/ Xxxx Xxxxxxxx | |||||||
| Name: X. X. Xxxxxxx | Name: Xxxx Xxxxxxxx | |||||||||
| Title: CFO | Title: Relationship Manager | |||||||||
| OPTIUM CORPORATION |
||||
| By: | /s/ X. X. Xxxxxxx | |||
| Name: | X. X. Xxxxxxx | |||
| Title: | CFO | |||
SCHEDULE 1
EXHIBIT E
BORROWING BASE CERTIFICATE
Borrower: Finisar Corporation and Optium Corporation
Lender: Silicon Valley Bank
Commitment Amount: $25,000,000.00
Lender: Silicon Valley Bank
Commitment Amount: $25,000,000.00
ACCOUNTS RECEIVABLE |
||||
1. Accounts Receivable Book Value as of |
$ | |||
2. Additions (please explain on reverse) |
$ | |||
3. TOTAL ACCOUNTS RECEIVABLE |
$ | |||
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication) |
||||
4. Amounts over 90 days due |
$ | |||
5. Balance of 50% over 90 day accounts |
$ | |||
6. Credit balances over 90 days |
$ | |||
7. Concentration Limits |
$ | |||
8. Foreign Accounts |
$ | |||
9. Governmental Accounts |
$ | |||
10. Contra Accounts |
$ | |||
11. Promotion or Demo Accounts |
$ | |||
12. Intercompany/Employee Accounts |
$ | |||
13. Disputed Accounts |
$ | |||
14. Deferred Revenue |
$ | |||
15. Other (please explain on reverse) |
$ | |||
16. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS |
$ | |||
17. Eligible Accounts (#3 minus #16) |
$ | |||
18. ELIGIBLE AMOUNT OF ACCOUNTS (80% of #17) |
$ | |||
19. Eligible Foreign Accounts |
$ | |||
20. ELIGIBLE AMOUNT OF ELIGIBLE FOREIGN ACCOUNTS (lesser of (a)
65% of
#19, and (b) $5,000,000)) |
$ | |||
BALANCES |
||||
21. Maximum Loan Amount |
$ | |||
22. Total Funds Available Lesser of #21 or (#18 plus #20) |
$ | |||
23. Present balance owing on Line of Credit |
$ | |||
24. Outstanding under Sublimits |
$ | |||
25. RESERVE POSITION (#22 minus #23 and #24) |
$ |
The undersigned represents and warrants that this is true, complete and correct, and
that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Loan and Security Agreement between the
undersigned and Silicon Valley Bank.
COMMENTS:
|
BANK USE ONLY | ||||||
| Received by: | |||||||
| FINISAR CORPORATION | AUTHORIZED SIGNER | ||||||
| OPTIUM CORPORATION | Date: | ||||||
| Verified: | |||||||
| AUTHORIZED SIGNER | |||||||
By:
|
Date: | ||||||
| Authorized Signer | Compliance Status: Yes No | ||||||
Date: |
|||||||
