1
EXHIBIT 10.34
AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT
This Amendment No. 6 to Loan and Security Agreement (this "Amendment")
is made as of May 9, 1997, by and among PharmChem Laboratories, Inc. and
PharmChem Laboratories Operations, Inc. (individually, a "Borrower" and
collectively, the "Borrowers") and Silicon Valley Bank ("Bank").
RECITALS
A. Borrowers and Bank are parties to, among other documents, a Loan and
Security Agreement dated as of November 17, 1994, as such agreement may be
amended from time to time (the "Loan Agreement").
B. Borrower and Bank desire to modify the Loan Agreement, in accordance
with the terms and conditions of this Amendment.
C. Subject to the representations and warranties of the Borrowers
herein and upon the terms and conditions set forth in this Amendment, the Bank
is willing to so amend the Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and
intending to be legally bound, the parties hereto agree as follows:
SECTION 1. THE BORROWERS' REPRESENTATIONS AND WARRANTIES. Each of the
Borrowers represents and warrants that, immediately before and immediately after
giving effect to this Amendment, no event shall have occurred and be continuing
which constitutes an Event of Default.
SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT.
2.1 DEFINITIONS. The definition of "Applicable Margin" in Section
1.1 of the Loan Agreement is hereby amended in its entirety as follows:
"Applicable Margin" means: (a) in the case of an Advance under
Facility A, one half of one percent (0.500%); and (b) in the case of Facility B,
one percent (1.000%). Notwithstanding the foregoing, the Applicable Margin, in
both cases, will increase by one half of one percent (0.500%) over the otherwise
effective Applicable Margin, upon Borrowers violation of any financial covenant
set forth in Sections 6.8, 6.9, 6.10, 6.11, or 6.12. The effective date of such
Applicable Margin change will be the first day of the month following Bank's
receipt of Borrowers financial statements showing Borrowers' violation of such
financial covenant.
2.2 Section 6.11 entitled "Cash Flow Coverage" is hereby amended
in part to provide that the ratio shall now be calculated on a rolling four (4)
quarter basis (rather than quarterly annualized basis) beginning as of the
quarter ended March 31, 1997.
2.3 Section 6.12 entitled "Profitability" is hereby amended in its
entirety as follows:
Borrowers shall not permit a maximum cumulative loss in excess of
$750,000.00 for the quarters ending March 31, 1997 through September 30, 1997.
SECTION 3. LIMITATION. The amendments set forth in this Amendment shall
be limited precisely as written and shall not be deemed (a) to be a modification
of any other term or condition of the Loan Agreement or of any other instrument
or agreement referred to therein or to prejudice any right or remedy which the
Bank may now have or may have in the future under or in connection with the Loan
Agreement or any instrument or agreement referred to therein; or (b) to be a
consent to any future amendment or modification to any instrument or agreement
the execution and delivery of which is
2
consented to hereby, or to any waiver of any of the provisions thereof. Except
as expressly amended hereby, the Loan Agreement shall continue in full force and
effect.
SECTION 4. EFFECTIVENESS.
4.1. This Amendment shall be deemed to be effective as of the date
first written above, provided, however, that such effectiveness is subject to
the conditions precedent that Bank shall have received, in form and substance
satisfactory to Bank and its counsel, the following:
(a) The execution and deliver of a copy hereof; whether the same
or different copies, by each of the Borrowers, to the Bank;
(b) Bank's receipt of the Reaffirmation of Guaranty, executed by
the Guarantor.
SECTION 5. RELEASE AND WAIVER. EACH BORROWER HEREBY REPRESENTS AND
WARRANTS TO THE BANK THAT IS HAS NO KNOWLEDGE OF ANY FACTS THAT WOULD SUPPORT A
CLAIM, COUNTERCLAIM, DEFENSE OR RIGHT OF SET-OFF, AND HEREBY RELEASES BANK FROM
ALL LIABILITY ARISING UNDER OR WITH RESPECT TO AND WAIVES ANY AND ALL CLAIMS,
COUNTERCLAIMS, DEFENSES AND RIGHTS OF SET-OFF, AT LAW OR IN EQUITY, THAT ANY
BORROWER MAY HAVE AGAINST BANK EXISTING AS OF THE DATE OF THIS AMENDMENT ARISING
UNDER OR RELATED TO THIS AMENDMENT, THE LOAN AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR THE LOANS CONTEMPLATED HEREBY OR THEREBY OR TO ANY ACT OR OMISSION
TO ACT BY THE BANK WITH RESPECT HERETO OR THERETO.
SECTION 6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, and by different parties hereto in separate counterparts, with
the same effect as if the signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Amendment.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
BORROWERS: BANK:
PHARMCHEM LABORATORIES, INC. SILICON VALLEY BANK
BY: /s/ Xxxxx X. Xxxxxxxxx BY: /s/ Xxxx Xxxxxx
------------------------------- ----------------------------
NAME: Xxxxx X. Xxxxxxxxx NAME: Xxxx Xxxxxx
----------------------------- --------------------------
TITLE: Chief Financial Officer TITLE: Vice President
---------------------------- -------------------------
PHARMCHEM LABORATORIES OPERATIONS, INC.
BY: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
NAME: Xxxxx X. Xxxxxxxxx
-----------------------------
TITLE: Chief Financial Officer
----------------------------
