FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
(ACCOUNTS AND INVENTORY)
AND
AMENDED AND RESTATED INVENTORY RIDER
(REVOLVING ADVANCES)
This FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (ACCOUNTS AND
INVENTORY) AND AMENDED AND RESTATED INVENTORY RIDER (REVOLVING ADVANCES) (this
"Amendment") is entered into as of April 27, 2005 by and between COMERICA BANK,
successor by merger to Comerica Bank-California ("Bank"), with its principal
place of business at 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 and
FIBERSTARS, INC., a California corporation ("Borrower"), with its principal
place of business at 00000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Borrower and Bank have previously entered into that certain Loan and
Security Agreement (Accounts and Inventory) dated as of December 7, 2001, as
amended by that certain First Amendment to Loan and Security Agreement (Accounts
and Inventory) and Amended and Restated Inventory Rider (Revolving Advances)
dated as of January 9, 2003, that certain Second Amendment to Loan and Security
Agreement (Accounts and Inventory) and Amended and Restated Inventory Rider
(Revolving Advances) dated as of June 23, 2003, and that certain Third Amendment
to Loan and Security Agreement (Accounts And Inventory) and Amended and Restated
Inventory Rider (Revolving Advances) dated as of April 2, 2004 (as otherwise
amended, the "Loan Agreement"), together with that certain LIBOR Addendum to
Loan & Security Agreement dated December 7, 2001 (as amended, the "LIBOR
Addendum") thereto and that certain Amended and Restated Inventory Rider
(Revolving Advances) dated December 7, 2001 (as amended, the "Inventory Rider").
The Loan Agreement, LIBOR Addendum, Inventory Rider and the other documents
executed in connection therewith are collectively referred to as the "Loan
Documents."
B. Pursuant to the Loan Agreement, Bank has made available to Borrower a
line of credit (the "Line of Credit") in an aggregate principal amount not to
exceed Five Million and 00/100 Dollars ($5,000,000.00) at any one time, on the
terms and conditions set forth more completely in the Loan Agreement.
C. Borrower and Bank have agreed to amend the Loan Documents on the terms
and conditions set forth below.
AGREEMENT
For good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as set forth below.
1. Incorporation by Reference; Definitions. The foregoing Loan Documents
and the Recitals are incorporated herein by this reference as though set forth
in full herein. Any terms not defined herein shall have the meanings given in
the Loan Agreement.
2. Amendment to the Loan Agreement. The Loan Agreement is hereby amended
as set forth below.
2.1 Amendment to Section 1.6 of the Loan Agreement. Section 1.6 of
the Loan Agreement is hereby amended by deleting the reference to "seventy
percent (70%)" and replacing it with "fifty percent (50%)".
2.2 Amendment to Section 2.5(a) of the Loan Agreement. Section
2.5(a) of the Loan Agreement is hereby amended by deleting the reference to "Ten
Thousand Dollars ($10,000)" and replacing it with "Twelve Thousand Five Hundred
Dollars ($12,500)".
2.3 Amendment to Section 3.1 of the Loan Agreement. Section 3.1 of
the Loan Agreement is hereby amended by deleting the reference to "June 1, 2005"
and replacing it with "September 1, 2005".
2.4 Amendment to Section 6.17(a) of the Loan Agreement. The
reference to "Nine Million Eight Hundred Thousand Dollars ($9,800,000)" in
Section 6.17(a) of the Loan Agreement is hereby replaced with "Eleven Million
Dollars ($11,000,000)".
2.5 Amendment to Section 6.17(b) of the Loan Agreement. The
reference to "Thirteen Million Dollars ($13,000,000)" in Section 6.17(b) of the
Loan Agreement is hereby replaced with "Fourteen Million Dollars ($14,000,000)."
2.6 Amendment to Section 7 of the Loan Agreement. In addition to the
Events of Default set forth in Section 7 of the Loan Agreement, it shall also be
considered an Event of Default if Borrower fails to deliver to Bank by May 15,
2005 a signed proposal letter from a finance company detailing a credit
arrangement with adequate availability to refinance the Credit Limit.
2.7 Amendment to Section 6.17(h) of the Loan Agreement. Section
6.17(h) of the Loan Agreement is hereby replaced with the following:
"h. Borrower shall have a year-to-date pre-tax loss of no
greater than (i) negative One Million Five Hundred Thousand Dollars
(-$1,500,000) measured on a cumulative and consolidated basis for the
period ending May 31, 2005, (ii) negative One Million Dollars
(-$1,000,000) measured on a cumulative and consolidated basis for the
period ending June 30, 2005. Borrower shall have a pre-tax profit of
no less than Five Hundred Thousand Dollars ($500,000) measured on a
cumulative and consolidated basis for the quarter ending June 30,
2005."
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3. Amendment to the Inventory Rider. The Inventory Rider is hereby
amended as set forth below.
3.1 Amendment to Section 1(a) of the Inventory Rider. Section 1(a)
of the Inventory Rider is hereby amended by deleting the reference to "December
31, 2004" and replacing it with "December 31, 2005".
4. Modification Fee. Borrower agrees to pay Bank a modification fee in an
amount equal to Two Thousand Five Hundred Dollars ($2,500), which fee shall be
fully earned as of and payable upon execution of this Amendment and the receipt
of which by Bank is a condition precedent to the effectiveness of this
Amendment.
5. No Amendment of Other Indebtedness; No Effect on Collateral. Except as
amended herein or in any document executed in connection herewith, the Loan
Agreement and the Loan Documents are and shall remain unmodified and in full
force and effect. Borrower ratifies and reaffirms the Indebtedness, without
setoff, defense, or counterclaim, and agrees fully and faithfully to pay,
perform and discharge, as and when payment, performance and discharge are due,
all of the Indebtedness under the Loan Agreement, as amended hereby. Nothing
herein shall be deemed to affect in anyway the Collateral that secures the
obligations under the Loan Agreement (as modified by this Amendment) or under
any other agreement now or in the future.
6. Conflicts. If a conflict exists between the provisions of the Loan
Documents and the provisions of this Amendment, the provisions of this Amendment
shall control.
7. Further Assurances. Borrower agrees to make and execute such other
documents and/or take such other action and/or provide such further assurances
as may be requested by Bank in connection with the Indebtedness or as may be
necessary or required to effectuate the terms and conditions of this Amendment
and any documents executed in connection herewith.
8. Future Modifications. Neither this Amendment nor any document executed
herein entitles, or implies any consent or agreement to, any further or future
modification of, amendment to, waiver of, or consent with respect to any
provision of the Agreement. Any amendments hereto shall be in writing and signed
by the parties.
9. Integration. This Amendment and any documents executed in connection
herewith are integrated agreements, and supersede all negotiations and
agreements regarding the subject matter hereof and thereof, and taken together
with the Loan Documents and any documents executed in connection herewith,
constitute the final agreement of the parties with respect to the subject matter
hereof and thereof.
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10. Severability. In the event any one or more of the provisions contained
in this Amendment is held to be invalid, illegal or unenforceable in any
respect, then such provision shall be ineffective only to the extent of such
prohibition or invalidity, and the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
11. Interpretation. This Amendment and all agreements relating to the
subject matter hereof are the product of negotiation and preparation by and
among each party and its respective attorneys, and shall be construed
accordingly. The parties waive the provisions of California Civil
Code Section 1654.
12. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument. Delivery of an executed counterpart of
the signature page to this Amendment by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Amendment, and any party
delivering such an executed counterpart of the signature page to this Amendment
by telefacsimile to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Amendment to such other party, provided
that the failure to deliver such manually executed counterpart shall not affect
the validity, enforceability, or binding effect of this Amendment.
IN WITNESS WHEREOF, the parties have caused this FOURTH AMENDMENT TO LOAN
AND SECURITY AGREEMENT (ACCOUNTS AND INVENTORY) AND AMENDED AND RESTATED
INVENTORY RIDER (REVOLVING ADVANCES) to be executed as of the day and year first
written above.
FIBERSTARS, INC.
/s/ Xxxxx X. Xxxxxxx
--------------------------
By: Xxxxx X. Xxxxxxx
Title: President, C.E.O
/s/ Xxxxxx X. Xxxxxxx
--------------------------
By: Xxxxxx X. Xxxxxxx
Title: C.F.O.
Signatures continue on following page.
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COMERICA BANK
/s/ Xxxx X. Xxxxxx
-------------------
By: Xxxx X. Xxxxxx
Its: Vice President
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