EXHIBIT 10.19(j)
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of March
31, 1997, by and between FAFCO, Inc. ("Borrower") whose address
is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and Silicon
Valley Bank ("Bank") whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
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, an Amended
and Restated Loan and Security Agreement, dated June 5, 1996, as
may be amended from time to time, (the "Loan Agreement".) The
Loan Agreement provided for, among other things, a Committed Line
in the original principal amount of One Million and 00/100
Dollars ($1,000,000.00) (The "Revolving Facility".) 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
referenced 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 quarantines, 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. The defined term "Maturity Date" is hereby amended in its entirety to
read as:
April 1, 1998.
2. The first sentence in section 2.3 (c) entitled "Payments" is hereby
amended to read as follows:
Interest hereunder shall be due and payable on the thirteenth calendar
day of each month during the
term hereof.
3. Item "(a)" contained in the paragraph entitled "Eligible Accounts" is
hereby amended in its entirety to read as follows:
(a) Accounts that the account debtor has failed to pay within ninety (90)
days of invoice date provided that, from December 1 to August 1,
accounts under the Borrower's advanced buy program shall be ineligible
after 150 days from date of invoice and shall not exceed an aggregate
amount of $350,000.00.
4. The paragraph entitled "Eligible Foreign Accounts" is hereby amended in
its entirety to read as follows:
EXHIBIT 10.19(j) page two
"Eligible Foreign Accounts" means Accounts with respect to which the
account debtor does not have its principal place of business in the
United States and that are: (1) covered by credit insurance in form and
amount, and by insurer satisfactory to Bank less the amount of any
deductibles(s) which may be or become owing thereon; or (2) supported by
one or more letters of credit in favor of Bank as beneficiary, in an
amount and of a tenor, and issued by a financial institution, acceptable
to Bank; or (3) those certain accounts from Ebara Corp. and ▇▇▇▇ ▇▇▇
Systems Engineers to an aggregate maximum of $500,000.00; or (4) that Bank
approves on a case-by-case basis.
5. Section 6.8 entitled "Quick Ratio" is hereby amended in its entirety to
read as follows:
Borrower shall maintain, as of the last day of each calendar month, a
ratio of total liabilities less subordinated debt to tangible net worth
plus subordinated debt of not more than 2.00 to 1.00.
6. Section 6.9 entitled "Debt-Net Worth Ratio" is hereby amended in its
entirety to read as follows:
Borrower shall maintain. as of the last day of each calendar month, a
ratio of Total Liabilities less subordinated debt to Tangible Net Worth
plus Subordinated Debt of not more than 2.00 to 1.00.
7. Section 6.10 entitled "Tangible New Worth" is hereby amended in its
entirety to read as follows:
Borrower shall maintain, as of the last day of each calendar month, a
Tangible Net Worth plus Subordinated Debt of not less than One Million Six
Hundred Fifty and 00/100 Dollars ($1,650,000.00).
8. Section 6.11 entitled "Profitability" is hereby amended in its entirety to
read as follows:
As of the last day of each of Borrower's fiscal quarters, Borrower shall
have a minimum net profit, measured on a fiscal year to date basis, of not
less than One Dollar ($1.00).
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Bank a fee in the amount of
Seven Thousand Five Hundred and 00/100 Dollars ($7,500.00) (the "Loan
Fee") plus all out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of this date, 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 EXHIBIT 10.19(j) page three Existing Loan Documents remain
unchanged and in full force and effect. Bank's agreement to modifications
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 Loan Fee. This Loan
Modification Agreement is executed as of the date first written above.
BORROWER: LENDER:
FAFCO, INC. SILICON VALLEY BANK
By: \s\▇▇▇▇ ▇. ▇▇▇▇ By: \s\▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Title:
V.P. Finance & Administration Assistant Vice President