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EXHIBIT 10.16
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
Borrower: QLogic Corporation
Address: 0000 Xxxxxx Xxxxxxxxx, X.X. Xxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Dated as of: July 6, 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 the Loan and Security Agreement between
them, dated March 31, 1994, as amended by that Amendment to Loan and Security
Agreement dated July 10, 1995, as amended by that Amendment to Loan and Security
Agreement dated July 5, 1996 and as amended by that Amendment to Loan Agreement
dated as of July 6, 1998 (as so amended and as otherwise amended from time to
time, the "Loan Agreement"), as follows, effective as of the date hereof.
(Capitalized terms used but not defined in this Amendment, shall have the
meanings set forth in the Loan Agreement.)
1. AMENDED CREDIT LIMIT. The section of the Schedule to the Loan
Agreement entitled "Credit Limit (Section 1.1)" is amended effective on the date
hereof, to read as follows:
"CREDIT LIMIT
(Section 1.1): An amount not to exceed $5,000,000; Provided, however, that
the minimum amount of a Loan shall be $100,000;
Letters of Credit Silicon, in its reasonable discretion, will from time to
time during the term of this Agreement issue letters of
credit for the account of the Borrower ("Letters of
Credit"), in an aggregate amount at any one time outstanding
not to exceed $3,000,000, upon the request of the Borrower,
provided that, on the date the Letters of Credit are to be
issued, Borrower has available to it Loans in an amount
equal to or greater than the face amount of the Letters of
Credit to be issued. Prior to the issuance of any Letters of
Credit, Borrower shall execute and deliver to Silicon
Applications for Letters of Credit and such other
documentation as Silicon shall specify (the "Letter of
Credit Documentation"). Fees for the Letters of Credit shall
be as provided in the Letter of Credit Documentation.
The Loans available under this Agreement at any time shall
be reduced by the face amount of Letters of Credit from time
to time outstanding."
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2. AMENDED MATURITY DATE. The section of the Schedule to the Loan
Agreement entitled "Maturity Date (Section 5.1)" is amended effective on the
date hereof, to read as follows:
"MATURITY DATE
(Section 5.1): JULY 5, 2000.
3. AMENDED FINANCIAL COVENANTS. The section of the Schedule to the Loan
Agreement entitled "Financial Covenants (Section 4.1)" is amended effective on
the date hereof, 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 quarter, except as otherwise specifically provided
below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick Assets" to
current liabilities of not less than 2.50 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth of not less
than $100,000,000.
DEBT TO TANGIBLE
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 any
fiscal quarter during the term hereof, other than for a
loss (after taxes) in a single fiscal quarter;
notwithstanding the foregoing permitted loss, Borrower
shall not incur a loss (after taxes) for any fiscal year.
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, capitalized software
and organizational costs, licenses 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).
DEFERRED REVENUES: For purposes of the above quick asset ratio deferred
revenues shall not be counted as current liabilities. For
purposes of the above debt to tangible net worth ratio,
deferred revenues shall not be counted in determining
total liabilities but shall be counted in determining
tangible net worth for purposes of such ratio. For all
other purposes deferred revenues shall be counted as
liabilities in accordance with generally accepted
accounting principles.
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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."
4. FACILITY FEE. Borrower shall pay to Silicon concurrently herewith a
facility fee of $25,000, which shall be in addition to all interest and all
other fees payable to Silicon and shall be non-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, 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.
BORROWER: SILICON:
QLOGIC CORPORATION SILICON VALLEY BANK
BY BY
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PRESIDENT OR VICE PRESIDENT TITLE
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BY
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SECRETARY OR ASS'T SECRETARY
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