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SEEQ TECHNOLOGY, INC. EXHIBIT 10.10.1
October 4, 1995
Seeq Technology Incorporated
Kodiak Technology Incorporated
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX. 00000
Attention: Xxxxxxx Xxxxxxxx, President
RE: Loan and Security Agreement dated November 22, 1993 and any and all
amendments and supplements thereto entered into between The CIT Group/Credit
Finance, Inc. ("Lender") and Seeq Technology Incorporated and Kodiak Technology
Incorporated (collectively "Borrower") ("Agreement").
Dear Phil:
In confirmation of our understanding, the above-captioned Agreement is hereby
amended as set forth below. Except as specifically stated, all the following
amendments shall be effective immediately. To the extent of any inconsistencies
between this letter-amendment and the Agreement, the terms and conditions set
forth below shall govern. In all other respects the Agreement shall remain in
full force and effect.
1. The $3,000,000 presently invested in a Certificate of Deposit in Lender's
name will be applied in reduction of the existing Obligations on November
22, 1995.
2. The first sentence of Section 2.1(d) is amended to provide that all
accounts receivable of Kodiak Technology Incorporated ("Kodiak") will no
longer be eligible for lending purposes.
3. Section 2.1(d)14 (concerning eligibility criteria for Kodiak accounts) is
deleted in its entirety.
4. Effective November 22, 1995, the Minimum Borrowing provision of $1,500,000
as set forth in Section 2.1(g) shall only be applicable in the event
Borrower has a loan balance outstanding under the Agreement. This will
confirm that prior to requesting advances against the accounts receivable
Collateral, Borrower must provide Lender with at least 30 ays prior written
notice of its intention to request such advances to allow Lender sufficient
time to conduct a field examination of Borrower's facilities and any other
due diligence.
5. Effective November 22, 1995, Section 3.4 is hereby added and reads as
follows:
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"3.4 Unused Line Fee. Borrower shall pay Lender monthly, on the first day
of each month, in arrears, an Unused Line Fee for each month during the
initial and each renewal term at the rate per annum set forth in Section
10.4(d), calculated upon the amount, if any, by which the Maximum Credit
exceeds the average outstanding daily principal balance during the
preceding month of all Revolving Loans, Accommodation and any Term Loans."
6. Effective November 22, 1995, Section 5.1 shall read as follows:
"5.1 Collections. Borrower shall, at Borrower's expense and in the manner
requested by Lender from time to time, direct that remittances and all
other proceeds of accounts and other Collateral ("Remittances") shall be
sent to a lock box designated by and or maintained in the name of Lender.
Until Lender otherwise unilaterally notifies the depository bank and so
long as no Event of Default has occurred, all Remittances shall be
deposited into Borrower's operating account with such depository bank. Upon
Lender's receipt of Borrower's notice of intent to request advances, Lender
shall unilaterally notify the depository bank to deposit all remittances
into a bank account maintained in Lender's name under which all funds
deposited to such bank account are required to be transferred solely to
Lender. Borrower shall bear all risk of loss of any funds deposited into
such account whether such account is in the name of Borrower or Lender. In
connection therewith, orrower shall execute such lock box and bank account
agreements as Lender shall specify."
7. Section 6.1(a) is hereby amended to delete the requirement that Borrower
must provide monthly internal financial statements to CIT.
8. Section 6.11 (Financial Covenants) is hereby deleted in its entirety.
9. Effective November 22, 1995, Borrower's obligation to pay for expenses of
field examinations under Section 6.13(d) shall apply once Borrower seeks
advances under the Agreement and/or if Borrower is in default under the
Agreement.
10. Section 9.1 shall be amended to read as follows:
"This Agreement shall continue in full force and effect through November
21, 1997 and shall be deemed automatically renewed for successive terms of
one (1) year unless terminated as of the end of the initial or any renewal
term (each a "Term") by either party giving the other written notice at
least sixty (60) days prior to the end of the then-current Term."
11. Effective November 22, 1995, Section 9.2(a) shall be amended to provide
that no early termination fee shall be due should Borrower wish to prepay
its Obligations to CIT under the Agreement. Section 9.2(b) is deleted.
12. Effective November 22, 1995, Section 10.1(e) is hereby amended to decrease
the Minimum Borrowing from $3,000,000.00 to $1,500,000.00.
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13. Effective November 22, 1995, Section 10.4(a) is hereby amended to decrease
the interest rate from Prime Rate plus 2.25% per annum over a 360-day year
to Prime Rate plus 2.00% per annum over a 360-day year.
14. Section 10.4(b) is hereby amended to decrease the Facility Fee from 0.75%
to 0.50% of the Maximum Credit.
15. Effective November 22, 1995, Section 10.4(d) is hereby added and reads as
follows:
"Unused Line Fee: 0.50% per annum over
a 360-day year"
16. Section 10.5(a), (b) and (c) (financial covenants) are hereby deleted.
17. Section 10.6(c) is hereby amended to change Borrower's chief executive
office to : 00000 Xxxxxxx Xxxxxxx, Xxxxxxx XX. 00000.
If the foregoing correctly sets forth our agreement, please so acknowledge by
dating and signing below and returning a copy of this letter via facsimile and
original via mail.
Very truly yours,
The CIT Group/
Credit Finance, Inc.
Xxxxxx Xxxxx
Vice President
All of the foregoing is hereby agreed to and accepted.
Seeq Technology Incorporated Kodiak Technology Incorporated
By By
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