Exhibit 10.31
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of August 10, 2001
between Harmonic, Inc. ("Borrower") and Silicon Valley Bank ("Bank").
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, a Second Amended and Restated Loan and Security Agreement,
dated March 5, 1999, as may be amended from time to time, (the "Loan
Agreement"). The Loan Agreement provided for, among other things, a Revolving
Commitment in the original principal amount of Ten Million Dollars
($10,000,000). 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 referred to as
the "Indebtedness."
Hereinafter, 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. Section 6.8 entitled "Quick Ratio" is hereby amended to read as
follows:
A ratio of Quick Assets to Current Liabilities of at least .85
to 1.00
2. Section 6.10 entitled "Maximum Loss" is hereby amended to read
as follows:
Borrower may suffer losses not to exceed:
$15,000,000 for the fiscal quarter ending September 30, 2001; and
$11,500,000 for the fiscal quarter ending December 31, 2001
B. Waiver of Covenant Default(s).
1. Bank hereby waives Borrower's existing default under the Loan
Agreement by virtue of Borrower's failure to comply with the (i)
Quick Ratio and (ii) Maximum Loss covenants as of quarter ended
June 30, 2001. Bank's waiver of Borrower's compliance of these
covenants shall apply only to the foregoing period. Accordingly,
for the period ending September 30, 2001, Borrower shall be in
compliance with these covenants, as amended herein.
Bank's agreement to waive the above-described default (1) in no
way shall be deemed an agreement by the Bank to waive Borrower's
compliance with the above-described covenant as of all other
dates and (2) shall not limit or impair the Bank's right to
demand strict performance of these covenants as of all other
dates and (3) shall not limit or impair the Bank's right to
demand strict performance of all other covenants as of any date.
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 Five
Thousand Dollars ($5,000) (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 the date hereof, it has no defenses against the
obligations to pay any amounts under the indebtedness.
7. CONCERNING REVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE. The Borrower
affirms and reaffirms that notwithstanding the terms of the Loan Agreement to
the contrary, (i) that the definition of "Code", "UCC" or "Uniform Commercial
Code" as set forth in the Loan Agreement shall be deemed to mean and refer to
"the Uniform Commercial Code" as adopted by the State of California, as may be
amended and in effect from time to time and (ii) the Collateral is all assets of
the Borrower as set forth in the Loan Agreement. In connection therewith, the
Collateral shall include, without limitation, the following categories of assets
as defined in the Code; goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents, accounts
(including health-care-insurance receivables, and license fees), chattel paper
(whether tangible or electronic), deposit accounts, letter-of-credit rights
(whether or not the letter of credit is evidenced by a writing), commercial tort
claims, securities and all other investment property, general intangibles
(including payment intangibles and software) as set forth in the Loan Agreement,
supporting obligations and any and all proceeds of any thereof, wherever
located, whether now owned or hereafter acquired.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Bank's receipt of Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
HARMONIC, INC. SILICON VALLEY BANK
Xxxxxxx Xxx
By:______________________ By:_______________________
Name: ___________________ Name:_____________________
Title:___________________ Title:_____________________
