1
- --------------------------------------------------------------------------------
[SILICON VALLEY BANK LOGO]
AMENDMENT TO LOAN AGREEMENT
BORROWERS: EMULEX CORPORATION
3535 HARBOR BOULEVARD
COSTA MESA, CALIFORNIA 92626
INTERCONNECTIONS, INC.
14711 NE 29TH PLACE
BELLEVUE, WASHINGTON 98007
EMULEX EUROPE LIMITED
MULBERRY BUSINESS PARK, FISHPONDS ROAD
WOKINGHAM, BERKSHIRE
UNITED KINGDOM RG11 2QY
DATED: APRIL 18, 1996
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrowers named above (jointly and severally referred
to as the "Borrower").
The Parties hereby agree to amend the Loan and Security Agreement between
them, dated March 31, 1994, as amended by that Amendment to Loan Agreement dated
April 25, 1994, as amended by that Amendment to Loan Agreement dated July 1,
1994, as amended by that Amendment to Loan Agreement dated June 26, 1995, as
amended by that Amendment to Loan Agreement dated July 24, 1995, as amended by
that Amendment to Loan Agreement dated October 5, 1995, and as amended by that
Amendment to Loan Agreement dated January 18, 1996 (as so amended and as
otherwise amended or modified from time to time, the "Loan Agreement"), as
follows, effective as of March 25, 1996.
1. REVISED SCHEDULE. The Schedule to Loan Agreement is hereby deleted and
replaced with the Schedule to Loan Agreement as attached hereto.
2. REVISED SECTION 2.2A. Section 2.2A of the Loan Agreement is hereby
amended in its entirety to read as follows:
"2.2A GRANT OF SECURITY INTEREST IN COLLATERAL. The Borrower grants Silicon
a continuing security interest in all of the Borrower's interest in the
types of property described below, whether now owned or hereafter acquired,
and wherever located (collectively, the "Collateral") as security for all
Obligations: (a) All accounts, contract rights, chattel paper, letters of
credit, documents, securities, money, and instruments, and all other
obligations now or in the future owing to the Borrower; (b)
-1-
2
SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
- --------------------------------------------------------------------------------
All inventory, goods, merchandise, materials, raw materials, work in
process, finished goods, farm products, advertising, packaging and shipping
materials, supplies, and all other tangible personal property which is held
for sale or lease or furnished under contracts of service or consumed in
the Borrower's business, and all warehouse receipts and other documents;
and (c) All equipment, including without limitation all machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, materials,
tools, machine tools, office equipment, computers and peripheral
devices, appliances, apparatus, parts, dies, and jigs; (d) All general
intangibles including, but not limited to, deposit accounts, goodwill,
names, trade names, trademarks and the goodwill of the business symbolized
thereby, trade secrets, drawings, blueprints, customer lists, patents,
patent applications, copyrights, security deposits, loan commitment fees,
federal, state and local tax refunds and claims, all rights in all
litigation presently or hereafter pending for any cause or claim (whether
in contract, tort or otherwise), and all judgments now or hereafter arising
therefrom, all claims of Borrower against Silicon, all rights to purchase
or sell real or personal property, all rights as a licensor or licensee of
any kind, all royalties, licenses, processes, telephone numbers,
proprietary information, purchase orders, and all insurance policies and
claims (including without limitation credit, liability, property and other
insurance), and all other rights, privileges and franchises of every kind;
(e) All books and records, whether stored on computers or otherwise
maintained; and (f) All substitutions, additions and accessions to any of
the foregoing, and all products, proceeds and insurance proceeds of the
foregoing, and all guaranties of and security for the foregoing; and all
books and records relating to any of the foregoing. Silicon's security
interest in any present or future technology (including patents, trade
secrets, and other technology) shall be subject to any licenses or rights
now or in the future granted by the Borrower to any third parties in the
ordinary course of Borrower's business; provided that if the Borrower
proposes to sell, license or grant any other rights with respect to any
technology in a transaction that, in substance, conveys a major part of the
economic value of that technology, Silicon shall first be requested to
release its security interest in the same, and Silicon may withhold such
release in its reasonable discretion."
3. ADDITIONAL DOCUMENTATION AND ACTIONS REGARDING GRANT OF SECURITY
INTEREST. In connection with the grant of the security interest as set forth in
Section 2.2A of the Loan Agreement as modified by this Amendment, Borrower
agrees to execute such additional documentation and take such additional actions
as Silicon determines in its discretion are necessary or desirable in connection
therewith. Further, Borrower agrees to cause all guarantors of the Obligations
to take such actions and execute such documentation as Silicon determines in its
discretion are necessary or desirable relating to the guaranties of such
guarantors and any grant of a security interest by such guarantor parties in
favor of Silicon, including, without limitation, with respect to Emulex Caribe,
Inc., the execution and delivery of the Puerto Rico Documentation.
4. REVISED SECTION 4.5. Section 4.5 of the Loan Agreement is hereby amended
in its entirety to read as follows:
"4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times, and
upon one business day notice, Silicon, or its agents, shall have the right
to inspect the Collateral, and the right to audit and copy the Borrower's
accounting books and records and Borrower's books and records relating to
the Collateral. Silicon shall take reasonable steps to keep confidential
all information obtained in any such inspection or audit, but Silicon shall
have the right to disclose any such information to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal
process. The foregoing audits shall be at Silicon's expense, except that
the
-2-
3
SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
- --------------------------------------------------------------------------------
Borrower shall reimburse Silicon for its reasonable out of pocket costs for
semi-annual accounts receivable audits by third parties retained by
Silicon, and Silicon may debit Borrower's deposit accounts with Silicon for
the cost of such semi-annual accounts receivable audits (in which event
Silicon shall send notification thereof to the Borrower)*. Notwithstanding
the foregoing, after the occurrence of an Event of Default all audits shall
be at the Borrower's expense.
* PROVIDED THAT IT IS AGREED THAT THE PER AUDIT CHARGE OF ANY SUCH AUDIT TO
BE CHARGED TO THE BORROWER SHALL NOT EXCEED $2,000, PROVIDED, FURTHER, THAT
SILICON AGREES TO SEND SUCH NOTIFICATION TO THE BORROWER SUBSTANTIALLY
CONCURRENTLY WITH ANY SUCH DEBIT OF BORROWER'S DEPOSIT ACCOUNTS"
5. REPRESENTATION REGARDING DISSOLVED CORPORATIONS. Borrower hereby
represents and warrants to Silicon that each of Emulex S.A.R.L., Emulex Italia
S.r.l., Emulex GmbH, Emulex Canada Inc., and Emulex Australia PTY. Limited,
affiliates of Borrower, have been dissolved in accordance with applicable law.
6. FEE. Borrower shall pay to Silicon a fee in the amount of $2,500 in
connection with this Amendment, which shall be in addition to all interest and
all other amounts payable hereunder and which shall not be refundable.
7. 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:
EMULEX CORPORATION SILICON VALLEY BANK
BY /s/ Paul F. Folino BY /s/ Michael P. Quain
------------------------------- ---------------------------------
PRESIDENT OR VICE PRESIDENT TITLE VP
BY /s/ Walter J. McBride
-------------------------------
SECRETARY OR ASS'T SECRETARY
BORROWER: BORROWER:
INTERCONNECTIONS, INC. EMULEX EUROPE LIMITED
BY /s/ Paul F. Folino BY /s/ Paul F. Folino
------------------------------- -------------------------------
PRESIDENT OR VICE PRESIDENT PRESIDENT OR VICE PRESIDENT
BY /s/ Walter J. McBride BY /s/ Walter J. McBride
------------------------------- -------------------------------
SECRETARY OR ASS'T SECRETARY SECRETARY OR ASS'T SECRETARY
-3-
4
SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
- --------------------------------------------------------------------------------
GUARANTORS' CONSENT
The undersigned, guarantors, acknowledge that their consent to the foregoing
Amendment is not required, but the undersigned nevertheless do hereby consent to
the foregoing Amendment and to the documents and agreements referred to therein
and to all future modifications and amendments thereto, and to any and all other
present and future documents and agreements between or among the foregoing
parties. Nothing herein shall in any way limit any of the terms or provisions of
the Continuing Guaranty executed by the undersigned in favor of Silicon, which
is hereby ratified and affirmed and shall continue in full force and effect.
Guarantor Signature: Emulex Corporation, a Delaware corporation
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
Guarantor Signature: Emulex Caribe, Inc.
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
Guarantor Signature: Computer Array Development, Inc.
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
Guarantor Signature: Highspeed Communications, Inc.
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
Guarantor Signature: Digital House, Ltd.
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
Guarantor Signature: Emulex Foreign Sales Corporation
By /s/ Paul F. Folino
----------------------
Title PRESIDENT
-4-