SILICON LOAN DOCUMENTS
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SCHEDULE TO LOAN AND SECURITY AGREEMENT -.S.
57
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: HATHAWAY CORPORATION
HATHAWAY SYSTEMS CORPORATION
HATHAWAY PROCESS INSTRUMENTATION CORPORATION
HATHAWAY MOTION CONTROL CORPORATION
HATHAWAY INDUSTRIAL AUTOMATION, INC.
COMPUTER OPTICAL PRODUCTS, INC.
EMOTEQ CORPORATION
TATE INTEGRATED SYSTEMS, INC.
ADDRESS: 8228 PARK MEADOWS
LITTLETON, CO 80124
DATE: MAY 7, 1998
This Schedule forms an integral part of the Loan and Security Agreement between
Silicon Valley Bank and the above-borrower of even date.
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1. CREDIT LIMIT
(SECTION 1.1): An amount not to exceed the lesser of: (i) $3,000,000 at
any one time outstanding (the "Maximum Credit Limit");
or (ii) 85% of the amount of Borrower's Eligible
Receivables (as defined in Section 8 above).
LETTER OF CREDIT SUBLIMIT
(SECTION 1.5): $500,000
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2. INTEREST.
INTEREST RATE (SECTION 1.2):
A rate equal to the "Prime Rate" in effect from time to
time, plus 2.0% per annum. Provided, however, upon
Borrower achieving a net loss (on a consolidated basis)
of less than $750,000 at the end of any fiscal quarter
ending after the date hereof for the twelve month period
ending as of the end of such fiscal quarter, then the
interest rate shall be reduced to a rate equal to the
Prime Rate in effect from time to time, plus 1.50% per
annum.
Provided, further, that if thereafter Borrower incurs a
net loss (on a consolidated basis) of greater than
$750,000 at the end of any fiscal quarter ending after
the date thereof for the twelve month period ending as
of the end of such fiscal quarter, then the interest
rate shall be increased to a rate equal to the Prime
Rate in effect from time to time, plus 2.0% per annum.
Any such rate reduction shall go into effect following
Silicon's review and approval of Borrower's financial
statements (on a consolidated basis) showing Borrower is
entitled to such rate reduction.
If Borrower is entitled to a rate reduction and
thereafter the rate is increased pursuant to the terms
set forth above, Borrower shall still be entitled to
future rate reductions
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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(and subject to future rate increases) upon
compliance with the terms for such reduction (or
increase) set forth above.
Interest shall be calculated on the basis of a
360-day year for the actual number of days
elapsed. "Prime Rate" means the rate announced
from time to time by Silicon as its "Prime
Rate;" it is a base rate upon which other rates
charged by Silicon are based, and it is not
necessarily the best rate available at Silicon.
The interest rate applicable to the obligations
shall change on each date there is a change in
the Prime Rate.
MINIMUM MONTHLY
INTEREST (SECTION 1.2): Not Applicable.
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3. FEES (SECTION 1.4):
Loan Fee: $30,000, payable concurrently herewith. (Any
Commitment Fee previously paid by the Borrower
in connection with this loan shall be credited
against this Fee.)
Collateral Monitoring
Fee: $1,500, per calendar month, payable in arrears
(prorated for any partial calendar month at the
beginning and at termination of this Agreement).
Unused Line Fee: Borrower shall pay Silicon an Unused Line Fee,
in addition to all interest and other fees
payable hereunder. The amount of the Unused Line
Fee shall be 0.125% per month multiplied by an
amount equal to the Maximum Credit Limit minus
the average daily balance of the outstanding
Loans. Provided, however, upon Borrower
achieving a net loss (on a consolidated basis)
of less than $750,000 at the end of any fiscal
quarter ending after the date hereof for the
twelve month period ending as of the end of such
fiscal quarter, then the Unused Line Fee shall
be reduced to an amount equal to 0.0625% per
month multiplied by an amount equal to the
Maximum Credit Limit minus the average daily
balance of the outstanding Loans. Provided,
further, that if thereafter Borrower incurs a
net loss (on a consolidated basis) of greater
than $750,000 at the end of any fiscal quarter
ending after the date thereof for the twelve
month period ending as of the end of such fiscal
quarter, then the Unused Line Fee shall be
increased to an amount equal to 0.125% per month
multiplied by an amount equal to the Maximum
Credit Limit minus the average daily balance of
the outstanding Loans. Any such reduction in the
unused line fee shall go into effect following
Silicon's review and approval of Borrower's
financial statements (on a consolidated basis)
showing Borrower is entitled to such reduction.
If Borrower is entitled to a reduction in the
Unused Line Fee and thereafter the Unused Line
Fee is increased pursuant to the terms set forth
above, Borrower shall still be entitled to
future reductions (and subject to future
increases) upon compliance with the terms for
such reduction (or increase) set forth above.
the Unused Line Fee shall be computed and paid
monthly, in arrears (prorated for any partial
calendar month at the beginning and at
termination of this agreement), and shall be due
on the last day of each calendar month.
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4. MATURITY DATE
(SECTION 6.1): Two years from the date of this Agreement,
subject to automatic renewal as provided in
Section 6.1 above, and early termination as
provided in Section 6.2 above.
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5. FINANCIAL COVENANTS
(SECTION 5.1): Borrower shall comply with all of the following
covenants. Compliance shall be
determined as of the end of each month (on a
consolidated basis), except as otherwise
specifically provided below:
MINIMUM TANGIBLE
NET WORTH: Borrower shall maintain a Tangible Net Worth of
not less than $8,000,000.
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SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
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DEFINITIONS. For purposes of the foregoing financial covenants, the
following terms shall have the following meanings:
"Current assets", "current liabilities" and
"liabilities" shall have the meanings ascribed to them
by generally accepted accounting principles.
"Tangible Net Worth" shall mean the excess of total
assets over total liabilities, determined in accordance
with generally accepted accounting principles, with the
following adjustments:
(A) there shall be excluded from assets: (i) notes,
accounts receivable and other obligations owing to
the Borrower from its officers or other Affiliates,
and (ii) 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
(B) there shall be excluded from liabilities: all
indebtedness which is subordinated to the
Obligations under a subordination agreement in form
specified by Silicon or by language in the
instrument evidencing the indebtedness which is
acceptable to Silicon in its discretion.
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6. REPORTING.
(SECTION 5.3):
Borrower shall provide Silicon with the following:
1. Monthly Receivable agings, aged by invoice date,
within fifteen days after the end of each month,
except when the Streamline Facility of
approximate even date is in effect.
2. Monthly accounts payable agings, aged by invoice
date within fifteen days after the end of each
month, except when the Streamline Facility of
approximate even date is in effect.
3. Monthly outstanding or held check registers, if
any, within thirty days after the end of each
month.
4. Monthly reconciliations of Receivable agings
(aged by invoice date), transaction reports, and
general ledger, within fifteen days after the
end of each month.
5.
6. Monthly unaudited financial statements, as soon
as available, and in any event within thirty
days after the end of each month.
7. Monthly Compliance Certificates, within thirty
days after the end of each month, in such form
as silicon shall reasonably specify, signed by
the Chief Financial Officer of Borrower,
certifying that as of the end of such month
Borrower was in full compliance with all of the
terms and conditions of this Agreement, and
setting forth calculations showing compliance
with the financial covenants set forth in this
Agreement and such other information as Silicon
shall reasonably request, including, without
limitation, a statement that at the end of such
month there were no held checks.
8. Quarterly unaudited financial statements, as
soon as available, and in any event within
thirty days after the end of each fiscal quarter
of Borrower.
9. Annual operating budgets (including income
statements, balance sheets and cash flow
statements, by month) for the upcoming fiscal
year of Borrower within thirty days prior to the
end of each fiscal year of Borrower.
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10. Annual financial statements, as soon as available, and
in any event within 120 days following the end of
Borrower's fiscal year, certified by independent
certified public accountants acceptable to Silicon.
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7. COMPENSATION
(SECTION 5.5): Not Applicable.
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8. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(SECTION 3.2): See Representations and Warranties of Borrower dated
February 6, 1998.
PRIOR TRADE
NAMES OF BORROWER
(SECTION 3.2): See Representations and Warranties of Borrower dated
February 6, 1998.
EXISTING TRADE
NAMES OF BORROWER
(SECTION 3.2): See Representations and Warranties of Borrower dated
February 6, 1998.
OTHER LOCATIONS AND
ADDRESSES
(SECTION 3.3): See Representations and Warranties of Borrower
dated February 6, 1998.
MATERIAL ADVERSE
LITIGATION
(SECTION 3.10): None
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9. OTHER COVENANTS
(SECTION 5.1): Borrower shall at all times comply with all of the
following additional covenants:
1. BANKING RELATIONSHIP. Borrower shall at all times
maintain its primary banking relationship with
Silicon.
2. GUARANTY BY U.K. COMPANIES. Borrower shall cause
each of Hathaway Systems U.K. Group, Ltd., and
Hathaway Systems, Ltd. (collectively, the "UK
Guarantors") to, concurrently with the date hereof,
execute and deliver to Silicon a guaranty, in form
and substance acceptable to Silicon in its sole
discretion, pursuant to which the UK Guarantors shall
guarantee the obligations of the Borrower (the "UK
Guaranty"). Borrower
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shall cause such UK Guaranty to continue in full
force and effect while any obligations remain
outstanding.
Borrower: Borrower:
HATHAWAY CORPORATION HATHAWAY SYSTEMS CORPORATION
By /s/Richard D. Smith By /s/ Richard D. Smith
Vice President President
By /s/ Susan M. Chiarmonte By /s/ Susan M. Chiarmonte
Secretary Secretary
Borrower: Borrower:
HATHAWAY PROCESS INSTRUMENTATION HATHAWAY MOTION CONTROL CORPORATION
CORPORATION
By /s/ Richard D. Smith By /s/ Richard D. Smith
Vice President Vice President
By /s/ Susan M. Chiarmonte By /s/ Susan M. Chiarmonte
Secretary Secretary
Borrower: Borrower:
HATHAWAY INDUSTRIAL AUTOMATION, INC. COMPUTER OPTICAL PRODUCTS, INC.
By /s/ Richard D. Smith By /s/ Richard D. Smith
Vice President Vice President
By /s/ Susan M. Chiarmonte By /s/ Susan M. Chiarmonte
Secretary Secretary
Borrower: Borrower:
EMOTEQ CORPORATION TATE INTEGRATED SYSTEMS, INC.
By /s/ Richard D. Smith By /s/ Richard D. Smith
Vice President Vice President
By /s/ Susan M. Chiarmonte By /s/ Susan M. Chiarmonte
Secretary Secretary
Silicon:
SILICON VALLEY BANK
By /s/ Chris Hill
Title Vice President
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