Exhibit 10.1


 


FOURTH AMENDMENT


TO


LOAN AND SECURITY AGREEMENT


 


THIS FOURTH AMENDMENT to Loan and Security Agreement (this “Amendment”)
is entered into effective as of this 5th day of April, 2010 by and between
Silicon Valley Bank (“Bank”) and SOURCE PHOTONICS, INC., a Delaware
corporation, SOURCE PHOTONICS SANTA CLARA, INC. (f/k/a FIBERXON, INC.), a
Delaware corporation and SOURCE PHOTONICS USA, INC. (f/k/a LUMINENTOIC, INC.),
a Delaware corporation each with its principal place of business at 20550 Nordhoff
Street, Chatsworth, CA 91311 (FAX 818-349-9258) and SOURCE PHOTONICS MACAO
COMMERCIAL OFFSHORE LIMITED (f/k/a FIBERXON (MACAO COMMERCIAL OFFSHORE)
LIMITED), an entity organized under the laws of Macao, registered with the
Commercial and Movable Assets Registry of Macau under No. 24468 (SO) (each
a “Borrower” and collectively “Borrowers”).


 


RECITALS


 


A.                                   Bank and Borrowers have entered
into that certain Loan and Security Agreement dated as of April 7, 2008,
as amended by that certain First Amendment to Loan and Security Agreement by
and between Bank and Borrowers dated as of July 24, 2008, that certain
Second Amendment to Loan and Security Agreement by and between Bank and
Borrowers dated as of March 27, 2009 and that certain Third Amendment to
Loan and Security Agreement dated as of October 1, 2009 (as the same may
from time to time be further amended, modified, supplemented or restated, the “Loan
Agreement”).


 


B.                                     Bank has extended credit to
Borrowers for the purposes permitted in the Loan Agreement.


 


C.                                     Borrowers have requested that
Bank amend the Loan Agreement to extend the maturity date and make certain
other revisions as more fully set forth herein.


 


D.                                    Bank has agreed to so amend
certain provisions of the Loan Agreement, but only to the extent, in accordance
with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.


 


AGREEMENT


 


NOW,
THEREFORE, in
consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:


 


1.                                      Definitions. 
Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.


 


2.                                      Amendments to Loan Agreement.


 


2.1                               Section 2.2.2 (Facility Fee).  Section 2.2.2
is amended in its entirety and replaced with the following


 


“2.2.2              Facility Fees, Unused Fee. 
Borrowers shall pay to Bank


 

















 


(a)                                  Facility Fees. A fully earned, non-refundable facility
fee of Thirty Thousand Dollars ($30,000) upon execution of that certain Fourth
Amendment to Loan and Security Agreement by and between Borrowers and Bank
effective as of April 5, 2010 and April 5, 2011; and


 


(b)                                 Unused Fee.  A fee,
payable quarterly, in arrears, on a calendar year basis, in an amount equal to
one quarter of one percent (0.25%) per annum of the average unused portion of
the Facility Amount, as determined by Bank.”


 


2.2                               Section 2.2.4
(Administrative Fee).  Section 2.2.4 is amended in its entirety
and replaced with the following


 


“2.2.4              Administrative Fee. 
If at the end of any Reconciliation Period, Borrowers’ Senior Debt to
EBITDA Ratio is greater than 2.00 to 1.00, Borrowers shall pay to Bank an
administrative fee equal to one quarter of one percent (0.25%) of the face
amount of each Financed Receivable financed during the subsequent
Reconciliation Period (the “Administrative Fee”).  The Administrative Fee is payable when the
Advance made based on such Financed Receivable is payable in accordance with Section 2.3
hereof.  After an Event of Default, the
Administrative Fee will increase an additional 0.50% effective immediately upon
the occurrence of such Event of Default.”


 


2.3                               Section 6.2
(Financial Statements, Reports, Certificates.).  Section 6.2(a)(ii) is
amended in its entirety and replaced with the following:


 


“(ii) as soon
as available, but no later than (a) forty five (45) days after the last
day of each calendar quarter and (b) thirty (30) days after the last day
of each month (other than March, June, September and December), a company
prepared consolidated and consolidating financial statements prepared in
accordance with GAAP (including P&L, balance sheet and statement of cash
flow) covering each Borrower and each of its Subsidiary’s operations during the
period certified by a Responsible Officer and in a form acceptable to Bank;”


 


2.4                               Section 6.2
(Financial Statements, Reports, Certificates.).  Section 6.2(a)(iii) is
amended in its entirety and replaced with the following:


 


“(iii)                         as soon as available, but no later than
one hundred eighty (180) days after the last day of each Borrower’s fiscal year
(beginning with the 2010 fiscal year), audited consolidated financial
statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm reasonably acceptable to Bank;”


 


2.5                               Section 6.2
(Financial Statements, Reports, Certificates.).  Section 6.2(e) is
amended in its entirety and replaced with the following:


 


“(e)                            as soon as available, but no later than (a) forty
five (45) days after the last day of each calendar quarter and (b) thirty
(30) days after the last day of each month (other than March, June, September and
December), deliver to Bank an aged listing of accounts receivable and accounts
payable by invoice date, in form acceptable to Bank.”


 


2.6                               Section 13
(Definitions).  The following terms and their respective
definitions in Section 13.1 of
the Loan Agreement are either added or amended in their entirety and replaced
with the following:


 


“Applicable
Interest Rate Percentage” is (i) zero percent (0%) if Borrowers’ Senior
Debt to EBITDA Ratio as of the most recently ended calendar quarter is less
than 1.00:1.00 or (ii) two percent (2.00%) if Borrowers’ Senior Debt to
EBITDA Ratio as of the most recently ended calendar quarter is greater than or
equal to 1.00:1.00.


 

















 


“EBITDA” means Borrowers’
consolidated earnings before interest, taxes, depreciation and amortization in
accordance with GAAP.


 


“Maturity
Date” is  April 5, 2012.


 


“Senior Debt” means any short term or long term obligations
owed by Borrowers, or Borrowers’ Chinese or Taiwanese subsidiaries to Bank or
any other lender.  Any cash secured
obligations shall be excluded from the computation of Senior Debt.


 


“Senior
Debt to EBITDA Ratio’
means a ratio of (i) Senior Debt to (ii) annualized EBITDA measured
on a trailing six (6) month basis.


 


2.7                               Exhibit B to the Agreement is hereby
replaced with Exhibit B attached hereto.


 


3.                                      Limitation of Amendments.


 


3.1                               The amendments set forth in Section 2, above, are effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed
to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any
right or remedy which Bank may now have or may have in the future under or in
connection with any Loan Document.


 


3.2                               This Amendment shall be construed in
connection with and as part of the Loan Documents and all terms, conditions,
representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and
shall remain in full force and effect.


 


4.                                      Representations and Warranties. 
To induce Bank to enter into this Amendment, each Borrower hereby
represents and warrants to Bank as follows:


 


4.1                               Immediately after giving effect to this
Amendment (a) the representations and warranties contained in the Loan
Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date), and (b) no
Event of Default has occurred and is continuing;


 


4.2                               Borrower has the power and authority to
execute and deliver this Amendment and to perform its obligations under the
Loan Agreement, as amended by this Amendment;


 


4.3                               The organizational documents of Borrower
delivered to Bank on the Effective Date (or on the date of the First Amendment
to Loan and Security Agreement with respect to Source Photonics Macao) remain
true, accurate and complete and have not been amended, supplemented or restated
and are and continue to be in full force and effect;


 


4.4                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, have been duly authorized;


 


4.5                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any
law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or
decree of any court or other governmental or public body or authority, or
subdivision thereof, binding on Borrower, or (d) the organizational
documents of Borrower;


 

















 


4.6                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, do not require any order,
consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by any governmental or public body
or authority, or subdivision thereof, binding on either Borrower, except as
already has been obtained or made; and


 


4.7                               This Amendment has been duly executed and
delivered by Borrower and is the binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium or other similar laws of general application and equitable
principles relating to or affecting creditors’ rights.


 


5.                                      Counterparts. 
This Amendment may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.


 


6.                                      Effectiveness. 
This Amendment shall be deemed effective upon the due execution and
delivery to Bank of this Amendment by each party hereto.


 


[Signature page follows.]


 

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.


 


 


	
  SOURCE PHOTONICS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brett Chloupek

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Brett Chloupek

  	
   

  
	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOURCE PHOTONICS SANTA CLARA, INC.,

  	
   

  
	
  f/k/a FIBERXON, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brett Chloupek

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Brett Chloupek

  	
   

  
	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOURCE PHOTONICS USA, INC.,

  	
   

  
	
  f/k/a LUMINENTOIC, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brett Chloupek

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Brett Chloupek

  	
   

  
	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOURCE PHOTONICS MACAO COMMERCIAL OFFSHORE LIMITED,

  	
   

  
	
  f/k/a FIBERXON (MACAO COMMERCIAL OFFSHORE) LIMITED

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Anita Quan

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Anita Quan

  	
   

  
	
   

  	
   

  
	
  Title: VP Finance China

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANK:

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ben Fargo

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Ben Fargo

  	
   

  
	
   

  	
   

  
	
  Title: VP/Relationship Manager