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EXHIBIT 10.24
SILICON VALLEY BANK
AMENDMENT TO LOAN AND SECURITY
AGREEMENT
BORROWER: SUPERCONDUCTOR TECHNOLOGIES INC.
ADDRESS: 000 XXXX XXXXX, XXXXX X
XXXXX XXXXXXX, XX 00000
DATE: DECEMBER 21, 1998
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT is entered into between
SILICON VALLEY BANK ("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated August 26, 1994, as amended by that certain Amendment to Loan Agreement
dated December 20, 1994, as amended by that certain Amendment to Loan Agreement
dated June 27, 1995, and as otherwise amended from time to time (the "Loan
Agreement"), as follows, effective as of the date hereof. (Capitalized terms
used but not defined in this Amendment, shall have the meanings set forth in
the Loan Agreement.)
1. AMENDED SCHEDULE. The Schedule to Loan Agreement is amended
effective on the date hereof, to read as set forth on the Amended Schedule to
Loan and Security Agreement attached hereto.
2. LIMITED WAIVER. Silicon hereby agrees to waive the existing Events
of Default arising from the Borrower's failure to comply with the financial
covenant obligations in effect prior to the date hereof. Nothing herein is
intended to mean or imply that Silicon agrees or will agree to waive any
subsequent Events of Default whether relating to financial covenant violations
or otherwise.
3. FACILITY FEE. The Borrower shall pay Silicon concurrently herewith a
facility fee of $15,000, of which $5,000 has already been paid by the Borrower.
Said facility fee shall be in addition to all interest and other sums payable
to Silicon, and shall not be refundable.
4. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon
that all representations and warranties in the Loan Agreement continue to be
true and correct.
5. 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
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SILICON VALLEY BANK AMENDMENT TO LOAN AND SECURITY AGREEMENT
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and the Borrower shall continue in full force and effect and the same are
hereby ratified and confirmed.
BORROWER: SILICON:
SUPERCONDUCTOR SILICON VALLEY BANK
TECHNOLOGIES, INC.
BY: /s/ M. Xxxxx Xxxxxx BY: /s/ Xxxx X. Xxxxx
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PRESIDENT OR VICE PRESIDENT TITLE: VICE PRESIDENT
BY: /s/ Xxxxx X. Xxxxx, Xx.
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SECRETARY OR ASS'T SECRETARY
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SILICON VALLEY BANK
AMENDED SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: SUPERCONDUCTOR TECHNOLOGIES, INC.
ADDRESS: 000 XXXX XXXXX, XXXXX X
XXXXX XXXXXXX, XXXXXXXXXX 00000
DATE: DECEMBER 21, 1998
CREDIT LIMIT (Section 1.1): An amount (each advance being an "Account Loan"
and collectively all of such advances being
referred to herein as the "Accounts Loans") up
to the lesser of: (A) $1,500,000 at any one time
outstanding; or (B) 75% of the Net Amount of
Borrower's accounts, which Silicon in its
discretion deems eligible for borrowing.
Borrower has an existing term loan outstanding
(the "Existing Term Loan"). Upon the
effectiveness of the Amendment to Loan Agreement
dated December 21, 1998 (the "December 1998
Amendment"), the Existing Term Loan, all accrued
and unpaid interest thereon and all Obligations
relating thereto shall be repaid in full with
the proceeds of an Accounts Loan, and Borrower
hereby requests that Silicon advance such an
Accounts Loan concurrently with the closing of
the December 1998 Amendment and related
transactions.
With respect to the Accounts Loans, and without
limiting the fact that the determination of
which accounts are eligible for borrowing is a
matter of Silicon's discretion, the following
will not be deemed eligible for borrowing: (a)
accounts outstanding for more than 90 days from
the invoice date; (b) accounts subject to any
contingencies, or arising from a consignment,
guaranteed sale, xxxx and hold, sale on approval
or other transaction in which payment by the
account debtor is conditional; (c) accounts
owing from the United States or any department,
agency or instrumentality of the United States
or any state, city or municipality, other than
with respect to up to $500,000 in an aggregate
amount owing to Borrower from any account debtor
with respect to such obligors on such accounts,
provided, however, on and after June 30, 1999
such $500,000 amount shall be reduced to $0
unless Borrower otherwise complies the United
States Assignment of Claims Act; (d) accounts
owing from an account debtor whose chief
executive office or principal place of business
is outside the United States (unless the account
is pre-approved by Silicon in its discretion, or
backed by a letter of credit satisfactory to
Silicon, or FCIA insured satisfactory to
Silicon, or the account arises from goods
shipped or services rendered to a branch or
office of the account debtor in the United
States); (e) accounts owing from one account
debtor to the extent they exceed 25% of the
total eligible accounts outstanding; (f)
accounts owing from an affiliate of Borrower;
(g) accounts owing
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from an account debtor to whom Borrower is or
may be liable for goods purchased from, or
services received from, such account debtor or
otherwise (to the extent of the amount owing
to such account debtor); and (h) accounts owing
from account debtors for the purchase of goods
relating to which such account debtors has more
than 30 days from the relating invoice date to
return such goods. In addition, if more than
50% of the accounts owing from an account
debtor are outstanding more than 90 days from
the invoice date or are otherwise not eligible
for borrowing, then all accounts owing from
that account debtor will be deemed ineligible
for borrowing.
INTEREST RATE (Section 1.2): A rate equal to the "Prime Rate" in effect from
time to time, plus 1% per annum. 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 are available
at Silicon. The interest rate applicable to the
Obligations shall change on each date there is
a change in the Prime Rate.
LOAN ORIGINATION FEE
(Section 1.3): See Amendment to Loan and Security Agreement of
even date.
MATURITY DATE
(Section 5.1): DECEMBER 20, 1999.
PRIOR NAMES OF BORROWER
(Section 3.2): NONE
TRADE NAMES OF BORROWER
(Section 3.2): NONE
OTHER LOCATIONS AND ADDRESSES
(Section 3.3): NONE
MATERIAL ADVERSE LITIGATION
(Section 3.10): NONE
NEGATIVE COVENANTS-EXCEPTIONS
(Section 4.6): NONE
FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the following
covenants. Compliance shall be based on all
Loans and shall be determined as of the end of
each month, except as otherwise specifically
provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick
Assets" to current liabilities of not less than
.85 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth of
not less than $5,000,000.
DEBT TO TANGIBLE
NET WORTH RATIO: Borrower shall maintain a ratio of total
liabilities to tangible net worth of not more
than 1.50 to 1.
PROFITABILITY: Borrower shall not incur a loss (after taxes) in
excess of $3,000,000 for the quarter ending
December 31, 1998. With respect to the period
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beginning with the quarter end period of March 31,
1999, and ending with and including the quarter end
period of September 30, 1999, Borrower shall not incur
a cumulative loss (after taxes) in excess of
$3,500,000. Thereafter, Borrower shall not incur a loss
(after taxes) in any fiscal quarter.
DEFINITIONS: "Current assets," and "current liabilities" shall have
the meanings ascribed to them in accordance with
generally accepted accounting principles.
"Tangible net worth" means the excess of total assets
over total liabilities, determined in accordance with
generally accepted accounting principles, excluding
however 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.
"Quick Assets" means cash on hand or on deposit in
banks, readily marketable securities issued by the
United States, readily marketable commercial paper
rated "A-1" by Standard Poor's Corporation (or a
similar rating by a similar rating organization),
certificates of deposit and banker's acceptances, and
accounts receivable (net of allowance for doubtful
accounts).
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing covenants
do not include indebtedness which is subordinated to
the indebtedness to Silicon under a subordination
agreement in form specified by Silicon or by language
in the instrument evidencing the indebtedness which is
acceptable to Silicon.
OTHER COVENANTS
(Section 4.1): 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. WARRANTS. Borrower shall concurrently herewith
provide Lender with warrants to purchase 40,000 shares
of Common stock of the Borrower, at an initial
exercise price of $4.00 per share, and subject further
to the terms and conditions set forth in the Warrant
to Purchase Stock and related documents being executed
concurrently with this Agreement.
3. BORROWING BASE CERTIFICATE; AGINGS. Within 20 days
after the last day of each month, Borrower shall
deliver to Silicon a borrowing base certificate signed
by a Responsible Officer in form acceptable to
Silicon, together with an aged listings of accounts
receivable.
4. PERMITTED SALE/LEASEBACK. On and after the date
hereof, Borrower shall be permitted to enter into a
sale/leaseback transaction with a third party lender
in an aggregate transactional amount of up to
$1,200,000, provided that the liens of such lender are
limited to the
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equipment that is the subject of such
transaction and proceeds thereof, and Silicon
agrees to subordinate its liens on such
equipment in accordance with documentation
reasonably acceptable to Silicon.
BORROWER:
SUPERCONDUCTOR TECHNOLOGIES, INC.
BY /s/ M. Xxxxx Xxxxxx
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PRESIDENT OR VICE PRESIDENT
BY /s/ Xxxxx X. Xxxxx, Xx.
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SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY /s/ Xxxx X. Xxxxx
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TITLE Vice President
