EXHIBIT 10.13
THERMATRIX INC.
FIRST AMENDMENT TO THE
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment to the Amended and Restated Loan and Security Agreement,
dated as of March 18, 1998, (the "Amendment"), is entered into by and between
THERMATRIX INC. ("Borrower") and VENTURE BANKING GROUP, A DIVISION OF CUPERTINO
NATIONAL BANK ("Bank"). Capitalized terms used herein without definition shall
have the same meanings as is given to them in the Agreement (defined below).
RECITALS
--------
A. The Borrower and the Bank have entered into that certain Amended and
Restated Loan and Security Agreement dated as of January 21, 1998, (as amended
or modified from time to time, the "Agreement") pursuant to which the Bank has
agreed to extend and make available to the Borrower certain advances of money.
B. Borrower has requested certain modification(s) to the Agreement, and
desires that the Bank amend the Agreement upon the terms and conditions more
fully set forth herein.
C. Subject to the representations and warranties of the Borrower herein
and upon the terms and conditions set forth in this Amendment, the Bank is
willing to amend the Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing Recitals and intending to
be legally bound, the parties hereto agree as follows:
SECTION 1. THE BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants that:
(a) the execution, delivery, and performance of the Loan Documents
are within Borrower's powers, have been duly authorized, and are not in conflict
with nor constitute a breach of any provision contained in Borrower's Amended
and Restated Articles of Incorporation or Bylaws, nor will they constitute an
event of default under any material agreement to which Borrower is a party or by
which Borrower is bound. Borrower is not in default under any agreement to which
it is a party or by which it is bound, which default could have a Material
Adverse Effect; and
(b) immediately before and immediately after giving effect to this
Amendment, no event shall have occurred and be continuing which constitutes an
Event of Default that has not been disclosed to Bank.
SECTION 2. AMENDMENTS TO THE LOAN AND SECURITY AGREEMENT.
2.1 Section 6.3 entitled Financial Statements, Reports,
Certificates, is hereby amended to include the following paragraph:
"Borrower shall deliver to Bank with the quarterly financial
statements a Backlog Report".
2.2 Section 6.10 entitled Tangible Net Worth, is hereby deleted and
amended to read in its entirety as follows:
1
"6.10 Tangible Net Worth. Borrower shall maintain a Tangible Net
------------------
Worth of not less than $7,500,000 for the fiscal quarter ending March 31, 1998,
not less than $7,500,000 for the fiscal quarter ending June 30, 1998, not less
than $7,000,000 for the fiscal quarter ending September 31, 1998, or not less
than $5,800,000 for the fiscal quarter ending December 31, 1998".
2.3 Section 6.11 entitled Profitability, is hereby deleted and
amended to read in its entirety as follows:
"6.11 Profitability. Borrower shall not suffer a loss in excess of
-------------
$1,550,000 for the fiscal quarter ending March 31, 1998, a loss in excess of
$1,500,000 for the fiscal quarter ending June 30, 1998, a loss in excess of
$1,500,000 for the fiscal quarter ending September 30, 1998, or a loss in excess
of $1,750,000 for the fiscal quarter ending December 31, 1998. Borrower shall be
profitable for each fiscal quarter thereafter".
2.4 Exhibit E to the Agreement is replaced with Exhibit E hereto.
--------- ---------
SECTION 3. LIMITATION. The amendments and waivers set forth in this
----------
Amendment shall be limited precisely as written and shall not be deemed (a) to
be a modification of any other term or condition of the Agreement or of any
other instrument or agreement referred to therein or to prejudice any right or
remedy which the Bank may now have or may have in the future under or in
connection with the Agreement or any instrument or agreement referred to
therein; or (b) to be a consent to any future amendment or waiver to any
instrument or agreement the execution and delivery of which is consented to
hereby, or to any waiver of any of the provisions thereof. Except as expressly
amended hereby, the Agreement shall continue in full force and effect.
SECTION 4. EFFECTIVENESS. This Amendment shall become effective upon:
(1) The execution and delivery of a copy hereof by Borrower to the
Bank; and
(2) Bank shall have received, in form and substance satisfactory to
Bank, such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
SECTION 5. RELEASE AND WAIVER. BORROWER HEREBY REPRESENTS AND WARRANTS TO
THE BANK THAT IT HAS NO KNOWLEDGE OF ANY FACTS THAT WOULD SUPPORT A CLAIM,
COUNTERCLAIM, DEFENSE OR RIGHT OF SET-OFF, AND HEREBY RELEASES BANK FROM ALL
LIABILITY ARISING UNDER OR WITH RESPECT TO AND WAIVES ANY AND ALL CLAIMS,
COUNTERCLAIMS, DEFENSES AND RIGHTS OF SET-OFF, AT LAW OR IN EQUITY, THAT
BORROWER MAY HAVE AGAINST BANK EXISTING AS OF THE DATE OF THIS AMENDMENT ARISING
UNDER OR RELATED TO THIS AMENDMENT, THE AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY OR TO ANY ACT OR
OMISSION TO ACT BY THE BANK WITH RESPECT HERETO OR THERETO.
SECTION 6. COUNTERPARTS. This Amendment may be signed in any number of
------------
counterparts, and by different parties hereto in separate counterparts, with the
same effect as if the signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Amendment.
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
THERMATRIX INC. VENTURE BANKING GROUP, a division of
Cupertino National Bank
By: /s/ Xxxxxxx Xxxxxxx By: /s/ X. Xxxxxxxxxxxx
--------------------------- -------------------------------
Title: VP, Finance & Administration Title: Account Officer
--------------------------- -------------------------------
3
EXHIBIT E
COMPLIANCE CERTIFICATE
TO: Venture Banking Group
FROM: Thermatrix Inc.
The undersigned authorized officer of Thermatrix Inc. hereby certifies that
in accordance with the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the "Agreement"), (i) Borrower is in complete
compliance for the period ending _______________________________ with all
required covenants except as noted below and (ii) all representations and
warranties of Borrower stated in the Agreement are true correct in all material
respects as of the date hereof. Attached herewith are the required documents
supporting the above certification. The Officer further certifies that these
are prepared in accordance with Generally Accepted Accounting Principles (GAAP)
and are consistently applied from one period to the next except as explained in
an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
------------------ -------- --------
Quarterly financial statements Quarterly within 45 days Yes No
Quarterly Backlog Report Quarterly within 45 days Yes No
Annual CPA Audited FYE within 120 days Yes No
10Q and 10K Within 5 days of filing Yes No
Borrowing Base, A/R & A/P Agings Monthly within 30 days Yes No
A/R Audit Initial and Semi-Annual Yes No
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Maintain on a Quarterly Basis:
Minimum Quick Ratio 1.0:1.0 ___:1.0 Yes No
Minimum Tangible Net Worth $______1 $______ Yes No
Maximum Debt/Tangible Net Worth 1.5:1.0 ___:1.0 Yes No
Profitability $______2 $______ Yes No
2 Permitted Tangible Net Worth not less than $7,500,000 for quarter ending
3/31/98; $7,500,000 for quarter ending 6/30/98; $7,000,000 for quarter ending
9/30/98; and $5,800,000 for quarter ending 12/31/98.
1 Permitted losses not to exceed: $1,550,000 for quarter ending 3/31/98;
$1,500,000 for quarter ending 6/30/98, $1,500,000 for quarter ending 9/30/98;
and $1,750,000 for quarter ending 12/31/98. Preliability required for each
fiscal quarter thereafter.
Comments Regarding Exceptions: See Attached.
Sincerely,
______________________________________
SIGNATURE
______________________________________
TITLE
______________________________________
DATE
--------------------------------------------------
BANK USE ONLY
Received by:______________________________
AUTHORIZED SIGNER
Date:_____________________________________
Verified:_________________________________
AUTHORIZED SIGNER
Date:_____________________________________
Compliance Status: Yes No
--------------------------------------------------
4
