1
EXHIBIT 10.14
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of May 29, 1998, by
and between Celeritek, Inc. ("Borrower") whose address is 0000 Xxxxx
Xxxxxxxxx, Xxxxx Xxxxx, XX 00000, and Silicon Valley Bank ("Bank") whose
address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, an Amended and Restated Loan and Security Agreement, dated
September 23, 1997, as may be amended from time to time, (the "Loan
Agreement"). The Loan Agreement provided for, among other things, a Committed
Revolving Line in the original principal amount of Four Million and 00/100
Dollars ($4,000,000.00) and a Committed Equipment Line in the original
principal amount of One Million and 00/100 Dollars ($1,000,000.00). Defined
terms used but not otherwise defined herein shall have the same meanings as in
the Loan Agreement. The total outstanding Equipment Advances under the
Committed Equipment Line as of this date is $944,444.44.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement.
Hereinafter, the above-described security documents, together with all other
documents securing repayment of the Indebtedness shall be referred to as the
"Security Documents." Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Indebtedness shall be referred to as
the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS
A. Modification(s) to Loan Agreement
1. The first sentence of sub-section (a) of section 2.1.2 entitled
"Equipment Advances" is hereby amended in its entirety to read
as follows:
Through May 29, 1999 (the "Equipment Availability End Date"),
Bank will make advances ("Equipment Advance" and, collectively,
"Equipment Advances") not exceeding the Committed Equipment Line.
2. Sub-section (b) of Section 2.1.2 entitled "Equipment Advances"
is hereby amended in its entirety to read as follows:
Interest accrues from the date of each Equipment Advance at the
rate in Section 2.2(a) and is payable monthly until the
Equipment Availability End Date occurs. Equipment Advances
outstanding on November 29, 1998, are payable in 36 equal
monthly installments of principal, plus accrued interest,
beginning December 29, 1998 and all subsequent payments of
principal plus interest are due on the same day of each month
after that. Additionally, Equipment Advances outstanding on the
Equipment Availability End Date are payable in 36 equal monthly
installments of principal plus accrued interest, beginning on
the twenty-ninth day of the month following the Equipment
Availability End Date. The final payment for all Equipment
Advances will be due on May 29, 2002 (the "Equipment Loan
Maturity Date"). Equipment Advances when repaid may not be
reborrowed.
2
3. Any and all references to Section 2.1.2 entitled "Letter of
Credit" shall herein after mean Section 2.1.3.
4. Sub-section (iv) of Section 6.7 entitled "Financial
Covenants" is hereby amended to read as follows:
DEBT SERVICE COVERAGE. Maintain a ratio of at least 1.50 to
1.00 on a quarterly basis.
5. The defined term "Committed Equipment Line" is hereby amended
to mean a credit extension of up to $1,944,444.44.
6. The defined term "Debt Service Coverage" is hereby amended to
read as follows:
Net income plus depreciation, amortization and interest
expense, less unfunded capital expenditures, divided by
interest expense and scheduled principal payments, all
calculated on a quarterly basis.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that it has no defenses against the obligations to pay any
amounts under the Indebtedness.
6. PAYMENT OF LOAN FEE. Borrower shall pay to Bank a fee in the amount of
Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) (the "Loan Fee"), plus
all out-of-pocket expenses.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker, endorser,
or guarantor will be released by virtue of this Loan Modification Agreement.
The terms of this paragraph apply not only to this Loan Modification Agreement,
but also to all subsequent loan modification agreements.
8. CONDITION. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
CELERITEK, INC. SILICON VALLEY BANK
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxx Xxxxxx
-------------------------------- --------------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxx Xxxxxx
------------------------------ ------------------------------
Title: CFO Title: SVP
----------------------------- -----------------------------
2
