FIRST AMENDMENT TO
FIRST
AMENDMENT TO
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Amendment”) is
made as of August 21, 2008 (the “Amendment Effective Date”)
between SILICON VALLEY
BANK, a California chartered bank, with its principal place of business
at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 (“Bank”) and GIGOPTIX, LLC, an Idaho
limited liability company (“Borrower”) whose address is
0000 Xxxx Xx., Xxxxx 000, Xxxx Xxxx, XX 00000.
Recitals
A.
Bank and Borrower have entered into that certain Loan
and Security Agreement dated as of October 5, 2007 (the “Existing Loan
Agreement”).
B.
Bank has extended credit to Borrower for the purposes
permitted in the Existing Loan Agreement.
C.
Borrower is in default under the Existing Loan Agreement. Borrower
has requested that Bank extend the maturity and amend certain provisions of the
Existing Loan Agreement as more fully set forth herein.
D.
Bank has agreed to amend certain provisions of the Existing
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 in this Amendment.
Agreement
Now,
Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, 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 Existing Loan Agreement. The Existing Loan Agreement, as
modified by this Amendment, and as it may be further amended from time to time
in a writing signed by the parties, is sometimes referred to herein as the
“Loan
Agreement.”
2.
Amendment to Existing
Loan Agreement. The Existing Loan Agreement is amended as
follows.
2.1 Section 13
(DEFINITIONS). Section 13.1 of the Existing Loan Agreement is
amended as follows:
The
following terms and their respective definitions, which are set forth in
Section 13.1 of the Existing Loan Agreement, are amended and replaced with
the following:
“Facility
Amount” is
Seven Hundred Fifty Thousand Dollars ($750,000).
“Maturity
Date” is
December 31, 2008.
2.2 Section
2.1.1(b) Maximum
Advances.
Section 2.1.1(b) of the Existing Loan Agreement is amended by deleting the
amount “Two Million
Dollars ($2,000,000)” and substituting in its place the amount “Six Hundred Thousand Dollars
$600,000)”.
2.3 Section
2.1.1(f) Maturity. Section 2.1.1(f) of
the Existing Loan Agreement is deleted in its entirety and is replaced by the
following:
(f)
Maturity. Unless otherwise terminated pursuant to
subsection 2.1(g) or (h) below, this Agreement shall terminate and all
Obligations outstanding hereunder shall be immediately due and payable on the
Maturity Date; provided that Borrower shall not submit a request for an Advance
after December 1, 2008.
2.4 Section
6.6 Financial
Covenants. Section 6.6 of the Existing Loan Agreement is
deleted in its entirety.
2.5 Compliance
Certificate. The form of Compliance Certificate that is
attached to this Amendment as Attachment
A shall amend and supersede the form of Compliance Certificate that is
attached as Exhibit
B to the Existing Loan Agreement.
3.
Acknowledgement of Defaults; Merger.
3.1 Borrower
acknowledges that it is in default under the Existing Loan Agreement, including
all three of the financial covenants set forth in Section
6.6. Borrower has not maintained the minimum required liquidity and
it has been unable to obtain the new round of equity financing.
3.2 Borrower
has advised Bank that it has entered into a merger agreement with Lumera
Corporation; that it expects over the next 90 days to file a Form S-4
registration statement with the Securities Exchange Commission, to submit the
merger to its members and managers for formal approval, and to seek all other
consents and take all other actions necessary to proceed with the
merger.
3.3 Borrower
has requested that Bank forbear from terminating the Existing Loan Agreement and
exercising its remedies thereunder, notwithstanding the defaults and Events of
Default that have occurred. Instead, Borrower has asked Bank to
extend the maturity to December 31, 2008 to provide liquidity to Borrower while
it works to complete the merger. Bank is willing to extend the
maturity, and to amend the Existing Loan Agreement, provided that the maximum
aggregate Advances be reduced, and otherwise as expressly provided
herein. Bank reserves each of its rights and remedies, including
without limitation its rights to terminate the Loan Agreement, accelerate the
maturity, and exercise its creditor remedies, if any Event of Default occurs
after the Effective Date of this Amendment, or if any Event of Default of which
Bank is unaware has occurred as of the Effective Date.
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3.4 Section
7.3 of the Existing Loan Agreement remains in effect; Bank has not given its
consent to the proposed merger with Lumera Corporation; Bank has not received
sufficient information about the merger to approve or disapprove it; and nothing
in this Amendment or any other instrument or agreement, and no act or omission
by Bank to date, shall be construed as Bank’s consent to the
merger. Bank reserves the right to approve or disapprove the merger
in its sole discretion. Such consent would be given, if at all, in a
writing signed by Bank.
4.
Limitation of Amendments.
4.1 The
modifications set forth above in Section 2 of this
Amendment are effective for the purposes set forth herein, shall be limited and
interpreted precisely as written, and shall not be deemed to (a) be a
consent to any other amendment, waiver or modification of any other provision or
condition of the Loan Agreement any other 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 the Loan Agreement or any other Loan
Document.
4.2 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 expressly modified by this
Amendment, are hereby ratified and confirmed and shall remain in full force and
effect.
5.
Representations and
Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:
5.1 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;
5.2 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;
5.3 The
organizational documents of Borrower delivered to Bank on the remain true,
accurate and complete and have not been amended, supplemented or restated and
are and continue to be in full force and effect;
5.4 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;
5.5 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;
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5.6 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
5.7 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.
6.
Integration. This
Amendment and the Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements. All
prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Amendment and the Loan
Documents merge into this Amendment and the Loan Documents.
7.
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.
8.
Effectiveness. This
Amendment shall be deemed effective as of the “Amendment Effective Date,”
which is the date set forth in the preamble hereto, provided that each of the
following conditions precedent has been satisfied: (a) the due execution and
delivery of this Amendment by Borrower and Bank; (b) Borrower has provided
borrowing resolutions and such other instruments, agreements and other items as
Bank may request; and (c) Bank’s receipt from Borrower of an
amendment fee in an amount equal to $10,000.
In Witness
Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.
|
BANK
|
BORROWER
|
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| Silicon Valley Bank |
GIGOPTIX
LLC,
an
Idaho limited liability company
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| By: |
/s/
Xxxxx Xxxx
|
By: |
/s/
Xxxxxxx Xxxxxx
|
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| Name: |
Xxxxx
Xxxx
|
Name: |
Xxxxxxx
Xxxxxx
|
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| Title: | Relationship Manager | Title: |
CFO
|
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