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EXHIBIT 10.68
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AMENDMENT NUMBER ONE TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT, dated as of April
21, 1999 (this "Amendment"), amends that certain Loan and Security Agreement,
dated as of June 19, 1997 (as amended from time to time, the "Loan Agreement"),
by and between CATALYST SEMICONDUCTOR, INC., a Delaware corporation
("Borrower"), on the one hand, and COAST BUSINESS CREDIT, a division of Southern
Pacific Bank, a California corporation ("Coast"), on the other hand. All
initially capitalized terms used in this Amendment shall have the meanings
ascribed thereto in the Loan Agreement unless specifically defined herein.
RECITALS
WHEREAS, Borrower and Coast wish to amend the Loan Agreement pursuant to
the terms and provisions set forth in this Amendment; and
NOW, THEREFORE, the parties hereto agree as follows:
AMENDMENT
Section 1. AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT REGARDING THE
MAXIMUM DOLLAR AMOUNT. Section 1.1 of the Loan Agreement is hereby amended by
deleting such Section in its entirety and replacing it with the following:
"1.1 LOANS, COLLATERAL AGREEMENTS. Borrower has requested and may hereafter
request that Coast advance funds or otherwise extend credit to or for the
benefit of Borrower ("Loans(s)") in accordance with the terms and
provisions of this Loan Agreement and other written agreements ("Collateral
Agreements(s)"), including, but not limited to, any one or more of the
following described security agreements now or hereafter entered into
between Borrower and Coast: (a) Accounts Collateral Security Agreement; (b)
Inventory Collateral Security Agreement; (c) Intellectual Property
Collateral Security Agreement; and (d) any promissory notes or guaranties.
The amount and terms of payment of any Loans by Coast to Borrower shall be
determined in accordance with the terms and provisions of this Loan
Agreement and of any extended Collateral Agreements. Notwithstanding
anything herein or in any Collateral Agreement to the contrary, in no event
shall the Borrower permit the total balance of all Loans and all other
Obligations outstanding at any one time exceed $5,000,000 ("Maximum Dollar
Amount"); and, if for any reason they do, Borrower shall immediately pay
the amount of such excess to Coast in immediately available funds."
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Section 2. AMENDMENT TO SECTION 1.2 OF THE LOAN AGREEMENT REGARDING THE
INTEREST RATE AND MINIMUM INTEREST. Section 1.2 of the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:
"1.2 INTEREST. All Loans shall bear interest at a rate equal to the "Prime
Rate" (as hereinafter defined), plus 4.5% per annum, calculated on the
basis of a 360-day year for the actual number of days elapsed provided,
however, all Loans shall bear interest at a rate equal to the Prime Rate
plus 3.50% per annum upon receipt of evidence acceptable to Coast in its
sole and absolute discretion that Borrower has achieved for a period of two
consecutive quarters and thereafter maintained a Tangible Net Worth (as
that term is define herein) no more negative than negative ($1,000,000),
and provided, further, all Loans shall bear interest at a rate equal to the
Prime Rate plus 2.50% per annum upon receipt of evidence acceptable to
Coast in its sole and absolute discretion that Borrower has achieved for a
period of two consecutive quarters and thereafter maintained a Tangible Net
Worth (as that term is defined herein) of at least a positive $500,000. The
interest rate applicable to all Loans shall be adjusted monthly as of the
first day of each month, and the interest to be charged for that month
shall be based on the highest "Prime Rate" in effect during said month, but
in no event shall the rate of interest charged on any Loans in any month be
less than 8% per annum. "Prime Rate" is defined as the actual "Reference
Rate" or the substitute therefor of the Bank of America NT & SA ("B of A")
whether or not that rate is the lowest interest rate charged by B of A. If
the Prime Rate, as defined, is unavailable, "Prime Rate" shall mean the
highest of the prime rates published in the Wall Street Journal on the
first business day of the month, as the base rate on corporate loans at
large U.S. money center commercial banks. Regardless of the amount of
Obligations that may be outstanding from time to time, Borrower shall pay
Coast minimum monthly interest during the effectiveness of this Agreement
in the amount due based on daily outstandings of not less than forty
percent of the Maximum Dollar Amount."
Section 3. AMENDMENT TO SECTION 1.3 OF THE LOAN AGREEMENT REGARDING THE
FACILITY FEE. Section 1.3 of the Loan Agreement is hereby amended by deleting
the second sentence of such Section in its entirety and replacing it with the
following:
"Borrower shall pay to Coast a facility fee of Three Thousand Dollars
($3,000) per quarter (prorated for any partial quarter during the term of
this Agreement)."
Section 4. AMENDMENT TO SECTION 1.4 OF THE LOAN AGREEMENT REGARDING LETTERS
OF CREDIT. Section 1.4 of the
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Agreement is amended by deleting all provisions which provide for the issuance
of Letters of Credit for the account of Borrower, All other Letters of Credit
provisions of said Section and the Agreement shall survive including, without
limitation, Borrower's indemnification of Coast arising out of or in connection
with any Letters of Credit.
Section 5. AMENDMENT TO SECTION 4.10 OF THE LOAN AGREEMENT REGARDING THE
TANGIBLE NET WORTH COVENANT. Section 4.10 of the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:
"4.10 TANGIBLE NET WORTH. Borrower shall maintain, at all times at which
any Obligations remain outstanding, a minimum Tangible Net Worth no more
negative than negative ($2,500,000) where "Tangible Net Worth" means
consolidated stockholders' equity, less, goodwill, patents, trademarks,
copyrights, franchises, formulas, leasehold interests, leasehold
improvements, non-compete agreements, engineering plans, deferred tax
benefits and organization costs. The Tangible Net Worth requirement stated
in this Section shall be adjusted as follows on the following dates: (1) no
more negative than negative ($1,800,000) by July 31, 1999, (2) no more
negative than negative ($1,000,000) by January 31, 2000, (3) no more
negative than negative ($500,000) by April 30, 2000, and (4) equal to or
greater than a positive $100,000 by October 31, 2000."
Section 6. AMENDMENT TO SECTION 5 OF THE LOAN AGREEMENT REGARDING FLOAT
DAYS. Section 5 of the Loan Agreement is hereby amended by deleting such Section
in its entirety and replacing it with the following:
"All forms of payments delivered to Coast on account of the Obligations
constitute conditional payment only until such items are actually paid in
cash to Coast; solely for the purpose of computing interest earned by
coast, credit therefor and for bank wire transfers shall be given as of the
second business day after receipt by Coast as to uncollected funds and zero
days after receipt of collected (good) funds in order to allow for
clearance, bookkeeping and computer entries. All payments made by Borrower
may be applied, and in Coast's sole discretion reversed and re-applied, in
whole or in part to any of the Obligations, in such order and manner as
Coast shall determine in its sole discretion."
Section 7. AMENDMENT TO SECTION 8 OF THE LOAN AGREEMENT REGARDING THE
TERMINATION DATE, NOTICE OF TERMINATION AND EARLY TERMINATION FEE. Section 8 of
the Loan Agreement is hereby amended by deleting the first sentence (and the
parenthetical immediately following the first sentence), second sentence and
fifth sentence of such Section in their entirety and replacing them with the
following:
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[1st sentence]
"This Loan Agreement and all Collateral Agreement(s) shall continue in
effect until June 30, 2001 (the "renewal date") and shall thereafter
automatically and continuously renew for successive additional terms of one
year(s) each unless terminated as to future transactions as hereinafter
provided. Borrower, upon execution of this Amendment, shall immediately pay
a renewal fee of 0.5% of the Maximum dollar Amount in consideration of this
renewal through June 30, 2001 and shall pay a renewal fee of 0.5% of the
Maximum Dollar Amount to Coast prior to the renewal date and on each
subsequent anniversary thereafter that this Loan Agreement and the
Collateral Agreement(s) automatically renew. (The renewal date and each
subsequent date on which the terms of this Loan Agreement and the
Collateral Agreement(s) automatically renew are hereinafter referred to as
"renewal dates".)"
[2nd sentence]
"This Loan Agreement and any Collateral Agreement may be terminated, as to
future transactions only, as follows: (a) By written notice from either
Coast or borrower to the other, not less than ninety (90) days prior to the
next renewal date, in which event termination shall be effective on the
next renewal date; or (b) By Coast at any time after the occurrence of an
Event of Default, without notice, in which event termination shall be
effective immediately; or (c) By ninety (90) days' prior written notice
from Borrower to Coast, in which event, termination shall be effective on
the ninetieth day after such notice is given or (d) By the grant by
Borrower to any third party of a lien or encumbrance on, or security
interest in, any of the Collateral, as provided in Paragraph 3.5, in which
event termination shall be effective on the date selected by Coast pursuant
to Paragraph 3.5."
[5th sentence]
"If termination occurs under subparagraph (b), (c) or (d) above, Borrower
shall pay to Coast a termination fee in an amount equal to four percent
(4%) of the Maximum Dollar Amount if termination occurs at any time prior
to or including June 30, 2000 and two percent (2%) of the Maximum Dollar
Amount if termination occurs any time thereafter."
Section 8. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon: (i) the receipt by Coast of an executed copy of this
Amendment executed by Borrower, and (ii) payment of a renewal fee in an amount
equal to 0.5% of the Maximum Dollar Amount.
Section 9. ENTIRE AGREEMENT. The Loan Documents, as amended hereby,
embody the entire agreement and understanding between the parties hereto and
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supersede all prior agreements and understandings relating to the subject matter
hereof. Borrower represents, warrants and agrees that in entering into the Loan
Documents and consenting to this Amendment, it has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, Coast or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Documents, as amended hereby.
Section 10. CONFLICTING TERMS. In the event of a conflict between the terms
and provisions of this Amendment and the terms and provisions of the Loan
Documents, the terms of this Amendment shall govern. In all other respects, the
Loan Documents, as amended and supplemented hereby, shall remain in full force
and effect.
Section 11. MISCELLANEOUS. This Amendment shall be governed by and
construed in accordance with the laws of the State of California. This Amendment
may be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any party hereto may execute this Amendment by
signing such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWER:
CATALYST SEMICONDUCTOR, INC.,
A Delaware Corporation
By /s/ Radu M. Vanco
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President or Vice President
By /s/ Thomas E. Gay III
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Secretary or Ass't Secretary
COAST:
COAST BUSINESS CREDIT,
A division of Southern Pacific Bank
By /s/ Jeffrey Cristol
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Title Vice President
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