AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
This Amendment Number One to Loan and Security Agreement
("Amendment") is entered into as of December 8, 1998, by and between FOOTHILL
CAPITAL CORPORATION, a California corporation ("Foothill"), and SILICON
STORAGE TECHNOLOGY, INC., a California corporation ("Borrower"), in light of
the following:
FACT ONE: Borrower and Foothill have previously entered into that
certain Loan and Security Agreement, dated as of September 22, 1998 (the
"Agreement").
FACT TWO: Borrower and Foothill desire to amend the Agreement as
provided for and on the conditions herein.
NOW, THEREFORE, Borrower and Foothill hereby amend and supplement
the Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this
Amendment shall have the meanings given to them in the Agreement unless
specifically defined herein.
2. AMENDMENT.
Section 7.20 of the Agreement is hereby amended to read as
follows:
"7.20 FINANCIAL COVENANT. Fail to maintain Tangible Net
Worth of at least $24,000,000, at all times during the term of this
Agreement, measured on a fiscal quarter ending basis; PROVIDED,
HOWEVER that Foothill shall be entitled to reset this financial
covenant for each fiscal quarter after December 31, 1999, based
upon Borrower's financial projections for the year 2000."
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to
Foothill that all of Borrower's representations and warranties set forth in
the Agreement are true, complete and accurate in all respects as of the date
hereof.
4. NO DEFAULTS. Borrower hereby affirms to Foothill that no
Event of Default has occurred and is continuing as of the date hereof.
5. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon the following:
(a) Payment by Borrower to Foothill of an amendment fee in
the aggregate amount of $ 2,500, such fee to be charged to Borrower's loan
account pursuant to Section 2.6(e) of the Agreement; and
(b) Receipt by Foothill of an executed copy of this Amendment.
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6. COSTS AND EXPENSES. Borrower shall pay to Foothill all of
Foothill's out-of-pocket costs and expenses (including, without limitation,
the fees and expenses of its counsel, which counsel may include any local
counsel deemed necessary, search fees, filing and recording fees,
documentation fees, appraisal fees, travel expenses, and other fees) arising
in connection with the preparation, execution, and delivery of this Amendment
and all related documents.
7. LIMITED EFFECT. In the event of a conflict between the terms
and provisions of this Amendment and the terms and provisions of the
Agreement, the terms and provisions of this Amendment shall govern. In all
other respects, the Agreement, as amended and supplemented hereby, shall
remain in full force and effect.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties on separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original. All such counterparts, taken together, shall constitute but
one and the same Amendment. This Amendment shall become effective upon the
execution of a counterpart of this Amendment by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first set forth above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/Xxxxxx Xxxxxxxxx
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Title: Vice President
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SILICON STORAGE TECHNOLOGY, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
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Title: VP/CFO
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