Exhibit 10.1
SEVENTH LOAN MODIFICATION AGREEMENT
This Seventh Loan Modification Agreement is entered into as of June 28,
1999, by and between LIGHTBRIDGE, INC., a Delaware corporation, with its
principal place of business at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Borrower") and SILICON VALLEY BANK, a
California-chartered bank ("Bank"), with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan production office
located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, doing business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a
loan arrangement dated as of June 18, 1996, evidenced by, among other
documents, (i) an Amended and Restated Promissory Note dated June 18, 1996 in
the original principal amount of Four Million Dollars ($4,000,000.00) (the
"Working Capital Note" or "Working Capital Line"), and (ii) a Promissory Note
dated June 18, 1996 in the original principal amount of Two Million Dollars
($2,000,000.00) (the "Equipment Note" or "Equipment Line") (hereinafter,
individually and collectively, the "Notes"). The Notes are governed by the
terms and conditions of a certain Amended and Restated Credit Agreement dated
June 18, 1996 between Borrower and Bank, as amended by certain Loan
Modification Agreements dated as of August 19, 1996, December 12, 1996,
March 5, 1997, June 5, 1997, October 15, 1997, and June 26, 1998 (as amended,
the "Loan Agreement"). Capitalized terms used but not otherwise defined
herein shall have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to
as the "Indebtedness".
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured by
the Collateral as described in the Loan Agreement, which includes certain
Collateral defined in (i) a Security Agreement dated April 1, 1992 by
Borrower in favor of Bank, as amended by a First Amendment to Security
agreement dated October 5, 1994, and (ii) a Collateral Assignment of
Trademarks dated as of October 5, 1994 (together with any other collateral
security granted to Bank, 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 WORKING CAPITAL NOTE.
1. The maximum principal amount of the Working Capital Note is
hereby increased from Four Million Dollars ($4,000,000.00) to
Five Million Dollars ($5,000,000.00).
B. MODIFICATION(S) TO LOAN AGREEMENT.
1. The Loan Agreement shall be amended by deleting the
following definition appearing in Section 1.1 thereof:
" "Revolving Maturity Date" means June 4, 1999."
and inserting in lieu thereof the following:
" "Revolving Maturity Date" means June 27, 2000."
2. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 1.1 thereof:
" "Committed Revolving Line" means Four Million Dollars
($4,000,000.00)."
and inserting in lieu thereof the following:
" "Committed Revolving Line" means Five Million Dollars
($5,000,000.00)."
3. The Loan Agreement shall be amended by deleting the first
paragraph only of Section 2.1.2 thereof entitled "Letters of
Credit" reading as follows with the remaining paragraphs of
Section 2.1.2 unaffected hereby:
"Subject to the terms and conditions of this Agreement, Bank
agrees to issue or cause to be issued Letters of Credit for
the account of Borrower in an aggregate face amount not to
exceed (i) the lesser of Four Million Dollars ($4,000,000.00)
or the Borrowing Base minus (ii) the then outstanding
principal balance of the Committed Revolving Line; PROVIDED
that the face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) shall
not in any case exceed One Million Two Hundred Fifty
Thousand and 00/100 Dollars ($1,250,000.00). Each such
Letter of Credit shall have an expiry date no later than one
hundred eighty (180) days after the Maturity Date of the
Working Capital Line of Credit Note provided that Borrower's
Letter of Credit reimbursement obligation shall be secured
by cash on terms acceptable to Bank at any time after the
Maturity Date if the term of the Agreement is not extended
by Bank. All such Letters of Credit shall be, in form and
substance, acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank's form
of application and Letter of Credit Agreement."
and inserting in lieu thereof the following:
"Subject to the terms and conditions of this Agreement, Bank
agrees to issue or cause to be issued Letters of Credit for
the account of Borrower in an aggregate outstanding face
amount not to exceed (i) the lesser of the Committed
Revolving Line or the Borrowing Base, minus (ii) the then
outstanding principal balance of the Committed Revolving
Line; PROVIDED that the face amount of outstanding Letters
of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve) shall not in any
case exceed One Million Two Hundred Fifty Thousand Dollars
and 00/100 ($1,250,000.00). Each Letter of Credit shall have
an expiry date no later than one hundred eighty (180) days
after the Revolving Maturity Date (with the exception of the
Letter of Credit issued by the Bank in favor of SUMITOMO
LIFE REALTY (N.Y.) INC. in the original face amount of
$1,000,000.00 with a present expiry date of March 14, 2000
which Letter of Credit may extend no later than two hundred
eighty days (280) days after the Revolving Maturity Date)
provided in that Borrower's Letter of Credit reimbursement
obligation shall be secured by cash on terms acceptable to
Bank at any time after the Maturity Date if the term of this
Agreement is not extended by Bank. All such Letters of
Credit shall be, in form and substance, acceptable to Bank
in its sole discretion and shall be subject to the terms and
conditions of Bank's form of standard Application and
Letter of Credit Agreement."
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4. The Loan Agreement shall be amended by deleting in its
entirety the following text of the fourth paragraph of
Section 6.3 entitled "Financial Statements, Reports,
Certificates."
"Bank shall have a right from time to time hereafter to
audit Borrower's Accounts at Borrower's expense, provided
that such audits will be conducted no more often than every
twelve (12) months unless an Event of Default has occurred
and is continuing."
and inserting in lieu thereof the following:
"Bank shall have a right from time to time hereafter to
audit Borrower's Accounts at Borrower's expense, provided
that such audits will be conducted no more often than every
twelve (12) months unless an Event of Default has occurred
and is continuing. Notwithstanding the foregoing, the
Borrower's initial Advance under the Committed Revolving
Line shall be conditioned upon completion by the Bank of
an audit satisfactory to the Bank in its sole discretion."
5. The Borrowing Base Certificate appearing as EXHIBIT B to the
Loan Agreement is hereby replaced with the Borrowing Base
Certificate attached as EXHIBIT A hereto.
4. FEE. Borrower shall pay to Bank a modification fee equal to Twelve
Thousand Five Hundred and 00/100 Dollars ($12,500.00), which fee shall be due
on the date hereof and which shall be deemed fully earned as of the date
hereof. The Borrower shall also reimburse Bank for all legal fees and
expenses incurred in connection with this amendment to the Existing Loan
Documents.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral
granted to the Bank, and confirms that the Indebtedness secured thereby
includes, without limitation, the Indebtedness.
7. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has
no defenses against the obligations to pay any amounts under the Indebtedness.
8. CONTINUING VALIDITY. Borrower 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.
9. JURISDICTION/VENUE. Borrower accepts for itself and in connection with
its properties, unconditionally, the non-exclusive jurisdiction of any state
or federal court of competent jurisdiction in the Commonwealth of
Massachusetts in any action, suit, or proceeding of any kind against it which
arises out
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of or by reason of this Loan Modification Agreement, provided, however, that
if for any reason Bank cannot avail itself of the courts of the Commonwealth
of Massachusetts, then venue shall lie in Santa Xxxxx County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank
(provided, however, in no event shall this Loan Modification Agreement become
effective until signed by an officer of Bank in California).
This Loan Modification Agreement is executed as of the date first
written above.
("BORROWER")
LIGHTBRIDGE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
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Title: Sr. VP & CFO
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("BANK")
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
---------------------------------
Title: SVP
---------------------------------
SILICON VALLEY BANK
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
---------------------------------
Title: Assistant Vice President
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(signed in Santa Xxxxx County,
California)
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