DEFAULT WAIVER AND FOURTH
AMENDMENT
TO
LOAN AND SECURITY
AGREEMENT
THIS DEFAULT WAIVER AND FOURTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT (this “
Amendment ”) is made as of December 31, 2008 (the
“ Amendment Effective Date ”) between SILICON
VALLEY BANK , a California chartered bank, with its principal
place of business at 3003 Tasman Drive, Santa Clara, California
95054 (“ Bank ”) and GIGOPTIX, LLC , an
Idaho limited liability company (“ Borrower ,”)
whose address is 2400 Geng Rd., Suite 100, Palo Alto, CA
94303.
Recitals
A. Bank
and Borrower have entered into that certain Loan and Security
Agreement dated as of October 5, 2007, as amended by that certain
First Amendment to Loan and Security Agreement dated as of August
21, 2008, that certain Default Waiver and Second Amendment to Loan
and Security Agreement dated as of September 26, 2008, and that
certain Third Amendment to Loan and Security Agreement dated as of
October 27, 2008 (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 waive the default and extend the maturity of
the Existing Loan Agreement as more fully set forth
herein.
D. Bank
has agreed to waive one specific default and to extend the maturity
of the 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, the receipt and adequacy of which are acknowledged,
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. Amendments
to Existing Loan Agreement.
2.1
Section 13 ( Definitions ). The following
term and its definition set forth in Section 13.1 are
amended in their entirety and replaced with the
following:
“Maturity Date”
is February 28, 2009
.
2.2
Section 13 (Definitions) . The following term and
its definition are added to Section 13.1:
“Guarantor”
is any present or future
guarantor of the Obligations.
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.
2.4
Section 6.5(a) Accounts
. Section 6.5(a) is deleted in its entirety and replaced
by the following:
(a)
To permit Bank to monitor Borrower’s financial performance
and condition, Borrower and all of Borrower’s United States
Subsidiaries shall maintain their primary operating deposit
accounts and securities accounts with Bank and Bank’s
affiliates. Borrower shall maintain at least $800,000 on
deposit with Bank and Bank’s affiliates at all
times. Each Guarantor shall maintain all of its
depository, operating and securities accounts with Bank,
Bank’s affiliates, or the depository institutions specified
in the Perfection Certificate delivered to Bank in connection with
the Default Waiver and Fourth Amendment to Loan and Security
Agreement between Borrower and Bank.
3. Acknowledgement
of Defaults; Consent to Merger.
3.1 Borrower
acknowledges that it is in default under Section 7.3 of the
Existing Loan Agreement. Borrower completed its merger
with an affiliate of Lumera Corporation without obtaining
Bank’s prior consent (the “ Existing Default
.”)
3.2 Borrower
has asked Bank to extend the maturity to February 28, 2009, to
waive the Existing Default, and to consent to the
merger. Subject to the terms and conditions and in
reliance on the representations and warranties set forth in this
Amendment: (a) Bank agrees to amend the Existing Loan Agreement to
extend the maturity, as set forth in Section 2.2
above; (b) Bank waives the Existing Default; and (c)
Bank consents to the merger. 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.
4. Limitation
of Amendment, Waiver and Consent.
4.1 The
amendment set forth in Section 2 above, and the waiver
and consent set forth in Section 3 above, are effective only
for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) be a consent to any
other default or any amendment, waiver or modification of any other
term or condition of any 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 any 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 herein amended, 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 exec
