Exhibit 10.1

 

THIRD AMENDMENT TO

LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered into this 19th day of June 2019, by and between SILICON VALLEY BANK, a
California corporation “Bank”), and EVERSPIN TECHNOLOGIES, INC., a Delaware
corporation (“Borrower”).

RECITALS

A.         Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of May 4, 2017 (as the same may from time to time be amended,
modified, supplemented or restated; the “Loan Agreement”).

B.         Bank has extended credit to Borrower for the purposes permitted in
the Loan Agreement.

C.         Borrower has requested that Bank amend the Loan Agreement to modify
the financial covenants and make certain revisions to the Loan Agreement as more
fully set forth herein.

D.         Bank has agreed to modify the financial covenants and amend certain
provisions 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 below.

 

AGREEMENT

 

Now, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the patties hereto agree as
follows:

1.          Definitions. Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Loan Agreement.

2.          Amendments to Loan Agreement.

2.1        Financial Covenants. Section 6.7(b) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

(b) Performance to Plan. As of the last day of each month, Borrower's TFS
Revenue for such month calculated on a cumulative fiscal year to date basis,
shall be equal to or greater than the amount set forth for such month on
Schedule 1 of the Compliance Certificate.

Commencing with the month ending January 31, 2020, the Performance to Plan
financial covenant set forth in this Section shall be calculated based on not
less than ninety percent (90%) of Borrower's projected performance as set forth
in Borrower's annual financial projections approved by Borrower's Board of
Directors for the 2020 fiscal year and delivered to Bank (the "2020 Performance
to Plan Financial Covenant"). Borrower's failure to reach an agreement with Bank
on the 2020 Performance to Plan Financial Covenant and to execute and

deliver to Bank an amendment to this Agreement which provides the terms for such
2020 Performance to Plan Financial Covenant no later than February 29, 2020,
shall constitute an immediate Event of Default under this Agreement.

2.2        Formation   or Acquisition of Subsidiaries.  Section 6.11 of the Loan
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:

6.11 Formation or Acquisition of Subsidiaries. Notwithstanding and without
limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the
time that Borrower forms any direct or indirect Subsidiary or acquires any
direct or indirect Subsidiary after the Effective Date (including, without
limitation, pursuant to a Division), Borrower shall, upon Bank's request in its
sole and absolute discretion, (a) cause such new Subsidiary to provide to Bank
either a joinder to this Agreement to cause such Subsidiary to become a
co-borrower hereunder or a Guaranty, together with such appropriate financing
statements and/or Control Agreements, all in form and substance satisfactory to
Bank (including being sufficient to grant Bank a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary), (b) provide to Bank appropriate certificates and powers and
financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary, in form and substance satisfact01y to Bank, and
(c) provide to Bank all other documentation in form and substance satisfactory
to Bank, including one or more opinions of counsel satisfactory to Bank, which
in its opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above. Any document, agreement, or
instrument executed or issued pursuant to this Section 6.11 shall be a Loan
Document.

2.3        Dispositions.  Section 7.1 of the Loan Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:

7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(including, without limitation, pursuant to a Division) (collectively,
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the ordinary
course of business; (ii) of worn-out or obsolete Equipment that is, in the
reasonable judgment of Borrower, no longer economically practicable to maintain
or useful in the ordinary course of business of Borrower; (iii) consisting of
Permitted Liens and Permitted Investments; (iv) consisting of the sale or
issuance of any stock of Borrower permitted under Section 7.2 of this Agreement;
(v) consisting of Borrower's use or transfer of money or Cash Equivalents in the
ordinary course of its business for the payment of ordinary course business
expenses in a manner that is not prohibited by the terms of this Agreement or
the other Loan Documents; (vi) of non-exclusive licenses for the use of the
property of Borrower or its Subsidiaries in the ordinary course of business and
licenses that could not result in a legal transfer of title of the licensed
property but that may be exclusive in respects other than granting rights to a
specific geographical territory and that may be exclusive as to territory only
as to discreet geographical areas outside of the United States; and (vii) other
Transfers that do not in the aggregate exceed Two Hundred Fifty Thousand Dollars
($250,000) during any fiscal year.

2.4        Mergers or Acquisitions. Section 7.3 of the Loan Agreement is hereby
amended by deleting it in its entirety and replacing it with the following:

 

7.3      Mergers or Acquisitions.   Merge or consolidate or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person (including, without limitation, by
the formation of any Subsidiary or pursuant to a Division).  A Subsidiary may
merge or consolidate into another Subsidiary or into Borrower.

2.5        Definitions.  The following new defined term is hereby inserted into
Section 13.1 of the Loan Agreement following the definition of "Designated
Deposit Account":

"Division" means, in reference to any Person which is an entity, the division of
such Person into two (2) or more separate Persons, with the dividing Person
either continuing or terminating its existence as part of such division,
including,  without limitation, as contemplated under Section 18-217 of the
Delaware Limited Liability Company Act for limited liability companies formed
under Delaware law, or any analogous action taken pursuant to any other
applicable law with respect to any corporation, limited liability company,
partnership or other entity

2.6        Compliance Certificate. From and after the date hereof, Exhibit B of
the Loan Agreement is replaced in its entirety with Exhibit B attached hereto
and all references in the Loan Agreement to the Compliance Certificate shall be
deemed to refer to Exhibit B attached hereto.

3.          Limitation of Amendments.

 

3.1        The amendments set forth in Section 2, above, are effective 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 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.

3.2        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.

4.         Representations and Warranties. To induce Bank to enter into this
Amendment, Borrower hereby represents and warrants to Bank as follows:

4.1        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;

4.2        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;

4.3        The organizational documents of Borrower delivered to Bank on the
Effective Date remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

4.4        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;

4.5        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;

4.6        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 Borrower, except as already has been
obtained  or made; and

4.7        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.

5.          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.

 

6.          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.

7.Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto, (b)
Borrower's payment of a fully earned, non-refundable, amendment fee in an amount
equal to Twenty-Five Thousand

Dollars ($25,000), and (c) Borrower's payment of Bank's legal fees and expenses
incurred in connection with the negotiation and preparation of this Agreement.

 

[Signature page follows.]

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BORROWER:

 

 

 

EVERSPIN TECHNOLOGIES, INC.

 

 

 

 

 

By:

/s/ Jeff Winzeler

 

 

Name: Jeff Winzeler

 

 

Title: Chief Financial Officer

 

 

 

 

 

BANK:

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

By:

/s/ Derek Hofmeister

 

 

Name: Derek Hofmeister

 

 

Title: Vice President

 

 

EXHIBIT B

COMPLIANCE CERTIFICATE

 

TO: SILICON VALLEY BANK

Date:

 

 

 

FROM: EVERSPIN TECHNOLOGIES, INC.

The undersigned authorized officer of EVERSPIN TECHNOLOGIES, INC., a Delaware
corporation, (“Borrower”) certifies that under the terms and conditions of the
Loan and Security Agreement between Borrower and Bank (the “Agreement”):

(1) Borrower is in complete compliance for the period ending _______________
with all required covenants except as noted below; (2) there are no Events of
Default; (3) all representations and warranties in the Agreement are true and
correct in all material respects on this date except as noted below; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date;
(4) Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement;
and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank.

Attached are the required documents supporting the certification.  The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.  The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance
is determined not just at the date this certificate is delivered.  Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenants

Required

Complies

 

 

 

Monthly financial statements with Compliance Certificate

Monthly within 30 days

Yes   No

Annual financial statement (CPA Audited)

FYE within 150 days

Yes   No

Board Projections

Earlier of (i) 15 days after board approval or (ii) February 28th of each
calendar year

Yes   No

 

 

 

 

10‑Q, 10‑K and 8-K

Within 5 days after filing with SEC

Yes   No

Board Projections

FYE within 30 days

Yes   No

 

 

 

Financial Covenant

Required

Actual

Complies

 

 

 

 

Maintain on a Monthly Basis:

 

 

 

Liquidity Ratio

1.50:1.00

____ to 1.00

Yes   No

TFS Revenue

See Schedule 1

$_____

Yes   No

 

The following financial covenant analysis and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.

Other Matters

 

Have there been any amendments of or other changes to the capitalization table
of Borrower and to the Operating Documents of Borrower or any of its
Subsidiaries?  If yes, provide copies of any such amendments or changes with
this Compliance Certificate.

Yes

No

 

The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)

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EVERSPIN TECHNOLOGIES, INC.

    

BANK USE ONLY

 

 

 

 

 

 

 

 

Received by:

 

 

 

 

By:

 

 

AUTHORIZED SIGNER

 

 

 

Name:

 

 

Date:

 

 

 

 

Title:

 

 

 

 

 

Verified:

 

 

 

 

 

 

AUTHORIZED SIGNER

 

 

 

 

 

Date:

 

 

 

 

 

 

 

 

 

Compliance Status: Yes No

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall govern.

 

Dated:   ____________________

 

I.           Liquidity Ratio (Section 6.7(a))

Required:           As of the last day of each month, a Liquidity Ratio of not
less than 1.50:1.00.

Actual:

 

A.

Unrestricted cash and Cash Equivalents maintained at Bank

$________

B.

Net accounts receivable

$________

C.

Liquidity (line A, plus line B)

$________

D.

Outstanding Obligations

$________

E.

Liquidity Ratio (line C, divided by line D)

______

 

Is line E equal to or greater than 1.50:1.00?

 

 

 

No, not in compliance

 

 

Yes, in compliance

 

II.          Performance to Plan (Section 6.7(b))

 

Required TFS Revenue of Borrower for such month (calculated on a cumulative
fiscal year to date basis):

 

 

 

Month Ending

Minimum TFS Revenue

June 30, 2019

$17,806,000

July 31, 2019

$19,500,000

August 31, 2019

$22,000,000

September 30, 2019

$26,147,000

October 31, 2019

$28,200,000

November 30, 2019

$31,300,000

December 31, 2019

$36,426,000

 

Actual:

 

 

 

___________

 

 

A.

Actual TFS Revenue of Borrower for such month (calculated on a cumulative year
to date basis):

$___________

 

Is line A equal to or greater than the amount required above?

 

 

 

No, not in compliance

 

 

Yes, in compliance