Document:

ex10_3.htm

 Exhibit 10.3

 

FIRST AMENDMENT

 

TO

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT to Second Amended and Restated Loan and Security Agreement (this “Amendment”) is entered into this 5th day of March, 2012, by and between Silicon Valley Bank (“Bank”) and ACTIVE POWER, INC., a Delaware corporation (“Borrower”), with its principal place of business at 2128 W Braker Lane BK 12, Austin, TX 78758.

 

Recitals

 

A.           Bank and Borrower have entered into that certain Second Amended and Restated Loan and Security Agreement dated as of August 5, 2010 (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 consent to a transaction with an Affiliate of Borrower.

 

D.           Bank has agreed to so 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 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 Loan Agreement.

 

2.           Amendments to Loan Agreement.

 

2.1           Section 7.7 (Transactions with Affiliates).  Section 7.7 is amended in its entirety and replaced with the following:

 

“7.7           Transactions with Affiliates.  Enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person; provided that the foregoing restriction shall not apply to (i) any transaction between Borrower and any of its Subsidiaries or between any Subsidiaries that is not otherwise prohibited by this Agreement, (ii) reasonable and customary fees paid to members of the board of directors of Borrower and its Subsidiaries, (iii) compensation arrangements and benefit plans for officers and other employees of Borrower and its Subsidiaries entered into or maintained in the ordinary course of business and (iv) transactions pursuant to the Securities Purchase Agreement.

 

  

  

  

 

2.2           Section 13 (Definitions).  The following term and its definition are hereby added to Section 13.1:

 

“Securities Purchase Agreement” is that certain Securities Purchase Agreement by and among Borrower and the Purchasers party thereto dated as of March 5, 2012.

 

2.3           Bank hereby agrees that any Letters of Credit or Cash Management Services that are currently required to be cash secured pursuant to the terms of the Agreement may remain not cash secured until March 23, 2012, at which time any such Letters of Credit or Cash Management Services that are required to be cash secured pursuant to the terms of the Agreement at such time shall be immediately cash secured.

 

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;

 

  

2

  

 

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 either 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.           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.

 

6.           Effectiveness.  This Amendment shall be deemed effective upon the due execution and delivery to Bank of this Amendment by each party hereto.

 

[Signature page follows.]

  

3

  

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

 

	
BANK

	 	
BORROWER

	 
	  	 	  	 
	
Silicon Valley Bank

	 	
Active Power, Inc.

	 
	  	 	  	 
	By:	 	 	By:	
 

	 
	Name:	
  /s/  Priya Iyer

	 	Name:	
/s/ John K. Penver

	 
	Title:	
 Relationship Manager

	 	Title:	
 Chief Financial Officer

	 

 

4ex10_27-1.htm

Exhibit 10.27.1

PULSE ELECTRONICS CORPORATION

12220 World Trade Drive

San Diego, California 92128

July 30, 2012

Mr. Drew A. Moyer

922 Intrepid Court

Del Mar, CA  92014

Dear Drew,

This letter confirms the terms of your continued employment with Pulse Electronics Corporation (“Pulse” or the “Company”).  Your employment from and after July 30, 2012 will continue on an at will basis.  Your title will remain as Senior Vice President and Chief Financial Officer, and you shall report to the Chief Executive Officer and to the Board of Directors of the Company.  Your annual salary will remain at $321,299.97 until such time as the Board determines otherwise.  Paychecks are distributed bi-weekly.  You will earn four weeks of vacation days on a pro rated basis throughout the year, subject to all the terms of Company policy.

You shall be entitled to other benefits, bonuses and perquisites as determined by the Board of Directors of the Company in its sole discretion or in accordance with any duly adopted plan, policy or program established by the Company, subject to the terms of those plans, policies or programs.  Currently, your own benefits entitlements include the Pulse Electronics Corporation Executive Severance Policy as well as group health, dental, life and long term disability insurance, 401(k) and a Flexible Spending Account (FSA).  In addition, as previously agreed, the Company has agreed to provide transition benefits to you in connection with the termination of your current Company automobile benefit. Accordingly, at the end of the current lease to your Company car (a) Pulse will deliver title of the leased car to you and provide you with a one-time equity award of $50,000 and a special salary increase of 5% of your then current base salary, and (b) you will no longer be provided with a Company car.

The Company shall reimburse you for all reasonable business expenses incurred in carrying out your duties upon appropriate substantiation and documentation of such expenses and in accordance with the policies, practices and procedures of the Company as in effect from time to time.

As a condition of your continued employment, you acknowledge that you have signed and returned to the Company a copy of its standard Confidential Information and Invention Assignment Agreement.

 

You shall perform and discharge faithfully, diligently and to the best of your ability your duties and responsibilities to the Company, devote your full-time efforts to the business and affairs of the Company, and not devote time to activities or interests that would impair your ability to perform your obligations to the Company.

 

You shall at all times comply with and abide by the provisions of this at will letter, all applicable work policies, the Company's Statement of Principles Policy and Code of Business Conduct as in effect from time to time, and any and all procedures and rules as may be issued by Company from time to time, and you shall strive to comply with any and all federal, state and local statutes, regulations and public ordinances applicable to the performance of your duties.

 

Any legal action or proceeding with respect to your employment, except for those arising out of or relating to the standard Confidential Information and Invention Assignment Agreement, will be brought and, except as set forth below, any and all disputes, controversies, or claims (hereinafter "disputes") arising out of or related to the employment relationship between you and the Company, shall be submitted for adjudication exclusively to arbitration before the American Arbitration Association ("AAA"), located in the city in which the Company is headquartered.  In agreeing to arbitration of any and all disputes, both you and the Company knowingly and voluntarily waive and relinquish their rights to have such disputes decided through law suits, in a court of law with a judge and jury and, instead, shall have them decided by an arbitrator under the rules and regulations of AAA.  In such arbitration the Company shall pay the costs of the arbitrator. Any decision of the arbitrator resolving such dispute shall be final and binding upon the parties. This arbitration provision shall not be deemed to prohibit or restrict either party from initiating legal action in a court of competent jurisdiction to seek injunctive or other equitable relief, and excludes disputes arising out of or relating to the standard Confidential Information and Invention Assignment Agreement. 

  

  

  

As with all Company employees, employment is “at will” and can be terminated by you or by the Company at any time with or without advance notice or “cause.” If you are terminated other than for cause, your termination benefits will be as provided in the Pulse Electronics Corporation Executive Severance Policy, as it may be in effect from time to time, and those of your Company-provided automobile transition benefits as described above.  This “at will” employment relationship can only be modified in a written agreement executed and delivered by you and an executive officer of the Company that has been duly authorized by the Board of Directors of the Company.  This paragraph contains the entire agreement between you and the Company regarding the right or ability of either you or the Company to terminate your employment with the Company.

We look forward to your continuing employment with the Company.  Please sign and return this letter to us by the close of business on the date hereof. This offer letter supersedes any previous discussion, agreement, or understanding between you and the Company regarding the subject matter of this letter.

 

Sincerely,

PULSE ELECTRONICS CORPORATION

By:

	  	
/s/ Ralph E. Fasion

	  
	
Ralph E. Faison

	
Chairman and Chief Executive Officer

I hereby accept the above offer:

	  	
/s/ Drew A. Moyer

	 	
July 30, 2012

	  
	
Drew A. Moyer

	 	
Date

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