Item 1.01. Entry into a Material Definitive Agreement.
On July 28, 2014, Active Power, Inc. (the "Company") entered into the Third
Amendment to Second Amended and Restated Loan and Security Agreement with
Silicon Valley Bank (the "Amendment"), which amends the Second Amended and
Restated Loan and Security Agreement, dated as of August 5, 2010, by and between
the Company and Silicon Valley Bank (the "Loan Agreement").
Pursuant to the Amendment, the maturity date of the loan facility was extended
by three years, to August 5, 2017, unless earlier terminated by the Company,
subject to any then applicable early termination fee. The Amendment further
provides for, among other things: (i) increasing the aggregate facility size
from $12,500,000 to $15,000,000, subject to certain borrowing bases; (ii)
increasing the Company's inventory and purchase order availability from
$3,500,000 to $7,000,000; (iii) reducing the finance charge to a per annum rate
equal to Silicon Valley Bank's prime rate, subject to a minimum prime rate of
4.00%, plus (a) 0.50% for eligible accounts, inventory and purchase orders when
the Company is Borrowing Base Eligible (as defined in the Loan Agreement), or
(b) 1.20% for eligible accounts when the Company is not Borrowing Base Eligible;
(iv) adding the qualifying receivables and cash of the Company's German
subsidiary for the purposes of providing additional credit availability and for
the purpose of covenant calculations; (v) amending the sublimits under the
borrowing base formula such that (x) the $5 million sublimit for U.K. accounts
receivables applies to both U.K. and German eligible accounts receivables, (y)
the sublimits for eligible aged accounts receivables and eligible inventory are
increased to $2 million and $4 million, respectively, and (z) adding $3 million
sublimit for eligible purchase orders.
The loans made to the Company under the Loan Agreement are secured by a lien on
substantially all of its assets.
A copy of the Amendment is attached as Exhibit 10.1 to this Current Report and
is incorporated by reference herein. The foregoing description of the Amendment
is qualified in its entirety by reference to the full text of the Loan
Item 2.02. Results of Operations and Financial Condition.
On July 29, 2014, the Company issued a press release reporting its results of
operations for its fiscal quarter ended June 30, 2014. A copy of the press
release is furnished as Exhibit 99.1 and incorporated into this Item 2.02 by
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01, "Entry into a Material Definitive
Agreement," is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
99.1† Press Release of Active Power, Inc.
dated July 29, 2014
10.1†† Third Amendment to Second Amended and Restated Loan and Security Agreement
with Silicon Valley Bank, dated July 28, 2014
† Furnished with this report.
†† Filed with this report.