THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.14.3
THIRD
AMENDMENT
TO
This Third
Amendment to Loan and Security Agreement (this “Amendment”) is entered into as
of July 29, 2009, by and between Hercules
Technology Growth Capital, Inc. (“Lender”) and NEXX
SYSTEMS, INC.,
a Delaware corporation (hereinafter the “Borrower”).
Recitals
Borrower
and Lender are parties to that certain Loan and Security Agreement dated as of
December 19, 2006, as amended from time to time, including that certain First
Amendment to Loan and Security Agreement dated as of June 19, 2007 and Second
Amendment to Loan and Security Agreement dated as of July 25, 2008
(collectively, the “Agreement”). The
parties desire to amend the Agreement in accordance with the terms of this
Amendment. Unless otherwise defined herein, capitalized terms in this
Amendment shall have the meanings assigned in the Agreement.
Now,
Therefore, the parties agree as follows:
1. The
following definitions in Section 1.1 of the Agreement are hereby added or
amended to read as follows:
“Borrowing
Base” means the sum of (i) an amount equal to up to 80% of Eligible Accounts,
plus (ii) 25% of Eligible Inventory.
“Eligible
Inventory” means Borrower’s inventory acceptable to Lender from time to time,
such acceptance not to be unreasonably withheld, valued at lower of cost or
market determined per NEXX Internal Control documents, “Purchasing/ Inventory
Policies and Procedures”.
“Interest
Rate” means (a) for Term Advances: for any day, the greater of (i) the prime
rate as reported in The Wall Street Journal (the “Prime Rate”) plus 3.50% or
(ii) 11.25%; (b) for Revolving Advances, the greater of (i) the Prime
Rate plus 8% or (ii) 13.25%; or (c) for Nonformula Advances, the greater of (i)
the Prime Rate plus 8% or (ii) 17.5% per annum.
“Nonformula
Advances” means the amount by which the Borrowing Base exceeds $3,000,000, plus
50% of Eligible Inventory. Such Nonformula Advances may be up to
$2,000,000 and, after January 1, 2010 and satisfaction of the following
milestones, $3,000,000: (a) for advances prior to January 1, 2010,
Borrower has EBITDA of at least $1.00 for the quarter ended June 30, 2009; and
(b) for advances after January 1, 2010, Borrower has EBITDA for fiscal year 2009
of at least $1,500,000. EBITDA per definition in Section 7.14 of the
First Amendment to Loan and Security Agreement.
“Operating
Plan” means the operating plan approved by Borrower’s Board of Directors in the
form presented to Lender on or before June 30, 2009.
“Revolving
Line” means $6,000,000.
“Revolving
Maturity Date” means June 30, 2010.
2. Clause
(e) is added to the definition of Eligible Accounts, and existing clause (e) is
relettered to (f), as follows: (e) except as approved in writing by
Lender, which approval will not be unreasonably withheld, Accounts with respect
to an account debtor, including its Subsidiaries and Affiliates, whose total
obligations to Borrower exceed fifty percent (50%) of all Accounts, but only to
the extent such obligations exceed such percentage.
1
3. Section
2.1(a) is amended to read as follows:
(a) Revolving Advances.
Subject to the terms and conditions of this Agreement, Lender will make
Revolving Advances to Borrower in minimum increments of $250,000, through the
Revolving Maturity Date. The aggregate outstanding Revolving Advances
may be up to the lesser of (i) the Borrowing Base plus Nonformula Advances and
(ii) the Revolving Line. If the outstanding Revolving Advances exceed
the lesser of (i) the then applicable Borrowing Base plus Nonformula Advances or
(ii) the Revolving Line at any time, Borrower shall on demand repay to Lender
the amount of such excess in cash. Subject to the terms and
conditions of this Agreement, Revolving Advances may be repaid and reborrowed at
any time through the Revolving Maturity Date, at which time all Revolving
Advances shall be immediately due and payable. Borrower may
prepay
4. Borrower
shall have EBITDA on a rolling 6-month basis, tested monthly within thirty (30)
days following the end of the most recent month tested, of at least as
follows:
|
Minimum EBITDA
|
|
|
July
30, 2009
|
$455,000
|
|
July
31, 2009
|
$455,000
|
|
August
31, 2009
|
$455,000
|
|
September
30, 2009
|
$240,000
|
|
October
31, 2009
|
$240,000
|
|
November
30, 2009
|
$250,000
|
|
December
31, 2009
|
$1,275,000
|
|
January
31, 2010
|
$1,000,000
|
|
February
28, 2010
|
$1,000,000
|
|
March
31, 2010
|
$1,000,000
|
|
April
30, 2010
|
$1,000,000
|
|
May
31, 2010
|
$1,000,000
|
|
June
30, 2010
|
$1,000,000
|
5. The
Operating Plan delivered to Lender as of the date of this Amendment is a true
and correct copy of the Operating Plan as currently in effect. The
Lender acknowledges that the Borrower may change its Operating Plan as approved
by the Board of Directors from time to time, in which case the Borrower shall
promptly provide the Lender with a copy of such amended Operating Plan as
approved by the Board of Directors.
6. Unless
otherwise defined, all initially capitalized terms in this Amendment shall be as
defined in the Agreement. The Agreement, as amended hereby, shall
remain in full force and effect in accordance with its terms. Except
as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Lender under the Loan Documents, as in effect prior to the
date hereof.
7. This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
instrument.
8. As a
condition to the effectiveness of this Amendment, Lender shall have received, in
form and substance satisfactory to Lender, the following:
(a) this
Amendment, duly executed by Borrower;
(b) Corporate
Resolutions to Borrow;
(c) Warrant
to Purchase Stock;
2
(d) payment
of an amendment fee equal to $125,000, plus an amount equal to the Lender
Expenses incurred in connection with this Amendment of
$_______________.
9. Borrower
acknowledges that there are existing and uncured Events of Default arising from
Borrower’s failure to comply with Section 7.14 through the date hereof or any
previously permitted advances in excess of the Borrowing Base (the “Existing
Defaults”). Subject to the conditions contained herein and
performance by Borrower of all of the terms of the Agreement after the date
hereof, Lender waives the Existing Defaults. Lender does not waive
Borrower’s obligations under such Sections after the date hereof, and Lender
does not waive any other failure by Borrower to perform its Obligations under
the Loan Documents. This waiver is not a continuing waiver with
respect to any failure to perform any Obligation after the date
hereof. In addition, Lender acknowledges and agrees that the issuance
and proposed issuance by Borrower of shares of Series D Preferred Stock and
warrants to purchase shares of Series D Preferred Stock to current and new
investors, as well as the warrants to purchase shares of Series D
Preferred Stock to Lender as contemplated hereby, shall not constitute a
“Prepayment Event.”
10. In
consideration of the amounts paid herein and in the prior amendments to the Loan
and Security Agreement, the provisions of Sections 2.7 and 8 of the Loan and
Security Agreement, Section 3 of the First Amendment to Loan Agreement and
Sections 5 of the Second Amendment to Loan and Security Agreement are hereby
deleted and of no further force and effect.
11. Sections
9.7 and 9.8 of the Loan and Security Agreement are hereby amended to read as
follows:
“9.7 Attachments;
Judgments. Any portion of Borrower’s assets is attached
or seized (other than through an ex parte attachment), or a levy is filed
against any such assets or a judgment or judgments is entered for the payment of
money, individually or in the aggregate, of at least $350,000, or Borrower is
enjoined or in any way prevented by court order from conducting any material
part of its business; or
9.8. Other Obligations. Either
(a) the occurrence of any default under any agreement or obligation of Borrower
involving any obligation in excess of $350,000 (other than the late delivery of
any system purchase order) or that, when aggregated with any other such
defaults, would reasonably be expected to have a Material Adverse
Effect.”
In Witness
Whereof, the undersigned have executed this Amendment as of the first
date above written.
NEXX SYSTEMS, INC.
By: /s/ Xxxxxxx
Xxxxxx
Title:
CFO
HERCULES
TECHNOLOGY GROWTH CAPITAL, INC.
By: /s/ X. Xxxxxxxx
Martitsh
Title: Associate General
Counsel
3
