SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.14.2
SECOND
AMENDMENT
TO
This Second
Amendment to Loan and Security Agreement (this “Amendment”) is entered into as
of July 25, 2008, by and between Hercules
Technology Growth Capital, Inc. (“Lender”) and NEXX
SYSTEMS, INC.,
a Delaware corporation, and each of its subsidiaries, (hereinafter
collectively referred to as 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
(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. 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 (the
“Existing
Default”). 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 Default. 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.
2. The
following definitions in Section 1.1 of the Agreement are hereby added or
amended to read as follows:
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“Borrowing
Base” means the sum of (i) an amount equal to up to 80% of Eligible
Accounts, plus (ii) 70% of firm orders for delivery scheduled within 365
days in an amount not to exceed
$1,500,000.
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“Revolving
Maturity Date” means June 30, 2009, provided however, that
in the event that Borrower maintains EBITDA greater than one dollar on a
cumulative quarterly basis for two consecutive quarters prior to or up to
June 30, 2009, the Revolving Maturity Date shall mean December 31,
2009.
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“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 3% or (ii) 11.25%; or (c) for Nonformula
Advances, the greater of (i) the Prime Rate plus 5% or (ii) 14% per
annum.
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“Nonformula Advances” means the amount
by which the outstanding Revolving Advances exceedsthe Borrowing Base, which may be up to
$2,500,000 through December 31, 2008, and $0 thereafter.
“Revolving Line” means
$5,000,000.
“Term Maturity Date” means March 1,
2010.
3. Section
2.1(a) is amended to read as follows:
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(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 including without limitation Section 2.7, 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.
4. Section
2.4 is amended to read as follows:
2.4 Payment. Borrower
will pay interest on each Revolving Advance on the first day of each month,
beginning the month after the Advance Date and continuing through the Revolving
Maturity Date, at which time the entire principal balance and all accrued but
unpaid interest hereunder shall be due and payable, along with an end-of-term
payment of $250,000. Borrower shall repay the aggregate principal
balance on the Term Advance that is outstanding on July __, 2008, in 21 equal
monthly installments of principal and interest beginning August 1, 2008 and
continuing on the first business day of each month thereafter. The
entire principal balance and all accrued but unpaid interest on the Term Advance
shall be due and payable on the Term Maturity Date. Borrower shall
make all payments under this Agreement without setoff, recoupment or deduction
and regardless of any counterclaim or defense.
5. Section
2.7 is amended to read as follows:
2.7 Prepayment. Subject
to the terms of this Section 2.7, at its option, Borrower may prepay all, but
not less than all, of the outstanding Advances by paying the entire principal
balance, all accrued interest, and all interest that would have accrued had the
Advances been outstanding through the Revolving Maturity Date, provided that
Borrower also pays an end-of-term payment of $250,000 in the event of such
prepayment. Borrower shall prepay the outstanding amount of all principal and
accrued interest and unpaid interest upon the earlier to occur of a Prepayment
Event or within 90 days of the completion of an Initial Public
Offering. Except in the event of an Initial Public Offering in which
Lender requires a prepayment (in which event no prepayment premium shall be
payable), Borrower shall pay a prepayment premium equal to 3.0% of the amount of
the Term Advances if prepayment is made on or before the July 31, 2009, or 1.5%
of the Term Advances if prepayment is made on or after August 1, 2009 but before
March 1, 2010. If any Revolving Advances are repaid with the proceeds
of any funds lent to Borrower, Borrower shall pay a prepayment premium equal to
3.0% of the amount of the Revolving Advances if prepayment is made on or before
the first anniversary of the Closing Date, 1.25% of the amount of the Revolving
Advances if prepayment is made after the first anniversary, but on or before the
second anniversary of the Closing Date, and 0.5% of the Revolving Advances if
prepayment is made after the second anniversary of the Closing
Date. If any part of the incremental $3,000,000 of Revolving Advances
is repaid with the proceeds of any funds lent to Borrower by a commercial bank
or other business entity (other than by entities which are then stockholders of
Borrower), Borrower shall pay a prepayment premium equal to 5.0%
of the entire $3,000,000. Such prepayment premium shall
not apply to any prepayment if Borrower is in default of its obligations under
the provisions of the Agreement or this Amendment and Lender has made demand on
Borrower to repay the $3,000,000 overadvance.
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.
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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) Amendment
to Warrants;
(d) payment
of an amendment fee equal to $43,000, plus an amount equal to the Lender
Expenses incurred in connection with this Amendment.
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
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