AMENDMENT NO. 2 Dated February 28, 2011
Exhibit 4.13
AMENDMENT NO. 2
Dated February 28, 2011
THIS AMENDMENT NO. 2 (“Amendment 2”) to that certain Loan and Security Agreement No. 1452
dated as of January 27, 2010 (“Agreement”), by and between Lighthouse Capital Partners VI,
L.P., as “Agent” for the lenders identified on Schedule A to the Agreement (such
lenders, together with their respective successors and assigns are referred to herein each
individually as a “Lender” and collectively as “Lenders”), the Lenders and KIOR, INC. (“Borrower”).
RECITALS
WHEREAS, Borrower and Lenders have previously entered into that certain Loan and Security
Agreement No. 1452 dated January 27, 2010, as amended (the “Agreement”) (all capitalized terms not
otherwise defined herein are defined in the Agreement);
WHEREAS, Borrower has requested that Lenders modify certain terms of its existing term loan
financing; and
WHEREAS, Lenders have agreed to do so under the Agreement, subject to all of the terms and
conditions hereof and of the Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
the parties hereby agree to modify the Agreement and to perform such other covenants and conditions
as follows:
I. Section 1.1, the following definitions shall be added to the Agreement:
“Amendment I” means that certain Amendment No. 1 to Loan and Security Agreement by and between
Agent, Lenders and Parent.
“Amendment 2” means this Amendment No. 2 to Loan and Security Agreement by and between Agent,
Lenders and Borrower.
“Columbus” means Kior Columbus LLC, a limited liability company organized under the laws of
Delaware and a wholly-owned subsidiary of Borrower.
“Exempt Subsidiary” means (i) Columbus and (ii) each Subsidiary formed after the date hereof that
is the primary obligor to the United States Department of Energy under one or more credit
arrangements for the development of alternative fuel projects.
“New Warrants” means the warrant agreements in the form attached to this Amendment 2 as Exhibit
C-2.
II. Section 1.1, the following definitions of the Agreement shall be deleted in their entirety and
replaced with the following:
“Basic Rate” a per annum rate of interest equal to (i) 13% during the Interest Only Period and
(ii) 12% on and after the Loan Commencement Date.
“Commitment Fee” means (i) $15,000 due in conjunction with the Agreement; and (ii) $15,000 due in
conjunction with this Amendment 2.
“Disclosure Schedule” means the updated schedule attached as Schedule 1-1 hereto.
“Loan Documents” means, collectively, the Agreement, Amendment 1, Amendment 2, the Warrant, the
Notes, and a11 other documents, instruments and agreements entered into between Borrower or any
Subsidiary or affiliate of Borrower and Lender in connection with the Loan, all as amended or
extended from time to time.
“Incumbency Certificate” means the document in the form of Exhibit E attached to the Agreement for
Parent and in the form of
Exhibit E-1 attached to this Amendment 2.
Exhibit E-1 attached to this Amendment 2.
“Interest Only Period” means the period commencing on February 1, 2011 and continuing through the
day immediately preceding the Loan Commencement Date.
“Loan Commencement Date” means March 1, 2012.
“Note” means collectively (i) the Amended and Restated Secured Promissory Note (the “LCP Amended
Note”) in the form of Exhibit B-1 attached to Amendment 2, which shall amend and restate the Note
issued by Borrower to Lighthouse Capital Partners VI. L.P. an January 29. 2010 in the principal
amount of $4,900,000; and (ii) (A) the Amended and Restated Secured Promissory Note (the “Leader-A
Amended Note”) in the form of Exhibit B-2 attached to Amendment 2, which shall amend and restate
the Note issued by Borrower to Leader Lending, LLC — Series A on January 29. 2010 in the principal
amount of $1,050,000 and (B) the Amended and Restated Secured Promissory Note (the “Leader-B
Amended Note”) in the form of Exhibit B-3 attached to Amendment 2, which shall amend and restate
the Note issued by Borrower to Leader Lending, LLC — Series B on January 29, 2010 in the principal
amount of $1,050,000.
“Permitted Indebtedness” means: (i) the Loan; (ii) unsecured trade debt incurred in the ordinary
course of Borrower’s or any Subsidiary’s business; (iii) Indebtedness secured by clauses (ii). (v),
and (vi) of Permitted Liens; (iv) Indebtedness between the Borrower and any Exempt Subsidiary
created in the ordinary course of business (for clarity, for purposes of this section, the
“ordinary course of business” shall include such intercompany Indebtedness incurred for purposes of
funding the expenses related to the financing, buildout. development and operation of the business
of such Exempt Subsidiary); (v) Indebtedness between the Borrower and any subsidiaries that are not
Exempt Subsidiaries created in the ordinary course of business, provided such Subsidiary is a
co-Borrower hereunder; (vi) Indebtedness set forth on the Disclosure Schedule as of the date of
this Agreement; (vii) Subordinated Indebtedness; (viii) unsecured guarantees of Borrower made with
respect to the primary obligations of its Exempt Subsidiaries including obligations of the Exempt
Subsidiaries in favor of the State of Mississippi and in the future the United States Department of
Energy, provided such primary obligations of the Exempt Subsidiary and the corresponding Borrower
guaranty agreements are all in form and substance reasonably satisfactory to Lender; and (ix)
extensions, refinancing, modifications, amendments and restatements of any items of Permitted
Indebtedness above, provided that the principal amount thereof is not increased or the terms
thereof are not modified to impose more burdensome terms upon Borrower or an Exempt Subsidiary, as
the case may be.
“Permitted Investments” means (i) Investments existing as of the date hereof and disclosed on the
Disclosure Schedule; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency or any State thereof maturing within 1 year from the
date of acquisition thereof, (b) commercial paper maturing no more than one year from the date of
creation thereof and currently having a rating of at least A-3 or P-2 from either Standard & Poor’s
Corporation or Xxxxx’x Investors Service, (c) certificates of deposit maturing no more than 1 year
from the date of investment therein, and (d) money market accounts; (iii) Investments made pursuant
to an investment policy approved by the Board of Directors that is designed to maintain liquidity
and preserve capital with respect to Borrower’s excess cash; (iv) Investments not to exceed
$100,000 in the aggregate in any fiscal year consisting of (a) travel advances and employee
relocation loans and other employee loans and advances in the ordinary course of business and (b)
loans to employees, officers and directors relating to the purchase of equity securities of
Borrower pursuant to employee stock purchase plan agreements approved by Borrower’s Board of
Directors; (v) Investments (including debt obligations) received in connection with the bankruptcy
or reorganization of customers or suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business;
(vi) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not affiliates, in the ordinary course of business;
and (vii) deposit accounts maintained by Borrower in the ordinary course of business; (viii)
Investments by Borrower into Subsidiary (including without limitation the Exempt Subsidiaries) or
by a Subsidiary into another Subsidiary to fund such Subsidiary’s ordinary course operations (for
clarity, for purposes of this section, the “ordinary course operations” shall include operations
related to the financing, buildout, development and operation of the business of such Exempt
Subsidiary, including the Indebtedness of the Exempt Subsidiaries in favor of the State of
Mississippi and in the future the United States Department of Energy).
“Subsidiary” means any entity of which a majority of the outstanding capital interest entitled to
vote for the election of directors (otherwise than as the result of a default) is owned by Borrower
directly or indirectly through Subsidiaries, including any Exempt Subsidiary.
“Warrant” or “Warrants” means the Warrant in favor of each of the Lenders and its affiliates to
purchase securities of Borrower substantially in the form of Exhibit C attached to the Agreement
and the New Warrants in the form of that of Exhibit C-2 attached to this Amendment 2.
III. Section 5 of the Agreement. Section 5.3 of the Agreement shall be deleted and replaced with
the following:
5.3 Disclosure Schedule. All information on the Disclosure Schedule is true. correct and
complete as of the date of this Amendment 2.
IV. Section 6 of the Agreement. Section 6.1 of the Agreement shall be deleted and replaced with
the following:
6.1 Good Standing and Compliance. Borrower and its Subsidiaries shall maintain all
governmental licenses, rights and agreements necessary for its operations or business and comply in
all material respects with all statutes, laws, ordinances and government rules and regulations to
which it is subject, except where the failure to do so would not reasonably be expected to result
in a Material Adverse Effect.
V. Section 6 of the Agreement. Section 6.7 of the Agreement shall be deleted and replaced with
the following:
6.7 Taxes. Borrower and its Subsidiaries shall file a]l required tax returns, and shall pay
all taxes they owe other than where the failure to comply would not reasonably be expected to have
a Material Adverse Effect.
VI. Section 6.10 of the Agreement shall be deleted and replaced with the following:
6.10 Dissolution of Kior BV. Borrower shall not permit a Lien to arise on the capital
stock of Kior BV, or physically pledge the stock certificates of Kior BV, in favor of any other
party other than Lender and Borrower shall diligently pursue the dissolution of Kior BV as soon as
reasonably practicable. The Agent, on behalf of itself and the Lenders, hereby waives any Event of
Default that may have arisen under Section 8.3 of the Agreement as a result of the Borrower’s
inability to dissolve the existence of Kior BV prior to the date of this Amendment 2.
VII. Section 6 of the Agreement. A new Section 6.11 and Section 6.12 shall be added:
6.11 Creation of Subsidiaries. Borrower shall provide Agent not less than 15 days prior
written notice of the formation of a Subsidiary after the date hereof, whether domestic or foreign.
Except as set forth herein, Borrower shall take all steps necessary at the request of Lenders to
cause each domestic Subsidiary to be a co-borrower hereunder or a guarantor hereof and shall cause
such Subsidiary to grant a first priority security interest in all of its assets to Agent on behalf
of Lenders and/or cause a pledge of such Subsidiary’s stock in favor of Agent on behalf of Lenders.
Borrower shall take all steps necessary at the request of Lenders to pledge in favor of Agent on
behalf of Lenders the capital stock of each foreign Subsidiary provided such pledge may be limited
to sixty-five percent (65%) of such Subsidiary’s capital stock, Notwithstanding the foregoing,
Columbus shall not be required to become a Borrower or guarantor hereof, and unless and until the
membership interests of Columbus are evidenced in certificated form. Agent will not require a
physical pledge of the membership interests of Columbus (provided
nothing herein shall be deemed to release Agent’s security interest in such membership interests).
In addition, Agent agrees that from time to time in the future Borrower may form Exempt
Subsidiaries. Provided that Agent is given prior notice as required by the first sentence of this
Section 6.11, and provided such obligations are in form and substance acceptable to Agent. Borrower
shall not, upon Agent’s approval, be required to cause such Exempt Subsidiary to become a Borrower
or guarantor hereof, provided that nothing herein shall be deemed to release Agent’s security
interest in an Exempt Subsidiary’s capita] stock or membership interests and Agent shall not be
deemed to have waived the right to request a physical pledge of such Exempt subsidiary’s capital
stock in favor of Agent.
6.12 Issuance of New Warrants. On or before March 31. 2011, Borrower shall issue to each Lender a
New Warrant for the purchase of the Borrower’s Series C Preferred Stock in a total aggregate price
to all Lenders of S250,000, which series of preferred stock is to be authorized, designated, issued
and sold for purposes of an equity financing of Borrower after the date hereof in the amount of at
least $60,000,000 (the “Series C Offering”). in the event that the Series C Offering is not
completed by such date, then in such event, Borrower shall issue to each Lender a New Warrant for
the purchase of Borrower’s existing Series B Preferred Stock in a total aggregate price to all
Lenders of $250,000 with an exercise price of $9.84, and Borrower shall take all steps necessary to
authorize additional shares of Series B Preferred Stock (with identical terms, rights and
privileges as the authorized and issued Series B Preferred Stock) for issuance under the New
Warrant, including the amendment of Borrower’s Amended and Restated Certificate of Incorporation of
Kior, Inc. Borrower’s failure to issue and deliver the New Warrants to Lenders by March 31, 2011
shall be an Event of Default.
VIII. Section 7 of the Agreement. Section 7.11 of the Agreement shall be deleted and replaced with
the following:
7.11 Deposit and Securities Accounts; Accounts of Exempt Subsidiaries. Maintain any deposit
accounts or accounts holding securities owned by Borrower except accounts in which Agent on behalf
of all Lenders has obtained a perfected first priority security interest. Notwithstanding the
foregoing. Lender shall not have a perfected security interest in (i) Borrower’s certificate of
deposit account no. 0910-00121407355 with Bank of America which secures Borrower’s commercial
credit card facility, provided the amount of such account shall not exceed $125,000; and (ii) any
deposit account maintained by Columbus, provided the amount of funds in such deposit account(s)
does not exceed at any time the sum of (a) S5,000,000 plus (b) the aggregate of the accounts
payable of Columbus then due and payable within the following 60 days; and (iii) any deposit
account maintained by an Exempt Subsidiary provided the amount of funds in such deposit account(s)
does not exceed at any time the sum of (a) $5,000,000 plus (b) the aggregate of the accounts
payable of such Exempt Subsidiary then due and payable within the following 60 days. For so long as
the Obligations are outstanding. Borrower shall not hold directly or indirectly, purchase or create
a purchase order or directive to purchase any auction rate securities or similar financial
instruments regardless of whether such securities are to be held by Borrower or through one or more
brokerage accounts.
IX. Section 7 of the Agreement. Section 7.12 of the Agreement shall be deleted and replaced with
the following:
7.12 Maintenance of Subsidiaries. Except as set forth in Section 6.10 hereof Borrower shall
not, and shall not permit or cause any Subsidiary to, (i) except with respect to Columbus, and upon
Agent’s approval with respect to any future Exempt Subsidiary, which approval shall not he
unreasonably withheld and timely, sell, dispose of, convey, or allow a Lien to arise on any of its
assets, including Intellectual Property (as defined in Exhibit A) owned by such Subsidiary (and for
this purpose, the definition of “Intellectual Property” shall be deemed to refer to such
Subsidiary) except for non-exclusive licenses entered into in the ordinary course of business; (ii)
divest or “spin-oft” any Subsidiary except where as a result of such transaction Borrower and/or
Borrower’s shareholders or affiliates retain or obtain majority ownership of such Subsidiary; (iii)
merge or consolidate any Subsidiary with or into another entity (unless as a result of such merger
Borrower and/or Borrower’s shareholders or affiliates retain or obtain majority ownership of the
surviving entity); (iv) permit a Change of Control (as defined below) of any Subsidiary; (v) make a
pledge of. any capital stock of any Subsidiary in favor of any person other than Lender; or (vi)
materially change the corporate structure and business operations of the Borrower and its
Subsidiaries taken as a whole. For the purposes of this Section 7.12, a “Change of Control” shall
mean, any transaction or series of related transactions whereby the Borrower and/or Borrower’s
shareholders or affiliates of Borrower holding in excess of
50% of the outstanding voting capital stock of any Subsidiary immediately prior to such transaction
or transactions, shall own less than 50% of the outstanding voting or capital stock of such
Subsidiary immediately following such transaction or transactions.
X. Conditions Precedent to the effectiveness of Amendment 2:
The obligation of Lenders to enter into this Amendment 2 is subject to the performance
and fulfillment of each and every of the following conditions precedent in form and substance
satisfactory to Lenders in their sole discretion:
(a) This Amendment 2 shall have been duly executed and delivered by Borrower.
(b) The LCP Amended Note, the Leader-A Amended Note, and the Leader B Amended Note shall have been
duly executed and issued by Borrower to Lenders.
(c) Without limiting the foregoing or Lender’s rights or Borrower’s Obligations under the
Agreement, such consents, including the approvals of Borrower’s board of directors, amendments,
filings, recordations, or other documents from any persons or entities necessary to maintain the
perfection and priority of Lenders’ security interest in the Collateral as amended hereby and as
originally configured, in form and substance satisfactory to Lenders in its sole discretion, shall
have been delivered by Borrower to Lenders.
(d) A good standing certificate from Borrower’s state of incorporation or formation and the state
in which Borrower’s principal place of business is located, together with certificates of the
applicable governmental authorities stating that Borrower is in compliance with the franchise tax
laws of each such state, each dated as of a recent date shall have been delivered to Lenders.
(e) All necessary consents of shareholders, members, and other third parties with respect to the
execution, delivery and performance of this Amendment 2, and the other Loan Documents shall have
been delivered to Lenders.
XI. Additional Terms and Conditions
(a) Further Conditions. The following are conditions precedent to Lenders’ obligations
hereunder, without delivery and performance of which to Lenders’ satisfaction, the original payment
terms of the Loan Documents and the Notes shall remain in full force and effect, unamended hereby:
(i) Borrower shall deliver an Incumbency Certificate, in the form attached hereto as Exhibit E-1,
certified by responsible officers of Borrower, and attachments thereto including the resolutions
adopted by Borrower’s board of directors authorizing the execution and delivery of this Amendment 2
and the other documents referred to in this Amendment 2 and the performance by Borrower of its
obligations under such documents.
(ii) Borrower shall execute and deliver all other documents, as Lenders shall have reasonably
requested prior to the execution by Borrower and Lender of this Amendment 2.
(b) Representations and Warranties of Borrower. Giving effect to this Amendment 2 and the
Disclosure Schedules attached hereto and made a part hereof, Borrower reaffirms the
representations and warranties made to Lenders in the Agreement as of the date hereof as
though fully set forth herein. Borrower further warrants and represents, as a significant material
inducement to Lenders to enter hereinto, that: (i) no Events of Default have occurred that have not
been disclosed to Lenders by Borrower in writing; (ii) it is not and has no reason to believe it
may be named as a party to any judicial or administrative proceedinu, 1itigation or arbitration,
and has not received any communication from any person or entity (whether private or governmental)
threatening or indicating the same, except as previously disclosed to Lender in writing; and (iii)
it is in full compliance with Section 7.11 of the Agreement.
(c) No Control. Borrower warrants and represents, as a significant material inducement to
Lenders to enter hereinto, that none of Lenders nor, to the Borrower’s knowledge, any affiliate,
officer, director, employee, agent, or attorney of Lenders, have at any time, from Borrower’s date
of formation through to the date hereof, (i) exercised management or other control over the
Borrower. (ii) exercised undue influence over Borrower or any of its officers, employees or
directors. (iii) made any representation or warranty, express or implied, to any party on behalf
of Borrower, (iv) entered into any joint venture, agency relationship, employment relationship, or
partnership with Borrower, (v) directed or instructed Borrower on the manner, method, amount, or
identity of payee of any payment made to any creditor of Borrower, and further, Borrower warrants
and represents that by entering hereinto with Lenders has not, are not and will not have engaged in
any of the foregoing.
XII. Integration Clause. This Amendment 2, together with all Loan Documents required to be entered into
in connection with this Amendment 2, represents and documents the entirety of the agreement and
understanding of the parties hereto with respect to its subject matter. All prior understandings,
whether oral or written, other than the Loan Documents, are hereby merged hereinto. NONE OF THE
AGREEMENT OR THIS AMENDMENT 02 MAY BE MODIFIED EXCEPT BY A WRITING SIGNED BY LENDERS AND BORROWER.
Each provision hereof shall be severable from every other provision when determining its legal
enforceability such that Lenders’ rights and remedies tinder this Amendment 2 and the Agreement may
be enforced to the maximum extent permitted under applicable law. This Amendment 2 shall be binding
upon, and inure to the benefit of, each party’s respective permitted successors and assigns. This
Amendment 2 may be executed in counterpart originals, all of which, when taken together, shall
constitute one and the same original document. No provision of any other document between Lenders
and Borrower shall limit the effectiveness hereof or the rights and remedies of Lenders against
Borrower.
Except as amended hereby, the Agreement remains unmodified and unchanged.
| BORROWER: | ||||||||
| KIOR, INC. | ||||||||
By:
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/s/ Xxxx Xxxxxx | |||||||
Name:
|
Xxxx Xxxxxx | |||||||
Title:
|
President & CEO | |||||||
| AGENT: | ||||||||
| Lighthouse Capital Partners VI, L.P. | ||||||||
| Lighthouse Management Partners VI, L.L.C., its general partner |
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By: |
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Name: |
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Title: |
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LENDERS: |
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| Leader Lending, LLC—Series A | Leader Lending, LLC—Series B | |||||||
By:
|
By: | |||||||
Name:
|
Name: | |||||||
Title:
|
Title: | |||||||
| Lighthouse Capital Partners VI, L.P. | ||||||||
| Lighthouse Management Partners VI, L.L.C., its general partner |
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By: |
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Name: |
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Title: |
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Attachments
Exhibit B-1
|
Amended and Restated Promissory Note (Lighthouse) | |
Exhibit B-2
|
Amended and Restated Promissory Note (Leader — Series A) | |
Exhibit B-3
|
Amended and Restated Promissory Note (Leader— Series B) | |
Exhibit C-2
|
Form of New Warrant |
