FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.1
FIFTH AMENDMENT
TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT
This
Fifth Amendment to Second Amended and Restated Loan and Security
Agreement is entered into as of October 30, 2018 (the
“Amendment”), by and between AVIDBANK
(“Bank”), LIGHTPATH TECHNOLOGIES, INC.
(“Parent”) and ISP OPTICS CORPORATION
(“ISP”). Parent and ISP are each also referred to as a
“Borrower” and together as the
“Borrowers”.
RECITALS
Borrowers and Bank
are parties to that certain Second Amended and Restated Loan and
Security Agreement dated as of December 21, 2016 and as amended
from time to time, including pursuant to that certain First
Amendment to Second Amended and Restated Loan and Security
Agreement dated as of December 20, 2017, that certain Second
Amendment to Second Amended and Restated Loan and Security
Agreement dated as of January 16, 2018, that certain Third
Amendment to Second Amended and Restated Loan and Security
Agreement dated as of May 11, 2018 and that certain Fourth
Amendment to Second Amended and Restated Loan and Security
Agreement dated as of September 7, 2018 (collectively, the
“Agreement”). The parties desire to amend the Agreement
in accordance with the terms of this Amendment.
NOW,
THEREFORE, the parties agree as follows:
1. The
following definitions in Section 1.1 of the Agreement are amended
and restated in their entirety to read as follows:
“Adjusted
EBITDA” means Borrowers’ consolidated earnings before
interest, taxes, depreciation and amortization expenses, plus (i)
stock-based compensation expenses, (ii) non-cash expenses (income)
related to change of fair value of warrant liabilities or
Subordinated Debt owing under the Seller Note, (iii) foreign
currency translation loss, (iv) one-time transaction expenses in
connection with acquisition of Target (not to exceed $50,000 for
the trailing twelve month period ending in December 31, 2017); and
(v) such other one-time expenses as may be consented to in writing
by Bank on a case by case basis.
“Revolving
Maturity Date” means March 21, 2019.
2. The
following is added to the end of Section 6.9(a) of the
Agreement:
In
addition to the foregoing, solely for purposes of calculating
Borrowers’ Adjusted EBITDA for use in determining the Fixed
Charge Coverage Ratio and Borrower’s compliance with this
Section 6.9(a), Borrowers may elect to include in Adjusted EBITDA
the addback of one-time expenses with respect to (i) implementation
and integration to ERP systems, (ii) consulting expenses with Xxxx
Xxxxxxxx and Xxxxxx Xxxxxxx, (iii) manufacturing overlap due to
deficiencies with New York site, (iv) relocation, severance, and
retention expense for New York staff, (v) closure of New York site,
(vi) Equipment relocation costs, and (vi) new facility readiness
(collectively, the “One-Time Addback Amounts”), in an
aggregate amount not to exceed the amounts set forth below for the
fiscal quarters set forth below:
Fiscal Quarter
Ending
|
One-Time Addback
Amount
|
12/31/17
|
$82,240
|
3/31/18
|
$49,005
|
6/30/18
|
$190,463
|
9/30/18
|
$91,054
|
12/31/18
|
$288,450
|
3/31/19
|
$292,500
|
6/30/19
|
$181,701
|
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3. Unless
otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as
amended hereby, shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and
confirmed in all respects. 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 Bank under the Agreement, as in effect prior to
the date hereof. Each Borrower ratifies and reaffirms the
continuing effectiveness of all agreements entered into in
connection with the Agreement.
4. Borrowers
represent and warrant that the representations and warranties
contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is
continuing.
5. 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. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an
original hereof. Notwithstanding the foregoing, Borrowers shall
deliver all original signed documents no later than ten (10)
Business Days following the date of execution.
6. As
a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the
following:
(a) this
Amendment, duly executed by Borrowers;
(b) affirmation
of guaranty;
(c) payment
of a pro-rated facility fee in the amount of $937.50 plus an
amendment fee in the amount of $500 plus all Bank Expenses incurred
through the date of this Amendment; and
(d) such
other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
[signature page follows]
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date above written.
BORROWERS:
LIGHTPATH
TECHNOLOGIES, INC.
Name: J. Xxxxx Xxxxxx
Title: President & Chief Executive
Officer
ISP
OPTICS CORPORATION
By: /s/ J. Xxxxx
Xxxxxx
Name: J. Xxxxx
Xxxxxx
Title: President & Chief Executive
Officer
BANK:
AVIDBANK
By: /s/ Xxx
Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Senior Vice
President
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