Exhibit 10.2

 

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Hercules Capital, Inc.

 

 

 

First Supplement to Note Purchase Agreement

 

 

Dated as of November 2, 2020

 

 

 

 

Re: 

$50,000,000 4.50% Series 2020B Senior Notes, Tranche A,

Due March 4, 2026

$50,000,000 4.55% Series 2020B Senior Notes, Tranche B,

Due March 4, 2026

 

 

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Hercules Capital, Inc.

 

 

Dated as of

November 2, 2020

 

To the Additional Purchaser(s) named in

Schedule A hereto

 

 

Ladies and Gentlemen:

 

This First Supplement to Note Purchase Agreement (the or this “Supplement”) is
between Hercules Capital, Inc., a Maryland corporation (the “Company”), and the
institutional investors named on Schedule A attached hereto (the “Additional
Purchasers”).

 

Reference is hereby made to that certain Note Purchase Agreement dated February
5, 2020 (the “Note Purchase Agreement”) among the Company and the Purchasers
listed on the Purchaser Schedule thereto. All capitalized terms not otherwise
defined herein shall have the same meaning as specified in the Note Purchase
Agreement. Reference is further made to Section 4.14 of the Note Purchase
Agreement which requires that, prior to the delivery of any Additional Notes,
the Company and each Additional Purchaser shall execute and deliver a
Supplement.

 

The Company hereby agrees with the Additional Purchaser(s) as follows:

 

1.     The Company has authorized the issue and sale of (a) $50,000,000
aggregate principal amount of its 4.50% Series 2020B Senior Notes, Tranche A,
due March 4, 2026 (the “Tranche A Notes”) and (b) $50,000,000 aggregate
principal amount of its 4.55% Series 2020B Senior Notes, Tranche B, due March 4,
2026 (the “Tranche B Notes”; collectively with the Tranche A Notes, as amended,
restated or otherwise modified from time to time pursuant to Section 17 of the
Note Purchase Agreement and including any such notes issued in substitution
therefor pursuant to Section 13 of the Note Purchase Agreement, the “Series
2020B Notes”). The Series 2020B Notes, together with the Series 2020 Notes
issued pursuant to the Note Purchase Agreement and each series of Additional
Notes which may from time to time hereafter be issued pursuant to the provisions
of Section 2.2 of the Note Purchase Agreement, are collectively referred to as
the “Notes” (such term shall also include any such notes issued in substitution
therefor pursuant to Section 13 of the Note Purchase Agreement). The
Series 2020B Notes shall be substantially in the form set out in Exhibit 1 and 2
hereto, as applicable, with such changes therefrom, if any, as may be approved
by the Additional Purchaser(s) and the Company.

 

2.     Subject to the terms and conditions hereof and as set forth in the Note
Purchase Agreement and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Additional
Purchaser, and each Additional Purchaser agrees to purchase from the Company,
Series 2020B Notes in the principal amount set forth opposite such Additional
Purchaser’s name on Schedule A hereto at a price of 100% of the principal amount
thereof on the closing date hereinafter mentioned.

 

 

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3.     The execution and delivery of this Supplement shall occur at the offices
of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, on
November 2, 2020 (the “Execution Date”). The sale and purchase of the
Series 2020B Notes to be purchased by each Additional Purchaser shall occur at
the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois
60603, at 8:00 a.m. Chicago time, at not more than two closings (individually a
“Series 2020B Closing” and, collectively, the “Series 2020B Closings”)

 

(a)     The first Series 2020B Closing, at which the Tranche A Notes are,
subject to section 4 hereof and Section 4 of the Note Purchase Agreement, to be
purchased, shall be held on November 4, 2020 or on such other Business Day
thereafter on or prior to November 6, 2020 as may be agreed upon by the Company
and the Additional Purchasers purchasing such Series 2020B Notes at such Series
2020B Closing (the “First Series 2020B Closing”).

 

(b)     The second Series 2020B Closing, at which the Tranche B Notes are,
subject to section 4 hereof and Section 4 of the Note Purchase Agreement, to be
purchased, shall be held on March 4, 2021 or on such other Business Day
thereafter on or prior to March 5, 2021 as may be agreed upon by the Company and
the Additional Purchasers purchasing such Series 2020B Notes at such Series
2020B Closing (the “Second Series 2020B Closing”).

 

At each Series 2020B Closing, the Company will deliver to each Additional
Purchaser the Series 2020B Notes to be purchased by such Additional Purchaser in
the form of a single Series 2020B Note (or such greater number of Series 2020B
Notes in denominations of at least $100,000 as such Additional Purchaser may
request) dated the date of such Series 2020B Closing and registered in such
Additional Purchaser’s name (or in the name of such Additional Purchaser’s
nominee), against delivery by such Additional Purchaser to the Company or its
order of immediately available funds for the account of the Company pursuant to
the applicable funding instructions delivered in accordance with Section 4.10 of
the Note Purchase Agreement. If, at a Series 2020B Closing, the Company shall
fail to tender such Series 2020B Notes to any Additional Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to any Additional Purchaser’s satisfaction, such
Additional Purchaser shall, at such Additional Purchaser’s election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights such Additional Purchaser may have by reason of such failure by the
Company to tender such Series 2020B Notes or any of the conditions specified in
Section 4 not having been fulfilled to such Additional Purchaser’s satisfaction.

 

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4.     The obligation of each Additional Purchaser to purchase and pay for the
Series 2020B Notes to be sold to such Additional Purchaser at a Series 2020B
Closing is subject to the fulfillment to such Additional Purchaser’s
satisfaction, prior to such Series 2020B Closing, of the conditions set forth in
Section 4 of the Note Purchase Agreement with respect to the Series 2020B Notes
to be purchased at such Series 2020B Closing as if each reference to “Notes,”
“Closing” and “Purchaser” set forth therein was modified to refer the “Series
2020B Notes,” the “Series 2020B Closing” and the “Additional Purchaser” (each as
defined in this Supplement) and to the following additional conditions:

 

(a)     Except as supplemented, amended or superceded by the representations and
warranties set forth in Exhibit A hereto, each of the representations and
warranties of the Company set forth in Section 5 of the Note Purchase Agreement
shall be correct as of the date of such Series 2020B Closing (except for
representations and warranties which apply to a specific earlier date which
shall be true as of such earlier date or as of the date specified in Exhibit A
to the extent such provision is superceded in Exhibit A) and the Company shall
have delivered to each Additional Purchaser an Officer’s Certificate, dated the
date of such Series 2020B Closing certifying that such condition has been
fulfilled.

 

(b)     Contemporaneously with such Series 2020B Closing, the Company shall sell
to each Additional Purchaser, and each Additional Purchaser shall purchase, the
Series 2020B Notes to be purchased by such Additional Purchaser at such Series
2020B Closing as specified in Schedule A.

 

5.     The terms of Section 8 of the Note Purchase Agreement shall apply to the
Series 2020B Notes except that

 

“Prepayment Settlement Amount” shall mean,

 

(a)      with respect to any Tranche A Note, an amount equal to the “Prepayment
Settlement Amount”, as follows:

 

Prepaid or accelerated during the period

 

Prepayment Settlement Amount

     

On or before November 4, 2023

 

Make-Whole Amount

     

After November 4, 2023
but on or before
November 4, 2024

 

an amount equal to 2.0% of the principal amount of the Series 2020B Notes or
portion thereof to be prepaid or accelerated

     

After November 4, 2024
but on or before
May 4, 2025

 

an amount equal to 1.0% of the principal amount of the Series 2020B Notes or
portion thereof to be prepaid or accelerated

 

After May 4, 2025, the Prepayment Settlement Amount with respect to the Series
2020B Notes shall be zero.

 

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(b)      with respect to any Tranche B Note, an amount equal to the “Prepayment
Settlement Amount”, as follows:

 

Prepaid or accelerated during the period

 

Prepayment Settlement Amount

     

On or before March 4, 2024

 

Make-Whole Amount

     

After March 4, 2024
but on or before
March 4, 2025

 

an amount equal to 2.0% of the principal amount of the Series 2020B Notes or
portion thereof to be prepaid or accelerated

     

After March 4, 2025
but on or before
September 4, 2025

 

an amount equal to 1.0% of the principal amount of the Series 2020B Notes or
portion thereof to be prepaid or accelerated

 

After September 4, 2025, the Prepayment Settlement Amount with respect to the
Series 2020B Notes shall be zero.

 

For the avoidance of doubt, the definition of “Make-Whole Amount” set forth in
Section 8.6 of the Note Purchase Agreement shall be applicable to any
Series 2020B Note.

 

6.     In addition to the covenants and agreements set forth in the Note
Purchase Agreement, the Company covenants and agrees, which covenants and
agreements shall have the benefit of Section 11(c)(ii) of the Note Purchase
Agreement, for the benefit of the Additional Purchasers and each other holder of
a Note that the following is hereby added to the Note Purchase Agreement as
Section 22.8:

 

Section 22.8.      Externalization. (a) Notice of Externalization. The Company
will, within fifteen Business Days after the occurrence of an Externalization,
give written notice of such Externalization to each holder of Notes. Such notice
shall contain and constitute an offer to prepay Notes as described in
subparagraph (b) of this Section 22.8 and shall be accompanied by the
certificate described in subparagraph (e) of this Section 22.8.

 

(b)     Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraph (a) of this Section 22.8 shall be an offer to prepay, in accordance
with and subject to this Section 22.8, all, but not less than all, the Notes
held by each holder (in this case only, “holder” in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the “Section 22.8
Proposed Prepayment Date”). Such date shall be not less than 30 days and not
more than 60 days after the date of such offer (if the Section 22.8 Proposed
Prepayment Date shall not be specified in such offer, the Section 22.8 Proposed
Prepayment Date shall be the first Business Day after the 45th day after the
date of such offer).

 

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(c)     Acceptance/Rejection. A holder of Notes may accept the offer to prepay
made pursuant to this Section 22.8 by causing a notice of such acceptance to be
delivered to the Company not later than 15 Business Days after receipt by such
holder of the most recent offer of prepayment. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 22.8 shall be deemed
to constitute rejection of such offer by such holder.

 

(d)     Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 22.8 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to, but excluding, the date of prepayment,
but without Make-Whole Amount, Prepayment Settlement Amount or other premium.

 

(e)     Officer’s Certificate. Each offer to prepay the Notes pursuant to this
Section 22.8 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Section 22.8 Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 22.8; (iii) the principal amount of each Note offered
to be prepaid; (iv) the interest that would be due on each Note offered to be
prepaid, accrued to, but excluding, the Section 22.8 Proposed Prepayment Date;
(v) that the conditions of this Section 22.8 have been fulfilled; and (vi) the
date of the Externalization.

 

For the purposes of this Section 22.8, an “Externalization” means the date on
which the shareholders of the Company duly and validly approve a change in the
management structure of the Company from an internally managed business
development company to an externally managed business development company by
approving the Company entering into an investment advisory agreement with a
third-party external adviser.

 

For the avoidance of doubt, the provisions of this Section 22.8 are applicable
to the Series 2020 Notes, the Series 2020B Notes and any Additional Notes sold
by the Company.

 

7.     In addition to the covenants and agreements set forth in the Note
Purchase Agreement, the Company covenants and agrees for the benefit of the
Additional Purchasers and each other holder of a Note, that the definition of
“Unencumbered Assets” shall be amended to read as follows:

 

 “Unencumbered Assets” means (a) the value of total assets of the Company that
are not secured by a Lien (other than Liens not prohibited by Section
10.5 (except for Liens securing Indebtedness for borrowed money incurred
directly by the Company as the borrower or guarantor (other than a customary
bad-boy or limited guaranty of Indebtedness of a Financing
Subsidiary) and permitted by Section 10.5(dd)) and, notwithstanding the
foregoing, in the event a Lien exists, in connection with Indebtedness incurred
by such Finance Subsidiary, on the Equity Interest of such Financing
Subsidiary (as a result of a guaranty, accommodation pledge or otherwise), such
Equity Interest shall be deemed an asset for purposes of this clause (a) with
the value of such Equity Interest being equal to the value of the assets owned
by such Subsidiary less the principal amount of Indebtedness for borrowed money
of such Subsidiary), including, without duplication, the value of any Equity
Interests owned by the Company, directly or indirectly, in a consolidated
subsidiary, less (b) all unsecured liabilities and unsecured indebtedness not
represented by Senior Securities of the Company

 

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8.     In addition to the covenants and agreements set forth in the Note
Purchase Agreement, the Company covenants and agrees, for the benefit of the
Additional Purchasers and each other holder of a Note, that Section
17.1(a)(2)(iii) of the Note Purchase Agreement shall be amended to read as
follows:

 

(iii)     amend any of Sections 8 (except as set forth in the second sentence of
Section 8.2 (or such corresponding provision of any Supplement) and Section
17.1(a)(3)), 11(a), 11(b), 12, 17, 20 or 22.8; and

 

9.     In addition to the covenants and agreements set forth in the Note
Purchase Agreement, the Company covenants and agrees, for the benefit of the
Additional Purchasers and each other holder of a Note, that the following
definitions are hereby added to the Schedule A of Note Purchase Agreement:

 

“NRSRO” means a Nationally Recognized Statistical Rating Organization so
designated by the SEC whose ratings for senior unsecured indebtedness of
business development companies are authorized for use with, and recognized by,
the SVO, other than Egan Jones.

 

“Egan Jones” means Egan Jones Rating Company or if applicable, its successor.

 

10.     Each Additional Purchaser represents and warrants that the
representations and warranties set forth in Section 6 of the Note Purchase
Agreement are true and correct on the date of the applicable Series 2020B
Closing with respect to the purchase of the Series 2020B Notes by such
Additional Purchaser as if each reference to “Notes,” “Closing” and “Purchaser”
set forth therein was modified to refer the “Series 2020B Notes,” the “Series
2020B Closing” and the “Additional Purchaser” and each reference to “this
Agreement” therein was modified to refer to the Note Purchase Agreement as
supplemented by this Supplement.

 

11.     The Company and each Additional Purchaser agree to be bound by and
comply with the terms and provisions of the Note Purchase Agreement as fully and
completely as if such Additional Purchaser were an original signatory to the
Note Purchase Agreement.

 

The execution hereof shall constitute a contract between the Company and the
Additional Purchaser(s) for the uses and purposes hereinabove set forth, and
this agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

 

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  Hercules Capital, Inc.               By: /s/ Seth H. Meyer    

 

Name: Seth H. Meyer

Title: Chief Financial Officer

 

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Accepted as of November 2, 2020

 

 

Teachers Insurance and Annuity Association of America,

 a New York domiciled life insurance company

  By: Nuveen Alternatives Advisors LLC, a Delaware limited liability company,
its investment manager         By: /s/ Ho Young Lee      

Name: Ho Young Lee

Title: Managing Director

 

 

Pacific Life Insurance Company

      By: Nuveen Alternatives Advisors LLC, a Delaware limited liability
company, its investment manager         By: /s/ Ho Young Lee      

Name: Ho Young Lee

Title: Managing Director

       

American Republic Insurance Company

Blue Cross and Blue Shield of Florida, Inc.

Catholic United Financial

Cincinnati Equitable Life Insurance Company

Farm Bureau Life Insurance Company of Michigan

Minnesota Life Insurance Company

New Era Life Insurance Company

The Cincinnati Insurance Company

Trustmark Insurance Company

Unity Financial Life Insurance Company

Western Fraternal Life Association

      By: Securian Asset Management, Inc.                     By: /s/ Robin J.
Lenarz      

Name: Robin J. Lenarz

Title: Vice President

 

 

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  Equitrust Life Insurance Company           By: /s/ Kenyatta K. Matheny      

Name: Kenyatta K. Matheny

Title: Chief Investment Officer

      Arch Reinsurance Ltd.           By: /s/ Roderick Romeo      

Name: Roderick Romeo

Title: Chief Financial Officer

      Guaranty Income Life Insurance Company           By: /s/ Erik Braun      

Name: Erik Braun

Title: Officer

      Lincoln Benefit Life Company           By: /s/ Erik Braun      

Name: Erik Braun

Title: Chief Financial Officer

      Thrivent Financial for Lutherans           By: /s/ Allen Stoltman      

Name: Allen Stoltman

Title: Managing Director

      Electric Insurance Company   By: Conning, Inc., as Investment Manager    
    By: /s/ John Petchler      

Name: John Petchler

Title: Director

 

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  Penn National Security Insurance Company   By: Conning, Inc., as Investment
Manager             By: /s/ John Petchler      

Name: John Petchler

Title: Director

          Pennsylvania National Mutual Casualty Insurance Company   By: Conning,
Inc., as Investment Manager         By: /s/ John Petchler      

Name: John Petchler

Title: Director

          RLI Insurance Company   By: Conning, Inc., as Investment Manager     
    By:

/s/ John Petchler

     

Name: John Petchler

Title: Director

         

Triton Insurance Company

  By: Conning, Inc., as Investment Manager         By: /s/ John Petchler      

Name: John Petchler

Title: Director

          Primerica Life Insurance Company   By: Conning, Inc., as Investment
Manager         By: /s/ John Petchler      

Name: John Petchler

Title: Director

 

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  The Guardian Life Insurance Company of America         By: /s/ Trinh Nguyen  
   

Name: Trinh Nguyen

Title: Managing Director

 

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  The Ohio National Life Insurance Company           By: /s/ Brenda Kalb      

Name: Brenda Kalb

Title: Vice President

 

  Ohio Life Assurance Company           By: /s/ Brenda Kalb      

Name: Brenda Kalb

Title: Vice President

 

  Federated Mutual Insurance Company           By: /s/ Tiffany Haney      

Name: Tiffany Haney

Title: Associate Portfolio Manager

 

  The John W. Jordan II Revocable Trust           By: /s/ John W. Jordan II    
 

Name: John W. Jordan II

Title: Trustee

 

  TJT (B) (Bermuda) Investment Company, Ltd.           By: /s/ John W. Jordan II
     

Name: John W. Jordan II

Title: President

 

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Supplemental Representations

 

The Company represents and warrants to each Additional Purchaser that except as
hereinafter set forth in this Exhibit A, each of the representations and
warranties set forth in Section 5 of the Note Purchase Agreement (other than
representations and warranties that apply solely to a specific earlier date
which shall be true as of such earlier date and other than the Section
references hereinafter set forth) is true and correct in all material respects
as of the date of the applicable Series 2020 Closing with respect to the Series
2020B Notes with the same force and effect as if each reference to “the Notes”
set forth therein was modified to refer to the “Series 2020B Notes” and each
reference to “this Agreement” therein was modified to refer to the Note Purchase
Agreement as supplemented by the First Supplement. The Section references
hereinafter set forth correspond to the similar sections of the Note Purchase
Agreement which are supplemented hereby:

 

Section 5.3.     Disclosure. (a) The Company, through its agent, Goldman Sachs,
has delivered to each Additional Purchaser a copy of an Investor Presentation,
dated October 2020 (the “Memorandum”), relating to the transactions contemplated
hereby in connection with the Series 2020B Notes. The Memorandum fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Subsidiaries. This Agreement, the
Memorandum, the financial statements listed in Schedule 5.5 and the documents,
certificates or other writings delivered to the Additional Purchasers by or on
behalf of the Company (other than financial projections, pro forma financial
information and other forward-looking information referenced in Section 5.3(b),
information relating to third parties and general economic information) prior to
October 21, 2020 in connection with the transactions contemplated hereby and
identified in Schedule 5.3 (this Agreement, the Memorandum and such documents,
certificates or other writings and such financial statements delivered to each
Additional Purchaser being referred to, collectively, as the “Disclosure
Documents”), taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which they were made. Except
as disclosed in the Disclosure Documents, since December 31, 2019, there has
been no change in the financial condition, operations, business or properties of
the Company or any Subsidiary except changes that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. There
is no fact known to the Company that would reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the Disclosure
Documents.

 

(b)     All financial projections, pro forma financial information and other
forward-looking information which has been delivered to each Additional
Purchaser by or on behalf of the Company in connection with the transactions
contemplated by this Agreement are based upon good faith assumptions and, in the
case of financial projections and pro forma financial information, good faith
estimates, in each case, believed to be reasonable at the time made, it being
recognized that (i) such financial information as it relates to future events is
subject to significant uncertainty and contingencies (many of which are beyond
the control of the Company) and are therefore not to be viewed as fact, and (ii)
actual results during the period or periods covered by such financial
information may materially differ from the results set forth therein.

 

 

Exhibit A

(to Supplement)

 

 

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Section 5.4.     Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists as of the date of the applicable Series 2020B Closing of (i) the
Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the
jurisdiction of its organization, the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by the Company and
each other Subsidiary and whether such Subsidiary is a Subsidiary Guarantor, and
(ii) the Company’s directors and senior officers.

 

Section 5.5.     Financial Statements; Material Liabilities. The Company has
delivered to each Additional Purchaser copies of the financial statements of the
Company and its Subsidiaries listed on Schedule 5.5. All of such financial
statements (including in each case the related schedules and notes, but
excluding all financial projections, pro forma financial information and other
forward-looking information) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments and lack of
footnotes).

 

Section 5.13.     Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any substantially similar
debt Securities for sale to, or solicited any offer to buy the Notes or any
substantially similar debt Securities from, or otherwise approached or
negotiated in respect thereof with, any Person other than the Additional
Purchasers and not more than 35 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
section 5 of the Securities Act or to the registration requirements of any
Securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14.     Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes hereunder for the general corporate
purposes of the Company and its Subsidiaries and as otherwise set forth in the
section of the Transaction Overview of the Executive Summary in the Memorandum.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading
in any Securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 25% of the value of the consolidated assets of the
Company and its subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 25% of the value of such assets. As
used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.

 

Section 5.15.     Existing Indebtedness; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of the applicable Series
2020B Closing, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Subsidiaries. As of the applicable Series
2020B Closing, neither the Company nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Indebtedness of the Company or such Subsidiary and, to the
knowledge of the Company, no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.

 

 

 

Schedules 5.3, 5.4, 5.5, 5.15, 10.1, 10.5 and 10.7 of the Note Purchase
Agreement are hereby supplemented by the attached Schedules 5.3, 5.4, 5.5, 5.15,
10.1, 10.5 and 10.7

 

A-2

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[Form of Series 2020B Note, Tranche A]

 

Hercules Capital, Inc.

 

4.50% Series 2020B Senior Note, Tranche A, due March 4, 2026

 

No. [_________]    [Date] $[____________]  PPN 427096 B* 2

   

For Value Received, the undersigned, Hercules Capital, Inc. (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Maryland, hereby promises to pay to [____________], or registered assigns, the
principal sum of [_____________________] Dollars (or so much thereof as shall
not have been prepaid) on March 4, 2026 (the “Maturity Date”), with interest
(computed on the basis of a 360 day year of twelve 30 day months) (a) on the
unpaid balance hereof at the rate of (a) 4.50% per annum from the date hereof,
payable semiannually, on the 4th day of March and September in each year,
commencing with the March or September next succeeding the date hereof, and on
the Maturity Date, until the principal hereof shall have become due and payable,
and (b) to the extent permitted by law, (x) on any overdue payment of interest
and (y) during the continuance of an Event of Default, on such unpaid balance
and on any overdue payment of any Prepayment Settlement Amount (if any), at a
rate per annum from time to time equal to the Default Rate (as defined in the
hereinafter defined Note Purchase Agreement), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Prepayment Settlement Amount with
respect to this Note are to be made in lawful money of the United States of
America at the Company in New York, New York or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to a
Supplement to the Note Purchase Agreement, dated February 5, 2020 (as from time
to time amended, supplemented or modified, the “Note Purchase Agreement”), among
the Company, the Additional Purchasers named therein and Additional Purchasers
of Notes from time to time issued pursuant to any Supplement to the Note
Purchase Agreement. This Note and the holder hereof are entitled with the
holders of all other Notes of all series from time to time outstanding under the
Note Purchase Agreement to all the benefits provided for thereby or referred to
therein. Each holder of this Note will be deemed, by its acceptance hereof,
(i) to have agreed to the confidentiality provisions set forth in Section 20 of
the Note Purchase Agreement and (ii) to have made the representation set forth
in Section 6 of the Note Purchase Agreement. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.

 

This Note is a registered Note with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
of the same series for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the Person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.

 

Exhibit 1
(to Supplement)

 

 

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This Note is not subject to regularly scheduled prepayments of principal. This
Note is subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Prepayment Settlement Amount) and with the effect
provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

 

  Hercules Capital, Inc.           By       Name:       Title:  

 

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[Form of Series 2020B Note, Tranche B]

 

Hercules Capital, Inc.

 

4.55% Series 2020B Senior Note, Tranche B, due March 4, 2026

 

No. [_________]   [Date] $[____________] PPN 427096 B@ 0

 

For Value Received, the undersigned, Hercules Capital, Inc. (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Maryland, hereby promises to pay to [____________], or registered assigns, the
principal sum of [_____________________] Dollars (or so much thereof as shall
not have been prepaid) on March 4, 2026 (the “Maturity Date”), with interest
(computed on the basis of a 360 day year of twelve 30 day months) (a) on the
unpaid balance hereof at the rate of (a) 4.55% per annum from the date hereof,
payable semiannually, on the 4th day of March and September in each year,
commencing with the March or September next succeeding the date hereof, and on
the Maturity Date, until the principal hereof shall have become due and payable,
and (b) to the extent permitted by law, (x) on any overdue payment of interest
and (y) during the continuance of an Event of Default, on such unpaid balance
and on any overdue payment of any Prepayment Settlement Amount (if any), at a
rate per annum from time to time equal to the Default Rate (as defined in the
hereinafter defined Note Purchase Agreement), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Prepayment Settlement Amount with
respect to this Note are to be made in lawful money of the United States of
America at the Company in New York, New York or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to a
Supplement to the Note Purchase Agreement, dated February 5, 2020 (as from time
to time amended, supplemented or modified, the “Note Purchase Agreement”), among
the Company, the Additional Purchasers named therein and Additional Purchasers
of Notes from time to time issued pursuant to any Supplement to the Note
Purchase Agreement. This Note and the holder hereof are entitled with the
holders of all other Notes of all series from time to time outstanding under the
Note Purchase Agreement to all the benefits provided for thereby or referred to
therein. Each holder of this Note will be deemed, by its acceptance hereof,
(i) to have agreed to the confidentiality provisions set forth in Section 20 of
the Note Purchase Agreement and (ii) to have made the representation set forth
in Section 6 of the Note Purchase Agreement. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.

 

This Note is a registered Note with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
of the same series for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the Person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.

 

Exhibit 2
(to Supplement)

 

 

--------------------------------------------------------------------------------

 

 

This Note is not subject to regularly scheduled prepayments of principal. This
Note is subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Prepayment Settlement Amount) and with the effect
provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would permit the application of the laws of a jurisdiction other than such
State.

 

  Hercules Capital, Inc.           By       Name:       Title:  

 

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