ex10-3.htm


     

     

    
      

      

    

    Exhibit 10.3

     

    
      THIRD
AMENDMENT TO

       

      LOAN
AND SECURITY AGREEMENT

       

      This
Third Amendment to Loan and Security Agreement (this “Amendment”) is dated as of
the 30th day of
April, 2009, and is made by and among EMCORE Corporation, a New Jersey
corporation (“Borrower”), Bank of America, N.A. (“Lender”), and the other
Obligors party to that certain Loan and Security Agreement dated
September 26, 2008 (as amended, modified, supplemented or restated from
time to time, the “Agreement”).  Borrower, Lender and such other
Obligors now desire to amend the Agreement as provided herein, subject to the
conditions set forth herein.  Capitalized terms used in this Amendment
and not otherwise defined herein have the meanings given to such terms in the
Agreement.

       

      NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, Borrower, such other Obligors
and Lender agree as follows:

       

      1. Obligors
acknowledge that Events of Default have occurred under the Agreement by reason
of Obligors’ failure, as of March 31, 2009, to cause Borrower and its
Subsidiaries to (a) maintain the minimum EBITDA required by Section 14(b) of the
Agreement, and (b) maintain the Fixed Charge Coverage Ratio required by Section
14(a) of the Agreement (the “Specific Events of Default”).  Obligors
further acknowledge that as a result of such Specific Events of Default, Lender
has the right to immediately exercise all rights and remedies available under
the Agreement, related documents and applicable law, including but not limited
to the right to cease making loans and advances to Borrower, the right to demand
and collect all of Obligors’ outstanding Liabilities, and the right to exercise
its remedies with respect to the Collateral securing such
Liabilities.

       

      2. The
Specific Events of Default are hereby waived by Lender.  The foregoing
waiver does not constitute a waiver of any other Event of Default now existing
or hereafter arising, whether known or unknown by Lender.  In
addition, Lender’s waiver does not represent any amendment of any provision of
the Agreement.  The Agreement, as modified by this Amendment, remains
in full force and effect, and Lender expects Obligors to comply with all of its
provisions.

       

      3. Clause
(x) of the definition of “Eligible Account” contained in Section 1 of the
Agreement is amended to read in its entirety as follows:

       

      “(x)           the
Account Debtor (A) is located within the United States of America, or (B) is
located outside the United States, subject to such conditions (including
conditions requiring that Accounts payable by any such Account Debtor be
supported by insurance or a letter of credit) and limitations (including
limitations relating to the creditworthiness of any such Account Debtor and the
country in which any such Account Debtor is located) as Lender may apply in its
Permitted Discretion; provided that if the Account is payable in a foreign
currency, then for purposes of computing availability under this Agreement, the
net amount of such Account shall be converted to U.S. Dollars based on the rate
of exchange of said currency then being quoted by Lender;”

       

      4. Subsection
2(a)(ii) of the Agreement is amended to read in its entirety as
follows:

       

      “(ii)           [Reserved.]”

       

      5. The
proviso following subsection 2(a)(iii) of the Agreement is amended to read in
its entirety as follows:

       

      “provided
that the Revolving Loan Limit shall in no event exceed Fourteen Million and
No/100 Dollars ($14,000,000) (the “Maximum
Revolving Loan Limit”); and provided further that (A) in no event shall
advances against the Eligible Accounts described in clause (x), subclause (B) of
the definition thereof exceed Ten Million and No/100 Dollars ($10,000,000) in
the aggregate at any time, and (B) in no event shall advances against Eligible
Accounts described in clause (viii) of the definition thereof exceed Two Million
Five Hundred Thousand and No/100 Dollars ($2,500,000) in the aggregate at any
time.”

       

      6. Subsection
4(a)(i) of the Agreement is amended to read in its entirety as
follows:

       

      “(i)           With
respect to Prime Rate Loans, a rate per annum equal to the Prime Rate in effect
from time to time plus five percent (5.00%), payable on the first Business Day
of each month in arrears.  Said rate of interest shall increase or
decrease by an amount equal to each increase or decrease in the Prime Rate
effective on the effective date of each such change in the Prime
Rate.”

       

      7. Clause
(i) of Subsection 9(c) of the Agreement is amended to read in its entirety as
follows:

       

      “(i) no
later than thirty (30) days after the end of each calendar month, copies of
internally prepared financial statements, including, without limitation, balance
sheets and statements of income of Borrower and its Subsidiaries on an
unconsolidated basis, and, commencing with respect to the calendar month ending
June 30, 2009, balance sheets and statements of income of Borrower and its
Subsidiaries on a consolidated basis, in each case certified by the Chief
Financial Officer of Borrower;”

       

      8. Subsection
12(m) of the Agreement is amended to read in its entirety as
follows:

       

      “(m)                      [Reserved.]”

       

      9. A new
subsection (o) is added to Section 12 of the Agreement, to read in its entirety
as follows:

       

      “(o)           Until
such time as Borrower and the other Obligors have generated positive cash flows
from operations on a consolidated basis for a period of two (2) consecutive
fiscal quarters, Borrower shall continue to retain the Keystone Group or such
other consultant as may be acceptable to Lender in its sole discretion as a
management consultant.”

       

      10. Subsection
14(b) of the Agreement is amended to read in its entirety as
follows:

       

      “No
Obligor shall permit the Consolidated EBITDA of Borrower and its Subsidiaries to
be less than the amount set forth below for the corresponding period set forth
below:

       

              Period                                                                                         Minimum
EBITDA

       

      Three
months ended June 30,
2009                                      ($ 
8,640,000)

       

      Six
months ended September 30,
2009                                  ($14,649,000)

       

      Nine
months ended December 31,
2009                                   ($12,333,000)

       

      Fiscal
quarter ended March 31, 2010, and each
fiscal quarter end
thereafter                     $  5,000,000”

       

      11. Borrower
agrees to pay an amendment fee to Lender associated with this Amendment in the
amount of $50,000. Borrower shall pay all expenses, including attorney fees,
which Lender incurs in connection with the preparation of this Amendment and any
related documents.  All such fees and expenses maybe charged against
Borrower’s loan account.

       

      12. To induce
Lender to enter into this Amendment, Obligors make the following representations
and warranties:

       

      (a) Each
recital, representation and warranty contained in this Amendment, in the
Agreement as amended by this Amendment and in the Other Agreements, is true and
correct as of the date of this Amendment and does not omit to state a material
fact required to make such recital, representation or warranty not misleading;
and

       

      (b) Except
for the Specific Events of Default, no Event of Default or event which, with the
passage of time or the giving of notice or both, would constitute an Event of
Default has occurred and is continuing under the Agreement or any of the Other
Agreements.

       

      13. Each
Obligor waives any and all defense, claims, counterclaims and offsets against
Lender which may have arisen or accrued through the date of this
Amendment.  Each Obligor acknowledges that Lender and its employees,
officers, agents and attorneys have made no representations or promises except
as specifically reflected in this Amendment and in the written agreements which
have been previously executed.

       

      14. Each
Obligor represents and warrants to Lender that this Amendment has been approved
by all necessary corporate action, and the individual signing below represents
and warrants that he or she is fully authorized to do so.

       

      15. This
Amendment shall not become effective until this Amendment and the Guarantors’
Acknowledgement attached hereto have been fully executed by all parties hereto
or thereto and delivered to Lender.

       

      16. Except as
expressly amended hereby and by any other supplemental documents or instruments
executed by either party hereto in order to effectuate the transactions
contemplated by this Amendment, the Agreement and all Exhibits thereto are
ratified and confirmed by Obligors and Lender and remain in full force and
effect in accordance with their terms.

       

      17. This
Amendment may be executed in any number of counterparts, each of which shall be
an original, but all of which, taken together, shall constitute one and the same
agreement.  This Amendment may be delivered by facsimile, and when so
delivered will have the same force and effect as delivery of an original
signature.


      IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.

       

      EMCORE
CORPORATION

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      EMCORE
IRB COMPANY, LLC

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      OPTICOMM
CORP.

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      EMCORE
SOLAR POWER, INC.

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      BANK OF
AMERICA, N.A.

       

      /s/
Joseph G. Fudacz

       

      By:          Joseph
G. Fudacz

      Title:       Portfolio
Manager

             
Senior Vice President

             
Business Finance

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      GUARANTORS’
ACKNOWLEDGMENT

       

       

      The
undersigned guarantors acknowledge that Bank of America, N.A. (“Lender”) has no
obligation to provide them with notice of, or to obtain their consent to, the
terms of the foregoing Third Amendment to Loan and Security Agreement (the
“Amendment”).  The undersigned guarantors nevertheless:  (i)
acknowledge and agree to the terms and conditions of the Amendment; (ii)
acknowledge that their guaranties remain fully valid, binding, and enforceable;
and (iii) waive any and all defenses, claims, counterclaims, and offsets which
they may have against Lender through the date of the Amendment.

       

      EMCORE
IRB COMPANY, LLC

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      OPTICOMM
CORP.

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary

       

       

      EMCORE
SOLAR POWER, INC.

       

      /s/
Keith J Kosco

       

      By:           Keith
J. Kosco, Esq.

      Title:        Chief
Legal Officer and Secretary