www.eXFILE.com 888-775-4789 --- NEXX SYSTEMS, INC.  FORM S-1


    EXHIBIT
10.19

    
 


    THIS
SECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE, THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF AND THE SECURITIES, IF ANY, ISSUABLE UPON CONVERSION OF SUCH
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”).  NO SALE,
PLEDGE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER
SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.

     

    THIS
SECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE AND THE INDEBTEDNESS, RIGHTS
AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE “SUBORDINATION AGREEMENT”)
DATED AS OF OCTOBER 31, 2007 AMONG THE COMPANY (AS DEFINED BELOW),  TO
CERTAIN INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF COMPANY TO THE SENIOR LENDER
(AS DEFINED BELOW) AND THE HOLDERS OF ALL PROMISSORY NOTES ISSUED BY THE COMPANY
IN CONNECTION WITH THE 2007 BRIDGE LOAN FINANCING (AS DEFINED BELOW) AND LIENS
AND SECURITY INTERESTS OF THE SENIOR LENDER SECURING THE SAME ALL AS DESCRIBED
IN THE SUBORDINATION AGREEMENT; AND EACH HOLDER AND TRANSFEREE OF THIS
SUBORDINATED CONVERTIBLE PROMISSORY NOTE, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY
AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.

     

     

    SECURED
SUBORDINATED CONVERTIBLE PROMISSORY NOTE

     

    
      	$[_______________]	October 31,
      2007


    

     

    For value
received, NEXX Systems, Inc., a Delaware corporation
(the “Company”),
promises to pay to the order of [_________________] (together with its
successors and assigns, the “Holder”), the principal sum of
[_________________], together with interest accrued but unpaid hereon, upon the
terms of this Secured Subordinated Convertible Promissory Note (the “Note” and, together with the
other notes issued pursuant to the Note Purchase Agreement, the “Notes”).

     

    Interest
shall accrue on the then outstanding principal balance of this Note at a simple
rate of interest per annum equal to nine percent (9%), accruing on a daily
basis.  All computations of interest shall be made on the basis of a
year of 360 days.  All accrued interest shall be payable in cash or in
securities as set forth in Section 4 below, upon conversion of the principal of
the Note in accordance with Section 4 below or at the time any principal due
hereunder is repaid.

     

    Unless
earlier converted or repaid pursuant to the terms hereof, the outstanding
principal and accrued but unpaid interest shall be immediately due and payable
beginning June 30, 2008 (the “Maturity Date”) upon demand by
the holders of a majority of the then outstanding principal amount of the Notes
(the “Lender Majority”)
purchased pursuant to the Note Purchase Agreement (as defined
below).

     

    1. This Note is one of a series of Notes
issued pursuant to the terms of that certain Secured Subordinated Convertible
Note and Warrant Purchase Agreement, dated as of October 31, 2007 (as amended or
otherwise modified from time to time, the “Note Purchase Agreement”)
between the Company and, among others, the Holder.  The Holder is
entitled to the benefit of, and is subject to certain restrictions contained in,
the Note Purchase Agreement and a certain Security Agreement of even date by and
among the Company and each of the Purchasers named in the Note Purchase
Agreement (the “Security
Agreement”).  Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Note Purchase Agreement and the
Security Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.        
Whenever
any payment hereunder shall be stated to be due, or whenever any interest
payment date or any other date specified hereunder would otherwise occur, on a
day other than a Business Day (as defined below), then such payment shall be
made, and such interest payment date or other date shall occur, on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest hereunder.  As used
herein, “Business Day”
means a day (i) other than Saturday or Sunday, and (ii) on which commercial
banks are open for business in Boston, Massachusetts.

     

    3.       
 All
payments in respect of this Note shall be in immediately available lawful money
of the United States of America and shall be sent so as to be received no later
than 2 p.m. (Eastern time) on the date of payment, at the address specified in
the Note Purchase Agreement, or at such other address as may be specified from
time to time by the Holder in a written notice delivered to
Company.  Other than upon the occurrence of a closing of the Qualified
Financing (as defined below) or a Company Sale (as defined below), no prepayment
of the Note shall be permitted without the written consent of the Lender
Majority.  Subject to the foregoing, the outstanding principal balance
of this Note and interest accrued thereon may be prepaid by the Company in
whole, but not in part, upon a ten (10) days prior written notice by the Company
to the Holder.

     

    4. The Note shall be convertible into
equity securities of the Company as follows:

     

    (a) The
outstanding principal balance on this Note and any accrued but unpaid interest
hereon shall be automatically converted (i) upon the closing of the Company’s
next equity financing which results in gross proceeds to the Company of at least
U.S. ten million dollars ($10,000,000) (including conversion of the Notes) as a
result of a private placement by the Company, or (ii) immediately prior to the
effectiveness of the Company’s registration statement with the U.S. Securities
and Exchange Commission for an initial public offering of its securities which
results in gross proceeds to the Company of at least U.S. thirty million dollars
($30,000,000) (each of (i) and (ii), a “Qualifying
Financing”).  Upon the occurrence of a Qualifying Financing,
each Holder shall convert all of the outstanding principal balance on this Note
and any accrued but unpaid interest hereon into shares of capital stock of the
Company which shall be issued in a Qualifying Financing (the “New Equity Shares”) at a
purchase price equal to the lowest price per share paid for such New Equity
Shares in the Qualifying Financing.

     

    (b) If a
Qualifying Financing has not occurred on or prior to the Maturity Date, the
outstanding principal balance on this Note and any accrued but unpaid interest
hereon, at the election of the Lender Majority, may be (i) converted into shares
of Series C-1 Preferred Stock of the Company (the “Series C-1 Preferred”) at a
purchase price equal to the lowest price per share paid for the Series C-1
Preferred, (ii) redeemed by the Company or (iii) remain due and payable, with
the maturity date for repayment extended for a period of time as determined by
the Lender Majority (the “Extension
Period”).  If the Note is so extended pursuant to this Section
4(b)(iii), then the outstanding balance on this Note and any accrued but unpaid
interest hereon may be converted into (x) if a Qualifying Financing is
consummated during the Extension Period, New Equity Shares at a purchase price
equal to the lowest price per share paid for such New Equity Shares in the
Qualifying Financing reduced by fifteen percent (15%) or (y) if a Qualifying
Financing is not consummated during the Extension Period, at the option of the
Lender Majority, shares of Series C-1 Preferred at a purchase price equal to the
lowest price per share paid for the Series C-1 Preferred or redeemed for
cash.

     

    (c) The
outstanding principal balance on this Note and any accrued but unpaid interest
hereon may, at the option of the Holder, if not earlier converted, be converted
immediately prior to (i) the initial firm commitment underwritten public
offering of the Company’s common stock pursuant to an
effective  registration statement not constituting a Qualifying
Financing (the “Non-Qualifying
IPO”), (ii) the consolidation, share exchange, reorganization or
recapitalization involving the Company, or issuance, sale or transfer of
capital stock of the Company, in any case in a single transaction or series
of related transactions, which results in the holders of capital stock of
the Company immediately prior to such transaction or series of related
transactions ceasing to hold at least fifty-one percent (51%) of the voting
power of the Company or the surviving entity following such
transaction or series of related transactions, or (iii) the sale, lease,
exclusive license or other disposition of all or substantially all of the assets
of the Company in any case in a single transaction or series of
related transactions (subsections 4(c)(ii) and 4(c)(iii) collectively referred
to herein as the “Company
Sale”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (i)

            	
              In
      the event of a Non-Qualifying IPO,  this Note may be converted,
      at the option of the Lender Majority, into either (A) shares of capital
      stock of the Company issued and sold in the  Non-Qualifying IPO
      at a purchase price equal to the lowest price per share to the public paid
      for such securities in the Non-Qualifying IPO or (B) shares of Series C-1
      Preferred Stock at a purchase price equal to the lowest price per share
      paid for the Series C-1 Preferred.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              In
      the event of a Company Sale, this Note may be converted, at the option of
      the Lender Majority, into either (A) shares of the Company’s Common Stock
      at a purchase price equal to eighty-five percent (85%) of the per share
      price paid in exchange for each share of the Company’s Common Stock, or
      (B)  shares of the  Series C-1 Preferred Stock at a
      purchase price equal to the lowest price per share paid for the Series C-1
      Preferred.

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Notwithstanding
      the foregoing, if, in the event of a Non-Qualifying IPO or a Company Sale,
      if the Lender Majority does not elect to convert the Notes pursuant to
      this Section 4(c) and a Qualified Financing has not occurred prior to such
      date, the Notes shall remain outstanding and each Holder shall have an
      option to either (x) accelerate the outstanding principal balance on this
      Note and any accrued but unpaid interest hereon, in which case such
      amounts shall become immediately due and payable in full or (y) convert
      the outstanding principal balance on this Note and any accrued but unpaid
      interest hereon (or any portion thereof) into shares of Series C-1
      Preferred, at a purchase price equal to the lowest price per share paid
      for the Series C-1 Preferred immediately prior to such Company
      Sale.

            


    

     

    (d) As
promptly as practicable after any conversion of this Note under Section 4(a),
and the Holder’s surrender of this Note, the Company, at its expense, shall
issue and deliver to the Holder a certificate or certificates evidencing the
number of shares to be issued to the Holder upon any such
conversion.

     

    (e) If the
Lender Majority elects to exercise the conversion rights under Sections 4(b) and
4(c), they shall provide written notice of such election to the Company on or
prior to the later of (i) fifteen (15) Business Days following delivery of
written notice of the Non-Qualifying IPO or Company Sale, as applicable, by the
Company in accordance with Section 9.5 of the Note Purchase Agreement and (ii)
the date that is fifteen (15)  Business Days prior to the expected
closing date of such Non-Qualifying IPO or Company Sale, as applicable, as set
forth in such notice, and the Holder shall specify which equity securities the
Note shall be converted to and the name or names (if other than the name of the
Holder) in which the certificate or certificates for equity securities are to be
issued in respect of this Note.  The Company shall issue and deliver
to the Holder, or to the nominee or nominees of the Holder, a certificate or
certificates for the name and number of equity securities into which this Note,
and any accrued but unpaid interest hereon, shall have been converted as soon as
practicable following the closing of the Non-Qualifying IPO or Company Sale, as
applicable, and surrender of this Note.  All equity securities issued
pursuant hereto shall be issued fully paid and non-assessable.

     

    (f) No
fractional shares shall be issued upon conversion of this Note.  The
Company shall, in lieu of such fractional entitlement, pay to the Holder a sum
in cash equal to such fractional entitlement multiplied by the then effective
conversion price per share pursuant hereto.

     

    (g) This Note
shall not entitle the Holder to any voting or other rights as a stockholder of
the Company prior to conversion hereof.

     

    5.  For
purposes hereof, the occurrence of any of the following shall constitute an
“Event of Default” under this
Note:

     

    (a) The
failure to make any payment of the principal and any accrued but unpaid interest
when due under the Notes, which failure shall remain unremedied for a period of
thirty (30) days after written notice thereof from the Lender
Majority;

     

    (b) Any
representation or warranty by the Company under or in connection with this Note,
the Note Purchase Agreement, the Security Agreement or any of the other
agreements executed in connection herewith and therewith, is incorrect in any
material respect and has a Material Adverse Effect on the Company, which shall
remain unremedied for a period of thirty (30) days after written notice thereof
from the Lender Majority;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) The
failure of the Company to perform or observe any term, covenant, condition,
obligation or agreement contained in Section 4 of this Note or Section 7 of the
Note Purchase Agreement, which failure shall remain unremedied for a period of
thirty (30) days after written notice thereof from the Lender
Majority;

     

    (d) The
failure of the Company to perform or observe any other material term, covenant,
condition, obligation or agreement contained in this Note, the Note Purchase
Agreement, the Security Agreement or any other agreement executed in connection
therewith and herewith, which failure shall remain unremedied for a period of
thirty (30) days after written notice thereof from the Lender Majority;
and

     

    (e) The
filing of a petition in bankruptcy or under any similar insolvency law by the
Company, the making of an assignment for the benefit of creditors, or if any
voluntary petition in bankruptcy or under any similar insolvency law is filed
against the Company and such petition is not dismissed within one hundred and
fifty (150) days after the filing thereof.

     

      
Upon the occurrence of the Events of Default in (a) and (e) above, in addition
to any other remedies allowed by law, the unpaid principal amount of this Note,
any accrued and unpaid interest and all other amounts payable hereunder or under
any of the Agreements entered into in connection with the Note Purchase
Agreement may be declared, at the election of the Lender Majority in writing, to
be immediately due and payable, whereupon such acceleration the unpaid principal
amount of this Note, any accrued and unpaid interest and all such other amounts,
shall become immediately due and payable without presentment, demand, protest or
further notice of any kind.  The Holder shall have all rights and may
exercise any remedies available to it under law, successively or concurrently,
including the rights set forth in the Security Agreement.  The Lender
Majority, in their sole discretion, may proceed to enforce all other rights and
remedies available to the Holder and any other Purchaser (as defined in the Note
Purchase Agreement) under applicable law.

     

    6.  The terms
of this Note shall be construed in accordance with the laws of the State of
Delaware, as applied to contracts entered into by Delaware residents within the
State of Delaware, which contracts are to be performed entirely within the State
of Delaware.  Notwithstanding any provision of this Note to the
contrary, the rate of interest due on this Note shall not exceed the maximum
rate permitted by applicable law.  To the extent that any interest
otherwise paid or payable by the Company to the Holder shall have been finally
adjudicated to exceed the maximum amount permitted by applicable law, such
interest shall be retroactively deemed to have been a required repayment of
principal (and any such amount paid in excess of the outstanding principal
amount shall be promptly returned to the Company).

     

    7.  Any term
of this Note may be amended, and the observance of any term of this Note may be
waived as set forth in Section 9.6 of the Note Purchase Agreement.

     

    8.  In
connection with the conversion of this Note under Section 4 above, the Holder
agrees to accede to the investor rights and related stockholder agreements and
other related agreements entered by the other purchasers of equity securities in
the Qualifying Financing, to which such Holder is not already a
party.

     

    9.  No remedy
herein conferred upon the Holder or the Purchasers is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to every right other remedy now or hereafter existing at
law or in equity or by statute or otherwise.

     

    10.   
 No course
of dealing between the Company and the Holder or the Purchasers or any delay on
the part of the Holder or the Purchasers in exercising any rights or remedies
shall operate as a waiver of any such right or remedy of the Holder or the
Purchasers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.   
 This Note
shall be binding on and inure to the benefit of and be enforceable by the
Company, the Holder and the Purchasers and their respective successors and
assigns.

     

    12.     Whenever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under all applicable laws and regulations.  If,
however, any provision of this Note shall be prohibited by or invalid under any
such law or regulation in any jurisdiction, it shall, as to such jurisdiction,
be deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall be
ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of this Note, or the validity or
effectiveness of such provision in any other jurisdiction.

     

    13.    
The
Company agrees to pay on demand all reasonable costs and expenses of the Holder
and the other Purchasers, and all reasonable fees and disbursements of one
counsel to the Purchasers as selected by the Lender Majority, in connection
with  the enforcement or attempted enforcement of, and preservation of
any rights under, this Note.

     

    14.    
Notwithstanding
anything to the contrary contained herein, in the Note Purchase Agreement or in
any other document executed or delivered in connection herewith, this Note, the
Security Agreement and such other documents are subject to the provisions set
forth in the Subordination Agreement.

     

    


     

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    This Note has been issued in reliance
upon the representations of the Holder set forth in the Note Purchase
Agreement.

     

    COMPANY:

    


    NEXX SYSTEMS, INC.

    


    


    By:    __________________________________

            Name:  Stanley
D. Piekos

    Title:    Vice
President, Finance and

    Chief Financial Officer