| Item 1.01 |
Entry into a Material Definitive Agreement. |
Amendment to Membership Interest Purchase Agreement
On June 30, 2025, SkyWater Technology, Inc. (the “Company”) and Spansion LLC (“Seller”), an affiliate of Infineon Technologies AG, entered into Amendment No. 1 to Membership Interest Purchase Agreement (the “Amendment”), by and between Seller and the Company, dated June 30, 2025, which amended the Membership Interest Purchase Agreement (the “Purchase Agreement”), dated as of February 25, 2025, by and between Seller and the Company, with respect to the Company’s acquisition of all of the issued and outstanding memberships interests of Spansion Fab 25, LLC, a newly-formed limited liability company (the “Acquired Business”), that received, pursuant to a pre-closing restructuring, substantially all of the property, plant and equipment and employees and certain other assets and liabilities related to Infineon Technologies AG’s 200 mm fab in Austin, Texas (the “Transaction”). The Amendment amended the Purchase Agreement to increase the purchase price payable at the closing of the Transaction by $18 million and to eliminate the $25 million payable at the conclusion of the multi-year supply agreement entered into in connection with the Transaction.
The foregoing description of the Amendment is a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed herewith as Exhibit 2.2 and incorporated herein by reference.
Amended and Restated Loan and Security Agreement
On June 30, 2025, the Company and its subsidiaries, SkyWater Technology Foundry, Inc., SkyWater Federal, LLC, SkyWater Florida, Inc. and Spansion Fab 25 LLC (the “Borrowers”) entered into an Amended and Restated Loan and Security Agreement (the “Loan Agreement”) with (1) Siena Lending Group LLC, as agent (“Agent”), for (2) Siena Lending Group LLC (“Siena”), (3) Benefit Street Partners SMA-K L.P., Franklin BSP Private Credit Fund, BSP Debt Fund V L.P., Benefit Street Partners SMA-OS L.P., Benefit Street Partners Capital Opportunity, Fund III-A L.P., BSP DF V 2022 SPV LP (collectively, “BSP”), (4) GRC SPV Investments, LLC (“GRC”), (5) ACF FinCo I LP (“Ares”; and together with Siena, BSP, GRC, collectively, “Lenders”). Under the Loan Agreement, SkyWater Technology Foundry, Inc. (“SkyWater Foundry”) will act as agent for all of the Borrowers.
The Loan Agreement provides for a revolving line of credit of up to $350 million with scheduled maturity date of June 30, 2030. The Borrowers may be required to prepay the unpaid principal balance of the loans following specified prepayment events in the amount of 100% of the net proceeds received by the Company or any Borrower with respect to such prepayment event.
Borrowing under the Loan Agreement is limited by a borrowing base of specified advance rates applicable to billed accounts receivable, unbilled accounts receivable, inventory and equipment, subject to various conditions and limits as provided in the Loan Agreement. The Loan Agreement also provides for borrowing base sublimits applicable to each of unbilled accounts receivable and equipment. Under certain circumstances, the Agent may from time to time establish and revise reserves against the borrowing base and/or the maximum revolving facility amount.
Proceeds of borrowings will initially be used to refinance all indebtedness owing to Siena and GRC, to fund the acquisition of Spansion Fab 25 LLC and to pay the fees, costs, and expenses incurred in connection with the acquisition of Spansion Fab 25 LLC, the Loan Agreement, and the transactions contemplated thereby, and thereafter, for working capital purposes, for equipment, and for such other purposes as specifically permitted pursuant to the terms of the Loan Agreement. The Borrowers’ obligations under the Loan Agreement are secured by substantially all of their assets and guaranteed by the Company as further described in the Loan Agreement.
Borrowings under the Loan Agreement bear interest at a rate that depends upon the type of borrowing, whether a term secured overnight financing rate (SOFR) loan or base rate loan, plus the applicable margin. The term SOFR loan rate is a forward-looking term rate based on SOFR for a tenor of one month on the applicable day, subject to a minimum of 2.5% per annum. The base rate is the greatest of the prime rate, the Federal funds rate plus 0.5%, and 7.0% per annum. The applicable margin is an applicable percentage based on the fixed charge coverage ratio that ranges from 5.0% to 4.0% per annum for term SOFR loans and ranges from 4.0% to 3.0% per annum for base rate loans.
The Loan Agreement contains customary representations and warranties and financial and other covenants and conditions. Subject to certain cure rights and financial conditions, the Loan Agreement requires $10 million in minimum EBITDA (as defined in the Loan Agreement) calculated as of the last day of each calendar month for the preceding twelve calendar months, prohibits unfunded capital expenditures in excess of the amounts set forth in the Loan Agreement calculated as of the last day of each calendar year commencing December 31, 2025, requires a minimum fixed charge coverage ratio, measured on a trailing twelve month basis, of not less than 1.00 to 1.00 if the Borrowers’ liquidity is less than (i) $30 million prior to the consummation of a sale and leaseback transaction on certain owned real property in Austin, Texas or (ii) $80 million following the consummation of such sale and leaseback transaction, and requires the Borrowers maintain liquidity of at least $70 million at all times following such sale and leaseback transaction.
