TENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS
Exhibit 10.29
TENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS
THIS TENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS (the “Amendment”), dated as of June 12, 2012, is entered into by and between CAPSTONE TURBINE CORPORATION, a Delaware corporation (“Company”), and XXXXX FARGO BANK, NATIONAL ASSOCIATION (“Xxxxx Fargo”), acting through its Xxxxx Fargo Business Credit operating division.
RECITALS
A. Company and Xxxxx Fargo are parties to (i) a Credit and Security Agreement dated February 9, 2009 (as amended by that certain First Amendment to Credit and Security Agreements, dated June 9, 2009 (“First Amendment”), that certain Second Amendment to Credit and Security Agreements and Waiver of Defaults, dated November 5, 2009 (“Second Amendment”), that certain Third Amendment to Credit and Security Agreements and Waiver of Default, dated June 11, 2010 (“Third Amendment”), that certain Fourth Amendment to Credit and Security Agreements, dated June 29, 2010 (“Fourth Amendment”), that certain Fifth Amendment to Credit and Security Agreements, dated November 9, 2010 (“Fifth Amendment”), that certain Sixth Amendment to Credit and Security Agreement and Waiver of Default, dated March 23, 2011 (“Sixth Amendment”), that certain Seventh Amendment to Credit and Security Agreements and Waiver of Default, dated June 2, 2011 (“Seventh Amendment”), that certain Eighth Amendment to Credit and Security Agreements, dated September 27, 2011 (“Eighth Amendment”), and that certain Ninth Amendment to Credit and Security Agreements and Waiver of Default, dated February 7, 2012 (“Ninth Amendment”), and as further amended from time to time, the “Domestic Credit Agreement”), and (ii) a Credit and Security Agreement (Ex-Im Subfacility), dated February 9, 2009 (as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment, and the Ninth Amendment, and as further amended from time to time, the “Ex-Im Credit Agreement”; and together with the Domestic Credit Agreement, the “Credit Agreements”). Capitalized terms used in these recitals have the meanings given to them in the Credit Agreements unless otherwise specified.
B. Company has requested that certain amendments be made to the Credit Agreements, and Xxxxx Fargo is willing to agree to such amendments pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:
1. Amendments to Credit Agreements. The Credit Agreements are amended as follows:
1.1 Section 5.2(b) of the Credit Agreements. Section 5.2(b) of the Credit Agreements is amended to read in its entirety as follows:
“(b) Minimum Net Income. Company shall achieve Net Income, measured on each of the following test dates described below, for the periods specified below, of not less than the amount set forth opposite each such test date and test period (numbers appearing between “< >“ are negative):
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Test Date and Test Period |
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Minimum Net Income |
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Fiscal Year to Date Period ending June 30, 2012 |
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$<10,634,000> |
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Fiscal Year to Date Period ending September 30, 2012 |
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$<16,450,000> |
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Fiscal Year to Date Period ending December 31, 2012 |
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$<20,781,000> |
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Fiscal Year to Date Period ending March 31, 2013 |
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$<22,669,000> |
1.2 Section 5.2(c) of the Credit Agreements. Section 5.2(c) of the Credit Agreements is amended to read in its entirety as follows:
“(c) Minimum Cash to Unreimbursed Line of Credit Advances Coverage Ratio. At all times during which this Section 5.2(c) shall be in effect, the ratio of (i) the sum of the outstanding Advances under the Revolving Note plus the L/C Amount plus the outstanding “Advances” under the Ex-Im Credit Agreement to (ii) cash and Cash Equivalents of Company in which Xxxxx Fargo has a perfected first priority security interest, shall not exceed the Required Coverage Ratio (as defined below). Compliance with the foregoing covenant shall be reported as Xxxxx Fargo shall request from time to time in its sole discretion. “Required Coverage Ratio” shall mean: (i) 80%, unless one of the following clauses applies; (ii) 100%, if Company’s Gross Profit Margin for the fiscal year ending March 31, 2013 equals or exceeds 15% (as determined based on Company’s CPA-audited financial statements for such fiscal year); (iii) 150%, if Company’s Adjusted EBITDA for any fiscal year equals or exceeds $2,000,000 (as determined based on Company’s CPA-audited financial statements for such fiscal year); or (iv) no requirement (i.e., this Section 5.2(c) shall not apply), if Company’s Adjusted Net Income for any fiscal year equals or exceeds $-0- (as determined based on Company’s CPA-audited financial statements for such fiscal year); provided that (A) if Company satisfies both clauses (iii) and (iv) of this paragraph, this Section 5.2(c) shall not apply, and (B) any change in the Required Coverage Ratio shall begin to apply as of the first day of the first calendar month after receipt by Xxxxx Fargo of Company’s relevant CPA-audited financial statements.”
1.3 Section 5.2(d) of the Credit Agreements. Section 5.2(d) of the Credit Agreements is amended to read in its entirety as follows:
“(d) Capital Expenditures. Company shall not incur or contract to incur Capital Expenditures of more than (i) $2,500,000 in the aggregate during Company’s fiscal year ending March 31, 2013, and (ii) zero for each subsequent year until Company and Xxxxx Fargo agree on limits on Capital Expenditures for subsequent periods based on Company’s projections for such periods.”
2. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreements and the other Loan Documents shall remain in full force and effect and shall apply to any advance or letter of credit thereunder.
3. Accommodation Fee. [Intentionally Omitted].
4. Conditions Precedent. This Amendment shall be effective when Xxxxx Fargo shall have received an executed original of this Amendment, together with each of the following, each in substance and form acceptable to Xxxxx Fargo in its sole discretion:
4.1 A Certificate of the Secretary of Company certifying as to (i) the resolutions of the board of directors of Company approving the execution and delivery of this Amendment, (ii) the fact that the certificate of incorporation and bylaws of Company, which were certified and delivered to Xxxxx Fargo pursuant to the Certificate of Authority of Company’s secretary or assistant secretary dated February 9, 2009, continue in full force and effect and have not been amended or otherwise modified except as set forth in the Certificate to be delivered, and (iii) the fact that the officers and agents of Company who have been certified to Xxxxx Fargo, pursuant to the Certificate of Authority of Company’s secretary or assistant secretary dated February 9, 2009, as being authorized to sign and to act on behalf of Company continue to be so authorized;
4.2 Consent and approval of this Amendment by the Export Import Bank of the United States, if required by Xxxxx Fargo;
4.3 The Acknowledgement and Agreement of Guarantor set forth at the end of this Amendment, duly executed by Guarantor; and
4.4 Such other matters as Xxxxx Fargo may require.
5. Representations and Warranties. Company hereby represents and warrants to Xxxxx Fargo as follows:
5.1 Company has all requisite power and authority to execute this Amendment and any other agreements or instruments required hereunder and to perform all of its obligations hereunder, and this Amendment and all such other agreements and instruments have been duly executed and delivered by Company and constitute the legal, valid and binding obligation of Company, enforceable in accordance with their terms.
5.2 The execution, delivery and performance by Company of this Amendment and any other agreements or instruments required hereunder have been duly authorized by all necessary corporate action and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to Company, or the certificate of incorporation or bylaws of Company, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which Company is a party or by which it or its properties may be bound or affected.
5.3 After giving effect to this Amendment, all of the representations and warranties contained in Section 4 of, and Exhibit D to, the Credit Agreements are true and correct in all material respects on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date (in which case they shall continue to be true and correct as of such earlier date).
6. References. All references in the Credit Agreements to “this Agreement” shall be deemed to refer to the relevant Credit Agreement as amended hereby; and any and all references in the Security Documents to the Credit Agreements shall be deemed to refer to the relevant Credit Agreement as amended hereby.
7. No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreements or a waiver of any breach, default or event of default under any Security Document or other document held by Xxxxx Fargo, whether or not known to Xxxxx Fargo and whether or not existing on the date of this Amendment.
8. Release. Company and the Guarantor signing the Acknowledgment and Agreement of Guarantor set forth below hereby absolutely and unconditionally release and forever discharge Xxxxx Fargo, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents, attorneys, and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Company or Guarantor has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. It is the intention of the Company and Guarantor in executing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified and in furtherance of this intention the Company and Guarantor each waives and relinquishes all rights and benefits under Section 1542 of the Civil Code of the State of California, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MIGHT HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
The parties acknowledge that each may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.
9. Costs and Expenses. Company hereby reaffirms its agreement under the Credit Agreements to pay or reimburse Xxxxx Fargo on demand for all costs and expenses incurred by Xxxxx Fargo in connection with the Loan Documents, including, without limitation, all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, Company specifically agrees to pay all reasonable fees and disbursements of counsel to Xxxxx Fargo for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. Company hereby agrees that Xxxxx Fargo may, at any time or from time to time in its sole discretion and without further authorization by Company, make a loan to Company under the Credit Agreements, or apply the proceeds of any loan, for the purpose of paying any such reasonable fees, disbursements, costs and expenses.
10. Miscellaneous. This Amendment and the Acknowledgment and Agreement of Guarantor may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument. Transmission by facsimile or “pdf” file of an executed counterpart of this Amendment shall be deemed to constitute due and sufficient delivery of such counterpart. Any party hereto may request an original counterpart of any party delivering such electronic counterpart. This Amendment and the rights and obligations of the parties hereto shall be construed in accordance with, and governed by, the laws of the State of California. In the event of any conflict between this Amendment and the Credit Agreements, the terms of this Amendment shall govern. The Export-Import Bank of the United States shall be an express intended beneficiary of this Amendment.
[Signatures on next page]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
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XXXXX FARGO BANK, | |
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NATIONAL ASSOCIATION | |
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By: |
/s/Xxxxxxx Xxxxx |
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Print Name: Xxxxxxx Xxxxx | |
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Title: Authorized Signatory | |
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CAPSTONE TURBINE CORPORATION | |
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By: |
/s/Xxxxxx X. Xxxxx |
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Print Name: Xxxxxx X. Xxxxx | |
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Its: Executive Vice President and CFO | |
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The undersigned, a guarantor of the indebtedness of Capstone Turbine Corporation (“Company”) to Xxxxx Fargo Bank, National Association (as more fully defined in the Amendment, “Xxxxx Fargo”), acting through its Xxxxx Fargo Business Credit operating division, pursuant to the separate Guaranty dated February 9, 2009 (“Guaranty”), hereby (i) acknowledges receipt of the foregoing Tenth Amendment to Credit and Security Agreements (“Amendment”); (ii) consents and agrees to the terms (including, without limitation, the release set forth in Section 8 of the Amendment) and execution and performance thereof; (iii) reaffirms all obligations to Xxxxx Fargo pursuant to the terms of the Guaranty; and (iv) acknowledges that Xxxxx Fargo may amend, restate, extend, renew or otherwise modify the Credit Agreements and any indebtedness or agreement of the Company, or enter into any agreement or extend additional or other credit accommodations, without notifying or obtaining the consent of the undersigned and without impairing the liability of the undersigned under the Guaranty for all of the Company’s present and future indebtedness to Xxxxx Fargo.
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CAPSTONE TURBINE INTERNATIONAL, INC. | ||||
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By: |
/s/ Xxxxxx X. Xxxxx | |||
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Print Name: |
Xxxxxx X. Xxxxx | |||
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Title: |
Executive Vice President and CFO | |||
