Exhibit 10.2

AMENDMENT NUMBER TWO TO BUSINESS FINANCING AGREEMENT

This AMENDMENT NUMBER TWO TO BUSINESS FINANCING AGREEMENT (this “Amendment”),
dated as of August 2, 2019, is entered into by and between  Western Alliance
Bank, an Arizona corporation Lender”), one the one hand, and, ORION ENERGY
SYSTEMS, INC., a Wisconsin corporation (“Parent”), the Subsidiaries of Parent
listed on Schedule 1 attached to the Agreement defined below, and such other
direct or indirect Subsidiaries of Parent that may hereafter become parties
hereto (collectively with Parent, “Borrowers” and each a “Borrower”), on the
other hand, with reference to the following facts:

A.Borrowers and Lender previously entered into that certain Business Financing
Agreement, dated as of October 26, 2018, as amended by that certain Amendment
Number One to Business Financing Agreement, dated as of June 3, 2019 (as so
amended, the “Agreement”).

B.Borrowers and Lender desire to amend the Agreement in accordance with the
terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby
agree as follows:

1.Defined Terms.  All initially capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Agreement.

2.Amendment to Section 4.8(g).  Section 4.8(g) of the Agreement is hereby
amended in its entirety as follows:

 

(g)

Within 30 days of the end of each month, a Compliance Certificate of Borrowers,
signed by an authorized financial officer and setting forth (i) the information
and computations (in sufficient detail) to calculate the financial covenants at
the end of the period covered by the financial statements then being furnished,
(ii) whether there existed as of the date of such financial statements and
whether there exists as of the date of the certificate, any Event of Default
under this Agreement and, if any such Event of Default exists, specifying the
nature thereof and the action Borrowers are taking and proposes to take with
respect thereto, and (iii) a certification as to whether a default exists under
any of Borrowers’ premises leases and, if any default exists, the location of
the leased premises and a description of the default(s).

 

3.Amendments to Section 12.1.

(a)Clause (i) of the definition of Eligible Inventory set forth in Section 12.1
of the Agreement is hereby amended in its entirety as follows:

 

(i)

the Inventory is located at one of Borrowers’ locations within the United
States, and for each such location, a rent reserve under the Borrowing Base and
the Credit Limit has been established in an amount equal to 3 months future rent
due to the landlord for such location;

 

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(b)The following defined term set forth in Section 12.1 of the Agreement is
hereby amended in its entirety as follows:

“Inventory Sublimit” means $3,000,000; provided that in the event that Borrower
shall be in default under any premises lease where any Eligible Inventory is
maintained, then the Inventory Sublimit shall reduce monthly each time by an
amount equal to $1,000,000, commencing on the date of Lender’s notice to
Borrowers of such reduction and continuing on the same day of each month
thereafter until the Inventory Sublimit is reduced to $0.

4.Replacement Exhibit A.  Exhibit A attached to the Agreement is hereby replaced
with Exhibit A attached to this Amendment.

5.Conditions Precedent to Effectiveness of Amendment.  The effectiveness of this
Amendment is subject to and contingent upon the fulfillment of each and every
one of the following conditions to the satisfaction of Lender:

(a)Lender shall have received this Amendment, duly executed by Borrowers;

(b)No Event of Default or Default shall have occurred and be continuing; and

(c)All of the representations and warranties set forth herein and in the
Agreement shall be true, complete and accurate in all respects as of the date
hereof (except for representations and warranties which are expressly stated to
be true and correct as of the date of the Agreement).

6.Representations and Warranties.  In order to induce Lender to enter into this
Amendment, each Borrower hereby represents and warrants to Lender that:

(a)No Event of Default or Default is continuing;

(b)All of the representations and warranties set forth in the Agreement and in
the Agreement are true, complete and accurate in all respects (except for
representations and warranties which are expressly stated to be true and correct
as of the date of the Agreement); and

(c)This Amendment has been duly executed and delivered by Borrowers, and the
Agreement continues to constitute the legal, valid and binding agreements and
obligations of Borrowers, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, and similar laws and
equitable principles affecting the enforcement of creditors’ rights generally.

7.Counterparts; Electronic Execution.  This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Amendment.  Delivery of an executed counterpart of this Amendment electronically
(including by e-mail delivery of a “.pdf” format data file) shall be equally as
effective as delivery of a manually executed counterpart of this Amendment.  Any
party delivering an executed counterpart of this Amendment electronically also
shall deliver a manually executed counterpart of this Amendment but the failure
to deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment.

8.Integration.  The Agreement as amended by this Amendment constitutes the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and thereof, and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.

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9.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, whether or not known to Lender and whether or
not existing on the date of this Amendment.

10.Release.

(a)Each Borrower hereby absolutely and unconditionally releases and forever
discharges Lender, 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 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 such Borrower 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.  Each Borrower hereto certifies that it has read
the following provisions of California Civil Code Section 1542:

A general release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of executing
the release and that, if known by him or her, would have materially affected his
or her settlement with the debtor or released party.

(b)Each Borrower understands and acknowledges that the significance and
consequence of this waiver of California Civil Code Section 1542 is that even if
it should eventually suffer additional damages arising out of the facts referred
to above, it will not be able to make any claim for those damages. Furthermore,
each Borrower acknowledges that it intends these consequences even as to claims
for damages that may exist as of the date of this release but which it does not
know exist, and which, if known, would materially affect its decision to execute
this Agreement, regardless of whether its lack of knowledge is the result of
ignorance, oversight, error, negligence, or any other cause.

11.Reaffirmation of the Agreement.  The Agreement as amended hereby and the Loan
Documents remain in full force and effect.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Amendment as of the date first hereinabove written.

BORROWERS:

ORION ENERGY SYSTEMS, INC.,
a Wisconsin corporation

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

CLEAN ENERGY SOLUTIONS, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

GREAT LAKES ENERGY TECHNOLOGIES, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

ORION SHARED SERVICES, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

ORION AVIATION, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

ORION TECHNOLOGY VENTURES, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

Amendment Number Two to Business Financing Agreement

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ORION ASSET MANAGEMENT, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

 

ORION OPERATIONS, LLC,
a Wisconsin limited liability company

 

 

 

By:

 

/s/ William T. Hull

 

Name:

 

William T. Hull

 

Title:

 

Chief Financial Officer

 

LENDER:

WESTERN ALLIANCE BANK,
an Arizona corporation

 

 

 

By:

 

/s/ Lisa Chang

 

Name:

 

Lisa Chang

 

Title:

 

Vice President

 

 

 

Amendment Number Two to Business Financing Agreement

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Exhibit A
to
Amendment Number Two to Business Financing Agreement

 

Replacement Form of Compliance Certificate

 

COMPLIANCE CERTIFICATE

TO:

WESTERN ALLIANCE BANK, an Arizona corporation (the “Lender”)

FROM:

ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (the “Borrower”)

The undersigned authorized officer of Borrower hereby certifies in his capacity
as an officer of Borrower and not in his individual capacity that in accordance
with the terms and conditions of the Business Financing Agreement between
Borrower and Lender (the “Agreement”), (i) Borrower is in compliance in all
material respects for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
(except to the extent such representation is qualified by "materiality",
"material adverse change" or words of similar import, in which case they shall
be true and correct in all respects) as of the date hereof, except to the extent
such representation or warranty relates to a specific earlier date in which case
such representation and warranties shall be true and correct in all material
respects (except to the extent such representation is qualified by
"materiality", "material adverse change" or words of similar import, in which
case they shall be true and correct in all respects) as of such stated earlier
date.  Attached herewith are the required documents supporting the above
certification.  The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) (except in the
case of interim financial statements, the absence of footnote disclosures and
year-end audit adjustments) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenant

Required

Complies

Company-prepared consolidated monthly financial statements

Within 30 days after the end of each month

Yes

No

 

 

 

 

Compliance Certificate

Within 30 days after the end of each month

Yes

No

 

 

 

 

Borrowing Base Certificate, A/R & A/P agings, inventory schedule, deferred
revenue schedule, sales journal, credit memo report, and accrued rebates
schedule

Within 10 days after the end of each calendar month and with each Advance
Request

Yes

No

 

 

 

 

CPA-audited consolidated annual financial statements

Within 5 days after SEC filing

Yes

No

 

 

 

 

Annual financial projections acceptable to Lender, presented in a month-by-month
format

Within 45 days after the beginning of each fiscal year

Yes

No

 

 

 

 

CPA-prepared business tax returns

Within 15 days after filing

Yes

No

 

 

 

 

10K, 10Q and 8K reports (where applicable)

Concurrent with SEC filing

Yes

No

 

 

 

 

Management Letters to or from Borrower’s auditors

Promptly upon sending or receipt

Yes

No

 

 

 

 

Amendment Number Two to Business Financing Agreement

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Financial Covenant

Required

Actual

Complies

RML

9 months

___ months

Yes

No

 

 

 

 

 

Deposits

 

 

 

 

Deposits held at Bridge Bank: $________________________

 

 

 

 

Deposits held outside of Bridge Bank: $_________________

 

 

 

 

 

Other tracking:

Quick Ratio (for Applicable Margin)

N/A

_____:1.00

N/A

 

Cash Flow

 

$________ on a trailing 3-month basis

 

$________ on a single-month basis

N/A

 

Borrower hereby certifies to Lender that (check one):

_______ there is no

_______ there is a

default under one or more of Borrower’s premises leases.  Please indicate below
the leased location and nature of any default(s) under the lease for that
location:

 

 

 

 

 

 

 

 

 

 

 

Comments Regarding Exceptions:  See Attached.

BANK USE ONLY

 

 

 

Received by:

 

 

Sincerely,

AUTHORIZED SIGNER

 

 

 

Date:

 

 

 

 

 

 

Verified:

 

 

William T. Hull

AUTHORIZED SIGNER

 

 

 

 

Chief Financial Officer

 

Date:

 

 

TITLE

 

 

Compliance Status

Yes

No

 

 

 

DATE

 

 

Amendment Number Two to Business Financing Agreement