Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
     THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into this
18th day of December, 2009, by and between ORION ENERGY SYSTEMS, INC., a
Wisconsin corporation, and GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin
limited liability company (“Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).
RECITALS
     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of March 18, 2008, as amended from time to time (“Credit Agreement”).
     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
     1. Section 1.1(a) and (b) are hereby deleted in their entirety, and
restated as follows:
     “(a) Line of Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including August 31, 2010, not to exceed at any time the aggregate principal
amount of TWENTY FIVE MILLION DOLLARS ($25,000,000.00) (“Line of Credit”), the
proceeds of which shall be used for working capital or other general corporate
purposes. Borrower’s obligation to repay advances under the Line of Credit shall
be evidenced by a $25,000,000.00 promissory note dated the same date as this
Agreement (“Line of Credit Note”), the terms of which are incorporated by
reference. The Line of Credit Note shall be given as a replacement for, and not
in satisfaction of, the Borrower’s $25,000,000 Revolving Note dated December 22,
2005.
     (b) Limitation on Borrowings. Outstanding borrowings under the Line of
Credit shall not at any time exceed a 95% advance rate for aggregate Listed
Money Market Funds acceptable to Bank that are held in Borrower’s Account
#                     maintained with Wells Fargo Securities, LLC, and that have
been pledged to Bank pursuant to the Security Agreement: Securities Account
granting Bank, less $300,000.00, representing Borrower’s purchasing card
(P-Card) commitment from Bank.”
     2. Section 1.2 (c) is hereby deleted in its entirety, and the following
substituted therefor:
     “(c) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to
fifteen hundredths percent (.15%) per annum (computed on the basis of a 360-day
year, actual days elapsed) on the average daily unused amount of the Line of
Credit, which fee shall be calculated on a quarterly basis by Bank and shall be
due and payable by Borrower in arrears on the date of this agreement, then the
fee shall be calculated on the full amount of the increased Line of Credit.”

 

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     3. Section 1.4 is hereby deleted in its entirety and the following is
substituted therefore:
     “SECTION 1.4. COLLATERAL. As security for all indebtedness and other
obligations of Borrower to Bank, Borrower granted to Bank pursuant to the
Security Agreement: Continuing Rights to Payment and Inventory dated March 18,
2008 (the “2008 Security Agreement”), a first lien security interest in all
Borrower’s accounts receivable and other rights to payment, general intangibles
and inventory, which security interest extends without limitation to all deposit
accounts, securities entitlements, investment property, and cash owned by each
Borrower. Bank and Borrower have now agreed that Bank shall deliver cash subject
to this existing security interest to Bank for deposit to securities account
#                     maintained by Borrower with Wells Fargo Securities, LLC
(the “Securities Account”), which shall continue to secure all indebtedness and
other obligations of Borrower to Bank hereunder, pursuant to the terms of a
Security Agreement: Securities Account, dated the same date as the Second to
Credit Agreement (the “2009 Security Agreement”), which 2009 Security Agreement
shall continue the existing security interest in effect and replace the original
2008 Security Agreement.
     In consideration of Borrower delivering cash collateral to the Securities
Account, which account shall be controlled by Bank and thus subject to Bank’s
perfected security interest, Bank agrees that it will release its security
interest in all other personal property collateral owned by each Borrower and
granted to Bank pursuant to the 2008 Security Agreement (other than the security
interest in collateral continued by the 2009 Security Agreement), which
collateral being released hereby that is owned by each Borrower has a value
significantly in excess of the cash collateral deposited to the Securities
Account, and Bank further agrees to terminate its security interest in
collateral granted to it by Orion Asset Management, LLC and Clean Energy
Solutions, LLC pursuant to security agreements dated May 15, 2009 (although Bank
shall retain guaranties given by each of Orion Asset Management, LLC and Clean
Energy Solutions, LLC dated May 15, 2009).
     All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements and other documents as Bank shall
reasonably require, all in form and substance satisfactory to Bank. Borrower
shall pay to Bank immediately upon demand the full amount of all charges, costs
and expenses (to include fees paid to third parties and all allocated costs of
Bank personnel), expended or incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees and
costs of appraisals and audits.”
     4. Section 4.9 is hereby deleted in its entirety, and the following
substituted therefor:
     “SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s financial condition
as follows using generally accepted accounting principles consistently applied
and used consistently with prior practices (except to the extent modified by the
definitions herein), with compliance determined commencing with Borrower’s
financial statements for the period ending December 31, 2007:

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     (a) Total Liabilities divided by Tangible Net Worth not greater than 1.0 to
1.0 at each fiscal quarter end, with “Total Liabilities” defined as the
aggregate of current liabilities and noncurrent liabilities less subordinated
debt, and with “Tangible Net Worth” defined as the aggregate of total
stockholders’ and members’ equity plus subordinated debt less any intangible
assets.
     (b) Minimum Net income after taxes not less than ($4,611,000.00) as of
September 30, 2009, ($6,499,000.00) as of December 31, 2009, ($8,219,000.00) as
of March 31, 2010, ($1,700,000.00) as of June 30, 2010, determined as of each
fiscal quarter end, and calculated on a fiscal year-to-date basis.”
     5. As a condition precedent to the obligations of Bank hereunder, Borrower
shall deliver to Bank the 2009 Security Agreement, and Addendum to Security
Agreement: Securities Account, and a Securities Account Control Agreement,
together with a deposit of cash in the amount of $20,000,000.00 to the
Securities Account, and Bank shall not be required to terminate its interest in
the other collateral until Bank’s counsel, in its sole discretion, determines
that Bank has an unimpaired first lien security interest in the Securities
Account and all cash deposited thereto.
     6. Subject to the terms and conditions of this Amendment, Bank hereby
waives its rights to declare Borrower in default under the Agreement as a result
of Borrowers’ failure to comply with Sections 4.9(b) and 4.9(c) of the Agreement
with respect to the breach for the period ending September 30, 2009. This waiver
applies only to the specific breaches referenced herein. It is not a waiver of
any subsequent breach of the same provision of the Agreement, nor is it a waiver
of any breach of any other provision of the Agreement. Except as expressly
stated herein, Bank reserves all rights, powers and remedies available to Bank
under the Agreement and any other agreements signed by Borrower, including the
right to cease making advances and the right to accelerate any indebtedness, if
any subsequent breach of the same provisions or any other provisions of the
Agreement should occur.
     7. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
     8. Borrower hereby remakes all representations and warranties contained in
the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
     9. Borrower and Guarantors ratify, reaffirm, acknowledge, and agree that
the Agreement, as hereby amended, represents valid, enforceable and collectible
obligations of Borrower, and that there are no existing claims, defenses,
personal or otherwise, or rights of setoff whatsoever with respect to any of
these documents or instruments. In addition, Borrower and Guarantors hereby
expressly waive, release and absolutely and forever discharge Bank and its
shareholders, directors, officers, employees and agents, and their heirs,
personal

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representatives, successors and assigns, from any and all liability, claims,
demands, damages, actions and causes of action that Borrower or Guarantors may
now have, or have had prior to the date hereof and, without limiting the
generality of the foregoing, from any and all liability, claims, demands,
damages, actions and causes of action arising out of, or in any way connected
with, the Notes. Borrower and Guarantors further acknowledge and represent that
no event of default or unmatured event of default exists other than as set forth
in Section 6 of this Amendment.
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

               
ORION ENERGY SYSTEMS, INC.   WELLS FARGO BANK,
NATIONAL ASSOCIATION
 
           
By:
  /s/ Neal R. Verfuerth   By:   /s/ Thomas Fameree
 
           
 
  Neal R. Verfuerth, Chairman/CEO       Thomas Fameree, Vice President

          GREAT LAKES ENERGY
TECHNOLOGIES, LLC
      By:   s/ Michael J. Potts         Title: Executive Vice President         
      ACKNOWLEDGED AND AGREED TO
By Guarantors Orion Asset Management, LLC and Clean Energy Solutions, LLC
this 18th day of December, 2009.
     

              ORION ASSET MANAGEMENT, LLC   CLEAN ENERGY SOLUTIONS, LLC
 
           
By:
  /s/ Michael J. Potts   By:   s/ Michael J. Potts
 
           
 
  Title: Executive Vice President       Title: Executive Vice President

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