Exhibit 10.30

 

ELEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS

 

THIS ELEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENTS (the “Amendment”),
dated as of June 7, 2013, is entered into by and between CAPSTONE TURBINE
CORPORATION, a Delaware corporation (“Company”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Wells Fargo”), acting through its Wells Fargo Business Credit
operating division.

 

RECITALS

 

A.                                    Company and Wells 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”), that certain Ninth Amendment to Credit and Security Agreements and
Waiver of Default, dated February 7, 2012 (“Ninth Amendment”), and that certain
Tenth Amendment to Credit and Security Agreement, dated June 11, 2012 (“Tenth
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, the Ninth Amendment, and the Tenth
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 Wells 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 1.5(a) of the Domestic Credit
Agreement.  Section 1.5(a) of the Domestic Credit Agreement is amended to read
in its entirety as follows:

 

“(a)                           Interest Rate Applicable to Line of Credit. 
Except as otherwise provided in this Agreement, the unpaid principal amount of
each Line of Credit Advance evidenced by the Revolving Note shall accrue
interest at an annual interest rate calculated as follows:

 

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Floating Rate Pricing

 

The “Floating Rate” for Line of Credit Advances = the sum of (i) Daily Three
Month LIBOR, which interest rate shall change whenever Daily Three Month LIBOR
changes, plus (ii) the applicable Margin.

 

The “Margin” shall be three and three quarters percent (3.75%) per annum.”

 

1.2                               Section 1.5(a) of the Ex-Im Credit Agreement. 
Section 1.5(a) of the Ex-Im Credit Agreement is amended to read in its entirety
as follows:

 

“(a)                           Interest Rate Applicable to Line of Credit. 
Except as otherwise provided in this Agreement, the unpaid principal amount of
each Line of Credit Advance evidenced by the Revolving Notes shall accrue
interest at an annual interest rate calculated as follows:

 

Floating Rate Pricing

 

The “Floating Rate” for Line of Credit Advances = the sum of (i) Daily Three
Month LIBOR, which interest rate shall change whenever Daily Three Month LIBOR
changes, plus (ii) the applicable Margin.

 

The “Margin” shall be three and three quarters percent (3.75%) per annum.”

 

1.3                               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 Adjusted Net Income.  Company shall
achieve Adjusted 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):

 

Test Date and Test Period

 

Minimum Adjusted Net Income

 

Fiscal Year to Date Period ending June 30, 2013

 

$

<7,481,000>

 

Fiscal Year to Date Period ending September 30, 2013

 

$

<9,535,000>

 

Fiscal Year to Date Period ending December 31, 2013

 

$

<11,038,000>

 

Fiscal Year to Date Period ending March 31, 2014

 

$

<11,853,000>

 

 

1.4                               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:

 

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“(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
Wells 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 Wells 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, 2014 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 Wells Fargo of Company’s relevant
CPA-audited financial statements.”

 

1.5                               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, 2014, and (ii) zero for
each subsequent year until Company and Wells 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 Wells Fargo shall have received an executed original of
this Amendment, together with each of the following, each in substance and form
acceptable to Wells Fargo in its sole discretion:

 

4.1                               A Certificate of Authority from the Company’s
corporate secretary 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 Wells 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

 

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Wells 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 Wells 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 Wells Fargo may require.

 

5.                                      Representations and Warranties.  Company
hereby represents and warrants to Wells 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 Wells Fargo,
whether or not known to Wells Fargo and whether or not existing on the date of
this Amendment.

 

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8.                                      Release.  Company and the Guarantor
signing the Acknowledgment and Agreement of Guarantor set forth below hereby
absolutely and unconditionally release and forever discharge Wells 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 Wells
Fargo on demand for all costs and expenses incurred by Wells 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 Wells 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 Wells 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]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

 

 

WELLS FARGO BANK,

 

NATIONAL ASSOCIATION

 

 

 

 

 

By:

/ s/ Josephine Camalian

 

Print Name: Josephine Camalian

 

Title: Authorized Signatory

 

 

 

 

 

CAPSTONE TURBINE CORPORATION

 

 

 

By:

/s/ Edward I. Reich

 

Print Name: Edward I. Reich

 

Its: Executive Vice President and CFO

 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

 

The undersigned, a guarantor of the indebtedness of Capstone Turbine Corporation
(“Company”) to Wells Fargo Bank, National Association (as more fully defined in
the Amendment, “Wells Fargo”), acting through its Wells Fargo Business Credit
operating division, pursuant to the separate Guaranty dated February 9, 2009
(“Guaranty”), hereby (i) acknowledges receipt of the foregoing Eleventh
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 Wells Fargo pursuant to the terms of the Guaranty;
and (iv) acknowledges that Wells 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 Wells Fargo.

 

 

 

 

CAPSTONE TURBINE INTERNATIONAL, INC.

 

 

 

By:

/s/ Edward I. Reich

 

Print Name:

Edward I. Reich

 

Title:

Executive Vice President and CFO

 

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