Exhibit 10.31


 


FIRST AMENDMENT TO CREDIT
AND SECURITY AGREEMENTS


 


THIS FIRST AMENDMENT TO CREDIT AND SECURITY
AGREEMENTS (the “Amendment”), dated June 9, 2009, 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 from time to time, the “Domestic Credit Agreement”),
and (ii) a Credit and Security Agreement (Ex-Im Subfacility), dated February 9,
2009 (as 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, which Wells
Fargo is willing to make 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.                                     Section 5.2(a) of the Credit
Agreements.  Section 5.2(a) of the Credit
Agreements is hereby deleted in its entirety and replaced with the following:


 


“(a)                            Minimum Book
Net Worth.  Company
shall maintain a Book Net Worth, determined as of the following test dates, in
an amount not less than the amount set forth for each such test date (numbers
appearing between “< >” are negative):


 


	
  Test Date

  	
   

  	
  Minimum Book Net Worth

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  45,791,000

  	
   

  
	
  May 31, 2009

  	
   

  	
  $

  	
  53,826,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  53,336,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  50,504,000

  	
   

  
	
  August 31, 2009

  	
   

  	
  $

  	
  47,727,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  48,709,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  46,045,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  43,460,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  46,259,000

  	
   

  
	
  January 31, 2010

  	
   

  	
  $

  	
  43,763,000

  	
   

  
	
  February 28, 2010

  	
   

  	
  $

  	
  41,149,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  45,294,000

  	
   

  



 

















 


2.                                     Section 5.2(b) of the Credit
Agreements.  Section 5.2(b) of the Credit
Agreements is hereby deleted in its entirety and replaced with the following:


 


“(a)                            Minimum Net
Income.  Company shall achieve Net
Income, measured on each of the following test dates described below, for the
quarter period ending on each such test date, Net Income of not less than the
amount set forth opposite each such test date (numbers appearing between “<
>” are negative):


 


	
  Test Date

  	
   

  	
  Minimum Net Income

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  <9,226,000

  	
  > 

  
	
  September 30, 2009

  	
   

  	
  $

  	
  <7,003,000

  	
  > 

  
	
  December 31, 2009

  	
   

  	
  $

  	
  <4,826,000

  	
  > 

  
	
  March 31, 2010

  	
   

  	
  $

  	
  <3,341,000

  	
  > 

  



 


3.                                     Section 5.2(e) of the Credit
Agreements.  The following paragraph is added as a new Section 5.2(e) to
the Credit Agreements:


 


“(e)                            Maximum Annual
Loss.  During the fiscal year ending March 31,
2010, Company shall not suffer an Annual Loss in excess of $20,000,000.


 


4.                                     Exhibit A to the Credit Agreements. 
The following defined term is hereby added to Exhibit A to the
Credit Agreements in the appropriate alphabetical order:


 


““Annual Loss” means, as of each fiscal year end,
the after-tax net loss from continuing operations during such fiscal year,
including extraordinary losses but excluding extraordinary gains, as determined
in accordance with GAAP.”


 


5.                                     Exhibit E to the Domestic Credit
Agreement.  Exhibit E to the Domestic Credit
Agreement is hereby deleted and replaced with Exhibit E-1 attached
to this Amendment.


 


6.                                     Exhibit E to the Ex-Im Credit
Agreement.  Exhibit E to the Ex-Im Credit
Agreement is hereby deleted and replaced with Exhibit E-2 attached
to this Amendment.


 


7.                                     No Other Changes. 
Except as explicitly amended by this Amendment, all of the terms and
conditions of the Credit Agreements shall remain in full force and effect and
shall apply to any advance or letter of credit thereunder.


 


8.                                     Accommodation Fee. 
Company shall pay Wells Fargo as of the date hereof a fully earned,
non-refundable fee in the amount of $20,000 in consideration of Wells Fargo’s
execution and delivery of this Amendment (the “Accommodation Fee”).


 


9.                                     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:


 

















 


9.1                                 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 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 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;


 


9.2                                 Consent and approval of this Amendment by
the Export Import Bank of the United States, if required by Wells Fargo;


 


9.3                                 The Acknowledgement and Agreement of
Guarantor set forth at the end of this Amendment, duly executed by Guarantor;


 


9.4                                 Payment of the Accommodation Fee
described in Section 8 of this Amendment; and


 


9.5                                 Such other matters as Wells Fargo may
require.


 


10.                               Representations and Warranties. 
Company hereby represents and warrants to Wells Fargo as follows:


 


10.1                           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.


 


10.2                           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.


 


10.3                           All of the representations and warranties
contained in Section 4 of, and Exhibit D to, the Credit
Agreements are true and correct 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.


 


11.                               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.


 

















 


12.                               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.


 


13.                               Release.  Company and
the Guarantor signing the Acknowledgment and Agreement of Guarantors 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 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 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 FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.”


 


14.                               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 fees and disbursements of legal counsel. 
Without limiting the generality of the foregoing, Company specifically
agrees to pay all 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 fees,
disbursements, costs and expenses and the fee set forth in Section 8 of
this Amendment.


 


15.                               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.


 


	
   

  	
  WELLS
  FARGO BANK,

  
	
   

  	
  NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN CURRY

  
	
   

  	
  Print
  Name:

  	
  John
  Curry

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CAPSTONE
  TURBINE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ EDWARD REICH

  
	
   

  	
  Print Name:

  	
  Edward Reich

  
	
   

  	
  Its:

  	
  Executive Vice President and CFO

  



 


S-1

















 


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
Amendment; (ii) consents to the terms (including without limitation the
release set forth in Section 13 of the Amendment) and execution
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:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


1














 


Exhibit E-1


 


Exhibit E to Credit and
Security Agreement


 


COMPLIANCE
CERTIFICATE


 


To:                                                      Wells Fargo
Bank, National Association

Date:                                            [                                    ,
200  ]

Subject:                             Financial
Statements


 


In accordance with our Credit and Security Agreement
dated February 9, 2009 (as amended from time to time, the “Credit
Agreement”), attached are the financial statements of Capstone Turbine
Corporation (the “Company”) dated
[                            ,
200  ] (the “Reporting Date”) and the year-to-date period then ended
(the “Current Financials”).  All terms
used in this certificate have the meanings given in the Credit Agreement.


 


A.                                    Preparation and Accuracy of
Financial Statements.  I certify that the Current Financials have
been prepared in accordance with GAAP, subject to year-end audit adjustments,
and fairly present Company’s financial condition as of the Reporting Date.


 


B.                                    Name of Company; Merger and
Consolidation.  I certify that:


 


(Check one)


 


o                                    Company has
not, since the date of the Credit Agreement, changed its name or jurisdiction
of organization, nor has it consolidated or merged with another Person.


 


o                                    Company has,
since the date of the Credit Agreement, either changed its name or jurisdiction
of organization, or both, or has consolidated or merged with another Person,
which change, consolidation or merger: o was
consented to in advance by Wells Fargo in an Authenticated Record, and/or o is more
fully described in the statement of facts attached to this Certificate.


 


C.                                    Events of Default.  I
certify that:


 


(Check one)


 


o                                    I have no
knowledge of the occurrence of an Event of Default under the Credit Agreement,
except as previously reported to Wells Fargo in a Record.


 


o                                    I have
knowledge of an Event of Default under the Credit Agreement not previously
reported to Wells Fargo in a Record, as more fully described in the statement
of facts attached to this Certificate, and further, I acknowledge that Wells
Fargo may under the terms of the Credit Agreement impose the Default Rate at
any time during the resulting Default Period.


 


E-1-1

















 


D.                                    Litigation Matters. 
I certify that:


 


(Check
one)


 


o                                    I have no
knowledge of any material adverse change to the litigation exposure of Company
or any of its Affiliates or of any Guarantor.


 


o                                    I have
knowledge of material adverse changes to the litigation exposure of Company or
any of its Affiliates or of any Guarantor not previously disclosed in Exhibit D,
as more fully described in the statement of facts attached to this Certificate.


 


E.                                      Financial Covenants. 
I further certify that:


 


(Check and complete each of the following)


 


1.                                       Minimum Book Net Worth. 
Pursuant to Section 5.2(a) of the Credit Agreement, as
of the Reporting Date, Company’s Book Net Worth was
$[                        ],
which o satisfies o does not satisfy the requirement that such
amount be not less than the applicable amount set forth in the table below
(numbers appearing between “< >” are negative) on the Reporting Date:


 


	
  Test Date

  	
   

  	
  Minimum Book Net Worth

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  45,791,000

  	
   

  
	
  May 31, 2009

  	
   

  	
  $

  	
  53,826,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  53,336,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  50,504,000

  	
   

  
	
  August 31, 2009

  	
   

  	
  $

  	
  47,727,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  48,709,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  46,045,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  43,460,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  46,259,000

  	
   

  
	
  January 31, 2010

  	
   

  	
  $

  	
  43,763,000

  	
   

  
	
  February 28, 2010

  	
   

  	
  $

  	
  41,149,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  45,294,000

  	
   

  



 


2.                                       Minimum Net Income. 
Pursuant to Section 5.2(b) of the Credit Agreement, as
of the Reporting Date, Company’s Net Income was
[$                    ],
which o satisfies o does not satisfy the requirement that Net Income
be not less than the amount set forth in the table below (numbers appearing
between “< >” are negative) on the Reporting Date:


 


	
  Test Date

  	
   

  	
  Minimum Net Income

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  <9,226,000

  	
  > 

  
	
  September 30, 2009

  	
   

  	
  $

  	
  <7,003,000

  	
  > 

  
	
  December 31, 2009

  	
   

  	
  $

  	
  <4,826,000

  	
  > 

  
	
  March 31, 2010

  	
   

  	
  $

  	
  <3,341,000

  	
  > 

  



 


E-1-2

















 


3.                                       Minimum Cash to Unreimbursed Line
of Credit Advances Coverage Ratio.  Pursuant to Section 5.2(c) of
the Credit Agreement, as of the Reporting Date, at all times, Company has o has not o been
in compliance with the requirement that the percentage of the unreimbursed Line
of Credit Advances under the Revolving Note plus the L/C Amount plus
outstanding “Advances” under the Ex-Im Credit Agreement to the amount of cash
plus Cash Equivalents of Company in which Wells Fargo has a perfected first
priority security interest be not greater than 80%.


 


4.                                       Capital Expenditures. 
Pursuant to Section 5.2(d) of the Credit Agreement, for
the year-to-date period ending on the Reporting Date, Company has expended or
contracted to expend during the fiscal year ended
                              ,
200      , for Capital Expenditures,
$                                
in the aggregate, which o satisfies o does
not satisfy the requirement that such expenditures not exceed $7,500,000 in the
aggregate during the fiscal year ended March 31, 2009, $10,000,000 in the
aggregate during the fiscal year ended March 31, 2010, and zero for each
subsequent fiscal year.


 


5.                                       Maximum Annual Loss. 
Pursuant to Section 5.2(e) of the Credit Agreement,
during the fiscal year ending March 31, 2010, Company has suffered an
Annual Loss of
$                                      ,
which o satisfies o does
not satisfy the requirement that Company not suffer an Annual Loss in excess of
$20,000,000.


 


Attached are statements of all relevant facts and
computations in reasonable detail sufficient to evidence Company’s compliance
with the financial covenants referred to above, which computations were made in
accordance with GAAP.


 


	
   

  	
  Capstone
  Turbine Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:
  Chief Financial Officer

  



 


E-1-3














 


Exhibit E-2


 


Exhibit E to Credit and
Security Agreement (Ex-Im Subfacility)



COMPLIANCE CERTIFICATE


 


To:                                                      Wells Fargo
Bank, National Association

Date:                                            [                                    ,
200  ]

Subject:                             Financial
Statements


 


In accordance with our Credit and Security Agreement
(Ex-Im Subfacility) dated February 9, 2009 (as amended from time to time,
the “Credit Agreement”), attached are the financial statements of Capstone
Turbine Corporation (the “Company”) dated
[                            ,
200  ] (the “Reporting Date”) and the year-to-date period then ended
(the “Current Financials”).  All terms
used in this certificate have the meanings given in the Credit Agreement.


 


F.                                      Preparation and Accuracy of
Financial Statements.  I certify that the Current Financials have
been prepared in accordance with GAAP, subject to year-end audit adjustments,
and fairly present Company’s financial condition as of the Reporting Date.


 


G.                                    Name of Company; Merger and
Consolidation.  I certify that:


 


(Check one)


 


o                                    Company has
not, since the date of the Credit Agreement, changed its name or jurisdiction
of organization, nor has it consolidated or merged with another Person.


 


o                                    Company has,
since the date of the Credit Agreement, either changed its name or jurisdiction
of organization, or both, or has consolidated or merged with another Person,
which change, consolidation or merger: o was
consented to in advance by Wells Fargo in an Authenticated Record, and/or o is more
fully described in the statement of facts attached to this Certificate.


 


H.                                    Events of Default. 
I certify that:


 


(Check one)


 


o                                    I have no
knowledge of the occurrence of an Event of Default under the Credit Agreement,
except as previously reported to Wells Fargo in a Record.


 


o                                    I have
knowledge of an Event of Default under the Credit Agreement not previously
reported to Wells Fargo in a Record, as more fully described in the statement
of facts attached to this Certificate, and further, I acknowledge that Wells
Fargo may under the terms of the Credit Agreement impose the Default Rate at
any time during the resulting Default Period.


 


E-2-1

















 


I.                                         Litigation Matters. 
I certify that:


 


(Check
one)


 


o                                    I have no
knowledge of any material adverse change to the litigation exposure of Company
or any of its Affiliates or of any Guarantor.


 


o                                    I have
knowledge of material adverse changes to the litigation exposure of Company or
any of its Affiliates or of any Guarantor not previously disclosed in Exhibit D,
as more fully described in the statement of facts attached to this Certificate.


 


J.                                      Financial Covenants. 
I further certify that:


 


(Check and complete each of the following)


 


1.                                       Minimum Book Net Worth. 
Pursuant to Section 5.2(a) of the Credit Agreement, as
of the Reporting Date, Company’s Book Net Worth was
$[                        ],
which o satisfies o does not satisfy the requirement
that such amount be not less than the applicable amount set forth in the table
below (numbers appearing between “< >” are negative) on the Reporting
Date:


 


	
  Test Date

  	
   

  	
  Minimum Book Net Worth

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  45,791,000

  	
   

  
	
  May 31, 2009

  	
   

  	
  $

  	
  53,826,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  53,336,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  50,504,000

  	
   

  
	
  August 31, 2009

  	
   

  	
  $

  	
  47,727,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  48,709,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  46,045,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  43,460,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  46,259,000

  	
   

  
	
  January 31, 2010

  	
   

  	
  $

  	
  43,763,000

  	
   

  
	
  February 28, 2010

  	
   

  	
  $

  	
  41,149,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  45,294,000

  	
   

  



 


2.                                       Minimum Net Income. 
Pursuant to Section 5.2(b) of the Credit Agreement, as
of the Reporting Date, Company’s Net Income was
[$                    ],
which o satisfies o does not satisfy the requirement
that Net Income be not less than the amount set forth in the table below
(numbers appearing between “< >” are negative) on the Reporting
Date:


 


	
  Test Date

  	
   

  	
  Minimum Net Income

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  <9,226,000

  	
  > 

  
	
  September 30, 2009

  	
   

  	
  $

  	
  <7,003,000

  	
  > 

  
	
  December 31, 2009

  	
   

  	
  $

  	
  <4,826,000

  	
  > 

  
	
  March 31, 2010

  	
   

  	
  $

  	
  <3,341,000

  	
  > 

  



 


E-2-2

















 


3.                                       Minimum Cash to Unreimbursed Line
of Credit Advances Coverage Ratio.  Pursuant to Section 5.2(c) of
the Credit Agreement, as of the Reporting Date, at all times, Company has o has not o been
in compliance with the requirement that the percentage of the unreimbursed “Advances”
plus the L/C Amount under the Domestic Facility Agreement plus outstanding “Advances”
under the Domestic Facility Agreement to the amount of cash plus Cash
Equivalents of Company in which Wells Fargo has a perfected first priority
security interest be not greater than 80%.


 


4.                                       Capital Expenditures. 
Pursuant to Section 5.2(d) of the Credit Agreement, for
the year-to-date period ending on the Reporting Date, Company has expended or
contracted to expend during the fiscal year ended
                              ,
200      , for Capital Expenditures,
$                                
in the aggregate, which o satisfies o does
not satisfy the requirement that such expenditures not exceed $7,500,000 in the
aggregate during the fiscal year ended March 31, 2009, $10,000,000 in the
aggregate during the fiscal year ended March 31, 2010, and zero for each
subsequent fiscal year.


 


5.                                       Maximum Annual Loss. 
Pursuant to Section 5.2(e) of the Credit Agreement,
during the fiscal year ending March 31, 2010, Company has suffered an
Annual Loss of
$                                      ,
which o satisfies o does
not satisfy the requirement that Company not suffer an Annual Loss in excess of
$20,000,000.


 


Attached are statements of all relevant facts and
computations in reasonable detail sufficient to evidence Company’s compliance
with the financial covenants referred to above, which computations were made in
accordance with GAAP.


 


	
   

  	
  Capstone
  Turbine Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:
  Chief Financial Officer

  



 


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