Item 1.01Entry into a
Material Definitive Agreement
Amended
& Restated Note Purchase Agreement
On October 1, 2020 (the “Closing Date”), Capstone Turbine
Corporation (the “Company”), certain subsidiaries of the company,
Goldman Sachs Specialty Lending Group, L.P. (as successor in
interest to Goldman Sachs Specialty Lending Holdings, Inc.), as
collateral agent (the “Collateral Agent”), and the Purchasers party
thereto (the “Purchasers”) entered into an Amended & Restated
Note Purchase Agreement, dated October 1, 2020 (the “A&R Note
Purchase Agreement”). The A&R Note Purchase Agreement amends
and restates that certain Note Purchase Agreement, as amended,
dated February 4, 2019, by and among the Company, the Collateral
Agent and the other parties party thereto. Under the A&R Note
Purchase Agreement, the Company issued $20 million in additional
senior secured notes (together with the $30 million in senior
secured notes that were issued prior to the Closing Date, the
“Notes”). The Notes bear interest at the Adjusted LIBO Rate
(as defined in the A&R Note Purchase Agreement) plus 8.75% per
annum, payable on the last day of each interest period of one-,
two-, three- or six-months (but, in the case of a six-month
interest period, every three-months). The entire principal amount
of the Notes is due and payable on October 1, 2023 (the “Maturity
Date”). The Notes do not amortize and the entire principal balance
is due in a single payment on the Maturity Date.
The Company’s obligations under the A&R Note Purchase Agreement
are unconditionally guaranteed by certain of the Company’s
subsidiaries and secured by a lien on substantially all of the
present and future property and assets of the Company and such
subsidiaries, in each case, subject to customary exceptions and
exclusions.
The A&R Note Purchase Agreement contains customary covenants,
including, among others, covenants that restrict the Company’s
ability to incur debt, grant liens, make certain investments and
acquisitions, pay dividends, repurchase equity interests, repay
certain debt, amend certain contracts, enter into affiliate
transactions and asset sales or make certain equity issuances, and
covenants that require the Company to, among other things, provide
annual, quarterly and monthly financial statements, together with
the related compliance certificates, maintain its property in good
repair, maintain insurance and comply with applicable laws. Among
other things, the covenants require the Company to expand its
Rental Fleet (as defined in the A&R Note Purchase Agreement) by
(i) at least 6.25 MW by the 9-month anniversary of the Closing
Date, and (ii) at least 12.50 MW by the 18-month anniversary of the
Closing Date. The A&R Note Purchase Agreement also includes
financial covenants with respect to the Company’s consolidated
liquidity and consolidated adjusted EBITDA.
The A&R Note Purchase Agreement contains customary events of
default, including, among other things, payment default, bankruptcy
events, cross-default breaches of covenants and representations and
warranties, change of control, judgement defaults and an ownership
change within the meaning of Section 382 of the Internal Revenue
Code. In the case of an event of default, the Purchaser may, among
other remedies, accelerate the payment of all obligations under the
Additional Notes.
Any prepayment of the Notes made prior to the second anniversary of
the Closing Date must be accompanied by a yield maintenance
premium.
The Notes issued on the Closing Date and the related guarantees
have not be registered under the Securities Act, and have been
offered and sold in reliance on the exemption from the registration
provided by Rule 506 of Regulation D promulgated under the
Securities Act. The Notes and the related guarantees may not be
offered or sold in the United States without registration or an
applicable exemption from registration requirements.
The foregoing summary does
not purport to be complete and is qualified in its entirety by
reference to the A&R Note Purchase Agreement, which is filed as
Exhibit 4.1 to this Current Report on Form 8-K, and incorporated
herein by reference.
Purchase
Warrant for Common Shares
On October 1, 2020, the Company entered into an Amendment No. 3 to
the Purchase Warrant for Common Shares (the “Amendment No. 3”) with
Special Situations Investing Group II, LLC (as successor in
interest to Goldman Sachs & Co.