Exhibit
10.1
FIRST LOAN MODIFICATION
AGREEMENT
This First Loan
Modification Agreement (this “ First Loan Modification
Agreement ”) is entered into as of September 30, 2009, by
and between (i) SILICON VALLEY BANK , a California
corporation, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production
office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462 (“ Bank
”) and (ii) WORLD ENERGY SOLUTIONS, INC. ,
a Delaware corporation with offices located at 446 Main Street,
Worcester, Massachusetts 01608, and WORLD ENERGY SECURITIES
CORP. , a Massachusetts securities corporation with offices
located at 446 Main Street, Worcester, Massachusetts 01608
(individually and collectively, jointly and severally, “
Borrower ”).
1.
DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS . Among
other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated as of September 8, 2008, evidenced by, among
other documents, a certain Loan and Security Agreement dated as of
September 8, 2008, between Borrower and Bank (as amended, the
“ Loan Agreement
”). Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan
Agreement.
2.
DESCRIPTION OF COLLATERAL . Repayment of the
Obligations is secured by the Collateral as described in the Loan
Agreement (together with any other collateral security granted to
Bank, the “ Security Documents
”).
Hereinafter,
the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the
“ Existing Loan Documents ”.
3.
DESCRIPTION OF CHANGE IN TERMS .
A. Modifications
to Loan Agreement.
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 2.3(a) thereof, in its entirety:
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“(a)
Interest Rate ; Advances . Subject to
Section 2.3(b), (a) the principal amount of the Revolving Line
outstanding due to Advances made in respect of Eligible Accounts
shall accrue interest at a floating per annum rate equal to the
aggregate of the Prime Rate plus one and three-quarters of one
percentage point (1.75%), provided , however , during
a Streamline Period, the principal amount of the Revolving Line
outstanding due to Advances made in respect of Eligible Accounts
shall accrue interest at a floating per annum rate equal to the
aggregate of the Prime Rate plus three-quarters of one percentage
point (0.75%); and (b) the principal amount of the Revolving Line
outstanding due to Advances made in respect of Eligible Retail
Backlog Accounts shall accrue interest at a floating per annum rate
equal to the aggregate of the Prime Rate plus two and one-quarter
of one percentage point (2.25%), provided , however ,
during a Streamline Period, the principal amount of the Revolving
Line outstanding due to Advances made in respect of Eligible Retail
Backlog Accounts shall accrue interest at a floating per annum rate
equal to the aggregate of the Prime Rate plus one and one-half of
one percentage point (1.50%). Interest on any Credit
Extension shall be payable monthly.”
and inserting
in lieu thereof the following:
“(a)
Interest Rate ; Advances . Subject to
Section 2.3(b), (a) the principal amount of the Revolving Line
outstanding due to Advances made in respect of Eligible Accounts
shall accrue interest at a floating per annum rate equal to the
aggregate of the Prime Rate
plus two and
one-quarter of one percentage point (2.25%), provided ,
however , during a Streamline Period, the principal amount
of the Revolving Line outstanding due to Advances made in respect
of Eligible Accounts shall accrue interest at a floating per annum
rate equal to the aggregate of the Prime Rate plus one and
one-quarter percentage points (1.25%); and (b) the principal amount
of the Revolving Line outstanding due to Advances made in respect
of Eligible Retail Backlog Accounts shall accrue interest at a
floating per annum rate equal to the aggregate of the Prime Rate
plus two and three-quarters of one percentage point (2.75%),
provided , however , during a Streamline Period, the
principal amount of the Revolving Line outstanding due to Advances
made in respect of Eligible Retail Backlog Accounts shall accrue
interest at a floating per annum rate equal to the aggregate of the
Prime Rate plus two percentage points (2.00%). Interest
on any Credit Extension shall be payable monthly.”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 2.4(d) thereof, in its entirety:
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“(d)
Unused Revolving Line Facility Fee . A fee (the
“ Unused Revolving Line Facility Fee ”), which
fee shall be paid monthly, in arrears, on the last Business Day of
each month, in an amount equal to one-half of one percent (0.50%)
per annum of the average unused portion of the Revolving Line, as
determined by Bank. Borrower shall not be entitled to
any credit, rebate or repayment of any Unused Revolving Line
Facility Fee previously earned by Bank pursuant to this Section
notwithstanding any termination of the within Agreement, or
suspension or termination of Bank’s obligation to make loans
and advances hereunder; and”
and inserting
in lieu thereof the following:
“(d)
Unused Revolving Line Facility Fee . A fee (the
“ Unused Revolving Line Facility Fee ”), which
fee shall be paid monthly, in arrears, on the last Business Day of
each month, in an amount equal to three-quarters of one percent
(0.75%) per annum of the average unused portion of the Revolving
Line, as determined by Bank. Borrower shall not be
entitled to any credit, rebate or repayment of any Unused Revolving
Line Facility Fee previously earned by Bank pursuant to this
Section notwithstanding any termination of the within Agreement, or
suspension or termination of Bank’s obligation to make loans
and advances hereunder; and”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 6.2(a)(vi) thereof, in its entirety:
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“(vi) as
soon as available, and in any event within one hundred fifty (150)
days following the end of Borrower's fiscal year, annual financial
statements certified by, and with an unqualified opinion of,
independent certified public accountants acceptable to
Bank.”
and inserting
in lieu thereof the following:
“(vi) as
soon as available, and in any event within ninety (90) days
following the end of Borrower's fiscal year, annual financial
statements certified by, and with an unqualified opinion of,
independent certified public accountants acceptable to
Bank.”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 6.6 thereof, in its entirety:
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6.6
Access to Collateral; Books and Records . At
reasonable times, on one (1) Business Day’s notice (provided
no notice is required if an Event of Default has occurred and is
continuing), Bank, or its agents, shall have the right on a
semi-annual basis (or more frequently if an Event of Default has
occurred and is continuing), to inspect the
Collateral and
the right to audit and copy Borrower’s Books. The
foregoing inspections and audits shall be at Borrower’s
expense, and the charge therefor shall be $750 per person per day
(or such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket
expenses. In the event Borrower and Bank schedule an
audit more than ten (10) days in advance, and Borrower cancels or
seeks to reschedules the audit with less than ten (10) days written
notice to Bank, then (without limiting any of Bank’s rights
or remedies), Borrower shall pay Bank a fee of $1,000 plus any
out-of-pocket expenses incurred by Bank to compensate Bank for the
anticipated costs and expenses of the cancellation or
rescheduling.”
and inserting
in lieu thereof the following:
“
6.6
Access to Collateral; Books and Records . At
reasonable times, whenever there are any outstanding Credit
Extensions, on one (1) Business Day’s notice (provided no
notice is required if an Event of Default has occurred and is
continuing), Bank, or its agents, shall have the right on a
semi-annual basis (or more frequently if an Event of Default has
occurred and is continuing), to inspect the Collateral and the
right to audit and copy Borrower’s Books. The
foregoing inspections and audits shall be at Borrower’s
expense, and the charge therefor shall be $850 per person per day
(or such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket
expenses. In the event Borrower and Bank schedule an
audit more than ten (10) days in advance, and Borrower cancels or
seeks to reschedules the audit with less than ten (10) days written
notice to Bank, then (without limiting any of Bank’s rights
or remedies), Borrower shall pay Bank a fee of $1,000 plus any
out-of-pocket expenses incurred by Bank to compensate Bank for the
anticipated costs and expenses of the cancellation or
rescheduling. Borrower acknowledges and agrees that
prior to the first Credit Extension request to be made made after
the execution of the First Loan Modification Agreement, Bank shall
have completed an audit and inspection of Borrower’s
Accounts, the Collateral, and Borrower’s Books, with results
satisfactory to Bank in its sole and absolute
discretion.”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 6.9(a) thereof, in its entirety:
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“(a)
Tangible Net Worth . A Tangible Net Worth of at
least Five Hundred Thousand Dollars
($500,000.00).”
and inserting
in lieu thereof the following:
(a)
Minimum EBITDA . A minimum EBITDA, measured on a
trailing three-month basis ending as of the date indicated below,
in an amount not less than (no greater loss than) the amounts
indicated below:
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Trailing Three Month Period
Ended
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Minimum EBITDA (maximum
loss)
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September 30,
2009
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($450,000)
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October 31,
2009 through and including November 30, 2010
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($350,000)
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December 31,
2010 and each monthly period ending thereafter
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$1.00
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The Loan
Agreement shall be amended by deleting the following definition
appearing in Section 12.1thereof:
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“
12.1
Termination Prior to Maturity Date . This
Agreement may be terminated prior to the Revolving Line Maturity
Date by Borrower, effective three (3) Business Days after written
notice of termination is received by Bank or if Bank’s
obligation to fund Credit Extensions terminates pursuant to the
terms of Section 2.1.1(b). Notwithstanding any such
termination, Bank’s lien and security interest in the
Collateral shall continue until Borrower fully satisfies its
Obligations. If such termination is at Borrower’s
election or at Bank’s election due to the occurrence and
continuance of an Event of Default, Borrower shall pay to Bank, in
addition to the payment of any other expenses or fees then-owing, a
termination fee in an amount equal to Fifteen Thousand Dollars
($15,000.00) provided that no termination fee shall be charged if
the credit facility hereunder is replaced with a new facility from
another division of Silicon Valley Bank. Upon payment in
full of the Obligations and at such time as Bank’s obligation
to make Credit Extensions has terminated, Bank shall
release
