8-K
ORION ENERGY SYSTEMS, INC. (OESX)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): September 30, 2025 |
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ORION ENERGY SYSTEMS, INC.
(Exact name of Registrant as Specified in Its Charter)
| Wisconsin | 01-33887 | 39-1847269 |
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| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 2210 Woodland Drive | ||
| Manitowoc, Wisconsin | 54220 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 920 892-9340 | ||
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| Not Applicable | ||
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, no par value | OESX | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
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The information included, or incorporated by reference, in Item 2.03 below, is incorporated by reference into this Item 1.01.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
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As previously disclosed, on June 23, 2025, Orion Energy Systems, Inc. (the “Company”) entered into a binding term sheet (as subsequently amended, the “Term Sheet”) with Final Frontier, LLC (“Final Frontier”) and its owner Kathleen Connors, the prior owner of Voltrek, LLC (“Voltrek”), with respect to the Company’s remaining earnout obligations owed to Final Frontier pursuant to its October 5, 2022 acquisition of Voltrek. Pursuant to the Term Sheet, on August 1, 2025, the Company paid Final Frontier $500,000, and on September 2, 2025 the Company paid an additional $375,000, in full and final payment of its fiscal 2024 Voltrek acquisition earnout obligations. Additionally, pursuant to the Term Sheet, on July 16, 2025, the Company issued $1.0 million in common stock of the Company, constituting 1,649,077 shares, to Kathleen Connors in partial payment of the Company’s fiscal 2025 and aggregate fiscal 2023 through fiscal 2025 earnout obligations. The Company agreed with Final Frontier to pay the remainder of the finally determined remaining amount of the Company’s fiscal 2025 earnout obligations (the “Remaining Earnout Amount”) pursuant to the Subordinated Loan Agreement (as defined below). The Company and Final Frontier agreed to submit the final determination of its Remaining Earnout Amount to binding arbitration.
Pursuant to the Term Sheet, on September 30, 2025, the Company, as borrower, Great Lakes Energy Technologies, LLC (“Great Lakes”), Clean Energy Solutions, LLC (“Clean Energy”), Orion Asset Management, LLC (“Asset Management”), Orion Technologies Ventures, LLC (“Orion Technology”, and together with Voltrek, Clean Energy, Asset Management and Orion Technology, the “Company Subsidiaries”) and Voltrek, as guarantors, and Final Frontier, as lender, entered into a senior subordinated loan agreement (the “Subordinated Loan Agreement”), pursuant to which Final Frontier agreed to defer payment of the Remaining Earnout Amount by the Company pursuant to the terms of the Subordinated Loan Agreement. The Company’s obligation to pay the Remaining Earnout Amount is further evidenced by a senior subordinated note issued by the Company under the Subordinated Loan Agreement (the “Senior Subordinated Note”). The Company agreed to pay monthly principal payments to Final Frontier on the Senior Subordinated Note of $25,000 beginning on January 15, 2026, which will increase to $50,000 on July 15, 2026 through the maturity date of July 15, 2027. The Company also agreed to pay interest monthly to Final Frontier at the annual rate of 7% beginning on July 15, 2025, subject to adjustment following the final determination in binding arbitration of the Remaining Earnout Amount, as set forth in more detail in the Subordinated Loan Agreement. The Company has the right to pay up to 20% of the remaining principal on the Senior Subordinated Note on the maturity date in shares of its common stock.
On September 30, 2025, in order to secure the Company’s obligations to Final Frontier under the Subordinated Loan Agreement and Senior Subordinated Note, the Company, the Company Subsidiaries and Final Frontier entered into a security agreement (the “Security Agreement”), pursuant to which the Company and each Company Subsidiary granted Final Frontier a security interest in, and lien upon, substantially all of the Company’s and each Company Subsidiary’s assets, which security interest and lien are subordinated pursuant to the Subordination Agreement (as defined below) to the first priority security interest and lien of Bank of America, N.A. (“Bank of America”).
Additionally, on September 30, 2025, the Company, the Company Subsidiaries, Final Frontier and Bank of America, entered into a subordination and intercreditor agreement (the “Subordination Agreement”), pursuant to which the Company and the Company Subsidiaries’ obligations under the Subordinated Loan Agreement and Senior Subordinated Note and liens granted under the Security Agreement are subordinated to the Company’s senior credit facilities with Bank of America, as set forth in more detail in the Subordination Agreement.
In connection with the Company’s entry into the Subordinated Loan Agreement, Senior Subordinated Note, Security Agreement and Subordination Agreement, on September 30, 2025, the Company, the Company Subsidiaries and Bank of America entered into an amendment no. 4 to loan and security agreement (“Amendment No. 4 to Senior Loan Agreement”), pursuant to which Bank of America consented to the subordinated liens granted by the Company and the Company Subsidiaries in favor of Final Frontier and consented to the Remaining Earnout Amount evidenced by the Subordinated Loan Agreement in (a) a maximum amount of up $3.0 million following the final determination in binding arbitration of the Remaining Earnout Amount or (b) such higher amount as consented to in writing by Bank of America promptly following its receipt of notice of the binding arbitration decision. In addition, the Amendment No. 4 to Senior Loan Agreement permits the Company to make the cash interest and principal payments to Final Frontier as set forth in the Subordinated Loan Agreement, subject to the terms set forth in the Amendment No. 4 to Senior Loan Agreement and the Subordination Agreement. The Amendment No. 4 to Senior Loan Agreement amends that certain Loan and Security Agreement, dated as of December 29, 2020 (as amended, the “Senior Loan Agreement”), by and among the Company, the Company Subsidiaries and Bank of America.
Also pursuant to the Term Sheet, on September 30, 2025, the Company, Final Frontier and Kathleen Connors entered into a support agreement (the “Support Agreement”). Under the Support Agreement, Final Frontier and Ms. Connors agreed not to initiate, propose, support or otherwise participate in any business combination transaction, proxy contest, proxy solicitation or shareholder
proposal affecting or relating to the Company and not to attempt to influence or interfere with or otherwise adversely affect the board of directors (the “Board”), management or affairs of the Company. Additionally, Final Frontier and Ms. Connors agreed to vote all shares of Company common stock owned by them in favor of any recommendation of the Board that is submitted to a vote of the Company’s shareholders. The obligations under the Support Agreement terminate upon the earliest to occur of the repayment of the Senior Secured Note, the maturity of the Senior Secured Note and the date that the Senior Secured Note is accelerated or could be accelerated.
Also pursuant to the Term Sheet, on September 30, 2025, the Company and Kathleen Connors entered into a Board observer agreement (the “Board Observer Agreement”). Under the Board Observer Agreement, Ms. Connors was granted the option and right to attend specific portions of the Company’s regularly scheduled quarterly Board meetings to the extent otherwise attended by other operational non-director management members, subject to certain limitations and exceptions set forth in the Board Observer Agreement. Ms. Connors will not have voting rights afforded to Board members, will not receive any compensation for her attendance, will not be entitled to any reimbursement of expenses related to her attendance, and will not be entitled to any indemnification, director and officer insurance or other rights from the Company as a director of the Company. The Board Observer Agreement will terminate upon the Company’s repayment and satisfaction in full of the Senior Subordinated Note.
The foregoing summary descriptions of the Term Sheet, Subordinated Loan Agreement, Senior Subordinated Note, Security Agreement and Subordination Agreement, Amendment No. 4 to Senior Loan Agreement, Support Agreement and Board Observer Agreement are qualified in their entirety by reference to the full texts of the Term Sheet, Subordinated Loan Agreement, Senior Subordinated Note, Security Agreement, Subordination Agreement, Amendment No. 4 to Senior Loan Agreement, Support Agreement and Board Observer Agreement, copies of which are filed herewith as Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8, respectively, and are incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
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(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ORION ENERGY SYSTEMS, INC. | |||
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| Date: | October 3, 2025 | By: | /s/ J. Per Brodin |
| J. Per Brodin<br>Chief Financial Officer |
EX-10.1
Confidential
Attorney-Client Privileged Execution Version
ORION ENERGY SYSTEMS, INC.
Proposed Voltrek Earn-Out Payment Term Sheet June 23, 2025
The following binding term sheet (“Term Sheet”) outlines the mutually agreed upon terms and conditions applicable to the payment by Orion Energy Systems, Inc. (“Company”) of its to-be- determined earn-out obligation (exclusive of the FY24 Earn-Out Payment, as defined below) (“Obligation”) owed to Final Frontier, LLC (“Final Frontier”) pursuant to the Membership Interest Purchase Agreement dated effective as of October 5, 2022 (“Purchase Agreement”):
| 1. | Cash: | Company will pay Final Frontier $875,000 (“FY24 Earn-Out Payment”) in cash on August 1, 2025 in full payment of the Company’s fiscal 2024 earn-out obligation. In connection with Company making such FY24 Earn-Out Payment, both parties hereby mutually agree to fully release the other party from any further claims or disputes with respect to the Company’s fiscal 2024 earn-out obligation or the calculation thereof. |
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| 2. | Company Common Stock: | $1,000,000 (“Company Common Stock<br><br>Payment”), represented by the Company’s issuance of such number of shares of the Company’s Common Stock determined by dividing $1,000,000 by the average closing sale price of the Company’s Common Stock over the 10 trading days beginning on the third trading day after the Company publicly announces its fiscal 2025 financial results and the principal terms of this Term Sheet, which announcements shall be made at least simultaneously (subject to the Company’s potential prior public announcement of this Term Sheet if required by SEC rules). The shares shall be issued on the first business day following such 10-day period. |
| 3. | Senior Subordinated Loan: | The principal amount of the senior<br><br>subordinated loan owed by the Company to Final Frontier for the remaining amount of the Obligation (“Senior Subordinated Loan”) will be equal to the Finally Determined Obligation (as defined below), less the Company Common Stock Payment and any Principal Payments (as defined below) to the extent paid by the Company (“Loan Amount”). The Company will use its commercially reasonable best efforts to obtain the consent of its senior lender, Bank of America, allowing the Company to grant Final Frontier a second-lien security interest in all assets of the Company and Voltrek, LLC, which security interest will be limited to the lesser of: (i) $10 million or (ii) the Loan Amount and will be fully subordinated and junior in priority to any and all current or future outstanding amounts payable by the Company to Bank of America (and/or any other financial institution or investor that refinances such amounts payable to Bank of America) under the Company’s current or future senior secured credit, loan and/or mortgage agreements (including any and all amendments, replacements, renewals or extension thereof) (“Senior Debt”). Senior Debt shall be capped at $34.2 million.<br><br>Final Frontier shall execute a subordination and intercreditor agreement reasonably acceptable to Final Frontier, Bank of America and the Company providing for payment and lien subordination of the Senior Subordinated Loan to the Senior Debt (“Subordination Agreement”).<br><br>The repayment of Final Frontier’s Senior Subordinated Loan will be senior to, and have priority over, all of the Company’s creditors, other than the holder of the Senior Debt. |
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| 4. | Senior Subordinated Note and Loan Agreement (“Note and Loan Agreement”) Terms: | The Senior Subordinated Loan will have a twenty-four (24) month maturity date from July 15, 2025, with a final payment of the Loan Amount together with all interest accrued thereon that is then unpaid on the maturity date. Over the term of the Senior Subordinated Loan, the Company shall pay<br>(a) principal payments of $25,000 per month paid on the 15th of each month beginning on January 15, 2026, which will increase to $50,000 per month on July 15, 2026 and continue monthly on the 15th of each month through the maturity date (“Principal Payments”), and (b) interest payments on a monthly basis paid on the 15th of each month beginning July 15, 2025 of $15,000 per month until the final determination of the Finally Determined Obligation, at which point such monthly interest payments shall be appropriately retroactively and prospectively adjusted based on an annual interest rate of 7% applied against the Finally Determined Obligation and, with respect to any retroactive increase in interest payments, such increased amount shall be paid within 10 days of the date that the Finally Determined Obligation is determined.<br><br>All payments on the Senior Subordinated Loan shall be made in cash by check or wire transfer of immediately available funds; provided, that if Company remains a public company whose securities are traded by the general public on a major securities exchange (including OTCQX and OTCQB), the Company shall have the option to pay up to 20% of the Loan Amount at maturity (but not upon acceleration or prepayment) in its Common Stock, with the number of shares to be issued determined by dividing the Loan Amount to be paid in Common Stock by the average closing sale price of the Company’s Common Stock over the 10 trading days immediately preceding the maturity date.<br><br>The Senior Subordinated Loan will be prepayable only in cash at the option of the Company in all or in part at any time or from |
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| time to time without premium, penalty or charge. | ||
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| Any payments required under the Note and Loan Agreement not made within 15 days after the scheduled due date for such payment, including at maturity or upon acceleration, shall bear cash interest from the date due until paid at a rate of 15% per annum. All additional interest shall be immediately due and payable in cash.<br><br>Subject to the terms of the Subordination Agreement, the unpaid Loan Amount (together with all accrued and unpaid interest thereon) shall become immediately due and payable only in cash upon any sale of the Company or Voltrek, LLC or the filing of a bankruptcy proceeding by or against the Company or of Voltrek, LLC.<br><br>Subject to the terms of the Subordination Agreement, if there is any uncured default under the Note and Loan Agreement, including an uncured payment default under the Senior Subordinated Loan, or if there is an uncured default under the Senior Debt and the Senior Debt is accelerated, Final Frontier may deliver written notice to the Company of its intention to accelerate the maturity of the Senior Subordinated Loan and, if the Company has not cured such default within 15 days after receiving such notice, then the unpaid Loan Amount (together with all accrued and unpaid interest thereon) shall, at the option of Final Frontier and subject to the Subordination Agreement, mature and become immediately due and payable.<br><br>All restrictive covenants (e.g., non-compete, non-solicit and management support covenant, but not any confidentiality covenants) applicable to Final Frontier or Ms. Connors shall automatically lapse in the event of an uncured and continuing event of default under the Note and Loan Agreement that either results in the Senior Subordinated Loan being accelerated or gives Final Frontier the right to accelerate the Senior Subordinated Loan but for the restrictions under the Subordination Agreement. | ||
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| Customary affirmative and negative covenants will be included in the Note and Loan Agreement similar to those contained in the Senior Debt.<br><br>Final Frontier will be simultaneously provided with the same reports and notices provided to the holder of the Senior Debt (exclusive of borrowing base certificates and similar reports).<br><br>The Note and Loan Agreement will contain a full mutual release of all claims relating to the purchase of Voltrek, LLC under the Purchase Agreement, including the earn-out calculation and payment terms which are being replaced by the terms reflected in this Term Sheet, but subject to the determination of the Finally Determined Obligation pursuant to the arbitration process described in Section 8 below, which will be excluded from the mutual release.<br><br>Subject to a mutually acceptable confidentiality agreement, for as long as amounts are outstanding under the Note and Loan Agreement, Ms. Connors shall be entitled to attend, as an observer, the portions of all regularly scheduled quarterly Company Board meetings that are otherwise attended by other operational non-director management members.<br><br>During the term of the Note and Loan Agreement, Final Frontier and Ms. Connors shall agree to a stock ownership management support covenant in the form attached as Exhibit A, which shall apply only for the Applicable Period (as defined on Exhibit A). | ||
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| 5. | Key Employee Employment (“Employment Agreement”): | Ms. Connors and the Company will separately discuss a mutually acceptable Employment Agreement in the form and content to be mutually determined. |
| 6. | Expenses: | Each party will be responsible for their own costs and expenses; provided that the Company will reimburse Final Frontier and Ms. Connors for their legal fees incurred in connection with the transactions contemplated by this Term Sheet up to a maximum amount of $85,000. |
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| 7. | Documentation: | The terms of this Term Sheet will be more fully documented as follows (collectively, the “Documentation”):<br><ul><li><font>Note and Loan Agreement</font></li><li><font>Subordination Agreement</font></li><li><font>Employment Agreement</font></li><li><font>Stock Ownership Management Support Agreement (containing only the covenant set forth on Exhibit A)</font></li><li><font>Confidentiality Agreement</font></li><li><font>Ancillary Agreements as mutually agreed</font></li></ul><br>Subject to the consent of Bank of America, the parties will use their commercially reasonable best efforts to execute mutually satisfactory Documentation within 30-days of the execution of this Term Sheet. Prior to completion of the Documentation and subject to any executed Subordination Agreement, Final Frontier will also be allowed to accelerate the due date of the Subordinated Loan Amount (a) if Bank of America accelerates the maturity date of its Senior Debt; (b) within 10 business days of any sale of the Company or Voltrek; (c) immediately upon the filing of any insolvency or bankruptcy proceeding by or against the Company or Voltrek; (d) if the FY24 Earn- Out Payment is not paid by the close of business on August 1, 2025; or (e) if any payment of interest or principal is not made within 15 days after the scheduled due date for such payment. |
| 8. | Arbitration: | The Company shall provide Final Frontier with an Earn Out Statement reflecting its determination of the total amount of the Obligation by July 7, 2025 and Final Frontier shall then have 30 days to dispute such determination. If so disputed by Final Frontier, thereafter, the parties shall attempt in good faith to resolve any such dispute over the next 30 days. If the parties cannot mutually agree on the amount of the Obligation during such 30-day period, then either party may submit the dispute to binding arbitration and final determination by Wipfli LLP pursuant to the terms and conditions set forth in Section 2.07(b) and 2.05(c) of the Purchase Agreement (the “Wipfli Resolution Process”); provided, however, that if Wipfli LLP advises the parties in writing that it cannot resolve one or more issues subject to such dispute, then either party may submit such issue(s) to binding arbitration pursuant to Article VIII of the Purchase Agreement (the “AAA Arbitration Process”) and the other party shall participate in such AAA Arbitration Process without the need for the parties to first comply with the negotiation provisions in Section 8.01 of the Purchase Agreement. If the resolution of the issue(s) submitted to the AAA Arbitration Process is necessary in order for Wipfli LLP to finally determine the Obligation, then the Wipfli Resolution Process shall be suspended until a final determination is rendered in the AAA Arbitration Process whereupon Wipfli LLP shall render its determination of the Obligation based on the determination of the arbitrator of issue(s) submitted to the AAA Arbitration Process.<br><br>The finally determined amount of the Obligation as determined by mutual agreement of the Company and Final Frontier or, failing such mutual agreement, as determined pursuant to the Wipfli Resolution Process and, if applicable, the AAA Arbitration Process referenced in this Section 8 shall be referred to in this Term Sheet as the “Finally Determined Obligation.” |
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[Signature Page Follows]
8
This Term Sheet is effective as of the date set forth above. This Term Sheet may be executed in counterparts and with digital or electronic signatures.
ORION ENERGY SYSTEMS, INC.
By: Sally A. Washlow
Chief Executive Officer
MS. CONNORS:
Kathleen M. Connors
FINAL FRONTIER, LLC
By: Kathleen M. Connors, Manager
[Term Sheet Signature Page]
Exhibit A Management Support Covenant
Kathleen M. Connors and Final Frontier, LLC (collectively, the “Connors Parties”) agree that, during the Applicable Period (as defined below), the Connors Parties will not, directly or indirectly, (a) initiate, propose, support or otherwise participate in any offer to acquire, acquisition, merger, tender offer or other business combination transaction affecting the Company; (b) initiate, propose, support or otherwise participate in any proxy contest, proxy solicitation or shareholder proposal relating to the Company; or (c) attempt to influence or interfere or otherwise adversely affect the board of directors, management or affairs of the Company. During the Applicable Period, the Connors Parties agree to vote all shares of Company stock owned by them in favor of any recommendation of the Company’s board of directors that is submitted to a vote of the Company’s shareholders. “Applicable Period” means the period commencing on the date of the Term Sheet and ending on the earliest of the following to occur: (i) the repayment in full of the Senior Subordinated Loan; (ii) the maturity of the Senior Subordinated Loan; or (iii) the date that the Senior Subordinated Loan is accelerated or could be accelerated but for the restrictions under the Subordination Agreement.
A-1
EX-10.2
Exhibit 10.2
This Agreement (as defined below) and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of SEPTEMBER 30, 2025, among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation, the other Loan Parties (as defined in the Subordination Agreement) party thereto, FINAL FRONTIER, LLC, A MASSACHUSETTS limited LIABILITY COMPANY, as subordinated creditor, and BANK OF AMERICA, N.A., as senior creditor, to the indebtedness (including interest) owed by the Loan Parties pursuant to certain Senior Debt Documents (as defined in the Subordination Agreement), and to indebtedness refinancing the indebtedness under such agreements as contemplated by the Subordination Agreement; and each party to this agreement, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.
Senior Subordinated LOAN Agreement
This Senior Subordinated Loan Agreement (this “Agreement”) is made as of September 30, 2025 (the “Effective Date”) by and among Orion Energy Systems, Inc., a Wisconsin corporation (the “Borrower”), Great Lakes Energy Technologies, LLC, a Wisconsin limited liability company (“Great Lakes”), Clean Energy Solutions, LLC, a Wisconsin limited liability company (“Clean Energy”), Orion Asset Management, LLC, a Wisconsin limited liability company (“Asset Management”), Orion Technologies Ventures, LLC, a Wisconsin limited liability company (“Orion Technology”), Voltrek, LLC, a Massachusetts limited liability company (“Voltrek”, and together with Great Lakes, Clean Energy, Asset Management and Orion Technology, the “Guarantors”, each being a “Guarantor”), Final Frontier, LLC, a Massachusetts limited liability company (the “Lender”), and solely to the extent of the Sections listed directly above her signature block, Kathleen M. Connors (“Ms. Connors”).
RECITALS:
WHEREAS, the Borrower and the Lender are party to the Final Frontier Purchase Agreement (as defined below);
WHEREAS, pursuant to the Final Frontier Purchase Agreement, the Borrower was required to make certain earnout payments to the Lender if the Company EBITDA (as defined in the Final Frontier Purchase Agreement) met certain target amounts for the applicable Earn Out Period (as defined in the Final Frontier Purchase Agreement), all on the terms and conditions set forth in the Final Frontier Purchase Agreement;
WHEREAS, on June 23, 2025, the Borrower, the Lender, and Ms. Connors entered into a binding term sheet (as amended, restated, supplemented or otherwise modified from time to
time on or prior to the Effective Date, the “Term Sheet”), pursuant to which the Borrower, the Lender and Ms. Connors mutually agreed upon terms and conditions applicable to the payment by the Borrower of its to-be-determined earn-out obligations (exclusive of the FY2024 Earn-Out Payment (as defined and governed by the Term Sheet)) owed to the Borrower pursuant to the Final Frontier Purchase Agreement, among other things;
WHEREAS, the Borrower and the Lender agreed to enter into this Agreement and the other Loan Documents (as defined below) pursuant to the Term Sheet to evidence and secure the Loan (as defined below);
WHEREAS, the Borrower paid the Lender $875,000 in cash pursuant to the Term Sheet as payment in full of the Borrower’s fiscal 2024 earn-out obligation, and such amount is expressly excluded from the Loan to be evidenced and secured by this Agreement and the other Loan Documents; and
WHEREAS, the parties hereto wish to enter into this Agreement in order to set forth the terms and conditions applicable to the Loan.
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the parties hereto hereby agree as follows.
AGREEMENT:
- Definitions. As used herein, the following terms have the meanings set forth after each, and any other terms defined in this Agreement shall have the meanings set forth at the place defined.
“Affiliate” means with respect to a specified Person, any other Person that directly, or indirectly through intermediaries, Controls, is Controlled by or is under common Control with the specified Person.
“Anti-Corruption Law” means any law relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 and Patriot Act.
“Anti-Terrorism Law” means any law relating to terrorism or money laundering, including the Patriot Act.
“Applicable Law” means all laws, rules, regulations and governmental guidelines applicable to the Person or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
“Board Observer Agreement” means that certain Board Observer Agreement, by and among the Borrower, the Lender and Ms. Connors, in her individual capacity, as Observer.
“Borrowed Money” means with respect to any Loan Party, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Loan Party, (ii) is evidenced
by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business), or (iv) was issued or assumed as full or partial payment for Property; (b) Finance Leases; (c) letter of credit reimbursement obligations; and (d) guaranties of any of the foregoing owing by another Person.
“Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks located in Wisconsin are authorized or required by Law to be closed for business.
“CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.).
“Common Stock” means the common stock of the Borrower, having no par value per share.
“Common Stock Payment” means the payment by the Borrower to the Lender, on or about the date hereof, of $1,000,000 represented by the Borrower’s issuance of shares of its Common Stock to the Lender in accordance with the terms of Section 2 of the Term Sheet.
“Contingent Obligation” means any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“primary obligation”) of another obligor (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; or (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.
“Control” means possession, directly or indirectly, of the power to direct or cause direction of a Person’s management or policies, whether through the ability to exercise voting power, by contract or otherwise.
“CWA” means the Clean Water Act (33 U.S.C. §§ 1251 et seq.).
“Debt” as applied to any Person, without duplication, (a) all items that would be included as liabilities on a balance sheet in accordance with GAAP, excluding trade payables incurred and being paid in the Ordinary Course of Business, accrued expenses incurred in the Ordinary Course of Business, deferred revenue incurred in the Ordinary Course of Business and Operating Leases (but including Finance Leases); (b) all Contingent
Obligations; (c) all reimbursement obligations in connection with letters of credit issued for the account of such Person; and (d) in the case of the Borrower, the Obligations. The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer.
“Default Interest Rate” means a rate per annum equal to fifteen percent (15.0%).
“Distribution” means any declaration or payment of a distribution, interest or Dividend on any Equity Interest (other than payment-in-kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.
“Dividend” means a cash dividend or other distribution.
“Dollars” or “$” refers to lawful money of the United States of America.
“Effective Date” means September 30, 2025.
“Employment Agreement” means that certain Key Employee Employment and Severance Agreement, dated October 5, 2022, between Ms. Connors and Borrower, as maybe amended and/or amended and restated and any future employment agreement that may be entered into after the Effective Date between Ms. Connors, in her individual capacity, and a Loan Party, in form and substance mutually acceptable to Ms. Connors and such Loan Party.
“Environmental Laws” means Applicable Laws (including programs, permits and guidance promulgated by regulators) relating to public health (other than occupational safety and health regulated by OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA.
“Environmental Release” means a release as defined in CERCLA or under any other Environmental Law.
“Equity Interest” means the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or (d) any other Person having any other form of equity security interest of ownership interest.
“Final Frontier Purchase Agreement” means that certain Membership Interest Purchase Agreement, dated as of October 5, 2022, entered into by and among the Lender, as seller (in such capacity, the “Seller”), the members of Seller party thereto and the Borrower, as purchaser, as amended, restated, supplemented or otherwise modified from time to time on or prior to the Effective Date.
“Finally Determined Obligation” has the meaning set forth in Section 8 of the Term Sheet.
“Finally Determined Obligation Date” means the date on which the amount of the Finally Determined Obligation is finally determined in accordance with Section 8 of the Term Sheet.
“Finance Lease” any lease which qualifies as a finance lease in accordance with ASC 842 under GAAP.
“Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries for accounting and tax purposes ending on March 31 of each year.
“GAAP” means generally accepted accounting principles in effect in the United States from time to time.
“Governmental Approvals” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
“Governmental Authority” means any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality, political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions for any governmental, judicial, investigative, regulatory or self-regulatory authority (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or European Central Bank).
“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Title 11 of the United States Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
“Intellectual Property” means all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.
“License” means any license or agreement under which a Loan Party is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
“Lien” means an interest in Property securing an obligation or claim, including any lien, security interest, pledge, hypothecation, assignment, trust, reservation, assessment right, encroachment, easement, right-of-way, covenant, condition, restriction, lease, or other title exception or encumbrance.
“Loan” has the meaning set forth in Section 2(a) hereto.
“Loan Documents” means, collectively, this Agreement, the Note, the Security Agreement and the Subordination Agreement, as such instruments, documents, and agreements may be amended, modified, renewed, restated, extended, supplemented, replaced, consolidated, substituted, or otherwise changed from time to time.
“Loan Parties” means the Borrower and the Guarantors.
“Management Support Agreement” means that certain Management Support Agreement, dated or about the Effective Date, among the Borrower, Ms. Connors, in her individual capacity, and the Lender.
“Material Adverse Effect” means the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, Properties or financial condition of the Loan Parties taken as a whole, the value of any material Collateral, the enforceability of any Loan Document, or the validity or priority of the Lender’s Lien on any Collateral; (b) impairs the ability of a Loan Paty to perform its material obligations under the Loan Documents, including repayment of any Obligations; or (c) otherwise impairs the Lender’s ability to enforce or collect any Obligations or to realize upon any material portion of the Collateral (subject to the limitations set forth in the Subordination Agreement).
“Maturity Date” means the earlier to occur of (i) July 15, 2027 or (ii) the closing of the sale of all of the Borrower’s membership interests in Voltrek or substantially all of the assets of Voltrek to a Person other than Borrower or a Guarantor.
“Note” means that certain Senior Subordinated Note, dated as of the Effective Date, made by the Borrower and payable to the Lender, and all amendments, extensions, renewals, replacements and modifications thereof.
“Obligations” means, as of any time of determination, the sum of (x) the outstanding principal amount of the Loan and (y) accrued and unpaid interest on the Loan.
“OFAC” means the Office of Foreign Assets Control of the U.S. Treasury Department.
“Operating Lease” means any lease which qualifies as an operating lease in accordance with ASC 842 under GAAP.
“Ordinary Course of Business” the ordinary course of business of the Borrower or its Subsidiaries, consistent with Applicable Law and past practices.
“Organic Documents” means with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
“OSHA” means the Occupational Safety and Hazard Act of 1970.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
“Permitted Lien” means, collectively or individually as the context requires, (a) Liens in favor of the Lender; (b) Liens in favor of the Senior Lender, provided, that such Liens do not secure Debt in excess of the Senior Debt Cap; (c) Liens described in the definition of “Permitted Liens” in Section 10.2.2(b), (c), (d), (f) and (h) through (n) of the Senior Loan Agreement as in effect on the Effective Date; (d) Liens described in the definition of “Permitted Liens” in Section 10.2.2(e) and (g) of the Senior Loan Agreement as in effect on the Effective Date as long as such Liens are at all times junior to Lender’s Liens; and (e) existing Liens described on Schedule PL attached hereto.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority or other entity of any kind.
“Properly Contested” means with respect to any obligation of a Loan Party, (a) the obligation is subject to a bona fide dispute regarding amount or the Loan Party’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Loan Party; (e) no Lien is imposed on assets of the Loan Party, unless bonded and stayed to the satisfaction of Lender; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“RCRA” means the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
“Restrictive Agreement” means an agreement (other than a Loan Document) that conditions or restricts the right of any Loan Party to incur or repay Borrowed Money, to grant Liens on any assets, to declare or make Distributions, to modify, extend or renew any agreement evidencing Borrowed Money, or to repay any intercompany Debt.
“Sanction” means any sanction administered or enforced by the U.S. government (including OFAC), United Nations Security Council, European Union, U.K. government or other sanctions authority.
“Security Agreement” means that certain Security Agreement, dated as of the Effective Date, by the Loan Parties in favor of the Lender, as amended, restated, supplemented or otherwise modified from time to time.
“Senior Debt Cap” has the meaning assigned to such term in the Subordination Agreement.
“Senior Lender” means Bank of America, N.A., in its capacity as lender under the Senior Loan Agreement.
“Senior Loan Agreement” means that certain Loan and Security Agreement, dated as of December 29, 2020, by and among the Loan Parties and the Senior Lender, as amended by Amendment No. 1 thereto, dated as of November 4, 2022, Amendment No. 2 thereto, dated as of April 22, 2024, Amendment No. 3 thereto, dated as of October 30, 2024, Amendment No. 4 thereto, dated as of the Effective Date, and as further amended, restated or supplemented from time to time.
“Subordination Agreement” means that certain Subordination and Intercreditor Agreement, dated as of the Effective Date, among the Borrower, certain Subsidiaries of the Borrower, the Lender, as subordinated creditor, and the Senior Lender, as the senior creditor, as the same may be amended, restated or supplemented from time to time.
“Subsidiary” means any entity at least 50% of whose voting securities or Equity Interests is owned by the Borrower (including indirect ownership through other entities in which the Borrower directly or indirectly owns 50% of the voting securities or Equity Interests).
“Swap” has the meaning set forth in Section 1a(47) of the Commodity Exchange Act.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Trading Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading Market” means whichever of the New York Stock Exchange, NYSE American, or the Nasdaq Stock Market (including the Nasdaq Capital Market), on which the Common Stock is listed or quoted for trading on the date in question.
“UCC” means the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
Loan; Amortization; Interest.
Loan. Except for federal, applicable state and local income tax purposes, on the Effective Date, the Lender shall be deemed to have made a single advance to the Borrower in the amount of the Finally Determined Obligation minus the Common Stock Payment (the “Loan”). Notwithstanding any provision of this Agreement to the contrary, the characterization of the Loan and each payment due thereon, for federal, applicable state and local income tax purposes, shall be determined pursuant to Section 5.05(j) of the Final Frontier Purchase Agreement as further clarified by Section 2(h) of this Agreement. The obligation of the Borrower to repay the Loan and interest thereon shall be evidenced by the Note. The Loan, or any portion thereof, once repaid, may not be reborrowed.
Amortization. Subject to Section 2(d)(iii), the Borrower shall repay the principal balance of the Loan to Lender as follows: (i) monthly installments shall be paid on the 15th day of each month commencing January 15, 2026 in an amount equal to (y) $25,000 per month commencing on January 15, 2026 through and including June 15, 2026 and (z) $50,000 per month commencing on July 15, 2026 through and including June 15, 2027 and (ii) the entire remaining principal amount of the Loan outstanding (together with accrued and unpaid interest) shall be paid in full to Lender on the Maturity Date. Effective automatically on the Finally Determined Obligation Date, all payments of principal on the Loan made by the Borrower to the Lender under this Section 2(b) prior to the Finally Determined Obligation Date shall be deducted from the outstanding principal balance of the of the Loan retroactively effective as of each date that such principal payments were made.
Interest Rate; Computation of Interest. The outstanding principal balance of the Loan shall bear interest at a fixed rate of seven percent (7.0%) per annum. Interest shall accrue from the Effective Date until the date that the entire principal balance of the Loan is paid in full. Interest on the Loan shall be computed on a 365-day/year basis; that is, by applying the interest rate over a year of 365 days, multiplied by the outstanding principal balance of the Loan, multiplied by the actual number of days the principal balance of the Loan is outstanding. The parties acknowledge that the principal balance of the Loan as of the Effective Date will not be finally determined until the Finally Determined Obligation Date and, as such, the amount of interest accruing and payable will be subject to retroactive adjustment in accordance with Section 2(d) below on and following the Finally Determined Obligation Date.
Interest Payments; Adjustments.
Commencing July 15, 2025, the Borrower shall make monthly payments to Lender that shall be applied to accrued interest on the 15th day of each month, in an amount equal to $15,000 per month until the 15th day of the month immediately prior to the Finally Determined Obligation Date.
Commencing on the 15th day of the month immediately following the Finally Determined Obligation Date, the Borrower shall make monthly payments to Lender that shall be applied to accrued interest on the 15th day of each month, in an amount based on a fixed interest of rate of 7.0% per annum against the outstanding principal balance of the Loan, after giving effect to the adjustment of the Loan amount set forth in Section 2(b).
Within 10 Trading Days after the Finally Determined Obligation Date, (y) the Borrower shall make a payment to the Lender equal to the aggregate retroactive increased interest payments, if any, that would have been due during the period from the Effective Date until 15th day of the month immediately prior to the Finally Determined Obligation Date (the “Resolution Period”) had the amount of the Loan been equal to the Finally Determined Obligation on the Effective Date and after giving effect to any payments of principal on the Loan made by the Borrower during the Resolution Period or (z) if the Borrower shall be deemed to have paid excess interest during the Resolution Period after recalculating the monthly interest payments that would have been due had the amount of the Loan been equal to the Finally Determined Obligation on the Effective Date and after giving effect to any payments of principal on the Loan made by the Borrower
during the Resolution Period, then an amount equal to such aggregate excess interest payments, if any, shall be applied by the Lender against the monthly installment payments of principal to be made after the Finally Determined Obligation Date.
Default Interest Rate. Any outstanding principal of the Loan that is not paid in full when due (whether on a scheduled payment date, at stated maturity, by acceleration, or otherwise) shall accrue interest at the Default Interest Rate for the period commencing fifteen (15) days after the due date to but excluding the date the same is paid in full. All default interest accrued shall be immediately due and payable on the Lender’s demand. The principal balance of the Loan shall be deemed due for purposes of accruing default interest hereunder on the date that the Lender could have accelerated the Loan but for the restrictions under the Subordination Agreement.
Optional Prepayments. The Borrower may prepay the Obligations, in whole or in part, at any time or from time to time, without premium or penalty.
General; Potential Common Stock Payment on the Maturity Date. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day. All payments under this Agreement and the other Loan Documents shall be payable without setoff, counterclaim, defense or any other deduction whatsoever. All payments hereunder shall be made in Dollars by check payable to the Lender or wire transfer of immediately available funds in accordance with the wiring instructions previously provided by the Lender to the Borrower, which may be changed by the Lender from time to time by providing at least two (2) Business Days’ prior written notice to the Borrower prior to the applicable payment date; provided, that if the Borrower remains a public company whose Common Stock is traded by the general public on a major securities exchange (including the OTCQX and OTCQB Markets), the Borrower shall have the option to pay up to 20% of the remaining outstanding principal balance of the Loan due on the Maturity Date (but excluding any amount due as a result of the acceleration of the Loan after an Event of Default) in its Common Stock (such amount as elected by Borrower, the “Optional Stock Payment Amount”); the number of shares of Common Stock to be issued shall be determined based on dividing the Optional Stock Payment Amount by the average closing sale price of the Borrower’s Common Stock over the ten (10) Trading Days immediately preceding the Maturity Date.
Tax Characterization of Loan. The Loan made pursuant to this Agreement effectuates the earn out set forth in Section 2.07 of the Final Frontier Purchase Agreement (the “Earn Out”) and modifies such Earn Out to impose the interest obligations described in this Agreement. The portion of the Earn Out to be paid pursuant to this Agreement is being documented as a loan, notwithstanding that no funds have been advanced by the Lender to the Borrower, solely for non-tax business reasons, and such documentary form shall not alter or control the economic substance of the Earn Out. For the avoidance of doubt, as of the Effective Date, no Earn Out Payment (as defined in the Final Frontier Purchase Agreement) has been made to the Lender for the Earn Out Period ending March 31, 2025 or for any additional Earn Out Payment that the Lender is eligible to receive under Section 2.07(c)(ii) or Section 2.07(c)(iii) of the Final Frontier Purchase Agreement. Accordingly, each principal payment made hereunder shall be reported by the Lender and the Borrower for federal, applicable state and local income tax purposes, as an Earn Out Payment for the Earn Out Period ending March 31, 2025 and for the additional Earn Out Payment that the Lender was eligible to receive under Section 2.07(c)(ii) or
Section 2.07(c)(iii), as applicable, of the Final Frontier Purchase Agreement, which shall be added to and included in the Purchase Price (each as defined in the Final Frontier Purchase Agreement) consistent with Section 5.05(j) of the Final Frontier Purchase Agreement. All payments of interest due hereunder by the Borrower to the Lender shall be characterized in accordance with their form (i.e., as interest and not as part of the Purchase Price) for federal, applicable state, and local income tax purposes.
Security Interest; Mortgage.
This Agreement and the Loan evidenced hereby are secured by a security interest in the Collateral (as defined in the Security Agreement) on the terms and conditions set forth in the Security Agreement; provided, that the Lender’s security interest shall at no time secure Obligations in excess of the lesser of (a) $10,000,000 and (b) the amount of the Loan (including after giving effect to any adjustment pursuant to Section 2(b) and (d)).
This Agreement and Loan evidenced hereby is also secured by a second-lien mortgage in favor of Lender on the real property and improvements thereon located in Manitowoc, WI that is owned by Great Lakes. Great Lakes agrees to execute, deliver and permit Lender to record a mortgage on such improved real property in a form acceptable to Lender. Great Lakes will prepare the draft of the mortgage and send to Lender for review and approval within 30 days after the Effective Date (or such longer period as mutually agreed upon by the Lender and Great Lakes). Each of Great Lakes and Lender shall be solely responsible for their own costs and expenses (including fees and expenses of their counsel) in connection with the preparation, negotiation and documentation of the mortgage, provided, that Great Lakes shall be responsible for all recording costs, expenses and taxes with respect to the mortgage.
Conditions. The Lender's obligation to make the Loan hereunder is subject to the condition precedent that the Lender shall have received, on or prior to the Effective Date, the following:
Each of the Loan Documents shall have been executed and delivered by all parties thereto;
Evidence that the Loan Parties shall have obtained any required approvals and consents necessary for entering into the transactions contemplated by the Loan Documents; and
Each of the representations and warranties contained in the Loan Documents is true and correct in all material respects, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects as of such earlier date.
Representations of the Borrower. On the Effective Date, each Loan Party represents and warrants to the Lender as of the Effective Date as follows:
Organization. Each Loan Party other than Voltrek is duly organized and in good standing in the State of Wisconsin. Voltrek is duly organized and in good standing in the Commonwealth of Massachusetts.
Power and Authority. It has all corporate or limited liability company power and authority to enter into the Loan Documents.
Corporate Action. The execution and delivery of the Loan Documents and the performance of the obligations of each Loan Party under the Loan Documents have been duly authorized by all necessary corporate or limited liability company action on the part of such Loan Party.
No Conflict or Violation or Required Consent or Approval. The execution and delivery of the Loan Documents by each Loan Party and each Loan Party’s performance under the Loan Documents do not (i) require any consent or approval of any Person, other than those already obtained, (ii) contravene the organizational documents of such Loan Party or (iii) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of such Loan Party.
Execution; Delivery and Enforceability. This Agreement has been duly executed and delivered by each Loan Party and is the legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, except as enforceability may be affected by applicable bankruptcy, insolvency, and similar proceedings affecting the rights of creditors generally.
Senior Loan Not in Default. No event or circumstance has occurred and is continuing that constitutes a “Default” or “Event of Default” (as such terms are defined and used in the Senior Loan Agreement) under the Senior Loan Agreement and each of the representations and warranties made by the Loan Parties in the Senior Loan Agreement are true and correct in all material respects, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects as of such earlier date.
Affirmative Covenants. As long as the Obligations remain outstanding, each Loan Party shall:
Use of Proceeds. Use the proceeds of the Loan exclusively by the Borrower for payment of earnout obligations and for general working capital purposes.
Inspections. Permit Lender from time to time, subject (unless an Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Loan Party, inspect, audit and make extracts from any Loan Party’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Loan Party’s business, financial condition, assets, prospects and results of operations. Lender shall have no duty to any Loan Party to make any inspection, nor to share any results of any inspection, appraisal or report with any Loan Party. The Borrower acknowledges that all inspections, appraisals and reports are prepared by Lender for its purposes, and the Borrower shall not be entitled to rely upon them.
Financial and Other Information. Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Lender:
as soon as available, and in any event within 120 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders equity for such Fiscal Year, on consolidated basis for the Borrower and its Subsidiaries, which consolidated statements shall be audited and certified (without qualification) by a firm of independent certified public accountants of recognized standing selected by the Borrower and acceptable to the Lender, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Lender;
as soon as available, and in any event within 30 days after the end of each month (but within 60 days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on consolidated basis for the Borrower and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year, subject to normal year-end adjustments and the absence of footnotes;
concurrently with delivery of financial statements under clause (i) above, copies of all management letters and other material reports submitted to the Borrower by its accountants in connection with such financial statements;
at the Lender’s request (but no more frequently than monthly so long as no Event of Default exists), a listing of the Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form satisfactory to Lender;
promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that the Borrower has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses that the Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange; and copies of any press releases or other statements made available by the Borrower to the public concerning material changes to or developments in the business of the Borrower;
promptly after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan (as defined in the Senior Loan Agreement) or Foreign Plan (as defined in the Senior Loan Agreement); and
such other reports and information (financial or otherwise) as the Lender may reasonably request from time to time in connection with any Collateral or any Loan Party’s financial condition, ownership or business.
Notices. Notify the Lender in writing, promptly after the Borrower’s obtaining knowledge thereof, of any of the events listed in Section 10.1.3 of the Senior Loan Agreement as in effect on the Effective Date.
Landlord and Storage Agreements. Upon request, provide Lender with copies of all existing agreements, and promptly after execution thereof provide Lender with copies of all
future agreements, between a Loan Party and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.
Compliance with Laws. Comply with all Applicable Laws and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Each Loan Party shall maintain policies and procedures designed to promote and achieve compliance with applicable Anti-Corruption Laws and Sanctions. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Borrower or Subsidiary, it shall act promptly and diligently to investigate and report to Lender and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not directed to do so by any Governmental Authority.
Taxes. Pay and discharge all Taxes prior to the date on which they become delinquent or penalties attach, unless such Taxes are being Properly Contested.
Insurance. Maintain insurance in form and substance and with insurers (with a Best rating of at least A+, unless otherwise approved by the Lender in its discretion) satisfactory to the Lender, (i) with respect to the Properties and business of the Loan Parties of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated; and (ii) business interruption insurance in an amount not less than $6,000,000, in each case with deductibles, endorsements and assignments satisfactory to the Lender.
Licenses. (i) Keep each License affecting any material portion of the Collateral (including manufacture, distribution or disposition of Inventory) or the services provided by the Loan Parties (each a “Material License”) in full force and effect; (ii) promptly notify the Lender of any proposed material modification to any such Material License, or entry into any new License that would be a Material License, in each case, to the extent such modification or new License would require the consent of any Person other than the Borrower (1) to the assignment thereof to the Lender or (2) to permit the Lender to sell inventory pursuant to the terms of such License; (iii) pay all royalties and other amounts when due under any Material License; and (iv) notify the Lender of any default or breach asserted by any Person to have occurred under any Material License, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
Negative Covenants. As long as the Obligations remain outstanding, no Loan Party shall:
Debt. Create, incur, guarantee or suffer to exist any Debt, except for:
the Obligations; and
Debt permitted under Section 10.2.1 of the Senior Loan Agreement; provided, that, (y) the principal amount of “Obligations” (as such term is used in and
defined in the Senior Loan Agreement) shall not at any time exceed the Senior Debt Cap; and (z) the “Subordinated Debt” (as such term is used in and defined in the Senior Loan Agreement) shall be expressly subordinate and junior to the repayment of the Obligations to Lender hereunder pursuant a subordination agreement acceptable to Lender.
Liens. Create or suffer to exist any Lien upon any of its Property, except for Permitted Liens.
Asset Disposition. Make any Asset Disposition (as defined in the Senior Loan Agreement as in effect on the Effective Date), except for Permitted Asset Dispositions (as defined in the Senior Loan Agreement as in effect on the Effective Date) with any disposition under subpart (d) of the definition of Permitted Asset Disposition also requiring the consent of Lender), unless the Obligations are paid in full in connection with such Asset Disposition.
Fundamental Changes. Change its name or conduct business under any fictitious name or change its tax, charter or other organizational identification number, in each case, without giving Lender at least 30 days prior written notice; change its organizational form or state of organization; liquidate, wind up its affairs or dissolve itself.
Organic Documents. Amend, modify or otherwise change any of its Organic Documents, except in any manner that is not materially adverse to the Lender, including in connection with a transaction permitted under Section 7(d).
Restrictive Agreements. Become a party to any Restrictive Agreement, except a Restrictive Agreement (i) in effect on the Effective Date; (ii) relating to secured Debt permitted hereunder, as long as the restrictions apply only to collateral for such Debt; or (iii) constituting customary restrictions on assignment in leases and other contracts.
Events of Defaults; Remedies.
Events of Default. Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
The Borrower fails to pay the Obligations when due (whether on any scheduled payment date, at stated maturity, on demand, upon acceleration or otherwise) and such failure shall continue unremedied for fifteen (15) days after such payment became due;
Any representation, warranty or other written statement of a Loan Party made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given;
A Loan Party breaches or fails to perform any covenant contained in any Loan Document and such breach or failure is not cured within fifteen (15) days after the Borrower receives written notice thereof from the Lender;
An Insolvency Proceeding is commenced by a Loan Party; a Loan Party makes an offer of settlement, extension or composition to its unsecured creditors generally;
a trustee is appointed to take possession of any substantial Property of or to operate any of the business of a Loan Party; or an Insolvency Proceeding is commenced against a Loan Party and the Loan Party consents to institution of the proceeding, the petition commencing the proceeding is not timely contested by such Loan Party, the petition is not dismissed within 60 days after filing, or an order for relief is entered in the proceeding;
An event or circumstance has occurred and is continuing that constitutes a “Default” or “Event of Default” (as such terms are defined and used in the Senior Loan Agreement) under the Senior Loan Agreement after the expiration of any grace or cure periods that results in the Senior Debt being accelerated.
Remedies.
If an Event of Default described in Section 8(a)(iv) occurs with respect to any Loan Party, then to the extent permitted by Applicable Law, all Obligations shall become automatically due and payable, without any action by Lender or notice of any kind.
If any Event of Default occurs and such Event of Default has not been waived in writing by the Lender, the Lender may, in its discretion:
By written notice to the Borrower, accelerate the Obligations and declare all or any part of the Obligations immediately due and payable, whereupon they shall become immediately due and payable;
Exercise any other rights or remedies afforded under any agreement, including this Agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to (I) take possession of any Collateral; (II) require the Loan Parties to assemble Collateral, at Borrowers’ expense, and make it available to the Lender at a place designated by the Lender; (III) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by a Loan Party, the Loan Parties agree not to charge for such storage); and (IV) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Lender, in its discretion, deems advisable and, in furtherance of such sale or other disposition, Borrower agrees that, to the extent notice of sale shall be required by Applicable Law, 10 days’ notice to the applicable Loan Party of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and, further, the Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given and the Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned; and
By written notice to the Borrower, declare that all restrictive covenants set forth in the Board Observer Agreement, the Management Support
Agreement, the Final Frontier Purchase Agreement (and any separate restrictive covenant agreements executed in connection therewith) and the Employment Agreement (and any separate restrictive covenant agreements executed in connection therewith) that, in any case, are applicable to the Lender or Ms. Connors be terminated effective immediately, including all non-competition and non-solicitation covenants but excluding, in each case, any confidentially covenants which shall survive termination of the restrictive covenants set forth in the Board Observer Agreement, the Management Support Agreement and the Employment Agreement.
Release of Claims. Each Loan Party, on one hand, and the Lender on the other hand, in each case, on behalf of itself and its affiliates (such party and its affiliates, the “Releasing Party”) hereby releases, acquits, and discharges the other parties, their affiliates, officers, directors, employees, agents, successors, and assigns (the “Released Parties”) from any and all claims, demands, actions, causes of action, suits, liabilities, losses, damages, costs, and expenses, whether known or unknown, which the Releasing Party may have or claim to have against any of the Released Parties arising out of or relating to the purchase by the Borrower of Voltrek under the Final Frontier Purchase Agreement or the transactions contemplated therein, including, without limitation, the calculation of the Earn Out Payment (as defined in the Final Frontier Purchase Agreement) and all of the payment terms thereunder; provided, that the determination of the Finally Determined Obligation in accordance with Section 8 of the Term Sheet (including all provisions of the Final Frontier Purchase Agreement applicable thereto) and the parties’ other respective obligations under the Term Sheet, the Loan Documents and any other agreement entered into among the parties after the Effective Date are hereby excluded from the release set forth in this Section 9.
Assignments. No party hereto shall have the right to assign any of its respective rights hereunder without the prior written consent of the other parties hereto.
Notices. Any notice required or permitted to be given hereunder shall be in writing and shall be: (a) personally delivered; (b) transmitted by postage prepaid certified mail; (c) transmitted by a recognized overnight courier service; or (d) transmitted by electronic mail with a request for electronic receipt confirmation, to the receiving party as follows, as elected by the party giving such notice:
If to the Borrower or any Loan Party:
Orion Energy Systems, Inc. 2210 Woodland Drive
Manitowoc, Wisconsin 54220
Telephone: (920) 785-8344 Email: pbrodin@oesx.com Attention: Per Brodin, Chief Financial Officer
with a copy (which shall not constitute notice) to:
Foley & Lardner LLP
777 E. Wisconsin Avenue
Milwaukee, WI 53202
Telephone: (414) 297-5662 (414) 319-7024
Email: sbarth@foley.com
gbishop@foley.com
Attention: Steven R. Barth; Garrett F. Bishop
If to the Lender:
Final Frontier, LLC
P.O. Box 2086
Andover, Massachusetts 01810
Email: kathleen@voltrek.com
Attention: Kathleen M. Connors
with a copy (which shall not constitute notice) to:
Rubin and Rudman LLP
53 State Street
Boston, Massachusetts 02109
Attention: Christine Cordes
Email: ccordes@rubinrudman.com
Costs and Expenses. Each party shall be responsible for its own costs and expenses incurred in connection with the negotiation, documentation and execution of the Loan Documents and performance of their applicable obligations under this Agreement; provided, that the Borrower shall reimburse the Lender and Ms. Connors for their legal fees in connection with the negotiation, documentation and execution of the Term Sheet and the transactions contemplated therein, including the Loan Documents, in an amount not to exceed $85,000, subject to the Lender providing the Borrower with an invoice for such legal fees. NOTWITHSTANDING THE FOREGOING IF AN EVENT OF DEFAULT OCCURS HEREUNDER, BORROWER SHALL, UPON DEMAND, PAY TO THE LENDER THE AMOUNT OF ANY AND ALL COSTS AND EXPENSES, INCLUDING THE FEES AND EXPENSES OF LENDER’S COUNSEL, WHICH THE LENDER MAY INCUR IN CONNECTION WITH THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OR REMEDIES OF THE LENDER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT OR THE TERM SHEET.
Indemnification. Each Loan Party, on one hand, and the Lender, on the other hand (such party, the “Indemnifying Party”), agrees to indemnify, defend, and hold harmless the other parties, their affiliates, officers, directors, employees and agents (collectively, the “Indemnified Parties”, and each individually, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable and documented attorney's fees) arising out of or in connection with any breach of this Agreement by the Indemnifying Party. The indemnification obligations set forth herein shall not apply to the extent that the claims arise from the willful misconduct of the Indemnified Party.
Subordination Agreement.
The Lender and the Loan Parties acknowledge and agree that the priority of Lender’s Liens, the exercise of certain of the Lender’s rights and remedies hereunder and under the other Loan Documents, the delivery or possession of certain possessory Collateral and other terms under the Loan Documents shall be subject to and restricted by the provisions of the Subordination Agreement. Until such time as the Subordination Agreement shall have terminated and Full Payment (as defined in the Senior Loan Agreement as in effect on the date hereof) of the “Obligations” under the Senior Loan Agreement shall have occurred, each reference to a “first priority lien” (or similar terms) of the Lender under any Loan Document shall mean first priority as to Liens other than the Lien of the Senior Lender.
Each of the Loan Parties and the Lender agree that in the event of any direct and irreconcilable conflict between the terms of any Loan Document and the Subordination Agreement, the terms of the Subordination Agreement shall govern and control. Each Loan Party agrees that it shall be bound by the terms and conditions of the Subordination Agreement.
Continuing Guaranty.
Guaranty. Each Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of Borrower to the Lender, arising hereunder or under any other Loan Document.
Rights of the Lender. Each Guarantor consents and agrees that Lender may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as Lender in its sole discretion may determine; and (d) release or substitute one or more of any endorsers or other Guarantors of any of the Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of any Guarantor under this guaranty or which, but for this provision, might operate as a discharge of any Guarantor.
Acknowledgment by the Lender and Ms. Connors. Each of the Lender and Ms. Connors hereby acknowledge and agree that all of the outstanding Earn Out obligations under Section 2.07 of the Final Frontier Purchase Agreement are (i) prior to the Finally Determined Obligation Date, evidenced and governed solely by the Final Frontier Purchase Agreement, the Term Sheet and this Agreement and the other Loan Documents, and (ii) following the Finally Determined Obligation Date, evidenced and governed solely by this Agreement and the other Loan Documents.
Miscellaneous. Each party hereto agrees that: (a) if any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement; (b) this Agreement, together with the other Loan Documents, the Purchase Agreement, the Term Sheet and the other documents referenced therein, constitute the sole and entire agreements of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous understandings and agreements, both written and oral; (c) this Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns; (d) this Agreement is irrevocable and may only be amended, modified or supplemented by an agreement in writing signed by each party hereto; (e) all matters arising out of or relating to this Agreement and the other Loan Documents shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law provision or rule (whether of the State of Delaware or any other jurisdiction); (f) any legal suit, action, proceeding or dispute arising out of or related to this Agreement shall be resolved in accordance with Article VIII and Section 9.07 of the Purchase Agreement; (g) this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed to be one and the same agreement; (h) the headings and titles of the sections and subsections hereof are for convenience only and shall not be deemed to limit or in any way affect the scope, meaning or intent of this Agreement or any portion hereof; and (i) a signed copy of this Agreement delivered by email, DocuSign or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers, as of the date first above written.
ORION ENERGY SYSTEMS, INC., as Borrower
By: /s/ Per Brodin Name: Per Brodin
Title: Chief Financial Officer
GREAT LAKES ENERGY TECHNOLOGIES, LLC, as Guarantor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
CLEAN ENERGY SOLUTIONS, LLC, as Guarantor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION ASSET MANAGEMENT, LLC, as Guarantor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION TECHNOLOGY VENTURES, LLC, as Guarantor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
VOLTREK, LLC, as Guarantor
By: /s/ Per Brodin
Name: Per Brodin
Title: Treasurer and Secretary
Signature Page to
Senior Subordinated Loan Agreement
FINAL FRONTIER, LLC, as the Lender
By: /s/ Kathleen M. Connors Name: Kathleen M. Connors
Title: Manager
Solely with respect to Sections 16 and 17:
/s/ Kathleen M. Connors
Kathleen M. Connors
Signature Page to
Senior Subordinated Loan Agreement
Schedule PL
Permitted Liens
None.
EX-10.3
Exhibit 10.3
This Note (as defined below) and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of September 30, 2025, by and among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation, the other Loan Parties (as DEFINED in the Subordination Agreement) party thereto, FINAL FRONTIER, LLC, a Massachusetts limited liability company, as Subordinated Creditor, and BANK OF AMERICA, N.A., as senior Creditor, to the indebtedness (including interest) owed by the Loan Parties pursuant to certain Senior Debt Documents (as defined in the Subordination Agreement), and to indebtedness refinancing the indebtedness under such agreements as contemplated by the Subordination Agreement; and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.
SENIOR SUBORDINATED NOTE
September 30, 2025
FOR VALUE RECEIVED, the undersigned, ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (the “Borrower”), hereby promises to pay FINAL FRONTIER, LLC, a Massachusetts limited liability company (the “Lender”), at Final Frontier, LLC, P.O. Box 2086, Andover, Massachusetts 01810 (or at such other place as the holder may from time to time designate) the principal sum of the Loan (as defined in the Loan Agreement (as defined below)), together with interest, as provided herein.
This Senior Subordinated Note (this “Note”) is the “Note” referred to in the Senior Subordinated Loan Agreement, dated as of the date hereof, between the Borrower and the Lender (amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). Capitalized terms used in this Note are defined in the Loan Agreement, unless otherwise expressly stated herein. This Note is entitled to the benefits of the Loan Agreement and is subject to all of the agreements, terms and conditions contained therein, all of which are incorporated herein by this reference. Payment of this Note is subject to the agreements, terms and conditions contained in the Subordination Agreement. This Note may not be prepaid, in whole or in part, except in accordance with the terms and conditions set forth in the Loan Agreement
The outstanding principal balance of this Note and all interest accrued thereon shall be due and payable as provided in Section 2.l of the Loan Agreement.
The repayment of the Borrower’s obligations evidenced by this Note to the Lender shall be senior to, and have priority over, all of the Borrower’s other creditors, other than the Senior Lender.
If any Event of Default shall occur and is continuing, Lender may at any time (unless any such Event of Default shall have been cured or waived in accordance with the Loan Agreement) at Lender’s option, exercise any or all of the remedies described in the Loan Agreement. No course of dealing and no delay on the part of Lender in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice Lender’s rights, powers and remedies.
Borrower hereby waives presentment, notice, protest and all other notices in connection with the delivery, acceptance, performance and enforcement of this Note. No waiver of any right or amendment hereto shall be effective unless in writing and signed by Lender nor shall a waiver on one occasion be construed as a bar to or waiver of any such right on any future occasion. Without limiting the generality of the foregoing, the acceptance by Lender of any late payment shall not be deemed to be a waiver of the Event of Default arising as a consequence thereof.
THIS NOTE shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law provision or rule (whether of the State of Delaware or any other jurisdiction).
[signature page follows]
IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has duly executed this Note as of the day and year first written above.
ORION ENERGY SYSTEMS, INC., as Borrower
By: /s/ Per Brodin Name: Per Brodin
Title: Chief Financial Officer
Signature Page to
Senior Subordinated Note
EX-10.4
Exhibit 10.4
This Agreement (as defined below) and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of SEPtember 30, 2025, among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation, the other Loan Parties (as defined in the Subordination Agreement) party thereto, FINAL FRONTIER, LLC, A MASSACHUSETTS limited LIABILITY COMPANY, as subordinated creditor, and BANK OF AMERICA, N.A., as senior creidtor, to the indebtedness (including interest) owed by the Loan Parties pursuant to certain Senior Debt Documents (as defined in the Subordination Agreement), and to indebtedness refinancing the indebtedness under such agreements as contemplated by the Subordination Agreement; and each party to this agreement, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this “Agreement”), dated as of September 30, 2025, is made by each of Orion Energy Systems, Inc., a Wisconsin corporation (the “Borrower”), Great Lakes Energy Technologies, LLC, a Wisconsin limited liability company (“Great Lakes”), Clean Energy Solutions, LLC, a Wisconsin limited liability company (“Clean Energy”), Orion Asset Management, LLC, a Wisconsin limited liability company (“Asset Management”), Orion Technologies Ventures, LLC, a Wisconsin limited liability company (“Orion Technology”), Voltrek, LLC, a Massachusetts limited liability company (“Voltrek”, and together with the Borrower, Great Lakes, Clean Energy, Asset Management and Orion Technology, the “Debtors”, each being a “Debtor”), in favor of Final Frontier, LLC, a Massachusetts limited liability company (the “Secured Party”).
RECITALS:
WHEREAS, pursuant to that certain Senior Subordinated Loan Agreement, dated as of the date hereof (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and among the Borrower, the other Loan Parties, as guarantors, and the Secured Party, the Secured Party made a loan to the Borrower that is evidenced by that certain Senior Subordinated Note, dated as of the date hereof (as amended, modified, supplemented or restated from time to time, the “Note”), made by the Borrower to the order of the Secured Party;
WHEREAS, as a condition to entering into the Loan Agreement and the Note, the Secured Party has required the execution and delivery of this Agreement by the Debtors.
NOW THEREFORE, in consideration of the mutual covenants contained in the Note and herein, the parties hereby agree as follows:
- Definitions. All terms defined in the recitals hereto that are not otherwise defined herein shall have the meanings given them in the Loan Agreement. All terms defined in the UCC and not otherwise defined herein have the meanings assigned to them in the UCC. In addition, the following terms have the meanings set forth below or in the referenced Section of this Agreement:
“Collateral” means all of each Debtor’s now owned or hereafter acquired right, title and interest in and to all property, wherever located, including (a) all Accounts, chattel paper and electronic chattel paper, General Intangibles, documents, instruments, securities, deposit accounts, certificates of deposit and the Pledged Equity Interests; (b) all Inventory and goods; (c) all letter-of-credit rights, and letters of credit; (d) all Equipment and fixtures and, in the case of all goods, all accessions, all accessories, attachments, parts, Equipment and repairs now or subsequently attached or affixed to or used in connection with any goods and all warehouse receipts, bills of lading and other documents of title that cover such goods now or in the future; (e) all books and records relating to all of the foregoing property and interests in property, including all computer programs, printed output and computer readable data in the possession or control of such Debtor, any computer service bureau or other third party; (f) all Investment Property; (g) all real property identified in any mortgage, deed, deed of trust or other security or encumbrance instrument executed by or for the benefit of such Debtor in favor of or for the benefit of the Secured Party; (h) all money or other assets of such Debtor that come into the possession, custody, or control of the Secured Party now or in the future; (i) all additions to, substitutions and replacements for, any of the foregoing; and (j) all products and Proceeds of the foregoing.
“Pledged Equity Interests” means, with respect to each Debtor (other than the Borrower), all of the Borrower’s interest in the limited liability company interests issued by such Debtor and all related rights to manage such Debtor, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests issued by such Debtor to the Borrower.
“Security Interest” has the meaning given in Section 2.
- Security Interest.
- Each Debtor hereby pledges, assigns and grants to the Secured Party a Lien and security interest (the “Security Interest”) in the Collateral, subject only to Permitted Liens, as security for the payment and performance of all Obligations; provided, that, the Security Interest shall at no time secure Obligations in excess of the lesser of (i) $10,000,000 and (ii) the amount of the Loan (including after giving effect to any adjustment pursuant to Section 2(b) and 2(d) of the Loan Agreement).
- Anything herein to the contrary notwithstanding, (i) each Debtor shall remain liable with respect to and under all Collateral, (ii) the exercise by the Secured Party of any of the rights hereunder shall not release any Debtor from any of its duties or obligations with respect to or under any Collateral or under this Agreement, and (iii) the Secured Party shall not have any obligation or liability with respect to or under any Collateral by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of any Debtor
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- thereunder or to take any action to collect or enforce any claim for payment assigned or in which a security interest is granted hereunder.
- Representations, Warranties and Agreements. Each Debtor hereby represents, warrants and agrees as follows:
- Existence; Authorization; Execution; Delivery. (i) It is a corporation (solely with respect to the Borrower) or limited liability company (solely with respect to each Debtor other than the Borrower), duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the power and authority to make and deliver this Agreement; (ii) the execution, delivery and performance of this Agreement by each Debtor have been duly authorized by all necessary corporate (solely with respect to the Borrower) or limited liability company (solely with respect to each Debtor other than the Borrower) action and do not and will not violate the provisions of, or constitute a default under, any presently Applicable Law or its constituent documents or any material agreement presently binding on it; and (iii) this Agreement has been duly executed and delivered by each Debtor and constitutes a valid and legally binding obligation of each Debtor, enforceable against each Debtor in accordance with its terms, except to the extent enforceability hereof may be limited under applicable bankruptcy, moratorium, insolvency or similar laws and by equitable principles relating to enforceability, good faith and fair dealing.
- Title. It (i) has absolute title to each item of its Collateral in existence on the date hereof, free and clear of all Liens except the Permitted Liens; (ii) will have, at the time such Debtor acquires any rights in Collateral hereafter arising, absolute title to each such item of Collateral free and clear of all Liens except Permitted Liens; (iii) will keep all Collateral free and clear of all Liens except Permitted Liens; and (iv) will defend the Collateral against all claims or demands of all Persons other than the Secured Party and the holders of Permitted Liens. Except for the Senior Loan Agreement and the Subordination Agreement, there is no document or agreement governing any Pledged Equity Interest which would limit or restrict the grant of a Security Interest in the Pledged Equity Interests, the perfection of such Security Interest, the exercise of remedies in respect of such Security Interest on the Pledged Equity Interests as contemplated by this Agreement, the admission of any transferee of the Pledged Equity Interests as a member of any Debtor (other than the Borrower), or the exercise by such transferee of all voting and management rights as to any Debtor (other than the Borrower).
- General. This Agreement and the grant of the Security Interest pursuant to this Agreement create a valid security interest in the Collateral in favor of the Secured Party, securing the payment and performance of the Obligations, and such security interest will be perfected upon the filing of UCC-1 financing statements for such Debtor, in the form delivered by such Debtor to the Secured Party on or prior to the date of this Agreement and in the appropriate filing offices for the jurisdictions in which each Debtor is organized to the extent such security interests can be perfected by the filing of UCC-1 financing statements for such Debtor.
- Approvals, Consents, Etc. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Person is necessary or required (i) for the pledge by such Debtor of the Collateral pledged by it hereunder, for the grant by such Debtor of the security interest granted hereby, or for the execution, delivery, or performance of this Agreement
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- by such Debtor, (ii) for the perfection or maintenance of the pledge, assignment, and security interest created hereby (including the second priority nature of such pledge, assignment, and security interest, subject to Permitted Liens) or (iii) for the enforcement of remedies by the Secured Party, in each case other than (A) filings required by the UCC, and (B) such approvals, consents, exemptions, authorizations, actions, notices or filings that have been duly obtained, taken or made and are in full force and effect.
- Changes in Name, Organizational Documents, Location. It will not (i) change its organizational documents in a manner adverse to the Secured Party without the prior written consent of the Secured Party or sell substantially all of its assets or dissolve any Debtor, except in each case, as permitted by the Loan Agreement; (ii) change its name or jurisdiction of organization without prompt written notice to Secured Party such that the Secured Party can take such steps (with the cooperation of such Debtor to the extent necessary or advisable) as are necessary or advisable to properly maintain the validity and perfection of the Secured Party’s security interest in the Collateral; and (iii) change its chief executive office address (with respect to the Borrower) or its principal place of business (with respect to each Debtor other than the Borrower) without prior written notice to the Secured Party. As of the date hereof, (y) the chief executive office address of each Debtor (other than Voltrek) is 2210 Woodland Drive, Manitowoc, Wisconsin 54220 and its jurisdiction of organization is Wisconsin and (z) the principal place of business of Voltrek is 280 Merrimack Street, Suite 554, Lawrence, Massachusetts 01843 and its jurisdiction of organization is Massachusetts.
- Miscellaneous Covenants.
- Each Debtor will keep accurate and complete records in all material respects pertaining to the Collateral and pertaining to such Debtor’s business and financial condition;
- Each Debtor will from time to time authorize or execute such financing statements and continuation statements as the Secured Party may reasonably require in order to perfect the Security Interest.
- Each Debtor will authorize, execute, deliver or endorse any and all instruments, documents, assignments, security agreements and other agreements and writings which the Secured Party may at any time reasonably request in order to secure, protect, perfect or enforce the Security Interest and the Secured Party’s rights under this Agreement.
- In addition to such other information as shall be specifically provided for herein, each Debtor shall furnish to the Secured Party such other information (including copies of documents) with respect to such Debtor and the Collateral as the Secured Party may reasonably request.
- All representations and warranties made hereunder shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Secured Party, regardless of any investigation made by the
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- Secured Party or on its behalf and notwithstanding that the Secured Party may have had notice or knowledge of any inaccuracy at any time.
- Remedies.
- If an Event of Default exists, in addition to all other remedies available to it under Applicable Law, each Debtor agrees that Secured Party may exercise the remedies described in the Loan Agreement.
- In addition, because of the Securities Act of 1933, as amended (the “Securities Act”), and other Applicable Laws, including without limitation state “blue sky” laws, or contractual restrictions or agreements, there may be legal restrictions or limitations affecting the Secured Party in any attempts to dispose of the Pledged Equity Interests and the Secured Party’s enforcement of its rights under this Agreement with respect thereto. For these reasons, the Secured Party is authorized by each Debtor, but not obligated, if any Event of Default exists, to sell or otherwise dispose of any of the Pledged Equity Interests at private sale, subject to an investment letter, or in any other manner which will not require the Pledged Equity Interests, or any part thereof, to be registered in accordance with the Securities Act or any other Applicable Law. Each Debtor understands that the Secured Party may in its discretion approach a restricted number of potential purchasers and that a sale under such circumstances may yield a lower price for the Pledged Equity Interests than would otherwise be obtainable if the same were registered and/or sold in the open market.
- Each Debtor agrees that if an Event of Default exists and the Secured Party sells the Collateral or any portion thereof at any private sale or sales, the Secured Party shall have the right to rely upon the advice and opinion of appraisers and other Persons, which appraisers and other Persons are acceptable to the Secured Party, as to the best price reasonably obtainable upon such a private sale thereof.
- Assignment. None of the parties hereto shall have the right to assign any of their respective rights hereunder without the prior written consent of the other parties.
- Notices. All notices required to be given to any party under this Agreement shall be deemed given when given in accordance with the terms of the Loan Agreement.
- Miscellaneous. Each party hereto agrees that: (a) if any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement; (b) this Agreement, together with the other Loan Documents, the Purchase Agreement, the Term Sheet and the other documents referenced therein, constitute the sole and entire agreements of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous understandings and agreements, both written and oral; (c) this Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns; (d) this Agreement is irrevocable and may only be amended, modified or supplemented by an agreement in writing signed by each party hereto; (e) all matters arising out of or relating to this Agreement and the other Loan Documents shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law provision or rule (whether of the
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- State of Delaware or any other jurisdiction); (f) any legal suit, action, proceeding or dispute arising out of or related to this Agreement shall be resolved in accordance with Article VIII and Section 9.07 of the Purchase Agreement; (g) this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed to be one and the same agreement; (h) the headings and titles of the sections and subsections hereof are for convenience only and shall not be deemed to limit or in any way affect the scope, meaning or intent of this Agreement or any portion hereof; and (i) a signed copy of this Agreement delivered by email, DocuSign or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers, as of the date first above written.
ORION ENERGY SYSTEMS, INC., as a Debtor
By: /s/ Per Brodin Name: Per Brodin
Title: Chief Financial Officer
GREAT LAKES ENERGY TECHNOLOGIES, LLC, as Debtor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
CLEAN ENERGY SOLUTIONS, LLC, as Debtor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION ASSET MANAGEMENT, LLC, as Debtor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION TECHNOLOGY VENTURES, LLC, as Debtor
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
VOLTREK, LLC, as Debtor
By: /s/ Per Brodin
Name: Per Brodin
Title: Treasurer and Secretary
Signature Page to Security Agreement
FINAL FRONTIER, LLC, as Secured Party
By: /s/ Kathleen M. Connors Name: Kathleen M. Connors
Title: Manager
Signature Page to Security Agreement
EX-10.5
Exhibit 10.5
SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this “Agreement”) is entered into as of September 30, 2025 (the “Effective Date”), by and among FINAL FRONTIER, LLC, a Massachusetts limited liability company (on behalf of itself and any other holder of the Subordinated Debt (defined below), the “Subordinated Creditor”), and BANK OF AMERICA, N.A., as agent for itself, as Lender, and the Secured Parties under the Senior Credit Agreement (defined below) (in such capacity, “Senior Creditor”) and is acknowledged and agreed to by ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (“Company”), GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin limited liability company (“Great Lakes”), CLEAN ENERGY SOLUTIONS, LLC, a Wisconsin limited liability company (“Clean Energy”), ORION ASSET MANAGEMENT, LLC, a Wisconsin limited liability company (“Asset Management”), ORION TECHNOLOGY VENTURES, LLC, a Wisconsin limited liability company (“Orion Technology”), and VOLTREK, LLC, a Massachusetts limited liability company (“Voltrek”, and together with the Company, Great Lakes, Clean Energy, Asset Management and Orion Technology, collectively, the “Borrowers”). Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Senior Credit Agreement (defined below).
R E C I T A L S
Pursuant to the Loan and Security Agreement, dated as of December 29, 2020 (as amended on or prior to the date hereof and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Senior Credit Agreement”), by and among the Borrowers and Bank of America, N.A., Senior Creditor has agreed, among other things, to make certain loans and financial accommodations to the Borrowers upon the terms and subject to the conditions set forth therein. Certain affiliates of the Company may guaranty from time to time the obligations of the Borrowers under the Senior Debt Documents (as defined below) pursuant to the terms of the Senior Credit Agreement. All of the obligations of the Obligors to Senior Creditor under the Senior Credit Agreement and the other Senior Debt Documents are secured by liens on and security interests in the Collateral (as defined below).
Pursuant to the Senior Subordinated Loan Agreement, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “Subordinated Loan Agreement”), between the Company, as borrower, the other Borrowers, as guarantors, and the Subordinated Creditor, as lender, the Subordinated Creditor has agreed, among other things, to defer the payment of certain earn out obligations of the Company, which is being structured as a deemed installment loan to the Company evidenced by that certain Senior Subordinated Note, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “Subordinated Note”) made by the Company and payable to the Subordinated Creditor. The Borrowers’ obligations to Subordinated Creditor under the Subordinated Loan Agreement, the Subordinated Note and the other Subordinated Debt Documents (as defined below) are secured by liens on and security interests in the Collateral (as defined below).
As an inducement to the Senior Creditor to maintain the transactions contemplated by the Senior Credit Agreement, Senior Creditor has required the execution and delivery of this
Agreement by Subordinated Creditor and the Loan Parties in order to set forth the relative rights and priorities of Senior Creditor and Subordinated Creditor under the Senior Debt Documents and the Subordinated Debt Documents.
NOW, THEREFORE, in order to induce Senior Creditor to maintain the transactions contemplated by the Senior Credit Agreement, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:
- Definitions. The following terms shall have the following meanings in this Agreement:
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the specified Person. As used in this definition, “control” or “controlled” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.
“BABC Loan Documents” means the Senior Credit Agreement, the Loan Documents (as defined in the Senior Credit Agreement) and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, restated, supplemented or otherwise modified from time to time, as permitted hereunder.
“Bankruptcy Code” means the provisions of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder.
“Bankruptcy Laws” means the Bankruptcy Code, and all other applicable federal, state, provincial or foreign liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief law affecting creditors’ rights generally, as amended and in effect from time to time.
“Collateral” means all of the existing or hereafter acquired property, whether real, personal or mixed, of each Loan Party.
“Control” has the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Uniform Commercial Code.
“DIP Financing” has the meaning assigned to such term in Section 2.2(d).
“Disposition” or “Dispose” means, with respect to any interest in property, the sale, assignment, transfer, lease (as lessor), license or other disposition of such interest in such property (or the granting of any option or other right to do any of the foregoing).
“Distribution” or “Distributed” means, with respect to any indebtedness, obligation or security, (a) any payment or distribution by any Person of cash, securities or other property (including, without limitation, any payment in the form of a deferred purchase price, earn-out or other contingent obligation), by set-off or otherwise, on account of such indebtedness, obligation or security, including the granting of adequate protection with respect thereto, (b) any redemption,
purchase or other acquisition of such indebtedness, obligation or security by any Person, whether voluntary or involuntary, or (c) the granting of any Lien to or for the benefit of the holders of such indebtedness, obligation or security in or upon any property or interests in property of any Person.
“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
“Enforcement Action” means (a) to take from or for the account of any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) by set-off or in any other manner (other than payments of Permitted Subordinated Debt Payments), the whole or any part of any moneys which may now or hereafter be owing by such Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) with respect to the Subordinated Debt, (b) to initiate or participate with others in any suit, action or proceeding against any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) to (i) enforce payment of or to collect the whole or any part of the Subordinated Debt, (ii) commence or join with other Persons to commence a Proceeding, or (iii) commence judicial or private enforcement of any of the rights and remedies under the Subordinated Debt Documents or applicable law with respect to the Subordinated Debt, (c) to take any action to enforce any rights or remedies with respect to the Subordinated Debt, (d) to exercise any put option or to cause any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) to honor any redemption or mandatory prepayment obligation under any Subordinated Debt Document or (e) to exercise any rights or remedies of a secured party under the Subordinated Debt Documents or applicable law or take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt), including the Collateral.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, title retention, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Loan Parties” means, collectively, Company, each other Borrower and each other Person that is a borrower, guarantor or obligor of all or any portion of both the Senior Debt and the Subordinated Debt.
“Paid in Full” or “Payment in Full” means, as of any date of determination with respect to the Senior Debt, that: (a) all of the Senior Debt (except as set forth in clauses (c), (d) and (e) below and other than contingent indemnification obligations with respect to which a claim has not been asserted and no reasonable basis for any claim is known) has been paid in full in cash, (b) all commitments to extend credit under the Senior Credit Agreement (or, after the consummation of a Permitted Refinancing, the Permitted Refinancing Senior Debt Documents) have expired or terminated and no Person has any further right to obtain any loans, letters of credit or other extensions of credit under the Senior Debt Documents, (c) any and all letters of credit issued under
the Senior Debt Documents have been cancelled and returned (or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount equal to 105% of the face amount of such letters of credit in accordance with the terms of such documents), (d) any and all Bank Product Debt between any Obligor and Senior Creditor or any of Affiliates thereof have been paid in cash and terminated (or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount reasonably determined by Senior Creditor as sufficient to satisfy the estimated credit exposure with respect to such Bank Product Debt) and (e) any costs, expenses and contingent indemnification obligations which are not yet due and payable but with respect to which a claim has been or may reasonably be expected to be asserted by Senior Creditor, are backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount reasonably estimated by Senior Creditor to be the amount of costs, expenses and contingent indemnification obligations that may become due and payable.
“Payment Conditions” means “Payment Conditions” as defined in the Senior Credit Agreement (or any Permitted Refinancing Senior Debt Document) as in effect on the Effective Date.
“Permitted Bank Product Debt” means the sum of (i) the aggregate amount of Bank Product Obligations for which a “Bank Product Reserve” (as defined in the Senior Credit Agreement as in effect on the date hereof or any substantially similar term having the same effect in any Permitted Refinancing) has been established by the Senior Creditor plus (ii) other Bank Product Debt not in excess of $5,000,000.
“Permitted Refinancing” means, subject to Section 3 hereof, any refinancing, extension or replacement of all or any part of the Senior Debt under the BABC Loan Documents (or any other Senior Debt Documents).
“Permitted Refinancing Senior Debt Documents” means, subject to Section 3 hereof, any financing documentation which replaces all or any part of the BABC Loan Documents (or any other Senior Debt Documents) and pursuant to which all or any part of the Senior Debt under the BABC Loan Documents (or any other Senior Debt Documents) is refinanced, extended or replaced, whether by the same or any other lender or group of lenders, as such financing documentation may be amended, supplemented, replaced, refinanced, extended or otherwise modified from time to time.
“Permitted Subordinated Debt Payments” means, collectively:
(a) payments of legal expenses of the Subordinated Creditor in connection with the negotiation, documentation and execution of the Term Sheet (as defined in the Subordinated Loan Agreement) and the transactions contemplated therein, including the Subordinated Debt Documents, paid in accordance with the terms of the Subordinated Loan Agreement in an aggregate amount not to exceed $85,000;
(b) regularly scheduled monthly payments of cash interest:
(i) prior to the Finally Determined Obligation Date (as defined in the Subordinated Loan Agreement), in an amount not to exceed $15,000 per month; and
(ii) after the Finally Determined Obligation Date, in an amount not to exceed a rate of 7.0% per annum of the amount of the Loan (as defined in the Subordinated Loan Agreement), after giving effect to the adjustment of the amount of the Loan set forth in Section 2(b) of the Subordinated Loan Agreement;
(c) (i) so long as no Senior Default has occurred and is continuing as of the date of the payment and no Senior Default will occur as a result of such payment, a one-time payment of cash interest as set forth in Section 2(d)(iii)(y) of the Subordinated Loan Agreement, if applicable, or (ii) a one-time deemed principal payment as set forth in Section 2(d)(iii)(z) of the Subordinated Loan Agreement, if applicable;
(d) so long as the Payment Conditions are satisfied with respect thereto, regularly scheduled monthly payments of principal:
(i) commencing on January 15, 2026 through and including June 15, 2026, in an amount not to exceed $25,000; and
(ii) commencing July 15, 2026 through and including June 15, 2027, in an amount not to exceed $50,000 per month;
(e) any non-cash payments made in the form of conversion of the Subordinated Debt into, or issuance to the Subordinated Creditor of, common equity interests of the Company (to the extent not otherwise resulting in a Senior Default); and
(f) so long as the Payment Conditions are satisfied with respect thereto, payment in full of the outstanding Subordinated Debt on the Subordinated Debt Maturity Date.
“Person” means any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.
“Proceeding” means any voluntary or involuntary insolvency, bankruptcy, receivership, interim-receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person, whether initiated under the Bankruptcy Code or any other Bankruptcy Laws.
“Senior Debt” means, collectively, (a) all Obligations (as defined in the Senior Credit Agreement) and all other obligations, liabilities and indebtedness of every nature of each Obligor from time to time owed to Senior Creditor under the Senior Debt Documents (additionally, and without limitation of the foregoing, the term Senior Debt shall include all obligations, liabilities and indebtedness arising from or in connection with any letters of credit, guarantees or other agreements or arrangements to induce Senior Creditor to issue or increase the amount of or extend the expiry date of one or more Letters of Credit (as defined in the Senior Credit Agreement)),
including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest accruing thereon (including, without limitation, interest accruing after the commencement of a Proceeding) and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding together with any interest, fees, costs and expenses accruing thereon after the commencement of a Proceeding, and (b) all Bank Product Debt; provided, that the principal amount (excluding any capitalized interest, fees or other amounts added thereto) of all “Senior Debt” shall not exceed the Senior Debt Cap (as defined herein). Senior Debt shall be considered to be outstanding whenever any loan or commitment under the Senior Debt Documents is outstanding.
“Senior Debt Cap” means the sum of (a) $34,200,000 plus (b) the amount of all Permitted Bank Product Debt.
“Senior Debt Documents” means the BABC Loan Documents and, after the consummation of any Permitted Refinancing, the Permitted Refinancing Senior Debt Documents in respect thereof.
“Senior Default” means any “Event of Default” under the Senior Debt Documents.
“Subordinated Debt” means, collectively, all of the obligations, liabilities and indebtedness of each Loan Party to Subordinated Creditor evidenced by or incurred pursuant to the Subordinated Debt Documents. For the avoidance of doubt, Subordinated Debt does not include any claims or causes of action held by the Subordinated Creditor which are not explicitly contemplated by the Subordinated Debt Documents.
“Subordinated Debt Documents” means the Subordinated Loan Agreement, the Subordinated Note, any security agreement or guaranty with respect thereto and all other documents, agreements and instruments now existing or hereinafter arising evidencing, governing or entered into in connection therewith, as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder.
“Subordinated Debt Maturity Date” means July 15, 2027.
“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of Illinois or in any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
Subordination.
Subordination of Subordinated Debt to Senior Debt. Each Loan Party covenants and agrees, and Subordinated Creditor by its acceptance of the Subordinated Debt Documents (whether upon original issue or upon transfer or assignment) likewise covenants and agrees, notwithstanding anything to the contrary contained in any of the Subordinated Debt Documents, that the payment of any and all of the Subordinated Debt shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the prior Payment in Full of the Senior Debt. Each holder of Senior Debt, whether now outstanding or hereafter created,
incurred, assumed or guaranteed, shall be deemed to have acquired Senior Debt in reliance upon the provisions contained in this Agreement.
Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding involving any Loan Party:
All Senior Debt shall first be Paid in Full before any Distribution, whether in cash, securities or other property, shall be made to Subordinated Creditor on account of the Subordinated Debt; provided that the foregoing shall not be deemed to prevent the Subordinated Creditor from receiving and retaining any Distribution made in any Proceeding in respect of the Subordinated Creditor’s general unsecured claim and not as a result of any Lien held by Subordinated Creditor on any Collateral (an “Unsecured Creditor Distribution”).
Any Distribution, other than an Unsecured Creditor Distribution, whether in cash, securities or other property which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Debt shall be paid or delivered directly to Senior Creditor (to be held and/or applied by Senior Creditor in accordance with the terms of the Senior Debt Documents) until all Senior Debt is Paid in Full. Subordinated Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, interim receiver, trustee, liquidator, custodian, conservator, monitor or other Person having authority, to pay or otherwise deliver all such Distributions to Senior Creditor for application to the Senior Debt until Payment in Full of the Senior Debt. Subordinated Creditor also irrevocably authorizes and empowers Senior Creditor, in the name of Subordinated Creditor, to demand, sue for, collect and receive any and all such Distributions. Subordinated Creditor will duly and promptly take such action, at the expense of Company, as Senior Creditor may reasonably request to (i) collect the Subordinated Debt for the account of Senior Creditor and to file appropriate claims or proofs of claim with respect thereto, (ii) execute and deliver to Senior Creditor such powers of attorney, assignments or other instruments as Senior Creditor may request in order to enable it to enforce any and all claims with respect to, and any security interests and other liens securing payment of, the Subordinated Debt, and (iii) collect and receive for the account of Senior Creditor any and all payments and other Distributions which may be payable or deliverable upon or with respect to the Subordinated Debt, until the Payment in Full of the Senior Debt.
Subordinated Creditor agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Debt requested by Senior Creditor in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Senior Creditor as its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor promptly to do so prior to 10 days before the expiration of the time to file any such proof of claim and (ii) vote such claim in any such Proceeding upon the failure of Subordinated Creditor to do so prior to 5 days before the expiration of the time to vote any such claim; provided, Senior Creditor shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim. In the event that Senior Creditor votes any claim in accordance with the authority granted hereby, Subordinated Creditor shall not be entitled to change or withdraw any such vote.
Notwithstanding the foregoing, nothing in this Agreement shall restrict or impair the right of Subordinated Creditor to vote its claim in respect of the Subordinated Debt in any Proceeding; provided that, without the prior written consent of Senior Creditor, Subordinated Creditor may not vote in favor of a plan of reorganization in a Proceeding that contravenes the priority or subordination provisions of this Agreement.
Subordinated Creditor agrees that it will consent to, and not object to or oppose any use of cash collateral consented to by Senior Creditor or any financing provided by Senior Creditor to any Loan Party or any of its subsidiaries during a Proceeding (or any financing provided by any other Person consented to by Senior Creditor) provided that the aggregate principal amount (excluding any capitalized interest, fees or other amounts added thereto) of the Senior Debt and any financing provided during a Proceeding does not exceed the Senior Debt Cap (collectively, “DIP Financing”) on such other terms and conditions as Senior Creditor, in its sole discretion, may decide. In connection therewith, any Loan Party may grant to Senior Creditor Liens and security interests upon all of the property of such Loan Party, which Liens and security interests (i) shall secure payment of all Senior Debt (whether such Senior Debt arose prior to the commencement of any Proceeding or at any time thereafter) and DIP Financing provided by Senior Creditor or consented to by Senior Creditor during the Proceeding and (ii) shall be superior in priority to the Liens and security interests, if any, in favor of Subordinated Creditor on the property of such Loan Party. If, in connection with any cash collateral use or DIP Financing, any Liens and security interests on the Collateral held by Senior Creditor are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee “carve out,” or fees owed to the United States Trustee, then the Liens of Subordinated Creditor on the Collateral shall also be subordinated to such interest or claim and shall remain subordinated to the Liens and security interests on the Collateral held by Senior Creditor consistent with this Agreement. Subordinated Creditor agrees that it will consent to, and not object to or oppose, a sale or other Disposition of any property securing all or any part of any Senior Debt free and clear of security interests, Liens or other claims of Subordinated Creditor under applicable Bankruptcy Laws (or any order issued by a court in a Proceeding), including Sections 363, 365 and 1129 of the Bankruptcy Code, if Senior Creditor has consented to such sale or other Disposition. Subordinated Creditor agrees not to assert any right it may have in any Proceeding arising from any Loan Party’s or any of their respective subsidiaries’ use, sale or other Disposition of Collateral and agrees that Subordinated Creditor will not seek (or support any other Person seeking) to have any stay, whether automatic or otherwise, lifted with respect to any Collateral without the prior written consent of Senior Creditor. Subordinated Creditor agrees that Subordinated Creditor will not, and will not permit, any of its Affiliates to, directly or indirectly, provide, participate in or otherwise support, any debtor-in-possession financing (or any other financing in a Proceeding) to any Loan Party without the prior written consent of Senior Creditor. Subordinated Creditor will not object to or oppose any adequate protection sought by Senior Creditor or object to or oppose any motion by Senior Creditor to lift any automatic stay or any other stay in any Proceeding. Except for replacement Liens on Collateral or additional Liens on Collateral, in each case, that are subordinated to the Liens of Senior Creditor on the Collateral pursuant to or otherwise consistent with the terms of this Agreement, Subordinated Creditor will not seek or assert any right it may have for adequate protection of its interest in any Collateral in any Proceeding. If the Collateral of
any Loan Party is not subject to Senior Creditor’s Lien and Subordinated Creditor is granted adequate protection in the form of periodic cash payments on account of such Collateral, such payments shall be subject to the terms of this Agreement (including, without limitation, Section 2.3). Subordinated Creditor waives any claim it may now or hereafter have arising out of Senior Creditor’s election, in any Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code. Subordinated Creditor further agrees that it shall not, without Senior Creditor’s prior written consent, (A) commence or continue any Proceeding against any Loan Party or (B) propose any plan of reorganization, compromise, arrangement or proposal or file any motion, pleading or material in support of any motion or plan of reorganization, compromise, arrangement or proposal that is in conflict with the priorities or other terms of this Agreement.
This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Proceeding in accordance with its terms. The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Creditor and Subordinated Creditor even if all or part of the Senior Debt or the Liens securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed in connection with any such Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Debt is rescinded or must otherwise be returned by any holder of Senior Debt or any representative of such holder (a “Senior Recovery”) and all rights, interests, priorities and privileges recognized in this Agreement shall apply with respect to any such Senior Recovery. If this Agreement shall have been terminated prior to such Senior Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Proceeding.
To the extent not inconsistent with, prohibited by or in contravention of the terms of this Agreement, the Subordinated Creditor may exercise its rights and remedies as an unsecured creditor against the Loan Parties in accordance with the terms of the applicable Subordinated Debt Documents and applicable law; provided that, in the event Subordinated Creditor becomes a judgment lien creditor in respect of the Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to any Lien on such Collateral securing any Senior Debt in respect of such Collateral on the same basis and to the same extent as the Liens on such Collateral securing Subordinated Debt are subordinated to the Liens on such Collateral securing such Senior Debt under this Agreement..
Subordinated Debt Payment Restrictions. Notwithstanding the terms of the Subordinated Debt Documents, each Loan Party hereby agrees that it may not make (or permit any of its subsidiaries to make), and Subordinated Creditor hereby agrees that it will not accept, any Distribution with respect to the Subordinated Debt until the Senior Debt is Paid in Full. Notwithstanding the immediately preceding sentence, subject to the terms of Section 2.2, the Borrowers may make, and Subordinated Creditor may accept, Permitted Subordinated Debt Payments; provided, however, that the Borrowers and Subordinated Creditor further agree that no
Permitted Subordinated Debt Payment may be made by any Borrower or accepted by Subordinated Creditor if, at the time of such payment, a Senior Default has occurred and has not been waived.
Subordinated Debt Standstill Provisions.
Until the Senior Debt is Paid in Full, Subordinated Creditor shall not, without the prior written consent of Senior Creditor, take any Enforcement Action with respect to the Subordinated Debt or under the Subordinated Debt Documents.
Notwithstanding the foregoing, Subordinated Creditor may (i) file proofs of claim against any Loan Party in any Proceeding involving such Loan Party, (ii) make filings and take other administrative actions to preserve any claims, Liens, security interests or rights of Subordinated Creditor with respect to or against the Collateral or any Loan Party (in any case not in contravention of this Agreement), (iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of any claims, Liens, security interests or rights of Subordinated Creditor with respect to or against the Collateral or any Loan Party (in any case not in contravention of this Agreement), (iv) accelerate the Subordinated Debt pursuant to the Subordinated Debt Documents, (v) sue and obtain judgment on account of the Subordinated Debt (provided that Subordinated Creditor shall not execute on or otherwise enforce any judgment obtained or take any enforcement action with respect to any Collateral without the written consent of the Senior Creditor), (vi) exercise the rights and remedies under Section 8(b)(ii)(C) of the Subordinated Loan Agreement to terminate restrictive covenants as set forth therein and (vii) accrue (but not collect) default interest. Any Distributions or other proceeds of any Enforcement Action obtained by Subordinated Creditor shall in any event be held in trust by it for the benefit of Senior Creditor and promptly paid or delivered to Senior Creditor in the form received until the Senior Debt is Paid in Full.
Notwithstanding anything contained herein to the contrary, if following the commencement of a Proceeding involving any Loan Party such Proceeding is rescinded, settled or otherwise ceases (whether or not any existing Senior Default has been cured or waived), then all related Enforcement Actions taken by Subordinated Creditor under Section 2.4(b)(i) through (iii) shall likewise be rescinded.
Incorrect Payments. If any Distribution on account of the Subordinated Debt not permitted to be made by any Loan Party or accepted by Subordinated Creditor under this Agreement is received by Subordinated Creditor, such Distribution shall be deemed to be held in trust by Subordinated Creditor for the benefit of Senior Creditor and shall be promptly paid over to Senior Creditor, with any necessary endorsement, for application (in accordance with the Senior Debt Documents) to the payment of the Senior Debt then remaining unpaid, until all of the Senior Debt is Paid in Full.
Subordination of Liens and Security Interests; Agreement Not to Contest; Sale of Collateral; Release of Liens.
Until the Senior Debt has been Paid in Full, any Liens and security interests of Subordinated Creditor in the Collateral which may exist shall be and hereby are subordinated for all purposes and in all respects to the Liens and security interests of Senior Creditor in the Collateral, regardless of the time, manner or order of creation, granting, attachment or perfection of any such Liens and security interests and regardless of the validity, perfection or enforceability of such Liens and security interests of Senior Creditor. The parties hereto agree that, so long as the Senior Debt has not been Paid in Full, Subordinated Creditor shall not demand or accept the grant of any additional Liens on any asset of any Loan Party or of any subsidiary thereof to secure any Subordinated Debt unless Company has granted, or concurrently therewith grants, a Lien on such asset to secure the Senior Debt, in which case such additional Liens on any assets of Company will be subject to the priority and terms of this Agreement. Subordinated Creditor acknowledges and agrees that the Liens of Senior Creditor in the Collateral are not prohibited by the terms of the Subordinated Debt Documents (notwithstanding anything to the contrary therein) and agrees that it will not at any time contest the validity, perfection, extent, priority or enforceability of the Senior Debt, the Senior Debt Documents, or the Liens and security interests of Senior Creditor in the Collateral securing the Senior Debt.
If the Senior Creditor shall release its Liens (or such Liens are released by operation of law) on any part of the Collateral:
in connection with any Enforcement Action; or
that is subject to a Disposition permitted by both the Senior Debt Documents and the Junior Debt Documents; provided that the Liens of the Subordinated Creditor shall attach to the proceeds of any such Disposition with the same relative priority as the Liens of the Subordinated Creditor which attached to the Collateral being Disposed of); or
that is subject to a Disposition permitted by Senior Creditor during the continuance of a Senior Default; provided that (x) the proceeds thereof are applied to permanently reduce the commitments under the Senior Debt Documents, and (y) the Liens of the Subordinated Creditor shall attach to the proceeds of any such Disposition with the same relative priority as the Liens of the Subordinated Creditor which attached to the Collateral being Disposed of,
then in each case of clauses (i), (ii) and (iii) above, the Liens, if any, of the Subordinated Creditor on such part of the Collateral shall be automatically, unconditionally and simultaneously released. The Subordinated Creditor shall be deemed to have consented under the Subordinated Debt Documents to such Disposition to the same extent as the consent of the Senior Creditor. Any purchaser of any Collateral may rely on this Agreement as evidence of Subordinated Creditor’s consent to such Disposition and that such Disposition is free and clear of any Liens and security interests of Subordinated Creditor in such Collateral (and if such Disposition involves the equity interests of any subsidiary of Company, that such subsidiary is released from any guaranty or other obligation owing to Subordinated Creditor).
- Subordinated Creditor shall promptly execute and deliver to Senior Creditor such termination statements, payoff letters, releases and other termination agreements as Senior Creditor shall request to effect the release of the Liens of Subordinated Creditor in the Collateral in accordance with Section 2.6(b); provided, that the failure of Subordinated Creditor to execute such releases shall not affect the right of the purchaser of such Collateral to rely on this Agreement. Without limiting any other right or remedy available to Senior Creditor, Subordinated Creditor agrees that any amounts received by or Distributed to Subordinated Creditor pursuant to or as a result of any Lien granted in contravention of this Section shall be subject to Section 2.5. Until the Payment in Full of the Senior Debt occurs, Subordinated Creditor hereby irrevocably constitutes and appoints Senior Creditor and any officer or agent of Senior Creditor, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Subordinated Creditor or such holder or in Senior Creditor’s own name, from time to time in Senior Creditor’s discretion, for the purpose of carrying out the terms of this Section 2.6, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 2.6, including any endorsements or other instruments of transfer or release.
- Sale, Transfer or other Disposition of Subordinated Debt.
- Subordinated Creditor shall not sell, assign, pledge, Dispose of or otherwise transfer all or any portion of the Subordinated Debt or any Subordinated Debt Document without the prior written consent of Senior Creditor.
- Notwithstanding the failure of Subordinated Creditor to comply with Section 2.7(a), the subordination effected hereby shall survive any sale, assignment, pledge, Disposition or other transfer of all or any portion of the Subordinated Debt, and the terms of this Agreement shall be binding upon the successors and assigns of Subordinated Creditor, as provided in Section 9 hereof.
- Legends. Until the termination of this Agreement in accordance with Section 15 hereof, Subordinated Creditor will cause to be clearly, conspicuously and prominently inserted in each Subordinated Debt Document, as well as any renewals, extensions, refinancings or replacements thereof, the following legend or a similar reference to this Agreement:
“This [agreement][instrument] and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of September 30, 2025, by and among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation, the other Loan Parties (as defined in the Subordination Agreement) party thereto, FINAL FRONTIER, LLC, a Massachusetts limited liability company, as Subordinated Creditor, and BANK OF AMERICA, N.A.. as Senior Creditor, to the indebtedness (including interest) owed by the Loan Parties pursuant to certain Senior Debt Documents (as defined in the Subordination Agreement), and to indebtedness refinancing the indebtedness under such agreements as contemplated by the
Subordination Agreement; and each [party to this agreement][holder of this instrument], by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.”
- Obligations Hereunder Not Affected. All rights and interest of Senior Creditor hereunder, and all agreements and obligations of Subordinated Creditor and the Loan Parties hereunder, shall remain in full force and effect irrespective of:
- any lack of validity or enforceability of any document evidencing any of the Senior Debt;
- any change in the time, manner or place of payment of, or any other term of, all or any of the Senior Debt, or any other amendment or waiver of or any release or consent to departure from any of the Senior Debt Documents, in each case, to the extent not otherwise restricted under this Agreement;
- any exchange, subordination, release or non-perfection of any collateral for all or any of the Senior Debt;
- any failure of Senior Creditor to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any Senior Debt Document other than this Agreement;
- any reduction, limitation, impairment or termination of the Senior Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Loan Parties and Subordinated Creditor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuiness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Senior Debt; and
- any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Loan Parties in respect of the Senior Debt or Subordinated Debt in respect of this Agreement.
Subordinated Creditor acknowledges and agrees that Senior Creditor may in accordance with the terms of the Senior Debt Documents, without notice or demand and without affecting or impairing Subordinated Creditor’s obligations hereunder, from time to time, (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the Senior Debt and the Senior Debt Documents or any part thereof, including, without limitation, to increase or decrease the rate of interest thereon or the principal amount thereof; provided, that, notwithstanding the foregoing, without the prior written consent of the Subordinated Creditor, no amendment, modification, restatement, replacement or supplement to any Senior Debt Document shall increase the amount of the Senior Debt in excess of the Senior Debt Cap, modify the Payment Conditions, or modify the component definitions of the Payment Conditions in a manner that would restrict payment to the Subordinated Creditor; (ii) take or hold security for the payment of the Senior Debt and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Senior Creditor in its sole discretion, may determine; (iv) release and substitute one or more endorsers, warrantors, borrowers
or other obligors; and (v) exercise or refrain from exercising any rights against any Loan Party or any other Person. The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Creditor and Subordinated Creditor even if all or part of the Senior Debt or the security interests securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed.
Marshaling. Subordinated Creditor hereby waives any rights it may have under applicable law to assert the doctrine of marshaling or to otherwise require Senior Creditor to marshal any property of any Loan Party or of any other guarantor or obligor of the Senior Debt for the benefit of Subordinated Creditor.
Application of Proceeds from Sale or other Disposition of the Collateral. In the event of any Disposition (including a casualty loss or taking through eminent domain) of the Collateral, the proceeds resulting therefrom (including insurance proceeds) shall be applied to the Senior Debt in the order and manner set forth in the Senior Debt Documents until such time as the Senior Debt is Paid in Full. On and after the commencement of any Proceeding, the term “Senior Debt” for the purposes of this Section and any circumstance in which Subordinated Creditor receives proceeds of Collateral as a result of its Lien thereon (but not Unsecured Creditor Distributions), shall be deemed to include all interest, fees costs and expenses with respect to the Senior Debt without regard to whether or not such interest, fees, costs and expenses are an allowed claim in any Proceeding.
Rights Relating to Senior Creditor’s Actions with respect to the Collateral.
The Senior Creditor shall have the exclusive right to enforce rights and exercise remedies with respect to the Collateral until the Senior Debt is paid in full. In exercising rights and remedies with respect to the Collateral, the Senior Creditor may enforce the provisions of the Senior Debt Documents and exercise remedies thereunder, all in such order and in such manner as it or they may determine in the exercise of its or their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to sell or otherwise dispose of Collateral, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction. In conducting any public or private sale under the Uniform Commercial Code, the Senior Creditor shall give the Subordinated Creditor such notice of such sale as may be required by the applicable Uniform Commercial Code; provided, however, that 10 days’ notice shall be deemed to be commercially reasonable notice.
Subordinated Creditor hereby waives, to the extent permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing Senior Creditor from taking, or refraining from taking, any action with respect to all or any part of the Collateral. Without limitation of the foregoing, Subordinated Creditor hereby agrees (i) that it has no right to direct or object to the manner in which Senior Creditor applies the proceeds of such Collateral resulting from the exercise by Senior Creditor of rights and remedies under the Senior Debt Documents to the Senior Debt, (ii) that it waives any right to object to any action or inaction by Senior Creditor with respect to exercising its rights or remedies under the Senior Debt Documents or with
respect to such Collateral (including in connection with any foreclosure or enforcement of Liens in respect of such Collateral), and (iii) Senior Creditor has not assumed any obligation to act as agent for Subordinated Creditor with respect to the Collateral. Without limitation of the foregoing, Subordinated Creditor shall not object as a holder of a Lien on any of the Collateral to any proposed retention or acceptance of Collateral by Senior Creditor in full or partial satisfaction of the Senior Debt and agrees that any such retention or acceptance by Senior Creditor shall be free and clear of Subordinated Creditor’s security interests and Liens.
Insurance Proceeds. Until the Senior Debt has been Paid in Full, Senior Creditor shall have the sole and exclusive right, as against Subordinated Creditor, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of the Collateral. All proceeds of such insurance shall inure to Senior Creditor to the extent of the Senior Debt, and Subordinated Creditor shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds to the holders of Senior Debt (or any representative thereof). In the event the holders of Senior Debt (or any representative thereof), in their or its sole discretion or pursuant to agreement with any Loan Party, permit such Loan Party to utilize the proceeds of insurance, the consent of the holders of Senior Debt (or any representative thereof) shall be deemed to include the consent of Subordinated Creditor.
Possessory or Control Collateral. Senior Creditor and Subordinated Creditor each agree to hold that part of the Collateral securing both the Senior Debt and the Subordinated Debt and that is in its possession (or in the possession of its agents or bailees) or Control, to the extent that possession or Control is necessary to perfect a Lien thereon under applicable law (such possessory Collateral being referred to as the “Pledged Collateral”), as gratuitous bailee and as a non-fiduciary representative for each other party, as applicable, solely for the purpose of perfecting the security interest granted under the Senior Debt Documents or the Subordinated Debt Documents, as applicable, subject to the terms and conditions of this Section 2.14. Subordinated Creditor hereby appoints Senior Creditor as its gratuitous bailee and non-fiduciary representative for the purposes of perfecting its security interest in all Pledged Collateral in which Senior Creditor has a perfected security interest under applicable law. Senior Creditor hereby appoints Subordinated Creditor as its gratuitous bailee and non-fiduciary representative for the purposes of perfecting its security interest in all Pledged Collateral in which Subordinated Creditor has a perfected security interest under applicable law. Senior Creditor and Subordinated Creditor hereby accept such appointments pursuant to this Section 2.14. Until the Payment in Full of all Senior Debt, Subordinated Creditor agrees to promptly notify Senior Creditor of any Pledged Collateral held by Subordinated Creditor, and, immediately upon the request of Senior Creditor at any time prior to the Payment in Full of the Senior Debt, Subordinated Creditor agrees to deliver to Senior Creditor any such Pledged Collateral held by it, together with any necessary endorsements (or otherwise allow Senior Creditor to obtain possession or Control of such Pledged Collateral), subject otherwise to the terms of this Agreement. Senior Creditor shall have no obligation whatsoever to Subordinated Creditor to ensure that the Pledged Collateral is genuine or owned by any of Loan Parties or to preserve rights or benefits of any person except as expressly set forth in this Section 2.14. The duties or responsibilities of Senior Creditor under this Section 2.14 shall be limited solely to holding the Pledged Collateral as bailee and non-fiduciary representative in accordance with this Section 2.14. Senior Creditor, in acting pursuant to this Section 2.14, shall not have, or be deemed to have, a fiduciary relationship in respect of Subordinated Creditor.
Waiver of Certain Rights by Subordinated Creditor. Subordinated Creditor hereby waives all notice of the acceptance by Senior Creditor of the subordination and other provisions of this Agreement, and Subordinated Creditor expressly consents to reliance by Senior Creditor upon the subordination and other agreements as herein provided.
Modifications.
Modifications to Senior Debt Documents. Senior Creditor may, in accordance with the terms of the Senior Debt Documents, at any time and from time to time without the consent of or notice to Subordinated Creditor, without incurring liability to Subordinated Creditor and without impairing or releasing the obligations of Subordinated Creditor under this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Debt, or amend or otherwise modify in any manner the Senior Credit Agreement, any other Senior Debt Document or any other agreement, note, guaranty or other instrument evidencing or securing or otherwise relating to the Senior Debt; provided, that, notwithstanding the foregoing, without the prior written consent of the Subordinated Creditor, no amendment, modification, restatement, replacement or supplement to any Senior Debt Document shall (a) increase the principal amount (excluding any capitalized interest, fees or other amounts added thereto) of the Senior Debt to an amount in excess of the Senior Debt Cap or (b) modify the Payment Conditions, or modify the component definitions of the Payment Conditions, in a manner that would restrict required payments to the Subordinated Creditor.
Modifications to Subordinated Debt Documents. Until the Senior Debt has been Paid in Full, and notwithstanding anything to the contrary contained in the Subordinated Debt Documents, Subordinated Creditor and the Company shall not, without the prior written consent of Senior Creditor, amend, modify, restate, replace or supplement any Subordinated Debt Document the effect of which is to (i) increase the maximum principal amount of the Subordinated Debt or rate of interest on any of the Subordinated Debt (provided, however, that it is understood and agreed that the determination of the Finally Determined Obligation and the interest rate adjustment pursuant to the Subordinated Loan Agreement as in effect on the date hereof shall not be restricted by this clause (i)), (ii) shorten the dates upon which payments of principal or interest on the Subordinated Debt is due or otherwise alter the repayment terms of the Subordinated Debt in a manner adverse to any Loan Party, (iii) add any default or event of default or any covenant with respect to the Subordinated Debt or make any change to any default, event of default or covenant which would have the effect of making such default, event of default or covenant more restrictive (provided, however, the removal, loosening or making less restrictive of any covenant, default or event of default shall not be deemed prohibited hereby), (iv) change any redemption or prepayment provisions of the Subordinated Debt, (v) alter (or purport or attempt to alter) the subordination provisions with respect to the Subordinated Debt, including, without limitation, subordinating the Subordinated Debt to any other indebtedness, (vi) take any additional liens or security interests in any assets of the Company or any of its subsidiaries, or any guarantor of the Subordinated Debt (including any lien on any property of the Company or any subsidiary securing any judgment in favor of any Subordinated Creditor) over which the Senior Creditor does not already have a perfected lien or (vii) change or amend any other term of the Subordinated Debt Documents if such change or amendment would result in a default or an event of default under the Senior Debt Documents, increase the obligations of the Company, its subsidiaries or any guarantor of the Subordinated Debt or confer additional material rights on Subordinated Creditor or any other
holder of the Subordinated Debt in a manner adverse to the Company, any of its subsidiaries, any guarantor or Senior Creditor nor shall Subordinated Creditor agree to further subordinate all or any portion of the Subordinated Debt.
Representations and Warranties of Subordinated Creditor. To induce Senior Creditor to execute and deliver this Agreement, Subordinated Creditor hereby represents and warrants to Senior Creditor that as of the date hereof: (a) it is duly formed and validly existing under the laws of the jurisdiction of its organization and has the legal capacity, power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action; (b) the execution of this Agreement by Subordinated Creditor will not violate or conflict with (i) the organizational documents of Subordinated Creditor, (ii) any agreement binding upon Subordinated Creditor or (iii) any applicable law, regulation or order or require any consent or approval which has not been obtained; (c) this Agreement is the legal, valid and binding obligation of Subordinated Creditor, enforceable against Subordinated Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles; (d) Subordinated Creditor is the sole owner, beneficially and of record, of all of the Subordinated Debt Documents and the Subordinated Debt, and (e) other than the grant of Liens and security interests on the Collateral in connection with the Subordinated Debt that are subject to his Agreement, the Subordinated Creditor has no Liens or security interests on any property of any Loan Party.
Subrogation; Recovery. Subject to the Payment in Full of the Senior Debt, Subordinated Creditor shall be subrogated to the rights of Senior Creditor to receive Distributions with respect to the Senior Debt until the Senior Debt is Paid in Full. Without limiting the foregoing, Subordinated Creditor will not exercise (a) any right of subrogation that Subordinated Creditor may now or hereafter have or obtain in respect of the rights of Senior Creditor against any Loan Party or any other guarantor or obligor in respect of any of the Senior Debt or any of the Collateral or (b) any right to participate in any claim or remedy of Senior Creditor against any Loan Party or any other guarantor or obligor in respect of any of the Senior Debt or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, in each case until all of the Senior Debt has been Paid in Full. If Senior Creditor is required to disgorge any proceeds of its Collateral, payment or other amount received by Senior Creditor (whether because such proceeds, payment or other amount is invalidated, declared to be fraudulent or preferential or otherwise) or turn over or otherwise pay any amount (a “Recovery”) to the estate or to any creditor or representative of a Loan Party or any other Person, then the Senior Debt shall be reinstated (to the extent of such Recovery) as if such Senior Debt had never been paid, and to the extent Subordinated Creditor has received proceeds, payments or other amounts to which Subordinated Creditor would not have been entitled under this Agreement had such reinstatement occurred prior to receipt of such proceeds, payments or other amounts, Subordinated Creditor shall turn over such proceeds, payments or other amounts to Senior Creditor for reapplication to the Senior Debt. A Distribution made pursuant to this Agreement to Senior Creditor which otherwise would have been made to Subordinated Creditor is not, as between the Loan Parties and Subordinated Creditor, a payment by the Loan Parties to or on account of the Subordinated Debt.
Modification. Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by Senior Creditor, Subordinated Creditor and, in the case of any modifications that adversely affect the rights or duties of any Loan Party, such Loan Party, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder. Except as provided above, Senior Creditor and Subordinated Creditor shall have the right to modify or terminate this Agreement pursuant to the terms hereof at any time without notice to or approval of any Loan Party or any other Person.
Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the terms of this Agreement.
Notices. Unless otherwise specifically provided herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, telecopied (or by other electronic means) or sent by overnight courier service or certified or registered United States mail and shall be deemed to have been given (a) if delivered in person, when delivered, (b) if delivered by telecopy or other electronic means, on the date of transmission if transmitted on a business day before 4:00 p.m. (Dallas time) or, if not, on the next succeeding business day and (c) if delivered by courier or certified or registered United States mail, when received.
Notices shall be addressed as follows:
If to Subordinated Creditor:
Final Frontier, LLC
P.O. Box 2086
Andover, Massachusetts 01810
Email: kathleen@voltrek.com
Attention: Kathleen M. Connors
with a copy (which shall not constitute notice) to:
Rubin and Rudman LLP
53 State Street
Boston, Massachusetts 02109
Attention: Christine Cordes
Email: ccordes@rubinrudman.com
If to a Loan Party:
c/o Orion Energy Systems, Inc. 2210 Woodland Drive
Manitowoc, Wisconsin 54220
Telephone: (920) 785-8344 Email: pbrodin@oesx.com Attention: Per Brodin, Chief Financial Officer
with a copy (which shall not constitute notice) to:
Foley & Lardner LLP
777 E. Wisconsin Avenue
Milwaukee, WI 53202
Telephone: (414) 297-5662 (414) 319-7024
Email: sbarth@foley.com
gbishop@foley.com
Attention: Steven R. Barth; Garrett F. Bishop
If to Senior Creditor:
Bank of America, N.A.
833 E. Michigan Street,
Suite 70 I WI9-833-07-0I
Milwaukee, WI 53202
Attn: Jonah Vogt
Email: Jonah.vogt@bofa.com
; or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 8.
Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective heirs, legal representatives, successors and assigns of Senior Creditor, Subordinated Creditor and the Loan Parties. To the extent permitted under the Senior Debt Documents, Senior Creditor may, from time to time, without notice to Subordinated Creditor, assign or transfer any or all of the Senior Debt or any interest therein to any Person and, notwithstanding any such assignment or transfer, or any subsequent assignment or transfer, the Senior Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes of this Agreement, and every permitted assignee or transferee of any of the Senior Debt or of any interest therein shall, to the extent of the interest of such permitted assignee or transferee in the Senior Debt, be entitled to rely upon and be the third party beneficiary of the subordination provided under this Agreement and shall be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto. Subordinated Creditor agrees that any party that consummates a Permitted Refinancing may rely on and enforce this Agreement to the extent such party replaces Senior Creditor. Subordinated Creditor further agrees that it will, at the request of Senior Creditor, enter into an agreement, in the form of this Agreement, mutatis mutandis, with the party that consummates the Permitted Refinancing; provided, that the failure of Subordinated Creditor to execute such an agreement shall not affect such party’s right to rely on and enforce the terms of this Agreement.
Relative Rights; No Right of Loan Parties to Enforce. This Agreement shall define the relative rights of Senior Creditor and Subordinated Creditor. Each of the Loan Parties understands that this Agreement is for the sole benefit of Senior Creditor and Subordinated Creditor and their respective successors and assigns, and that none of the Loan Parties is an intended beneficiary or third party beneficiary thereof. It is understood and agreed that none of the Loan Parties or any of their Affiliates shall have any right to enforce any term, provision or agreement of this Agreement against Senior Creditor and/or Subordinated Creditor. Nothing in this Agreement shall (a) impair, as between the Loan Parties and Senior Creditor and as between the Loan Parties and Subordinated Creditor, the obligations of the Loan Parties with respect to the payment of the Senior Debt or the Subordinated Debt, as applicable, in accordance with the terms of the Senior Debt Documents or the Subordinated Debt Documents, as applicable, or (b) affect the relative rights of Senior Creditor or Subordinated Creditor with respect to any other creditors of the Loan Parties. The terms of this Agreement shall govern even if all or any part of the Senior Debt or the Liens in favor of Senior Creditor are avoided, disallowed, unperfected, set aside or otherwise invalidated in any judicial proceeding or otherwise.
Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Senior Debt Documents or Subordinated Debt Documents, the provisions of this Agreement shall control and govern.
Headings. The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions hereof.
Counterparts; Electronic Execution. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement that is an Electronic Signature transmitted by facsimile, emailed pdf. or any other
electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement.
Severability. In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement.
Continuation of Subordination; Termination of Agreement. This Agreement shall remain in full force and effect until the Payment in Full of the Senior Debt after which this Agreement shall terminate without further action on the part of the parties hereto; provided, that if any payment is, subsequent to such termination, recovered from any holder of Senior Debt, this Agreement shall be reinstated; provided, further that a Permitted Refinancing shall not be deemed to be Payment in Full of the Senior Debt.
Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Illinois, but giving effect to any applicable federal laws.
Jurisdiction; Consent to Service of Process.
Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. Federal or Illinois State court sitting in Cook County, Illinois in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 17.1. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable law.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Nonreliance; Information Concerning Financial Condition.
Each of Senior Creditor and Subordinated Creditor acknowledge that (i) each has, independently and without reliance upon, in the case of Senior Creditor, Subordinated Creditor and, in the case of Subordinated Creditor, Senior Creditor, and based on such documents and information as each has deemed appropriate, made their own credit analyses and decisions to enter into the Senior Debt Documents or Subordinated Debt Documents to which they are party and (ii) each will, independently and without reliance upon, in the case of Senior Creditor, Subordinated Creditor and, in the case of Subordinated Creditor, Senior Creditor, and based on such documents and information as they shall from time to time deem appropriate, continue to make their own credit decisions in taking or not taking any action under this Agreement or any other Senior Debt Document or Subordinated Debt Document to which they are party. Senior Creditor and Subordinated Creditor shall have no duty to disclose to the other, any information relating to any Loan Party, or any other circumstance bearing upon the risk of nonpayment of any of the Senior Debt or the Subordinated Debt, as the case may be, that is known or becomes known to any of them or any of their Affiliates.
Senior Creditor hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and of all other circumstances bearing upon the risk of nonpayment of the Senior Debt and agrees that Subordinated Creditor has and shall have no duty to advise Senior Creditor of information known to Subordinated Creditor regarding such condition or any such circumstances. In the event that Subordinated Creditor, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to Senior Creditor, then Subordinated Creditor shall not be under any obligation to (i) provide any such information to Senior Creditor on any subsequent occasion, (ii) undertake any investigation, or (iii) disclose any information which, pursuant to its commercial finance practices, Subordinated Creditor wishes to maintain confidential. Senior Creditor acknowledges and agrees that Subordinated Creditor has not made any warranties or representations with respect to the legality, validity, enforceability, collectibility or perfection of the Subordinated Debt or any Liens or security interests held in connection therewith.
Subordinated Creditor hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and of all other circumstances bearing upon the risk of nonpayment of the Subordinated Debt, and agrees that Senior Creditor has and shall have no duty to advise Subordinated Creditor of information known to Senior Creditor regarding such condition or any such circumstances. In the event that Senior Creditor, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to Subordinated Creditor, then Senior Creditor shall not be under any obligation to (i) provide any such information to Subordinated Creditor on any subsequent occasion, (ii) undertake any investigation, or (iii) disclose any information which, pursuant to its commercial finance practices, Senior Creditor wishes to maintain confidential. Subordinated Creditor acknowledges and agrees that Senior Creditor has not made any warranties or representations with respect to the legality, validity, enforceability, collectibility or perfection of the Senior Debt or any Liens or security interests held in connection therewith.
Specific Performance; Additional Remedies. Senior Creditor may demand specific performance of this Agreement and Subordinated Creditor hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by Senior Creditor. If Subordinated Creditor violates any of the terms of this Agreement, in addition to any remedies in law, equity, or otherwise, Senior Creditor may restrain such violation in any court of law and may, in its own or in any Loan Party’s name, interpose this Agreement as a defense in any action by Subordinated Creditor. Upon Senior Creditor’s written request, Subordinated Creditor will promptly take all actions which Senior Creditor may reasonably request to carry out the purposes and provisions of this Agreement.
Acknowledgment; Additional Loan Parties.
Each of the undersigned Loan Parties has read this Agreement and acknowledges, and agrees with, the provisions of this Agreement. Each of the undersigned Loan Parties agrees not to take any action that would be contrary to the provisions of this Agreement, agrees to abide by the requirements applicable to it under this Agreement and agrees that neither Senior Creditor nor Subordinated Creditor shall have any liability to any Loan Party for acting in accordance with the provisions of this Agreement. Without limiting the generality of the foregoing, each Loan Party agrees to take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as Senior Creditor and/or Subordinated Creditor may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.
Company shall cause any Person that becomes an obligor in respect of the Subordinated Debt or a party to any Subordinated Debt Document after the date hereof to execute a joinder (in form and substance satisfactory to Senior Creditor) to this Agreement. Such joinder shall be effective to bind such Person to this Agreement as a Loan Party without the execution thereof by any other Person, including without limitation, Subordinated Creditor or Senior Creditor. Notwithstanding the foregoing, any failure by Company to comply with this Section 21(b) shall not invalidate any provision of this Agreement or affect any other terms and conditions set forth in this Agreement.
NOTICE OF FINAL AGREEMENT. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, Subordinated Creditor, Company, the other Loan Parties and Senior Creditor have caused this Agreement to be executed as of the date first above written.
SUBORDINATED CREDITOR:
FINAL FRONTIER, LLC,
a Delaware limited liability company
By: /s/ Kathleen M. Connors
Name: Kathleen M. Connors
Title: Manager
Signature Page to Subordination and Intercreditor Agreement
LOAN PARTIES:
ORION ENERGY SYSTEMS, INC.
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
GREAT LAKES ENERGY TECHNOLOGIES, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
CLEAN ENERGY SOLUTIONS, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION ASSET MANAGEMENT, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION TECHNOLOGY VENTURES, LLC,
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
VOLTREK, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Treasurer and Secretary
Signature Page to Subordination and Intercreditor Agreement
SENIOR CREDITOR:
BANK OF AMERICA, N.A., as Senior Creditor
By: /s/ Jonah Vogt
Name: Jonah Vogt
Title: Senior Vice President
Signature Page to Subordination and Intercreditor Agreement
EX-10.6
Exhibit 10.6
AMENDMENT NO. 4 TO LOAN AND SECURITY Agreement
This AMENDMENT NO. 4 TO LOAN AND SECURITY Agreement (this “Amendment”) is dated effective as of September 30, 2025 and entered into by and among ORION ENERGY SYSTEMS, INC., a Wisconsin corporation (“Company”), GREAT LAKES ENERGY TECHNOLOGIES, LLC, a Wisconsin limited liability company (“Great Lakes”), CLEAN ENERGY SOLUTIONS, LLC, a Wisconsin limited liability company (“Clean Energy”), ORION ASSET MANAGEMENT, LLC, a Wisconsin limited liability company (“Asset Management”), ORION TECHNOLOGY VENTURES, LLC, a Wisconsin limited liability company (“Orion Technology”), and VOLTREK, LLC, a Massachusetts limited liability company (“Voltrek”, and together with the Company, Great Lakes, Clean Energy, Asset Management and Orion Technology, collectively, the “Borrowers”), and BANK OF AMERICA, N.A., a national banking association, as lender (“Lender”). Capitalized terms used herein but not otherwise defined shall have their respective meanings as defined in the Loan Agreement (defined below).
Recitals
WHEREAS, the Borrowers, the Guarantors and the Lender have entered into that certain Loan and Security Agreement dated as of December 29, 2020 (as amended on or prior to the date hereof and as may be further amended, restated, extended, supplemented or otherwise modified, the “Loan Agreement”);
WHEREAS, the Company, Final Frontier, LLC, a Massachusetts limited liability company (“Final Frontier”), and Kathleen M. Connors (“Ms. Connors”) are parties to that certain term sheet dated June 23, 2025 (as amended, restated, supplemented or otherwise modified from time to time on or prior to the Effective Date (defined below), the “Final Frontier Term Sheet”), pursuant to which the Company, Final Frontier and Ms. Connors mutually agreed, among other things, to certain terms and conditions applicable to the payment by the Company of certain agreed and to-be-determined earn-out obligations (the “Final Frontier Earn-Out Obligations”) owing by the Company pursuant to that certain Membership Interest Purchase Agreement, dated as of October 5, 2022, by and among Final Frontier, the members of Final Frontier party thereto and the Company (as amended, restated, supplemented or otherwise modified from time to time on or prior to the Effective Date, the “Final Frontier Purchase Agreement”);
WHEREAS, pursuant to the Final Frontier Term Sheet, the Company is (a) making (i) payments in cash to Final Frontier of a portion of the Earn-Out Obligations in the aggregate amount of $875,000 (the “2024 Earn-Out Obligation”), and (ii) a non-cash payment through the issuance of common Equity Interests in the Company with a value of approximately $1,000,000 to Final Frontier and (b) entering into that certain Senior Subordinated Loan Agreement dated as of the date hereof by and among the Company, as borrower, the other Borrowers, as guarantors, and Final Frontier, as subordinated lender (the “Final Frontier Subordinated Loan Agreement”), as well as certain related “Loan Documents” as defined therein, including, without limitation, (A) solely to the extent incorporated by reference in the Final Frontier Subordinated Loan Agreement, the Final Frontier Term Sheet, and (B) that certain Subordination and Intercreditor Agreement dated as of the date hereof among Final Frontier, the Lender and the Borrowers (the “Final Frontier Subordination Agreement”) (collectively, the “Final Frontier Subordinated Loan Documents”) pursuant to which the Company will provide for the restatement of the Final Frontier Earn-Out Obligations (other than the 2024 Earn-Out Obligations) owing to Final Frontier on a subordinated basis and provide a junior subordinated lien on the assets of the Borrowers in favor of Final Frontier, all pursuant to and in accordance with the Final Frontier Subordinated Loan Documents (the transactions under clause (a) and (b) above, collectively, the “Subject Transactions”); and
WHEREAS, the Obligors have requested that the Lender (a) consent to the Subject Transactions and (b) amendment the Loan Agreement as set forth herein in connection therewith.
AGREEMENT
NOW THEREFORE, for and in consideration of the premises and the mutual covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Borrowers and the Lender agree as follows:
- CONSENT. Subject to the satisfaction of the conditions set forth in Section 3.1 of this Agreement, and in reliance upon the representations and warranties of each Obligor made herein, the Lender hereby consents, on a limited and one-time basis, to the Borrowers entering into the Final Frontier Subordinated Loan Documents and granting the Liens on its assets set forth therein (the “Consent”). The Consent shall not be deemed a waiver of or consent to any default under any other terms, covenants or provisions of the Loan Agreement (as amended hereby) or any other Loan Document, or any obligations of the Obligors, other than as expressly set forth above. Such Consent in no manner creates a course of dealing or otherwise impairs the future ability of the Lender to declare a Default or Event of Default under or otherwise enforce the terms of the Loan Agreement (as amended hereby), other than with respect to matters specifically consented to herein. Each Obligor party hereto hereby consents, acknowledges and agrees to the Consent.
- AMENDMENTS TO THE LOAN AGREEMENT.
- Loan Agreement Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 3.1 hereof, effective on and as of the Effective Date, the Loan Agreement is hereby amended as follows:
- Section 1.1 of the Loan Agreement is hereby amended by inserting the following new defined terms therein in alphabetical position:
Amendment No. 4: that certain Amendment No. 4 to Loan and Security Agreement, by and among the Borrowers and the Lender dated as of September 30, 2025.
Amendment No. 4 Effective Date: the “Effective Date” as defined in Amendment No. 4.
Final Frontier: Final Frontier, LLC, a Massachusetts limited liability company
Final Frontier Debt: all Debt and obligations of the Borrowers owing to Final Frontier evidenced by or arising under the Final Frontier Subordinated Loan Documents in an aggregate amount of up to $ 1,387,500; provided that such maximum aggregate amount may be increased in connection with establishing the Finally Determined Obligation (as defined in the Final Frontier Subordinated Loan Agreement) to the extent (a) not in excess of $3,000,000 or (b) consented to in writing by the Lender (such consent not to be unreasonably withheld) promptly following notice of the Finally Determined Obligation Date (as defined in the Final Frontier Subordinated Loan Agreement).
Final Frontier Purchase Agreement: that certain Membership Interest Purchase Agreement, dated as of October 5, 2022, by and among Final Frontier, the members of Final Frontier party thereto, as sellers, and the Company, as buyer, as amended, restated, supplemented or otherwise modified from time to time on or prior to the Effective Date.
Final Frontier Subordinated Loan Agreement: that certain Senior Subordinated Loan Agreement dated as of the Amendment No. 4 Effective Date by and among the
Company, as borrower, the other Borrowers, as guarantors, and Final Frontier, as subordinated lender.
Final Frontier Subordinated Loan Documents: the Final Frontier Subordinated Loan Agreement and the related “Loan Documents” as defined therein, including, without limitation, (A) solely to the extent incorporated by reference in the Final Frontier Subordinated Loan Agreement, the Final Frontier Term Sheet (as defined in Amendment No. 4) and (B) the Final Frontier Subordination Agreement.
Final Frontier Subordination Agreement: that certain Subordination and Intercreditor Agreement dated as of the Amendment No. 4 Effective Date by and among Final Frontier, the Lender and the Borrowers.
- Section 1.1 of the Loan Agreement is hereby amended by (i) deleting the defined term “WAB Credit Card Program” and (ii) amending and restating the defined term “Subordinated Debt” as follows:
Subordinated Debt: the Final Frontier Debt and all other Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Lender.
- Section 10.2.1 of the Loan Agreement is hereby amended by deleting the existing clause (m) and inserting the following in replacement thereof:
(m) the Final Frontier Debt;
- Section 10.2.2 of the Loan Agreement is hereby amended by deleting the existing clause (o) and inserting the following in replacement thereof:
(o) Liens on assets of the Borrowers securing the Final Frontier Debt to the extent such Liens are subject to the Final Frontier Subordination Agreement; and
- Section 10.2.8 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
- Restrictions on Payment of Certain Debt. (a) Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any Subordinated Debt, except regularly scheduled payments of principal, interest and fees, but only to the extent (i) permitted under any subordination agreement relating to such Debt or (ii) the Payment Conditions are satisfied with respect thereto; or (b) make any prepayment or redemption, retirement, defeasance or acquisition with respect to other Borrowed Money (other than the Obligations) prior to its due date under the agreements evidencing or governing such Debt as in effect on the Closing Date (or as amended thereafter or incurred with the consent of Lender) except to the extent the Payment Conditions are satisfied with respect thereto.
- Section 11.1 of the Loan Agreement is hereby amended by (i) deleting the word “or” at the end of clause (l) thereof, (ii) replacing the period at the end of clause (m) thereof with the word “; or” and (iii) and inserting the following new clause (n) at the end thereof:
(n) Any material provision of the Final Frontier Subordination Agreement, or any other subordination agreement (including any terms of subordination) relating to any Subordinated Debt, shall for any reason be revoked or invalidated by any Person (other than the Lender), or otherwise cease to be in full force and effect, or any Person (other than the Lender) shall contest in any manner the validity or enforceability thereof or Final Frontier or any subordinated creditor shall deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by this Agreement or the Final Frontier Subordination Agreement or any other such subordination agreement.
CONDITIONS.
Effectiveness. This Amendment shall become effective upon receipt by the Lender of the following in form and substance acceptable to the Lender (the “Effective Date”):
a duly executed counterpart of this Amendment which, when taken together, bears the authorized signatures of each Obligor and the Lender;
a duly executed counterpart of the Final Frontier Subordination Agreement;
a certified copy of the fully executed Final Frontier Subordinated Loan Documents;
evidence satisfactory to Lender that, upon consummation of the Subject Transactions, Final Frontier and Ms. Connors acknowledge and agree that all outstanding Final Frontier Earnout Obligations are (i) prior to the Finally Determined Obligation Date (as defined in the Final Frontier Subordinated Loan Agreement), evidenced and governed solely by the Final Frontier Purchase Agreement, the Final Frontier Term Sheet and the Final Frontier Subordinated Loan Documents, and (ii) following the Finally Determined Obligation Date, evidenced and governed solely by the Final Frontier Subordinated Loan Documents; and
copies of such other documents and information as the Lender may reasonably request.
FEES AND EXPENSES. On or prior to the Effective Date, Borrowers shall have paid all reasonable and documented out-of-pocket expenses of Lender in connection with this Amendment and the transactions contemplated hereby (including the reasonable and documented out-of-pocket fees and expenses of counsel to Lender).
REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS. In order to induce the Lender to enter into this Amendment, each Obligor that is party to this Amendment represents and warrants to the Lender that the following statements are true, correct and complete as of the Effective Date after giving effect to this Amendment:
Power and Authority. Each Obligor has all corporate or limited liability company, as applicable, power and authority to enter into this Amendment.
Corporate Action. The execution and delivery of this Amendment and the performance of the obligations of each Obligor hereunder and under the Loan Agreement have been duly authorized by all necessary corporate or limited liability company, as applicable, action on the part of such Obligor.
No Conflict or Violation or Required Consent or Approval. The execution and delivery of this Amendment and each Obligor’s performance of this Amendment and the Loan Agreement do not (a)
require any consent or approval of any holders of Equity Interests of such Obligor, other than those already obtained, (b) contravene the Organic Documents of any Obligor, (c) violate or cause a default under any Applicable Law or Material Contract, or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Obligor.
Execution, Delivery and Enforceability. This Amendment has been duly executed and delivered by each Obligor and is the legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms, except as enforceability may be affected by applicable bankruptcy, insolvency, and similar proceedings affecting the rights of creditors generally.
No Default or Event of Default. No event or circumstance has occurred and is continuing that constitutes a Default or Event of Default.
Representations and Warranties. Each of the representations and warranties contained in the Loan Documents is and will be true and correct in all material respects, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects as of such earlier date. Each Borrower represents and warrants that there are currently no Guarantors of the Obligations and that the Borrowers signatory hereto constitute all Obligors.
Officer's Certificate. Other than with respect to Stay-Lite Lighting, Inc., the organizational documents, resolutions and incumbency certificates attached to that certain Officer's Certificate dated April 22, 2024, delivered by Borrowers to Lender, remain in full force and effect and have not been amended, modified, revoked or, in the case of the resolutions, contradicted by any other resolution.
EFFECT OF AMENDMENT; RATIFICATION. From and after the Effective Date, all references in the Loan Documents to the Loan Agreement shall mean the Loan Agreement as amended hereby. Except as expressly set forth herein, the Loan Agreement and the other Loan Documents, including the Liens granted thereunder, shall remain in full force and effect, and all terms and provisions thereof are hereby ratified and confirmed.
APPLICABLE LAW.
THIS AMENDMENT AND ALL CLAIMS, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS
EACH OBLIGOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER COOK COUNTY, ILLINOIS AND THE NORTHERN DISTRICT OF ILLINOIS, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. OF THE LOAN AGREEMENT.
NO WAIVER. The execution, delivery and effectiveness of this Amendment does not constitute a waiver of any Default or Event of Default, amend or modify any provision of any Loan Document except as expressly set forth herein or constitute a course of dealing or any other basis for altering the Obligations of any Obligor.
COMPLETE AGREEMENT. This Amendment constitutes a Loan Document and, together with all other Loan Documents, sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relating to such subject matter.
CAPTIONS; COUNTERPARTS. The headings and captions herein are intended solely for convenience of reference and shall not be used to interpret or construe the provisions hereof. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by telecopy), all of which taken together shall constitute but one and the same instrument.
REAFFIRMATION. Each Obligor hereby consents this Amendment and the transactions contemplated hereby and hereby confirms its respective pledges, grants of security interests and other obligations (including, with respect to the Guarantors, their guaranty obligations) under the Loan Agreement and each Loan Document to which such Obligor is a party, as applicable, under and subject to the terms of the Loan Agreement and the other Loan Documents, and agrees that, notwithstanding the effectiveness of the Amendment, such pledges, grants of security interests and other obligations, and the terms of the Loan Agreement and the other Loan Documents, are not impaired or affected in any manner whatsoever, except as expressly set forth herein, and shall continue to be in full force and effect and shall also secure all obligations as amended, reaffirmed, increased or otherwise modified pursuant to the Amendment.
RELEASE. For and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Obligor (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge the Lender and each of its Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Effective Date arising out of, connected with or related in any way to this Amendment, the Loan Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of the Lender contained therein, or the possession, use, operation or control of any of the assets of each Obligor, or the making of any Loans or other advances, or the management of such Loans or advances or the Collateral on or prior to the Effective Date. As to each and every claim released hereunder, each Obligor hereby represents that it has received the advice of legal counsel with regard to the releases contained herein.
[Signatures follow; remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.
BORROWERS:
ORION ENERGY SYSTEMS, INC.
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
GREAT LAKES ENERGY TECHNOLOGIES, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
CLEAN ENERGY SOLUTIONS, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION ASSET MANAGEMENT, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
ORION TECHNOLOGY VENTURES, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Chief Financial Officer
VOLTREK, LLC
By: /s/ Per Brodin
Name: Per Brodin
Title: Treasurer and Secretary
Signature Page to Amendment No. 4 to Loan and Security Agreement
| LENDER:<br><br><br><br>BANK OF AMERICA, N.A.<br><br><br><br><br><br>By: /s/ Jonah Vogt<br><br>Name: Jonah Vogt<br><br>Title: Vice President |
|---|
Signature Page to Amendment No. 4 to Loan and Security Agreement
EX-10.7
Exhibit 10.7
ORION ENERGY SYSTEMS, INC.
2210 Woodland Drive
Manitowoc, Wisconsin 54220
September 30, 2025
Confidential
Kathleen M. Connors
Final Frontier, LLC
P.O. Box 2086
Andover, MA 01810
Email: kathleen@voltrek.com
Re: Management Support Agreement (this “Agreement”)
Dear Kathleen:
Reference is hereby made to that certain Membership Interest Purchase Agreement, dated effective as of October 5, 2022, among Orion Energy Systems, Inc., a Wisconsin corporation (the “Company”), Final Frontier, LLC, a Massachusetts limited liability company (“Final Frontier”), and the members of Final Frontier party thereto, including you (the “Purchase Agreement”), pursuant to which Final Frontier sold and transferred to the Company, and the Company purchased from Final Frontier, all of the issued and outstanding limited liability company membership interests of Voltrek, LLC, a Massachusetts limited liability company (“Voltrek”). Additionally, reference is made to that binding term sheet, dated June 23, 2025, among the Company, Final Frontier and you (as amended, restated, supplemented or otherwise modified from time to time on or prior to the date hereof, the “Term Sheet”), pursuant to which the Company, Final Frontier and you mutually agreed upon terms and conditions applicable to the payment by the Company of its to-be-determined earn-out obligation (exclusive of the FY2024 Earn-Out Payment) owed to Final Frontier pursuant to the Purchase Agreement, among other things. All capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Term Sheet.
You and Final Frontier (collectively, the “Connors Parties”) agree that, during the Applicable Period (as defined below), the Connors Parties will not, directly or indirectly, (a) initiate, propose, support or otherwise participate in any offer to acquire, acquisition, merger, tender offer or other business combination transaction affecting the Company; (b) initiate, propose, support or otherwise participate in any proxy contest, proxy solicitation or shareholder proposal relating to the Company; or (c) attempt to influence or interfere or otherwise adversely affect the board of directors, management or affairs of the Company. During the Applicable Period, the Connors Parties agree to vote all shares of Company stock owned by them in favor of any recommendation of the Company’s board of directors that is submitted to a vote of the Company’s shareholders. “Applicable Period” means the period commencing on the date of the Term Sheet and ending on the earliest of the following to occur: (i) the repayment in full of the Senior Subordinated Loan; (ii) the maturity of the Senior
Subordinated Loan; or (iii) the date that the Senior Subordinated Loan is accelerated or could be accelerated but for the restrictions under the Subordination Agreement.
The Connors Parties understand and agree that: (a) the Company is relying on this Agreement in consummating the transactions set forth in the Term Sheet; (b) if any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement; (c) this Agreement, together with the Purchase Agreement, the Term Sheet and the other documents referenced therein, constitute the sole and entire agreements of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous understandings and agreements, both written and oral; (d) this Agreement shall be binding upon you and your heirs, personal representatives, successors and assigns; (e) this Agreement is irrevocable by you and may only be amended, modified or supplemented by an agreement in writing signed by each party hereto; (f) all matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law provision or rule (whether of the State of Delaware or any other jurisdiction); (g) any legal suit, action, proceeding or dispute arising out of or related to this Agreement shall be resolved in accordance with Article VIII and Section 9.07 of the Purchase Agreement; (h) this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed to be one and the same agreement; and (i) a signed copy of this Agreement delivered by email, DocuSign or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[Signature page follows]
Very truly yours,
ORION ENERGY SYSTEMS, INC.
By: /s/ Per Brodin
Per Brodin
Chief Financial Officer
Accepted and agreed as of the date first written above:
/s/ Kathleen M. Connors
Kathleen M. Connors
FINAL FRONTIER, LLC
By: /s/ Kathleen M. Connors
Kathleen M. Connors, Manager
EX-10.8
Exhibit 10.8
ORION ENERGY SYSTEMS, INC. Board Observer AND CONFIDENTIALITY Agreement
THIS BOARD OBSERVER AND CONFIDENTIALITY AGREEMENT (the “Agreement”) is made effective as of September 30, 2025 by and between Orion Energy Systems, Inc., a Wisconsin corporation (the “Company”), and Kathleen M. Connors (“Ms. Connors”).
WHEREAS, reference is hereby made to that certain Membership Interest Purchase Agreement, dated effective as of October 5, 2022 (the “Purchase Agreement”), among the Company, Ms. Connors and Final Frontier, LLC, a Massachusetts limited liability company (a company owned by Ms. Connors) (“Final Frontier”), pursuant to which Final Frontier sold and transferred to the Company, and the Company purchased from Final Frontier, all of the issued and outstanding limited liability company membership interests of Voltrek, LLC, a Massachusetts limited liability company (“Voltrek”).
WHEREAS, additional reference is made to that binding term sheet, as of dated June 23, 2025, among the Company, Final Frontier and Ms. Connors (as amended, restated, supplemented or otherwise modified from time to time on or prior to the date hereof, the “Term Sheet”), pursuant to which the Company, Final Frontier and Ms. Connors mutually agreed upon terms and conditions applicable to the payment by the Company of its to-be-determined earn-out obligations (exclusive of the FY2024 Earn-Out Payment) owed to Final Frontier pursuant to the Purchase Agreement, among other things.
WHEREAS, this Agreement is simultaneously being entered into along with a certain Senior Subordinated Note (the “Note”), which is being issued to Final Frontier pursuant to a certain Senior Subordinated Loan Agreement between the Company and Final Frontier (the “Loan Agreement”) as contemplated by the Term Sheet.
WHEREAS, pursuant to the Term Sheet, the Loan Agreement and the Note, the Company desires to provide Ms. Connors with certain observation rights regarding the Company's board of directors (the “Board”) as further described, and subject to the terms and conditions set forth, herein.
NOW, THEREFORE, the parties agree as follows:
Board Observer Rights.
As of the date hereof through the Expiration Date (as defined below), the Company hereby grants to Ms. Connors the option and right to attend the specific portions of the Company’s regularly scheduled quarterly Board meetings (including telephonic or videoconference meetings) to the extent otherwise attended by other operational non-director management members (“Qualifying Board Meetings”) in a non-voting and non-participating, passive observer only capacity (except to the extent she is otherwise attending any Qualifying Board Meeting by invitation of the Board Chair or Chief Executive Officer to report to the Board on the Company’s Voltrek Division in her capacity as an employee of the Company or Voltrek). In no event shall Ms. Connors (a) be deemed to be a member of the Board; (b) without limitation of the obligations expressly set forth in this Agreement, have or be deemed to have, or otherwise be subject to, any duties (fiduciary or otherwise) to the Company or its shareholders (aside from those contractual obligations specifically set forth herein or in the other agreements contemplated by the Term Sheet); (c) be entitled to any indemnification (or reimbursement of expenses), or director and officer insurance, rights from the Company as a director of the Company; (d) have the right to require that Ms. Connors be provided with any information (including any notices (other than notices to Ms. Connors inviting her to attend each Qualifying Board Meeting), resolutions, minutes, consents, explanatory reports or materials otherwise provided to the Board) or the right to propose any questions, actions, motions or
resolutions to the Board or any members thereof; or (e) have the obligation to respond to any questions or otherwise make any presentation to the Board in her role as an observer (except to the extent she is otherwise attending any Qualifying Board Meeting by invitation of the Board Chair or Chief Executive Officer to report to the Board on the Company’s Voltrek Division in her capacity as an employee of the Company or Voltrek). The presence of Ms. Connors shall not be required for purposes of establishing a quorum of the Board at any Qualifying Board Meeting or otherwise. For the avoidance of doubt, Ms. Connors shall not have the right to attend any meetings of the Board or of any committees of the Board that are not a Qualifying Board Meeting, unless Ms. Connors is invited to attend by the Board Chair, the applicable committee chair or the Company’s Chief Executive Officer (it being understood that any such invitation shall apply solely to such particular meeting (or portion thereof) and shall not serve as a standing invitation).
Notwithstanding anything herein to the contrary, the Company may exclude Ms. Connors from access to any Qualifying Board Meeting or any portion thereof if the Board Chair concludes, acting in good faith, that (a) such exclusion is reasonably necessary to preserve the attorney-client or work product privilege between the Company and its counsel (provided, however, that any such exclusion shall only apply to such portion of such Qualifying Board Meeting which would be required to preserve such privilege); (b) such discussion relates to the Company's relationship, contractual or otherwise, with Ms. Connors or Final Frontier or any actual or potential transactions or arrangements between or involving the Company and Ms. Connors or Final Frontier (including, but not limited to, the exercise or anticipated exercise of any rights by Ms. Connors or Final Frontier pursuant to the Term Sheet, Loan Agreement, Note or any related agreements or Ms. Connors’ employment agreement with the Company); or (c) such exclusion is necessary to avoid a conflict of interest or disclosure that is restricted by any agreement or obligation to which the Company is a party or otherwise bound. In addition, if Ms. Connors has knowledge of a conflict of interest, or a potential conflict of interest, between Ms. Connors or Final Frontier and the Company, then Ms. Connors agrees that she shall inform the Board Chair or Board Secretary of the Company, as appropriate, prior to any Board discussion of such matter or becoming aware of such conflict or potential conflict.
No Compensation or Expenses. The Company shall not compensate Ms. Connors for her Board observer role and shall not be obligated to reimburse Ms. Connors for any of her out of pocket expenses incurred in connection with Ms. Connors' attendance at any Qualifying Board Meetings as an observer; provided, that nothing herein shall release the Company of its obligation to compensate Ms. Connors in her capacity as an employee in furtherance of performing her duties under her employment agreement, which may include Ms. Connors' attendance at Qualifying Board Meetings at which she has been invited to report to the Board on the Company’s Voltrek Division in her capacity as an employee of the Company or Voltrek)
Compliance with Policies. Unless otherwise set forth herein, Ms. Connors agrees that, as a Board observer, she shall be subject to, and shall comply with, the requirements of all Company policies applicable to the Company’s directors and which are capable of applying to Ms. Connors in her role as a Board observer, including, but not limited to, the Company’s Insider Trading Policy, but excluding director stock ownership guidelines, as if Ms. Connors were a director of the Company. The Company shall conduct an “onboarding” process promptly following the date hereof to provide Ms. Connors with training with respect to such applicable Board policies.
Confidential Information.
To the extent that any information obtained by Ms. Connors in her role as a Board observer is Confidential Information (as defined below), then Ms. Connors shall treat any such Confidential Information as strictly confidential in accordance with the terms and conditions set forth in this Section 4.
As used in this Agreement, “Confidential Information” means any and all information or data relating to, or in connection with, the business and affairs of the Company, whether in verbal, visual, written, electronic or other form, together with all information discerned from, based on or relating to any of the foregoing which may be prepared or created by Ms. Connors; provided, however, that “Confidential Information” shall not include information that:
is or becomes generally available to the public, other than as a result of disclosure of such information by Ms. Connors;
is independently developed by Ms. Connors in her role as an employee of the Company or Voltrek or otherwise without use of Confidential Information otherwise provided by the Company or by any director, officer, employee, advisor or agent thereof;
becomes available to Ms. Connors at any time on a non-confidential basis from a third party (including employees of the Company or Voltrek) that is not prohibited from disclosing such information to Ms. Connors by any contractual, legal or fiduciary obligation to the Company; or
was known by Ms. Connors prior to receipt from the Company or from any director, officer, employee, advisor or agent thereof, other than to the extent such information became known as a result of a breach of any contractual (including this Agreement), legal or fiduciary obligation to the Company or to any third party.
Ms. Connors shall (a) retain all Confidential Information in strict confidence; (b) not release or disclose Confidential Information in any manner to any other person; and (c) use the Confidential Information solely in connection with (i) Ms. Connors' Board observer rights hereunder or in furtherance of her employment with the Company or Voltrek or (ii) monitoring, reviewing and analyzing Ms. Connors’ and Final Frontier’s investment in the Company (whether in the Company’s common stock or pursuant to the Note) or in enforcing Ms. Connors’ or Final Frontier’s rights under the Term Sheet, Note, Loan Agreement and/or other documents entered into in connection with any of the foregoing and not for any other purpose; provided, however, that the foregoing shall not apply to the extent Ms. Connors is compelled to disclose Confidential Information by judicial or administrative process or by requirements of law, in each case pursuant to the advice of her counsel; provided, further, however, that prior written notice of such disclosure shall be given by Ms. Connors to the Company as soon as reasonably practicable so that the Company may take action, at its expense, to prevent such disclosure and any such disclosure is limited only to that portion of the Confidential Information which such person is legally compelled to disclose pursuant to advice of counsel.
Ms. Connors acknowledges that the Confidential Information is proprietary to the Company and may include trade secrets or other business information the unauthorized disclosure of which could harm the Company. Ms. Connors will not, by virtue of the Company's disclosure of, or Ms. Conners’ use of any Confidential Information, acquire any rights with respect thereto, all of which rights (including intellectual property rights) shall remain exclusively owned by the Company.
Ms. Connors agrees that, upon the Expiration Date or otherwise upon request of the Company, she will promptly (a) return or destroy, at the Company's option, all physical materials containing or consisting of Confidential Information and all hard copies thereof in her possession or control and (b) destroy all electronically stored Confidential Information in her possession or control; provided, however, that Ms. Connors may retain any electronic or written copies of Confidential Information (i) as may be stored on her electronic records or storage system resulting from automated back-up systems, (ii) as may be required by law or (iii) as necessary to monitor, review and analyze Ms. Connors’ and Final Frontier’s investment in the Company (whether in the Company’s common stock or pursuant to the Note) or to enforce Ms. Connors’ or Final Frontier’s rights under the Term Sheet, Note, Loan Agreement and/or
other documents entered into in connection with any of the foregoing; provided, further, however, that any such retained Confidential Information shall remain subject to this Section 4.
Notices. Notices pursuant to the Agreement are to be delivered in writing,
in the case of the Company, to:
Orion Energy Systems, Inc.
2210 Woodland Drive
Manitowoc, Wisconsin 54220
Attn: Anthony L. Otten, Board Chair
and in the case of Ms. Connors, to:
Kathleen M. Connors
c/o Final Frontier, LLC
P.O. Box 2086 Andover, Massachusetts 01810
With a copy to:
Rubin and Rudman LLP
c/o Christine Cordes, Esq.
53 State Street
Boston, Massachusetts 02109 or to such other address as may be given by either party to the other party from time to time under this Section. Notices shall be deemed properly given upon personal delivery or the day following deposit by overnight carrier.
Miscellaneous Provisions. Ms. Connors understands and agrees that: (a) the Company is relying on this Agreement in consummating the transactions set forth in the Term Sheet; (b) if any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement; (c) this Agreement, together with the Purchase Agreement, the Term Sheet, the Loan Agreement, the Note and the other documents referenced therein, constitute the sole and entire agreements of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous understandings and agreements, both written and oral; (d) this Agreement shall be binding upon Ms. Connors and her heirs, personal representatives, successors and assigns; (e) this Agreement is irrevocable by Ms. Connors and may only be amended, modified or supplemented by an agreement in writing signed by each party hereto; (f) all matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice of law provision or rule (whether of the State of Delaware or any other jurisdiction); (g) any legal suit, action, proceeding or dispute arising out of, or related to, this Agreement shall be resolved in accordance with Article VIII and Section 9.07 of the Purchase Agreement; (h) this Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed to be one and the same agreement; and (i) a signed copy of this Agreement delivered by email, DocuSign or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Remedies. The Company, on the one hand, and Ms. Connors, on the other hand, each acknowledge and agree that monetary damages would not be a sufficient remedy for any breach (or threatened breach) of this Agreement by it or her and that, in the event of any breach or threatened breach hereof, (a) the non-breaching party shall have the right to seek immediate injunctive and other equitable relief, without proof of actual damages; (b) the breaching party will not plead in defense thereto that there
would be an adequate remedy at law; and (c) the breaching party agrees to waive any applicable right or requirement that a bond be posted by the non-breaching party. Such remedies will not be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies that may be available to the non-breaching party at law or in equity.
Termination. This Agreement shall immediately and automatically terminate and expire upon the Company’s repayment and satisfaction in full of the Note (the “Expiration Date”). In addition and notwithstanding the foregoing, this Agreement shall be terminable prior to the Expiration Date: (a) by Ms. Connors at any time upon written notice to the Company; (b) by the Company, if Ms. Connors joins the board of directors (or becomes a board observer) of any competitor of the Company or Voltrek (as determined in good faith by the Board Chair), whether public or private; (c) by the Company, in the event of a breach by Ms. Connors of Section 3 or 4 of this Agreement; or (d) by the Company, in the event that Ms. Connors, in the determination in good faith of the Board Chair, directly or indirectly breaches the Management Support Agreement contemplated by the Term Sheet; provided, that Sections 4, 6, 7 and 8 shall survive any such termination or expiration. Ms. Connors shall promptly inform the Company of any board role that may meet the standard set forth in clause (b) above.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.
| ORION ENERGY SYSTEMS, INC. | |
|---|---|
| By: | /s/ Per Brodin |
| Per Brodin | |
| Chief Financial Officer | |
| /s/ Kathleen M. Connors | |
| Kathleen M. Connors |
[Board Observer and Confidentiality Agreement Signature Page]