GUARANTY AGREEMENT
Execution Version
Dated as of July 28, 2022
by
SOLARA HOLDINGS GROUP LLC, a Delaware limited liability company, as Guarantor
in favor of
PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lender
In connection with that certain Term Loan Agreement, dated as of July 28, 2022, among Brightfield Cloud Services Inc., as Borrower, Pinnacle National Bank, National Association, as Lender and Administrative Agent, and Meridian Whitcomb LLC, as Collateral Agent, providing for a Senior Secured Term Loan in the principal amount of $35,000,000
TABLE OF CONTENTS
Right-click to update Table of Contents
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty"), dated as of July 28, 2022, is made by SOLARA HOLDINGS GROUP LLC, a Delaware limited liability company (the "Guarantor"), in favor of PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States (in its capacity as administrative agent, the "Administrative Agent," and in its capacity as sole lender, the "Lender"), under and in connection with that certain Term Loan Agreement, dated as of July 28, 2022 (as defined below, the "Term Loan Agreement"), among Brightfield Cloud Services Inc., a Delaware corporation ("Borrower"), the Administrative Agent, the Lender, and Meridian Whitcomb LLC, a Delaware limited liability company, as Collateral Agent (the "Collateral Agent").
RECITALS
A. Brightfield Cloud Services Inc. (the "Borrower"), a corporation duly organized and validly existing under the laws of the State of Delaware, has entered into that certain Term Loan Agreement, dated as of July 28, 2022 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Term Loan Agreement"), among the Borrower, Pinnacle National Bank, National Association, in its capacity as Lender and Administrative Agent (the "Administrative Agent"), and Meridian Whitcomb LLC, in its capacity as Collateral Agent (the "Collateral Agent"), pursuant to which the Administrative Agent, acting on behalf of the Lender, has agreed to extend a senior secured term loan facility in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) to the Borrower, on the terms and subject to the conditions set forth in the Term Loan Agreement.
B. Solara Holdings Group LLC (the "Guarantor") is a limited liability company duly organized and validly existing under the laws of the State of Delaware and is the direct parent holding company and sole member of the Borrower, holding one hundred percent (100%) of the equity interests of the Borrower. The Guarantor's principal office is located at 200 Park Avenue South, 22nd Floor, New York, New York 10003. The Guarantor's Employer Identification Number is 83-2047619. The Guarantor's registered agent in the State of Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801.
C. The Guarantor is managed by Solara Capital Partners Fund III, LP, a Delaware limited partnership (the "Sponsor"), which acquired the Borrower in October 2020 through a leveraged acquisition for an aggregate enterprise value of approximately Ninety-Five Million Dollars ($95,000,000).
D. It is a condition precedent to the funding of the term loan under the Term Loan Agreement that the Guarantor execute and deliver this Guaranty in favor of the Administrative Agent and the Lender. The Administrative Agent and the Lender would not have agreed to make the term loan available to the Borrower absent the execution and delivery of this Guaranty by the Guarantor.
E. The Guarantor will derive substantial direct and indirect economic benefit from the extensions of credit to the Borrower under the Term Loan Agreement, including without limitation by reason of the Guarantor's ownership of one hundred percent (100%) of the equity interests of the Borrower, and the Guarantor's execution and delivery of this Guaranty is in furtherance of its limited liability company purposes and is in the best interest of the Guarantor.
F. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Term Loan Agreement.
NOW, THEREFORE, in consideration of the premises set forth above and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I — DEFINITIONS
Section 1.01 — Defined Terms
As used in this Guaranty, the following terms shall have the following meanings:
"Administrative Agent" means Pinnacle National Bank, National Association, a national banking association organized under the laws of the United States, in its capacity as administrative agent under the Term Loan Agreement, together with its successors and assigns in such capacity.
"Borrower" means Brightfield Cloud Services Inc., a corporation duly organized and validly existing under the laws of the State of Delaware, with its principal executive offices and headquarters located at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731, together with its successors and permitted assigns.
"Collateral Agent" means Meridian Whitcomb LLC, a Delaware limited liability company, in its capacity as collateral agent under the Security Agreement, for the benefit of the Administrative Agent and the Lender, together with its successors and assigns in such capacity.
"Guaranteed Obligations" has the meaning set forth in Section 2.01 of this Guaranty.
"Guarantor" means Solara Holdings Group LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware, together with its successors and permitted assigns.
"Guaranty" means this Guaranty Agreement, dated as of July 28, 2022, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Lender" means Pinnacle National Bank, National Association, a national banking association organized under the laws of the United States, in its capacity as sole lender under the Term Loan Agreement, together with its successors and assigns in such capacity.
"Loan Documents" means, collectively, the Term Loan Agreement, this Guaranty, the Security Agreement, and all other documents, instruments, certificates, and agreements executed and delivered in connection therewith or contemplated thereby, in each case as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Security Agreement" means that certain Security Agreement, dated as of July 28, 2022, executed and delivered by the Borrower in favor of the Collateral Agent, for the benefit of the Administrative Agent and the Lender, granting to the Collateral Agent a security interest in substantially all of the assets of the Borrower, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Term Loan Agreement" means that certain Term Loan Agreement, dated as of July 28, 2022, among the Borrower, the Administrative Agent, the Lender, and the Collateral Agent, providing for a senior secured term loan in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000), as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
Section 1.02 — Rules of Interpretation
Unless the context of this Guaranty otherwise requires: (a) words importing any gender include the other genders; (b) words importing the singular number include the plural number and vice versa; (c) the word "including" and words of similar import shall mean "including, without limitation," and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it; (d) references herein to any Article, Section, Exhibit, or Schedule are references to Articles, Sections, Exhibits, or Schedules of or to this Guaranty unless otherwise specified; (e) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Guaranty; (f) references to any document, instrument, or agreement (including this Guaranty) shall be deemed to include references to such document, instrument, or agreement as amended, restated, supplemented, or otherwise modified from time to time, unless otherwise stated; (g) references to any person shall include such person's successors and permitted assigns; (h) article and section headings herein are included for convenience of reference only and shall not affect the interpretation or construction of this Guaranty; and (i) this Guaranty shall be construed in accordance with, and governed by, the internal laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations Law, but without regard to any other conflicts of law principles that would require the application of the laws of any other jurisdiction).
ARTICLE II — GUARANTY
Section 2.01 — Guaranty of Obligations
The Guarantor hereby unconditionally and irrevocably guarantees to the Administrative Agent and the Lender, as a primary obligor and not merely as surety, the due and punctual payment in full when due (whether at the stated maturity, by required prepayment, by acceleration, by demand, or otherwise) and the performance of all obligations, liabilities, and indebtedness of the Borrower to the Administrative Agent and the Lender arising under or in connection with the Term Loan Agreement and each of the other Loan Documents (all such obligations, liabilities, and indebtedness being hereinafter referred to collectively as the "Guaranteed Obligations"), including, without limitation, each of the following:
(a) the full and indefeasible payment of the aggregate principal amount of the term loan in the amount of Thirty-Five Million Dollars ($35,000,000), whether at the stated maturity date, upon acceleration, or otherwise, together with all mandatory and voluntary prepayments of principal required to be made by the Borrower under the Term Loan Agreement;
(b) all accrued and unpaid interest on the term loan, including interest computed at the Adjusted Term SOFR Rate plus three hundred fifty (350) basis points per annum (with a SOFR floor of fifty (50) basis points), and any additional interest at the default rate as provided in the Term Loan Agreement (being an additional two hundred (200) basis points per annum above the otherwise applicable interest rate), in each case whether such interest accrues before or after the maturity date, before or after the filing of any petition in bankruptcy, and whether or not a claim for post-filing interest is allowed in such proceeding;
(c) all fees due and payable by the Borrower under the Loan Documents, including, without limitation, (i) the upfront fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000) (being one percent (1.00%) of the aggregate commitment amount), (ii) the annual administrative agent fee in the amount of Twenty-Five Thousand Dollars ($25,000) payable to the Administrative Agent, and (iii) any and all other fees, charges, or commissions owing by the Borrower under or in connection with any of the Loan Documents;
(d) all costs, expenses (including, without limitation, all reasonable and documented out-of-pocket fees, charges, and disbursements of counsel retained by the Administrative Agent or the Lender), indemnification obligations, reimbursement obligations, and all other amounts of whatever nature payable by the Borrower to the Administrative Agent or the Lender under or in connection with any of the Loan Documents;
(e) all obligations of the Borrower arising upon or as a result of the acceleration of the Guaranteed Obligations, whether by reason of the occurrence and continuance of an Event of Default under the Term Loan Agreement or otherwise, including all obligations in respect of any breakage costs, prepayment premiums, yield maintenance amounts, or make-whole amounts, if applicable;
(f) all obligations of the Borrower arising after the commencement of any bankruptcy case or insolvency proceeding with respect to the Borrower under the Bankruptcy Code (Title 11, United States Code) or any other applicable federal, state, or foreign bankruptcy, insolvency, receivership, or similar law, whether or not such obligations constitute allowable claims against the Borrower in any such bankruptcy case or insolvency proceeding; and
(g) all renewals, extensions, modifications, amendments, and increases of or to any of the foregoing.
No Cap. The Guaranteed Obligations are not subject to any cap, limitation, ceiling, or maximum amount. The Guarantor provides full recourse to the entirety of its assets for the payment and performance of the Guaranteed Obligations. There shall be no diminution or limitation of the Guarantor's obligations hereunder by reason of any inadequacy or failure of any security, collateral, or other credit support at any time held by or available to the Administrative Agent or the Lender. The liability of the Guarantor under this Guaranty shall be unlimited.
Section 2.02 — Guaranty of Payment and Not of Collection
This Guaranty is a guaranty of payment and performance and not merely a guaranty of collection. The obligations of the Guarantor hereunder are independent of the obligations of the Borrower, and a separate action or actions may be brought and prosecuted against the Guarantor regardless of whether any action is brought or prosecuted against the Borrower or any other person, or whether the Borrower or any other person is joined in any such action or actions. The Administrative Agent and the Lender shall not be required, as a condition to the Guarantor's obligations hereunder or prior to making any demand upon or seeking any payment from the Guarantor, to:
(a) make any demand upon, or pursue or exhaust any of its rights or remedies against, the Borrower with respect to the payment or performance of any of the Guaranteed Obligations;
(b) make any demand upon, or pursue or exhaust any of its rights or remedies against, any other guarantor, surety, co-signer, or other person at any time liable for or obligated with respect to the payment or performance of any of the Guaranteed Obligations;
(c) commence any action, suit, or proceeding against the Borrower or any other person in any court or before any tribunal, whether judicial, administrative, or arbitral, or pursue any right or remedy whatsoever against the Borrower or any other person;
(d) pursue, realize upon, exhaust, or enforce any rights or remedies with respect to any collateral, security, lien, or encumbrance at any time securing or purporting to secure any of the Guaranteed Obligations, whether held pursuant to the Security Agreement or otherwise, or make any effort to realize upon or liquidate any such collateral or security; or
(e) pursue any other remedy or enforce any other right available to the Administrative Agent or the Lender under the Loan Documents, at law, in equity, or otherwise.
Section 2.03 — Continuing Guaranty
This Guaranty is a continuing guaranty and shall remain in full force and effect until (a) the indefeasible payment in full, in cash, of all Guaranteed Obligations (other than contingent indemnification obligations for which no claim has been asserted) and (b) the irrevocable termination of all commitments and obligations of the Lender to extend credit under the Term Loan Agreement. For reference, the stated maturity date of the term loan under the Term Loan Agreement is August 12, 2027, being a date that is five (5) years after the initial funding date of August 12, 2022. Notwithstanding the foregoing, this Guaranty shall continue to be effective and enforceable, and the obligations of the Guarantor hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended, or terminated, and the Guarantor shall not be released from liability hereunder, if any, by reason of the expiration or other termination of any such commitment, except to the extent that all Guaranteed Obligations are indefeasibly paid in full, in cash, as aforesaid.
Section 2.04 — Unconditional Nature of Guaranty
The obligations of the Guarantor under this Guaranty are unconditional and absolute, regardless of, and shall not be released, diminished, impaired, reduced, or affected by, any of the following circumstances or events (and irrespective of whether any such circumstance or event might otherwise constitute a legal or equitable defense available to, or discharge of, the Guarantor):
(a) the invalidity, irregularity, illegality, or unenforceability of the Term Loan Agreement, the Security Agreement, or any other Loan Document, or any provision of any thereof, for any reason whatsoever;
(b) any amendment, modification, supplement, renewal, extension, rearrangement, increase, acceleration, or waiver of or to any of the Loan Documents, or of any of the Guaranteed Obligations, whether or not notice thereof is given to or consent thereto is obtained from the Guarantor;
(c) any change in the corporate existence, limited liability company existence, organizational structure, or ownership of the Borrower, including without limitation any merger, consolidation, conversion, or other reorganization of the Borrower, or any sale, transfer, or other disposition of all or substantially all of the assets of the Borrower;
(d) any insolvency, bankruptcy, reorganization, arrangement, adjustment, composition, assignment for the benefit of creditors, receivership, liquidation, winding-up, dissolution, or similar proceeding, whether voluntary or involuntary, pending or threatened, commenced by or against the Borrower, or any action taken with respect to this Guaranty or any of the other Loan Documents by any trustee, receiver, or similar officer in any such proceeding;
(e) the existence of any claim, set-off, deduction, defense, reduction, or counterclaim that the Borrower may have at any time against the Administrative Agent, the Lender, the Collateral Agent, or any other person, whether in connection with the transactions contemplated by the Loan Documents or any unrelated transaction, provided that nothing herein shall prevent the assertion of any such claim by way of counterclaim to the extent such claim relates directly to a breach by the Administrative Agent or Lender of its obligations under the Loan Documents;
(f) any other circumstance (including, without limitation, any statute of limitations or any act or omission of the Administrative Agent or the Lender), whether or not similar to any of the foregoing, that might otherwise constitute a legal or equitable discharge, defense, or release of the obligations of a guarantor or surety.
Section 2.05 — Reinstatement
If at any time any payment of the principal of or interest on the term loan, or any other amount paid to the Administrative Agent or the Lender on account of the Guaranteed Obligations, is rescinded or must otherwise be restored or returned by the Administrative Agent or the Lender upon the insolvency, bankruptcy, reorganization, dissolution, or liquidation of the Borrower or the Guarantor, or upon or as a result of the appointment of a receiver, intervenor, conservator, or trustee for the Borrower or the Guarantor, or for a substantial part of the property of the Borrower or the Guarantor, or for any other reason, the obligations of the Guarantor under this Guaranty with respect to such payment shall be reinstated and restored and shall exist as though such payment had not been made, and the Guarantor shall indemnify the Administrative Agent and the Lender against, and hold each of them harmless from, all reasonable costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred by the Administrative Agent or the Lender in connection with any such rescission, restoration, or return. The provisions of this Section 2.05 shall survive the termination of this Guaranty and any satisfaction and discharge of the Borrower by virtue of any payment, court order, or any federal or state law.
ARTICLE III — WAIVERS
Section 3.01 — Waiver of Suretyship Defenses
The Guarantor hereby waives, to the fullest extent permitted by applicable law, each of the following:
(a) any defense arising by reason of any disability, lack of authority, or other defense of the Borrower, including, without limitation, any defense based upon the application of the doctrine of impracticability or impossibility of performance, frustration of purpose, illegality, force majeure, or the cessation or limitation of the liability of the Borrower from any cause whatsoever (other than the indefeasible payment in full of all Guaranteed Obligations);
(b) any defense based upon the cessation from any cause whatsoever (other than the indefeasible payment in full of all Guaranteed Obligations) of the liability of the Borrower, whether by operation of law, by reason of any voluntary act or involuntary occurrence, or otherwise;
(c) any right to require the Administrative Agent or the Lender to (i) proceed against the Borrower, (ii) proceed against or exhaust any security held from the Borrower or any other person, (iii) pursue any other remedy in the Administrative Agent's or Lender's power whatsoever, or (iv) make any presentment, demand, or protest, or give notice of nonpayment, nonperformance, or any other notice to any person, including notice to the Borrower or the Guarantor;
(d) any defense based upon an election of remedies by the Administrative Agent or the Lender, including, without limitation, an election to proceed by way of non-judicial foreclosure, which election destroys, diminishes, or otherwise adversely affects the Guarantor's right of subrogation, right to proceed against the Borrower for reimbursement, or any other right or remedy of the Guarantor;
(e) any defense arising from any act or omission of the Administrative Agent or the Lender that directly or indirectly results in or aids the discharge or release of the Borrower, any collateral securing the Guaranteed Obligations, or any other guarantor or co-obligor, by operation of law or otherwise, or that in any manner results in or contributes to the impairment, reduction, or diminishment of the value of any such collateral;
(f) the benefit of any statute of limitations affecting the Guarantor's liability hereunder, or the enforcement thereof, to the extent permitted by applicable law, and any act that shall defer or delay, or shall have the effect of deferring or delaying, the operation of any applicable statute of limitations.
Section 3.02 — Waiver of Notices
The Guarantor hereby waives any right to or requirement of notice of or with respect to each of the following, to the fullest extent permitted by applicable law:
(a) the acceptance of this Guaranty by the Administrative Agent or the Lender;
(b) any action taken or omitted by the Administrative Agent or the Lender in reliance hereon;
(c) presentment, demand for payment, protest, and notice of nonpayment, nonperformance, protest, dishonor, and any other notice with respect to any of the Guaranteed Obligations or any collateral securing the Guaranteed Obligations;
(d) any default or Event of Default under the Term Loan Agreement or any other Loan Document, or any acceleration of the maturity of the Guaranteed Obligations;
(e) any other notice to which the Guarantor might otherwise be entitled under applicable law, including, without limitation, notice of the existence, creation, or incurrence of any new or additional indebtedness or obligation, or of any action or non-action on the part of the Borrower, the Administrative Agent, the Lender, the Collateral Agent, or any other person whomsoever, in connection with any obligation or evidence of indebtedness held by or on behalf of the Administrative Agent or the Lender.
Section 3.03 — Waiver of Subrogation
Until the Guaranteed Obligations are indefeasibly paid in full, in cash, and all commitments under the Term Loan Agreement are irrevocably terminated, the Guarantor hereby irrevocably waives any and all rights of subrogation, reimbursement, contribution, indemnity, exoneration, or any other claim, right, or remedy that the Guarantor may now or hereafter have against the Borrower, any other guarantor, or any other person, or against any collateral or security, arising by reason of any payment or performance made by the Guarantor under this Guaranty, whether by contract, by statute (including, without limitation, any rights arising under Sections 509 and 547 of the Bankruptcy Code), at common law, in equity, or otherwise. The Guarantor acknowledges that it has been advised by counsel as to the nature and extent of the waiver contained in this Section 3.03 and confirms that the waiver is being made voluntarily, knowingly, and with full understanding of its implications.
Section 3.04 — Waiver of Right to Revoke Guaranty
The Guarantor hereby irrevocably waives any right to revoke, terminate, or rescind this Guaranty, and acknowledges that this Guaranty shall continue to be effective, binding, and enforceable, and may not be revoked, terminated, or rescinded by the Guarantor, until the earlier of (a) the indefeasible payment in full, in cash, of all Guaranteed Obligations (other than contingent indemnification obligations for which no claim has been asserted) and (b) the express written release of the Guarantor by the Administrative Agent. This waiver is made for the benefit of, and is enforceable by, the Administrative Agent and the Lender, and shall not be subject to any condition or contingency.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Administrative Agent and the Lender as follows, in each case as of the date hereof and as of the date of the initial funding of the term loan under the Term Loan Agreement:
Section 4.01 — Organization and Good Standing
The Guarantor is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Guarantor has the full limited liability company power and authority to own its properties and to conduct its business as presently conducted. The Guarantor is duly qualified and authorized to do business and is in good standing as a foreign limited liability company in each jurisdiction where the ownership, leasing, or operation of its property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on the Guarantor's ability to perform its obligations under this Guaranty. The Guarantor's registered agent in the State of Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801.
Section 4.02 — Authority and Authorization
The Guarantor has full limited liability company power and authority to execute, deliver, and perform this Guaranty and to consummate the transactions contemplated hereby. The execution, delivery, and performance by the Guarantor of this Guaranty have been duly authorized by all necessary limited liability company action on the part of the Guarantor, including, without limitation, all requisite authorization by Solara Capital Partners Fund III, LP, a Delaware limited partnership, in its capacity as the manager of the Guarantor. No further corporate, limited liability company, partnership, or other organizational action or proceeding on the part of the Guarantor is necessary for the execution, delivery, and performance by the Guarantor of this Guaranty.
Section 4.03 — Enforceability
This Guaranty has been duly executed and delivered by the Guarantor and constitutes the legal, valid, and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws of general applicability affecting the enforcement of creditors' rights generally and to general equitable principles (whether enforcement is sought by proceedings in equity or at law).
Section 4.04 — No Conflicts
The execution, delivery, and performance by the Guarantor of this Guaranty and the consummation of the transactions contemplated hereby do not and will not: (a) violate, conflict with, or result in any breach of any provision of the Certificate of Formation or Limited Liability Company Agreement of the Guarantor; (b) violate, conflict with, or result in any breach of any applicable law, rule, regulation, order, writ, judgment, injunction, decree, or award of any governmental authority applicable to the Guarantor or its properties or assets; or (c) result in any breach of, or constitute a default (or an event that, with the giving of notice or lapse of time, or both, would constitute a default) under, or give rise to any right of termination, amendment, acceleration, or cancellation of, any material agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination, or award to which the Guarantor is a party or by which the Guarantor or any of its assets or properties may be bound or affected.
Section 4.05 — No Consents Required
No consent, approval, authorization, order, registration, filing, or qualification of or with any court, governmental authority, regulatory body, or any other person or entity is required for the execution, delivery, and performance by the Guarantor of this Guaranty or for the consummation of the transactions contemplated hereby, other than those that have been duly obtained or made and are in full force and effect.
Section 4.06 — Ownership of Borrower
The Guarantor is the sole member and direct holder of one hundred percent (100%) of the issued and outstanding equity interests of the Borrower. Such equity interests are owned free and clear of all liens, encumbrances, security interests, and claims, other than as permitted by the Loan Documents. The Guarantor has not granted any options, warrants, or other rights to acquire any equity interests in the Borrower, other than as permitted by the Loan Documents.
Section 4.07 — No Litigation
There is no action, suit, proceeding, investigation, or arbitration pending or, to the knowledge of the Guarantor, threatened in writing before or by any court, governmental authority, regulatory body, or arbitral tribunal against or affecting the Guarantor or any of its properties or assets that could reasonably be expected to have a material adverse effect on the Guarantor's ability to execute, deliver, or perform its obligations under this Guaranty. The Guarantor is not in default under any order, writ, judgment, injunction, decree, determination, or award of any governmental authority that could reasonably be expected to have such a material adverse effect.
Section 4.08 — Solvency
The Guarantor is, and after giving effect to the execution, delivery, and performance of this Guaranty and the incurrence of the obligations hereunder, will be, solvent. Without limiting the generality of the foregoing: (a) the fair salable value of the Guarantor's assets exceeds and will, after giving effect to the transactions contemplated hereby, exceed the Guarantor's total liabilities (including contingent liabilities arising under this Guaranty); (b) the Guarantor is able to pay its debts as they become due and payable in the ordinary course of business; and (c) the Guarantor does not have, and does not intend to incur, debts or liabilities beyond its ability to pay as such debts and liabilities become due and payable. In making the representations contained in this Section 4.08, the Guarantor has taken into account the value of its interest in the Borrower and all reasonably expected income from such interest.
Section 4.09 — Benefit
The Guarantor acknowledges and confirms that it will derive substantial direct and indirect economic benefit from the extensions of credit to the Borrower under the Term Loan Agreement, including by reason of the Guarantor's ownership of one hundred percent (100%) of the equity interests of the Borrower and the use of the proceeds of the term loan by the Borrower in furtherance of the Borrower's business operations. The Guarantor further acknowledges that this Guaranty is being executed and delivered in consideration of such direct and indirect benefits and in consideration of the Administrative Agent's and Lender's agreement to extend credit to the Borrower under the Term Loan Agreement, and that the Administrative Agent and the Lender would not have agreed to make the term loan available to the Borrower without the execution and delivery of this Guaranty.
ARTICLE V — COVENANTS
The Guarantor hereby covenants and agrees with the Administrative Agent and the Lender as follows:
Section 5.01 — Preservation of Existence
The Guarantor shall preserve and maintain its existence, rights, franchises, licenses, and privileges as a limited liability company under the laws of the State of Delaware, and shall not dissolve, liquidate, wind-up, terminate, merge with, or consolidate into any other entity, or sell, transfer, assign, or otherwise dispose of all or substantially all of its assets, without the prior written consent of the Administrative Agent. The Guarantor shall maintain its good standing and qualification to do business in each jurisdiction where such qualification is required, except where the failure to do so could not reasonably be expected to have a material adverse effect on the Guarantor's ability to perform its obligations under this Guaranty.
Section 5.02 — Ownership of Borrower
The Guarantor shall, at all times during the term of this Guaranty, directly or indirectly own and control not less than fifty-one percent (51%) of the issued and outstanding voting equity interests of the Borrower, which threshold is consistent with the change of control provisions set forth in the Term Loan Agreement. Any failure by the Guarantor to maintain such minimum ownership level shall constitute an immediate Event of Default under the Term Loan Agreement and a breach of this Guaranty. The Guarantor shall not sell, transfer, assign, pledge, encumber, or otherwise dispose of any equity interests in the Borrower in a manner that would result in the Guarantor owning or controlling less than fifty-one percent (51%) of the voting equity of the Borrower without the prior written consent of the Administrative Agent.
Section 5.03 — Compliance with Laws
The Guarantor shall comply in all material respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees, or awards of any governmental authority applicable to the Guarantor or its properties, assets, or business, the failure to comply with which could reasonably be expected to have a material adverse effect on the Guarantor's ability to perform its obligations under this Guaranty.
Section 5.04 — Notices
The Guarantor shall promptly, and in any event within five (5) business days after the Guarantor becomes aware thereof, notify the Administrative Agent in writing of:
(a) any event, occurrence, condition, or circumstance that has occurred or exists and that could reasonably be expected to have a material adverse effect on the Guarantor's ability to perform its obligations under this Guaranty or on the value, validity, or enforceability of this Guaranty;
(b) any litigation, arbitration, proceeding, or investigation commenced or threatened against the Guarantor before any court, governmental authority, regulatory body, or arbitral tribunal that could reasonably be expected to have such a material adverse effect, together with a description of the nature and status thereof and the actions being taken by the Guarantor with respect thereto;
(c) any change in the Guarantor's Certificate of Formation, Limited Liability Company Agreement, or other organizational documents, any change in the Guarantor's principal office address or the identity of its authorized representative, and any change in the Guarantor's manager or managing member.
Section 5.05 — Further Assurances
The Guarantor shall, at its own cost and expense, promptly execute and deliver to the Administrative Agent such additional documents, instruments, agreements, and certificates as the Administrative Agent may from time to time reasonably request to carry out the purposes and intent of this Guaranty, to evidence the Guarantor's obligations hereunder, or to perfect or protect the rights and remedies of the Administrative Agent and the Lender under this Guaranty, including, without limitation, any amendments, supplements, or restatements of this Guaranty and any financing statements, consents, waivers, or other instruments as may be necessary or desirable. The Guarantor shall cooperate fully with the Administrative Agent in connection with any actions taken or to be taken pursuant to this Guaranty.
ARTICLE VI — SUBORDINATION
Section 6.01 — Subordination of Guarantor Claims
Any indebtedness, liabilities, or obligations of the Borrower now or hereafter owing to the Guarantor, whether for loans, advances, equity contributions, management fees, intercompany charges, or otherwise, and any interest thereon (collectively, "Guarantor Claims"), are hereby subordinated in right of payment to the prior indefeasible payment in full, in cash, of all Guaranteed Obligations. Until all Guaranteed Obligations have been indefeasibly paid in full, in cash, and all commitments under the Term Loan Agreement have been irrevocably terminated, the Guarantor shall not demand, accept, or receive, and the Borrower shall not make, any payment of or on account of any Guarantor Claims, except to the extent expressly permitted by the Term Loan Agreement. If the Guarantor receives any payment on account of any Guarantor Claim in violation of this Section 6.01, the Guarantor shall immediately deliver such payment or the proceeds thereof to the Administrative Agent, in the form received (with any necessary endorsements), for application to the Guaranteed Obligations in the order and manner specified in the Term Loan Agreement, and until so delivered, such payment or proceeds shall be held in trust by the Guarantor for the benefit of the Administrative Agent and the Lender.
Section 6.02 — Assignment of Claims in Bankruptcy
In the event of any insolvency, bankruptcy, receivership, liquidation, reorganization, arrangement, composition, or other similar proceeding relating to the Borrower or its property or assets, the Guarantor agrees that it shall not prove or file any claim in competition with the Administrative Agent or the Lender in respect of any Guarantor Claim or any obligation subordinated under Section 6.01, unless and until all Guaranteed Obligations have been indefeasibly paid in full, in cash. The Guarantor hereby irrevocably assigns to the Administrative Agent and the Lender all of its rights, title, and interest to prove, file, and vote any such claim in any such proceeding, subject to and contingent upon the prior indefeasible payment in full of all Guaranteed Obligations. The Guarantor agrees to execute and deliver to the Administrative Agent all powers of attorney, proofs of claim, assignments of claim, and other instruments as may be reasonably requested by the Administrative Agent in furtherance of the foregoing.
ARTICLE VII — REMEDIES
Section 7.01 — Rights of Administrative Agent and Lender
Upon the occurrence of any default in the payment or performance of any Guaranteed Obligation (whether resulting from the occurrence of an Event of Default under the Term Loan Agreement or otherwise), the Administrative Agent or the Lender may, in its sole and absolute discretion, proceed directly and at once, without notice, against the Guarantor to collect and recover the full amount, or any portion, of the Guaranteed Obligations then due and payable, without first proceeding against the Borrower, any other guarantor, or any other person liable therefor, and without first resorting to, pursuing, exhausting, or realizing upon any collateral, security, or other credit support at any time securing or available to secure the Guaranteed Obligations. The Administrative Agent and the Lender shall have the right to enforce this Guaranty independently of, or concurrently and jointly with, or successively with, any right or remedy available to the Administrative Agent or the Lender under the Term Loan Agreement, the Security Agreement, or any other Loan Document, at law, in equity, or otherwise, and the exercise or enforcement of any one such right or remedy shall not be deemed to be an election of remedies or a waiver of any other right or remedy.
Section 7.02 — Application of Payments
Any amounts received by the Administrative Agent or the Lender from the Guarantor under or in connection with this Guaranty shall be applied in the order and manner specified in the Term Loan Agreement for the application of payments, including, without limitation, first to the payment of all costs, expenses, and indemnification obligations then due and payable, second to the payment of all accrued and unpaid interest and fees, and third to the payment of the outstanding principal balance of the term loan. In the absence of a specific direction from the Administrative Agent, payments shall be applied in such order and manner as the Administrative Agent, in its reasonable discretion, shall determine. Nothing in this Section 7.02 shall be deemed to limit or modify the provisions of the Term Loan Agreement governing the application of payments.
Section 7.03 — Set-Off
In addition to any rights and remedies of the Administrative Agent and the Lender provided by law, the Administrative Agent and the Lender are hereby authorized, at any time and from time to time following the occurrence and during the continuance of any default in the payment or performance of any Guaranteed Obligation, without advance notice to the Guarantor (any such notice being expressly waived by the Guarantor to the fullest extent permitted by applicable law), to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by the Administrative Agent or the Lender to or for the credit or the account of the Guarantor, against any or all of the obligations of the Guarantor now or hereafter existing under this Guaranty, irrespective of whether the Administrative Agent or the Lender shall have made any demand under this Guaranty and although such obligations of the Guarantor may be contingent or unmatured or are owed to a branch, office, or affiliate of the Administrative Agent or the Lender different from the branch, office, or affiliate holding such deposit or obligated on such indebtedness. The rights of the Administrative Agent and the Lender under this Section 7.03 are in addition to other rights and remedies (including other rights of setoff) that the Administrative Agent and the Lender may have under applicable law or contract.
ARTICLE VIII — MISCELLANEOUS
Section 8.01 — Amendments and Waivers
No amendment, modification, supplement, termination, consent, or waiver of any provision of this Guaranty, and no consent to any departure by the Guarantor from the terms hereof, shall be effective unless the same shall be in writing and signed by the Guarantor and the Administrative Agent, and any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure or delay by the Administrative Agent or the Lender in exercising any right, remedy, power, or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. The rights and remedies of the Administrative Agent and the Lender provided herein and in the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law.
Section 8.02 — Notices
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and shall be (a) delivered by hand, (b) sent by nationally recognized overnight courier service, (c) sent by United States registered or certified mail, return receipt requested, postage prepaid, or (d) transmitted by electronic mail (with confirmation of receipt), addressed as follows:
If to the Guarantor:
Solara Holdings Group LLC 200 Park Avenue South, 22nd Floor New York, New York 10003
Attention: David Kessler, Managing Director
Email: dkessler@solaracapital.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP One Liberty Plaza, 42nd Floor New York, New York 10006
Attention: Ian Blackwood
Email: iblackwood@calderwoodharkness.com
If to the Administrative Agent / Lender:
Pinnacle National Bank, National Association 600 Lexington Avenue, 35th Floor New York, New York 10022
Attention: Thomas Whitford, Senior Vice President, Technology Lending Group
Email: twhitford@pinnaclenb.com
with a copy (which shall not constitute notice) to:
Wainwright & Pryor LLP 51 West 52nd Street New York, New York 10019
Attention: Gregory Fontaine
Email: gfontaine@wainwrightpryor.com
All such notices and communications shall be deemed to have been duly given or made when delivered by hand, one (1) business day after being deposited with a nationally recognized overnight courier service, three (3) business days after being deposited in the United States mail as aforesaid, or when transmitted by electronic mail with confirmation of receipt during normal business hours (or, if not during normal business hours, the next business day). Any party hereto may change its address for notices hereunder by giving written notice of such change to the other parties in the manner specified in this Section 8.02.
Section 8.03 — Governing Law
This Guaranty and any claims, controversies, disputes, or causes of action (whether in contract, tort, or otherwise) based upon, arising out of, or relating to this Guaranty and the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to conflicts of law principles thereof (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, which the parties agree shall apply to this Guaranty).
Section 8.04 — Submission to Jurisdiction; Venue
The Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan, the County of New York, and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in connection with any action, suit, or proceeding arising out of, based upon, or relating to this Guaranty or any other Loan Document, 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, suit, or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such United States federal court. Each of the parties hereto agrees that a final judgment in any such action, suit, 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. The Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any action, suit, or proceeding arising out of or relating to this Guaranty or any other Loan Document in any court referred to in this Section 8.04. The Guarantor hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action, suit, or proceeding in any such court.
Section 8.05 — Waiver of Jury Trial
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION, ACTION, SUIT, OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 GUARANTY AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.05.
Section 8.06 — Successors and Assigns
This Guaranty shall be binding upon the Guarantor and its successors, heirs, legal representatives, and assigns, and shall inure to the benefit of the Administrative Agent, the Lender, and their respective successors, transferees, and assigns. Without limiting the generality of the foregoing, the Administrative Agent and the Lender may assign or otherwise transfer their rights under this Guaranty and the other Loan Documents, in whole or in part, to any other person, and such other person shall thereupon become vested with all the benefits in respect thereof granted to the Administrative Agent or the Lender herein or otherwise, in each case as provided in the Term Loan Agreement. The Guarantor may not assign, transfer, or delegate any of its rights or obligations under this Guaranty to any other person without the prior written consent of the Administrative Agent, and any attempted assignment, transfer, or delegation without such consent shall be null and void.
Section 8.07 — Severability
If any one or more provisions of this Guaranty shall be held to be invalid, illegal, or unenforceable in any respect by any court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, and the parties shall endeavor in good-faith negotiations to replace the invalid, illegal, or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal, or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 8.08 — Entire Agreement
This Guaranty, together with the Term Loan Agreement and the other Loan Documents, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements, negotiations, representations, warranties, understandings, correspondence, and communications, whether oral or written, of the parties or any of them with respect to the subject matter hereof. There are no conditions to the effectiveness of this Guaranty that are not set forth or referred to herein. There are no representations, warranties, covenants, agreements, or conditions not contained herein or therein.
Section 8.09 — Counterparts
This Guaranty may be executed in one or more counterparts (and by different parties hereto in different 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 Guaranty by facsimile transmission or by electronic mail in portable document format (.pdf) or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall be as effective as delivery of a manually executed counterpart of this Guaranty. The words "execution," "signed," "signature," and words of like import in this Guaranty shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, and any other similar state laws based on the Uniform Electronic Transactions Act.
Section 8.10 — Headings
The headings of the Articles and Sections contained in this Guaranty are inserted for convenience of reference only and shall not be deemed to be a part of this Guaranty or affect the meaning, construction, or interpretation of any provision hereof.
Section 8.11 — Relationship to Term Loan Agreement
This Guaranty is delivered in connection with, and as a condition precedent to the initial funding under, the Term Loan Agreement, and the rights and obligations of the parties hereunder are subject to and governed by the Term Loan Agreement to the extent provided herein. In the event of any conflict or inconsistency between the terms and provisions of this Guaranty and the terms and provisions of the Term Loan Agreement with respect to the Guaranteed Obligations, the terms and provisions of the Term Loan Agreement shall control and prevail. For reference, the material terms of the Term Loan Agreement are as follows:
• Borrower: Brightfield Cloud Services Inc., a Delaware corporation
• Lender/Administrative Agent: Pinnacle National Bank, National Association
• Collateral Agent: Meridian Whitcomb LLC
• Execution Date: July 28, 2022
• Closing/Funding Date: August 12, 2022
• Principal Amount: $35,000,000
• Interest Rate: Adjusted Term SOFR + 350 basis points (SOFR floor of 0.50%)
• Default Rate: Additional 200 basis points per annum
• Maturity Date: August 12, 2027
• Quarterly Amortization: $87,500 per quarter
• Upfront Fee: $350,000 (1.00% of commitment)
• Annual Administrative Agent Fee: $25,000
• Financial Covenants:
• Maximum Total Leverage Ratio: 3.50x
• Minimum Interest Coverage Ratio: 3.00x
• Minimum Liquidity: $5,000,000
• Maximum Capital Expenditures: $18,000,000 per fiscal year
[Remainder of page intentionally left blank. Signature pages follow.]
SIGNATURE PAGES TO GUARANTY AGREEMENT
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this Guaranty Agreement as of the date first written above.
SOLARA HOLDINGS GROUP LLC, a Delaware limited liability company
By: ________
Name: David Kessler
Title: Authorized Representative (Managing Director, Solara Capital Partners)
Date: July 28, 2022
ACCEPTED AND AGREED as of the date first written above:
PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lender
By: ________