1042-00001 · Brightfield Cloud Services Inc · Transaction Documents

term-loan-agreement-execution.docx DOCUMENT Finance & Banking

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TERM LOAN AGREEMENT

Execution Version

$35,000,000

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

PREAMBLE

This TERM LOAN AGREEMENT dated as of July 28, 2022 (this "Agreement") is entered into among:

BRIGHTFIELD CLOUD SERVICES INC., a corporation duly organized and validly existing under the laws of the State of Delaware (the "Borrower"), with its principal office at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731;

PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States (the "Lender" and the "Administrative Agent"), with its principal office at 600 Lexington Avenue, 35th Floor, New York, New York 10022; and

MERIDIAN WHITCOMB LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (the "Collateral Agent"), with its principal office at 100 Wall Street, 18th Floor, New York, New York 10005.

RECITALS

WHEREAS, the Borrower has requested that the Lender make a senior secured term loan to the Borrower in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan");

WHEREAS, the proceeds of the Term Loan will be used for (a) the repayment in full of all outstanding obligations under the Existing Credit Facility (as defined herein) with Ridgeline Commercial Bank, (b) funding the build-out of new regional cloud data centers in Dallas, Texas and Phoenix, Arizona, (c) the procurement of proprietary server hardware and related appliances, (d) working capital and general corporate purposes of the Borrower, and (e) payment of fees and expenses incurred in connection with this Agreement and the other Loan Documents;

WHEREAS, the obligations of the Borrower hereunder will be guaranteed by Solara Holdings Group LLC, a Delaware limited liability company (the "Guarantor"), pursuant to that certain Guaranty Agreement of even date herewith (the "Guaranty");

WHEREAS, the obligations of the Borrower hereunder will be secured by a first-priority security interest in substantially all assets of the Borrower, granted pursuant to that certain Security Agreement of even date herewith (the "Security Agreement") by the Borrower in favor of the Collateral Agent, for the benefit of the Lender;

WHEREAS, the Lender is willing to make the Term Loan available to the Borrower upon the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.01 — Defined Terms

As used in this Agreement, the following terms shall have the meanings set forth below:

"Administrative Agent" means Pinnacle National Bank, National Association, in its capacity as administrative agent for the Lender under this Agreement and the other Loan Documents, or any successor administrative agent appointed in accordance with Article IX.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to vote ten percent (10%) or more of the securities having ordinary voting power for the election of directors, managers, or trustees of such other Person.

"Agreement" means this Term Loan Agreement, as the same may be amended, restated, amended and restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.

"Applicable Margin" means three and one-half percent (3.50%) per annum (350 basis points).

"Authorized Officer" means any of the following officers of the Borrower: (a) Marcus Elliston, Chief Executive Officer, (b) Priya Ramanathan, Chief Financial Officer, or (c) Jerome Hartwell, General Counsel and Secretary, or any successor to any such Person holding such office, as certified to the Administrative Agent from time to time in accordance with Section 3.01(e).

"Borrower" means Brightfield Cloud Services Inc., a Delaware corporation.

"Business Day" means any day other than a Saturday, a Sunday, or any other day on which banking institutions in New York, New York are authorized or required by law, regulation, or executive order to close; provided that, when used in connection with the determination of SOFR or any notice, payment, or calculation related to SOFR, the term "Business Day" also means a U.S. Government Securities Business Day.

"Capital Expenditures" means, for any period, all expenditures (whether paid in cash or accrued as a liability) by the Borrower and its Subsidiaries during such period for any fixed or capital assets, including real property, plant, equipment, leasehold improvements, and software development costs that are required to be capitalized in accordance with GAAP, but excluding Capital Expenditures funded with the proceeds of insurance or condemnation awards to the extent reinvested in replacement assets.

"Carryforward Amount" means, with respect to the annual Capital Expenditure limit set forth in Section 6.04, an amount equal to the lesser of (a) Three Million Dollars ($3,000,000) and (b) the unused portion of the Capital Expenditure limit for the immediately preceding Fiscal Year, which amount shall be permitted to be carried forward and added to the Capital Expenditure limit for the immediately succeeding Fiscal Year only.

"Change of Control" means the occurrence of any of the following: (a) any event, transaction, or series of related transactions resulting in Solara Holdings Group LLC ceasing to own, directly or indirectly, at least fifty-one percent (51%) of the issued and outstanding voting Equity Interests of the Borrower; (b) the occurrence of any merger, consolidation, recapitalization, or sale of all or substantially all of the assets of the Borrower not otherwise permitted under Section 7.05; or (c) the failure of Solara Holdings Group LLC to have the right or ability, by voting power, contract, or otherwise, to elect or designate for election a majority of the board of directors (or equivalent governing body) of the Borrower.

"Closing Date" means August 12, 2022, or such other date as may be agreed by the Borrower and the Administrative Agent, on which the conditions set forth in Section 3.01 have been satisfied (or waived by the Lender) and the Term Loan is funded.

"Collateral" means all assets, property, and rights of the Borrower in which a security interest has been granted, or is purported to have been granted, in favor of the Collateral Agent pursuant to the Security Agreement, including all proceeds and products thereof.

"Collateral Agent" means Meridian Whitcomb LLC, a Delaware limited liability company, in its capacity as collateral agent for the benefit of the Lender under this Agreement and the other Loan Documents, or any successor collateral agent appointed in accordance with Article IX.

"Compliance Certificate" means a certificate substantially in the form of Exhibit A attached hereto, executed and delivered by the Chief Financial Officer of the Borrower in accordance with Section 5.01(c).

"Consolidated EBITDA" or "EBITDA" means, for any period, the net income (or net loss) of the Borrower and its Subsidiaries on a consolidated basis for such period, determined in accordance with GAAP, plus the following to the extent deducted (and without duplication) in calculating such net income (or net loss): (a) consolidated interest expense, (b) income tax expense (including federal, state, local, and foreign income taxes), (c) depreciation expense, (d) amortization expense, (e) non-cash stock-based compensation expense, (f) non-recurring transaction expenses, costs, charges, and fees incurred in connection with this Agreement and the transactions contemplated hereby (including legal, accounting, and advisory fees), up to an aggregate amount not to exceed Two Million Dollars ($2,000,000), (g) non-cash charges, write-downs, and losses that do not represent a cash item in such period or any future period, and (h) extraordinary, unusual, or non-recurring losses; minus (i) non-cash gains and (ii) extraordinary, unusual, or non-recurring gains. EBITDA shall be determined on a trailing twelve-month (TTM) basis for the most recently ended four consecutive fiscal quarter period for which financial statements have been or are required to be delivered hereunder.

"Cross-Default Threshold" means One Million Dollars ($1,000,000).

"Default" means any event, condition, or circumstance that, with the giving of notice, the lapse of time, or both, would constitute an Event of Default under Article VIII.

"Default Rate" means, at any time, an interest rate per annum equal to the interest rate otherwise applicable to the Term Loan at such time plus two percent (2.00%) per annum.

"Deposit Account Control Agreement" or "DACA" means each deposit account control agreement entered into among the Borrower, the Collateral Agent, and the applicable depositary bank, in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the Collateral Agent is granted "control" (as defined in Section 9-104 of the UCC) over the applicable deposit account of the Borrower.

"Equity Interests" means shares of capital stock, partnership interests, membership interests, beneficial interests, or any other equity ownership interests in any Person, and any option, warrant, convertible security, or other right (contingent or otherwise) to acquire any such equity ownership interest.

"Event of Default" has the meaning set forth in Section 8.01.

"Existing Credit Facility" means that certain Senior Secured Revolving Credit Facility Agreement dated as of October 15, 2020, by and between the Borrower and Ridgeline Commercial Bank, as lender, providing for a revolving credit facility in the maximum aggregate principal amount of Fifteen Million Dollars ($15,000,000), of which Eight Million Two Hundred Thousand Dollars ($8,200,000) was outstanding as of the Signing Date, as such facility may have been amended, restated, or otherwise modified prior to the date hereof.

"Fiscal Year" means each twelve-month period ending on December 31 of each calendar year.

"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied.

"Governmental Authority" means any nation or government, any federal, state, provincial, local, municipal, or other political subdivision thereof, and any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

"Guarantee" or "Guaranty" means that certain Guaranty Agreement dated as of July 28, 2022, executed by the Guarantor in favor of the Administrative Agent, for the benefit of the Lender, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

"Guarantor" means Solara Holdings Group LLC, a Delaware limited liability company.

"Indebtedness" means, as to any Person at any date of determination (without duplication): (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes, loan agreements, or other similar instruments; (c) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business and not past due for more than sixty (60) days or being disputed in good faith); (d) all indebtedness of others secured by any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; (e) all obligations of such Person under capital leases determined in accordance with GAAP; (f) all obligations of such Person (contingent or otherwise) to purchase, redeem, retire, defease, or otherwise make any payment in respect of any Equity Interests of such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (g) all Guarantee obligations of such Person; (h) all obligations of such Person in respect of letters of credit, bankers' acceptances, bank guaranties, surety bonds, and similar instruments; and (i) all net obligations of such Person under hedging agreements.

"Interest Coverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the trailing twelve-month period most recently ended to (b) consolidated interest expense (including all accrued and paid interest, commitment fees, and other similar charges) for such trailing twelve-month period, in each case determined on a consolidated basis in accordance with GAAP.

"Interest Payment Date" means the last Business Day of each calendar month and the Maturity Date.

"Interest Period" means, initially, the period commencing on the Closing Date and ending on (but excluding) the last Business Day of the calendar month in which the Closing Date occurs, and thereafter, each successive one-month period commencing on the last Business Day of the immediately preceding calendar month and ending on (but excluding) the last Business Day of the next succeeding calendar month; provided that if any Interest Period would end on a day that is not a Business Day, such Interest Period shall end on the next succeeding Business Day.

"Lender" means Pinnacle National Bank, National Association, a national banking association, and its successors and permitted assigns.

"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, security interest, preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction.

"Loan Documents" means, collectively, this Agreement, the Guaranty, the Security Agreement, each Deposit Account Control Agreement, each Compliance Certificate, each Notice of Borrowing, each Prepayment Notice, each Officer's Certificate, each Secretary's Certificate, the Funds Flow Memorandum, and all other agreements, instruments, documents, and certificates executed and delivered by the Borrower, the Guarantor, or any other Person in connection with this Agreement and the transactions contemplated hereby, in each case as the same may be amended, restated, supplemented, or otherwise modified from time to time.

"Material Adverse Change" or "Material Adverse Effect" means any event, development, circumstance, change, condition, occurrence, or effect that, individually or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on: (a) the business, assets, properties, liabilities (actual or contingent), financial condition, results of operations, or prospects of the Borrower and its Subsidiaries, taken as a whole; (b) the ability of the Borrower or the Guarantor to perform any of its respective obligations under any Loan Document to which it is a party; or (c) the validity or enforceability of any Loan Document, or the rights, remedies, and benefits available to, or conferred upon, the Administrative Agent, the Lender, or the Collateral Agent under any Loan Document.

"Material Judgment Threshold" means Two Million Five Hundred Thousand Dollars ($2,500,000).

"Maturity Date" means August 12, 2027, or such earlier date on which the Term Loan becomes due and payable in accordance with the terms hereof (whether by acceleration, mandatory prepayment, or otherwise).

"Net Proceeds" means, with respect to any asset disposition, casualty event, or condemnation event, the gross cash proceeds received by the Borrower or any Subsidiary in connection therewith, minus (a) all reasonable and customary costs, fees, and expenses incurred by the Borrower or such Subsidiary in connection with such event (including brokerage commissions, legal fees, accounting fees, and investment banking fees), (b) all taxes (including income taxes) paid or reasonably estimated to be payable in connection with such event, and (c) any amounts required to be applied to repay any Indebtedness (other than the Obligations) secured by a Permitted Lien on the assets that were the subject of such event.

"Obligations" means all unpaid principal of and accrued and unpaid interest on the Term Loan, all accrued and unpaid fees, all expenses, reimbursements, indemnities, and all other amounts owing to the Administrative Agent, the Lender, or the Collateral Agent by the Borrower under this Agreement or any other Loan Document, in each case whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

"Organizational Documents" means (a) with respect to the Borrower, its Certificate of Incorporation filed with the Delaware Secretary of State and its Bylaws, each as amended from time to time, and (b) with respect to the Guarantor, its Certificate of Formation filed with the Delaware Secretary of State and its Limited Liability Company Agreement, each as amended from time to time.

"Permitted Indebtedness" means: (i) the Obligations under the Loan Documents; (ii) purchase money indebtedness and obligations under capital leases incurred to finance the acquisition of fixed or capital assets used in the ordinary course of the Borrower's business, in an aggregate outstanding principal amount not to exceed Two Million Dollars ($2,000,000) at any time; (iii) intercompany indebtedness among the Borrower and its Subsidiaries, provided that such indebtedness is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent; (iv) other unsecured indebtedness in an aggregate outstanding principal amount not to exceed Two Million Dollars ($2,000,000) at any time; and (v) Indebtedness set forth on Schedule 7.01 existing on the Closing Date and any refinancings, renewals, or extensions thereof (but not increases in the principal amount thereof).

"Permitted Liens" means: (i) Liens in favor of the Collateral Agent securing the Obligations; (ii) statutory Liens for taxes, assessments, or other governmental charges not yet delinquent or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (iii) purchase money Liens on assets acquired with Permitted Indebtedness described in clause (ii) of the definition of "Permitted Indebtedness," provided that such Liens attach only to the assets so acquired and the aggregate principal amount of the indebtedness secured thereby does not exceed Two Million Dollars ($2,000,000); (iv) easements, rights-of-way, restrictions, minor defects or irregularities in title, zoning restrictions, and similar encumbrances on real property that do not, individually or in the aggregate, materially interfere with the use of the affected property for its intended purpose; (v) Liens arising by operation of law in the ordinary course of business (including carriers', warehousemen's, mechanics', materialmen's, repairmen's, landlord's, and similar Liens) that are not overdue for a period of more than thirty (30) days or are being contested in good faith by appropriate proceedings; and (vi) Liens set forth on Schedule 7.02.

"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, governmental body, or other entity.

"Prepayment Premium" has the meaning set forth in Section 2.05(c).

"Pro Forma Basis" means, with respect to any transaction, that the calculation in question shall be made giving pro forma effect to such transaction (including any incurrence or repayment of Indebtedness in connection therewith), as if such transaction had occurred on the first day of the applicable measurement period (in the case of income statement items) or on the date of determination (in the case of balance sheet items), in each case in a manner reasonably acceptable to the Administrative Agent and consistent with GAAP.

"Restricted Payment" means (a) any dividend, distribution, or other payment (whether in cash, property, securities, or otherwise) on account of any Equity Interests of the Borrower, (b) any redemption, repurchase, retirement, defeasance, or other acquisition for value of any Equity Interests of the Borrower, and (c) any payment on account of any Indebtedness that is contractually subordinated to the Obligations, except regularly scheduled payments of interest and principal thereon to the extent permitted by the applicable subordination terms.

"Security Agreement" means that certain Security Agreement dated as of July 28, 2022, by and between the Borrower and the Collateral Agent, pursuant to which the Borrower has granted to the Collateral Agent, for the benefit of the Lender, a first-priority security interest in substantially all assets of the Borrower, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

"Signing Date" means July 28, 2022, the date first written above.

"SOFR" means, with respect to any Business Day, the Secured Overnight Financing Rate for such Business Day as published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at https://www.newyorkfed.org (or any successor source), on the immediately succeeding Business Day.

"SOFR Floor" means a rate of zero and one-half percent (0.50%) per annum.

"Solara Capital Partners" means Solara Capital Partners Fund III, LP, a Delaware limited partnership, the indirect parent of the Borrower.

"Sponsor" means Solara Capital Partners Fund III, LP.

"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which more than fifty percent (50%) of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers, trustees, or other members of the governing body thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, or a combination thereof. Unless otherwise specified, all references herein to a "Subsidiary" or "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower.

"Term Loan" means the term loan made by the Lender to the Borrower hereunder in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000).

"Total Funded Debt" means, at any date of determination, the aggregate outstanding principal amount of all Indebtedness for borrowed money (including the outstanding principal amount of the Term Loan and any Indebtedness constituting capital lease obligations) of the Borrower and its Subsidiaries on a consolidated basis, determined in accordance with GAAP.

"Total Leverage Ratio" means, as of any date of determination, the ratio of (a) Total Funded Debt as of such date to (b) Consolidated EBITDA for the trailing twelve-month period most recently ended.

"TTM" means the trailing twelve-month period ending on the applicable date of determination.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.

"Unrestricted Cash" means, at any date of determination, all cash and cash equivalents of the Borrower and its Subsidiaries on a consolidated basis that are not subject to any Lien (other than Liens in favor of the Collateral Agent) or restriction on use, in each case determined in accordance with GAAP.

"U.S. Government Securities Business Day" means any day except a Saturday, a Sunday, or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

Section 1.02 — Interpretation

Unless the context otherwise requires, in this Agreement and each other Loan Document:

(a) References to "Sections," "Articles," "Exhibits," and "Schedules" are references to Sections and Articles of, and Exhibits and Schedules to, this Agreement unless otherwise specifically stated.

(b) The terms "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them.

(c) The words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision hereof.

(d) Headings and captions are included for convenience of reference only and shall not affect the interpretation of this Agreement.

(e) The singular includes the plural and vice versa, and each gender includes all genders.

(f) References to any agreement or instrument (including this Agreement) shall mean such agreement or instrument as amended, supplemented, restated, or otherwise modified from time to time to the extent permitted hereunder or thereunder.

(g) References to any Person shall include such Person's successors and permitted assigns.

(h) References to any law, statute, rule, or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law, statute, rule, or regulation, and any reference to any law, statute, rule, or regulation shall, unless otherwise specified, refer to such law, statute, rule, or regulation as amended, modified, or supplemented from time to time.

(i) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."

(j) Unless otherwise expressly provided herein, references to organizational documents, agreements, or other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements, and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements, and other modifications are permitted by any Loan Document.

Section 1.03 — Accounting Terms and GAAP

(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP as in effect on the Closing Date, applied in a manner consistent with that used in preparing the audited financial statements delivered to the Administrative Agent pursuant to Section 3.01(h).

(b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Administrative Agent shall so request, the Administrative Agent and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Lender); provided that, until such amendment is effective, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein, and (ii) the Borrower shall provide to the Administrative Agent financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification Topic 825—Financial Instruments, or any successor thereto (including any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect), to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at "fair value," as defined therein.

Section 1.04 — SOFR Benchmark Replacement

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark (being, as of the date hereof, one-month Term SOFR), then the Administrative Agent may, in its reasonable discretion, select a Benchmark Replacement to replace such then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after the occurrence of such Benchmark Replacement Date. Any such Benchmark Replacement shall include a spread adjustment (which may be a positive or negative value or zero) that shall have been selected by the Administrative Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Benchmark Replacement by the Relevant Governmental Body and (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Benchmark Replacement for syndicated credit facilities denominated in United States Dollars at such time. The Administrative Agent shall notify the Borrower and the Lender promptly of the implementation of any Benchmark Replacement.

(b) Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement, the Administrative Agent shall have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lender of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision, or election that may be made by the Administrative Agent pursuant to this Section 1.04, including any determination with respect to a tenor, rate, or adjustment, or the occurrence or non-occurrence of an event, circumstance, or date, and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 1.04.

(d) Definitions. For purposes of this Section 1.04:

"Benchmark" means, initially, one-month Term SOFR (as published by CME Group Benchmark Administration Limited or a successor administrator); provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to one-month Term SOFR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to this Section 1.04.

"Benchmark Replacement" means the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent giving due consideration to any alternate rate of interest recommended by the Relevant Governmental Body or any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities, and (b) the related Benchmark Replacement Adjustment.

"Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, and (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.

"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative, or operational changes (including changes to the definition of "Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, and other technical, administrative, or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to occur of the following events: (a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all available tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of "Benchmark Transition Event," the first date on which all available tenors of such Benchmark (or the published component used in the calculation thereof) have been or, by the terms of such public statement, will no longer be representative of the underlying market and economic reality that such Benchmark (or such component thereof) is intended to measure.

"Benchmark Transition Event" means the occurrence of one or more of the following events: (a) a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all available tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any available tenor of such Benchmark (or such component thereof); (b) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component), or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all available tenors of such Benchmark (or such component thereof) permanently or indefinitely; or (c) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that all available tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative of the underlying market and economic reality that such Benchmark (or such component thereof) is intended to measure.

"Relevant Governmental Body" means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto, including the Alternative Reference Rates Committee.

"Unadjusted Benchmark Replacement" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

ARTICLE II — THE TERM LOAN

Section 2.01 — Term Loan Commitment

(a) Subject to the terms and conditions set forth herein, and in reliance upon the representations, warranties, and covenants of the Borrower contained herein and in the other Loan Documents, the Lender agrees to make a single-draw senior secured term loan to the Borrower on the Closing Date in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan").

(b) The Term Loan shall be funded in a single draw on the Closing Date. The full aggregate principal amount of the Term Loan shall be made available to the Borrower in immediately available funds on the Closing Date, subject to satisfaction (or waiver by the Lender) of the conditions precedent set forth in Section 3.01.

(c) The Term Loan is not a revolving credit facility. Any principal amount of the Term Loan that is repaid or prepaid may not be re-borrowed. Upon funding of the Term Loan on the Closing Date, the commitment of the Lender to make the Term Loan shall automatically and permanently terminate.

Section 2.02 — Interest

(a) Interest Rate. Subject to clause (d) below, the outstanding principal balance of the Term Loan shall bear interest at a rate per annum equal to the sum of (i) the greater of (A) one-month Term SOFR (as determined in accordance with clause (f) below) and (B) the SOFR Floor of zero and one-half percent (0.50%) per annum, plus (ii) the Applicable Margin of three and one-half percent (3.50%) per annum (350 basis points). For illustration purposes, at the time of execution of this Agreement, one-month Term SOFR was approximately two and twenty-nine hundredths percent (2.29%) per annum, resulting in an initial all-in interest rate of approximately five and seventy-nine hundredths percent (5.79%) per annum.

(b) Interest Period. The Term Loan shall have successive one-month Interest Periods as defined in Section 1.01. At the end of each Interest Period, a new Interest Period shall commence automatically without any action by the Borrower.

(c) Interest Payment Dates. Accrued and unpaid interest on the outstanding principal balance of the Term Loan shall be due and payable in arrears on each Interest Payment Date (i.e., the last Business Day of each calendar month) and on the Maturity Date. Interest shall accrue from and including the first day of the applicable Interest Period to but excluding the last day of such Interest Period.

(d) Default Interest. Upon the occurrence and during the continuance of an Event of Default, at the election of the Administrative Agent (acting at the direction of the Lender or in its own discretion), the outstanding principal balance of the Term Loan, and to the extent permitted by applicable law, any interest, fees, or other amounts payable hereunder that are overdue, shall bear interest at the Default Rate (i.e., the rate otherwise applicable plus two percent (2.00%) per annum). Default interest shall accrue from the date of such Event of Default (or, in the case of overdue amounts, from the date such amounts became due) until such Event of Default is cured or waived in accordance herewith, or until all Obligations are paid in full. The payment of default interest shall not constitute a waiver by the Administrative Agent or the Lender of any Event of Default or of any rights or remedies hereunder.

(e) Computation. Interest on the Term Loan shall be computed on the basis of a 360-day year for the actual number of days elapsed (including the first day but excluding the last day) in the applicable Interest Period or other period for which interest is being calculated.

(f) SOFR Determination. One-month Term SOFR applicable to each Interest Period shall be determined by the Administrative Agent two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period (the "SOFR Determination Date"). If one-month Term SOFR has not been published on the applicable SOFR Determination Date, the Administrative Agent shall use the rate published on the first preceding U.S. Government Securities Business Day for which such rate was published. Each determination by the Administrative Agent of the applicable SOFR rate shall be conclusive and binding for all purposes, absent manifest error.

Section 2.03 — Amortization and Repayment

(a) Scheduled Amortization. Commencing on November 12, 2022, and continuing on each quarterly amortization date thereafter (being February 12, May 12, August 12, and November 12 of each calendar year, or if such date is not a Business Day, the next succeeding Business Day), the Borrower shall repay the outstanding principal balance of the Term Loan in equal quarterly installments, each in the amount of Eighty-Seven Thousand Five Hundred Dollars ($87,500), representing one percent (1.00%) per annum of the original principal amount of the Term Loan (Thirty-Five Million Dollars ($35,000,000)) divided by four. The scheduled amortization installments shall continue through and including the amortization date immediately preceding the Maturity Date.

(b) Maturity Payment. The entire outstanding principal balance of the Term Loan, together with all accrued and unpaid interest thereon and all other Obligations then outstanding (including any unpaid fees, costs, expenses, and indemnification amounts), shall be due and payable in full on the Maturity Date, August 12, 2027.

(c) Application of Payments. Unless otherwise directed by the Administrative Agent in accordance with Section 8.03, all payments received from the Borrower under this Agreement shall be applied in the following order: first, to accrued and unpaid fees and expenses of the Administrative Agent and the Collateral Agent; second, to accrued and unpaid interest on the Term Loan; and third, to the outstanding principal balance of the Term Loan (applied to the scheduled amortization installments in order of maturity or as otherwise directed by the Administrative Agent).

Section 2.04 — Mandatory Prepayments

(a) Asset Dispositions. If the Borrower or any Subsidiary consummates any asset disposition (other than those expressly permitted under Section 7.03(a) or (b) without triggering a mandatory prepayment), the Borrower shall, within five (5) Business Days following receipt of the Net Proceeds therefrom, prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of such Net Proceeds; provided that this clause (a) shall not apply to any asset disposition to the extent the aggregate Net Proceeds thereof do not exceed One Million Five Hundred Thousand Dollars ($1,500,000) individually or Five Million Dollars ($5,000,000) in the aggregate during any Fiscal Year. For the avoidance of doubt, to the extent that the Net Proceeds of any asset disposition or series of related asset dispositions exceed the thresholds set forth in the preceding sentence, the full amount of such excess shall be applied as a mandatory prepayment.

(b) Insurance and Condemnation Proceeds. If the Borrower or any Subsidiary receives Net Proceeds from any casualty event or condemnation event (or payment in lieu thereof) in excess of One Million Dollars ($1,000,000) with respect to any single event or series of related events, the Borrower shall prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of such Net Proceeds; provided that no such prepayment shall be required to the extent such Net Proceeds are reinvested (or committed to be reinvested pursuant to a binding agreement) in replacement assets, repairs, or restoration of the affected assets within one hundred eighty (180) days following receipt thereof, so long as no Default or Event of Default exists at the time of such reinvestment or commitment.

(c) Indebtedness Proceeds. Promptly upon receipt, the Borrower shall prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of the net cash proceeds from the incurrence of any Indebtedness by the Borrower or any Subsidiary that does not constitute Permitted Indebtedness.

(d) Change of Control. Upon the occurrence of a Change of Control, the Borrower shall immediately prepay the entire outstanding principal balance of the Term Loan, together with all accrued and unpaid interest, fees, and all other Obligations, in full.

(e) Application. Mandatory prepayments under this Section 2.04 shall be applied to the outstanding principal balance of the Term Loan in inverse order of maturity (i.e., applied first to the final scheduled installment and then in reverse chronological order to the preceding scheduled installments), together with accrued and unpaid interest on the principal so prepaid to the date of prepayment, without regard to any minimum prepayment amounts otherwise applicable to voluntary prepayments. Mandatory prepayments shall be subject to the Prepayment Premium set forth in Section 2.05(c), applied in accordance with Section 2.05(d).

Section 2.05 — Voluntary Prepayments

(a) Right to Prepay. The Borrower may voluntarily prepay the outstanding principal balance of the Term Loan, in whole or in part, at any time and from time to time, subject to the Prepayment Premium set forth in clause (c) below, upon not less than five (5) Business Days' prior irrevocable written notice to the Administrative Agent (each such notice, a "Prepayment Notice"), which notice shall specify the date and amount of the prepayment and whether such prepayment is in whole or in part.

(b) Minimum Amounts. Each partial voluntary prepayment shall be in a minimum aggregate principal amount of One Million Dollars ($1,000,000) and in integral multiples of Five Hundred Thousand Dollars ($500,000) in excess thereof; provided that, if the outstanding principal balance of the Term Loan at the time of such prepayment is less than One Million Dollars ($1,000,000), the Borrower may prepay the entire remaining outstanding principal balance. Each voluntary prepayment shall be accompanied by accrued and unpaid interest on the principal amount prepaid to but excluding the date of such prepayment.

(c) Prepayment Premium. In connection with any voluntary prepayment (and, to the extent provided in Section 2.05(d), any mandatory prepayment) of all or any portion of the outstanding principal balance of the Term Loan, the Borrower shall pay to the Lender a prepayment premium (the "Prepayment Premium") as follows:

(i) If such prepayment occurs during the period from and including the Closing Date through and including the first anniversary of the Closing Date (i.e., from August 12, 2022 through and including August 12, 2023) ("Year 1"), the Prepayment Premium shall be equal to two percent (2.00%) of the aggregate principal amount so prepaid;

(ii) If such prepayment occurs during the period from (but excluding) the first anniversary of the Closing Date through and including the second anniversary of the Closing Date (i.e., from after August 12, 2023 through and including August 12, 2024) ("Year 2"), the Prepayment Premium shall be equal to one percent (1.00%) of the aggregate principal amount so prepaid; and

(iii) If such prepayment occurs at any time after the second anniversary of the Closing Date (i.e., after August 12, 2024), no Prepayment Premium shall be due or payable.

(d) Application to Mandatory Prepayments. The Prepayment Premium described in clause (c) above shall also apply to all mandatory prepayments required under Section 2.04, calculated in the same manner and at the same rate as would apply to a voluntary prepayment made on the date of such mandatory prepayment.

(e) Application. Voluntary prepayments shall be applied to the outstanding principal balance of the Term Loan in inverse order of maturity, unless otherwise agreed by the Administrative Agent and the Borrower. Principal amounts prepaid may not be re-borrowed.

Section 2.06 — Fees

(a) Upfront Fee. On the Closing Date, the Borrower shall pay to the Lender a non-refundable upfront fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000), representing one percent (1.00%) of the original aggregate principal amount of the Term Loan. The upfront fee shall be fully earned when paid and shall not be subject to refund or rebate under any circumstances.

(b) Administrative Agent Fee. The Borrower shall pay to the Administrative Agent, for its own account, an annual administrative agency fee in the amount of Twenty-Five Thousand Dollars ($25,000). The first annual administrative agency fee shall be payable on the Closing Date and shall cover the period from the Closing Date through and including the first anniversary thereof. Thereafter, the administrative agency fee shall be payable in advance on each anniversary of the Closing Date during the term of this Agreement. The administrative agency fee shall be fully earned when paid and shall not be subject to refund or rebate.

(c) Collateral Agent Fee. The Borrower shall pay to the Collateral Agent, for its own account, an annual collateral agency fee in such amount and at such times as are set forth in a separate fee letter dated as of the Signing Date between the Borrower and the Collateral Agent (the "Collateral Agent Fee Letter"). The terms and conditions of the Collateral Agent Fee Letter are incorporated herein by reference for all purposes.

Section 2.07 — Use of Proceeds

(a) The Borrower shall use the proceeds of the Term Loan solely for the following purposes, in the amounts set forth on Schedule 2.07:

(i) Repayment in full of all outstanding obligations under the Existing Credit Facility with Ridgeline Commercial Bank, including the outstanding principal balance of Eight Million Two Hundred Thousand Dollars ($8,200,000) plus approximately Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($37,422) of accrued and unpaid interest thereon, for an aggregate payoff amount of Eight Million Two Hundred Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($8,237,422);

(ii) Funding the design, construction, and build-out of a new regional cloud data center in Dallas, Texas, located at 2700 Stemmons Freeway, Building C, Dallas, Texas 75207, in the approximate amount of Eleven Million Five Hundred Thousand Dollars ($11,500,000);

(iii) Funding the design, construction, and build-out of a new regional cloud data center in Phoenix, Arizona, located at 1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009, in the approximate amount of Nine Million Eight Hundred Thousand Dollars ($9,800,000);

(iv) Procurement of proprietary server hardware, networking equipment, and related appliances, in the approximate amount of Three Million Five Hundred Thousand Dollars ($3,500,000);

(v) Working capital and general corporate purposes, in the approximate amount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000); and

(vi) Payment of fees and expenses incurred in connection with this Agreement and the other Loan Documents, including the Upfront Fee of Three Hundred Fifty Thousand Dollars ($350,000) and other transaction-related expenses.

(b) No portion of the proceeds of the Term Loan shall be used, directly or indirectly, (i) to purchase or carry any "margin stock" (as defined in Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock, in each case in violation of, or for a purpose that violates, Regulation U, (ii) in violation of any applicable anti-corruption laws (including the United States Foreign Corrupt Practices Act of 1977), (iii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable anti-corruption laws, or (iv) to fund any activity or business of or with any Sanctioned Person or in any Sanctioned Country.

Section 2.08 — Payments Generally

(a) All payments to be made by the Borrower under this Agreement and the other Loan Documents shall be made in lawful money of the United States of America in immediately available funds, without set-off, deduction, or counterclaim.

(b) All payments of principal, interest, fees, and other amounts due hereunder shall be made to the Administrative Agent at Pinnacle National Bank, National Association, ABA Routing Number 021-405-887, Account Number as notified by the Administrative Agent to the Borrower from time to time, for the account of the Lender, by no later than 2:00 p.m. (New York City time) on the date on which such payment is due. Any payment received by the Administrative Agent after 2:00 p.m. (New York City time) shall be deemed to have been received on the next succeeding Business Day. The Administrative Agent shall promptly distribute to the Lender its share of any payment received hereunder.

(c) If any payment date falls on a day that is not a Business Day, such payment shall instead be due and payable on the next succeeding Business Day, and additional interest shall accrue on any outstanding principal balance during the period of such extension.

(d) The Borrower hereby authorizes the Administrative Agent to debit the BCS operating account maintained by the Borrower at Pinnacle National Bank, National Association (Account No. 7841-0029-3356) for all scheduled payments of principal, interest, and fees when due under this Agreement. Such debit authorization shall remain in effect until all Obligations have been paid in full and this Agreement has been terminated, and the Borrower agrees that it shall maintain sufficient funds in such account to satisfy all payment obligations hereunder as they become due. The exercise of such debit authority by the Administrative Agent shall not relieve the Borrower of its obligation to make timely payments under this Agreement, and failure by the Administrative Agent to debit such account shall not constitute a waiver of any Event of Default.

Section 2.09 — Increased Costs

(a) If any Change in Law shall: (i) impose, modify, or deem applicable any reserve, special deposit, liquidity, compulsory loan, insurance charge, or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender; (ii) subject the Lender to any tax of any kind whatsoever with respect to this Agreement or the Term Loan, or change the basis of taxation of payments to the Lender in respect thereof (other than (A) taxes on or measured by the overall net income of the Lender imposed by the jurisdiction in which its principal office or applicable lending office is located, (B) branch profits taxes, and (C) any taxes described in Section 2.10); or (iii) impose on the Lender any other condition, cost, or expense (other than taxes) affecting this Agreement or the Term Loan, and the result of any of the foregoing is to increase the cost to the Lender of making, converting to, continuing, or maintaining the Term Loan, or to reduce the amount of any sum received or receivable by the Lender, then, upon request of the Lender (delivered through the Administrative Agent), the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.

(b) If the Lender determines that any Change in Law affecting the Lender regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on the Lender's capital or on the capital of the Lender's holding company, if any, as a consequence of this Agreement, the commitment of the Lender hereunder, or the Term Loan, to a level below that which the Lender or the Lender's holding company could have achieved but for such Change in Law, then from time to time upon the request of the Lender (delivered through the Administrative Agent), the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or the Lender's holding company for any such reduction suffered.

(c) A certificate of the Lender setting forth in reasonable detail the amount or amounts necessary to compensate the Lender as specified in this Section 2.09 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on

TERM LOAN AGREEMENT
Execution Version
$35,000,000
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
PREAMBLE
This TERM LOAN AGREEMENT dated as of July 28, 2022 (this "Agreement") is entered into among:
BRIGHTFIELD CLOUD SERVICES INC., a corporation duly organized and validly existing under the laws of the State of Delaware (the "Borrower"), with its principal office at 4200 Lone Star Parkway, Suite 800, Austin, Texas 78731;
PINNACLE NATIONAL BANK, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States (the "Lender" and the "Administrative Agent"), with its principal office at 600 Lexington Avenue, 35th Floor, New York, New York 10022; and
MERIDIAN WHITCOMB LLC, a limited liability company duly organized and existing under the laws of the State of Delaware (the "Collateral Agent"), with its principal office at 100 Wall Street, 18th Floor, New York, New York 10005.
RECITALS
WHEREAS, the Borrower has requested that the Lender make a senior secured term loan to the Borrower in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan");
WHEREAS, the proceeds of the Term Loan will be used for (a) the repayment in full of all outstanding obligations under the Existing Credit Facility (as defined herein) with Ridgeline Commercial Bank, (b) funding the build-out of new regional cloud data centers in Dallas, Texas and Phoenix, Arizona, (c) the procurement of proprietary server hardware and related appliances, (d) working capital and general corporate purposes of the Borrower, and (e) payment of fees and expenses incurred in connection with this Agreement and the other Loan Documents;
WHEREAS, the obligations of the Borrower hereunder will be guaranteed by Solara Holdings Group LLC, a Delaware limited liability company (the "Guarantor"), pursuant to that certain Guaranty Agreement of even date herewith (the "Guaranty");
WHEREAS, the obligations of the Borrower hereunder will be secured by a first-priority security interest in substantially all assets of the Borrower, granted pursuant to that certain Security Agreement of even date herewith (the "Security Agreement") by the Borrower in favor of the Collateral Agent, for the benefit of the Lender;
WHEREAS, the Lender is willing to make the Term Loan available to the Borrower upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Administrative Agent" means Pinnacle National Bank, National Association, in its capacity as administrative agent for the Lender under this Agreement and the other Loan Documents, or any successor administrative agent appointed in accordance with Article IX.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to vote ten percent (10%) or more of the securities having ordinary voting power for the election of directors, managers, or trustees of such other Person.
"Agreement" means this Term Loan Agreement, as the same may be amended, restated, amended and restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.
"Applicable Margin" means three and one-half percent (3.50%) per annum (350 basis points).
"Authorized Officer" means any of the following officers of the Borrower: (a) Marcus Elliston, Chief Executive Officer, (b) Priya Ramanathan, Chief Financial Officer, or (c) Jerome Hartwell, General Counsel and Secretary, or any successor to any such Person holding such office, as certified to the Administrative Agent from time to time in accordance with Section 3.01(e).
"Borrower" means Brightfield Cloud Services Inc., a Delaware corporation.
"Business Day" means any day other than a Saturday, a Sunday, or any other day on which banking institutions in New York, New York are authorized or required by law, regulation, or executive order to close; provided that, when used in connection with the determination of SOFR or any notice, payment, or calculation related to SOFR, the term "Business Day" also means a U.S. Government Securities Business Day.
"Capital Expenditures" means, for any period, all expenditures (whether paid in cash or accrued as a liability) by the Borrower and its Subsidiaries during such period for any fixed or capital assets, including real property, plant, equipment, leasehold improvements, and software development costs that are required to be capitalized in accordance with GAAP, but excluding Capital Expenditures funded with the proceeds of insurance or condemnation awards to the extent reinvested in replacement assets.
"Carryforward Amount" means, with respect to the annual Capital Expenditure limit set forth in Section 6.04, an amount equal to the lesser of (a) Three Million Dollars ($3,000,000) and (b) the unused portion of the Capital Expenditure limit for the immediately preceding Fiscal Year, which amount shall be permitted to be carried forward and added to the Capital Expenditure limit for the immediately succeeding Fiscal Year only.
"Change of Control" means the occurrence of any of the following: (a) any event, transaction, or series of related transactions resulting in Solara Holdings Group LLC ceasing to own, directly or indirectly, at least fifty-one percent (51%) of the issued and outstanding voting Equity Interests of the Borrower; (b) the occurrence of any merger, consolidation, recapitalization, or sale of all or substantially all of the assets of the Borrower not otherwise permitted under Section 7.05; or (c) the failure of Solara Holdings Group LLC to have the right or ability, by voting power, contract, or otherwise, to elect or designate for election a majority of the board of directors (or equivalent governing body) of the Borrower.
"Closing Date" means August 12, 2022, or such other date as may be agreed by the Borrower and the Administrative Agent, on which the conditions set forth in Section 3.01 have been satisfied (or waived by the Lender) and the Term Loan is funded.
"Collateral" means all assets, property, and rights of the Borrower in which a security interest has been granted, or is purported to have been granted, in favor of the Collateral Agent pursuant to the Security Agreement, including all proceeds and products thereof.
"Collateral Agent" means Meridian Whitcomb LLC, a Delaware limited liability company, in its capacity as collateral agent for the benefit of the Lender under this Agreement and the other Loan Documents, or any successor collateral agent appointed in accordance with Article IX.
"Compliance Certificate" means a certificate substantially in the form of Exhibit A attached hereto, executed and delivered by the Chief Financial Officer of the Borrower in accordance with Section 5.01(c).
"Consolidated EBITDA" or "EBITDA" means, for any period, the net income (or net loss) of the Borrower and its Subsidiaries on a consolidated basis for such period, determined in accordance with GAAP, plus the following to the extent deducted (and without duplication) in calculating such net income (or net loss): (a) consolidated interest expense, (b) income tax expense (including federal, state, local, and foreign income taxes), (c) depreciation expense, (d) amortization expense, (e) non-cash stock-based compensation expense, (f) non-recurring transaction expenses, costs, charges, and fees incurred in connection with this Agreement and the transactions contemplated hereby (including legal, accounting, and advisory fees), up to an aggregate amount not to exceed Two Million Dollars ($2,000,000), (g) non-cash charges, write-downs, and losses that do not represent a cash item in such period or any future period, and (h) extraordinary, unusual, or non-recurring losses; minus (i) non-cash gains and (ii) extraordinary, unusual, or non-recurring gains. EBITDA shall be determined on a trailing twelve-month (TTM) basis for the most recently ended four consecutive fiscal quarter period for which financial statements have been or are required to be delivered hereunder.
"Cross-Default Threshold" means One Million Dollars ($1,000,000).
"Default" means any event, condition, or circumstance that, with the giving of notice, the lapse of time, or both, would constitute an Event of Default under Article VIII.
"Default Rate" means, at any time, an interest rate per annum equal to the interest rate otherwise applicable to the Term Loan at such time plus two percent (2.00%) per annum.
"Deposit Account Control Agreement" or "DACA" means each deposit account control agreement entered into among the Borrower, the Collateral Agent, and the applicable depositary bank, in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the Collateral Agent is granted "control" (as defined in Section 9-104 of the UCC) over the applicable deposit account of the Borrower.
"Equity Interests" means shares of capital stock, partnership interests, membership interests, beneficial interests, or any other equity ownership interests in any Person, and any option, warrant, convertible security, or other right (contingent or otherwise) to acquire any such equity ownership interest.
"Event of Default" has the meaning set forth in Section 8.01.
"Existing Credit Facility" means that certain Senior Secured Revolving Credit Facility Agreement dated as of October 15, 2020, by and between the Borrower and Ridgeline Commercial Bank, as lender, providing for a revolving credit facility in the maximum aggregate principal amount of Fifteen Million Dollars ($15,000,000), of which Eight Million Two Hundred Thousand Dollars ($8,200,000) was outstanding as of the Signing Date, as such facility may have been amended, restated, or otherwise modified prior to the date hereof.
"Fiscal Year" means each twelve-month period ending on December 31 of each calendar year.
"GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied.
"Governmental Authority" means any nation or government, any federal, state, provincial, local, municipal, or other political subdivision thereof, and any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).
"Guarantee" or "Guaranty" means that certain Guaranty Agreement dated as of July 28, 2022, executed by the Guarantor in favor of the Administrative Agent, for the benefit of the Lender, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Guarantor" means Solara Holdings Group LLC, a Delaware limited liability company.
"Indebtedness" means, as to any Person at any date of determination (without duplication): (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes, loan agreements, or other similar instruments; (c) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business and not past due for more than sixty (60) days or being disputed in good faith); (d) all indebtedness of others secured by any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; (e) all obligations of such Person under capital leases determined in accordance with GAAP; (f) all obligations of such Person (contingent or otherwise) to purchase, redeem, retire, defease, or otherwise make any payment in respect of any Equity Interests of such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; (g) all Guarantee obligations of such Person; (h) all obligations of such Person in respect of letters of credit, bankers' acceptances, bank guaranties, surety bonds, and similar instruments; and (i) all net obligations of such Person under hedging agreements.
"Interest Coverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the trailing twelve-month period most recently ended to (b) consolidated interest expense (including all accrued and paid interest, commitment fees, and other similar charges) for such trailing twelve-month period, in each case determined on a consolidated basis in accordance with GAAP.
"Interest Payment Date" means the last Business Day of each calendar month and the Maturity Date.
"Interest Period" means, initially, the period commencing on the Closing Date and ending on (but excluding) the last Business Day of the calendar month in which the Closing Date occurs, and thereafter, each successive one-month period commencing on the last Business Day of the immediately preceding calendar month and ending on (but excluding) the last Business Day of the next succeeding calendar month; provided that if any Interest Period would end on a day that is not a Business Day, such Interest Period shall end on the next succeeding Business Day.
"Lender" means Pinnacle National Bank, National Association, a national banking association, and its successors and permitted assigns.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, security interest, preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction.
"Loan Documents" means, collectively, this Agreement, the Guaranty, the Security Agreement, each Deposit Account Control Agreement, each Compliance Certificate, each Notice of Borrowing, each Prepayment Notice, each Officer's Certificate, each Secretary's Certificate, the Funds Flow Memorandum, and all other agreements, instruments, documents, and certificates executed and delivered by the Borrower, the Guarantor, or any other Person in connection with this Agreement and the transactions contemplated hereby, in each case as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Material Adverse Change" or "Material Adverse Effect" means any event, development, circumstance, change, condition, occurrence, or effect that, individually or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on: (a) the business, assets, properties, liabilities (actual or contingent), financial condition, results of operations, or prospects of the Borrower and its Subsidiaries, taken as a whole; (b) the ability of the Borrower or the Guarantor to perform any of its respective obligations under any Loan Document to which it is a party; or (c) the validity or enforceability of any Loan Document, or the rights, remedies, and benefits available to, or conferred upon, the Administrative Agent, the Lender, or the Collateral Agent under any Loan Document.
"Material Judgment Threshold" means Two Million Five Hundred Thousand Dollars ($2,500,000).
"Maturity Date" means August 12, 2027, or such earlier date on which the Term Loan becomes due and payable in accordance with the terms hereof (whether by acceleration, mandatory prepayment, or otherwise).
"Net Proceeds" means, with respect to any asset disposition, casualty event, or condemnation event, the gross cash proceeds received by the Borrower or any Subsidiary in connection therewith, minus (a) all reasonable and customary costs, fees, and expenses incurred by the Borrower or such Subsidiary in connection with such event (including brokerage commissions, legal fees, accounting fees, and investment banking fees), (b) all taxes (including income taxes) paid or reasonably estimated to be payable in connection with such event, and (c) any amounts required to be applied to repay any Indebtedness (other than the Obligations) secured by a Permitted Lien on the assets that were the subject of such event.
"Obligations" means all unpaid principal of and accrued and unpaid interest on the Term Loan, all accrued and unpaid fees, all expenses, reimbursements, indemnities, and all other amounts owing to the Administrative Agent, the Lender, or the Collateral Agent by the Borrower under this Agreement or any other Loan Document, in each case whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
"Organizational Documents" means (a) with respect to the Borrower, its Certificate of Incorporation filed with the Delaware Secretary of State and its Bylaws, each as amended from time to time, and (b) with respect to the Guarantor, its Certificate of Formation filed with the Delaware Secretary of State and its Limited Liability Company Agreement, each as amended from time to time.
"Permitted Indebtedness" means: (i) the Obligations under the Loan Documents; (ii) purchase money indebtedness and obligations under capital leases incurred to finance the acquisition of fixed or capital assets used in the ordinary course of the Borrower's business, in an aggregate outstanding principal amount not to exceed Two Million Dollars ($2,000,000) at any time; (iii) intercompany indebtedness among the Borrower and its Subsidiaries, provided that such indebtedness is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent; (iv) other unsecured indebtedness in an aggregate outstanding principal amount not to exceed Two Million Dollars ($2,000,000) at any time; and (v) Indebtedness set forth on Schedule 7.01 existing on the Closing Date and any refinancings, renewals, or extensions thereof (but not increases in the principal amount thereof).
"Permitted Liens" means: (i) Liens in favor of the Collateral Agent securing the Obligations; (ii) statutory Liens for taxes, assessments, or other governmental charges not yet delinquent or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (iii) purchase money Liens on assets acquired with Permitted Indebtedness described in clause (ii) of the definition of "Permitted Indebtedness," provided that such Liens attach only to the assets so acquired and the aggregate principal amount of the indebtedness secured thereby does not exceed Two Million Dollars ($2,000,000); (iv) easements, rights-of-way, restrictions, minor defects or irregularities in title, zoning restrictions, and similar encumbrances on real property that do not, individually or in the aggregate, materially interfere with the use of the affected property for its intended purpose; (v) Liens arising by operation of law in the ordinary course of business (including carriers', warehousemen's, mechanics', materialmen's, repairmen's, landlord's, and similar Liens) that are not overdue for a period of more than thirty (30) days or are being contested in good faith by appropriate proceedings; and (vi) Liens set forth on Schedule 7.02.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, governmental body, or other entity.
"Prepayment Premium" has the meaning set forth in Section 2.05(c).
"Pro Forma Basis" means, with respect to any transaction, that the calculation in question shall be made giving pro forma effect to such transaction (including any incurrence or repayment of Indebtedness in connection therewith), as if such transaction had occurred on the first day of the applicable measurement period (in the case of income statement items) or on the date of determination (in the case of balance sheet items), in each case in a manner reasonably acceptable to the Administrative Agent and consistent with GAAP.
"Restricted Payment" means (a) any dividend, distribution, or other payment (whether in cash, property, securities, or otherwise) on account of any Equity Interests of the Borrower, (b) any redemption, repurchase, retirement, defeasance, or other acquisition for value of any Equity Interests of the Borrower, and (c) any payment on account of any Indebtedness that is contractually subordinated to the Obligations, except regularly scheduled payments of interest and principal thereon to the extent permitted by the applicable subordination terms.
"Security Agreement" means that certain Security Agreement dated as of July 28, 2022, by and between the Borrower and the Collateral Agent, pursuant to which the Borrower has granted to the Collateral Agent, for the benefit of the Lender, a first-priority security interest in substantially all assets of the Borrower, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Signing Date" means July 28, 2022, the date first written above.
"SOFR" means, with respect to any Business Day, the Secured Overnight Financing Rate for such Business Day as published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at https://www.newyorkfed.org (or any successor source), on the immediately succeeding Business Day.
"SOFR Floor" means a rate of zero and one-half percent (0.50%) per annum.
"Solara Capital Partners" means Solara Capital Partners Fund III, LP, a Delaware limited partnership, the indirect parent of the Borrower.
"Sponsor" means Solara Capital Partners Fund III, LP.
"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which more than fifty percent (50%) of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers, trustees, or other members of the governing body thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, or a combination thereof. Unless otherwise specified, all references herein to a "Subsidiary" or "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Term Loan" means the term loan made by the Lender to the Borrower hereunder in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000).
"Total Funded Debt" means, at any date of determination, the aggregate outstanding principal amount of all Indebtedness for borrowed money (including the outstanding principal amount of the Term Loan and any Indebtedness constituting capital lease obligations) of the Borrower and its Subsidiaries on a consolidated basis, determined in accordance with GAAP.
"Total Leverage Ratio" means, as of any date of determination, the ratio of (a) Total Funded Debt as of such date to (b) Consolidated EBITDA for the trailing twelve-month period most recently ended.
"TTM" means the trailing twelve-month period ending on the applicable date of determination.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.
"Unrestricted Cash" means, at any date of determination, all cash and cash equivalents of the Borrower and its Subsidiaries on a consolidated basis that are not subject to any Lien (other than Liens in favor of the Collateral Agent) or restriction on use, in each case determined in accordance with GAAP.
"U.S. Government Securities Business Day" means any day except a Saturday, a Sunday, or a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
Section 1.02 — Interpretation
Unless the context otherwise requires, in this Agreement and each other Loan Document:
(a) References to "Sections," "Articles," "Exhibits," and "Schedules" are references to Sections and Articles of, and Exhibits and Schedules to, this Agreement unless otherwise specifically stated.
(b) The terms "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them.
(c) The words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular provision hereof.
(d) Headings and captions are included for convenience of reference only and shall not affect the interpretation of this Agreement.
(e) The singular includes the plural and vice versa, and each gender includes all genders.
(f) References to any agreement or instrument (including this Agreement) shall mean such agreement or instrument as amended, supplemented, restated, or otherwise modified from time to time to the extent permitted hereunder or thereunder.
(g) References to any Person shall include such Person's successors and permitted assigns.
(h) References to any law, statute, rule, or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law, statute, rule, or regulation, and any reference to any law, statute, rule, or regulation shall, unless otherwise specified, refer to such law, statute, rule, or regulation as amended, modified, or supplemented from time to time.
(i) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."
(j) Unless otherwise expressly provided herein, references to organizational documents, agreements, or other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements, and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements, and other modifications are permitted by any Loan Document.
Section 1.03 — Accounting Terms and GAAP
(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP as in effect on the Closing Date, applied in a manner consistent with that used in preparing the audited financial statements delivered to the Administrative Agent pursuant to Section 3.01(h).
(b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Administrative Agent shall so request, the Administrative Agent and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Lender); provided that, until such amendment is effective, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein, and (ii) the Borrower shall provide to the Administrative Agent financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
(c) Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification Topic 825—Financial Instruments, or any successor thereto (including any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect), to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at "fair value," as defined therein.
Section 1.04 — SOFR Benchmark Replacement
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark (being, as of the date hereof, one-month Term SOFR), then the Administrative Agent may, in its reasonable discretion, select a Benchmark Replacement to replace such then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after the occurrence of such Benchmark Replacement Date. Any such Benchmark Replacement shall include a spread adjustment (which may be a positive or negative value or zero) that shall have been selected by the Administrative Agent giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Benchmark Replacement by the Relevant Governmental Body and (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Benchmark Replacement for syndicated credit facilities denominated in United States Dollars at such time. The Administrative Agent shall notify the Borrower and the Lender promptly of the implementation of any Benchmark Replacement.
(b) Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement, the Administrative Agent shall have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lender of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision, or election that may be made by the Administrative Agent pursuant to this Section 1.04, including any determination with respect to a tenor, rate, or adjustment, or the occurrence or non-occurrence of an event, circumstance, or date, and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 1.04.
(d) Definitions. For purposes of this Section 1.04:
"Benchmark" means, initially, one-month Term SOFR (as published by CME Group Benchmark Administration Limited or a successor administrator); provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to one-month Term SOFR or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to this Section 1.04.
"Benchmark Replacement" means the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent giving due consideration to any alternate rate of interest recommended by the Relevant Governmental Body or any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities, and (b) the related Benchmark Replacement Adjustment.
"Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body, and (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative, or operational changes (including changes to the definition of "Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, and other technical, administrative, or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
"Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to occur of the following events: (a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all available tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of "Benchmark Transition Event," the first date on which all available tenors of such Benchmark (or the published component used in the calculation thereof) have been or, by the terms of such public statement, will no longer be representative of the underlying market and economic reality that such Benchmark (or such component thereof) is intended to measure.
"Benchmark Transition Event" means the occurrence of one or more of the following events: (a) a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all available tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any available tenor of such Benchmark (or such component thereof); (b) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component), or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all available tenors of such Benchmark (or such component thereof) permanently or indefinitely; or (c) a public statement or publication of information by the regulatory supervisor for the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that all available tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative of the underlying market and economic reality that such Benchmark (or such component thereof) is intended to measure.
"Relevant Governmental Body" means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto, including the Alternative Reference Rates Committee.
"Unadjusted Benchmark Replacement" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
ARTICLE II — THE TERM LOAN
Section 2.01 — Term Loan Commitment
(a) Subject to the terms and conditions set forth herein, and in reliance upon the representations, warranties, and covenants of the Borrower contained herein and in the other Loan Documents, the Lender agrees to make a single-draw senior secured term loan to the Borrower on the Closing Date in the aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) (the "Term Loan").
(b) The Term Loan shall be funded in a single draw on the Closing Date. The full aggregate principal amount of the Term Loan shall be made available to the Borrower in immediately available funds on the Closing Date, subject to satisfaction (or waiver by the Lender) of the conditions precedent set forth in Section 3.01.
(c) The Term Loan is not a revolving credit facility. Any principal amount of the Term Loan that is repaid or prepaid may not be re-borrowed. Upon funding of the Term Loan on the Closing Date, the commitment of the Lender to make the Term Loan shall automatically and permanently terminate.
Section 2.02 — Interest
(a) Interest Rate. Subject to clause (d) below, the outstanding principal balance of the Term Loan shall bear interest at a rate per annum equal to the sum of (i) the greater of (A) one-month Term SOFR (as determined in accordance with clause (f) below) and (B) the SOFR Floor of zero and one-half percent (0.50%) per annum, plus (ii) the Applicable Margin of three and one-half percent (3.50%) per annum (350 basis points). For illustration purposes, at the time of execution of this Agreement, one-month Term SOFR was approximately two and twenty-nine hundredths percent (2.29%) per annum, resulting in an initial all-in interest rate of approximately five and seventy-nine hundredths percent (5.79%) per annum.
(b) Interest Period. The Term Loan shall have successive one-month Interest Periods as defined in Section 1.01. At the end of each Interest Period, a new Interest Period shall commence automatically without any action by the Borrower.
(c) Interest Payment Dates. Accrued and unpaid interest on the outstanding principal balance of the Term Loan shall be due and payable in arrears on each Interest Payment Date (i.e., the last Business Day of each calendar month) and on the Maturity Date. Interest shall accrue from and including the first day of the applicable Interest Period to but excluding the last day of such Interest Period.
(d) Default Interest. Upon the occurrence and during the continuance of an Event of Default, at the election of the Administrative Agent (acting at the direction of the Lender or in its own discretion), the outstanding principal balance of the Term Loan, and to the extent permitted by applicable law, any interest, fees, or other amounts payable hereunder that are overdue, shall bear interest at the Default Rate (i.e., the rate otherwise applicable plus two percent (2.00%) per annum). Default interest shall accrue from the date of such Event of Default (or, in the case of overdue amounts, from the date such amounts became due) until such Event of Default is cured or waived in accordance herewith, or until all Obligations are paid in full. The payment of default interest shall not constitute a waiver by the Administrative Agent or the Lender of any Event of Default or of any rights or remedies hereunder.
(e) Computation. Interest on the Term Loan shall be computed on the basis of a 360-day year for the actual number of days elapsed (including the first day but excluding the last day) in the applicable Interest Period or other period for which interest is being calculated.
(f) SOFR Determination. One-month Term SOFR applicable to each Interest Period shall be determined by the Administrative Agent two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period (the "SOFR Determination Date"). If one-month Term SOFR has not been published on the applicable SOFR Determination Date, the Administrative Agent shall use the rate published on the first preceding U.S. Government Securities Business Day for which such rate was published. Each determination by the Administrative Agent of the applicable SOFR rate shall be conclusive and binding for all purposes, absent manifest error.
Section 2.03 — Amortization and Repayment
(a) Scheduled Amortization. Commencing on November 12, 2022, and continuing on each quarterly amortization date thereafter (being February 12, May 12, August 12, and November 12 of each calendar year, or if such date is not a Business Day, the next succeeding Business Day), the Borrower shall repay the outstanding principal balance of the Term Loan in equal quarterly installments, each in the amount of Eighty-Seven Thousand Five Hundred Dollars ($87,500), representing one percent (1.00%) per annum of the original principal amount of the Term Loan (Thirty-Five Million Dollars ($35,000,000)) divided by four. The scheduled amortization installments shall continue through and including the amortization date immediately preceding the Maturity Date.
(b) Maturity Payment. The entire outstanding principal balance of the Term Loan, together with all accrued and unpaid interest thereon and all other Obligations then outstanding (including any unpaid fees, costs, expenses, and indemnification amounts), shall be due and payable in full on the Maturity Date, August 12, 2027.
(c) Application of Payments. Unless otherwise directed by the Administrative Agent in accordance with Section 8.03, all payments received from the Borrower under this Agreement shall be applied in the following order: first, to accrued and unpaid fees and expenses of the Administrative Agent and the Collateral Agent; second, to accrued and unpaid interest on the Term Loan; and third, to the outstanding principal balance of the Term Loan (applied to the scheduled amortization installments in order of maturity or as otherwise directed by the Administrative Agent).
Section 2.04 — Mandatory Prepayments
(a) Asset Dispositions. If the Borrower or any Subsidiary consummates any asset disposition (other than those expressly permitted under Section 7.03(a) or (b) without triggering a mandatory prepayment), the Borrower shall, within five (5) Business Days following receipt of the Net Proceeds therefrom, prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of such Net Proceeds; provided that this clause (a) shall not apply to any asset disposition to the extent the aggregate Net Proceeds thereof do not exceed One Million Five Hundred Thousand Dollars ($1,500,000) individually or Five Million Dollars ($5,000,000) in the aggregate during any Fiscal Year. For the avoidance of doubt, to the extent that the Net Proceeds of any asset disposition or series of related asset dispositions exceed the thresholds set forth in the preceding sentence, the full amount of such excess shall be applied as a mandatory prepayment.
(b) Insurance and Condemnation Proceeds. If the Borrower or any Subsidiary receives Net Proceeds from any casualty event or condemnation event (or payment in lieu thereof) in excess of One Million Dollars ($1,000,000) with respect to any single event or series of related events, the Borrower shall prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of such Net Proceeds; provided that no such prepayment shall be required to the extent such Net Proceeds are reinvested (or committed to be reinvested pursuant to a binding agreement) in replacement assets, repairs, or restoration of the affected assets within one hundred eighty (180) days following receipt thereof, so long as no Default or Event of Default exists at the time of such reinvestment or commitment.
(c) Indebtedness Proceeds. Promptly upon receipt, the Borrower shall prepay the outstanding principal balance of the Term Loan in an amount equal to one hundred percent (100%) of the net cash proceeds from the incurrence of any Indebtedness by the Borrower or any Subsidiary that does not constitute Permitted Indebtedness.
(d) Change of Control. Upon the occurrence of a Change of Control, the Borrower shall immediately prepay the entire outstanding principal balance of the Term Loan, together with all accrued and unpaid interest, fees, and all other Obligations, in full.
(e) Application. Mandatory prepayments under this Section 2.04 shall be applied to the outstanding principal balance of the Term Loan in inverse order of maturity (i.e., applied first to the final scheduled installment and then in reverse chronological order to the preceding scheduled installments), together with accrued and unpaid interest on the principal so prepaid to the date of prepayment, without regard to any minimum prepayment amounts otherwise applicable to voluntary prepayments. Mandatory prepayments shall be subject to the Prepayment Premium set forth in Section 2.05(c), applied in accordance with Section 2.05(d).
Section 2.05 — Voluntary Prepayments
(a) Right to Prepay. The Borrower may voluntarily prepay the outstanding principal balance of the Term Loan, in whole or in part, at any time and from time to time, subject to the Prepayment Premium set forth in clause (c) below, upon not less than five (5) Business Days' prior irrevocable written notice to the Administrative Agent (each such notice, a "Prepayment Notice"), which notice shall specify the date and amount of the prepayment and whether such prepayment is in whole or in part.
(b) Minimum Amounts. Each partial voluntary prepayment shall be in a minimum aggregate principal amount of One Million Dollars ($1,000,000) and in integral multiples of Five Hundred Thousand Dollars ($500,000) in excess thereof; provided that, if the outstanding principal balance of the Term Loan at the time of such prepayment is less than One Million Dollars ($1,000,000), the Borrower may prepay the entire remaining outstanding principal balance. Each voluntary prepayment shall be accompanied by accrued and unpaid interest on the principal amount prepaid to but excluding the date of such prepayment.
(c) Prepayment Premium. In connection with any voluntary prepayment (and, to the extent provided in Section 2.05(d), any mandatory prepayment) of all or any portion of the outstanding principal balance of the Term Loan, the Borrower shall pay to the Lender a prepayment premium (the "Prepayment Premium") as follows:
(i) If such prepayment occurs during the period from and including the Closing Date through and including the first anniversary of the Closing Date (i.e., from August 12, 2022 through and including August 12, 2023) ("Year 1"), the Prepayment Premium shall be equal to two percent (2.00%) of the aggregate principal amount so prepaid;
(ii) If such prepayment occurs during the period from (but excluding) the first anniversary of the Closing Date through and including the second anniversary of the Closing Date (i.e., from after August 12, 2023 through and including August 12, 2024) ("Year 2"), the Prepayment Premium shall be equal to one percent (1.00%) of the aggregate principal amount so prepaid; and
(iii) If such prepayment occurs at any time after the second anniversary of the Closing Date (i.e., after August 12, 2024), no Prepayment Premium shall be due or payable.
(d) Application to Mandatory Prepayments. The Prepayment Premium described in clause (c) above shall also apply to all mandatory prepayments required under Section 2.04, calculated in the same manner and at the same rate as would apply to a voluntary prepayment made on the date of such mandatory prepayment.
(e) Application. Voluntary prepayments shall be applied to the outstanding principal balance of the Term Loan in inverse order of maturity, unless otherwise agreed by the Administrative Agent and the Borrower. Principal amounts prepaid may not be re-borrowed.
Section 2.06 — Fees
(a) Upfront Fee. On the Closing Date, the Borrower shall pay to the Lender a non-refundable upfront fee in the amount of Three Hundred Fifty Thousand Dollars ($350,000), representing one percent (1.00%) of the original aggregate principal amount of the Term Loan. The upfront fee shall be fully earned when paid and shall not be subject to refund or rebate under any circumstances.
(b) Administrative Agent Fee. The Borrower shall pay to the Administrative Agent, for its own account, an annual administrative agency fee in the amount of Twenty-Five Thousand Dollars ($25,000). The first annual administrative agency fee shall be payable on the Closing Date and shall cover the period from the Closing Date through and including the first anniversary thereof. Thereafter, the administrative agency fee shall be payable in advance on each anniversary of the Closing Date during the term of this Agreement. The administrative agency fee shall be fully earned when paid and shall not be subject to refund or rebate.
(c) Collateral Agent Fee. The Borrower shall pay to the Collateral Agent, for its own account, an annual collateral agency fee in such amount and at such times as are set forth in a separate fee letter dated as of the Signing Date between the Borrower and the Collateral Agent (the "Collateral Agent Fee Letter"). The terms and conditions of the Collateral Agent Fee Letter are incorporated herein by reference for all purposes.
Section 2.07 — Use of Proceeds
(a) The Borrower shall use the proceeds of the Term Loan solely for the following purposes, in the amounts set forth on Schedule 2.07:
(i) Repayment in full of all outstanding obligations under the Existing Credit Facility with Ridgeline Commercial Bank, including the outstanding principal balance of Eight Million Two Hundred Thousand Dollars ($8,200,000) plus approximately Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($37,422) of accrued and unpaid interest thereon, for an aggregate payoff amount of Eight Million Two Hundred Thirty-Seven Thousand Four Hundred Twenty-Two Dollars ($8,237,422);
(ii) Funding the design, construction, and build-out of a new regional cloud data center in Dallas, Texas, located at 2700 Stemmons Freeway, Building C, Dallas, Texas 75207, in the approximate amount of Eleven Million Five Hundred Thousand Dollars ($11,500,000);
(iii) Funding the design, construction, and build-out of a new regional cloud data center in Phoenix, Arizona, located at 1850 West Buckeye Road, Suite 100, Phoenix, Arizona 85009, in the approximate amount of Nine Million Eight Hundred Thousand Dollars ($9,800,000);
(iv) Procurement of proprietary server hardware, networking equipment, and related appliances, in the approximate amount of Three Million Five Hundred Thousand Dollars ($3,500,000);
(v) Working capital and general corporate purposes, in the approximate amount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000); and
(vi) Payment of fees and expenses incurred in connection with this Agreement and the other Loan Documents, including the Upfront Fee of Three Hundred Fifty Thousand Dollars ($350,000) and other transaction-related expenses.
(b) No portion of the proceeds of the Term Loan shall be used, directly or indirectly, (i) to purchase or carry any "margin stock" (as defined in Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock, in each case in violation of, or for a purpose that violates, Regulation U, (ii) in violation of any applicable anti-corruption laws (including the United States Foreign Corrupt Practices Act of 1977), (iii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable anti-corruption laws, or (iv) to fund any activity or business of or with any Sanctioned Person or in any Sanctioned Country.
Section 2.08 — Payments Generally
(a) All payments to be made by the Borrower under this Agreement and the other Loan Documents shall be made in lawful money of the United States of America in immediately available funds, without set-off, deduction, or counterclaim.
(b) All payments of principal, interest, fees, and other amounts due hereunder shall be made to the Administrative Agent at Pinnacle National Bank, National Association, ABA Routing Number 021-405-887, Account Number as notified by the Administrative Agent to the Borrower from time to time, for the account of the Lender, by no later than 2:00 p.m. (New York City time) on the date on which such payment is due. Any payment received by the Administrative Agent after 2:00 p.m. (New York City time) shall be deemed to have been received on the next succeeding Business Day. The Administrative Agent shall promptly distribute to the Lender its share of any payment received hereunder.
(c) If any payment date falls on a day that is not a Business Day, such payment shall instead be due and payable on the next succeeding Business Day, and additional interest shall accrue on any outstanding principal balance during the period of such extension.
(d) The Borrower hereby authorizes the Administrative Agent to debit the BCS operating account maintained by the Borrower at Pinnacle National Bank, National Association (Account No. 7841-0029-3356) for all scheduled payments of principal, interest, and fees when due under this Agreement. Such debit authorization shall remain in effect until all Obligations have been paid in full and this Agreement has been terminated, and the Borrower agrees that it shall maintain sufficient funds in such account to satisfy all payment obligations hereunder as they become due. The exercise of such debit authority by the Administrative Agent shall not relieve the Borrower of its obligation to make timely payments under this Agreement, and failure by the Administrative Agent to debit such account shall not constitute a waiver of any Event of Default.
Section 2.09 — Increased Costs
(a) If any Change in Law shall: (i) impose, modify, or deem applicable any reserve, special deposit, liquidity, compulsory loan, insurance charge, or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender; (ii) subject the Lender to any tax of any kind whatsoever with respect to this Agreement or the Term Loan, or change the basis of taxation of payments to the Lender in respect thereof (other than (A) taxes on or measured by the overall net income of the Lender imposed by the jurisdiction in which its principal office or applicable lending office is located, (B) branch profits taxes, and (C) any taxes described in Section 2.10); or (iii) impose on the Lender any other condition, cost, or expense (other than taxes) affecting this Agreement or the Term Loan, and the result of any of the foregoing is to increase the cost to the Lender of making, converting to, continuing, or maintaining the Term Loan, or to reduce the amount of any sum received or receivable by the Lender, then, upon request of the Lender (delivered through the Administrative Agent), the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
(b) If the Lender determines that any Change in Law affecting the Lender regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on the Lender's capital or on the capital of the Lender's holding company, if any, as a consequence of this Agreement, the commitment of the Lender hereunder, or the Term Loan, to a level below that which the Lender or the Lender's holding company could have achieved but for such Change in Law, then from time to time upon the request of the Lender (delivered through the Administrative Agent), the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or the Lender's holding company for any such reduction suffered.
(c) A certificate of the Lender setting forth in reasonable detail the amount or amounts necessary to compensate the Lender as specified in this Section 2.09 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on

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