CAPSTONE TURBINE CORPORATION (NASDAQ:CPST) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On June2, 2017, Capstone Turbine Corporation, a Delaware
corporation (the Company), entered into two secured credit
facilities (the Credit Agreements) with Western Alliance Bank
through its Bridge Bank division (Bridge Bank), with credit
support provided by the Export-Import Bank of the United States
through its working capital guarantee program.Under the terms of
the Credit Agreements, the Company may borrow up to $12.0 million
on a revolving basis depending on, among other factors, the
amount of the Companys eligible inventory and accounts
receivable. The Credit Agreements are for a two-year period
ending June 2, 2019.

The Company maintained two Credit and Security Agreements, with
Wells Fargo Bank, National Association (Wells Fargo),that
provided the Company with a credit facility up to $20.0 million
in the aggregate. Upon closing with Bridge Bank the Companys
existing credit facilities with Wells Fargo, were paid off in
full.

Total borrowings, letter of credit obligations and the then
aggregate committed amount of cash management services under the
Credit Agreements may not exceed 85% of the sum of unrestricted
cash and the amount of cash collateral held at Bridge Bank. As a
condition of the Credit Agreements, the Companyhas restricted
$5.0 million of cash equivalents as additional security for the
credit facility.Borrowings under the Credit Agreements will bear
per annum interest at the prime rate plus 1.5 percent, subject to
increase during the occurrence of an event of default.
Obligations under the Credit Agreements are secured by all of the
Companys assets, including intellectual property and general
intangibles.

The Credit Agreements include affirmative covenants as well as
negative covenants that prohibit a variety of actions without
Bridge Banks consent, including covenants that limit the Companys
ability to (a) incur or guarantee debt, (b) create liens, (c)
enter into any merger, recapitalization or similar transaction or
purchase all or substantially all of the assets or stock of
another entity, or (d) sell, assign, transfer or otherwise
dispose of the Companys assets.

The financial covenantsof the domestic credit agreement with
Bridge Bank (the Domestic Facility) requires the Company not to
exceed specified levels of losses relative to its financial model
and the outstanding line of credit advances may not exceed 85%
ofthe sum of unrestricted cash and the amount of cash collateral
held at Bridge Bank. The Domestic Facility also defines an event
of default to include a material adverse effect on the Companys
business. An event of default for this or any other reason, if
not waived, could have a material adverse effect on the Company.

The description of the Credit Agreements does not purport to be
complete and is qualified in its entirety by the reference to the
full text of the Credit Agreements, a copy of which are filed
herewith as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3.

Item 2.03Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth under Item 1.01 above is hereby
incorporated by reference into Item 2.03

Item 8.01 Other Events.

On June 6, 2017, the Company issued a press release announcing
the new Credit Agreements. A copy of the press release is
attached as Exhibit 99.1 to this Current Report of Form 8-K and
is incorporated herein by reference.

About CAPSTONE TURBINE CORPORATION (NASDAQ:CPST)

Capstone Turbine Corporation (Capstone) develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications, including cogeneration (combined heat and power), integrated combined heat and power (ICHP), and combined cooling, heat and power (CCHP), renewable energy, natural resources and critical power supply. The Company’s microturbines are used as battery charging generators for hybrid electric vehicle applications. Capstone offers micro turbines for commercial, industrial and utility users with product offerings ranging from 30 kilowatts (kW) to 1 megawatt in electric power output. The Company sells complete microturbine units, subassemblies, components and various accessories. It also remanufactures micro turbine engines and provides after-market parts and services. Its products include C30, C65, TA100, C200, C600, C800, C1000 and waste heat recovery generator. It also offers C65 and C200 ICHP systems.