Commercial Mortgage Loan - CT
LOAN AGREEMENT
LOAN AGREEMENT dated June 28, 1996 (together with any
amendments or modifications hereto in effect from time to
time, the "Agreement"), between FIRST UNION BANK OF
CONNECTICUT ("Bank") and ENERGY RESEARCH CORPORATION
("Borrower").
Bank has agreed to make a loan to Borrower and Borrower
has agreed to accept the loan proceeds in the principal
amount of Two Million Two Hundred Fifty Thousand and 00/100
Dollars ($2,250,000.00) (the "Loan"), on the terms and
conditions set forth herein. The Loan shall be evidenced by
a Mortgage Note of even date herewith from Borrower to Bank
(the "Note").
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
and intending to be legally bound hereby, Bank and Borrower
agree as follows:
1. DEFINITIONS
1.1. "Affiliate" means First Union Corporation and any
of its direct and indirect affiliates and subsidiaries.
1.2. "Commitment Letter" means the commitment letter
dated April 26, 1996 pursuant to which Bank committed to
make the Loan to Borrower.
1.3. "Guarantor" means Fuel Cell Manufacturing
Corporation and Fuel Cell Engineering Corporation,
collectively.
1.4. "Liabilities" means, collectively: (i) the
repayment of all sums due under the Note (and all
extensions, renewals, replacements, substitutions,
amendments and modifications thereof) and the other Loan
Documents, including, without limitation, principal,
interest, fees, late charges and expenses, including
attorneys' fees and/or allocated fees of Bank's in-house
legal counsel; (ii) the repayment of all indebtedness
incurred or arising pursuant to the provisions of the
Mortgage; (iii) the performance of all terms, conditions and
covenants set forth in the Loan Documents; and (iv) the
repayment of all sums due or that may become due under the
Swap Agreement (as hereinafter defined).
1.5. "Loan Documents" means, collectively, this
Agreement, the Note, that certain Open-End Mortgage and
Security Agreement of even date herewith from Borrower to
Bank (the "Mortgage"), that certain Guaranty and Suretyship
Agreement (if any), of even date herewith from Guarantor to
Bank (the "Guaranty"), General Security Agreements from
Borrower and Fuel Cell Manufacturing Corporation] and any
other guaranty, document, certificate or instrument executed
by Borrower, Guarantor or any other obligated party in
connection with the Loan, together with all amendments,
modifications, renewals or extensions thereof.
1.6. "Mortgaged Premises" means the real, personal and
mixed property described in the Mortgage as the "Mortgaged
Premises" and located at 1 & 3 Great Pasture Road, Danbury,
Connecticut.
2. THE LOAN
2.1. Terms of Loan. Bank agrees to make the Loan to
Borrower on the date hereof on the terms and conditions
hereinafter set forth. The Loan will bear interest at the
rate and will be repaid as set forth in the Note.
2.2. Use of Loan Proceeds. Borrower shall use the
proceeds of the Loan only for the following purpose: To
repay the existing first mortgage loan pertaining to the
Mortgaged Premises held by Fleet National Bank.
2.3. Incorporation. All of the Loan Documents are
hereby made a part of this Agreement to the extent and with
the same effect as if fully set forth herein.
3. CONDITIONS PRECEDENT. Bank's obligations hereunder are
conditioned upon the fulfillment to Bank's satisfaction of
each of the following conditions precedent:
3.1. Borrower shall have delivered or caused to be
delivered to Bank each of the Loan Documents, in form and
substance satisfactory to Bank, duly executed by Borrower or
Guarantor, as applicable;
3.2. Borrower shall have delivered or caused to be
delivered to Bank each of the other documents, certificates
and instruments required by the Commitment Letter on or
prior to the date hereof, each in form and substance
satisfactory to Bank; and
3.3. Each of the other conditions contained in the
Commitment Letter shall have been satisfied.
4. REPRESENTATIONS AND WARRANTIES Borrower represents and
warrants as of the date hereof and, unless otherwise
indicated, at all times hereafter until the Liabilities are
fully paid and performed, as follows:
4.1. Organization, Powers. Borrower (i) is a
corporation, duly organized, validly existing and in good
standing under the laws of the state of its organization,
and is authorized to do business in each other jurisdiction
wherein its ownership of property or conduct of business
legally requires such authorization; (ii) has the power and
authority to own its properties and assets and to carry on
its business as now being conducted and as now contemplated;
and (iii) has the power and authority to execute, deliver
and perform all of its obligations under each Loan Document
to which it is a party.
4.2. Execution of Loan Documents. Each of the Loan
Documents to which Borrower is a party have been duly
executed and delivered by Borrower. Execution, delivery and
performance of each of the Loan Documents to which Borrower
is a party will not: (i) violate any of its organizational
documents, provision of law, order of any court, agency or
instrumentality of government, or any provision of any
indenture, agreement or other instrument to which it is a
party or by which it or any of its properties is bound; (ii)
result in the creation or imposition of any lien, charge or
encumbrance of any nature, other than the liens created by
the Loan Documents; and (iii) require any authorization,
consent, approval, license, exemption of, or filing or
registration with, any court or governmental authority.
4.3. Obligations of Borrower. Each of the Loan
Documents to which Borrower is a party is the legal, valid
and binding obligation of Borrower, enforceable against it
in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other
laws or equitable principles relating to or affecting the
enforcement of creditors' rights generally. Borrower is
obtaining the Loan for commercial purposes.
4.4. Litigation; Compliance with Laws. There is no
action, suit, or proceeding at law or in equity or by or
before any governmental authority, agency or other
instrumentality now pending or, to the knowledge of
Borrower, threatened against or affecting Borrower or any of
its properties or rights which, if adversely determined,
would materially impair or affect: (i) the value of any
collateral securing the Liabilities; (ii) Borrower's right
to carry on its business substantially as now conducted (and
as now contemplated); (iii) its financial condition; or (iv)
its capacity to consummate and perform its obligations under
the Loan Documents to which Borrower is a party. Borrower is
in substantial compliance with all laws, ordinances, rules,
regulations and requirements which materially affect
Borrower, its assets or the operation of its business, and
is not in violation of or in default with respect to any
order, writ, injunction, decree or demand of any court or
governmental authority.
4.5. Payment of Taxes. Borrower has filed or caused to
be filed all federal, state and local tax returns which are
required to be filed, and has paid or caused to be paid all
taxes as shown on said returns or on any assessment received
by it, to the extent that such taxes or assessments have
become due, except such that are contested in good faith by
Borrower by appropriate proceedings and for which adequate
reserves have been established. Borrower is not aware of any
material unasserted claims for prior taxes against it for
which adequate reserves satisfactory to Bank have not been
established.
4.6. No Defaults. Borrower is not in default in the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained herein or in
any material agreement or instrument to which it is a party
or by which it or any of its properties is bound. No Event
of Default or event which, with the giving of notice and/or
lapse of time, would constitute an Event of Default has
occurred and is continuing or would result from making the
Loan.
4.7. Financial Statements. All financial statements
delivered by Borrower to Bank, are true, correct and
complete in all material respects, fairly represent
Borrower's financial condition as of the date hereof and
thereof, and no information has been omitted which would
make the information previously furnished misleading or
incorrect in any material respect.
4.8. No Material Adverse Change. As of the date
hereof, there has been no material adverse change in the
financial condition, operations, affairs, prospects, or
business of Borrower from the date of the most recent
financial statements provided by Borrower to Bank.
4.9. No Untrue Statements. No Loan Document or other
document, certificate or statement furnished to Bank by or
on behalf of Borrower contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein
not misleading. It is specifically understood by Borrower
that all such statements, representations and warranties
shall be deemed to have been relied upon by Bank as an
inducement to make the Loan to Borrower.
4.10. Title to Property. Borrower has good and
marketable title to all of its properties and assets listed
in the most recent financial statements delivered to Bank on
or prior to the date hereof, except as otherwise expressly
described in said financial statements, and except those
properties and assets disposed of since the date of said
financial statements in the ordinary course of business.
4.11. ERISA. No employee benefit plan established or
maintained by the Borrower which is subject to the Employee
Retirement Income Security Act 29 U.S.C. 1001 et seq.
("ERISA") has an accumulated funding deficiency (as such
term is defined under ERISA). No material liability to the
Pension Benefit Guaranty Corporation (or any successor
thereto under ERISA) has been incurred by the Borrower with
respect to any such plan and no Reportable Event under ERISA
has occurred. The Borrower has no actual or anticipated
liability under Section 4971 of the Internal Revenue Code
("Code") (relating to tax on failure to meet the minimum
funding standard of Section 412 of the Code) with respect to
any employee benefit plan to which it contributes but which
is not maintained or established by it.
5. COVENANTS
5.1. Optional Hedge. Borrower may hedge the Loan's
floating interest expense for the full term of the Loan by
maintaining either: (i) the Swap Agreement; or (ii) a
comparable interest rate swap agreement with Bank or other
counterparty acceptable to Bank in a notional amount equal
to the then principal balance of the Loan and providing for
a fixed rate sufficient to satisfy the Debt Service Coverage
Ratio requirement set forth below, and containing such other
terms and conditions as shall be reasonably acceptable to
Bank.
5.2. Mergers, Restructure. Borrower shall not merge
into, consolidate with or into, or sell, assign, lease or
otherwise dispose of (whether in one transaction or a series
of transactions) all or substantially all of its assets (now
owned or hereafter acquired) to any person or entity,
without the prior written consent of Bank.
5.3. Maintenance of Business. Borrower shall: (i)
continue to remain in and operate substantially the same
line of business presently engaged in by it; (ii) not
suspend transaction of its usual business; (iii) conduct its
business in an orderly, efficient and customary manner; (iv)
substantially comply with all material laws, ordinances,
rules, regulations and requirements and shall maintain its
business, properties and assets necessary to conduct its
business in substantial compliance with all applicable
material governmental laws, ordinances, approvals, rules,
regulations and requirements, including without limitation,
zoning, sanitary, pollution, building, environmental and
safety laws and ordinances, and the rules and regulations
promulgated thereunder; and (v) not remove, demolish,
materially alter, discontinue the use of, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any part
of its properties and assets necessary for the continuance
of its business, as presently conducted and as presently
contemplated, other than in the normal course of its
business.
5.4. Books and Records. Borrower shall keep and
maintain complete and accurate books and records in
accordance with generally accepted accounting principles
consistently applied, reflecting all of the financial
affairs of Borrower. Borrower shall permit representatives
of Bank to examine and audit Borrower's (and its parent's
and its subsidiaries') books and records, to inspect
Borrower's facilities and properties, and to discuss
Borrower's financial condition and the contents of
Borrower's financial statements with Borrower's accountants.
5.5. Financial Statements; Compliance Certificate.
5.5.1. Borrower shall furnish to Bank the
following financial information, in each instance prepared
in accordance with generally accepted accounting principles
consistently applied:
(i) Not later than ninety (90) days
after the end of each fiscal year or ten (10) days after the
filing of same with the Securities and Exchange Commission,
as applicable, either (a) audited annual consolidated and
consolidating financial statements of Borrower and Guarantor
including, without limitation, a balance sheet, profit and
loss statement and statements of income and cash flows and
any other information requested by Bank, prepared by a
certified public accountant acceptable to Bank, or (b) a
copy of Borrower's form 10-K as filed with the Securities
and Exchange Commission, together with, in either case, all
supporting schedules, including, without limitation,
accounts receivable and accounts payable aging reports in
form, scope, substance and level of detail satisfactory to
the Bank.
(ii) Not later than thirty (30) days
after the end of each fiscal quarter or ten (10) days after
the filing of same with the Securities and Exchange
Commission, as applicable, copies of the Form 10-Q for
Borrower as filed with the Securities and Exchange
Commission, with all supporting schedules. The supporting
schedules shall include, without limitation, accounts
receivable and accounts payable aging reports, in form,
scope, substance and level of detail satisfactory to the
Bank.
(iii) Not later than thirty (30) days
after filing with the Internal Revenue Service or the
appropriate state taxing authority, as the case may be, a
true and complete copy of all federal and state tax returns,
including all schedules, of Borrower and Guarantor and for
any such return not timely filed, copies of all extension
requests.
(iv) Not later than fifteen (15) days
after execution, copies of all permitted new or modified
leases of the Mortgaged Premises.
(v) Such other information respecting
the operations of Borrower and/or the Mortgaged Premises as
Bank may from time to time reasonably request.
5.5.2. Borrower shall furnish to Bank, with each
set of financial statements described in Section 5.5.1.
above, a compliance certificate signed by Borrower's chief
financial officer certifying that: (i) all representations
and warranties of Borrower set forth in this Agreement or
any other Loan Document remain true and correct; (ii) none
of the covenants of Borrower contained in this Agreement or
any other Loan Document has been breached; and (iii) to its
knowledge, no event has occurred which constitutes an Event
of Default or, with the giving of notice or the passage of
time, or both, would constitute an Event of Default under
this Agreement or any other Loan Document. In addition,
Borrower shall promptly notify Bank of the occurrence of any
default, Event of Default, pending or threatened adverse
litigation or material adverse change in its financial
condition.
5.6. Taxes and Other Charges. Borrower shall prepare
and timely file all federal, state and local tax returns
required to be filed by Borrower and promptly pay and
discharge all taxes, assessments, water and sewer rents, and
other governmental charges, imposed upon Borrower or on any
of Borrower's property when due, but in no event after
interest or penalties commence to accrue thereon or become a
lien upon such property, except for those taxes,
assessments, water and sewer rents, and other governmental
charges then being contested in good faith by Borrower by
appropriate proceedings and for which Borrower has
established on its books or by deposit of cash with Bank at
the option of Bank, a reserve for the payment thereof in
such amount as Bank may require, and so long as such
contest: (i) operates to prevent collection, stay any
proceedings which may be instituted to enforce payment of
such item, and prevent a sale of Borrower's property to pay
such item; (ii) is maintained and prosecuted with due
diligence; and (iii) shall not have been terminated or
discontinued adversely to Borrower. Borrower shall submit to
Bank, upon request, an affidavit signed by Borrower
certifying that all federal, state and local income tax
returns have been filed to date and all real property taxes,
assessments and other governmental charges with respect to
Borrower's properties have been paid to date.
Notwithstanding the foregoing, the Bank agrees that no such
reserve will be required in connection with the currently
pending suit against the Department of Revenue Services
filed in the Connecticut Superior Court, Judicial District
of Hartford/New Britain at Hartford, including the pendency
of any appeals in connection therewith.
5.7. Indemnification.
5.7.1. Borrower hereby indemnifies and agrees to
protect, defend and hold harmless Bank, any entity which
"controls" Bank within the meaning of Section 15 of the
Securities Act of 1933, as amended, or is under common
control with Bank, and any member, officer, director,
official, agent, employee or attorney of Bank, and their
respective heirs, administrators, executors, successors and
assigns (collectively, the "Indemnified Parties"), from and
against any and all losses, damages, expenses or liabilities
of any kind or nature and from any suits, claims or demands,
including reasonable attorneys' fees incurred in
investigating or defending such claim, suffered by any of
them and caused by, relating to, arising out of, resulting
from, or in any way connected with the Loan Documents or the
transactions contemplated therein (unless determined by a
final judgment of a court of competent jurisdiction to have
been caused solely by the gross negligence or willful
misconduct of the Indemnified Parties) including, without
limitation: (i) disputes with any architect, general
contractor, subcontractor, materialman or supplier, or on
account of any act or omission to act by Bank in connection
with the Mortgaged Premises; (ii) losses, damages (including
consequential damages), expenses or liabilities sustained by
Bank in connection with any environmental inspection,
monitoring, sampling or cleanup of the Mortgaged Premises
required or mandated by any applicable environmental law;
(iii) any untrue statement of a material fact contained in
information submitted to Bank by Borrower or the omission of
any material fact necessary to be stated therein in order to
make such statement not misleading or incomplete; (iv) the
failure of Borrower to perform any obligations herein
required to be performed by Borrower; and (v) the ownership,
construction, occupancy, operation, use or maintenance of
the Mortgaged Premises.
5.7.2. In case any action shall be brought
against Bank or any other Indemnified Party in respect to
which indemnity may be sought against Borrower, Bank or such
other Indemnified Party shall promptly notify Borrower and
Borrower shall assume the defense thereof, including the
employment of counsel selected by Borrower and satisfactory
to Bank, the payment of all costs and expenses and the right
to negotiate and consent to settlement. The failure of Bank
to so notify Borrower shall not relieve Borrower of any
liability it may have under the foregoing indemnification
provisions or from any liability which it may otherwise have
to Bank or any of the other Indemnified Parties. Bank shall
have the right, at its sole option, to employ separate
counsel in any such action and to participate in the defense
thereof, all at Borrower's sole cost and expense. Borrower
shall not be liable for any settlement of any such action
effected without its consent, but if settled with Borrower's
consent, or if there be a final judgment for the claimant in
any such action, Borrower agrees to indemnify and save
harmless Bank from and against any loss or liability by
reason of such settlement or judgment.
5.7.3. The provisions of this Section 5.7 shall
survive the repayment or other satisfaction of the
Liabilities.
5.8. Financial Covenants. Borrower shall comply with
each of the following financial covenants:
5.8.1. Borrower shall not permit Tangible Net
Worth of Borrower and Guarantor, on a consolidated basis, at
any time to be less than $8,600,000. "Tangible Net Worth" is
defined, at any date as (i) the aggregate amount at which
all assets of the Borrower and Guarantor, on a consolidated
basis, would be shown on a balance sheet at such date after
deducting capitalized research and development costs,
capitalized interest, goodwill, patents, trademarks, trade
names, copyrights, service works, franchises, licenses,
amounts owing from officers, directors, shareholders,
principals, partners or affiliates of the Borrower and any
investments in any entities owned or controlled by any of
the foregoing, and such other assets as are properly
classified as "intangible assets" less (ii) Total
Liabilities. For the fiscal year ending October 31, 1996,
Tangible Net Worth shall equal or exceed $8,950,000. For
each fiscal year thereafter, Tangible Net Worth shall
increase over the immediately preceding fiscal year by not
less than $600,000. "Total Liabilities" is defined at any
date as all liabilities of the Borrower and Guarantor, on a
consolidated basis, including capitalized leases and all
reserves for deferred taxes and other deferred sums,
which would properly appear on the liabilities side of a
balance sheet in accordance with Generally Accepted
Accounting Principles ("GAAP") applied on a consistent
basis.
5.8.2. Borrower shall not permit the ratio of
Total Liabilities to Tangible Net Worth of Borrower and
Guarantor, on a consolidated basis, at any time to exceed
1.5:1.0.
5.8.3. Borrower shall at all times maintain at
the end of each fiscal quarter of Borrower a Debt Service
Coverage Ratio of Borrower and Guarantor, on a consolidated
basis, of not less than 2.5. to 1.0. Debt Service Coverage
Ratio is defined as:
EBITDA - Main Cap Ex
____________________________
CMLTD + CPCLO + interest expense
where:
EBITDA means earnings before interest, taxes, depreciation
and amortization for the one year period ending on the date
of determination;
CMLTD means current maturities of long term debt;
CPCLO means current portion of capital lease obligations;
and
Main. Cap Ex means that portion of capital expenditures for
the one year period ending on the date of determination
necessary for property, plant and equipment to maintain
existing revenue levels
5.8.4. Retained Earnings of Borrower and
Guarantor, on a consolidated basis determined in accordance
with GAAP, shall increase annually by an amount not less
than $350,000.
5.8.5. Borrower shall maintain its primary
operating accounts at Bank.
5.8.6. Borrower shall maintain a Loan to Value
Ratio of not more than 75%. Loan to Value Ratio means the
outstanding principal balance of the Loan at the time in
question divided by the then current fair market value of
the Mortgaged Premises, as determined by Bank in its
reasonable judgment.
5.8.7. Borrower and Guarantor, on a consolidated
basis, shall not make any loans or advances to any other
person or entity other than any Guarantor in excess of
$250,000 annually without the express written consent of
the Bank which shall not be unreasonably withheld.
5.8.8. Except for obligations to the Bank or any
Affiliate and except for obligations in relation to
Permitted Liens (as defined in Section 5.13), Borrower and
Guarantor, on a consolidated basis, shall not create, incur,
assume or permit to exist any indebtedness for borrowed
money, for the deferred purchase price of property or
services, for reimbursement of letters of credit issued by
others, or any other indebtedness evidenced by a note, bond
or other instrument, in excess of $250,000 annually without
the express written consent of the Bank, which shall not be
unreasonably withheld.
5.8.9. Borrower shall not assume, guarantee,
endorse or otherwise become directly or contingently liable
for the obligations of any other person or entity except for
obligations of any Guarantor, which obligations do not
violate any duty or obligation of such Guarantor to the Bank
and except by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
5.8.10. All amounts due from Borrower to
affiliates and/or shareholders of Borrower shall be fully
subordinated in writing to all obligations of Borrower to
the Bank on terms satisfactory to the Bank.
5.9. Contracts. Borrower shall not cancel any of the
Borrower's contracts with the Department of Energy, for any
reason. On a quarterly basis, Borrower will provide Bank
with an updated schedule of contracts indicating face value
and percentage of completion along with a re-affirmation
that all contracts are in full force and effect in terms of
each parties' contractual obligations.
5.10. Default on Other Contracts or Obligations.
Borrower shall not default on any material contract with, or
obligations due to any third party, or default in the
performance of any material obligation to a third party
incurred for money borrowed, which default has a material
adverse effect on Borrower and its business.
5.11. Judgment Entered. Borrower shall not permit the
entry of any money judgment or the assessment against, the
filing of any tax lien against, or the issuance of any writ
of garnishment or attachment against any property of or
debts due Borrower or Guarantor except such that are
contested in good faith by Borrower by appropriate
proceedings and for which adequate reserves have been
established.
5.12. Change of Fiscal Year. Borrower shall not change
its fiscal year without the express written consent of the
Bank.
5.13. Encumbrances. Borrower shall not create any
mortgage, security deed, deed of trust, pledge, lien, charge
or other encumbrance on any of its assets, whether now owned
or hereafter acquired other than (i) security interests
required by the Loan Documents; (ii) liens for taxes
contested in good faith; (iii) liens accruing by law for
employee benefits (other than liens arising under ERISA);
(iv) existing liens listed on Schedule 5.13 attached hereto
and liens as to which the Bank has given its express prior
written consent; or (v) liens which secure obligations
permitted pursuant to 5.8.8. ("Permitted Liens").
5.14. Investments. Borrower shall not purchase or
acquire any stock, securities, or evidence of indebtedness
of any other person or entity except investments in direct
obligations of the United States Government and certificates
of deposit of United States commercial banks having a tier 1
capital ratio of not less than 6% and then in an amount not
exceeding 10% of the issuing bank's unimpaired capital and
surplus.
5.15. Notice of Certain Events. Borrower shall
promptly give written notice to the Bank of (i) the details
of any Reportable Events (as defined in ERISA) which have
occurred; (ii) the occurrence of any event which alone or
with notice, the passage of time, or both, would constitute
an Event of Default; (iii) the commencement of any
proceeding or litigation which, if adversely determined,
would adversely affect its financial condition or ability to
conduct its business; and (iv) the formation of any
subsidiary of the Borrower after the date of this Agreement,
which notice shall be accompanied by the resolution of the
Board of Directors of such subsidiary authorizing such
subsidiary to execute a guaranty of the Liabilities,
satisfactory in form and substance to the Bank, together
with such guaranty duly executed by such subsidiary.
5.16. Preservation of Property; Insurance. Borrower
shall keep and maintain, and require its subsidiaries to
keep and maintain, all of its and their property and assets
in good order and repair, maintain extended coverage,
general liability, business interruption, hazard, property
and other insurance in amounts deemed sufficient by the Bank
and as is customary for businesses similar to the Borrower's
business, and deliver to the Bank certificates of all such
insurance in effect; and cause all such policies covering
any collateral and business interruption to contain loss
payee endorsements in favor of the Bank and to be subject to
cancellation or reduction in coverage only upon 30 days
prior written notice thereof to the Bank at its address set
forth in this Agreement.
5.17. Accounts. Borrower shall not sell, assign,
transfer or dispose of any of its accounts or notes
receivable, with or without recourse, except to the Bank.
5.18. Sale-Leaseback Transactions. Borrower shall not
enter into any sale-leaseback transaction or any transaction
howsoever termed which would have the same or substantially
the same result or effect as a sale-leaseback.
5.19. Prepayment of Other Indebtedness. Borrower
shall not prepay any material amounts not required to be
prepaid, except to the Bank or any Affiliate, or cause or
permit to be accelerated any material amounts on any
outstanding indebtedness now existing or hereafter arising;
6. EVENTS OF DEFAULT AND REMEDIES
6.1. Each of the following shall constitute a default
(each, an "Event of Default") hereunder:
6.1.1. Non-payment when due of any sum required
to be paid to Bank under any of the Loan Documents;
6.1.2. A breach of the covenants contained in
Sections 5.2., 5.3., 5.6., 5.8., 5.9., 5.10., 5.11., 5.12.,
5.13. or 5.14.hereof;
6.1.3. A breach by Borrower of any other term,
covenant, condition, obligation or agreement under this
Agreement, and the continuance of such breach for a period
of fifteen (15) days after written notice thereof shall have
been given to Borrower;
6.1.4. Any representation or warranty made by
Borrower or Guarantor in this Agreement or any other Loan
Document shall prove to be false, incorrect or misleading in
any material respect as of the date when made;
6.1.5. An Event of Default under any of the other
Loan Documents.
6.1.6. An Event of Default under that certain
Loan Agreement by and between Fuel Cell Manufacturing
Corporation and Bank of even date herewith or any document
related thereto or any other instrument, document or
agreement between Borrower, any Guarantor and the Bank.
6.1.7. The filing by or against Borrower or any
Guarantor of a petition seeking relief, or the granting of
relief, under the Federal Bankruptcy Code or any similar
federal or state statute; any assignment for the benefit of
creditors made by Borrower or any Guarantor; the appointment
of a custodian, receiver, liquidator or trustee for Borrower
or any Guarantor or for any of the property of Borrower or
any Guarantor, or any action by Borrower or any Guarantor to
effect any of the foregoing; or if Borrower or any Guarantor
becomes insolvent (however defined) or is not paying its
debts generally as they become due;
6.1.8. The death, dissolution, liquidation,
merger, consolidation or reorganization of Borrower or any
Guarantor, or the institution of any proceeding to effect
any of the foregoing;
6.1.9. A material deterioration in the financial
condition of Borrower or any Guarantor or the occurrence of
any event which, in the reasonable opinion of the Bank,
impairs the financial responsibility of Borrower or any
Guarantor and their ability to repay the Liabilities;
6.2. Upon or at any time after the occurrence of an
Event of Default, Bank may exercise any right, power or
remedy permitted by law or as set forth in any of the Loan
Documents including, without
limitation, the right to declare the entire unpaid amount
of this Loan immediately due and payable (provided that, in
the case of an Event of Default described in 6.1.7 above,
the entire unpaid amount of the Loan shall immediately and
automatically be due and payable) without presentment,
demand, notice of any kind, protest or notice of protest,
all of which are expressly waived, notwithstanding anything
to the contrary contained in any of the Loan Documents.
7. CONTINUING ENFORCEMENT OF AGREEMENT.
If, after receipt of any payment of all or any part of
the Liabilities, Bank is compelled or agrees, for settlement
purposes, to surrender such payment to any person or entity
for any reason (including, without limitation, a
determination that such payment is void or voidable as a
preference or fraudulent conveyance, an impermissible
setoff, or a diversion of trust funds), then this Agreement
and the other Loan Documents shall continue in full force
and effect, and Borrower shall be liable for, and shall
indemnify, defend and hold harmless Bank with respect to the
full amount so surrendered. The provisions of this Section
shall survive the termination of this Agreement and the
other Loan Documents and shall remain effective
notwithstanding the payment of the Liabilities, the
cancellation of the Note or any other Loan Document, the
release of any security interest, lien or encumbrance
securing the Liabilities or any other action which Bank may
have taken in reliance upon its receipt of such payment.
Any cancellation, release or other such action by Bank shall
be deemed to have been conditioned upon any payment of the
Liabilities having become final and irrevocable.
8. MISCELLANEOUS
8.1. Integration. This Agreement and the other Loan
Documents constitute the sole agreement of the parties with
respect to the transaction contemplated hereby and supersede
all oral negotiations and prior writings with respect
thereto.
8.2. Attorneys' Fees and Expenses. Borrower shall pay
all of the Bank's attorneys' fees and other costs incurred
in connection with this transaction. If Bank retains the
services of counsel by reason of a claim of a default or an
Event of Default hereunder or under any of the other Loan
Documents, or on account of any matter involving this
Agreement, or for examination of matters subject to Bank's
approval under the Loan Documents, all costs of suit and
collection and all reasonable attorneys' fees (and/or
allocated fees of Bank's in-house legal counsel) and such
other reasonable expenses so incurred by Bank shall
forthwith, on demand, become due and payable and shall be
secured hereby.
8.3. No Implied Waiver. Bank shall not be deemed to
have modified or waived any of its rights or remedies
hereunder unless such modification or waiver is in writing
and signed by Bank, and then only to the extent specifically
set forth therein. A waiver in one event shall not be
construed as continuing or as a waiver of or bar to such
right or remedy on a subsequent event.
8.4. Partial Invalidity. The invalidity or
unenforceability of any one or more provisions of this
Agreement shall not render any other provisions herein
contained invalid or unenforceable. In lieu of any invalid
or unenforceable provision, there shall be added
automatically a valid and enforceable provision as similar
in terms to such invalid or unenforceable provision as may
be possible.
8.5. Binding Effect. The covenants, conditions,
waivers, releases and agreements contained in this Agreement
shall bind, and the benefits thereof shall inure to, the
parties hereto and their respective heirs, executors,
administrators, successors and assigns; provided, however,
that this Agreement cannot be assigned by Borrower without
the prior written consent of Bank, and any such assignment
or attempted assignment by Borrower shall be void and of no
effect with respect to Bank.
8.6. Modifications. This Agreement may not be
supplemented, extended, modified or terminated except by an
agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge
is sought.
8.7. Jurisdiction. Borrower irrevocably appoints each
and every owner, partner and/or officer of Borrower as its
attorneys upon whom may be served any notice, process or
pleading in any action or proceeding against it arising out
of or in connection with this Agreement or any other Loan
Document. Borrower hereby consents that any action or
proceeding against it may be commenced and maintained in any
court within the State of Connecticut or in the United
States District Court for the District of Connecticut or, at
the option of Bank, any court in which Bank shall initiate
legal or equitable proceedings and which has subject matter
jurisdiction over the matter in controversy, and that such
action or proceeding may be commenced by service of process
on any such owner, partner and/or officer. Borrower agrees
that the courts of the State of Connecticut and the United
States District Court for the District of Connecticut shall
have jurisdiction with respect to the subject matter hereof
and the person of Borrower and all collateral securing the
obligations of Borrower. Borrower hereby further consents to
personal jurisdiction in any other court in which Bank shall
initiate legal or equitable proceedings and which has
subject matter jurisdiction over the matter in controversy.
Borrower hereby waives personal service of the summons and
complaint or other process or papers issued in any
proceeding of the type described in this Section 8.7 and
agrees that service of such summons and complaint, or other
process or papers may be made by regular or certified mail
addressed to Borrower at the address of Borrower set forth
herein. Borrower agrees not to assert any defense to any
proceeding initiated by Bank based upon improper venue or
inconvenient forum. Borrower agrees that any action brought
by Borrower shall be commenced and maintained only in a
court in the federal judicial district or county in which
Bank has a place of business in Connecticut.
8.8. Notices. All notices and communications under
this Agreement shall be in writing and shall be given by
either (a) hand-delivery, (b) first class mail (postage
prepaid), or (c) reliable overnight commercial courier
(charges prepaid) to the addresses listed in this Agreement.
Notice shall be deemed to have been given and received: (i)
if by hand delivery, upon delivery; (ii) if by mail, three
(3) calendar days after the date first deposited in the
United States mail; and (iii) if by overnight courier, on
the date scheduled for delivery. A party may change its
address by giving written notice to the other party as
specified herein.
8.9. Governing Law. This Agreement shall be governed
by and construed in accordance with the substantive laws of
the State of Connecticut without reference to conflict of
laws principles.
8.10. Waiver of Jury Trial. BORROWER AND BANK AGREE
THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT BY BANK OR BORROWER ON OR WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS
OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE
TRIED ONLY BY A COURT AND NOT BY A JURY. BANK AND BORROWER
EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE
COUNSEL, WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH
SUIT, ACTION OR PROCEEDING. FURTHER, BORROWER WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION
TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT
THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS
AGREEMENT AND THAT BANK WOULD NOT EXTEND CREDIT TO BORROWER
IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF
THIS AGREEMENT.
8.11. Prejudgment Remedy Waiver. BORROWER HEREBY
REPRESENTS, COVENANTS AND AGREES THAT THE PROCEEDS OF THE
LOAN SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND THAT
THE LOAN IS A "COMMERCIAL TRANSACTION" AS DEFINED BY THE
STATUTES OF THE STATE OF CONNECTICUT. BORROWER HEREBY WAIVES
ALL RIGHTS TO NOTICE AND PRIOR COURT
HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUTES,
SECTIONS 52-278a et seq., AS AMENDED, OR UNDER ANY OTHER
STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT
REMEDIES BANK MAY EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES
HEREUNDER. MORE SPECIFICALLY, BORROWER ACKNOWLEDGES THAT
BANK'S ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL
STATUTES, SECTION 52-278f, ISSUE A WRIT FOR A PREJUDGMENT
REMEDY WITHOUT SECURING A COURT ORDER. BORROWER ACKNOWLEDGES
AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO
THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY BANK'S
ATTORNEY, AND BANK ACKNOWLEDGES BORROWER'S RIGHT TO SAID
HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT. BORROWER
FURTHER HEREBY WAIVES ANY REQUIREMENT OR OBLIGATION OF BANK
TO POST A BOND OR OTHER SECURITY IN CONNECTION WITH ANY
PREJUDGMENT REMEDY OBTAINED BY BANK AND WAIVES ANY
OBJECTIONS TO ANY PREJUDGMENT REMEDY OBTAINED BY BANK BASED
ON ANY OFFSETS, CLAIMS, DEFENSES OR COUNTERCLAIMS OF
BORROWER OR ANY OTHER OBLIGATED PARTY TO ANY ACTION BROUGHT
BY BANK. BORROWER ACKNOWLEDGES AND AGREES THAT ALL OF THE
WAIVERS CONTAINED IN THIS SECTION HAVE BEEN MADE KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE
ADVICE OF ITS COUNSEL.
IN WITNESS WHEREOF, Borrower and Bank, intending to be
legally bound, have duly executed and delivered this Loan
Agreement as of the day and year first above written.
WITNESS: BORROWER:
ENERGY RESEARCH CORPORATION
By:
Name: Name:
Title: Title:
Address: 3 Great Pasture Road
Danbury, CT 06810
BANK:
FIRST UNION BANK OF
CONNECTICUT
By:
Name: Name: Diane Chamberlain
Title: Title: Vice President
Address: 300 Main Street
P.O. Box 700
CT2007
Stamford, CT
06904-0700
Attn: Anne S. Wilson
Vice President
Commercial Loan - CT
TERM LOAN AGREEMENT
LOAN AGREEMENT dated June 28, 1996 (together with any
amendments or modifications hereto in effect from time to
time, the "Agreement"), between FIRST UNION BANK OF
CONNECTICUT ("Bank") and FUEL CELL MANUFACTURING CORPORATION
("Borrower").
Bank has agreed to make a loan to Borrower and Borrower
has agreed to accept the loan proceeds in the principal
amount of Six Hundred Thousand and 00/100 Dollars
($600,000.00) (the "Loan"), on the terms and conditions set
forth herein. The Loan shall be evidenced by a Term Note of
even date herewith from Borrower to Bank (the "Note").
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
and intending to be legally bound hereby, Bank and Borrower
agree as follows:
1. DEFINITIONS
1.1. "Affiliate" means First Union Corporation and any
of its direct and indirect affiliates and subsidiaries.
1.2. "Commitment Letter" means the commitment letter
dated April 26, 1996 pursuant to which Bank committed to
make the Loan to Borrower.
1.3. "General Security Agreement" means that certain
General Security Agreement entered into between Borrower and
Bank, dated of even date herewith.
1.4. "Guarantor" means Energy Research Corporation and
Fuel Cell Engineering Corporation, collectively.
1.5. "Liabilities" means, collectively: (i) the
repayment of all sums due under the Note (and all
extensions, renewals, replacements, substitutions,
amendments and modifications thereof) and the other Loan
Documents, including, without limitation, principal,
interest, fees, late charges and expenses, including
attorneys' fees and/or allocated fees of Bank's in-house
legal counsel; (ii) the repayment of all indebtedness
incurred or arising pursuant to the provisions of the
Mortgage; and (iii) the performance of all terms, conditions
and covenants set forth in the Loan Documents.
1.6. "Loan Documents" means, collectively, this
Agreement, the Note, that certain Guaranty and Suretyship
Agreement (if any), of even date herewith from Guarantor to
Bank (the "Guaranty"), that certain Open-End Mortgage and
Security Agreement of even date herewith from Energy
Research Corporation to Bank (the "Mortgage"), General
Security Agreements from Borrower and Energy Research
Corporation, and any other guaranty, document, certificate
or instrument executed by Borrower, Guarantor or any other
obligated party in connection with the Loan, together with
all amendments, modifications, renewals or extensions
thereof.
1.7. "Mortgaged Premises" means the real, personal and
mixed property described in the Mortgage as the "Mortgaged
Premises" and located at 1 & 3 Great Pasture Road, Danbury,
Connecticut.
2. THE LOAN
2.1. Terms of Loan. Bank agrees to make the Loan to
Borrower on the date hereof on the terms and conditions
hereinafter set forth. The Loan will bear interest at the
rate and will be repaid as set forth in the Note.
2.2. Use of Loan Proceeds. Borrower shall use the
proceeds of the Loan only for the following purpose: To
repay the existing term loan held by Fleet National Bank.
2.3. Incorporation. All of the Loan Documents are
hereby made a part of this Agreement to the extent and with
the same effect as if fully set forth herein.
3. CONDITIONS PRECEDENT. Bank's obligations hereunder
are conditioned upon the fulfillment to Bank's satisfaction
of each of the following conditions precedent:
3.1. Borrower shall have delivered or caused to be
delivered to Bank each of the Loan Documents, in form and
substance satisfactory to Bank, duly executed by Borrower or
Guarantor, as applicable;
3.2. Borrower shall have delivered or caused to be
delivered to Bank each of the other documents, certificates
and instruments required by the Commitment Letter on or
prior to the date hereof, each in form and substance
satisfactory to Bank; and
3.3. Each of the other conditions contained in the
Commitment Letter shall have been satisfied.
4. REPRESENTATIONS AND WARRANTIES Borrower represents
and warrants as of the date hereof and, unless otherwise
indicated, at all times hereafter until the Liabilities are
fully paid and performed, as follows:
4.1. Organization, Powers. Borrower (i) is a
corporation, duly organized, validly existing and in good
standing under the laws of the state of its organization,
and is authorized to do business in each other jurisdiction
wherein its ownership of property or conduct of business
legally requires such authorization; (ii) has the power and
authority to own its properties and assets and to carry on
its business as now being conducted and as now contemplated;
and (iii) has the power and authority to execute, deliver
and perform all of its obligations under each Loan Document
to which it is a party.
4.2. Execution of Loan Documents. Each of the Loan
Documents to which Borrower is a party have been duly
executed and delivered by Borrower. Execution, delivery and
performance of each of the Loan Documents to which Borrower
is a party will not: (i) violate any of its organizational
documents, provision of law, order of any court, agency or
instrumentality of government, or any provision of any
indenture, agreement or other instrument to which it is a
party or by which it or any of its properties is bound; (ii)
result in the creation or imposition of any lien, charge or
encumbrance of any nature, other than the liens created by
the Loan Documents; and (iii) require any authorization,
consent, approval, license, exemption of, or filing or
registration with, any court or governmental authority.
4.3. Obligations of Borrower. Each of the Loan
Documents to which Borrower is a party is the legal, valid
and binding obligation of Borrower, enforceable against it
in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other
laws or equitable principles relating to or affecting the
enforcement of creditors' rights generally. Borrower is
obtaining the Loan for commercial purposes.
4.4. Litigation; Compliance with Laws. There is no
action, suit, or proceeding at law or in equity or by or
before any governmental authority, agency or other
instrumentality now pending or, to the knowledge of
Borrower, threatened against or affecting Borrower or any of
its properties or rights which, if adversely determined,
would materially impair or affect: (i) the value of any
collateral securing the
Liabilities; (ii) Borrower's right to carry on its business
substantially as now conducted (and as now contemplated);
(iii) its financial condition; or (iv) its capacity to
consummate and perform its obligations under the Loan
Documents to which Borrower is a party. Borrower is in
substantial compliance with all laws, ordinances, rules,
regulations and requirements which materially affect
Borrower, its assets or the operation of its business, and
is not in violation of or in default with respect to any
order, writ, injunction, decree or demand of any court or
governmental authority.
4.5. Payment of Taxes. Borrower has filed or caused to
be filed all federal, state and local tax returns which are
required to be filed, and has paid or caused to be paid all
taxes as shown on said returns or on any assessment received
by it, to the extent that such taxes or assessments have
become due, except such that are contested in good faith by
Borrower by appropriate proceedings and for which adequate
reserves have been established. Borrower is not aware of any
material unasserted claims for prior taxes against it for
which adequate reserves satisfactory to Bank have not been
established.
4.6. No Defaults. Borrower is not in default in the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained herein or in
any material agreement or instrument to which it is a party
or by which it or any of its properties is bound. No Event
of Default or event which, with the giving of notice and/or
lapse of time, would constitute an Event of Default has
occurred and is continuing or would result from making the
Loan.
4.7. Financial Statements. All financial statements
delivered by Borrower to Bank, are true, correct and
complete in all material respects, fairly represent
Borrower's financial condition as of the date hereof and
thereof, and no information has been omitted which would
make the information previously furnished misleading or
incorrect in any material respect.
4.8. No Material Adverse Change. As of the date
hereof, there has been no material adverse change in the
financial condition, operations, affairs, prospects, or
business of Borrower from the date of the most recent
financial statements provided by Borrower to Bank.
4.9. No Untrue Statements. No Loan Document or other
document, certificate or statement furnished to Bank by or
on behalf of Borrower contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein
not misleading. It is specifically understood by Borrower
that all such statements, representations and warranties
shall be deemed to have been relied upon by Bank as an
inducement to make the Loan to Borrower.
4.10. Title to Property. Borrower has good and
marketable title to all of its properties and assets listed
in the most recent financial statements delivered to Bank on
or prior to the date hereof, except as otherwise expressly
described in said financial statements, and except those
properties and assets disposed of since the date of said
financial statements in the ordinary course of business.
4.11. ERISA. No employee benefit plan established or
maintained by the Borrower which is subject to the Employee
Retirement Income Security Act 29 U.S.C. 1001 et seq.
("ERISA") has an accumulated funding deficiency (as such
term is defined under ERISA). No material liability to the
Pension Benefit Guaranty Corporation (or any successor
thereto under ERISA) has been incurred by the Borrower with
respect to any such plan and no Reportable Event under ERISA
has occurred. The Borrower has no actual or anticipated
liability under Section 4971 of the Internal Revenue Code
("Code") (relating to tax on failure to meet the minimum
funding standard of Section 412 of the Code) with respect to
any employee benefit plan to which it contributes but which
is not maintained or established by it.
5. COVENANTS
5.1. Optional Hedge. Borrower may hedge the Loan's
floating interest expense for the full term of the Loan by
maintaining either: (i) the Swap Agreement; or (ii) a
comparable interest rate swap agreement with Bank or other
counterparty acceptable to Bank in a notional amount equal
to the then principal balance of the Loan and providing for
a fixed rate sufficient to satisfy the Debt Service Coverage
Ratio requirement set forth below, and containing such other
terms and conditions as shall be reasonably acceptable to
Bank.
5.2. Mergers, Restructure. Borrower shall not merge
into, consolidate with or into, or sell, assign, lease or
otherwise dispose of (whether in one transaction or a series
of transactions) all or substantially all of its assets (now
owned or hereafter acquired) to any person or entity,
without the prior written consent of Bank.
5.3. Maintenance of Business. Borrower shall: (i)
continue to remain in and operate substantially the same
line of business presently engaged in by it; (ii) not
suspend transaction of its usual business; (iii) conduct its
business in an orderly, efficient and customary manner; (iv)
substantially comply with all materially laws, ordinances,
rules, regulations and requirements and shall maintain its
business, properties and assets necessary to conduct its
business in substantial compliance with all applicable
material governmental laws, ordinances, approvals, rules,
regulations and requirements, including without limitation,
zoning, sanitary, pollution, building, environmental and
safety laws and ordinances, and the rules and regulations
promulgated thereunder; and (v) not remove, demolish,
materially alter, discontinue the use of, sell, transfer,
assign, hypothecate, pledge or otherwise dispose of any part
of its properties and assets necessary for the continuance
of its business, as presently conducted and as presently
contemplated, other than in the normal course of its
business.
5.4. Books and Records. Borrower shall keep and
maintain complete and accurate books and records in
accordance with generally accepted accounting principles
consistently applied, reflecting all of the financial
affairs of Borrower. Borrower shall permit representatives
of Bank to examine and audit Borrower's (and its parent's
and its subsidiaries') books and records, to inspect
Borrower's facilities and properties, and to discuss
Borrower's financial condition and the contents of
Borrower's financial statements with Borrower's accountants.
5.5. Financial Statements; Compliance Certificate.
5.5.1. Borrower shall furnish to Bank the
following financial information, in each instance prepared
in accordance with generally accepted accounting principles
consistently applied:
(i) Not later than ninety (90) days
after the end of each fiscal year or ten (10) days after the
filing of same with the Securities and Exchange Commission,
as applicable, either (a) audited annual consolidated and
consolidating financial statements of Borrower and Guarantor
including, without limitation, a balance sheet, profit and
loss statement and statements of income and cash flows and
any other information requested by Bank, prepared by a
certified public accountant acceptable to Bank, or (b) a
copy of Borrower's form 10-K as filed with the Securities
and Exchange Commission, together with, in either case, all
supporting schedules, including, without limitation,
accounts receivable and accounts payable aging reports in
form, scope, substance and level of detail satisfactory to
the Bank.
(ii) Not later than thirty (30) days
after the end of each fiscal quarter or ten (10) days after
the filing of same with the Securities and Exchange
Commission, as applicable, copies of the Form 10-Q for
Borrower as filed with the Securities and Exchange
Commission, with all supporting
schedules. The supporting schedules shall include, without
limitation, accounts receivable and accounts payable aging
reports, in form, scope, substance and level of detail
satisfactory to the Bank.
(iii) Not later than thirty (30) days
after filing with the Internal Revenue Service or the
appropriate state taxing authority, as the case may be, a
true and complete copy of all federal and state tax returns,
including all schedules, of Borrower and Guarantor and for
any such return not timely filed, copies of all extension
requests.
(iv) Not later than fifteen (15) days
after execution, copies of all permitted new or modified
leases of the Mortgaged Premises.
(v) Such other information respecting
the operations of Borrower and/or the Mortgaged Premises as
Bank may from time to time reasonably request.
5.5.2. Borrower shall furnish to Bank, with each
set of financial statements described in Section 5.5.1.
above, a compliance certificate signed by Borrower's chief
financial officer certifying that: (i) all representations
and warranties of Borrower set forth in this Agreement or
any other Loan Document remain true and correct; (ii) none
of the covenants of Borrower contained in this Agreement or
any other Loan Document has been breached; and (iii) to its
knowledge, no event has occurred which constitutes an Event
of Default or, with the giving of notice or the passage of
time, or both, would constitute an Event of Default under
this Agreement or any other Loan Document. In addition,
Borrower shall promptly notify Bank of the occurrence of any
default, Event of Default, pending or threatened adverse
litigation or material adverse change in its financial
condition.
5.6. Taxes and Other Charges. Borrower shall prepare
and timely file all federal, state and local tax returns
required to be filed by Borrower and promptly pay and
discharge all taxes, assessments, water and sewer rents, and
other governmental charges, imposed upon Borrower or on any
of Borrower's property when due, but in no event after
interest or penalties commence to accrue thereon or become a
lien upon such property, except for those taxes,
assessments, water and sewer rents, and other governmental
charges then being contested in good faith by Borrower by
appropriate proceedings and for which Borrower has
established on its books or by deposit of cash with Bank at
the option of Bank, a reserve for the payment thereof in
such amount as Bank may require, and so long as such
contest: (i) operates to prevent collection, stay any
proceedings which may be instituted to enforce payment of
such item, and prevent a sale of Borrower's property to pay
such item; (ii) is maintained and prosecuted with due
diligence; and (iii) shall not have been terminated or
discontinued adversely to Borrower. Borrower shall submit to
Bank, upon request, an affidavit signed by Borrower
certifying that all federal, state and local income tax
returns have been filed to date and all real property taxes,
assessments and other governmental charges with respect to
Borrower's properties have been paid to date.
Notwithstanding the foregoing, the Bank agrees that no such
reserve will be required in connection with the currently
pending suit against the Department of Revenue Services
filed in the Connecticut Superior Court, Judicial District
of Hartford/New Britain at Hartford, including the pendency
of any appeals in connection therewith.
5.7. Indemnification.
5.7.1. Borrower hereby indemnifies and agrees to
protect, defend and hold harmless Bank, any entity which
"controls" Bank within the meaning of Section 15 of the
Securities Act of 1933, as amended, or is under common
control with Bank, and any member, officer, director,
official, agent, employee or attorney of Bank, and their
respective heirs, administrators, executors, successors and
assigns (collectively, the "Indemnified Parties"), from and
against any and all losses, damages, expenses or liabilities
of any kind or nature and from any suits, claims or demands,
including reasonable attorneys' fees incurred in
investigating or defending such claim, suffered by any of
them and caused by, relating to,
arising out of, resulting from, or in any way connected
with the Loan Documents or the transactions contemplated
therein (unless determined by a final judgment of a court of
competent jurisdiction to have been caused solely by the
gross negligence or willful misconduct of the Indemnified
Parties) including, without limitation: (i) disputes with
any architect, general contractor, subcontractor,
materialman or supplier, or on account of any act or
omission to act by Bank in connection with the Mortgaged
Premises; (ii) losses, damages (including consequential
damages), expenses or liabilities sustained by Bank in
connection with any environmental inspection, monitoring,
sampling or cleanup of the Mortgaged Premises required or
mandated by any applicable environmental law; (iii) any
untrue statement of a material fact contained in information
submitted to Bank by Borrower or the omission of any
material fact necessary to be stated therein in order to
make such statement not misleading or incomplete; (iv)the
failure of Borrower to perform any obligations herein
required to be performed by Borrower; and (v) the ownership,
construction, occupancy, operation, use or maintenance of
the Mortgaged Premises.
5.7.2. In case any action shall be brought
against Bank or any other Indemnified Party in respect to
which indemnity may be sought against Borrower, Bank or such
other Indemnified Party shall promptly notify Borrower and
Borrower shall assume the defense thereof, including the
employment of counsel selected by Borrower and satisfactory
to Bank, the payment of all costs and expenses and the right
to negotiate and consent to settlement. The failure of Bank
to so notify Borrower shall not relieve Borrower of any
liability it may have under the foregoing indemnification
provisions or from any liability which it may otherwise have
to Bank or any of the other Indemnified Parties. Bank shall
have the right, at its sole option, to employ separate
counsel in any such action and to participate in the defense
thereof, all at Borrower's sole cost and expense. Borrower
shall not be liable for any settlement of any such action
effected without its consent, but if settled with Borrower's
consent, or if there be a final judgment for the claimant in
any such action, Borrower agrees to indemnify and save
harmless Bank from and against any loss or liability by
reason of such settlement or judgment.
5.7.3. The provisions of this Section 5.7 shall
survive the repayment or other satisfaction of the
Liabilities.
5.8. Financial Covenants. Borrower shall comply with
each of the following financial covenants:
5.8.1. Borrower shall not permit Tangible Net
Worth of Borrower and Guarantor, on a consolidated basis, at
any time to be less than $8,600,000. "Tangible Net Worth" is
defined, at any date as (i) the aggregate amount at which
all assets of the Borrower and Guarantor, on a consolidated
basis, would be shown on a balance sheet at such date after
deducting capitalized research and development costs,
capitalized interest, goodwill, patents, trademarks, trade
names, copyrights, service works, franchises, licenses,
amounts owing from officers, directors, shareholders,
principals, partners or affiliates of the Borrower and any
investments in any entities owned or controlled by any of
the foregoing, and such other assets as are properly
classified as "intangible assets" less (ii) Total
Liabilities. For the fiscal year ending October 31, 1996,
Tangible Net Worth shall equal or exceed $8,950,000.00. For
each fiscal year thereafter, Tangible Net Worth shall
increase over the immediately preceding fiscal year by not
less than $600,000. "Total Liabilities" is defined at any
date as all liabilities of the Borrower and Guarantor, on a
consolidated basis, including capitalized leases and all
reserves for deferred taxes and other deferred sums, which
would properly appear on the liabilities side of a balance
sheet in accordance with Generally Accepted Accounting
Principles ("GAAP") applied on a consistent basis.
5.8.2. Borrower shall not permit the ratio of
Total Liabilities to Tangible Net Worth of Borrower and
Guarantor, on a consolidated basis, at any time to exceed
1.5:1.0.
5.8.3. Borrower shall at all times maintain at
the end of each fiscal quarter of Borrower a Debt Service
Coverage Ratio of Borrower and Guarantor, on a consolidated
basis, of not less than 2.5. to 1.0. Debt Service Coverage
Ratio is defined as:
EBITDA - Main Cap Ex
_______________________________
CMLTD + CPCLO + interest expense
where:
EBITDA means earnings before interest, taxes, depreciation
and amortization for the one year period ending on the date
of determination;
CMLTD means current maturities of long term debt;
CPCLO means current portion of capital lease obligations;
and
Main. Cap Ex means that portion of capital expenditures for
the one year period ending on the date of determination
necessary for property, plant and equipment to maintain
existing revenue levels
5.8.4. Retained Earnings of Borrower and
Guarantor, on a consolidated basis determined in accordance
with GAAP, shall increase annually by an amount not less
than $350,000.
5.8.5. Borrower shall maintain its primary
operating accounts at Bank.
5.8.6. Borrower shall maintain a Loan to
Liquidation Value Ratio of not more than 75%. Loan to
Liquidation Value Ratio means the outstanding principal
balance of the Loan at the time in question divided by the
then current fair market value of the machinery and
equipment included in the Collateral (as defined in the
General Security Agreement) in which the Bank has a first
priority security interest, as determined by Bank in its
reasonable business judgment.
5.8.7. Borrower and Guarantor, on a consolidated
basis, shall not make any loans or advances to any other
person or entity other than any Guarantor in excess of
$250,000 annually without the express written consent of the
Bank, which shall not be unreasonably withheld.
5.8.8. Except for obligations to the Bank or any
Affiliate and except for obligations in relation to
Permitted Liens (as defined in Section 5.13), Borrower and
Guarantor, on a consolidated basis, shall not create, incur,
assume or permit to exist any indebtedness for borrowed
money, for the deferred purchase price of property or
services, for reimbursement of letters of credit issued by
others, or any other indebtedness evidenced by a note, bond
or other instrument, in excess of $250,000 annually without
the express written consent of the Bank, which shall not be
unreasonably withheld.
5.8.9. Borrower shall not assume, guarantee,
endorse or otherwise become directly or contingently liable
for the obligations of any other person or entity except for
obligations of any Guarantor, which obligations do not
violate any duty or obligation of such Guarantor to the Bank
and except by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
5.8.10. All amounts due from Borrower to
affiliates and/or shareholders of Borrower shall be fully
subordinated in writing to all obligations of Borrower to
the Bank on terms satisfactory to the Bank.
5.9. Contracts. Borrower shall not cancel any of the
Borrower's contracts with the Department of Energy, for any
reason. On a quarterly basis, Borrower will provide Bank
with an updated schedule of contracts indicating face value
and percentage of completion along with a re-affirmation
that all contracts are in full force and effect in terms of
each parties' contractual obligations.
5.10. Default on Other Contracts or Obligations.
Borrower shall not default on any material contract with, or
obligations due to any third party, or default in the
performance of any material obligation
to a third party incurred for money borrowed, which default
has a material adverse effect on Borrower and its business.
5.11. Judgment Entered. Borrower shall not permit the
entry of any money judgment or the assessment against, the
filing of any tax lien against, or the issuance of any writ
of garnishment or attachment against any property of or
debts due Borrower or Guarantor except such that are
contested in good faith by Borrower by appropriate
proceedings and for which adequate reserves have been
established.
5.12. Change of Fiscal Year. Borrower shall not change
its fiscal year without the express written consent of the
Bank.
5.13. Encumbrances. Borrower shall not create any
mortgage, security deed, deed of trust, pledge, lien, charge
or other encumbrance on any of its assets, whether now owned
or hereafter acquired other than (i) security interests
required by the Loan Documents; (ii) liens for taxes
contested in good faith; (iii) liens accruing by law for
employee benefits (other than liens arising under ERISA);
(iv) existing liens listed on Schedule 5.13 attached hereto
and liens as to which the Bank has given its express prior
written consent; or (v) liens which secure obligations
permitted pursuant to Section 5.8.8. ("Permitted Liens").
5.14. Investments. Borrower shall not purchase or
acquire any stock, securities, or evidence of indebtedness
of any other person or entity except investments in direct
obligations of the United States Government and certificates
of deposit of United States commercial banks having a tier 1
capital ratio of not less than 6% and then in an amount not
exceeding 10% of the issuing bank's unimpaired capital and
surplus.
5.15. Notice of Certain Events. Borrower shall
promptly give written notice to the Bank of (i) the details
of any Reportable Events (as defined in ERISA) which have
occurred; (ii) the occurrence of any event which alone or
with notice, the passage of time, or both, would constitute
an Event of Default; (iii) the commencement of any
proceeding or litigation which, if adversely determined,
would adversely affect its financial condition or ability to
conduct its business; and (iv) the formation of any
subsidiary of the Borrower after the date of this Agreement,
which notice shall be accompanied by the resolution of the
Board of Directors of such subsidiary authorizing such
subsidiary to execute a guaranty of the Liabilities,
satisfactory in form and substance to the Bank, together
with such guaranty duly executed by such subsidiary.
5.16. Preservation of Property; Insurance. Borrower
shall keep and maintain, and require its subsidiaries to
keep and maintain, all of its and their property and assets
in good order and repair, maintain extended coverage,
general liability, business interruption, hazard, property
and other insurance in amounts deemed sufficient by the Bank
and as is customary for businesses similar to the Borrower's
business, and deliver to the Bank certificates of all such
insurance in effect; and cause all such policies covering
any collateral and business interruption to contain loss
payee endorsements in favor of the Bank and to be subject to
cancellation or reduction in coverage only upon 30 days
prior written notice thereof to the Bank at its address set
forth in this Agreement.
5.17. Accounts. Borrower shall not sell, assign,
transfer or dispose of any of its accounts or notes
receivable, with or without recourse, except to the Bank.
5.18. Sale-Leaseback Transactions. Borrower shall not
enter into any sale-leaseback transaction or any transaction
howsoever termed which would have the same or substantially
the same result or effect as a sale-leaseback.
5.19. Prepayment of Other Indebtedness. Borrower
shall not prepay any material amounts not required to be
prepaid, except to the Bank or any Affiliate, or cause or
permit to be accelerated any material amounts on any
outstanding indebtedness now existing or hereafter arising;
6. EVENTS OF DEFAULT AND REMEDIES
6.1 Each of the following shall constitute a default
(each, an "Event of Default") hereunder:
6.1.1. Non-payment when due of any sum required
to be paid to Bank under any of the Loan Documents;
6.1.2. A breach of the covenants contained in
Sections 5.2., 5.3., 5.6., 5.8., 5.9., 5.10., 5.11., 5.12.,
5.13. or 5.14.hereof;
6.1.3. A breach by Borrower of any other term,
covenant, condition, obligation or agreement under this
Agreement, and the continuance of such breach for a period
of fifteen (15) days after written notice thereof shall have
been given to Borrower;
6.1.4. Any representation or warranty made by
Borrower or Guarantor in this Agreement or any other Loan
Document shall prove to be false, incorrect or misleading in
any material respect as of the date when made;
6.1.5. An Event of Default under any of the
other Loan Documents.
6.1.6. An Event of Default under that certain
Loan Agreement by and between Energy Research Corporation
and Bank of even date herewith.
6.1.7. The filing by or against Borrower or any
Guarantor of a petition seeking relief, or the granting of
relief, under the Federal Bankruptcy Code or any similar
federal or state statute; any assignment for the benefit of
creditors made by Borrower or any Guarantor; the appointment
of a custodian, receiver, liquidator or trustee for Borrower
or any Guarantor or for any of the property of Borrower or
any Guarantor, or any action by Borrower or any Guarantor to
effect any of the foregoing; or if Borrower or any Guarantor
becomes insolvent (however defined) or is not paying its
debts generally as they become due;
6.1.8. The death, dissolution, liquidation,
merger, consolidation or reorganization of Borrower or any
Guarantor, or the institution of any proceeding to effect
any of the foregoing;
6.1.9. A material deterioration in the
financial condition of Borrower or any Guarantor or the
occurrence of any event which, in the reasonable opinion of
the Bank, impairs the financial responsibility of Borrower
or any Guarantor and their ability to repay the Liabilities;
6.2. Upon or at any time after the occurrence of an
Event of Default, Bank may exercise any right, power or
remedy permitted by law or as set forth in any of the Loan
Documents including, without limitation, the right to
declare the entire unpaid amount of this Loan immediately
due and payable (provided that, in the cae of an Event of
Default described in 6.1.7 above, the entire unpaid amount
of the Loan shall immediately and automatically be due and
payable) without presentment, demand, notice of any kind,
protest or notice of protest, all of which are expressly
waived, notwithstanding anything to the contrary contained
in any of the Loan Documents.
7. CONTINUING ENFORCEMENT OF AGREEMENT.
If, after receipt of any payment of all or any part of
the Liabilities, Bank is compelled or agrees, for settlement
purposes, to surrender such payment to any person or entity
for any reason (including, without limitation, a
determination that such payment is void or voidable as a
preference or fraudulent conveyance, an impermissible
setoff, or a diversion of trust funds), then this Agreement
and the other Loan Documents shall continue in full force
and effect, and Borrower shall be liable for, and shall
indemnify, defend and hold harmless Bank with respect to the
full amount so surrendered. The provisions of this Section
shall survive the termination of this Agreement and the
other Loan Documents and shall remain effective
notwithstanding the payment of the Liabilities, the
cancellation of the Note or any other Loan Document, the
release of any security interest, lien or encumbrance
securing the Liabilities or any other action which Bank may
have taken in reliance upon its receipt of such payment.
Any cancellation, release or other such action by Bank shall
be deemed to have been conditioned upon any payment of the
Liabilities having become final and irrevocable.
8. MISCELLANEOUS
8.1. Integration. This Agreement and the other Loan
Documents constitute the sole agreement of the parties with
respect to the transaction contemplated hereby and supersede
all oral negotiations and prior writings with respect
thereto.
8.2. Attorneys' Fees and Expenses. Borrower shall pay
all of the Bank's attorneys' fees and other costs incurred
in connection with this transaction. If Bank retains the
services of counsel by reason of a claim of a default or an
Event of Default hereunder or under any of the other Loan
Documents, or on account of any matter involving this
Agreement, or for examination of matters subject to Bank's
approval under the Loan Documents, all costs of suit and
collection and all reasonable attorneys' fees (and/or
allocated fees of Bank's in-house legal counsel) and such
other reasonable expenses so incurred by Bank shall
forthwith, on demand, become due and payable and shall be
secured hereby.
8.3. No Implied Waiver. Bank shall not be deemed to
have modified or waived any of its rights or remedies
hereunder unless such modification or waiver is in writing
and signed by Bank, and then only to the extent specifically
set forth therein. A waiver in one event shall not be
construed as continuing or as a waiver of or bar to such
right or remedy on a subsequent event.
8.4. Partial Invalidity. The invalidity or
unenforceability of any one or more provisions of this
Agreement shall not render any other provisions herein
contained invalid or unenforceable. In lieu of any invalid
or unenforceable provision, there shall be added
automatically a valid and enforceable provision as similar
in terms to such invalid or unenforceable provision as may
be possible.
8.5. Binding Effect. The covenants, conditions,
waivers, releases and agreements contained in this Agreement
shall bind, and the benefits thereof shall inure to, the
parties hereto and their respective heirs, executors,
administrators, successors and assigns; provided, however,
that this Agreement cannot be assigned by Borrower without
the prior written consent of Bank, and any such assignment
or attempted assignment by Borrower shall be void and of no
effect with respect to Bank.
8.6. Modifications. This Agreement may not be
supplemented, extended, modified or terminated except by an
agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge
is sought.
8.7. Jurisdiction. Borrower irrevocably appoints each
and every owner, partner and/or officer of Borrower as its
attorneys upon whom may be served any notice, process or
pleading in any action or proceeding against it arising out
of or in connection with this Agreement or any other Loan
Document. Borrower hereby consents that any action or
proceeding against it may be commenced and maintained in any
court within the State of Connecticut or in the United
States District Court for the District of Connecticut or, at
the option of Bank, any court in which Bank shall initiate
legal or equitable proceedings
and which has subject matter jurisdiction over the matter in
controversy, and that such action or proceeding may be
commenced by service of process on any such owner, partner
and/or officer. Borrower agrees that the courts of the State
of Connecticut and the United States District Court for the
District of Connecticut shall have jurisdiction with respect
to the subject matter hereof and the person of Borrower and
all collateral securing the obligations of Borrower.
Borrower hereby further consents to personal jurisdiction in
any other court in which Bank shall initiate legal or
equitable proceedings and which has subject matter
jurisdiction over the matter in controversy. Borrower hereby
waives personal service of the summons and complaint or
other process or papers issued in any proceeding of the type
described in this Section 8.7 and agrees that service of
such summons and complaint, or other process or papers may
be made by regular or certified mail addressed to Borrower
at the address of Borrower set forth herein. Borrower agrees
not to assert any defense to any proceeding initiated by
Bank based upon improper venue or inconvenient forum.
Borrower agrees that any action brought by Borrower shall be
commenced and maintained only in a court in the federal
judicial district or county in which Bank has a place of
business in Connecticut.
8.8. Notices. All notices and communications under
this Agreement shall be in writing and shall be given by
either (a) hand-delivery, (b) first class mail (postage
prepaid), or (c) reliable overnight commercial courier
(charges prepaid) to the addresses listed in this Agreement.
Notice shall be deemed to have been given and received: (i)
if by hand delivery, upon delivery; (ii) if by mail, three
(3) calendar days after the date first deposited in the
United States mail; and (iii) if by overnight courier, on
the date scheduled for delivery. A party may change its
address by giving written notice to the other party as
specified herein.
8.9. Governing Law. This Agreement shall be governed
by and construed in accordance with the substantive laws of
the State of Connecticut without reference to conflict of
laws principles.
8.10. Waiver of Jury Trial. BORROWER AND BANK AGREE
THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT BY BANK OR BORROWER ON OR WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS
OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE
TRIED ONLY BY A COURT AND NOT BY A JURY. BANK AND BORROWER
EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE
COUNSEL, WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH
SUIT, ACTION OR PROCEEDING. FURTHER, BORROWER WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION
TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT
THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS
AGREEMENT AND THAT BANK WOULD NOT EXTEND CREDIT TO BORROWER
IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF
THIS AGREEMENT.
8.11. Prejudgment Remedy Waiver. BORROWER HEREBY
REPRESENTS, COVENANTS AND AGREES THAT THE PROCEEDS OF THE
LOAN SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND THAT
THE LOAN IS A "COMMERCIAL TRANSACTION" AS DEFINED BY THE
STATUTES OF THE STATE OF CONNECTICUT. BORROWER HEREBY WAIVES
ALL RIGHTS TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER
UNDER CONNECTICUT GENERAL STATUTES, SECTIONS 52-278a et
seq., AS AMENDED, OR UNDER ANY OTHER STATE OR FEDERAL LAW
WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES BANK MAY
EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER. MORE
SPECIFICALLY, BORROWER ACKNOWLEDGES THAT BANK'S ATTORNEY
MAY, PURSUANT TO CONNECTICUT GENERAL STATUTES, SECTION 52-278f,
ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING
A COURT ORDER. BORROWER ACKNOWLEDGES AND RESERVES ITS RIGHT
TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT
FOR PREJUDGMENT REMEDY BY BANK'S ATTORNEY, AND BANK
ACKNOWLEDGES BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO
THE ISSUANCE OF SAID WRIT. BORROWER FURTHER HEREBY WAIVES
ANY REQUIREMENT OR OBLIGATION OF BANK TO POST A BOND OR
OTHER SECURITY IN CONNECTION
WITH ANY PREJUDGMENT REMEDY OBTAINED BY BANK AND WAIVES ANY
OBJECTIONS TO ANY PREJUDGMENT REMEDY OBTAINED BY BANK BASED
ON ANY OFFSETS, CLAIMS, DEFENSES OR COUNTERCLAIMS OF
BORROWER OR ANY OTHER OBLIGATED PARTY TO ANY ACTION BROUGHT
BY BANK. BORROWER ACKNOWLEDGES AND AGREES THAT ALL OF THE
WAIVERS CONTAINED IN THIS SECTION HAVE BEEN MADE KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE
ADVICE OF ITS COUNSEL.
IN WITNESS WHEREOF, Borrower and Bank, intending to be
legally bound, have duly executed and delivered this Loan
Agreement as of the day and year first above written.
WITNESS: BORROWER:
FUEL CELL MANUFACTURING CORPORATION
By:
Name: Name:
Title: Title:
Address: 3 Great Pasture Road
Danbury, CT 06810
BANK:
FIRST UNION BANK OF CONNECTICUT
By:
Name: Name: Diane Chamberlain
Title: Title: Vice President
Address: 300 Main Street
P.O. Box 700
CT2007
Stamford, CT 06904-0700
Attn: Anne S. Wilson
Vice President