EXHIBIT 10.24
REPLACEMENT
REIMBURSEMENT AGREEMENT
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This REPLACEMENT REIMBURSEMENT AGREEMENT ("Agreement"), dated as of the 1st
day of July, 1999, is by and among PLUG POWER, LLC, a Delaware limited
liability company (the "Company") and KEYBANK NATIONAL ASSOCIATION, a national
banking association (the "Bank").
WHEREAS, in order to provide financing for the construction of a building,
renovation of a building and installation in the buildings of machinery and
equipment and for the costs related thereto, Mechanical Technology Incorporated
("MTI") requested that the Town of Colonie Industrial Development Agency (the
"Agency") issue its Taxable Industrial Development Revenue Bonds in the
aggregate principal amount of Six Million Dollars ($6,000,000) (the "Bonds")
under the terms and conditions more fully set forth in the Trust Indenture dated
as of December 1, 1998 (the "Indenture"), by and between the Agency and
Manufacturers And Traders Trust Company as Trustee (the "Trustee"); and
WHEREAS, to enhance the marketability of the Bonds the Bank issued an
Irrevocable Transferable Direct Pay Letter of Credit No. ▇▇▇▇▇▇▇▇▇ (the "Letter
of Credit") at the request of MTI in favor of the Trustee in an aggregate amount
of Six Million One Hundred Sixty Thousand Two Hundred Seventy Four and no/100ths
Dollars ($6,160,274.00) to secure the payment of the principal of and accrued
interest on the Bonds; and
WHEREAS, the Company has agreed to assume the obligations of MTI under the
Financing Documents (as that term is defined in the Indenture) pursuant to the
terms of the Assignment and Assumption Agreement dated as of July 1, 1999 among
the Company, MTI, the Bank, the Underwriter (as defined in the Indenture), Ling
Electronics, Inc. and the Agency (the "Assumption Agreement"); and
WHEREAS, it is the purpose of this Agreement to set forth the terms
pursuant to which the Bank will allow the Company to assume the obligations of
MTI to the Bank including MTI's agreement to reimburse the Bank for any and all
payments made by the Bank pursuant to the Letter of Credit; and
NOW THEREFORE, in consideration of the mutual agreements made herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
SECTION ONE
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DEFINITIONS
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Section 1.1. Terms Defined. Unless otherwise defined herein, capitalized
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terms shall be defined as set forth in the Indenture. As used in this Agreement,
the following terms have the following respective meanings. Any accounting term
used but not specifically defined herein shall be construed in accordance with
GAAP. The definition of each agreement, document, and instrument set forth in
this Section 1.1 shall be deemed to mean and include such agreement,
document, or instrument as amended, restated, or modified from time to time:
"Agency" shall mean the Town of Colonie Industrial Development Agency, a
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public benefit corporation of the State of New York.
"Bank Obligation" shall mean an amount equal to the aggregate outstanding
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liability of the Bank from time to time under the Letter of Credit.
"Bank" shall mean KeyBank National Association, its successors and assigns.
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"Bank Documents" shall have the meaning set forth in the Indenture.
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"Bonds" shall mean the Six Million Dollars ($6,000,000) Town of Colonie
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Industrial Development Agency Taxable Industrial Development Revenue Bonds
(Mechanical Technology Incorporated Project - Letter Of Credit Secured) Series
1998A, issued by the Agency pursuant to the Indenture.
"Building Loan Agreement" shall mean the building loan agreement among the
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Agency, MTI and the Bank dated as of December 1, 1998 as the same may be
modified on or about the date hereof.
"Business Day" shall mean any day of the year other than (i) a Saturday or
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Sunday, (ii) any day on which banks located in either Albany, New York, or the
principal corporate trust office of the Trustee is located are required or
authorized by law to remain closed, or (iii) any day on which the New York Stock
Exchange is closed.
"Closing Date" shall mean such date agreed upon by the Company and the
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Bank.
"Company" shall mean, Plug Power, LLC, a Delaware limited liability
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company.
"Completion Date" shall mean April 30, 1999.
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"Contract Assignment" shall mean the Assignment Of Contract Rights, dated
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as of December 1, 1998 given by MTI to the Bank.
"Coverage Percentage" shall mean the percentage obtained at any time by
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dividing the maximum amount that can be drawn under the Letter of Credit by the
Market Value of the Securities Collateral (as determined in accordance with the
Securities Collateral Pledge And Security Agreement).
"Date of Issuance" shall mean the date of issuance of the Letter of Credit.
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"Default Rate" shall mean an interest rate per annum equal to four percent
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(4%) in excess of the Prime Rate, with each change in the Prime Rate
automatically changing the Default Rate.
"Drawing" shall mean any drawing under the Letter of Credit.
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"Environmental Law" shall mean any federal, state, or local statute, law,
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ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability upon a Person in connection with the use, release or disposal
of any hazardous, toxic or dangerous substance, waste
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or material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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the same may from time to time be amended or supplemented, and all regulations
thereunder.
"Event of Default" shall have the meaning assigned thereto in Section Six
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hereof.
"Expiration Date" shall mean April 30, 1999.
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"Financing Documents" shall have the meaning set forth in the Indenture.
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"Fiscal Quarter" shall mean a fiscal quarter of a Fiscal Year.
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"Fiscal Year" shall mean the fiscal year of the Company and its
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Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1998") refer to the Fiscal Year ending on
December 31 of such calendar year.
"GAAP" shall mean generally accepted accounting principles set forth from
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time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"General Contract" shall mean the construction contract with respect to the
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Project being constructed on the Premises, between MTI and the general
contractor for such construction.
"Indenture" shall mean the Trust Indenture, dated as of December 1, 1998
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between the Agency and the Trustee.
"Indenture Default" shall mean an Event of Default under and pursuant to
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the Indenture.
"Interest Commitment" shall have the meaning set forth in the Letter of
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Credit.
"Interest Payment Date" shall have the meaning set forth in the Indenture.
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"Interest Payment Rate" shall mean the Prime Rate plus two (2%) percent.
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"Letter of Credit" shall mean the Irrevocable Transferable Direct Pay
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Letter of Credit ▇▇. ▇▇▇▇▇▇▇▇▇ issued by the Bank on December 16, 1998.
"Letter of Credit Commitment" shall have the meaning set forth in the
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Letter of Credit.
"Letter of Credit Fee" shall have the meaning set forth in Section 2.2(b)
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of this Agreement.
"Lien" shall mean, with respect to any Person, any interest granted by such
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Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter
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of law, by judicial process or otherwise.
"Material Adverse Effect" shall mean (a) a material adverse change in, or a
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material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of either the Company or its Subsidiaries
taken as a whole, or (b) a material adverse effect upon any substantial portion
of the collateral under the Bank Documents or upon the legality, validity,
binding effect or enforceability against the Company of any Bank Document.
"Mortgage" shall mean the Mortgage and Security Agreement creating a good
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and valid first mortgage lien on the Mortgaged Property as that term is defined
therein, given by the Agency and MTI to the Bank, dated as of November 1, 1998
and recorded in the Albany County Clerk's office on December 18, 1998 in Liber
3666 at Page 137.
"Organizational Documents" shall mean with respect to a corporation, its
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certificate of incorporation and bylaws, with respect to a limited liability
company, its articles of organization and operating agreement, with respect to a
partnership, its partnership agreement, with respect to other entities such
documents as create and continue the existence of the entity and specify the
manner in which its affairs are governed.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
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pursuant to Title IV of ERISA.
"Permitted Encumbrances" shall have the meaning set forth in the Indenture.
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"Person" means any natural person, corporation (which shall be deemed to
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include business trust), association, partnership, political entity, or
political subdivision thereof.
"Plan" shall mean any plan defined in Section 4021(a) of ERISA in respect
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of which Company is an "employer" or a "substantial employer" as defined in
Section 3(5) and 4001(a)(2) of ERISA, respectively.
"Plans and Specification" shall mean the detailed plans and specifications
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for the Project prepared by the architect for the Project and approved by the
Bank.
"Pledge And Security Agreement" shall mean the Pledge And Security
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Agreement, dated as of December 1, 1998 among MTI, the Bank, and the Trustee.
"Pledged Collateral" shall mean the collateral in which: (i) MTI has given
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the Bank a mortgage lien pursuant to the Mortgage or a security interest
pursuant to the Security Agreement and/or the Pledge And Security Agreement and
(ii) the Company has given the Bank a security interest pursuant to the
Securities Collateral Pledge And Security Agreement.
"Premises" shall mean that certain premises owned by the Agency and located
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at ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ of Colonie, Albany County, New York as more
fully described in the Mortgage.
"Prime Rate" shall mean that interest rate established from time to time by
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the Bank as the Bank's Prime Rate, whether or not such rate is publicly
announced. The Prime Rate may not be the lowest rate charged by the Bank for
commercial or other extensions of credit.
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"Principal Commitment" shall have the meaning set forth in the Letter of
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Credit.
"Prohibited Transaction" shall mean any prohibited transaction as that term
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is defined for purposes of ERISA.
"Project" shall mean the building to be constructed on the Premises.
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"Purchaser" shall mean the original purchaser or purchasers of the Bonds.
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"Remarketing Agent" shall mean, initially, First Albany Corporation.
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"Remarketing Drawing" shall have the meaning set forth in the Letter of
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Credit.
"Reportable Event" shall mean any reportable event as that term is defined
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in ERISA.
"Security Agreement" shall mean the Security Agreement, dated as of
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December 1, 1998, given by the Agency and MTI to the Bank.
"Securities Collateral" shall mean marketable securities pledged by the
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Company to the Bank as security for the obligations of the Company hereunder.
"Securities Collateral Pledge And Security Agreement" shall mean the
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Securities Collateral Pledge And Security Agreement dated as of June 1, 1999
between the Company and the Bank.
"Subsidiary" shall mean with respect to any Person, a corporation of which
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such Person and/or its other Subsidiaries own, directly or indirectly, an
interest of at least 25% (whether by share holding, partnership interests or
otherwise).
"Tender Agent" shall mean the Trustee or any successor Trustee under the
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Indenture.
"Title Company" shall mean Chicago Title Insurance Company.
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"Title Policy" shall mean the ALTA Loan Policy issued by the Title Company
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with respect to the Premises on or about December 16, 1998, endorsed by the
Title Company to reflect the Company's ownership of the Premises and assumption
of obligations under the Financing Documents.
"Trustee" means Manufacturers And Traders Trust Company, or any successor
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Trustee under the Indenture.
"Unmatured Event of Default" means any event that, if it continues uncured,
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will, with lapse of time or notice or both, constitute an Event of Default.
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SECTION TWO
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ISSUANCE OF LETTER OF CREDIT
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Section 2.1. Issuance of Letter of Credit. The Bank delivered the Letter of
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Credit to the Trustee on December 16, 1998 for the benefit of MTI. Upon
assumption by the Company of the obligations of MTI under the Installment Sale
Agreement and the other Financing Documents, the Letter Of Credit shall be
considered to have been issued for the benefit of the Company. The obligations
of the Bank under the Letter of Credit shall be absolute and irrevocable and
shall be performed strictly in accordance with the terms of the Letter of Credit
and this Agreement.
Section 2.2. Fees and Reimbursement for Letter of Credit
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(a) The Company hereby agrees to pay the following to the Bank:
(i) Before 2:00 p.m., Albany, New York time, on each date that any
Drawing under the Letter of Credit pursuant to Section 408 of the Indenture
is made, the Company shall pay a sum equal to the amount of the drawing
under the Letter of Credit, plus (x) interest accrued, if any, on the
amount so drawn under the Letter of Credit as determined pursuant to clause
(iii) of this subsection (a) of this Section 2.2, plus (y) any and all
charges and expenses which the Bank may pay or incur relative to such
Drawing under the Letter of Credit, plus (z) a fee in the amount of Two
Hundred Dollars ($200) for that Drawing under the Letter of Credit.
(ii) Upon each transfer of the Letter of Credit in accordance with its
terms and as a condition thereto, the Company shall pay $500 to cover the
costs and expenses to the Bank incurred in connection with such transfer.
(iii) The Company shall pay interest at the Interest Rate, payable
on demand on any and all amounts of any not paid by the Company when due
under any section of this Agreement from the date such amounts become due
until payment in full.
(iv) For any payment of principal and/or interest not paid within ten
(10) days when due, the Company shall pay a late charge of an amount equal
to the greater of fifty dollars ($50) or four percent (4%) of the amount of
the payment.
(v) The Company shall pay on demand, reasonable costs, fees and
expenses incurred by the Bank in connection with the issuance of the Letter
of Credit and the preparation or execution of any documents or opinions
related thereto.
(vi) The Company shall pay on demand, any and all reasonable expenses
incurred by the Bank in enforcing any of its rights under the Bank
Documents.
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(b) The Company hereby also agrees to pay to the Bank:
(i) A commitment fee (the "Commitment Fee") of $15,000.00, $7,500.00
payable on the date of execution of this Agreement and the
balance payable on or before December 31, 1999; and
(ii) A commission (the "Letter of Credit Fee") equal to an amount
calculated by multiplying the "Applicable Percentage" set forth
below times the maximum amount available to be drawn under the
Letter Of Credit at the time of calculation. The Letter of Credit
Fee shall be payable annually on the date of execution of this
Agreement and thereafter on each anniversary of the Date of
Issuance until the Expiration Date of the Letter of Credit. The
Applicable Percentage shall be determined in accordance with the
following table:
Coverage Percentage Applicable Percentage Category
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Less than or equal to 80% forty (40) basis points 1
Greater than 80% but less fifty-five (55) basis points 2
than or equal to 90%
Greater than 90% seventy (70) basis points 3
(iii) If the Company has paid a Letter Of Credit Fee based on a Coverage
Percentage calculation at the time of said payment and the Coverage
Percentage subsequently changes, the following shall apply:
(1) If the Coverage Percentage improves (i.e. moves from a higher
percentage category to a lower percentage category), there shall be no
adjustment in the amount of the Letter Of Credit Fee.
(2) If the Coverage Percentage moves from a lower percentage to a higher
percentage, the Company shall have ten (10) days to add Securities
Collateral to restore the Coverage Percentage to its prior level,
provided, however, if the Company does not restore the Coverage
Percentage to its prior level, the Company shall pay an additional fee
of $750.00 per month if the change in Coverage Percentage from that on
which the Letter Of Credit Fee paid was based is a single category
change and $1,500.00 per month if the Coverage Percentage change is a
double category change.
(3) Any additional fee payable pursuant to (2) above shall be payable for
each month or fraction thereof that the Coverage Percentage change
remains in effect.
(iv) If the Letter of Credit is terminated prior to the Expiration Date, the
most recently paid Letter of Credit Fee shall be refunded to the Company
on the
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following basis:
Termination Date Percentage of Letter of Credit Fee
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to be Refunded
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Within 3 months after sixty (60%) percent
most recent anniversary of
Date of Issuance
From the first day of the 4/th/ thirty (30%) percent
month following the most
recent anniversary of the
Date of Issuance through and
including the 5/th/ month after the
most recent anniversary of the Date
of Issuance
From the first day of the 6/th/ fifteen (15%) percent
month following the most
recent anniversary of the
Date of Issuance through and
including the 8/th/ month after the
most recent anniversary of the Date
of Issuance
In the 9/th/ month or later No refund
(c) If any change in any law or regulation or in the interpretation thereof by
any court or administrative or governmental authority charged with the
administration thereof shall impose, modify or deem applicable any reserve,
special deposit or similar requirement which would increase or decrease the
Bank's costs (i) generally upon the issuance or maintenance of letters of
credit by the Bank, (ii) specifically in respect of this Agreement or the
Letter of Credit, or (iii) in respect of any capital adequacy requirement
(including, without limitation, a requirement which affects the manner in
which the Bank allocates capital resources to its commitments), and the
result of such an increase or decrease in costs as described in clause (i),
(ii), or (iii) above shall be to increase or decrease the costs to the Bank
of issuing or maintaining the Letter of Credit (which increase or decrease
in costs shall be the result of the Bank's reasonable allocation, of the
aggregate of such cost increases or decreases resulting from such events),
then, (x) within thirty (30) days of the Bank's obtaining knowledge of such
change in law, regulations or interpretation thereof, the Bank shall so
notify the Company and (y) upon receipt of such notice from the Bank,
accompanied by a certificate as to such increased or decreased cost, the
Company shall pay or receive a refund as of the effective date of such
change or interpretation all additional amounts which are necessary to
compensate the Bank or the Company for such increased or decreased cost
incurred by the Bank.
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(d) The Company's obligations to make payments to the Bank under this
Section 2.2 shall be deemed satisfied to the extent of payments made
by the Trustee to the Bank from funds on deposit with and held by the
Trustee pursuant to the Indenture.
Section 2.3. Company's Obligations Unconditional. The payment obligations
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of the Company under this Agreement shall be absolute, unconditional and
irrevocable and shall be satisfied strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances:
(a) Any lack of validity or enforceability of the Bank Documents, the
Financing Documents or any other agreement or instrument relating thereto;
(b) Any amendment or waiver of or any consent to departure from the terms
of the Letter of Credit, the Bank Documents, the Financing Documents or any
other agreement or instrument relating thereto;
(c) The existence of any claim, setoff, defense or right which the Company
may have at any time against any beneficiary or any transferee of the
Letter of Credit (or any persons or entities for whom any such beneficiary
or any such transferee may be acting), the Bank, or any other person or
entity, whether in connection with this Agreement, the transactions
contemplated by the Bank Documents, the Financing Documents, or any
unrelated transaction;
(d) Any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever; or
(e) Payment by the Bank under the Letter of Credit against presentation of
a request which on its face appears to be in accordance with the terms of
the Letter of Credit.
Section 2.4. Payments. The payments and amounts due the Bank under
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Section 2.2 above shall be made at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ or by the Bank's
debiting the Company's operating account with the Bank presently identified as
Account No. 325490037141 (the "Operating Account"). The Company covenants and
agrees that on the date any payment or other amount is due under Section 2.2
above, the Company will have unrestricted funds in the Operating Account in an
amount no less than the amount then due.
Section 2.5 Extension of Expiration Date. The Expiration Date
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automatically will be extended for one year periods to successive anniversaries
of the Expiration Date unless not fewer than ninety (90) days prior to the
currently operative Expiration Date, the Bank notifies the Company, the Agency
and the Trustee that the Bank will not extend the Expiration Date.
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SECTION THREE
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REPRESENTATIONS AND WARRANTIES
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The Company expressly represents and warrants that:
Section 3.1. Existence and Legal Authority. The Company is a limited
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liability company, duly formed, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its property and to carry on its business as now being
conducted, to enter into the Bank Documents to which it is a party and the other
agreements referred to herein and transactions contemplated thereby, and to
carry out the provisions and conditions of such Bank Documents to which it is a
party. The Company is duly qualified to do business and is in good standing in
every jurisdiction where the failure to so qualify would have a material adverse
effect on its business.
Section 3.2. Due Execution and Delivery. The Company has full power,
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authority and legal right to incur the obligations provided for in, and to
execute and deliver and to perform and observe the terms and provisions of, the
Bank Documents to which it is a party, and each of the Bank Documents to which
it is a party has been duly executed and delivered by it and authorized, by all
required corporate action, and the Company has obtained all requisite consents
to the transactions contemplated thereby under any instrument to which it is a
party, and the Bank Documents to which it is a party constitute its legal, valid
and binding obligations enforceable against it in accordance with their
respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency or other similar laws affecting creditors'
rights generally.
Section 3.3. No Breach of Other Instruments. Neither the execution and
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delivery of the Bank Documents to which the Company is a party, nor the
compliance by the Company with the terms and conditions of the Bank Documents to
which it is a party, nor the consummation of the transactions contemplated
thereby, will conflict with or result in a breach of its Organizational
Documents, or any of the terms, conditions or provisions of any agreement or
instrument or any charter or other organizational restriction or law,
regulation, rule or order of any governmental body or agency to which the
Company is now a party or is subject, or imposition of a lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of the
Company pursuant to the terms of any such agreement or instrument.
Section 3.4. Government Authorization. No consent, approval, authorization
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or order of any court or governmental agency or body not heretofore obtained is
required for the consummation by the Company of the transactions contemplated by
the Bank Documents other than any state or federal securities or "blue sky
laws".
Section 3.5. Pledged Collateral. The Company has good fee simple title to
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the Premises, free and clear of all liens, pledges, security interests, charges,
claims and other encumbrances, except the Permitted Encumbrances. Upon proper
recording and/or filing with the appropriate authorities, the Mortgage, the
Security Agreement and any financing statements executed in conjunction with the
Security Agreement, the Securities Collateral Pledge And Security Agreement and
the Pledge And Security Agreement create valid and prior perfected security
interests and liens in favor of the Bank, subject to no other liens or
encumbrances arising by, through or under the
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Company or any other Person, except for Permitted Encumbrances or as otherwise
provided in the Financing Documents.
Section 3.6. Absence of Defaults, etc. The Company is not (i) in material
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default under any indenture or contract or agreement to which it is a party or
by which it is bound, (ii) in violation of its Organizational Documents, (iii)
in default with respect to any order, writ, injunction or decree of any court,
or (iv) in default under any order or license of any federal or state
governmental department, which default or violation in any of the aforesaid
cases materially and adversely affects its business or property. There exists no
condition, event or act which constitutes, or after notice or lapse of time or
both would constitute, an Event of Default.
Section 3.7. Indebtedness of Company. The Company does not have
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outstanding on the date hereof, any Indebtedness for borrowed money, except for
such Indebtedness reflected on the financial statements referred to in Section
3.8 hereof.
Section 3.8. Financial Condition. The Company has furnished to the Bank
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true and correct financial statements audited by a certified public accountant
as of its December 31, 1998 year end which financial statements present fairly
its financial condition at such date, and there has been no material adverse
change in its financial condition since that date.
Section 3.9. No Adverse Change. Subsequent to the date of the financial
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statements referred to in Section 3.8 hereof, except as disclosed in interim
statements previously submitted to the Bank, the Company has not incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business and there has not been any increase in the aggregate amount of its
Indebtedness, or any change in its business, properties or condition, financial
or otherwise, except for changes arising in the ordinary course of business or
in connection with the issuance and sale of the Bonds or as may be otherwise
disclosed in writing to the Bank prior to the date hereof.
Section 3.10. Taxes. The Company has filed all tax returns which are to
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be filed and has paid, or has made adequate provision for the payment of, all
taxes which have or may become due pursuant to said returns or to assessments
received by it. The provisions for taxes reflected in the most recent balance
sheet included in the financial statements referred to in Section 3.8 are
believed adequate to cover any and all accrued and unpaid taxes for which the
Company is liable for the period ended on the date of such balance sheet and all
prior periods. The Company knows of no deficiency assessment or proposed
deficiency assessment of taxes against it, except as may be otherwise disclosed
in writing to the Bank prior to the date hereof.
Section 3.11. Litigation. Except as set forth on Schedule 3.11 attached
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hereto, there are no actions, suits or proceedings pending, or to the knowledge
of the Company, threatened against or affecting the Company property in any
court, or before or by any federal, state or municipal or other governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, which could result in any adverse change in the business, property
or assets, or in the condition, financial or otherwise, except for actions,
suits or proceedings of a character normally incident to the kind of business
conducted by it, none of which, either individually or in the aggregate, if
adversely determined, would materially impair the right or ability of it to
carry on its business substantially as now conducted or materially adversely
affect its financial position or operations.
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Section 3.12. Ownership of Property. Except for Permitted Encumbrances or
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as otherwise permitted in any of the Bank Documents to each of which the Company
is a party, the Company has good and marketable fee title to, or valid leasehold
interests in, its real properties in accordance with the laws of the
jurisdiction where located, respectively, and good and marketable title to
substantially all its other property and assets , subject, however, in the case
of real property, to title defects and restrictions which do not materially
interfere with its operations conducted thereon. Except for Permitted
Encumbrances, the real property and all other property and assets of the Company
are free from any liens or encumbrance securing Indebtedness and from any other
liens, encumbrances, charges or security interests of any kind. Each lease, if
any, to which the Company is a party is in full force and effect, and no
material default on its part or, to its knowledge, any other party thereto
exists.
Section 3.13. Environmental Matters. The Company is in compliance with all
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Environmental Laws and all applicable federal, state and local health and safety
laws, regulations, ordinances or rules, except to the extent that any non-
compliance will not, in the aggregate, have a materially adverse effect on it or
its ability to fulfill its obligations under this Agreement or any of the other
Bank Documents to which it is a party.
SECTION FOUR
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COVENANTS
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The Company covenants and agrees that, from the date of this Agreement and
until the obligations of the Company to the Bank hereunder are satisfied in
full, it will comply with the following provisions:
Section 4.1. Accounting; Financial Statements and Other Information. The
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Company will maintain, and will cause each Subsidiary to maintain, a standard
system of accounting, established and administered in accordance with GAAP
consistently followed through out the periods involved, and will set aside on
its books, for each fiscal year, the proper amounts for depreciation,
obsolescence, amortization, bad debts, current and deferred taxes, and other
purposes as shall be required by GAAP. The Company, unless the Bank shall
otherwise consent in writing, will deliver to the Bank or cause to be delivered
to the Bank:
(a) Audit Report. Promptly when available and in any event within 120
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days after the close of each Fiscal Year: (i) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year in the form of the 10-K
submitted by the Company to the SEC, certified without qualification by
independent auditors of recognized standing selected by the Company and
reasonably acceptable to the Bank and (ii) consolidating balance sheets of the
Company and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of earnings for the Company and its Subsidiaries for
such Fiscal Year, certified by the Chief Executive Officer, the Chief Financial
Officer or any Vice President of the Company.
(b) Quarterly Reports. Promptly when available and in any event within 60
-----------------
days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of
each Fiscal Year, internally prepared consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of
12
the end of such Fiscal Quarter together with consolidated and consolidating
statements of earnings and a consolidated and consolidating statement of cash
flows for such Fiscal Quarter and for the period beginning with the first day of
such Fiscal Year and ending on the last day of such Fiscal Quarter, certified by
the Chief Executive Officer, the Chief Financial Officer or any Vice President
of the Company.
(c) Compliance Certificates. Contemporaneously with the furnishing of a
-----------------------
copy of each set of quarterly statements pursuant to subparagraph (c), a duly
completed compliance certificate in form acceptable to the Bank, dated the date
of such quarterly statements and signed by the Chief Executive Officer, the
Chief Financial Officer or any Vice President of the Company, containing a
statement to the effect that such officer has not become aware of any Event of
Default or Unmatured Event of Default that has occurred and is continuing or, if
there is any such event, describing it and the steps, if any, being taken to
cure it.
(d) Reports to SEC and to Shareholders. Promptly upon the filing or
----------------------------------
sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC; and copies of all registration
statements of the Company or any Subsidiary filed with the SEC; and copies of
all proxy statements or other communications made to security holders generally
concerning adverse material developments in the business of the Company or any
Subsidiary.
(e) Notice of Default, Litigation and ERISA Matters. Promptly upon
-----------------------------------------------
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Borrower or the Subsidiary affected thereby with
respect thereto:
(i) the occurrence of an Event of Default or an Unmatured Event of
Default;
(ii) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Bank which has
been instituted or, to the knowledge of the Company, is threatened against
either the Borrower or any Subsidiary or to which any of the properties of
any thereof is subject which, if adversely determined, might reasonably be
expected to have a Material Adverse Effect;
(iii) the institution of any steps by any member of a "controlled
group"or any other Person to terminate any Pension Plan, or the failure of
any member of the controlled group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the controlled group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the
13
imposition of an excise tax, that any such plan is or has been funded at a
rate less than that required under Section 412 of the Code, that any such
plan is or may be terminated, or that any such plan is or may become
insolvent;
(iv) any cancellation or material change in any insurance maintained
by the Company or any Subsidiary;
(v) any event (including (i) any violation of any Environmental Law or
the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which might reasonably be
expected to have a Material Adverse Effect; or
(vi) any setoff, claims, withholdings or other defenses to which any
of the Pledged Collateral, or the Bank's, rights with respect to the
Pledged Collateral, are subject.
(f) Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
(g) Management Reports. Promptly upon the request of the Bank, copies of
------------------
all detailed financial and management reports submitted to the Company by
independent auditors in connection with each annual or interim audit made by
such auditors of the books of the Company.
(h) Budgets. As soon as practicable and in any event within 60 days after
-------
the commencement of each Fiscal Year, divisional and consolidated budgets for
the Company and its Subsidiaries for such Fiscal Year prepared in a manner
reasonably satisfactory to the Bank.
(i) Securities Collateral Information. At such times as the Bank may
---------------------------------
request and no less frequently than monthly, reports in such form and detail as
the Bank may require showing the composition and market value of the Securities
Collateral.
(j) Other Information. From time to time such other information
-----------------
concerning the Company and its Subsidiaries as the Bank may reasonably request.
Section 4.2. Insurance and Maintenance of Properties and Business. The
----------------------------------------------------
Company shall, and shall cause each of its Subsidiaries to, maintain insurance
in responsible companies in such amounts and against such risks as is
satisfactory to the Bank, and, in the case of all policies insuring property in
which Bank shall have a lien or security interest of any kind, all such policies
shall provide that the proceeds thereof shall be payable to it and Bank, as
their respective interests may appear. All said policies or certificates
thereof, including the endorsements, shall be deposited with the Bank; and such
policies shall contain provisions that no such insurance may be canceled or
decreased without thirty (30) days prior written notice to the Bank. In the
event of acquisition by the Company of additional insurable Pledged Collateral,
it shall cause such insurance coverage to be increased or amended in such manner
and to such extent as prudent business judgment would dictate. If the Company
shall at any time or times hereafter fail to obtain and/or maintain any of the
policies of insurance required herein, or fail to pay any premium in whole or in
part relating to such policies, Bank may, but shall not be obligated to, obtain
and/or cause to be maintained insurance coverage with respect to the Pledged
Collateral, including, at Bank's option, the coverage provided by all or any of
the policies of the Company, and pay all or any part of the premium therefor,
14
without waiving any default by Company; any sums disbursed by Bank shall be
additional loans to Company by Bank payable on demand. Bank shall have the
right to settle and compromise any and all claims under any of the policies
required to be maintained by Company hereunder and the Company hereby appoints
Bank as its attorney-in-fact, with power to demand, receive, and receipt for all
monies payable thereunder, to execute in its name or the name of the Bank or
both any proof of loss, notice, draft, or other instruments in connection with
such policies or any loss thereunder and generally to do and perform any and all
acts as Company, but for this appointment, might or could perform. The Company
will, upon request, furnish to the Bank a schedule of all insurance carried by
it, setting forth in detail the amount and type of such insurance. The Company
will maintain, in good repair, working order and condition, all properties used
or useful in its the business.
Section 4.3. Payment of Indebtedness and Taxes. The Company will pay (a)
---------------------------------
all of its Indebtedness (not required to be subordinated hereunder) and other
obligations in accordance with normal terms or any applicable grace periods and
(b) all taxes, assessments, and other governmental charges levied upon any of
its respective properties or assets or in respect of its respective franchises,
business, income, or profits before the same become delinquent, except that no
such Indebtedness, obligations, taxes, assessments, or other charges need be
paid if contested by the Company in good faith and by appropriate proceedings
promptly initiated and diligently conducted and if appropriate provision, if
any, as shall be required by GAAP, shall have been made therefor.
Section 4.4. Litigation; Adverse Changes. The Company will promptly notify
---------------------------
the Bank in writing of (a) any event which, if existing at the date hereof,
would require a material qualification of the representations and warranties set
forth in Section 3.6 and (b) any material adverse change in the condition,
business, or prospects, financial or otherwise, of the Company.
Section 4.5. Notice of Default. The Company will promptly notify the Bank
-----------------
of (a) any Event of Default or event which with the passage of time or service
of notice or both would constitute an Event of Default hereunder and (b) any
demands made upon the Company by any Person for the acceleration and immediate
payment of any material Indebtedness owed to such Person.
Section 4.6. Inspection. The Company will make available for inspection by
----------
duly authorized representatives of the Bank, its books, records, and properties,
and will furnish the Bank such information regarding its respective business
affairs and financial condition within a reasonable time after written request
therefor.
Section 4.7. Environmental Matters. The Company:
---------------------
(a) Shall comply in all material respects with all Environmental Laws.
(b) Shall deliver promptly to the Bank (i) copies of any documents received
from the United States Environmental Protection Agency or any state, county
or municipal environmental or health agency, and (ii) copies of any
documents submitted by the Company to the United States Environmental
Protection Agency or any state, county or municipal environmental or health
agency concerning its operations.
15
(c) Shall indemnify and hold Bank harmless from all liability or loss
arising out of the application of any Environmental Law to the Bank or to
any collateral (including without limitation the Premises) for any loan to
the Company, including, without limitation, any Environmental Law creating
a lien upon property or imposing any liability upon Bank for any clean up
costs; provided, however, that this indemnity shall not apply to liability
arising out of willful violation of Environmental laws by the Bank.
Section 4.8. Payments Under Installment Sale Agreement. The Company shall
-----------------------------------------
make the payments required pursuant to Section 5.3 of the Installment Sale
Agreement.
Section 4.9. Existence; Business. The Company will do all things
-------------------
reasonably necessary to preserve and keep in full force and effect its existence
and rights, to conduct its business in a prudent manner, to maintain in full
force and effect, and renew from time to time, its franchises, permits,
licenses, patents, and trademarks that are necessary to operate its business.
The Company will comply in all material respects with all valid laws and
regulations now in effect or hereafter promulgated by any properly constituted
governmental authority having jurisdiction; provided, however, the Company shall
not be required to comply with any law or regulation which it is contesting in
good faith by appropriate proceedings as long as either the effect of such law
or regulation is stayed pending the resolution of such proceedings or the effect
of not complying with such law or regulation is not to jeopardize any franchise,
license, permit, patent, or trademark necessary to conduct its business.
Section 4.10. Licenses. The Company shall have all licenses, permits and
--------
approvals required under any federal, state, or local statutes, regulation,
ordinance, rule, or other legal requirement relating to the establishment,
ownership or operation of any business conducted by it, including, without
limitation, appropriate environmental approvals.
Section 4.11. Title. The Company will keep the title to the Pledged
-----
Collateral owned by it free and clear of all liens, encumbrances, easements,
restrictions and claims, except for (a) the Permitted Encumbrances, (b) any
lien, restriction or encumbrance created in connection with any Credit Document
to which it is a party or otherwise approved by the Bank, and (c) real estate
taxes and installment of special assessments, if any, which are a lien but not
yet due and payable.
SECTION FIVE
------------
NEGATIVE COVENANTS
The Company further covenants and agrees that, from the date of this
Agreement and until the obligations of the Company to the Bank hereunder are
satisfied in full, the Company will, unless the Bank shall otherwise consent or
agree, comply with the following provisions:
Section 5.1. Sale, Purchase of Assets. The Company will not, directly or
------------------------
indirectly, (a) purchase, lease, or otherwise acquire any assets, including
without limitation shares of corporate stock or other equity interests in
entities, except in the ordinary course of business or as otherwise permitted
under this Agreement, or (b) sell, lease, transfer, or otherwise dispose of any
plant or other assets in an amount that exceeds Five Thousand Dollars
($5,000.00) per transaction, except for (i) assets sold for full and adequate
consideration in the reasonable judgment of the Company
16
which the Company has determined to be worn out or obsolete or not useful in the
ordinary course of its business, and (ii) assets sold in the ordinary course of
business provided that the Company receives full and adequate consideration in
its reasonable judgment in exchange for such assets sold.
Section 5.2. Liens. The Company will not, and will not permit any
-----
Subsidiary to, create or permit to exist any Lien on any of its real or personal
properties, assets or rights of whatsoever nature (whether now owned or
hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety
bonds, bids, performance bonds and similar obligations) for sums not
overdue or being contested in good faith by appropriate proceedings and not
involving any deposits or advances or borrowed money or the deferred
purchase price of property or services, and, in each case, for which it
maintains adequate reserves;
(c) Liens identified in Schedule 5.2;
------------
(d) Liens that constitute purchase money security interests on any
property securing debt incurred for the purpose of financing all or any
part of the cost of acquiring such property, provided that any such Lien
--------
attaches to such property within 60 days of the acquisition thereof and
such Lien attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $250,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Company
or any Subsidiary;
(g) Liens in favor of the Bank; and
(h) Liens granted to secure repayment of the Bonds.
Section 5.3. Reserved.
--------
17
Section 5.4. Advances and Other Investments. The Company will not, and
------------------------------
not permit any Subsidiary to, make, incur, assume or suffer to exist any
Investment in any other Person.
Section 5.5. Assumptions; Guaranties. The Company will not assume,
-----------------------
guarantee, endorse, or otherwise become directly or contingently liable for
(including, without limitation, liable by way of agreement, contingent or
otherwise, to purchase, to provide funds for payment, to supply funds to, or
otherwise invest in any debtor or otherwise to assure the creditor against loss)
any obligation or indebtedness of any other Person, except guaranties by
endorsement of negotiable instruments for deposit, collection, or similar
transactions in the ordinary course of business.
Section 5.6. Mergers; Consolidation. The Company will not and will not
-----------------------
permit any Subsidiary to merge or consolidate with any Person, dissolve, wind up
its affairs, or sell, assign, lease, or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person without the
consent of the Bank which shall not be unreasonably withheld, provided, however,
that this Section shall not prohibit the intended reorganization of the Company
from a limited liability company to a corporation.
Section 5.7. Reserved.
--------
Section 5.8. Bond Documents. The Company will not enter into an amendment
--------------
of the Bond Documents, without the prior written consent of the Bank.
SECTION SIX
-----------
EVENTS OF DEFAULT
-----------------
Section 6.1. Events of Default. The occurrence of any one or more of the
-----------------
following events shall constitute an Event of Default under this Agreement:
(a) Payments. The Company fails to make or cause to be made any payment
--------
to the Bank required to be made pursuant to the terms of this Agreement or any
of the other Bank Documents to which it is a party for a period of ten (10)
Business Days, or
(b) Representations; Warranties. If any representation or warranty made
---------------------------
herein by the Company, in any other written statement, certificate, report, or
financial statement at any time furnished by or for the Company in connection
herewith, proves to be incorrect in any material respect when made, or
(c) Covenant Defaults. If the Company fails to perform or observe any
-----------------
other provision, covenant, or agreement contained in this Agreement or in any
other of the Bank Documents, to which it is a party and such failure remains
unremedied for thirty (30) calendar days after the Bank shall have given written
notice thereof to the Company, or
(d) Other Indebtedness. If the Company (i) fails to pay any indebtedness
------------------
for borrowed money (other than as arising under the Bank Documents) owing by the
Company when due, whether at maturity, by acceleration, or otherwise or (ii)
fails to perform any term, covenant, or agreement on its part to be performed
under any agreement or instrument (other than the Bank Documents) evidencing,
securing or relating to such indebtedness when required to be performed,
18
or is otherwise in default thereunder, if the effect of such failure is to
accelerate, or to permit the holder(s) of such indebtedness or the trustee(s)
under any such agreement or instrument to accelerate, the maturity of such
indebtedness, whether or not such failure shall be waived by such holder(s) or
trustee(s), or
(e) Indenture. An Indenture Default shall have occurred, or
---------
(f) Adverse Change. If the Company discontinues business, or if there
--------------
occurs a material adverse change in its business, property, or its condition or
operations, financial or otherwise, or
(g) ERISA. If any of the following events occur: (i) any Reportable Event
-----
which the Bank determines in good faith might constitute grounds for the
termination of any Plan or for the appointment by the appropriate United States
district court of a trustee to administer any Plan, continues for thirty (30)
days after the Bank has given written notice thereof to the Company, (ii) any
Plan incurs any "accumulated funding deficiency" (as such term is defined in
ERISA) whether waived or not, (iii) the Company engages in any Prohibited
Transaction, (iv) a trustee is appointed by an appropriate United States
district court to administer any Plan, or (v) the PBGC institutes proceedings to
terminate any Plan or to appoint a trustee to administer any Plan, or
(h) Insolvency. If the Company (i) is adjudicated a debtor or insolvent,
----------
or ceases, is unable, or admits in writing its inability to pay its debts as
they mature, or makes an Assignments for the benefit of creditors, (ii) applies
for, or consents to, the appointment of any receiver, trustee, or similar
officer for it or for all or any substantial part of its property, or any such
receiver, trustee, or similar officer is appointed without the application or
consent of the Company, (iii) institutes, or consents to the institution of, by
petition, application, or otherwise, any bankruptcy reorganization, arrangement,
readjustment of debt, dissolution, liquidation, or similar proceeding relating
to it under the laws of any jurisdiction, (iv) has any such proceeding described
in clause (iii) instituted against it which remains thereafter undismissed for a
period of one hundred twenty (120) days or (v) has any judgment, writ, warrant
of attachment or execution or similar process issued or levied against a
substantial part of its property and such judgment, writ, or similar process is
not released, vacated, or fully bonded within one hundred twenty (120) days
after its issue or levy.
(i) Other Bank Documents. If an event of default occurs under any of the
--------------------
other Bank Documents (other than this Agreement).
Section 6.2. No Waiver; Remedies. If an Event of Default occurs, the Bank
-------------------
may exercise any and all remedies, legal or equitable on behalf of the Bank, to
collect the amounts due from the Company pursuant to this Agreement, and, in its
sole discretion, may instruct the Trustee to redeem the Bonds. Upon receipt by
the Trustee of such instructions from the Bank, the Bonds shall be redeemed
pursuant to the Indenture. No failure on the part of the Bank to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right or remedy.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law or equity.
19
SECTION SEVEN
-------------
TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT
------------------------------------------------------
Section 7.1. Transfer of Letter of Credit and Termination of Letter of
---------------------------------------------------------
Credit and Related Matters.
--------------------------
(a) Transfer. The Letter of Credit may be transferred in accordance with
--------
the provisions set forth therein.
(b) Termination. The Letter of Credit shall terminate automatically on the
-----------
earliest of (i) the payment by the Bank to the Trustee of the final drawing
available to be made under the Letter of Credit; (ii) receipt by the Bank of the
Letter of Credit and a certificate signed by an officer of the Trustee and an
authorized representative of Company stating that no Bonds remain outstanding;
(iii) receipt by the Bank of the Letter of Credit and a certificate signed by an
officer of the Trustee and an authorized representative of Company stating that
"An Alternate Credit Facility in substitution for the Letter of Credit has been
accepted by the Trustee and is in effect"; or (iv) the stated Expiration Date.
SECTION EIGHT
-------------
MISCELLANEOUS
-------------
Section 8.1. Liability of the Bank. Between the Company and the Bank, the
---------------------
Company assumes all risks of the acts or omissions of the Trustee and any
transferee of the Letter of Credit with respect to its use of the Letter of
Credit or its proceeds. Neither the Bank nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of the Letter
of Credit or any of the proceeds thereof, or for any acts or omissions of the
Trustee and any transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, inaccuracy of any of the statements or
representations contained therein or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Bank against presentation
of documents which do not strictly comply with the terms of the Letter of
Credit, including any failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit, except the Company
shall have a claim against the Bank, and the Bank shall be liable to the
Company, to the extent, but only to the extent of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in honoring a
draft under the Letter of Credit, or (ii) the Bank's willful failure to pay
under the Letter of Credit after presentation to it by the Trustee (or a
successor trustee under the Indenture to whom the Letter of Credit has been
transferred in accordance with its terms) of a sight draft and certificate
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, and may assume the
genuineness and rightfulness of any signature thereon, without responsibility
for further investigation, regardless of any notice or information to the
contrary unless actually received by the Bank; provided, that if the Bank shall
receive written notification from both the Trustee and the
20
Company that documents conforming to the terms of the Letter of Credit to be
presented to the Bank are not to be honored, the Bank agrees that it will not
honor such documents and the Company shall indemnify and hold the Bank harmless
from such failure to honor.
Section 8.2. Right to Set-Off. Upon the occurrence of any Event of Default
----------------
hereunder the Bank is hereby irrevocably authorized at any time and from time to
time without notice to the Company, any such notice being expressly waived by
the Company, to set-off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect or contingent or matured or unmatured, at any time held or owing by the
Bank to or for the credit or the account of the Company, or any part thereof in
such amounts as such Bank may elect, against and on account of the obligations
and liabilities of the Company to the Bank hereunder and claims of every nature
and description of the Bank against the Company, whether arising hereunder or
otherwise, as the Bank may elect, whether or not the Bank has made any demand
for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Bank agrees to notify the Company promptly of any
such set-off and the application made by the Bank, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Bank under this subsection are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the Bank
may have.
Section 8.3. Additional Collateral. As additional security for this
---------------------
Agreement, the Company agrees that in the event that Trustee shall, at any time
or from time to time, in response to an acceleration of the Bonds, draw upon the
Letter of Credit, the Bank shall be and become the assignee of all rights and
interests of the Company and the Trustee. The Company does hereby consent to
such Assignments, and agrees to execute any and all such documents, instruments
and certificates in connection therewith as the Bank shall deem appropriate.
Section 8.4. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be deemed to have been
made when delivered, or mailed first-class postage prepaid, or sent by wire,
telex, telecopier or similar electronic means of communication or delivered to a
telegraph office for transmission, addressed to the appropriate address set
forth below,
if to the Bank, at:
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, llp
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
21
or at such other address as may have been furnished for such purpose to the
Company by the Bank in writing; or
if to the Company, at:
Plug Power, LLC
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or at such other address as may have been furnished for such purpose to the Bank
by the Company in writing.
Section 8.5. Survival of Representations and Warranties. All agreements,
------------------------------------------
representations and warranties contained in the Bank Documents shall survive the
execution and delivery of this Agreement, any investigation at any time made by
or on behalf of the Bank and the issuance and acceptance of the Letter of
Credit. All statements contained in any certificates or other instruments
delivered by the Company pursuant hereto shall constitute representations and
warranties by the Company under this Agreement.
Section 8.6. Payments on Holidays. Whenever any payment to be made
--------------------
pursuant to this Agreement shall be stated to be due on a day other than a
Business Day, such payment may be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest, if
any, in connection with such payment.
Section 8.7. Computation of Interest. Except as otherwise provided, all
-----------------------
computations of interest with respect to the Letter of Credit hereunder shall be
made on the basis of a three hundred sixty-five (365) day year.
Section 8.8. Entire Agreement. The Bank Documents and the Letter of Credit
----------------
embody the entire agreement and understanding among the parties hereto and
supersede all prior agreements and understandings relating to the subject matter
hereof.
Section 8.9. Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto.
Section 8.10. Expenses. The Company agrees, regardless of whether or not
--------
the Bonds are eventually issued and sold and regardless of whether or not the
transactions contemplated hereby shall be consummated, to pay all reasonable
expenses incurred by the Bank incident to such transactions in the preparation
of documentation relating thereto, including all reasonable fees and
disbursement of the counsel (whether special outside counsel or attorneys in its
Law Group) of the
22
Bank, for services to the Bank. The Company further agree to pay all like
expenses incurred by the Bank in connection with any amendments of or waivers or
consents requested by the Company under or with respect to the Bank Documents.
Section 8.11. Counterparts. This Agreement may be executed in any number
------------
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 8.12. New York Contract. This Agreement shall be construed and
-----------------
enforced in accordance with and be governed by the laws of the State of New
York.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
PLUG POWER, LLC
By:
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
KEYBANK NATIONAL ASSOCIATION
By:
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF ALBANY )
On the ___ day of July in the year 1999 before me, the undersigned, a
notary public in and for said state, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
personally known to me or provided to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their capacity,
and that by his/her/their signature on the instrument, the individual or the
person upon behalf of which the individual acted, executed this instrument.
--------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.:
COUNTY OF ALBANY )
On the ___ day of July in the year 1999 before me, the undersigned, a
notary public in and for said state, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
personally known to me or provided to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their capacity,
and that by his/her/their signature on the instrument, the individual or the
person upon behalf of which the individual acted, executed this instrument.
--------------------------------
NOTARY PUBLIC
25
