LOAN AGREEMENT
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THIS LOAN AGREEMENT is made and entered into this 30th day of June, 2000,
by and between FUELCELL ENERGY, INC., a Delaware corporation having its chief
executive office at 0 Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000-0000 (the
"Borrower"), and the CONNECTICUT DEVELOPMENT AUTHORITY, a body politic and
corporate constituting a public instrumentality and political subdivision of the
State of Connecticut, having an office at 000 Xxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxxx 00000 (the "Authority").
WITNESSETH:
WHEREAS, the Borrower has requested that the Authority lend it the sum of
up to FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00) from the Connecticut Works
Fund established under Section 32-23ii of the Connecticut General Statutes (the
"Loan"); and
WHEREAS, the Authority has agreed to make the Loan upon the terms and
conditions hereinafter set forth in order to stimulate and encourage the growth
and development of the economy of the State of Connecticut.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the Borrower and the Authority agree as follows:
SECTION 1
THE LOAN
1.1. The Authority shall make the Loan in accordance with the terms and
conditions set forth in this Loan Agreement, which Loan shall be evidenced by a
promissory note from the Borrower to the Authority in the original principal
amount of $4,000,000.00, dated as of the date hereof (the "Note"). The Loan
shall be secured by the machinery and equipment acquired by the Borrower with
the proceeds of the Loan and certain other generally marketable, non-specialized
machinery and equipment owned by the Borrower and acceptable to the Authority,
such that, at the time of each advance under the Loan, the aggregate sixty (60)
day liquidation value of all of such machinery and equipment collateral is equal
to at least 150% of the outstanding balance of the Loan, all as more fully
described in a security agreement of even date herewith, executed by the
Borrower in favor of the Authority (the "Security Agreement"). To the extent
required by Connecticut Public Act 94-231, the Borrower and the Authority, on or
prior to the date hereof, are executing and delivering a joint statement as to
the number of jobs to be created and retained by Borrower in the State of
Connecticut, the Authority's public policy objectives in extending financial
assistance to the Borrower, and such other information as is required by Public
Act 00-000 (xxx "Xxxxx Xxxxxxxxx"). This Loan Agreement, the Note, the Security
Agreement, the Joint Statement and the other documents set forth in EXHIBIT A
are together sometimes referred to herein as the "Loan Documents".
1.2. Contemporaneously with the execution and delivery of this Loan
Agreement, the Borrower will execute and deliver to the Authority the Loan
Documents to which it is a party and such other documents to which it is a party
as are requested by the Authority. The Borrower will ensure that all other
documents set forth in EXHIBIT A will be executed and delivered to the Authority
contemporaneously with the execution and delivery of this Loan Agreement. All of
the Loan Documents shall be in form and content reasonably acceptable to the
Authority.
1.3. The closing (the "Closing") of the Loan is being conducted by the
Authority's special counsel, Xxxxxxx & Torrance LLP of Waterbury and New Haven,
Connecticut. The Closing is being held on the date of execution of this Loan
Agreement (the "Closing Date"), at the offices of Xxxxxxx & Torrance LLP in
Waterbury, Connecticut. The proceeds of the Loan shall be advanced by the
Authority to the Borrower in one or more future advances, each in an amount of
not less than $1,000,000.00, over the twelve-month period following the Closing
Date at such time(s) that the Borrower complies, to the full satisfaction of the
Authority, with the conditions to funding set forth in Section 1.4 below with
respect to each such advance; it being understood that the Authority shall have
no obligation to fund any advances to the Borrower on account of the Loan unless
all of the conditions precedent to such advance have been met by the Borrower to
the full satisfaction of the Authority. Each future advance by the Authority to
the Borrower on account of the Loan shall be evidenced by the Note. The
aggregate principal amount of all advances by the Authority to the Borrower on
account of the Loan shall not exceed the sum of $4,000,000.00. The Authority
shall have no obligation to make any future advances to the Borrower on account
of the Loan after June 30, 2001.
1.4. To the extent that (i) no Event of Default (as defined below) has
occurred and is continuing as of such date, (ii) no state of facts exist as of
such date which, with the passage of time or the giving of notice, or both,
would constitute an Event of Default, and (iii) there has been no material
adverse change in the financial, business or operating condition of the Borrower
as of such date, the Authority shall make one or more future advances to the
Borrower on account of the Loan, each advance to be in an amount of at least
$1,000,000.00, at such time that the Borrower has satisfied each of the
following conditions precedent (to the full satisfaction of the Authority):
(a) The Borrower has purchased machinery and equipment to be used by
it in its manufacturing operations at Technology Park, Technology Park Road,
Torrington, Connecticut 06790 (the "Torrington Facility") (the "Equipment"), and
the Equipment has been installed in and is in working order in the Torrington
Facility or has been installed in another location in the State of Connecticut
which is owned by or leased by the Borrower;
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(b) The Borrower has obtained a landlord waiver and consent
agreement, in form and substance reasonably acceptable to the Authority and its
legal counsel, from the landlord of the Torrington Facility or from the landlord
of the leased facility where such machinery and equipment shall be temporarily
located;
(c) The amount of the advance on account of the Loan requested by
the Borrower does not exceed eighty percent (80%) of the acquisition cost of
such Equipment (excluding applicable sales tax, delivery and installation
charges for such Equipment);
(d) At the time of such requested advance, the sixty (60) day
liquidation value of all machinery and equipment collateral presently securing
the Loan (including the Equipment) (the "Collateral"), based upon a then-current
equipment appraisal prepared by a reputable equipment appraiser acceptable to
the Authority, is equal to at least one hundred fifty percent (150%) of the
outstanding balance of the Loan (including the amount of the requested advance)
as of such date;
(e) The Borrower has prepared and delivered to the Authority an
updated Schedule A (and Schedule A-1, as appropriate) to the Security Agreement
and Schedule A (and Schedule A-1, as appropriate) to the UCC-1 financing
statements describing the Equipment acquired by the Borrower with the proceeds
of such advance and the other Collateral securing the Loan, and has executed and
delivered to the Authority any and all UCC-3 amendment statements reasonably
required by the Authority and its legal counsel;
(f) The Borrower has reimbursed the Authority for all additional
post-Closing reasonable attorneys' fees, filing/recording fees and other
expenses incurred by the Authority in connection with funding the requested
advance on account of the Loan; and
(g) All of the representations and warranties of the Borrower set
forth in Section 2 hereof are true and correct in all material respects as of
the date of such requested advance.
In addition to the foregoing conditions, and prior to the initial advance under
the Loan, the Borrower shall have obtained and delivered to the Authority all of
the items designated as "post-closing" on EXHIBIT A to this Loan Agreement; it
being understood that the Authority shall have no obligation to fund any portion
of the Loan until all of the items described on EXHIBIT A hereto have been
delivered to the Authority and its legal counsel.
1.5. If at the Closing the Borrower fails to deliver the Note to the
Authority, or if any of the conditions precedent to the closing of the Loan
specified herein have not been fulfilled by the Borrower, then the Authority may
thereupon elect to be relieved of all further obligations under this Agreement,
but the Borrower shall remain liable for the costs and expenses set forth in
Section 6.5 hereof.
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SECTION 2
WARRANTIES AND REPRESENTATIONS
OF THE BORROWER
The Borrower represents and warrants to the Authority as follows:
2.1. The Borrower is a corporation duly incorporated and validly existing
under the laws of the State of Delaware and is duly qualified as a foreign
corporation and in good standing in the State of Connecticut and in each other
jurisdiction in which it owns assets or conducts its business. The Borrower has
all requisite power and authority to conduct its business as presently conducted
and to own its property.
2.2. The Borrower has the power and authority to enter into and perform
this Loan Agreement and the other Loan Documents, and to incur the obligations
herein or therein provided for. The execution, delivery and performance by the
Borrower of the Loan Documents have been duly authorized by all necessary
corporate action and do not and will not violate any law or the Certificate of
Incorporation or the Bylaws of Borrower or any agreement, instrument or evidence
of indebtedness to which it is a party or by which it is bound or by which any
of its properties may be affected. The Loan Documents, when executed and
delivered, will be legal, valid and binding obligations of the Borrower,
enforceable against it in accordance with their respective terms, except as the
enforceability thereof may be limited by the (i) effect of applicable
bankruptcy, insolvency, reorganization and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto, and (ii)
application of equitable principles in any proceeding (regardless of whether
such enforceability is considered in a proceeding in equity or at law) and in
the application of which a court, among other things, might require any party
hereto to act with reasonableness and in good faith. The Borrower will deliver
at Closing an opinion from its legal counsel with respect to the foregoing and
with respect to such other matters as the Authority may reasonably require, in
form and substance satisfactory to the Authority.
2.3. No consent, license or approval from any governmental authority is or
will be necessary for the valid execution, delivery and performance by the
Borrower of the Loan Documents to which it is a party.
2.4. There has been no material adverse change in the financial condition
of the Borrower since the date of its application to the Authority for the Loan.
All financial statements, including, without limitation, balance sheets, income
statements and cash flow statements, delivered to the Authority in connection
with Borrower's application for the Loan are correct and complete and fairly
present the financial position and results of operations of the Borrower at the
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times of and for the periods reflected by such financial statements. The
financial statements and all other written statements furnished by the Borrower
to the Authority in connection with the Loan do not contain any untrue statement
of material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact which the Borrower
has not disclosed to the Authority in writing which materially and adversely
affects nor, as far as the Borrower can reasonably foresee, is reasonably likely
to prove to affect materially and adversely the business operations or financial
condition of the Borrower.
2.5. There are no actions, suits or proceedings pending or threatened
against it before any court or other federal, state, municipal or other
governmental authority or before any arbitrator(s) that if adversely determined
against the Borrower would have a material adverse effect on the business,
operations or financial condition of the Borrower (a "Material Adverse Effect").
The Borrower is not in default with respect to any order of any court,
arbitrator or governmental body.
2.6. The Borrower is not in default in the performance, observance or
fulfillment of any of the terms, obligations, covenants, conditions or
provisions contained in any agreement or instrument to which the Borrower is a
party or to which its property is subject, which default, together with all such
defaults, singly or in the aggregate, will have a Material Adverse Effect on the
Borrower.
2.7. The Borrower has filed all Federal, state and municipal income and
other tax returns which are required to be filed, and has paid, or made
provision for the payment of, all taxes which have become due pursuant to said
returns, except such taxes, if any, which are being contested in good faith and
as to which adequate reserves have been provided.
2.8. The Borrower has complied with all applicable statutes, rules,
regulations, orders and restrictions of any governmental entity, instrumentality
or agency having jurisdiction over the conduct of its business or the ownership
of its property, the noncompliance with which will have a Material Adverse
Effect.
2.9. No Event of Default (as defined herein) has occurred or is
continuing, and the Borrower does not have any knowledge of any currently
existing facts or circumstances which, with the passage of time or the giving of
notice, or both, would constitute an Event of Default.
2.10. The Borrower has all franchises, permits, licenses and other similar
authorizations necessary for the conduct of its business as now being conducted
by it, and the Borrower is not in violation, nor will the transactions
contemplated by this Loan Agreement or the other Loan Documents to which it is a
party cause a violation, of the terms or provisions of any such franchise,
permit, license or other similar authorization.
2.11. The Borrower's chief executive office and principal place of
business is at the location described in the recitals to this Loan Agreement.
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2.12. All statements contained in any of the Loan Documents shall
constitute representations and warranties made under this Loan Agreement. All
representations and warranties made under this Loan Agreement shall survive the
execution and delivery hereof.
2.13. The Borrower has good and marketable title to its properties and
assets. The Collateral is free and clear of any mortgage, security interest,
pledge, lien, lease, encumbrance or charge.
SECTION 3
COVENANTS OF THE BORROWER
The Borrower covenants that on and after the Closing and for so long as any
part of the Loan remains outstanding:
3.1. The Borrower will preserve and maintain its existence as a
corporation duly organized and validly existing under the laws of the State of
Delaware and will remain qualified to do business and in good standing in the
State of Connecticut and in each other state or other jurisdiction in which it
conducts its business.
3.2. The Borrower will notify the Authority promptly of any material
adverse change in the financial condition or business operations of the
Borrower.
3.3. The Borrower will pay the Note and all other amounts owing under the
Loan Documents according to their terms and comply with each provision of this
Loan Agreement and each provision of the other Loan Documents binding upon it.
3.4. The Borrower will promptly pay and discharge when due and payable all
taxes, assessments and governmental charges levied or imposed upon it, its
property, or any part thereof, or upon its income or profits, or any part
thereof, as well as all lawful claims for labor, materials and supplies, which,
if unpaid, might by law become a lien or charge upon its property, provided that
such items need not be paid while being contested by the Borrower in good faith
and by appropriate legal proceedings so long as adequate reserves have been
established with respect thereto and the Borrower's title to, and its right to
use, its property is not materially and adversely affected thereby.
3.5. The Borrower will not create, incur, assume or suffer to exist any
indebtedness for borrowed money except for indebtedness described on SCHEDULE
3.5 hereto (the "Permitted Indebtedness"). The Borrower will not, without the
prior written consent of the Authority, either directly or indirectly, incur,
create, assume or permit to exist any mortgage, pledge, lien, charge, security
interest or other encumbrance of any nature whatsoever on any of the Collateral
now owned or hereafter acquired.
3.6. The Borrower will not, either directly or indirectly, guarantee,
endorse, become surety for, or otherwise be or become responsible for the
obligations of any other person or entity, whether by agreement to purchase the
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indebtedness of any other person, or agreement for the furnishing of funds to
any other person or entity, directly or indirectly, through the purchase of
goods, supplies or services (or by way of stock purchase, capital contribution,
advance or loan) or for the purpose of paying or discharging the indebtedness of
any other person or entity or otherwise, except for (i) the endorsement by the
Borrower of negotiable instruments for collection in the ordinary course of
business, and (ii) travel, relocation and other minor business expenses incurred
in the ordinary course of business for the benefit of employees of the Borrower;
PROVIDED, HOWEVER, that the Borrower shall be permitted to guarantee the
indebtedness of third parties up to the maximum amount set forth on SCHEDULE 3.5
attached hereto, it being understood that the amount of such guarantee shall be
deemed to constitute direct indebtedness for borrowed money of the Borrower for
purposes of SCHEDULE 3.5 hereof.
3.7. The Borrower shall pay all of its material debts as they become due.
3.8. The Borrower will comply in all material respects with all laws and
regulations applicable to it, its properties and/or its business.
3.9. The Borrower covenants and agrees that it will use the proceeds of
the Loan for purposes consistent with the description provided in the Borrower's
application to the Authority for financial assistance.
3.10. The Borrower will maintain fire, extended coverage, and other hazard
insurance policies (including flood insurance if required by the Authority) and
maintain liability insurance in form and amount satisfactory to the Authority.
Liability insurance shall be in an amount not less than $1,000,000.00 for injury
to or death of any one person and $1,000,000.00 for each occurrence in respect
of personal injury or death and $250,000.00 for each occurrence of property
damage. Without limiting or qualifying any other provision in this Loan
Agreement or in the other Loan Documents, all insurance shall be maintained in
amounts and manner consistent with the practice and policy of companies engaged
in the same or similar businesses in the same or similar locations. Each policy
of insurance shall include a clause that it cannot lapse or be canceled or
modified except upon at least thirty (30) days' prior written notice to the
Authority. Each policy of insurance shall be issued by a company licensed to
provide such insurance in the State of Connecticut and acceptable to the
Authority and shall be satisfactory in form to the Authority. A copy of each
policy of insurance shall be delivered to the Authority at the time of execution
of this Loan Agreement. The Authority shall be named as loss payee and as an
additional insured on such liability insurance policy.
3.11. The Borrower will indemnify and hold harmless the Authority and its
successors, assigns, officers, directors, employees and agents from and against
any liabilities, losses, damages, costs or expenses, including reasonable
attorneys' fees and costs, arising out of or in connection with the presence of
hazardous waste on or in any of the Collateral, or any lien or claim under
Section 22a-452a of the Connecticut General Statutes, as amended, or other
federal, state or municipal statute, regulation, rule, law or proceeding
relating to environmental matters, which indemnity shall survive realization on
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any of the Collateral, payment in full of the Loan, and termination, exercise
and/or release of the Loan Documents, whichever occurs last, at which time such
indemnity shall terminate. This Section 3.11 shall not limit any Environmental
Indemnity Agreement or similar document, however denominated, that the Borrower
may now or hereafter make and/or deliver to the Authority.
3.12. Upon the request of the Authority, the Borrower will execute and
deliver or cause to be executed and delivered such further documents and
instruments and do such further acts and things as the Authority may reasonably
request in order to effectuate more fully the purposes of this Loan Agreement
and the express rights of the Authority hereunder to vest more completely in and
assure to the Authority its rights under this Loan Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, the Borrower shall
join with the Authority in executing such financial statements, agreements,
notices or other documents or instruments as the Authority shall deem necessary
or desirable to create, preserve, protect, maintain or enforce its rights and
interests in and its liens on the Collateral. The Borrower shall pay the cost of
filing and recording, or refiling and re-recording, such documents and
instruments in all public offices in which such filing or recording, or refiling
or re-recording, is deemed by the Authority to be necessary or desirable.
3.13. The Borrower will notify the Authority promptly of the occurrence of
any default hereunder or under any of the other Loan Documents and of the
actions it intends to take in order to cure such default, and will notify the
Authority within thirty (30) days of becoming aware of any default under any
other material document, instrument, or agreement to which the Borrower or its
properties are subject which would have a Material Adverse Effect on the
Borrower.
3.14. The Borrower will not discontinue its business, be dissolved or
otherwise suffer or permit any termination of its corporate existence. In
particular, the Borrower shall not "relocate" its business operations outside
the State of Connecticut as more fully described in Section 3.19 hereof.
3.15. Without the Authority's prior written consent, the Borrower shall
not permit the transfer of shares of its capital stock, nor issue any additional
shares of capital stock, nor redeem or otherwise retire any shares of its
capital stock if such event would result in a "change in control" in the stock
ownership of the Borrower. For purposes hereof, a "change in control" of the
stock ownership of the Borrower shall occur if any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than the Borrower, is or becomes the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of fifty-one percent (51%) or more of the capital stock of the
Borrower.
3.16. The Borrower shall deliver to the Authority (a) within ninety (90)
days after the end of each fiscal year, a true and correct copy of its Form 10-K
submitted by the Borrower to the Securities and Exchange Commission ("SEC")
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(together with all schedules and notes attached thereto); and (b) within
forty-five (45) days after the close of each of its first three fiscal quarters,
a true and correct copy of its Form 10-Q submitted by the Borrower to the SEC
(together with all schedules and notes attached thereto). The Borrower will
promptly file when due and deliver to the Authority, within thirty (30) days
after filing same, copies of the Borrower's State of Connecticut Employee
Quarterly Earnings Reports (Form UC-5A).
3.17. The Borrower is and will remain in compliance with the Affirmative
Action Policy heretofore approved by the Authority.
3.18. The Authority shall from time to time, in its discretion, during
regular business hours and upon reasonable prior notice to the Borrower, have
the right of making an inspection of the Collateral, and the Borrower shall
assist the Authority in said inspection and shall make available such books and
other records relating to the Collateral and the Borrower's obligations to the
Authority hereunder as the Authority may reasonably request.
3.19. The Borrower hereby acknowledges and agrees that the Loan is
extended subject to the terms of Section 32-5a of the Connecticut General
Statutes, as amended by Public Act 93-218 and Public Act 93-360, and further
hereby covenants and agrees that (a) if the Borrower relocates its manufacturing
operations at the Torrington Facility outside of the State of Connecticut, at
any time during the ten year period following the date hereof (the "Benefit
Period"), the Borrower shall immediately pay to the Authority (i) all
outstanding principal of the Note, accrued interest thereon and all other
amounts payable to the Authority under this Loan Agreement, the Note and the
other Loan Documents, if any, PLUS (ii) a penalty equal to seven and one-half
percent (7.5%) of the aggregate principal amount of the Loan (whether or not any
amount then remains outstanding under this Loan Agreement, the Note or the other
Loan Documents), and (b) if the Borrower relocates it manufacturing operations
at the Torrington Facility within the State of Connecticut during the Benefit
Period, the Borrower shall offer employment at the new location to its employees
from the prior location, if such employment is available. As used herein, the
term "relocate" shall have the meaning given such term by Connecticut General
Statutes Section 32-5a, and regulations related thereto, as the same may be
amended from time to time. If the Borrower decides to relocate its business
operations outside of the State of Connecticut at any time during the Benefit
Period, the Borrower agrees to provide the Authority with immediate written
notice of its intent to relocate its business operations, together with such
other information concerning such relocation as the Authority may request. The
provisions of this Section 3.19 shall survive the payment in full of the
principal of the Note, interest thereon and all other amounts payable under this
Loan Agreement, the Note and the other Loan Documents and termination of this
Loan Agreement.
3.20. To induce the Authority to make the Loan to the Borrower, the
Borrower has represented in writing to the Authority that it intends to employ
at least one hundred fifty (150) permanent full-time employees at the Torrington
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Facility (the "Employment Threshold") by December 31, 2002 (the "Employment
Threshold Determination Date"). To the extent that the Borrower fails to attain
the Employment Threshold by the Employment Threshold Determination Date, then
the Borrower shall pay to the Authority a penalty with respect to the Loan equal
to $3,000.00 MULTIPLIED BY that number of permanent full-time employees employed
by the Borrower at the Torrington Facility as of the Employment Threshold
Determination Date which is less than the Employment Threshold. In no event
shall the penalty payable by the Borrower to the Authority under this Section
3.20 exceed the sum of $50,000.00.
3.21. The Borrower shall immediately pay to and reimburse the Authority
for any and all reasonable attorneys' fees incurred by the Authority in
connection with the administration of the Loan and the enforcement of the
Authority's rights and remedies hereunder and under the other Loan Documents.
3.22. On or before January 1, 2001, the Borrower shall have (i) executed a
written lease agreement for the Torrington Facility with an initial term of at
least ten (10) years (and with a five year renewal option), and shall have
delivered to the Authority and its legal counsel a true and correct copy of
same, (ii) obtained a certificate of occupancy for the Torrington Facility from
the Town of Torrington, and shall have delivered to the Authority and its legal
counsel a true and correct copy of same, (iii) moved and installed all of the
Equipment and other Collateral to the Torrington Facility, and (iv) obtained and
delivered to the Authority a landlord waiver and consent from the landlord of
the Torrington Facility, in form and substance acceptable to the Authority and
its legal counsel.
SECTION 4
DEFAULT AND REMEDIES
4.1. Each of the following is an Event of Default under this Loan
Agreement:
(a) the failure of the Borrower to make payment of any installment
of principal and/or interest due under the Note within ten (10) days after the
same is due;
(b) the failure of the Borrower to pay any other amount due the
Authority within ten (10) days after the same is due;
(c) the inaccuracy in any material respect of any representation
made by or on behalf of the Borrower in the loan application, this Loan
Agreement or any of the other Loan Documents;
(d) the material breach by the Borrower of any its warranties in
Section 2 of this Loan Agreement or in any of the other Loan Documents, which is
not cured by the Borrower within thirty (30) days after the Borrower becomes
aware of such material breach;
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(e) the failure of the Borrower to observe or perform any other
covenant or obligation of the Borrower in this Loan Agreement, including, but
not limited to, Section 3 hereof, or in any of the other Loan Documents, and,
with respect to the covenants set forth in Sections 3.1, 3.2, 3.4, 3.8, 3.11,
3.12, 3.16 and 3.17, such breach or default is not cured by the Borrower within
thirty (30) days after the Borrower becomes aware of such breach or default;
(f) the failure of the Borrower generally to pay its debts as such
debts become due;
(g) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Borrower in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Borrower or for any substantial part of the Borrower's
properties, or the issuance of an order for the winding-up or liquidation of the
affairs of the Borrower and the continuance of any such decree or order unstayed
and in effect for a period of sixty (60) consecutive days; or upon the
commencement by the Borrower of a voluntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or the consent by the Borrower to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Borrower or
for any substantial part of the Borrower or the making by the Borrower of any
assignment for the benefit of creditors, or the taking of corporate action by
the Borrower in furtherance of any of the foregoing;
(h) a final, unappealed judgment shall be entered against the
Borrower by any court for the payment of money which is not satisfied within
thirty (30) days after judgment and which, together with all such other
outstanding judgments against the Borrower exceeds $50,000.00 in the aggregate,
or a tax lien shall be filed, or a warrant of attachment or execution or similar
process shall be issued or levied, against property of the Borrower, which
together with other such property subject to other such tax liens or process,
exceeds a value of $50,000.00 in the aggregate;
(i) at any time after the Closing, this Loan Agreement or any of the
other Loan Documents shall fail to be the legal, valid, binding, and enforceable
obligation of the Borrower;
(j) the Borrower relocates (as defined in Section 3.19 of this
Agreement) its business operations at the Torrington Facility during the Benefit
Period (as defined in Section 3.19 of this Agreement) (A) outside of the State
of Connecticut; or (B) within the State of Connecticut and does not offer
employment at the new location to its employees from the prior location if such
employment is available;
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(k) if the Borrower shall dissolve or liquidate, or be dissolved or
liquidated, or cease to legally exist, or merge or consolidate, or be merged or
consolidated with or into any corporation or entity without the prior written
consent of the Authority; or
(l) a default or an event of default shall occur under any of the
other Loan Documents, and shall not be cured by the Borrower within any
applicable cure or grace period.
4.2. In addition to, and not in limitation of, any other term of this Loan
Agreement or any other right or remedy hereunder or under any other Loan
Document or in accordance with law, upon the occurrence of any Event of Default
and during the continuance thereof:
(a) the whole of the principal sum and accrued interest on the Note,
and all other amounts owed to the Authority, at the option of the Authority and
without notice, demand or legal process of any kind, shall become and be
immediately due and payable;
(b) the Authority may proceed to enforce the performance or
observance of any obligations, agreements or covenants of the Borrower in this
Loan Agreement or any of the other Loan Documents, and to collect the amounts
then due and thereafter to become due;
(c) in the event of a default under Section 4.1(j) of this
Agreement, in addition to the other remedies available to the Authority under
this Loan Agreement, the other Loan Documents, at law or in equity, the
Authority shall be entitled to recover, in addition to all other sums due and
owing, the seven and one-half percent (7.5%) penalty referenced in Section 3.19
of this Loan Agreement, which penalty shall be immediately due and payable.
4.3. No failure to exercise or delay in exercising any right, power or
remedy of the Authority under this Loan Agreement or any of the other Loan
Documents shall operate as a waiver thereof, nor shall any partial exercise of
any right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The failure of the Authority to
insist upon the strict observance or performance of any provision of this Loan
Agreement or of any of the other Loan Documents shall not be construed as a
waiver or relinquishment of such provision. The rights and remedies provided
herein and in the other Loan Documents are cumulative and not exclusive of any
other rights or remedies provided at law or in equity.
4.4. If the Authority should obtain a judgment because of a breach of any
covenant contained in this Loan Agreement or any of the other Loan Documents, or
a judgment because of a default in payment under the Notes, then interest shall
accrue on said judgment at the interest rate set forth in the Notes or as is
provided by statute, whichever rate shall be greater at that time.
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SECTION 5
MISCELLANEOUS
5.1. This Loan Agreement may not be modified or amended in any manner
except in writing executed by all of the parties hereto.
5.2. This Loan Agreement and any of the documents related hereto and the
rights, duties or obligations thereunder may not be assigned by the Borrower
without the written consent of the Authority.
5.3. All warranties, representations and covenants made by the Borrower
herein or in any of the other Loan Documents or any certificate or instrument
delivered to the Authority in connection with the Loan shall be considered to
have been relied upon by the Authority and shall survive until final and
irrevocable payment in full of the Note and all other amounts owing under the
Loan Documents.
5.4. This Loan Agreement and the other Loan Documents shall be binding
upon and inure to the benefit of the successors and assigns of each of the
parties; PROVIDED, HOWEVER, that nothing in this provision shall imply that the
Borrower has the right or authority to assign its rights, duties or obligations
hereunder or under any of the Loan Documents. The provisions of this Loan
Agreement are intended to be for the benefit of any and all holders, from time
to time, of the Notes and shall be enforceable by any such holder.
5.5. Whether or not the transactions contemplated hereby are consummated,
the Borrower will pay all expenses in connection with the closing of the Loan,
including the fees and disbursements of the Authority's special counsel.
5.6. Any notice given to the Borrower pursuant hereto or pursuant to any
of the Loan Documents may be served in person or by mail. Any such requirement
shall be deemed met by any written notice personally served at the principal
place of business of the Borrower, or at such other address as the Borrower
shall notify the Authority, or mailed by depositing it in any post office
station or letter box enclosed in a postage-paid envelope addressed to the
Borrower at such principal office or other address. Any notice served upon the
Authority or the Borrower under this Loan Agreement or any of the other Loan
Documents shall be effective only upon receipt by the Authority or the Borrower,
as the case may be.
5.7. The Borrower agrees that the execution of this Loan Agreement and the
other Loan Documents, and the performance of its obligations hereunder and
thereunder, shall be deemed to have a Connecticut situs and the Borrower shall
be subject to the personal jurisdiction of the courts of the State of
Connecticut with respect to any action the Authority, its successors or assigns
may commence hereunder or thereunder. Accordingly, the Borrower hereby
specifically and irrevocably consents to the jurisdiction of the courts of the
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State of Connecticut with respect to all matters concerning this Loan Agreement
or any of the other Loan Documents, or the enforcement thereof.
5.8. THE BORROWER ACKNOWLEDGES THAT THIS LOAN AGREEMENT AND THE UNDERLYING
TRANSACTIONS GIVING RISE HERETO CONSTITUTE COMMERCIAL BUSINESS TRANSACTED WITHIN
THE STATE OF CONNECTICUT. IN THE EVENT OF ANY LEGAL ACTION BETWEEN THE BORROWER
AND THE AUTHORITY HEREUNDER, THE BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHTS
WITH REGARD TO NOTICE, PRIOR HEARING AND ANY OTHER RIGHTS IT MAY HAVE UNDER THE
CONNECTICUT GENERAL STATUTES, CHAPTER 903a AS NOW CONSTITUTED OR HEREAFTER
AMENDED, OR OTHER STATUTE OR STATUTES, STATE OR FEDERAL, AFFECTING PREJUDGMENT
REMEDIES, AND THE AUTHORITY MAY INVOKE ANY PREJUDGMENT REMEDY AVAILABLE TO IT,
INCLUDING, BUT NOT LIMITED TO, GARNISHMENT, ATTACHMENT, FOREIGN ATTACHMENT AND
REPLEVIN, WITH RESPECT TO ANY TANGIBLE OR INTANGIBLE PROPERTY (WHETHER REAL OR
PERSONAL) OF THE BORROWER TO ENFORCE THE PROVISIONS OF THIS AGREEMENT, WITHOUT
GIVING THE BORROWER ANY NOTICE OR OPPORTUNITY FOR A HEARING.
5.9. This Loan Agreement shall be governed by the laws of the State of
Connecticut.
IN WITNESS WHEREOF, this Loan Agreement has been duly signed, sealed and
delivered by the Borrower and the Authority as of the date and year first above
written.
CONNECTICUT DEVELOPMENT AUTHORITY
By: /s/ Brien T. Day
------------------------------
Brien T. Day
Its Vice President
Duly Authorized
FUELCELL ENERGY, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxxxx X. Xxxxxxx
Its Executive Vice President
Duly Authorized
- 14 -
Exhibit A
---------
LIST OF DOCUMENTS
Loan Agreement
Promissory Note
Security Agreement
UCC-1 Financing Statements (Post-Closing)
Landlord Waiver and Consents (Post-Closing)
Certificate of the Secretary of the Borrower, certifying: (1) the accuracy of
the Corporate Resolutions attached thereto; (2) that the Certificate of
Incorporation attached thereto (certified by the Secretary of the State of
Delaware) has not been amended and is in full force and effect; (3) that the
Bylaws attached thereto are accurate and have not been amended and are in full
force and effect; and, (4) that the named Officers signing any of the Loan
Documents are incumbent and that their signatures are as shown. Attached should
be copies of the Corporate Resolutions authorizing the Borrower to borrow the
funds and to take all other actions necessary for the completion of the Loan and
authorizing its Officers to execute all necessary documents on its behalf.
Certificate of Good Standing/Existence for the Borrower issued by the State of
Delaware
Certificate of Existence for the Borrower issued by the State of Connecticut
Tax Clearance Letter (corporate/business tax and sales and use tax) from the
State of Connecticut Department of Revenue Services for the Borrower
(Post-Closing)
Labor Clearance Letter from the State of Connecticut Department of Labor for the
Borrower
Opinion Letter of Borrower's Legal Counsel
Affirmative Action Plan Approval (Post-Closing)
Joint Statement
Copy of Borrower's most recent State of Connecticut Employee Quarterly Earnings
Report, Form UC-5a
Financial Statements
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Certificate of No Adverse Change
Certificate of Non-Relocation
Environmental Certificate and Indemnity Agreement
Prejudgment Remedy Waiver
Original Insurance Certificate (Post-Closing)
Copies of Purchase Orders for Equipment purchased with initial advance under
Loan (Post-Closing)
A list of Other Machinery and Equipment, acceptable to the Authority, to be
pledged to the Authority to secure the Loan, together with a copy of the 60-day
liquidation value appraisal of such other machinery and equipment (Post-Closing)
- 16 -
SCHEDULE 3.5
------------
Schedule of Permitted Indebtedness
The Borrower's total indebtedness for borrowed money (which shall
include the amount of indebtedness of third parties hereafter
guaranteed by the Borrower as prescribed by Section 3.6, but shall
exclude the Borrower's indebtedness to the Authority on account of the
Loan and the Borrower's existing indebtedness (but not increases
thereof) to First Union National Bank) shall not exceed the aggregate
sum of $16,000,000.00 at any time outstanding.
- 17 -
