SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This
Second Amendment to Loan and Security Agreement (this “Amendment”),
dated
as of October 17, 2008, is by and among HYDROGEN,
L.L.C., an
Ohio
limited liability company, with its principal place of business located at
0
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the “Borrower”),
HYDROGEN
CORPORATION, a
Nevada
corporation, with its principal place of business located at 00 Xxxx
00xx
Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ( the “Guarantor”
or
“HYDRO
Corp”),
FEDERATED
XXXXXXXX FUND, a
portfolio of Federated Equity Funds, a Massachusetts business trust, with
offices located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, in
its
capacity as agent for the benefit of the Lenders (together with its successors
and assigns, the “Agent”),
FEDERATED
XXXXXXXX FUND, a
portfolio of Federated Equity Funds, a Massachusetts business trust, with
offices located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, in
its
capacity as a Lender, and SAMSUNG
C & T CORPORATION,
a
corporation organized under the laws of the Republic of Korea, with offices
at
Samsung C&T Corporation Building, 1321-20, Seocho-2 Dong, Seocho-Gu, Seoul,
Korea, in its capacity as a Lender (together with their respective successors
and assigns, the “Lenders”).
RECITALS
WHERAS,
the
Borrower, Guarantor, Agent and Lenders are parties to that certain Loan and
Security Agreement dated as of August 22, 2008, as amended by the First
Amendment to Loan and Security Agreement dated as of September 22, 2008 (as
amended, restated, supplemented and otherwise modified, the “Loan
Agreement”).
WHEREAS,
the
parties hereto desire to amend certain terms and provisions of the Loan
Agreement on the terms and conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the premises herein contained, and for other good and valuable
consideration (the receipt, sufficiency and adequacy of which are hereby
acknowledged), the parties hereto (intending to be legally bound) hereby agree
as follows:
1. Definitions.
Terms
capitalized herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement, as amended hereby.
2. Amendments
to Loan Agreement. Subject
to the terms and conditions contained herein, the Borrower, Guarantor, Agent
and
Lenders hereby amend the Loan Agreement as follows:
(a)
After
Section 1.91, the following new Section shall be added:
1.91(a) “Viable
Offer” shall mean
a
written offer from one or more Persons to the Borrower or Guarantor to
consummate either (i) an equity or debt investment transaction in the Borrower
or Guarantor or (ii) the purchase of all or substantially all of the assets
or
capital stock of the Borrower or Guarantor, that in each case would enable
the
Loan to be repaid in full on or prior to the Maturity Date. To satisfy this
definition, a Viable Offer must be accompanied by a deposit, in the form of
a
certified check, bank check, wire transfer, or letter of credit, payable to
the
Borrower or Guarantor in the amount of five hundred thousand dollars ($500,000),
which, if such offer is accepted by the Borrower or Guarantor, shall be
refundable only under certain limited conditions agreed to by the Borrower
or
Guarantor (the “Viable
Offer Deposit”).
(b)
Sections 2.1(a), 2.1(b) and 2.1(c) of the Loan Agreement are hereby amended
and
restated in their entirety as follows:
| 2.1 |
Loan.
Upon the terms and provisions and subject to the conditions contained
in
this Agreement, on the date hereof, each Lender is willing to extend
in
one (1) advance term loans (collectively, the “Loan”)
to the Borrower in an aggregate principal amount equal to each Term
Loan
Commitment, which aggregate amount equals the Aggregate Term Loan
Commitment. On the Closing Date, each Lender shall provide to the
Borrower
50% of its respective Term Loan Commitment. The remaining 50% of
such Term
Loan Commitment shall be deposited into an account in the name of
the
Borrower which shall require the authorization of the Agent for any
release of funds (the “Borrower’s
Account”)
and shall be released to the Borrower or the Lenders, as applicable,
upon
the satisfaction of such conditions and in such amounts as described
in
this Section 2.1. The Agent and the Borrower agree that upon satisfaction
of the conditions in Section 2.1(a) and (b), they shall take all
necessary
action, including, without limitation, delivering signed authorizations
or
instructions, to release the applicable amount in the Borrower’s Account
to the Borrower.
|
(a)
On
the
date of this Amendment, four hundred fifty thousand dollars ($450,000.00) shall
be released from the Borrower’s Account to the Borrower.
(b)
If
on or
before October 20, 2008, the Agent has received a letter from the Borrower
or
Guarantor transmitting a communication that qualifies as a Viable Offer together
with a notarized copy of such Viable Offer and a confirmation that the Viable
Offer Deposit is duly deposited, then the remaining balance in the Borrower’s
Account shall be released to the Borrower. If the condition in the preceding
sentence is not satisfied by October 20, 2008, Agent and Borrower shall promptly
take all necessary action, including delivering signed authorizations or
instructions, to return the remaining balance in the Borrower’s Account to the
Lenders without payment of the Prepayment Fee, which is waived.
(c) In
the
event of a bankruptcy filing by the Borrower or Guarantor, to the extent the
Borrower or Guarantor seeks to use cash in excess of the approximately
$225,000.00 that does not constitute Collateral under Section 5.1(y), the Agent
and the Lenders consent to the use of such excess with such cash to be used
solely for general business and operating purposes related to the reorganization
of the Borrower and/or Guarantor, sale of the Borrower and/or Guarantor as
a
going concern, or orderly liquidation of the assets of the Borrower and/or
Guarantor through bankruptcy or otherwise, as applicable.
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3. Reference
to and Effect on the Loan Agreement.
(a) Except
as
expressly provided herein, the Loan Agreement and all of the other Loan
Documents shall remain unmodified and continue in full force and effect and
are
hereby ratified and confirmed.
(b) Except
as
expressly provided herein, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of: (i) any right, power or remedy
of
the Parties under the Loan Agreement or any of the other Loan Documents, or
(ii)
any Event of Default under the Loan Agreement.
4. Representations
and Warranties of the Borrower and Guarantor. Each
of
Borrower and Guarantor hereby represents and warrants to the Agent and the
Lenders, which representations and warranties shall survive the execution and
delivery hereof, that on and as of the date hereof and after giving effect
to
this Amendment:
(a) It
has
the requisite power and authority to execute, deliver and perform its
obligations under this Amendment. This Amendment has been duly authorized by
all
necessary action of it. This Amendment constitutes the legal, valid and binding
obligation of it, enforceable against it in accordance with its terms, subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors’ rights generally and general principles of
equity;
(b) The
representations set forth in the Loan Agreement and in the Loan Documents are
true, correct and complete on and as of the date hereof; and
(c) No
Event
of Default has occurred and is continuing.
5. Reference
to Loan Agreement; No Waiver.
(a) Upon
the
effectiveness of this Amendment, each reference in the Loan Agreement to “this
Loan Agreement,” “this Agreement”, “hereunder,” “hereof,” “herein” or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby. The term “Loan Documents” as defined in Section 1.53 of the Loan
Agreement shall include (in addition to the Loan Documents described in the
Loan
Agreement) this Amendment and any other agreements, instruments or other
documents executed in connection herewith.
(b) The
Agent’s failure, at any time or times hereafter, to require strict performance
by the Borrower of any provision or term of the Loan Agreement, this Amendment
or the other Loan Documents shall not waive, affect or diminish any right of
the
Lender hereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver by the Lender of a breach of this Amendment
or any Event of Default under the Loan Agreement shall not, except as expressly
set forth herein, suspend, waive or affect any other breach of this Amendment
or
any Event of Default under the Loan Agreement, whether the same is prior or
subsequent thereto and whether of the same or of a different kind or character.
None of the undertakings, agreements, warranties, covenants and representations
of the Borrower or Guarantor contained in this Amendment, shall be deemed to
have been suspended or waived by the Agent unless such suspension or waiver
is:
(i) in writing and signed by the Agent, and (ii) delivered to the Borrower
or
Guarantor. In no event shall the Agent’s execution and delivery of this
Amendment establish a course of dealing among the Agent, Guarantor, Borrower
or
any other obligor or in any other way obligate the Agent to hereafter provide
any amendments or waivers with respect to the Loan Agreement. The terms and
provisions of this Amendment shall be limited precisely as written and shall
not
be deemed: (A) to be a consent to a modification (except as expressly provided
herein) or waiver of any other term or condition of the Loan Agreement or of
any
other Loan Documents, or (B) to prejudice any right or remedy that the Agent
may
now have under or in connection with the Loan Agreement or any of the other
Loan
Documents.
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6. Successors
and Assigns.
This Amendment shall be binding upon and inure to the benefit of the Agent,
the
Lenders and each of the other parties hereto and their respective successors
and
assigns; provided,
however,
the
Borrower may not assign this Amendment or any of the Borrower’s rights hereunder
without the Agent’s prior written consent. Any prohibited assignment of this
Amendment shall be absolutely null and void. This Amendment may only be amended
or modified by a writing signed by the Agent, Lenders, Borrower and
Guarantor.
7. Severability.
Wherever
possible, each provision of this Amendment shall be interpreted in such a manner
so as to be effective and valid under applicable law, but if any provision
of
this Amendment is held to be prohibited by or invalid under applicable law,
such
provision or provisions shall be ineffective only to the extent of such
provision and invalidity, without invalidating the remainder of this
Amendment.
8. Governing
Law.
THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH
THE LAWS OF THE STATE OF NEW YORK, THE LAWS OF WHICH THE BORROWER HEREBY
EXPRESSLY ELECTS TO APPLY TO THIS AMENDMENT, WITHOUT GIVING EFFECT TO PROVISIONS
FOR CHOICE OF LAW HEREUNDER. THE BORROWER AGREES THAT ANY ACTION OR PROCEEDING
BROUGHT TO ENFORCE OR ARISING OUT OF THIS AMENDMENT SHALL BE COMMENCED IN
ACCORDANCE WITH THE PROVISIONS OF THE LOAN AGREEMENT.
9. Counterparts;
Facsimile or Other Electronic Transmission.
This Agreement may be executed in counterparts and by facsimile or other
electronic signatures, each of which when so executed, shall be deemed an
original, but all of which shall constitute but one and the same
instrument.
***Signature
Page Follows***
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IN
WITNESS WHEREOF,
the
undersigned have caused this Second Amendment to Loan and Security Agreement
to
be duly executed and delivered as of the date first above written.
BORROWER:
HYDROGEN,
L.L.C.
By:
/s/ Xxxx
Xxxxxxxx
Name:
Xxxx
Xxxxxxxx
Title:
President
GUARANTOR:
HYDROGEN
CORPORATION
By:
/s/ Xxxx
Xxxxxxxx
Name:
Xxxx
Xxxxxxxx
Title:
President
AGENT:
FEDERATED
XXXXXXXX FUND
a
portfolio of Federated Equity Funds
By:
/s/ Xxxx
Xxxxx
Name:
Xxxx
Xxxxx
Title:
Vice
President
LENDERS:
FEDERATED
XXXXXXXX FUND
a
portfolio of Federated Equity Funds
By:
/s/ Xxxx
Xxxxx
Name:
Xxxx
Xxxxx
Title:
Vice
President
SAMSUNG
C&T CORPORATION
By:
/s/ Xxxxx-Xxx
Xxx
Name: Xxxxx-Xxx
Xxx
Title: Senior
Executive Vice
President
