Exhibit 10.24
CONTRIBUTION AGREEMENT
BETWEEN
EDISON DEVELOPMENT CORPORATION
(a Michigan Corporation),
MECHANICAL TECHNOLOGY, INCORPORATED
AND
PLUG POWER, L.L.C.
(a Delaware limited liability company)
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made as of the 10th day
of June, 1998, between Edison Development Corporation, a Michigan corporation,
with its principal office at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
("EDC"), Mechanical Technology, Incorporated, a New York Corporation with its
principal office at 000 Xxxxxx-Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000 ("MTI") and
Plug Power, L.L.C., a Delaware limited liability company, with its principal
office at 000 Xxxxxx-Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000 (the "Company").
The following facts underlie this Agreement:
WHEREAS, Edison Development Corporation ("EDC") and Mechanical
Technology, Incorporated ("MTI") are the sole members of the Company.
WHEREAS, on or about April 15, 1998, EDC made a capital contribution of
$2.25 million to the Company.
WHEREAS, MTI and EDC have agreed that MTI will fund $2 million of its
capital contribution through contribution of a below market lease, pursuant to
the terms and conditions set forth below.
WHEREAS, MTI will purchase an option to match the remaining $250,000
capital contribution by EDC, pursuant to the terms of the Option Agreement -
Contribution Match, attached hereto as Exhibit A ("Option Agreement").
WHEREAS, in order to accomplish the foregoing, EDC and MTI, individually
and as the sole members of the Company, have agreed to undertake the following:
* Amend the Operating Agreement of the Company;
* Enter into certain leases with respect to the Company's use and
occupancy of certain property owned by MTI; and
* Enter into a certain Option Agreement as provided herein.
In consideration of the mutual promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Definitions. Unless the context otherwise requires, for purposes of
this Agreement the following terms shall have the meanings set forth in this
Section 1 (all other defined terms shall have the meaning set forth in the
Section defining such terms):
"Capital Account" shall have the meaning given to such term in the
Operating Agreement.
"Capital Contribution" shall have the meaning given to such term in the
Operating Agreement.
"MTI" shall mean Mechanical Technology, Inc., a New York corporation and
developer of the Technology (as defined in the Operating Agreement).
"Membership Interest" shall mean a Class A Membership Interest (as
defined in the Operating Agreement) in the Company.
"Operating Agreement" shall mean the Limited Liability Company Agreement
of Plug Power, L.L.C., a Delaware limited liability company, as amended from
time to time.
"Person" shall mean an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity.
"Sharing Ratios" shall mean Sharing Ratios as defined under the
Operating Agreement.
2. Basic Contribution Transaction.
2.1 MTI Contribution. MTI and Company acknowledge that on
or about April 15, 1998, EDC made a cash capital contribution of $2,250,000 to
the Company in exchange for 2,250,000 shares of Class A Membership Interests in
the Company. Pursuant to the Operating Agreement, MTI is permitted to maintain
its relative Sharing Ratio and ownership interest in the Company by making a
matching cash contribution or taking an option, or a combination thereof. EDC,
MTI and Company agree that, in lieu of a cash contribution of $2,250,000 by MTI
to the Company and in order to allow MTI to maintain its relative Sharing Ratio
in the Company:
(a) MTI will lease to the Company, the property
commonly known as Xxxxxxxx 0, 000 Xxxxxx-Xxxxxx Xxxx, Xxxxxx,
Xxx Xxxx pursuant to a lease in the form attached as Exhibit A
(the "Building Three Lease"). The parties acknowledge that the
Building Three Lease is at a preferable below market rate and that
the fair market value of such below market lease to Company is
$2,000,000. In exchange for the Building Three Lease, the Company
shall issue 2,000,000 Class A Membership Interests to MTI (the
"New Shares"). The parties further acknowledge that such Building
Three Lease is being entered into by MTI in lieu of a matching
cash capital contribution or option by MTI in the amount of
$2,000,000; and
(b) MTI will enter into a "Option Agreement - Contribution
Match" in the form of Exhibit B whereby MTI will have the right
to match $250,000 of EDC's capital contribution pursuant to the
terms of the Option Agreement in exchange for 250,000 Class A
Membership Interests (the "Option Shares"); and
(c) MTI and the Company will enter into leases for
Building 3 until September 30, 1998; Building 2; and the test
house substantially in the form as the Building Three Lease.
2.2 Capital Account Reduction. The parties acknowledge
that the value of MTI's contribution of a below market lease will be realized
over a period of years and that the benefit to the Company of such an in-kind
contribution in lieu of cash will be reduced if Company dissolves or undergoes
a bankruptcy or similar event in the near term. Accordingly, the parties agree
that in the event that on or before the earlier of (a) May 29, 2000 or (b) an
initial public offering of the Company's shares, the Company shall file a
petition in voluntary bankruptcy under the Federal Bankruptcy Code or any
similar law, state or Federal, or a trustee or receiver shall be appointed for
the Company or any court shall have taken jurisdiction of the Company's
property in any involuntary proceeding for the reorganization, dissolution,
liquidation or winding up of the Company, than in such event:
(i) MTI's Capital Account in the Company shall be
immediately reduced by the sum of $1,000,000 and the number of
shares of Class A Membership Interests held by MTI shall be
immediately reduced by 1,000,000; and
(ii) The Company's Lease with MTI shall terminate.
The parties further acknowledge that MTI is required to pay or reimburse
the Company for improvements pursuant to Section 3 of the Building 3 Lease.
With respect to such improvements, the parties agree as follows;
(a) If MTI fails to reimburse Tenant for improvements
required under Section 3(b) of the Building 3 Lease within the time
period set forth therein, MTI's Capital Account in the Company and
Class A Membership Interests shall be immediately reduced by the amount
of such unreimbursed improvements.
(b) MTI shall use all reasonable efforts to secure XXX
financing for payment and or reimbursement of the Tenant Improvements
Allowance (as defined in Section 3(a) of the Building 3 Lease). If
MTI is unable to secure such XXX financing on or before September 1,
1998, and has found no alternative source for financing of the Tenant
Improvements Allowance, then MTI shall, on or before September 1, 1998,
pay to Company the sum of $179,900, plus interest on such amount from
April 15, 1998 of $5,860 (the "Option Price"). In exchange for such
payment, MTI shall have the right to retain the remaining New Shares
not previously paid for or forfeited, pursuant to subsection (a) above,
and pursuant to the terms of the Option Agreement - Contribution Match
through April 15, 1999 (the "Remaining Option Shares"). Furthermore,
the rental under the Building 3 Lease shall be adjusted to the fair
market rental value for similar space as determined by a licensed real
estate professional agreed to by MTI, EDC and the Company (the
"parties"). If the parties cannot agree on a licensed real estate
professional, each shall select a real estate professional and the
average of the rents recommended by such individuals shall prevail.
Such real estate appraisal shall value the fair market rental of
Building 3 without regard to any improvements made by the Company
(i.e., based on the Building 3 Lease) and such rental rate shall not
exceed $8.00 per square foot.
(c) In the event that MTI fails to pay the Option Price
pursuant to subsection (b), MTI's Capital Account and Shares of Class A
Membership Interest in the Company shall be reduced by the Option Price
plus the value and number of the Remaining Option Shares.
(d) In the event that MTI pays the Option Price pursuant to
subsection (b), but fails to pay for the Remaining Option Shares on
or before April 15, 1999, then MTI's Capital Account and Shares of
Class A Membership Interest in the Company shall be reduced by the
value and number of the Remaining Option Shares.
In addition to the foregoing, in the event that MTI fails to make
certain tenant improvements as required by the Building Three Lease (or fails to
reimburse the Company for improvements previously made which are the
responsibility of MTI under the Building Three Lease) on or before March 31,
1999. MTI's capital account shall be reduced dollar for dollar by the cost of
the improvements not made by the required deadline and the number of shares of
Class A Membership Interests held by MTI shall be reduced by a like amount.
2.3 Financing Options. The Company agrees that it will not
request EDC to finance improvements to Building 3 before it has used its best
efforts to obtain such financing from MTI.
2.4 Effect of Agreement. Nothing herein shall be deemed a
waiver of strict compliance with the terms of the Operating Agreement or an
amendment to any of the Agreements of the parties except to the extent expressly
provided herein.
3. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if (a) delivered in person, (b) sent by
Federal Express or similar overnight courier, or (c) by registered or certified
mail, postage prepaid, to the respective party at the address that follows or
to such other address any party shall have given notice in accordance with this
Section 3:
To EDC:
Edison Development Corporation
0000 Xxxxxx Xxxxxx, 000 XXX
Xxxxxxx, Xxxxxxxx 00000
Attn: X. Xxxxxxxxxxxxxxxxxx
With a copy to:
DTE Energy, Inc.
0000 Xxxxxx Xxxxxx, 000 XXX
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxx
To the Company:
Plug Power, L.L.C.
000 Xxxxxx-Xxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxxx
With a copy to:
Wise & Xxxxxx
00xx Xxxxx, Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxx
To MTI:
Mechanical Technology, Incorporated
000 Xxxxxx-Xxxxxx Xxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
Such notices or other communications shall be deemed received (a) on the
date delivered, if delivered personally, (b) three business days after being
deposited with the U.S. Post Office, if sent by registered or certified mail,
or (c) on the next business day, if sent by Federal Express or similar
overnight carrier.
4. Assignment. MTI shall not assign this Agreement, or any interest in
this Agreement, without the prior written consent of the Company, which consent
Company is expressly authorized to withhold.
5. Parties in Interest. This Agreement shall inure to the benefit of, and
be binding on, the named parties and their respective successors and permitted
assigns, but not any other person.
6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
on the date first above written.
EDISON DEVELOPMENT CORPORATION
(a Michigan corporation)
/s/ Xxxxx Xxxxxxxxxx
_____________________________________
By: Xxxxx X. Xxxxxxxxxx
Its: Executive Vice President and
Chief Financial Officer
"EDC"
MECHANICAL TECHNOLOGY, INCORPORATED
(a New York corporation)
/s/ Xxxxxxx X. Xxxxxxx
_____________________________________
By: Xxxxxxx X. Xxxxxxx
Its: Vice President and
Chief Financial Officer
"MTI"
PLUG POWER, L.L.C.
(a Delaware limited liability company)
/s/ Xxxx Xxxxxxxxx
_____________________________________
By: Xxxx Xxxxxxxxx
Its: President and
Chief Executive Officer
"Company"