EXH10-6
LOAN AGREEMENT
THIS AGREEMENT, made this 5th day of December, 1990, between AUTOMATED
LIGHT TECHNOLOGIES, INC. having an office at and principal place of business
located at 000 Xxxxxx Xxxx, in the Town of Vernon, County of Tolland, and State
of Connecticut (the "Borrower"), and the CONNECTICUT DEVELOPMENT AUTHORITY
having an office at 000 Xxxxxxxxxx Xxxxxx, xx xxx xxxx xx Xxxxxxxx, Xxxxxx of
Hartford and State of Connecticut (the "Authority").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Authority shall lend the
Borrower the SUM of THREE HUNDRED THOUSAND AND NO/100 ($300,000.00) DOLLARS from
the Connecticut Growth Fund established under section 25 of Public Act 88-265
(Reg. Sess.) (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:
1. The Authority shall lend the Borrower the sum of THREE HUNDRED
THOUSAND AND NO/100 DOLLARS ($300,000.00) in accordance with the terms and
conditions set forth in this Agreement, in a promissory note (the "Note") and in
a security agreement and collateral assignment and security agreement (the
"Security Agreements"), each executed of even date herewith.
2. Contemporaneously with the execution and delivery of this Agreement,
the Borrower will execute and deliver to the Authority the Note, the Security
Agreements, and such other documents as may be required by the Authority (all
collectively hereafter referred to 88 the "Financing Documents"), all of which
are set forth in Exhibit "A" to this Agreement.
3. The Borrower agrees:
a. To furnish to the Authority (i) its balance sheet and the
related statements of earnings and retained earnings within
ninety (90) days after the end of each fiscal year, including
all supporting schedules and comments, all of which shall be
prepared by an independent public accountant of recognized
standing, (ii) a balance sheet and related statements of
earnings within forty-five (45) days after the end of each
fiscal quarter, all of which may be prepared by the Borrower,
and (iii) such further financial and other information the
Executive Director of the Authority may require from time to
time in his discretion.
b. To notify the Authority promptly of any material adverse
change in the financial condition or business prospects of the
Borrower.
c. Not to relocate its business premises or any material portion
of its workforce or business assets from the location at which
it currently conducts its business without the prior written
consent of the Authority.
d. To provide such security for the Loan 8s the Authority may
require as described in the Security Agreements and to execute
and deliver all documents in connection therewith.
e. That the funds provided will not be used otherwise than for
the purposes or project for which the Loan was approved.
f. To maintain fire and other hazard insurance policies covering
the property and collateral securing the Loan (the
"Collateral") in an amount not less than eighty percent (80%)
of the full value of the insurable Collateral. Such insurance
policies shall be issued by a company licensed to provide such
insurance in the State of Connecticut and shall be
satisfactory in form to the Executive Director of the
Authority. The policies shall name the Authority as an insured
person as its interests appear. A copy of the policies shall
be delivered to the Authority at the time of the execution of
this Agreement.
g. To maintain a liability insurance policy form and amount
satisfactory to the Executive Director of the Authority. Such
insurance policy shall be issued by a company licensed to
provide such insurance in the State of Connecticut and shall
be satisfactory in form to the Authority. A copy of the policy
shall be delivered to the Authority at the time of the
execution of this Agreement.
h. To obtain and maintain key man life insurance on the lives of
Xxxxxxx XxXxxx and Xxxx X. Xxxxxx in the amount of $100,000.00
each and to assign the same to the Authority.
i. To provide to the Authority the study being prepared by CASE
for Connecticut Innovations Incorporated, which study shall be
satisfactory to the Authority.
j. To perform the majority of its manufacturing in the State of
Connecticut and/or to hire a majority of its subcontractors
from corporations or businesses located in the State of
Connecticut, both within one (1) year of the date of this
Agreement; provided, however, that compliance does not
adversely and materially effect the financial viability of the
Borrower. Failure to do so shall result in the increase in the
number of shares the Authority is entitled to purchase under
the Warrant to 200,000 and shall increase the put value of the
Warrant to $300,000.00 and the shares of common stock issued
thereunder to S600.000.00. '
4. The Borrower represents and warrants that:
a. It, its officers or partners and its guarantor(s) if any, have
the power and authority to enter into and perform this
Agreement and to incur the obligations herein provided for and
that all documents and agreements executed ant delivered
pursuant hereto, when delivered, will be valid and binding in
accordance with their respective terms and that it will
deliver at closing an opinion from its counsel with respect
thereto.
b. There has been no material adverse change in the financial
condition of the Borrower and its guarantor(s), if any, since
the date of application for this loan. '
c. It will comply with the Affirmative Action Policy of the
Authority, and has delivered to the Authority within six
months of the date hereof a copy of an Affirmative Action Plan
covering Borrower and any related guarantors, if any, such
Affirmative Action Plan to be acceptable to the Authority.
d. It has obtained and put into place financing from Connecticut
Innovations Incorporated in an amount equal to the amount of
the loan.
5. The Authority shall from time to time, in its discretion, during
regular business hours, have the privilege 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 as the Authority may
reasonably request. The Authority agree that, unless Borrower is in default
hereunder or under any of the documents executed in connection herewith, it
shall keep confidential to the extent permitted by law, the proprietary
information regarding Borrower's operations and products in the possession of or
known to the Authority.
6. This Agreement may not be modified or amended in any manner except
in writing executed by all of the parties hereto.
7. This Agreement and any of the documents related hereto and the
rights thereunder may not be assigned by the Borrower without the written
consent of the Authority. In the event that the Authority receives a bona fide
third party offer (the "Offer") to purchase this Agreement prior to the
termination hereof and desires to accept such offer, then the Authority shall
give notice of such Offer to the Borrower. The Borrower shall have the right to
purchase this Agreement on the same terms and conditions as are set forth in the
Offer. If the Borrower elects to exercise its rights to purchase this Agreement,
it shall give notice of the same to the Authority within thirty (30) days of the
date of the Authority's notice to the Borrower. Failure of the Borrower to
provide such notice within said thirty (30) days shall terminate the Borrower' 8
right of first refusal with respect to the Offer.
8. The terms and conditions of the Financing Documents are incorporated
herein, and any breach of said terms and conditions is a breach hereunder, and a
breach hereunder shall be a breach of any of the Financing Documents.
9. Any misrepresentation, breach of warranty or other breach of any
agreement or covenant contained in this Agreement shall entitle the Authority to
declare the unpaid balance of the Note due and payable without further notice to
the Borrower, or to exercise any remedy it may have with respect to the
Collateral as set forth in the Financing Documents or otherwise provided by law,
or to exercise any such remedies cumulatively.
10. Any default under the terms of this Agreement shall constitute a
default under the Note, the Financing Documents, and any other documents or
instruments evidencing or securing any other loan now existing or hereafter made
by the Authority to the Borrower, and a default under the Note, the Financing
Documents or such other documents or instruments shall constitute a default
under this Agreement.
11. The security interest, liens and other rights and interests in or
relating to any of the real or personal property of the Borrower or its
guarantors, if any, now or hereafter granted to the Authority by the Borrower or
its guarantors, if any, including but not limited to the Security Agreement,
shall serve as security for any and all liabilities of the Borrower and its
guarantors to the Authority including but not limited to the liabilities
described in this Agreement and the Note but excluding the Borrower's
obligations under the Warrant and, for the repayment thereof, the Authority may
resort to any security held by it in such order and manner as it may elect.
12. Any event of default under this Agreement shall entitle the
Authority, at its sole discretion, to demand immediate and full payment of the
principal on the Note, together with accrued interest, remaining unpaid at the
time of such event of default.
13. The Borrower shall provide the Authority with an opinion of its
counsel that the Borrower in substantially the same form as Exhibit B attached
hereto and made a part hereof.
14. This Agreement shall terminate upon payment in full of the loan.
IN WITNESS WHEREOF, this Agreement has been duly signed, sealed, acknowledged
and delivered by the Borrower and the Authority as of the date and year first
above written as of the date and year first above written.
Signed and Delivered in the CONNECTICUT DEVELOPMENT AUTHORITY
Presence of:
---------------------------
____________________________ By:__________________________
XXXXXX X. XXXXXXXX
Its Loan Officer
AUTOMATED LIGHT TECHNOLOGIES, INC.
---------------------------
____________________________ By:__________________________
XXXX X. XXXXXX
Its President
Duly Authorized
STATE OF CONNECTICUT)
) ss. at Hartford
COUNTY OF HARTFORD )
On this 5th day of December, 1990, before me, the undersigned officer,
personally appeared Xxxxxx X. Xxxxxxxx, who acknowledged himself to be the Loan
Officer of the Connecticut Development Authority and that he, as such officer
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the name of the Authority by himself as such
officer, and that the same is his free act and deed and the free act and deed of
the Authority.
In Witness Whereof I hereunto set my hand.
____/s/___________________________
Commissioner of the Superior Court
Notary Public
My commission expires:
STATE OF CONNECTICUT)
) ss. at Hartford
COUNTY OF HARTFORD )
On this 5th day of December, 5990, before me, the undersigned officer,
personally appeared Xxxx X. Xxxxxx, who acknowledged himself to be the President
of Automated Light Technologies, Inc., a corporation, and that he as such
President, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by himself as
President.
In Witness Whereof I hereunto set my hand.
____/s/___________________________
Commissioner of the Superior Court
Notary Public
My commission expires:
EXHIBIT A
to
LOAN AGREEMENT
between
AUTOMATED LIGHT TECHNOLOGIES, INC.
and the
CONNECTICUT DEVELOPMENT AUTHORITY
List of Financing Documents
Promissory Note
Security Agreement
UCC-1 Financing Statement
Collateral Assignment and Security Agreement
Guaranty of the full value of the loan executed by Xxxx X. Xxxxxx and Xxxxxxx
XxXxxx
Warrant
Subordination Agreement
Shared Priority Agreement
Corporate Resolutions of Automated Light Technologies, Inc. authorizing the
Corporation to borrow the funds and to take all other action necessary for the
completion of this loan and authorizing its officers to execute all necessary
documents on its behalf
Certificate of the Secretary of Automated Light Technologies, Inc. certifying
the accuracy of the Corporate Resolutions
Certificate of Good Standing issued by the Secretary of the States of Delaware
and Connecticut for Automated Light Technologies, Inc.
Certificate of No Adverse Change
Certificate of Non-Relocation
Opinion Letter of Borrower's Counsel
Certificate(s) of Insurance establishing the existence of (a) liability
insurance and (b) fire and other casualty insurance covering the property listed
in Schedule A of the Security Agreement, which insurance shall name the
Connecticut Development Authority as a loss payee and mortgagee as its interest
may appear
Affirmative Action Plan Approval
Evidence of Life Insurance in the amount of $100,000.00 each on the lives of
Xxxx X. Xxxxxx and Xxxxxxx XxXxxx
Assignment of Life Insurance Policy on the lives of Xxxx X. Xxxxxx and Xxxxxxx
XxXxxx acknowledged by the home office of the insurer
