EXH10-1
LOAN AGREEMENT
AGREEMENT, made this 2nd day of August, 1990, by and between AUTOMATED
LIGHT TECHNOLOGIES, INC., a Delaware corporation with an office and principal
place of business located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ in the Town of Vernon, County of
Tolland and State of Connecticut (the "Borrower"), and CONNECTICUT INNOVATIONS
INCORPORATED, a corporation constituted a quasi-public instrumentality of the
State of Connecticut with an office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, in the Town of
▇▇▇▇▇ ▇▇▇▇, County of Hartford and State of Connecticut ("CII").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that CII shall lend the Borrower
the sum of THREE HUNDRED THOUSAND and NO/100 DOLLARS ($300,000.00) under the ▇▇▇
▇▇▇▇▇▇▇ (▇▇▇) Loan Fund; and
WHEREAS, CII has agreed to make said loan upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties agree as follows:
l. CII 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 and under a promissory note ("Note") of even date
herewith, a copy of which may be attached hereto.
2. Contemporaneously with the execution and delivery of this Agreement,
the Borrower will execute and deliver to CII a Security Agreement and a
Collateral Assignment and Security Agreement (the "Security Agreements"), a
Subordination Agreement executed by ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Subordina-tion"), a Warrant for 66,667 shares of common stock of Borrower (the
"Warrant") and such other documents collectively, the ("Financing Documents") as
are set forth in Exhibit "A" to this Agreement.
3. The Borrower agrees:
a. To furnish upon request to CII (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, such quarterly statements may be
prepared by the Borrower; (iii) a report on the amount of
new employment created as a result of development
of the product within forty-five (45) days after the end of
each fiscal quarter, to accompany said quarterly financial
statements; and (iv) such further financial and other
information as CII may in its discretion reasonably require
from time to time;
b. To furnish to CII, upon request, its employment records and
any other personnel records that CII may reasonably request
in order to verify the creation of new employment;
c. To notify CII promptly of any material adverse change in the
financial condition of the Borrower;
d. To provide such security for the loan as CII may require as
described in the Security Agreements and to execute and
deliver all documents in connection therewith as of the date
hereof except as may be provided in the Financing Documents;
e. That the funds provided will not be used otherwise than for
working capital;
f. To maintain fire and other hazard insurance policies
covering the property securing this loan ("Property") in an
amount satisfactory to CII. Such insurance policies shall be
provided by a company licensed to provide such insurance in
the State of Connecticut and shall be satisfactory in form
to CII. The policies shall name CII as Loss Payee as its
interests may appear and a copy of the policies shall be
deposited with CII upon the execution hereof;
g. To maintain a policy of liability insurance in form and
amount satisfactory to CII, such policy to be issued by a
company licensed to provide such insurance in the State of
Connecticut;
h. To obtain the permission of CII prior to any move of its
principal place of business within the State of Connecticut.
The Borrower may not relocate its principal place of
business outside of the State of Connecticut; and
i. To obtain and maintain during the term of the loan life
insurance on the life of ▇▇▇▇ ▇. ▇▇▇▇▇▇ in the amount of
$200,000.00 and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the amount of $100,000.00
and to assign the same to CII, the proceeds of which shall
be used to pay down outstanding principal and interest on
the loan, with any surplus being returned to the designated
beneficiaries.
4. The Borrower represents and warrants that:
a. It is a technology based company engaged in product
innovation in an area listed as a "▇▇▇ Eligibility Area";
b. It and its officers 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 and delivered pursuant hereto, when delivered, will
be valid and binding in accordance with their respective
terms;
c. There has been no material adverse change in the financial
condition of the Borrower since April 30, 1990;
d. It has obtained or will obtain funding for the project equal
to or greater than the amount of the loan from the
Connecticut Development Authority or other source and shall
close such transaction within ninety (90) days of the date
of this Agreement;
e. It is unable, on reasonable terms, to obtain sufficient
assistance to undertake development of the project from
commercial sources alone: and
f. Over the term of the loan, the project for which the funds
are provided is expected to create at least one new job for
every ten thousand dollars borrowed.
5. CII shall from time to time, in its discretion, and without notice
to the Borrower, during regular business hours, have the privilege of making an
inspection of the Property and the Borrower shall assist CII in making said
inspection and shall make available such books and other records as CII may
reasonably request. CII agrees that it shall keep confidential, except as may be
required by law and provided that Borrower is not in default hereunder
(including expiration of any applicable grace and cure periods), all proprietary
information regarding Borrower's operations and products in the possession of or
known to CII.
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 hereunder may not be assigned by the Borrower without the written consent
of CII This Agreement and any o f the documents related hereto and the rights
hereunder may be assigned by CII; provided, however, that CII agrees that,
unless Borrower
is in default hereunder (including the expiration of any applicable grace and
cure periods) and the loan has been accelerated by CII, it shall not assign the
same to a competitor of Borrower. For the purposes hereof, a "competitor of
Borrower" shall be any person or entity that develops, manufactures or markets
systems for monitoring or locating breaks and damages in fiber optic and/or
copper lines or any other system or systems currently or in the future
developed, manufactured or marketed by Borrower.
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 herein not cured within any applicable cure
period, including, without limitation, the cure periods set forth in the
Financing Documents, shall entitle CII to declare the unpaid balance of the loan
due and payable without further notice to the Borrower, or to exercise any
remedy it may have with respect to the Property as set forth in the Financing
Documents, subject to the limitations set forth therein, or otherwise provided
by law, or to exercise any such remedies cumulatively.
10. The Borrower shall provide CII with the opinion of the Borrower's
counsel in the form of Exhibit B attached hereto.
11. The Borrower agrees and warrants that in the performance of this
contract it will not discriminate or permit discrimination against any person or
group of persons on the grounds of race, color, religious creed, age, marital
status, national origin, sex, mental retardation or physical disability,
including, but not limited to blindness, unless it is shown by such Borrower
that such disability prevents performance of the work involved, in any manner
prohibited by the laws of the United States or of the State of Connecticut, and
further agrees to provide the Commission on Human Rights and Opportunities with
such information requested by the Commission concerning the employment practices
and procedures of the Borrower as relate to the provisions of this section.
12. Any words or phrases used herein that are defined in Section 32-34
of the Connecticut General Statutes or in the Regulations of Connecticut State
Agencies adopted and promulgated under said Sections of said Statutes shall have
the meanings set forth in said definitions.
13. This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut.
14. This Agreement shall terminate upon payment in full of the loan.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
date and year first above written.
CONNECTICUT INNOVATIONS
INCORPORATED
BY:
________________________ _______________________________
▇▇▇▇▇ ▇. DRIVER
Its Executive Director
________________________ AUTOMATED LIGHT TECHNOLOGIES,
INC.
BY:
________________________ _______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Its President,
Duly Authorized
________________________
STATE OF CONNECTICUT)
) ss. at Hartford
COUNTY OF HARTFORD )
On this ___ day of August, 1990, before me, the undersigned officer,
personally appeared ▇▇▇▇▇ ▇. Driver, who acknowledged himself to be the
Executive Director of CONNECTICUT INNOVATIONS INCORPORATED, a corporation, and
that he as such Executive Director, being authorized so to do, executed the
foregoing instrument for the purposes herein contained, by signing the name of
the corporation by himself as Executive Director.
In Witness Whereof I hereunto set my hand.
-----------------------------
Commissioner of the Superior
Court/Notary Public
STATE OF CONNECTICUT)
) ss. at Hartford
COUNTY OF HARTFORD )
On this 2nd day of August, 1990, before me, the undersigned officer,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 herein contained, by signing the name of the corporation by himself as
President.
In Witness Whereof I hereunto set my hand.
----------------------------
Commissioner of the Superior
Court/Notary Public
