Exhibit 10.61
EXPORT LOAN AGREEMENT
THIS EXPORT LOAN AGREEMENT between JPMorgan Chase Bank, N.A. and FuelCell
Energy, Inc., a corporation organized and existing under the laws of Delaware
(“Borrower”), is made and executed as of January 4, 2011. This Agreement governs
the Credit Accommodations described herein. Borrower understands and agrees
that: (a) in granting, issuing, renewing, or extending such Credit
Accommodations, Lender is relying upon Borrower’s representations, warranties,
and agreements set forth in this Agreement and the other Financing Documents;
and (b) such Credit Accommodations shall be and remain subject to the following
terms and conditions of this Agreement until all Borrower’s Obligations
hereunder have been paid and performed in full.
ARTICLE I
CERTAIN DEFINED TERMS
Section 1.1 Definitions. Capitalized terms used but not defined in this
Agreement shall have the meanings assigned those terms in the Borrower
Agreement. As used herein, the following terms shall have the following meanings
unless the context requires otherwise:
“Adjusted One Month LIBOR Rate” means, an interest rate per annum equal to the
sum of (i) 2.50% per annum plus (ii) the quotient of (a) the interest rate
determined by Lender by reference to the Reuters Screen LIBOR01 Page (or on any
successor or substitute page) to be the rate at approximately 11:00 a.m. London
time, on such date or, if such date is not a Business Day, on the immediately
preceding Business Day, for dollar deposits with a maturity equal to one (1)
month divided by (b) one minus the Reserve Requirement (expressed as a decimal)
applicable to dollar deposits in the London interbank market with a maturity
equal to one (1) month.
“Affiliate” shall mean any person, corporation or other entity directly or
indirectly controlling, controlled by or under common control with the Borrower
and any director or officer of the Borrower or any subsidiary of the Borrower.
“Agreement” shall mean this Export Loan Agreement, as it may be amended,
modified, restated, renewed and extended from time to time, together with all
exhibits and schedules attached hereto from time to time. This Agreement is the
Loan Agreement referred to in the Borrower Agreement.
“Borrower” shall mean FuelCell Energy, Inc. and its successors and assigns.
“Borrower Agreement” shall mean the Borrower Agreement relating to the Loan
executed by Borrower for the benefit of Lender and Ex-Im Bank, in the form
prescribed by Ex-Im Bank attached hereto as Exhibit A.
“Borrower’s Obligations” shall mean all loans, advances, debts, expenses, fees,
liabilities, and obligations, including any accrued interest thereon, for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by Borrower to Lender, of any kind or
nature, present or future, arising in connection with the Loan. Borrower’s
Obligations are the Loan Facility Obligations, as defined in the Borrower
Agreement, and are included in the Liabilities, as defined in the Security
Agreement and the Guaranty.

 

 

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“Business Day” means a day (other than a Saturday or Sunday) on which banks
generally are open in Connecticut and/or New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market.
“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate. Any change in the CB
Floating Rate due to a change in the Prime Rate or the Adjusted One Month LIBOR
Rate shall be effective from and including the effective date of such change in
the Prime Rate or the Adjusted One Month LIBOR Rate, respectively.
“CBFR Interest” means interest accrued at the CB Floating Rate as contemplated
by Section 2.5.
“Collateral” shall mean all real or personal property and interests in real and
personal property in and upon which Lender has been granted a Lien, including
the Security Interest, as security for the payment and performance of Borrower’s
Obligations and all Proceeds thereof.
“Credit Period” shall be the period commencing on the Effective Date (as defined
in the Borrower Agreement) and ending on the Stated Final Disbursement Date.
“Default” means any Event of Default or any event or circumstance which will
constitute an Event of Default after notice or the passage of time or both.
“Default Rate” shall mean the interest otherwise applicable to the Credit
Accommodations, plus three percent (3%).
“Dollars” and the sign “$” shall mean dollars in lawful money of the United
States of America and, in relation to all payments in Dollars hereunder,
(i) same day funds paid through the Regional Clearing House Interbank Payments
System, or (ii) immediately available funds paid through the Regional Federal
Reserve Bank, or (iii) such other funds as may then be required by the customary
procedure of member banks of the Regional Clearing House Association for the
settlement of payments.
“Domestic Credit Agreements” shall mean, collectively, the following agreements
together with all amendments, modifications and extensions thereof: (i) that
certain Purchasing Card Agreement governing the $1,800M internal guidance line
to support business credit card use; (ii) Application and Agreement for
Irrevocable Standby Letter of Credit dated January 13, 2010, executed by the
Borrower, as applicant for the letter of credit in the amount of up to $333,000
described therein, to the Lender; (iii) Application and Agreement for
Irrevocable Standby Letter of Credit dated November 17, 2008, executed by the
Borrower, as applicant for the letter of credit in the amount of up to $570,895
described therein, to the Lender; (iv) Application and Agreement for Irrevocable
Standby

 

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Letter of Credit dated May 12, 2010, executed by the Borrower, as applicant for
the letter of credit in the amount of up to $3,233,149 described therein, to the
Lender, (v) Application and Agreement for Irrevocable Standby Letter of Credit
dated May 12, 2010, executed by the Borrower, as applicant for the letter of
credit in the amount of up to $3,121,999 described therein, to the Lender,
(vi) Continuing Pledge Agreement dated as of April 4, 2007 executed by the
Borrower in favor of the Lender; (vii) Control Agreement dated as of April 4,
2007 executed among the Borrower, the Lender and J.P. Morgan Securities Inc., as
securities intermediary; (viii) Assignment of Deposit(s) dated as of November 3,
2008 executed by the Borrower in favor of the Lender; (ix) Assignment of Deposit
Account dated as of January 13, 2010 executed by the Borrower in favor of the
Lender; and (x) Assignment of Deposit Account dated as of May 12, 2010 executed
by the Borrower in favor of the Lender.
“Eligible Export-Related Accounts Receivable” means any Accounts which (a) arise
as a result of the export sale of Items, (b) are eligible for insurance under
the Ex-Im Bank Short-Term Comprehensive Insurance Program but are not insured
due to policy limitations, (c) are not more than 60 days past due, and (d) are
not supported by sight drafts or letters of credit. In no event will Eligible
Export-Related Accounts Receivable include (i) any Accounts Receivable of the
types described in paragraphs (a) through (bb) of the definition of Eligible
Export-Related Accounts Receivable in the Borrower Agreement or (ii) any
Accounts Receivable of any single Buyer whenever the portion of the Accounts
Receivable of such Buyer which have not been paid within sixty (60) days from
the due date is in excess of 50% of the total amount outstanding on all Accounts
Receivable payable by such Buyer.
“Event of Default” shall have the meaning assigned to such term in Section 8.1
of this Agreement.
“Ex-Im Bank” shall mean the Export-Import Bank of the United States, its
successors and assigns.
“Ex-Im Bank Guarantee” shall mean the Master Guarantee Agreement between Lender
and Ex-Im Bank, together with (i) the Super Delegated Authority Letter Agreement
between Lender and Ex-Im Bank, (ii) the Affiliate Guarantee Authorization
Agreement between Lender and Ex-Im Bank and (iii) the Loan Authorization Notice.
“Export-Related Borrowing Base” shall mean, at the date of determination
thereof, (a) the sum of (i) the Export-Related Inventory Value multiplied by the
Advance Rate applicable to Eligible Export-Related Inventory set forth in
Section 5.B.(1.) of the Loan Authorization Notice plus (ii) the Export-Related
Accounts Receivable Value multiplied by the Advance Rate applicable to Eligible
Export-Related Accounts Receivable set forth in Section 5.B.(2.) of the Loan
Authorization Notice, less (b) such reserves and in such amounts deemed
necessary and proper by Lender from time to time.
“Export-Related Borrowing Base Certificate” shall mean a Borrowing Base
Certificate in the form attached hereto as Exhibit B.

 

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“Export-Related Collateral” shall mean all Export-Related Inventory,
Export-Related Accounts Receivable (as such term of modified pursuant to the
terms of the Waiver Letter), Export-Related General Intangibles, and all
Proceeds.
“Financing Documents” shall mean, collectively, this Agreement, the Note, the
Security Agreement, the Guaranty, the Borrower Agreement, the Ex-Im Bank
Guarantee, the Waiver Letter, the Letter of Credit Application(s), all Letters
of Credit issued pursuant hereto, and any other documents, certificates and
agreements which are executed and delivered by Borrower or any other Person
evidencing, securing, guaranteeing or otherwise relating to Borrower’s
Obligations. The Financing Documents are the Loan Documents, as defined in the
Borrower Agreement.
“Highest Lawful Rate” shall mean the maximum nonusurious rate of interest
permitted to be charged by applicable Federal or Connecticut law (whichever
permits the higher lawful rate) from time to time in effect.
“Incorporated Covenants” shall have the meaning given such term in Article VII.
“Lender” means JPMorgan Chase Bank, N.A., its successors and assigns.
“Letter of Credit Application” shall mean an Application and Agreement for
Irrevocable Standby Letter of Credit or an Application and Agreement for
Irrevocable Commercial Letter of Credit, as the case may be, in such form as is
provided by Lender to Borrower and which is executed by Borrower and delivered
to Lender in connection with a request for the issuance of a Standby Letter of
Credit or a Commercial Letter of Credit, respectively, pursuant to this
Agreement.
“LIBOR Advance” means the outstanding principal amount of the Note that is
accruing interest at the LIBOR Rate as provided in Section 2.5.
“LIBOR Interest” means interest accruing at the LIBOR Rate as contemplated by
Section 2.5.
“LIBOR Period” means, the period commencing on the day the Borrower specifies as
the day any part of the outstanding principal balance of the Note is to begin to
accrue interest at the LIBOR Rate as contemplated by Section 2.5 and ending on
the numerically corresponding day in the calendar month that is one month
thereafter, and each period of one month thereafter commencing on the last day
of the preceding LIBOR Period until the Borrower elects to thereafter have no
part of the outstanding principal balance of the Note accrue interest at the
LIBOR Rate pursuant to Section 2.5(e); provided, that (i) if any such LIBOR
Period would end on a day other than a Business Day, such LIBOR Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such LIBOR
Period shall end on the next preceding Business Day, (ii) any LIBOR Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the next succeeding calendar month)
shall end on the last Business Day of the next succeeding calendar month, and
(iii) any LIBOR Period that would otherwise end after the Stated Final
Disbursement Date shall end on the Business Day after the Stated Final
Disbursement Date.

 

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“LIBOR Rate” means, for any LIBOR Period, the interest rate per annum equal to
the sum of (i) 1.50% plus (ii) quotient of (a) the interest rate determined by
Lender by reference to the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) to be the rate at approximately 11:00 a.m. London time, on the
second Business Days immediately preceding the first day of the LIBOR Period for
dollar deposits with a maturity equal to one (1) month divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to dollar deposits
in the London interbank market with a maturity equal to one (1) month.
“Loan” means the credit facility described in Section 2.1. The Loan is the Loan
Facility, as defined in the Borrower Agreement.
“Loan Authorization Notice” shall mean the Loan Authorization Notice executed by
Lender and delivered to and acknowledged by Ex-Im Bank setting forth the terms
and conditions of the Loan, a copy of which is attached hereto as Exhibit C. The
Loan Authorization Notice is the Loan Authorization Notice, as defined in the
Borrower Agreement.
“Maturity Date” shall mean the first Business Day following the Stated Final
Disbursement Date; provided, however, that with regard to Letter of Credit
Obligations outstanding on the Stated Final Disbursement Date, the Maturity Date
for any Disbursement under the Letter(s) of Credit related thereto shall be the
first Business Day following the date of such Disbursement.
“Note” shall mean the promissory note of even date herewith in the original
principal amount of Five Million and No/100 Dollars ($5,000,000) executed by
Borrower and payable to Lender evidencing the outstanding principal balance of
the Disbursements, together with all renewals, extensions, modifications,
refinancings and consolidations of and substitutions for such promissory note.
“Prime Rate” means the rate of interest per annum announced from time to time by
the Lender as its prime rate. The Prime Rate is a variable rate and each change
in the Prime Rate is effective from and including the date the change is
announced as being effective. THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE
THE BANK’S LOWEST RATE.
“Proceeds” or “proceeds” shall mean, when used with respect to any of the
Collateral, all products and proceeds, cash and non-cash, within the meaning of
the UCC and shall include the proceeds of any and all contracts, letters of
credit and insurance policies.
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.
“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

 

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“Reserve Requirement” means, with respect to any LIBOR Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D.
“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its Property or to which the Person or any of its Property is subject.
“Security Agreement” shall mean the Security Agreement of even date herewith,
executed by Borrower in favor of Lender creating the Security Interest in the
Collateral described therein, together with all amendments, modifications and
extensions thereof.
“Security Interest” is the security interest in the Collateral created pursuant
to the Security Agreement.
“Stated Final Disbursement Date” means the date stipulated as the Final
Disbursement Date in Section 10 of the Loan Authorization Notice.
“Waiver Letter” shall mean that, collectively, (i) that certain letter dated
August 2, 2010 to Lender from Ex-Im Bank, (ii) that certain letter dated
November 10, 2010 to Lender from Ex-Im Bank, (iii) that certain letter dated
December 13, 2010 and (iv) that certain e-mail correspondence dated December 16,
2010, pursuant to which Ex-Im Bank waives some requirements under the Master
Guarantee Agreement, subject to the conditions specified therein.
Section 1.2 Accounting Terms. All accounting terms used but not defined in this
Agreement or the Borrower Agreement shall be construed in accordance and
conformity with GAAP applied on a consistent basis. Except as expressly provided
herein, terms used herein that are defined in the UCC and are not otherwise
defined in this Agreement or the Borrower Agreement shall have the meanings
assigned to such terms in the UCC.
ARTICLE II
TERMS AND CONDITIONS
Section 2.1 Advances and Letters of Credit.
(a) Subject to the provisions of this Agreement, including without limitation
the satisfaction of the conditions described in Article III, Lender agrees to
establish a Revolving Loan Facility pursuant to which Lender may, in its sole
discretion upon request of Borrower, make and incur Credit Accommodations in
support of Export Orders, provided the Credit Accommodation Amount at any time
shall not exceed the lesser of (i) the Maximum Amount, and (ii) the
Export-Related Borrowing Base. All Letters of Credit issued shall be in Dollars
and all Disbursements shall be made in Dollars.

 

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(b) Lender may agree to make advances directly to Borrower or for Borrower’s
account during the Credit Period, it being expressly agreed that Lender has no
commitment to do so. Borrower shall request each advance under the Loan by
delivering to Lender a written request therefore, an Export-Related Borrowing
Base Certificate, a copy of the Export Order(s) against which Borrower is
requesting an advance, and such other information and documentation as Lender
may require, in accordance with Section 6.10. Upon receipt of the above
described information and documents by Lender, Lender shall make such advance
within five (5) Business Days following Lender’s determination that all
conditions to the making of such advance have been satisfied. Each advance shall
be conclusively deemed to have been made at the request of and for the benefit
of Borrower (a) when credited to any deposit account of Borrower maintained with
Lender, or (b) when advanced in accordance with the instructions of an
authorized Person. Lender, at its option, may set a cutoff time, after which all
requests for advances under the Loan will be treated as having been requested on
the next succeeding Business Day.
(c) Lender may agree to issue Letters of Credit on behalf of Borrower or for
Borrower’s account from time to time during the Credit Period, it being
expressly agreed that Lender has no commitment to do so. Standby Letters of
Credit may be issued for Borrower’s account for use as a performance bond, which
Standby Letters of Credit can be drawn upon by Buyers only if Borrower fails to
perform its obligations with respect to the relevant Export Order. Each
Disbursement to fund a drawing under a Standby Letter of Credit shall
conclusively be deemed to have been made when advanced in accordance with a draw
request or instructions of an authorized Person. Each Letter of Credit will be
in form and substance satisfactory to Lender and if approved for issuance by
Lender in its sole discretion, will be issued by Lender as soon as practicable
following (a) Lender’s receipt of a completed Letter of Credit Application, an
Export-Related Borrowing Base Certificate, a copy of the Export Order with
respect to which Borrower is requesting a Letter of Credit, and such other
information and documentation as Lender may require, in accordance with
Section 6.10; and (b) Lender’s determination that all conditions to issuing such
Letter of Credit have been satisfied, including but not limited to the
Borrower’s obligation to provide and maintain adequate collateral in the amount
equivalent to twenty-five percent (25%) of the undrawn amount of each Letter of
Credit issued hereunder. In no event shall (i) the expiry date of any Letter of
Credit be later than twelve (12) months from the date of issuance of such Letter
of Credit. Lender shall not be requested to issue during the last sixty
(60) days of the Credit Period any Letter of Credit which will expire after the
Stated Final Disbursement Date unless Lender agrees in writing to a renewal of
the Loan, or Ex-Im Bank’s prior written approval of the issuance of such Letter
of Credit is obtained.
(d) The terms and conditions of each Letter of Credit Application delivered by
Borrower and accepted by Lender hereunder, including without limitation terms
related to reimbursement of amounts drawn and the payment of fees and interest,
are incorporated herein by this reference; provided, however, that (a) no
provisions subjecting Lender and Borrower to arbitration or other dispute
resolution provisions contained in any Letter of Credit Application shall be
incorporated into this Agreement or applicable to Letters of Credit issued
pursuant to this Agreement, and (b) to the extent that there is any conflict
between the terms and conditions of any Letter of Credit Application and this
Agreement, the terms of this Agreement shall prevail, except for (i) definitions
contained in any Letter of Credit Application, (ii) if there is any provision
contained in any Letter of Credit Application which subjects the Letter of
Credit issued pursuant thereto to the UCP, the UCP shall prevail and (iii) if
there is any provision contained in any Letter of Credit Application for a
Standby Letter of Credit which subjects the Standby Letter of Credit issued
pursuant thereto to the ISP, the ISP shall prevail.
(e) The outstanding principal balance of Disbursements hereunder shall be
evidenced by the Note and shall be repaid as set forth in Section 2.3 below.

 

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(f) Interest on the outstanding principal balance of the Note shall accrue and
be payable as set forth in Section 2.5 below.
(g) If the Lender determines that the introduction of any Requirement of Law, or
any change in any Requirement of Law, or in the interpretation or administration
of any Requirement of Law, has made it unlawful, or that any central bank or
other Governmental Authority has asserted that it is unlawful, for the Lender to
make the Disbursements and have interest accruing thereon on the basis of the
LIBOR Rate, then, on notice thereof by the Lender to the Borrower, the
Disbursements shall thereafter accrue interest at the CB Floating Rate until the
Bank notifies the Borrower that the circumstances giving rise to such
determination no longer exist. If the Bank determines that for any reason
adequate and reasonable means do not exist for determining the LIBOR Rate for
any LIBOR Period, or that the LIBOR Rate does not adequately and fairly reflect
the cost to the Bank of making or maintaining the Disbursements, (i) the Bank
will promptly so notify the Borrower, and (ii) thereafter, the obligation of the
Bank to make or maintain the Disbursements with interest accruing thereon on the
basis of the LIBOR Rate shall be suspended until the Lender revokes such notice
in writing.
Section 2.2 Credit Accommodations.
(a) The amount of the Credit Accommodations available to be made or incurred
hereunder at any particular time from time to time shall be equal to the
difference between (a) the lesser at such time of (i) the Maximum Amount, or
(ii) the Export-Related Borrowing Base; and (b) the Credit Accommodation Amount
at such time. The Export-Related Borrowing Base shall be determined in
accordance with this Agreement, the Borrower Agreement, the Waiver Letter and
the Export-Related Borrowing Base Certificate. Any Eligible Export-Related
Account Receivable included in the Export-Related Borrowing Base which
subsequently fails to satisfy any of the applicable eligibility criteria shall
immediately cease to be included in the Export-Related Borrowing Base.
(b) Notwithstanding anything contained in this Agreement to the contrary:
(i) Lender shall not undertake any new Credit Accommodation under this
Agreement:
(A) after the Stated Final Disbursement Date;
(B) during the continuance of an Event of Default hereunder;
(C) if such Credit Accommodation has been or will be used in a manner prohibited
by the Borrower Agreement; or
(D) if no outstanding Export Order(s) exist with respect to Borrower.
(ii) No Warranty Letters of Credit shall be issued by Lender under this
Agreement without the prior written approval of Lender and Ex-Im Bank; and if
such approval is obtained, any Warranty Letter of Credit so approved shall be
issued only upon the satisfaction of all conditions to such issuance, including
reserves from the Export-Related Borrowing Base, established by Lender and Ex-Im
Bank.

 

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Section 2.3 Payments and Prepayment of Borrower’s Obligations
(a) Borrower’s Obligations shall be paid (and may be prepaid) in accordance with
the provisions of this Agreement, the Borrower Agreement and the Note. Unless
sooner due and payable or paid pursuant to the other provisions of this
Agreement, the Borrower Agreement and the Note, Borrower shall pay to Lender in
full on the Maturity Date all outstanding Borrower’s Obligations, including,
without limitation, the aggregate principal amount of all Disbursements then
outstanding and all accrued but unpaid interest, together with all other
applicable fees, costs and charges, if any, not yet paid. Disbursements made to
Borrower or for Borrower’s account and repaid by Borrower during the Credit
Period may, at the option of Lender and at Borrower’s request, be available on a
continuous basis until the Stated Final Disbursement Date to fund Credit
Accommodations made or incurred under the Loan in accordance with the terms of
this Agreement and the Borrower Agreement.
(b) In accordance with the Borrower Agreement, upon demand by Lender, Borrower
shall provide additional Collateral or make additional payment(s) to Lender to
ensure that at all times (i) the Export-Related Borrowing Base equals or exceeds
the Disbursements; and (ii) the outstanding principal balance of the Credit
Accommodations that is supported by Eligible Export-Related Inventory does not
exceed sixty percent (60%) of the sum of (y) the outstanding principal balance
of the Disbursement(s), and (z) the undrawn face amount of all outstanding
Commercial Letters of Credit hereunder.
(c) All payments made by or received from Borrower or for Borrower’s account in
respect of Borrower’s Obligations (including prepayments by Borrower and
Proceeds received by Lender) shall be applied by Lender first to the payment of
accrued and unpaid interest, second to the payment of the principal amount of
Borrower’s Obligations, and third to any unpaid costs, fees and expenses due
under this Agreement and the other Financing Documents.
(d) If (i) any payment or prepayment of principal of any LIBOR Advance is made
other than on the last day of the LIBOR Period for such LIBOR Advance or (ii) if
Borrower fails to make a principal or interest payment with respect to any LIBOR
Advance on the date such payment is due and payable, Borrower shall on demand
pay to Lender any amounts required to compensate Lender for any additional
losses, out-of-pocket costs or expenses which it may reasonably incur as a
result of such payment or nonpayment, including any loss, cost or expense
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by Lender to fund or maintain such LIBOR Advance. A
certificate of Lender setting forth any amount or amounts that Lender is
entitled to receive pursuant to this Section shall be delivered to Borrower and
shall be conclusive absent manifest error.

 

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Section 2.4 Reliance by Lender on Communications and Authorizations from
Borrower. In making or incurring any Credit Accommodation pursuant to this
Agreement and the other Financing Documents, Lender shall be authorized to rely
on any Export-Related Borrowing Base Certificate, Letter of Credit Application,
or other information, documentation, notice or communication which appears to
have been executed and delivered by any of the authorized representatives of
Borrower who are designated in the general certificate delivered by Borrower to
Lender. In the event that the Person(s) authorized to execute and deliver such
documents or to take action hereunder on behalf of Borrower become(s)
unavailable or unable to do so, Borrower promptly shall appoint one or more
successor representative(s) and shall furnish Lender with a certificate
satisfactory to Lender which shall contain a copy of the resolutions or other
actions taken by Borrower to authorize such appointment(s) and the specimen
signature of each Person so appointed to act on behalf of Borrower pursuant to
this Agreement.
Section 2.5 Interest.
(a) The outstanding principal balance of the Note shall bear interest at the
option of the Borrower at either the CB Floating Rate or the LIBOR Rate, in each
case as specified by Borrower to Bank in writing in form acceptable to Lender
pursuant to paragraph (e) of this Section 2.5; provided that (A) if prior to the
commencement of any LIBOR Period Lender determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBOR Rate; or the Lender determines that the LIBOR
Rate will not adequately and fairly reflect the cost to Lender of making or
maintaining any LIBOR Advance, then the entire outstanding principal balance of
the Note shall accrue interest at the CB Floating Rate; and (B) the outstanding
principal amount of the Note not paid when due will bear interest from its due
date until paid at the Default Rate. Notwithstanding the foregoing, if at any
time the rate determined to be applicable to the outstanding principal balance
of the Note pursuant to the foregoing sentence (the “Contract Rate”) exceeds the
Highest Lawful Rate, the actual rate of interest to accrue on such principal
amount will be limited to the Highest Lawful Rate, but any subsequent reductions
in the Contract Rate for any reason will not reduce the interest rate payable on
such amount below the Highest Lawful Rate until the total amount of interest
accrued on such principal amount equals the amount of interest which would have
accrued if the Contract Rate had at all times been in effect.
(b) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Lender may, at its option, by notice to the Borrower
(which notice may be revoked at the option of the Lender), declare that the
entire outstanding principal balance of the Note shall bear interest at the
Default Rate.
(c) CBFR Interest shall be paid on the last day of each calendar month and LIBOR
Interest shall be paid on the last day of each applicable LIBOR Period; provided
that (i) Default Interest shall be payable on demand, and (ii) in the event of
any repayment or prepayment of the Note, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment.
(d) All CBFR Interest shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and all LIBOR Interest shall be computed on the basis
of a year of 360 days, and in each case shall be payable for the actual number
of days elapsed. The applicable CB Floating Rate or LIBOR Rate shall be
determined by the Lender, and such determination shall be conclusive absent
manifest error.

 

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(e) At any time and from time to time, Borrower may notify Lender in writing in
form acceptable to Lender of what portion of the outstanding principal amount of
the Note Borrower elects to accrue interest at the LIBOR Rate and the first day
of the LIBOR Period to apply thereto, which day shall be at least three Business
Days after the date of such notice; and the remaining outstanding principal
balance of the Note shall accrue interest at the CB Floating Rate; provided that
(i) at no time may more than one LIBOR Period be in effect; (ii) the minimum
outstanding principal amount of any LIBOR Advance shall be $100,000; and
(iii) in the event Borrower fails to so notify Lender that a portion of the
outstanding principal balance of the Note is to accrue interest at the LIBOR
Rate, Borrower shall be deemed to have elected the CB Floating Rate to be the
rate of interest applicable to the entire outstanding principal balance of the
Note; and (iv) in the event Borrower fails to notify Lender at least three
Business Days prior to the last day of any LIBOR Period that Borrower elects to
change the outstanding principal amount of the LIBOR Advance for a new LIBOR
Period, Borrower shall be deemed to have elected to continue to have the same
amount continue to accrue interest at the LIBOR Rate for an additional LIBOR
Period commencing on the last day of the current LIBOR Period.
ARTICLE III
CONDITIONS PRECENDENT
Section 3.1 Conditions to Credit Accommodation. Lender may elect in its sole
discretion to make or not to make any Credit Accommodation requested Borrower,
it being expressly agreed that Lender has no commitment to do so hereunder.
Prior to making a decision about any requested Credit Accommodation, Lender
requires satisfaction of each of the following conditions precedent, with all
documents, instruments, opinions, reports, and other items described below to be
in form and substance satisfactory to Lender:
(a) Lender shall have received evidence that this Agreement and all other
Financing Documents have been duly authorized, executed, and delivered by the
parties thereto and shall be and remain valid and enforceable.
(b) To the extent not previously received by Lender, Lender shall have received
a general certificate of the Secretary of Borrower, dated no later than the date
of the execution and delivery of this Agreement, certifying (i) that attached
thereto is a true, complete and correct copy of Borrower’s organizational
documents as then in effect, (ii) that attached thereto is a true, complete and
correct copy of resolutions adopted by the board of directors or similar
governing body of Borrower authorizing the execution and delivery of this
Agreement and each of the other Financing Documents and authorizing Borrower to
incur Borrower’s Obligations and to perform all other covenants and agreements
of Borrower contained in this Agreement and in the other Financing Documents,
and (iii) as to the incumbency and specimen signature of each officer of
Borrower who is authorized to execute and deliver this Agreement, all
Export-Related Borrowing Base Certificates and Letter of Credit Applications to
be delivered pursuant hereto, and any other Financing Documents and other
instruments, certificates and documents to be executed and delivered by Borrower
hereunder.
(c) Lender shall have received satisfactory evidence that the insurance which
Borrower is required to maintain pursuant to this Agreement, including but not
limited to the insurance described in Section 6.6, is in full force and effect.
(d) Borrower shall have paid all of the fees, costs and expenses which are due
and payable under this Agreement and any other Financing Document.

 

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(e) Ex-Im Bank shall have acknowledged to Lender Ex-Im Bank’s receipt of the
Loan Authorization Notice to Lender effecting the coverage of Borrower’s
Obligations under the Ex-Im Bank Guarantee.
(f) All conditions set forth in the Loan Authorization Notice that were to be
satisfied as of the date of Lender’s making or incurring the requested Credit
Accommodation shall have been satisfied, and Lender otherwise shall be permitted
under the Ex-Im Bank Guarantee to make and incur Credit Accommodations
hereunder.
(g) All legal matters incident to the Loan and all documents necessary in the
opinion of Lender to the making or incurring of Credit Accommodations shall be
satisfactory in all respects to counsel for Lender.
(h) All Liens, including the Security Interest, in and upon the Collateral shall
have been duly authorized, created and perfected, (i) with first priority, with
respect to the Collateral described in Section 6(A) of the Loan Authorization
Notice, and (ii) with the priorities set forth in Sections 6(E) and (F) of the
Loan Authorization Notice with respect to other Collateral, in each case subject
only to Permitted Liens, and shall be and remain valid and enforceable.
(i) Lender, at its option and for its sole benefit, shall have conducted an
audit of the Collateral, books, records, and operations, and Lender shall be
satisfied as to their condition.
(j) Lender shall have received a completed and executed Export-Related Borrowing
Base Certificate and any other information and documentation that Lender may
require, in accordance with Section 4.3 hereof.
(k) (i) Borrower shall have complied with, and shall then be in compliance with,
all the terms, covenants, and conditions of this Agreement, the Borrower
Agreement, and all other Financing Documents which are binding upon it,
(ii) there shall exist no Event of Default under this Agreement, and (iii) all
representations and warranties of Borrower contained in this Agreement and all
other Financing Documents shall be true and correct.
(l) Borrower shall have complied with, and shall then be in compliance with, all
the terms, covenants, and conditions of any other agreement now existing or
hereafter arising between Lender and Borrower, and there shall exist no default
or event of default thereunder.
(m) Borrower shall have complied with applicable laws, and regulations in each
instance in which Borrower has generated, handled, used, stored or disposed of
any hazardous or toxic waste or substance, on or off its premises (whether or
not owned by Borrower). Borrower shall have no material contingent liability for
non-compliance with environmental or hazardous waste laws. Borrower shall have
not received any notice that it or any of its property or operations does not
comply with, or that any governmental authority is investigating its compliance
with, any environmental or hazardous waste laws.
(n) There shall have been no material adverse change in the business, condition
(financial or otherwise), operations, performance, property or prospects of
Borrower or the Borrower’s subsidiaries since December 31, 2009.

 

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(o) Lender shall have received from Borrower an Economic Impact Certification
covering the Items described in Paragraph 4.A of the Loan Authorization Notice.
ARTICLE IV
SECURITY
Section 4.1 Collateral. To secure payment and performance of all Borrower’s
Obligations, Borrower shall grant to Lender valid, enforceable and duly
perfected Liens, including the Security Interest, on all Collateral. The Liens
shall be of first priority with respect to the Collateral described in
Section 6(A) of the Loan Authorization Notice, and the Liens shall have the
priorities set forth in Sections 6(E) and (F) of the Loan Authorization Notice
with respect to the other Collateral, in each case subject only to Permitted
Liens. Borrower agrees that Lender shall have in respect of all Collateral that
is subject to the UCC all of the rights and remedies of a secured party under
the UCC in all states in which any portion of the Collateral may be located, as
well as those provided in this Agreement. In the event Lender has extended or
extends a loan or other credit accommodation to Borrower in addition to the Loan
and receives a Lien on any assets or property, the Lien on such assets and
property shall also secure Borrower’s Obligations, and Borrower agrees to
execute such documents and instruments as Lender requires to extend such
security to Borrower’s Obligations.
Section 4.2 Perfection of Security Interest. Borrower agrees to the filing of
financing statements and the execution of other documents and to take whatever
other actions are requested by Lender to perfect and continue Lender’s Liens
upon the Collateral. Borrower hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any financing statements and other
documents necessary to perfect or to continue its Liens. Lender may at any time,
and without further authorization from Borrower, file a copy, photograph,
facsimile, or other reproduction of any financing statement for use as a
financing statement. Borrower will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of Lender’s
Liens upon the Collateral. Borrower will promptly notify Lender of any change in
Borrower’s name including any change to the assumed business names of Borrower.
Borrower also will promptly notify Lender of any change in Borrower’s social
security number or employer identification number. Before any cash Collateral
shall be included in the Export-Related Borrowing Base, the Borrower shall cause
each deposit account or other bank account in which such cash is deposited to be
subject to a first priority lien in favor of Lender pursuant to an account
control agreement in form and substance satisfactory to Lender. The Lender’s
Security Interest in any Export-Related Accounts Receivable shall be further
perfected by Borrower’s execution and delivery to Lender of any instruments, the
giving of any notices and the taking of any additional steps that may be
required under foreign law in order to ensure the effectiveness of the
assignment of such Export-Related Accounts Receivable against the Buyer.

 

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Section 4.3 Collateral Records and Reports; Field Examinations. Borrower does
now, and at all times hereafter shall keep correct and accurate books and
records of the Collateral, all of which books and records shall be available to
Lender or Lender’s representative upon demand for inspection and copying at any
reasonable time. In this connection, Borrower acknowledges that Lender is
required by Ex-Im Bank to perform (or contract to perform) a field examination
of Borrower and the Collateral in accordance with Lender’s customary procedures
but in no event less than every six months. Such field examination shall include
without limitation an inspection and valuation of Inventory and Other Assets, a
book audit of Accounts Receivable and a review of the Accounts Receivable Aging
Report. Borrower further acknowledges that Lender is required by the Ex-Im Bank
to perform (or contract to perform) a review of Borrower’s sales records at
least on a quarterly basis. For Revolving Loan Facilities, if Lender elects in
its sole discretion to make Credit Accommodations based upon summaries of Export
Orders, then at least once each quarter, Lender shall review a sampling selected
by Lender of those Export Orders representing at least ten percent (10%) of the
aggregate Dollar volume of Export Orders and ten percent (10%) of the number of
Export Orders supporting Credit Accommodations made or incurred during the past
quarter. Specifically with respect to Export-Related Collateral, Borrower agrees
to keep and maintain such books and records as Lender may require. Borrower
shall submit to Lender in writing from time to time upon Lender’s request and in
any event no later than twenty (20) days after the end of each calendar month
(a) an Accounts Receivable Aging Report for the immediately preceding month,
which report shall include the customer name, Dollar amount due and number of
days outstanding for each Export-Related Account Receivable, (b) an Inventory
schedule for the immediately preceding month, which schedule shall include the
location of each Item of Inventory, (c) information concerning the status of
completion of Export Orders, and (d) such other information, reports, contracts,
invoices and other data relating to the Collateral as Lender may request.
Section 4.4 Payment under Borrower Letters of Credit. If the letter of credit
payment terms for the country specified in a certain Export Order are specified
in the Country Limitation Schedule with respect to such country, Borrower shall
require that each commercial letter of credit issued for its benefit with
respect to any Export-Related Account Receivable or Export-Related Inventory
arising out such Export Order shall provide that all payments of drawings
thereunder shall be paid for the account of Borrower directly to Borrower’s
account with Lender, or, alternatively, that payment shall be made only to
Lender’s account.
Section 4.5 Assignment of Foreign Credit Insurance Policy Proceeds and
Buyer/Supplier Financing. Borrower shall, simultaneously with the execution of
this Agreement and as and when such policies are put into effect or financing is
obtained by Borrower for the benefit of any Buyer, at any time prior to the
payment and performance in full of Borrower’s Obligations, assign to Lender the
proceeds of all foreign credit insurance policies maintained by Borrower and any
financing obtained by Borrower for the benefit of any Buyer, including, without
limitation, any financing the repayment of which is guaranteed or insured by
Ex-Im Bank or any other expert credit agency, such assignment to provide for
payment to be made directly into Borrower’s account with Lender or to Lender.
Section 4.6 Loss of Collateral. Lender shall not be liable for the loss of any
Collateral in its possession, nor shall such loss diminish Borrower’s
Obligations.
Section 4.7 Negative Pledge. Until the Borrower’s Obligations hereunder have
been paid in full, unless the Bank otherwise consents in writing, the Borrower
agrees that it shall not create or agree to create, any Lien on the Collateral,
except for Permitted Liens or Liens created for the benefit of Lender to secure
the Borrower’s Obligations.

 

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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants the following to Lender and Ex-Im Bank, as of
the Effective Date, as of the date each Credit Accommodation is made or incurred
hereunder, as of the date of any renewal, extension or modification of the Loan,
and at all times any of Borrower’s Obligations are outstanding, and it is the
affirmative obligation of Borrower to notify Lender in writing promptly, but in
any event within five (5) Business Days, of any occurrence, circumstance or fact
which would affect its ability to make the representations and warranties
contained herein:
Section 5.1 Organization and Authority. Borrower is a corporation which is duly
organized, validly existing, and in good standing under the laws of the state of
Borrower’s formation and is duly qualified and in good standing in all other
states in which Borrower is doing business except where the failure to so
qualify would not be expected to have a Material Adverse Effect. Borrower has
the full power and authority to own its properties and to transact the
businesses in which it is presently engaged or presently proposes to engage.
Borrower has not been suspended or debarred from doing business with the United
States government. The execution, delivery, and performance of this Agreement
and all other Financing Documents to which Borrower is a party have been duly
authorized by all necessary action by Borrower; do not require the consent or
approval of any other Person; and do not conflict with, result in a violation
of, or constitute a default under (a) any provision of Borrower’s organizational
documents or any other agreement or instrument binding upon Borrower, or (b) any
law, governmental regulation, court decree, or order applicable to Borrower.
Borrower has all requisite power and authority to execute and deliver this
Agreement and all other Financing Documents to which Borrower is a party.
Section 5.2 Financial Condition. Each financial statement of Borrower supplied
to Lender fairly discloses financial condition of Borrower as of the date of
each such statement, and there has been no material change in Borrower’s
financial condition subsequent to the date of the most recent financial
statement supplied to Lender, which has had or could reasonably be expected to
have a Material Adverse Effect. Borrower has no material contingent obligations
except as disclosed in such financial statements.
Section 5.3 Legal Effect. This Agreement and all other Financing Documents to
which Borrower is a party constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms,
except as limited by applicable bankruptcy and creditors’ rights laws, or
principles of general equity.
Section 5.4 Properties. Borrower is the sole owner of, and has good title to,
all of Borrower’s properties free and clear of all security interests except for
Permitted Liens and Liens in favor of Lender. Title to all of Borrower’s
properties are in Borrower’s legal name, and Borrower has not used, or filed a
UCC financing statement under, any other name for at least the last six
(6) years. Borrower possesses all permits, licenses, patents, trademarks, and
copyrights required to conduct its business. All easements, rights-of-way and
other rights necessary to maintain and operate Borrower’s property have been
obtained and are in full force and effect.

 

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Section 5.5 Compliance. Except as disclosed to and acknowledged by Lender in
writing, (a) Borrower is conducting Borrower’s businesses in material compliance
with all applicable federal, state and local laws, statutes, ordinances, rules,
regulations, orders, determinations and court decisions, including, without
limitation, those pertaining to health or environmental matters, and
(b) Borrower otherwise does not have any contingent liability in connection with
the release into the environment, disposal or the improper storage of any toxic
or hazardous substance or solid waste which has had or could reasonably be
expected to have a Material Adverse Effect.
Section 5.6 Licenses. All necessary licenses, permits and authorizations
required for the exporting of Items have been or will be timely obtained by
Borrower, and to the best of Borrower’s knowledge, all required necessary
licenses, permits and authorizations have been or will be timely obtained by
each importer.
Section 5.7 Performance. Borrower has an operating history of at least one year.
Borrower has sufficient financial resources with which to perform its Export
Orders and to pay any costs of completing its Export Orders which are not paid
from the proceeds of the Loan.
Section 5.8 Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes)
against Borrower is pending or, to Borrower’s knowledge, threatened, and no
other event has occurred which has had or could reasonably be expected to have a
Material Adverse Effect other than litigation, claims, or other events, if any,
that have been disclosed to and acknowledged by Lender in writing.
Section 5.9 Taxes. All tax returns and reports of Borrower that are or were
required to be filed have been filed in a timely manner, and all taxes,
assessments and other governmental charges have been paid in full, except those
that have been disclosed in writing to Lender which are presently being or to be
contested by Borrower in good faith in the ordinary course of business and for
which adequate reserves have been provided.
Section 5.10 Lien Priority. Unless otherwise previously disclosed to and
approved by Lender in writing, Borrower has not entered into any security
agreements, granted a Lien or permitted the filing or attachment of any Lien
(other than Permitted Liens) on or affecting any of the Collateral, except in
favor of Lender.
Section 5.11 Use of Proceeds. Borrower shall not use any Loan proceeds for
(i) the purchasing of fixed assets, (ii) capital expenditures, or (iii) the
purchasing or carrying of “margin stock” as defined in Regulation U issued by
the Board of Governors of the Federal Reserve System.
Section 5.12 Employee Benefit Plans. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (a) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to any
such plan, (b) Borrower has not withdrawn from any such plan or initiated steps
to do so, (c) no steps have been taken to terminate any such plan, and (d) there
are no unfunded liabilities other than those previously disclosed to Lender in
writing.

 

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Section 5.13 Location of Borrower’s Offices and Records. Borrower’s place of
business, or Borrower’s chief executive office if Borrower has more than one
place of business, is located at the address for notices to Borrower set forth
in Section 9.4. Unless Borrower has notified Lender and Lender has acknowledged
in writing to the contrary, said address is also the location of Borrower’s
books and records concerning the Collateral.
Section 5.14 Export-Related Accounts Receivable.
(a) All Export-Related Accounts Receivable represented by Borrower to constitute
Eligible Export-Related Accounts Receivable satisfy all relevant eligibility
criteria.
(b) All Export-Related Receivables information contained in Export-Related
Borrowing Base Certificates and related reports delivered to Lender will be true
and correct, subject to immaterial variance.
(c) Lender shall have the right at any time upon reasonable notice, during
normal business hours and at Borrower’s expense to confirm with Buyers the
accuracy of such Export-Related Accounts Receivable information.
Section 5.15 Information. All information heretofore or contemporaneously
herewith furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will be,
true and accurate in every material respect on the date as of which such
information is dated or certified; and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading. Borrower understands and agrees that Lender, without
independent investigation, is relying upon the above representations and
warranties in extending the Loan to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature and shall
remain in full force and effect as long as any of Borrower’s Obligations remain
outstanding.
ARTICLE VI
COVENANTS
Borrower covenants and agrees with Lender that, while this Agreement is in
effect and until all of Borrower’s Obligations are fully paid and performed,
Borrower shall:
Section 6.1 Additional Liabilities. Promptly, but in any event within five (5)
Business Days, inform Lender in writing (a) in the event any litigation, claim,
investigation, administrative proceeding or similar action affecting Borrower
which could reasonably be expected to have a Material Adverse Effect is filed or
threatened against Borrower, and (b) of the creation, occurrence or assumption
by Borrower of any actual or contingent liabilities not permitted under this
Agreement.
Section 6.2 Financial Records. Maintain or cause to be maintained books and
records in accordance with GAAP, and permit Lender and Ex-Im Bank or their
representatives to examine, review, audit and make and take away copies or
reproductions of Borrower’s books and records at all reasonable times. If any
books and records, including, without limitation, computer generated records and
computer software programs for the generation of such records, now or hereafter
are maintained in the possession of a third party, Borrower, upon request of
Lender, shall instruct such party to permit Lender and Ex-Im Bank or their
representatives free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at Borrower’s
expense.

 

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Section 6.3 Reporting Requirements. Furnish to Lender:
(a) As soon as available and in any event not later than forty-five (45) days
after the end of each fiscal quarter the unaudited consolidated financial
statements of Borrower as of the end of such quarter and the related unaudited
statements of income and shareholders’ equity and cash flows for the period
commencing at the end of the previous year and ending with the end of such
quarter, and the corresponding figures as at the end of, and for, the
corresponding period in the preceding fiscal year, all in reasonable detail and
duly certified with respect to such statements (subject to year-end audit
adjustments) by an authorized financial officer of Borrower as having been
prepared in accordance with GAAP;
(b) As soon as available and in any event not later than one hundred and twenty
(120) days after the end of each fiscal year, a copy of the audited annual
consolidated financial statement for such year for Borrower including therein
audited balance sheets of Borrower as of the end of such fiscal year and the
related statements of income, shareholders’ equity and cash flows for such
fiscal year, and the corresponding figures as at the end of, and for, the
preceding fiscal year, in each case audited and certified by a firm of
independent certified public accountants of recognized standing acceptable to
Lender, including any management letters delivered by such accounting firm to
Borrower in connection with such audit together with a certificate of such
accounting firm to Lender stating that, in the course of the regular audit of
the business of Borrower which auditing was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm has
obtained no knowledge that an Event of Default has occurred and is continuing,
or if, in the opinion of such accounting firm, an Event of Default has occurred
and is continuing, a statement as to the nature thereof;
(c) To the extent not hereinabove described, the financial statements of
Borrower deliverable pursuant to the Loan Authorization Notice by the dates set
forth therein.
Section 6.4 Taxes, Charges and Liens.
(a) Pay and discharge when due and prior to the date on which penalties would
attach, all of Borrower’s indebtedness and obligations, including, without
limitation, all assessments, taxes, governmental charges, levies and liens, of
every kind and nature, imposed upon Borrower or its properties, income, or
profits, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits; provided, however,
Borrower will not be required to pay and discharge any such assessment, tax,
charge, levy, lien or claim so long as (i) the legality of the same shall be
contested in good faith by appropriate proceedings, and (ii) Borrower shall have
established or caused to have been established adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance with
GAAP.

 

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(b) Borrower, upon demand of Lender, will furnish to Lender evidence of payment
of the assessments, taxes, charges, levies, liens and claims and will authorize
the appropriate governmental official to deliver to Lender at any time a written
statement of any assessments, taxes, charges, levies, liens and claims against
Borrower’s properties, income, or profits.
Section 6.5 Additional Information. Furnish to Lender such additional
information and statements, lists of assets and liabilities, aging of
receivables and payables, inventory schedules, budgets, forecasts, financial
information on principal suppliers of Borrower, and other reports with respect
to Borrower’s financial condition and business operations as Lender may
reasonably request from time to time, including, without limitation, reports
with respect to Borrower’s accounts payable within thirty (30) days after the
end of each calendar month.
Section 6.6 Insurance. Maintain fire and other risk insurance, public liability
insurance, business interruption insurance, multi-hazard insurance, export
credit insurance, worker’s compensation coverage, general liability insurance,
and such other insurance as Lender may require with respect to Borrower’s
properties and operations, in form, amounts, coverage and with insurance
companies reasonably acceptable to Lender. If Borrower fails to provide any
required insurance or fails to continue such insurance in force, Lender may, but
shall not be required to, obtain such insurance at Borrower’s expense, and the
cost of such insurance will be added to Borrower’s Obligations. Borrower, upon
request of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form and substance satisfactory to Lender,
including stipulations that coverage will not be canceled or changed without at
least ten (10) days’ prior written notice to Lender. In connection with all
policies covering any of the Collateral, Borrower will provide Lender with such
loss payable or other endorsements as Lender may require; and each such policy
in any event shall contain a standard non-contributing, non-reporting mortgagee
or loss payee clause naming Lender as mortgagee and loss payee. Each liability
insurance policy shall name Lender as additional insured. At Lender’s request
Borrower shall furnish to Lender from time to time reports on each existing
insurance policy including, without limitation, the following: (a) the name of
the insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; (f) the
expiration date of the policy; and (g) such additional information as Lender may
request.
Section 6.7 Other Agreements. Comply with, and cause its Affiliates to comply in
all material respects with, all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party, and
notify Lender immediately in writing of any default in connection with any other
such agreements.
Section 6.8 Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the other Financing Documents and
in all Export Orders (including, without limitation, the delivery of the goods
required thereby free and clear of defects and prior to the deadline specified
therein) in a timely manner, and promptly notify Lender (including, without
limitation, providing such notice of events as is required pursuant to the
Borrower Agreement) of the occurrence of any event which constitutes or may
constitute an Event of Default under this Agreement or a default under any of
the other Financing Documents or Export Orders. Borrower shall, as soon as
possible, take all actions necessary to entitle Borrower to receive any payments
due under all Export Orders, including, without limitation, the timely drawing
of drafts under any letters of credit issued for the benefit of Borrower in
connection therewith and the timely presentation of any claims under any
insurance policy issued by, or financing guaranteed by, Ex-Im Bank or any other
insurer or guarantor.

 

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Section 6.9 Operations. Conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state, municipal, and
foreign laws, ordinances, rules and regulations respecting its properties,
charters, businesses and operations, including without limitation, compliance
with the Americans with Disabilities Act, all applicable environmental statutes,
rules, regulations and ordinances and with all minimum funding standards and
other requirements of ERISA and other laws applicable to Borrower’s employee
benefit plans.
Section 6.10 Export-Related Borrowing Base Certificates. In addition to
deliveries within five (5) Business Days prior to the date each request for a
Credit Accommodation is made by Borrower (if required by Lender) or as otherwise
required by Lender and Ex-Im Bank, and so long as there are any Credit
Accommodations outstanding under the Loan, deliver to Lender no later than the
twenty (20) days after the end of each calendar month an Export-Related
Borrowing Base Certificate, along with such supporting documentation as Lender
may request. Without limiting the generality of the foregoing, each
Export-Related Borrowing Base Certificate shall include or be accompanied by
(a) in the event Borrower is requesting Credit Accommodations, a copy of the
Export Order(s) (or, for Revolving Loan Facilities, if permitted in writing by
Lender, a written summary of the Export Order(s)) and related invoice(s) against
which Borrower is requesting Credit Accommodations, and copies of all other
documentation pursuant to which the Buyer’s obligations in respect of the Export
Order(s) are evidenced, secured or guaranteed, and (b) in all cases, an Accounts
Receivable Aging Report and Inventory schedule as described in Section 4.3,
reconciled directly to Borrower’s month-end Accounts Receivable report, its
month-end Inventory schedule, and its general ledger, adjusted for intra-month
sales, receipts, credits and other adjustments.
Section 6.11 Additional Assurances. Execute, acknowledge and deliver, or cause
to be executed, acknowledged or delivered, to Lender and Ex-Im Bank such
promissory notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or Ex-Im Bank
may reasonably request to evidence and secure the Loan, to perfect the Liens or
otherwise facilitate the performance of this Agreement, any of the other
Financing Documents and the Waiver Letter.
Section 6.12 Compliance Certificate. Unless waived in writing by Lender, provide
Lender within fifteen (15) days after the end of each calendar quarter with a
certificate executed by Borrower’s chief financial officer or other officer or
person acceptable to Lender (a) certifying that the representations and
warranties set forth in this Agreement and the other Financing Documents are
true and correct as of the date of the certificate and that, as of the date of
the certificate, no Event of Default exists under this Agreement, and
(b) demonstrating compliance with all covenants set forth in this Agreement,
including the Incorporated Covenants.

 

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ARTICLE VII
INCORPORATED COVENANTS
Borrower covenants and agrees with Lender that, while this Agreement is in
effect and until all of Borrowers’ Obligations are fully paid and performed,
Borrower shall further perform and observe all of the covenants (the
“Incorporated Covenants”) set forth in the Domestic Credit Agreements.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1 Events of Default. Each of the following shall constitute an “Event
of Default” under this Agreement:
(a) Failure of Borrower to make any payment when due on any of Borrower’s
Obligations, including, without limitation, any mandatory prepayments of
Borrower’s Obligations from the Proceeds of or comprising Export-Related
Accounts Receivable and such failure shall continue for five (5) days;
(b) Failure of Borrower to comply with or to perform when due any other term,
obligation, covenant or condition contained in this Agreement, the Note, the
Borrower Agreement or in any of the other Financing Documents which is not cured
within fifteen (15) days;
(c) Failure of Borrower to pay when due any amount payable to Lender under any
other loan or credit accommodation to Borrower and such failure shall continue
for a period of five (5) days;
(d) The occurrence of any default or event of default under any other agreement
now existing or hereafter arising between Lender and Borrower;
(e) Any warranty, representation or statement made in or furnished to Lender
under this Agreement or the other Financing Documents is false or misleading in
any material respect when made or furnished, or becomes false or misleading in
any material respect at any time thereafter;
(f) The occurrence of any event which permits the acceleration of the maturity
of any indebtedness owing by Borrower to any third party under any agreement or
undertaking, or any such indebtedness shall not be paid as and when due;
(g) The occurrence of any event of default whether or not caused, directly or
indirectly, by actions or omissions of Borrower or any third party under any
agreement or undertaking entered into by Borrower, past any cure period provided
thereon;

 

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(h) Borrower (i) applies for, consents to or suffers the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
fiduciary of itself or of all or a substantial part of its property or calls a
meeting of its creditors, (ii) admits in writing its inability, or is generally
unable, to pay its debts as they become due or ceases operations of its present
business, (iii) makes a general assignment for the benefit of creditors, (iv)
commences a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) is adjudicated as bankrupt or insolvent, (vi) files a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesces to, or fails to have dismissed within thirty
(30) days, any petition filed against it in any involuntary case under such
bankruptcy laws, (viii) is the subject of any proceeding for the liquidation of
its assets or dissolution, or (ix) takes any action for the purpose of effecting
any of the foregoing.
(i) The Borrower becomes the subject of any merger or consolidation.
(j) Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of
Borrower, or by any governmental agency; or the issuance of any levy,
assessment, attachment, seizure or Lien, other than a Permitted Lien, against
any of the Collateral which is not stayed or lifted within fifteen (15) days.
(k) The occurrence of an event of default under the Ex-Im Bank Guarantee or the
Ex-Im Bank Guarantee ceases to be in effect for any reason whatsoever without
Lender’s prior written consent, including, without limitation, Borrower’s
failure to pay all fees due Ex-Im Bank.
(l) Any material delay occurs in Borrower’s performance of its obligations under
any Export Order, unless such delay is due to force majeure and Borrower is able
to satisfy Lender that the delay will not cause a default under the applicable
Export Order or diminish the Buyer’s payment obligations thereunder; or a
material adverse change occurs in the financial condition of any supplier to
Borrower.
(m) An event occurs which has had or could reasonably be expected to have a
Material Adverse Effect.
(n) Any Lien in any of the Collateral granted or intended by the Financing
Documents to be granted to Lender ceases to be a valid, enforceable, perfected,
first priority Lien (or a lesser priority if expressly permitted pursuant to
Section 6 of the Loan Authorization Notice) subject only to Permitted Liens.
(o) Any material provision of any Financing Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms.
(p) Any litigation is filed against Borrower which has had or could reasonably
be expected to have a Material Adverse Effect and such litigation is not
withdrawn or dismissed within thirty (30) days of the filing thereof.

 

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Section 8.2 Effect of an Event of Default. If any Event of Default shall occur,
and unless such Event of Default shall be cured to the satisfaction of Lender
and Ex-Im Bank, Lender may, at its option, without further notice or demand,
(a) declare all Borrower’s Obligations (contingent or otherwise) immediately due
and payable; (b) refuse to make or incur any additional Credit Accommodations
under this Agreement or the Note; (d) assemble, sell, lease, buy, transfer or
otherwise dispose of the Collateral or the Proceeds thereof; and (e) exercise
all the rights and remedies provided in this Agreement, the Note, the Waiver
Letter or in any of the other Financing Documents or available at law, in
equity, or otherwise; provided, however, that if any Event of Default of the
type described in Section 8.1(f) shall occur, all Borrower’s Obligations shall
automatically become fully due and payable, without any notice, demand or action
by Lender. Except as may be prohibited by applicable law, all of Lender’s rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower shall not affect Lender’s right to declare a
default and to exercise its rights and remedies.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments. This Agreement, together with the other Financing
Documents and the Waiver Letter, constitute the entire understanding and
agreement of the parties as to the matters set forth in this Agreement. No
alteration of or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or bound by the
alteration or amendment. This Agreement, the other Financing Documents and the
Waiver Letter supersede all existing agreements, oral or written, previously
entered into between Borrower and Lender with respect to the Loan unless
Borrower and Lender agree in writing to the contrary.
Section 9.2 Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Section 9.3 Consent to Loan Participation. Borrower agrees and consents to
Lender’s sale or transfer, at Lender’s sole discretion, whether now or later, of
one or more participation interests in the Loan to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without any
limitation whatsoever, to any one or more purchasers, potential purchasers, or
affiliates of Lender, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby
waives any rights to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation interests, as
well as all notices of any repurchase of such participation interests.

 

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Section 9.4 Notices. All communications and notices required to be given under
this Agreement shall be hand delivered or sent by nationally recognized
overnight courier or United States mail, certified or registered, postage
prepaid, addressed to the party to whom the notice is to be given at the address
shown below. All such communications and notices shall be effective upon
delivery. Any party may change its address for notices under this Agreement by
giving formal written notice to the other parties, specifying that the purpose
of the notice is to change the party’s address. To the extent permitted by
applicable law, if there is more than one Borrower, notice to any Borrower will
constitute notice to all Borrowers:
if to Borrower:
FuelCell Energy, Inc.
3 Great Pasture Road
Danbury, CT 06813
Attention: Michael Bishop, VP and Corporate Controller
if to Lender:
JPMorgan Chase Bank, N.A.
Two Corporate Drive, Suite 730
Shelton, CT 06484
Attention: James Patrick Murphy
with copy to:
JPMorgan Chase Bank, N.A. — Global Trade Services
2200 Ross Ave., 6th Floor
Dallas, Texas 75201
Attention: Mr. Randall Mascorro
if to Ex-Im Bank:
Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
Attention: Vice President, Business Credit Division
Section 9.5 Survival. All covenants, agreements, representations and warranties
of Borrower made herein and in the other Financing Documents and in the
certificates, instruments and other documents delivered pursuant hereto or
thereto shall survive the making or incurring of Credit Accommodations
hereunder, and shall continue in full force and effect until all of Borrower’s
Obligations have been paid and performed in full.
Section 9.6 Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of Borrower which are contained in this Agreement or
in the other Financing Documents shall inure to the benefit of the successors
and assigns of Lender and Ex-Im Bank, which is a third-party beneficiary of this
Agreement and each of the other Financing Documents to which it is not a direct
party. Borrower may not assign any interest that it may have under this
Agreement, including, without limitation, the right to receive the benefit of
the Loan to be extended hereunder, without the prior written consent of Lender
and Ex-Im Bank. Any assignment made or attempted by Borrower without the prior
written consent of Lender and Ex-Im Bank shall be void and of no effect. No
consent by Lender and Ex-Im Bank to an assignment by Borrower shall release
Borrower as the party primarily obligated and liable under the terms of this
Agreement unless Borrower shall be released specifically by Lender and Ex-Im
Bank in writing.

 

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No consent by Lender and Ex-Im Bank to an assignment shall be deemed to be a
waiver of the requirement of prior written consent by Lender and Ex-Im Bank with
respect to each and every further assignment and as a condition precedent to the
effectiveness of such assignment. Lender may assign its interest in any or all
of the Financing Documents or the Waiver Letter to any Person, including Ex-Im
Bank, without the consent of or notice to Borrower or any other Person, upon
such terms as Lender in its sole discretion deems appropriate.
Section 9.7 Payment of Fees and Expenses. Borrower shall pay all reasonable
out-of-pocket expenses, including, without limitation, the fees and
disbursements of legal counsel employed by Lender, incurred by Lender in
connection with (a) the preparation and negotiation of this Agreement, the
Waiver Letter and the other Financing Documents, (b) the making or incurring of
Credit Accommodations by Lender, (c) the protection of the Collateral and any
other security for the repayment of Borrower’s Obligations, and (d) the
enforcement and protection of the rights of Lender in connection with this
Agreement, the Waiver Letter or any of the other Financing Documents. Prior to
Lender’s making or incurring any Credit Accommodations hereunder, Borrower shall
pay to Lender, as an additional condition precedent to the making or incurring
of Credit Accommodations, the Ex-Im Bank facility fee determined in accordance
with the Loan Authorization Notice and all other fees and expenses due Lender.
Without limiting the generality of the foregoing, Borrower shall pay or cause to
be paid to Lender the Ex-Im Bank application fee in the amount of $100 and the
Ex-Im Bank guarantee fee in the amount of $75,000, payable on the Effective Date
and at any renewal hereof.
Section 9.8 Applicable Law; Jurisdiction; Consent to Service of Process. Except
as hereinafter expressly provided, this Agreement is governed by and shall be
construed in accordance with the laws of the State of Connecticut. The Ex-Im
Bank Guarantee is governed by New York law. Accordingly, notwithstanding any
provision to the contrary contained herein or in any of the other Financing
Documents, to the extent, but only to the extent, necessary to assure full
satisfaction of and compliance with all terms and conditions of Ex-Im Bank’s
guaranty of Borrower’s Obligations under the Ex-Im Bank Guarantee and to
preserve Lender’s rights thereunder, this Agreement and each of the other
Financing Documents shall be governed by and construed in accordance with the
laws of the State of New York. Lender and Borrower hereby submit to the
non-exclusive jurisdiction of any Connecticut state court or federal court
sitting in Connecticut over any suit, action or proceeding arising out of or
relating to this Agreement. Final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon
Borrower and may be enforced in any court to the jurisdiction of which Borrower
is subject, by a suit upon the judgment.
Section 9.9 No Liability of Lender. Neither Lender nor Ex-Im Bank shall be
liable for any act or omission by it pursuant to the provisions of this
Agreement, in the absence of fraud or gross negligence. Borrower hereby agrees
that neither Lender nor Ex-Im Bank shall be chargeable for any negligence,
mistake, act or omission of any accountant, examiner, agency or attorney
employed by it in making examinations, investigations or collections, or
otherwise in perfecting, maintaining, protecting or realizing upon any lien or
Security Interest in the Collateral or any other interest in any security for
Borrower’s Obligations. Neither Lender nor Ex-Im Bank shall incur any liability
to Borrower or to any other party in connection with the acts or omissions of
Lender or Ex-Im Bank in reliance upon any certificate or other paper believed by
Lender or Ex-Im Bank to be genuine or with respect to any other thing which
Lender or Ex-Im Bank may do or refrain from doing, unless such act or omission
amounts to fraud or gross negligence.

 

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Section 9.10 WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR
RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
Section 9.11 Indemnification. Borrower agrees to protect, indemnify, defend and
hold harmless Lender and Ex-Im Bank from and against any and all claims,
damages, losses, liabilities, costs or expenses (including, without limitation,
attorneys’ fees AND ANY SUCH CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS OR
EXPENSES INCURRED BY REASON OF THE LENDER’S OR EX-IM BANK’S OWN NEGLIGENCE OR
STRICT LIABILITY) whatsoever which Lender and Ex-Im Bank may, at any time,
sustain or incur by reason of or in consequence of or arising out of extending
the Loan to Borrower, the making or incurring of Credit Accommodations, or the
issuance of a guaranty of Borrower’s Obligations, as the case may be; it being
the intention of the parties that this Agreement shall be construed and applied
to protect, indemnify, defend and hold harmless Lender and Ex-Im Bank against
any and all risks involved in the transactions contemplated by this Agreement,
the Waiver Letter and the other Financing Documents, all of which risks are
hereby assumed by Borrower. The provisions of this Section shall survive the
expiration or termination of this Agreement, the Waiver Letter, the other
Financing Documents, and the payment and performance of Borrower’s Obligations.
Section 9.12 Authorization for Direct Payments (ACH Debits). To effectuate any
payment due under this Agreement, the Note or any other Financing Document,
Borrower hereby authorizes Lender to initiate debit entries to any deposit
account of Borrower maintained with Lender and to debit the same to such
account. This authorization to initiate debit entries shall remain in full force
and effect until Lender has received written notification of its termination in
such time and in such manner as to afford Lender a reasonable opportunity to act
on it. Borrower acknowledges (a) that such debit entries may cause an overdraft
of any such account which may result in Lender’s refusal to honor items drawn on
any such account until adequate deposits are made to any such account; (b) that
Lender is under no duty or obligation to initiate any debit entry for any
purpose; and (c) that if a debit is not made because any such account does not
have a sufficient available balance, or otherwise, the payments may be late or
past due.
Section 9.13 No Partnership. Nothing contained in this Agreement shall be
construed in a manner to create any relationship among Borrower, Lender and
Ex-Im Bank other than the relationship of borrower, lender and credit
enhancement provider, and Borrower, Lender and Ex-Im Bank shall not be
considered partners or co-venturers for any purpose on account of this
Agreement.
Section 9.14 Controlling Agreement. Borrower acknowledges and agrees that
(a) the Borrower Agreement contains additional representations, terms, covenants
and conditions related to Borrower and the Loan, and (b) as between Lender and
Borrower this Agreement and the Borrower Agreement together govern the
establishment of the Loan as a Loan Facility guaranteed pursuant to the Ex-Im
Bank Guarantee and the making and incurring of Credit Accommodations under the
Loan. In the event any of the representations, terms, covenants or conditions
contained in this Agreement conflict with those contained in the Borrower
Agreement, then as between Lender and Borrower, the more stringent provisions of
each with respect to Borrower shall govern and prevail.

 

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Section 9.15 USA PATRIOT ACT NOTIFICATION. The following notification is
provided to Borrowers pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services product.
What this means for Borrowers: When any Borrower opens an account, if any
Borrower is an individual Lender will ask for such Borrower’s name, taxpayer
identification number, residential address, date of birth, and other information
that will allow Lender to identify such Borrower, and if any Borrower is not an
individual Lender will ask for such Borrower’s name, taxpayer identification
number, business address, and other information that will allow Lender to
identify such Borrower. Lender may also ask, if any Borrower is an individual to
see such Borrower’s driver’s license or other identifying documents, and if any
Borrower is not an individual to see such Borrower’s legal organizational
documents or other identifying documents.
Section 9.16 Waiver of Trial by Jury. EACH OF BORROWER AND LENDER HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE), TO
WHICH BORROWER AND LENDER MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING
OR RELATED TO THIS AGREEMENT, THE WAIVER LETTER OR ANY OF THE OTHER FINANCING
DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS
WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH OF BORROWER AND
LENDER, AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY PERSON TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS THAT IT
HAS HAD THE OPPORTUNITY TO BE REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE
FINANCING HEREUNDER.
Section 9.17 Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity, however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all
other respect shall remain valid and enforceable.

 

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Section 9.18 Rules of Construction. For purposes of this Agreement, the
following additional rules of construction shall apply, unless specifically
indicated to the contrary: (a) wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter; (b) the term “or” is
not exclusive; (c) the term “including” (or any form thereof) shall not be
limiting or exclusive; (d) all references to statutes and related regulations
shall include any amendments of same and any successor statutes and regulations;
(e) the words “this Agreement”, “herein”, “hereof”, “hereunder” or other words
of similar import refer to this Agreement as a whole including the exhibits
hereto as the same may be amended, modified or supplemented; (f) all references
in this Agreement to sections, subsections, paragraphs and exhibits shall refer
to the corresponding sections, subsections, paragraphs and exhibits of or to
this Agreement; and (g) all references to any instruments or agreements,
including references to the Waiver Letter or any of the Financing Documents,
shall include any and all modifications, amendments and supplements thereto and
any and all restatements, extensions or renewals thereof to the extent permitted
under this Agreement.
Section 9.19 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document. Signature pages may be detached
from the counterparts to a single copy of this Agreement to physically form one
document.
Section 9.20 Time is of the Essence. Time is of the essence in the performance
of this Agreement.
Section 9.21 Waiver. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender’s right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender, shall constitute a waiver of any of
Lender’s rights or of any obligations of Borrower as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing consent
in subsequent instances where such consent is required, and in all cases such
consent may be granted or withheld in the sole discretion of Lender.
Section 9.22 Usury not Intended. Borrower and Lender intend to conform strictly
to applicable usury laws. Therefore, the total amount of interest (as defined
under applicable law) contracted for, charged or collected under this Agreement
or any other Loan Document will never exceed the Highest Lawful Rate. If Lender
contracts for, charges or receives any excess interest, it will be deemed a
mistake. Lender will automatically reform the Loan Document or charge to conform
to applicable law, and if excess interest has been received, Lender will either
refund the excess to Borrower or credit the excess on any unpaid principal
amount of the Note or any other Loan Document. All amounts constituting interest
will be spread throughout the full term of the Loan Document or applicable Note
in determining whether interest exceeds lawful amounts.

 

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Section 9.23 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE FINANCING
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Remainder of this page intentionally left blank]

 

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          EXECUTED as of the date first above written.    
 
        BORROWER:    
 
        FUELCELL ENERGY, INC.    
 
       
By:
  /s/ Joseph G. Mahler    
Name:
 
 
Joseph G. Mahler    
Title:
 
 
Sr. Vice President & CFO    
 
 
 
   
 
        LENDER:    
 
        JPMORGAN CHASE BANK, N.A.    
 
       
By:
  /s/ James P. Murphy    
Name:
 
 
James P. Murphy    
Title:
 
 
Authorized Signer    
 
 
 
   
 
        JPMORGAN CHASE BANK, N.A. — GLOBAL TRADE SERVICES    
 
       
By:
  /s/ Randall Mascorro    
Name:
 
 
Randall Mascorro    
Title:
  Vice President    

[Signature Page To Export Loan Agreement]

 

 

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EXHIBIT A
Export-Import Bank of the United States
Working Capital Guarantee Program
Borrower Agreement
Ex-Im Bank 12/31/05

 

 

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TABLE OF CONTENTS

         
ARTICLE I DEFINITIONS
    1    
1.01 Definition of Terms
    1  
1.02 Rules of Construction
    14  
1.03 Incorporation of Recitals
    15    
ARTICLE II OBLIGATIONS OF BORROWER
    15  
2.01 Use of Credit Accommodations
    15  
2.02 Security Interests
    15  
2.03 Loan Documents and Loan Authorization Agreement
    16  
2.04 Export-Related Borrowing Base Certificates and Export Orders
    16  
2.05 Schedules, Reports and Other Statements
    16  
2.06 Exclusions from the Export-Related Borrowing Base
    16  
2.07 Borrowings and Reborrowings
    17  
2.08 Repayment Terms
    17  
2.09 Financial Statements
    17  
2.10 Additional Security or Payment
    17  
2.11 Continued Security Interest
    18  
2.12 Inspection of Collateral and Facilities
    18  
2.13 General Intangibles
    19  
2.14 Economic Impact Approval
    19  
2.15 Indirect Exports
    20  
2.16 Overseas Inventory and Accounts Receivable
    20  
2.17 Country Limitation Schedule
    21  
2.18 Notice of Certain Event
    21  
2.19 Insurance
    22  
2.20 Taxes
    22  
2.21 Compliance with Laws
    22  
2.22 Negative Covenants
    22  
2.23 Cross Default
    22  
2.24 Munitions List
    22  
2.25 Suspension and Debarment, etc
    23  

Ex-Im Bank 12/31/05

 

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ARTICLE III RIGHTS AND REMEDIES
    23  
3.01 Indemnification
    23  
3.02 Liens
    23    
ARTICLE IV MISCELLANEOUS
    24  
4.01 Governing Law
    24  
4.02 Notification
    24  
4.03 Partial Invalidity
    24  
4.04 Waiver of Jury Trial
    24  
4.05 Consequential Damages
    24  

Ex-Im Bank 12/31/05

 

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Export-Import Bank of the United States
Working Capital Guarantee Program
Borrower Agreement
THIS BORROWER AGREEMENT (this “Agreement”) is made and entered into by the
entity identified as Borrower on the signature page hereof (“Borrower”) in favor
of the Export-Import Bank of the United States (“Ex-Im Bank”) and the
institution identified as Lender on the signature page hereof (“Lender”).
RECITALS
Borrower has requested that Lender establish a Loan Facility in favor of
Borrower for the purposes of providing Borrower with working capital to finance
the manufacture, production or purchase and subsequent export sale of Items.
Lender and Borrower expect that Ex-Im Bank will provide a guarantee to Lender
regarding this Loan Facility subject to the terms and conditions of the Master
Guarantee Agreement, a Loan Authorization Agreement, and to the extent
applicable, the Delegated Authority Letter Agreement or Fast Track Lender
Agreement.
Lender and Ex-Im Bank have requested that Borrower execute this Agreement as a
condition precedent to Lender establishing the Loan Facility and Ex-Im Bank
providing the guarantee.
NOW, THEREFORE, Borrower hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.01 Definition of Terms. As used in this Agreement, including the Recitals to
this Agreement and the Loan Authorization Agreement, the following terms shall
have the following meanings:
“Accounts Receivable” shall mean all of Borrower’s now owned or hereafter
acquired (a) “accounts” (as such term is defined in the UCC), other receivables,
book debts and other forms of obligations, whether arising out of goods sold or
services rendered or from any other transaction; (b) rights in, to and under all
purchase orders or receipts for goods or services; (c) rights to any goods
represented or purported to be represented by any of the foregoing (including
unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods); (d) moneys due
or to become due to such Borrower under all purchase orders and contracts (which
includes Export Orders) for the sale of goods or the performance of services or
both by Borrower (whether or not yet earned by performance on the part of
Borrower), including the proceeds of the foregoing; (e) any notes, drafts,
letters of credit, insurance proceeds or other instruments, documents and
writings evidencing or supporting the foregoing; and (f) all collateral security
and guarantees of any kind given by any other Person with respect to any of the
foregoing.
Ex-Im Bank 12/31/05

 

 

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“Accounts Receivable Aging Report” shall mean a report detailing the
Export-Related Accounts Receivable and Export-Related Overseas Accounts
Receivable for a Loan Facility, and the applicable terms for the relevant time
period; in the case of Indirect Exports, such report shall indicate the portion
of such Accounts Receivables corresponding to Indirect Exports.
“Advance Rate” shall mean, with respect to a Loan Facility, the rate specified
in Section 5.C. of the Loan Authorization Agreement for each category of Primary
Collateral except for Export-Related General Intangibles and Other Collateral.
Unless otherwise set forth in writing by Ex-Im Bank, in no event shall the
Advance Rate exceed (i) ninety percent (90%) for Eligible Export-Related
Accounts Receivable, (ii) seventy five percent (75%) for Eligible Export-Related
Inventory, (iii) seventy percent (70%) for Eligible Export-Related Overseas
Accounts Receivable or (iv) sixty percent (60%) for Eligible Export-Related
Overseas Inventory and (v) twenty five percent (25%) for Retainage Accounts
Receivable.
“Affiliated Foreign Person” shall have the meaning set forth in Section 2.15.
“Business Day” shall mean any day on which the Federal Reserve Bank of New York
is open for business.
“Buyer” shall mean a Person that has entered into one or more Export Orders with
Borrower or who is an obligor on Export-Related Accounts Receivable or
Export-Related Overseas Accounts Receivable.
“Capital Good” shall mean a capital good (e.g., manufacturing equipment,
licensing agreements) that will establish or expand foreign production capacity
of an exportable good.
“Collateral” shall mean all real and personal property and interest in real and
personal property in or upon which Lender has been, or shall be, granted a Lien
as security for the payment of all the Loan Facility Obligations and all
products and proceeds (cash and non-cash) thereof.
“Commercial Letters of Credit” shall mean those letters of credit subject to the
UCP payable in Dollars and issued or caused to be issued by Lender on behalf of
Borrower under a Loan Facility for the benefit of a supplier(s) of Borrower in
connection with Borrower’s purchase of goods or services from the supplier in
support of the export of the Items.
“Country Limitation Schedule” shall mean the schedule published from time to
time by Ex-Im Bank setting forth on a country by country basis whether and under
what conditions Ex-Im Bank will provide coverage for the financing of export
transactions to countries listed therein.
“Credit Accommodation Amount” shall mean, the sum of (a) the aggregate
outstanding amount of Disbursements and (b) the aggregate outstanding Letter of
Credit Obligations, which sum may not exceed the Maximum Amount.
“Credit Accommodations” shall mean, collectively, Disbursements and Letter of
Credit Obligations.

 

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“Debarment Regulations” shall mean, collectively, (a) the Governmentwide
Debarment and Suspension (Nonprocurement) regulations (Common Rule), 53 Fed.
Reg. 19204 (May 26, 1988), (b) Subpart 9.4 (Debarment, Suspension, and
Ineligibility) of the Federal Acquisition Regulations, 48 C.F.R. 9.400-9.409 and
(c) the revised Governmentwide Debarment and Suspension (Nonprocurement)
regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995).
“Delegated Authority Letter Agreement” shall mean the Delegated Authority Letter
Agreement, if any, between Ex-Im Bank and Lender.
“Disbursement” shall mean, collectively, (a) an advance of a working capital
loan from Lender to Borrower under the Loan Facility, and (b) an advance to fund
a drawing under a Letter of Credit issued or caused to be issued by Lender for
the account of Borrower under the Loan Facility.
“Dollars” or “$” shall mean the lawful currency of the United States.
“Economic Impact Approval” shall mean a written approval issued by Ex-Im Bank
stating the conditions under which a Capital Good may be included as an Item in
a Loan Facility consistent with Ex-Im Bank’s economic impact procedures (or
other mechanism for making this determination that Ex-Im Bank notifies Lender of
in writing).
“Economic Impact Certification” shall have the meaning set forth in
Section 2.14(b).
“Effective Date” shall mean the date on which (a) all of the Loan Documents have
been executed by Lender, Borrower and, if applicable, Ex-Im Bank and (b) all of
the conditions to the making of the initial Credit Accommodations under the Loan
Documents or any amendments thereto have been satisfied.
“Eligible Export-Related Accounts Receivable” shall mean Export-Related Accounts
Receivable which are acceptable to Lender and which are deemed to be eligible
pursuant to the Loan Documents, but in no event shall Eligible Export-Related
Accounts Receivable include any Account Receivable:
(a) that does not arise from the sale of Items in the ordinary course of
Borrower’s business;
(b) that is not subject to a valid, perfected first priority Lien in favor of
Lender;
(c) as to which any covenant, representation or warranty contained in the Loan
Documents with respect to such Account Receivable has been breached;
(d) that is not owned by Borrower or is subject to any right, claim or interest
of another Person other than the Lien in favor of Lender;
(e) with respect to which an invoice has not been sent;
(f) that arises from the sale of defense articles or defense services;

 

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(g) that arises from the sale of Items to be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment, reprocessing,
research or heavy water production facilities unless with Ex-Im Bank’s prior
written consent;
(h) that is due and payable from a Buyer located in a country with which Ex-Im
Bank is prohibited from doing business as designated in the Country Limitation
Schedule;
(i) that does not comply with the requirements of the Country Limitation
Schedule;
(j) that is due and payable more than one hundred eighty (180) days from the
date of the invoice;
(k) that is not paid within sixty (60) calendar days from its original due date,
unless it is insured through Ex-Im Bank export credit insurance for
comprehensive commercial and political risk, or through Ex-Im Bank approved
private insurers for comparable coverage, in which case it is not paid within
ninety (90) calendar days from its due date;
(l) of a Buyer for whom fifty percent (50%) or more of the Accounts Receivable
of such Buyer do not satisfy the requirements of subclauses (j) and (k) above;
(m) that arises from a sale of goods to or performance of services for an
employee of Borrower, a stockholder of Borrower, a subsidiary of Borrower, a
Person with a controlling interest in Borrower or a Person which shares common
controlling ownership with Borrower;
(n) that is backed by a letter of credit unless the Items covered by the subject
letter of credit have been shipped;
(o) that Lender or Ex-Im Bank, in its reasonable judgment, deems uncollectible
for any reason;
(p) that is due and payable in a currency other than Dollars, except as may be
approved in writing by Ex-Im Bank;
(q) that is due and payable from a military Buyer, except as may be approved in
writing by Ex-Im Bank;
(r) that does not comply with the terms of sale set forth in Section 7 of the
Loan Authorization Agreement;
(s) that is due and payable from a Buyer who (i) applies for, suffers, or
consents to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property or calls a meeting of its creditors, (ii) admits in writing its
inability, or is generally unable, to pay its debts as they become due or ceases
operations of its present business, (iii) makes a general assignment for the
benefit of creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as bankrupt
or insolvent, (vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails to have
dismissed, any petition which is filed against it in any involuntary case under
such bankruptcy laws, or (viii) takes any action for the purpose of effecting
any of the foregoing;

 

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(t) that arises from a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is evidenced by
chattel paper;
(u) for which the Items giving rise to such Accounts Receivable have not been
shipped to the Buyer or when the Items are services, such services have not been
performed or when the Export Order specifies a timing for invoicing the Items
other than shipment or performance and the Items have not been invoiced in
accordance with such terms of the Export Order, or the Accounts Receivable
otherwise do not represent a final sale;
(v) that is subject to any offset, deduction, defense, dispute, or counterclaim
or the Buyer is also a creditor or supplier of Borrower or the Account
Receivable is contingent in any respect or for any reason;
(w) for which Borrower has made any agreement with the Buyer for any deduction
therefrom, except for discounts or allowances made in the ordinary course of
business for prompt payment, all of which discounts or allowances are reflected
in the calculation of the face value of each respective invoice related thereto;
(x) for which any of the Items giving rise to such Account Receivable have been
returned, rejected or repossessed;
(y) that is included as an eligible receivable under any other credit facility
to which Borrower is a party;
(z) any of the Items giving rise to such Accounts Receivable are Capital Goods,
unless the transaction is in accordance with Section 2.14;
(aa) that is due and payable from a Buyer that is, or is located in, the United
States; provided however, that this subsection (aa) shall not preclude an
Export-Related Accounts Receivable arising from the sale of Items to foreign
contractors or subcontractors providing services to a United States Embassy or
the United States Military located overseas from being deemed an Eligible
Export-Related Accounts Receivable; or
(bb) that arises from the sale of Items that do not meet the U.S. Content
requirements in accordance with Section 2.01(b)(ii).
“Eligible Export-Related Inventory” shall mean Export-Related Inventory which is
acceptable to Lender and which is deemed to be eligible pursuant to the Loan
Documents, but in no event shall Eligible Export-Related Inventory include any
Inventory:
(a) that is not subject to a valid, perfected first priority Lien in favor of
Lender;
(b) that is located at an address that has not been disclosed to Lender in
writing;

 

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(c) that is placed by Borrower on consignment or held by Borrower on consignment
from another Person;
(d) that is in the possession of a processor or bailee, or located on premises
leased or subleased to Borrower, or on premises subject to a mortgage in favor
of a Person other than Lender, unless such processor or bailee or mortgagee or
the lessor or sublessor of such premises, as the case may be, has executed and
delivered all documentation which Lender shall require to evidence the
subordination or other limitation or extinguishment of such Person’s rights with
respect to such Inventory and Lender’s right to gain access thereto;
(e) that is produced in violation of the Fair Labor Standards Act or subject to
the “hot goods” provisions contained in 29 U.S.C.§215 or any successor statute
or section;
(f) as to which any covenant, representation or warranty with respect to such
Inventory contained in the Loan Documents has been breached;
(g) that is not located in the United States unless expressly permitted by
Lender, on terms acceptable to Lender;
(h) that is an Item or is to be incorporated into Items that do not meet U.S.
Content requirements in accordance with Section 2.01(b)(ii);
(i) that is demonstration Inventory;
(j) that consists of proprietary software (i.e. software designed solely for
Borrower’s internal use and not intended for resale);
(k) that is damaged, obsolete, returned, defective, recalled or unfit for
further processing;
(l) that has been previously exported from the United States;
(m) that constitutes, or will be incorporated into Items that constitute,
defense articles or defense services;
(n) that is an Item or will be incorporated into Items that will be used in the
construction, alteration, operation or maintenance of nuclear power, enrichment,
reprocessing, research or heavy water production facilities unless with Ex-Im
Bank’s prior written consent;
(o) that is an Item or is to be incorporated into Items destined for shipment to
a country as to which Ex-Im Bank is prohibited from doing business as designated
in the Country Limitation Schedule;
(p) that is an Item or is to be incorporated into Items destined for shipment to
a Buyer located in a country in which Ex-Im Bank coverage is not available for
commercial reasons as designated in the Country Limitation Schedule, unless and
only to the extent that such Items are to be sold to such country on terms of a
letter of credit confirmed by a bank acceptable to Ex-Im Bank;

 

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(q) that constitutes, or is to be incorporated into, Items whose sale would
result in an Accounts Receivable which would not be an Eligible Export-Related
Accounts Receivable;
(r) that is included as eligible inventory under any other credit facility to
which Borrower is a party; or
(s) that is, or is to be incorporated into, an Item that is a Capital Good,
unless the transaction is in accordance with Section 2.14.
“Eligible Export-Related Overseas Accounts Receivable” shall mean Export-Related
Overseas Accounts Receivable which are acceptable to Lender and which are deemed
to be eligible pursuant to the Loan Documents but in no event shall include the
Accounts Receivable (a) through (bb) excluded from the definition of Eligible
Export-Related Accounts Receivable.
“Eligible Export-Related Overseas Inventory” shall mean Export-Related Overseas
Inventory which is acceptable to Lender and which is deemed to be eligible
pursuant to the Loan Documents, but in no event shall include the Inventory
(a) through (r) excluded from the definition of Eligible Export-Related
Inventory.
“Eligible Person” shall mean a sole proprietorship, partnership, limited
liability partnership, corporation or limited liability company which (a) is
domiciled, organized or formed, as the case may be, in the United States,
whether or not such entity is owned by a foreign national or foreign entity;
(b) is in good standing in the state of its formation or otherwise authorized to
conduct business in the United States; (c) is not currently suspended or
debarred from doing business with the United States government or any
instrumentality, division, agency or department thereof; (d) exports or plans to
export Items; (e) operates and has operated as a going concern for at least one
(1) year; (f) has a positive tangible net worth determined in accordance with
GAAP; and (g) has revenue generating operations relating to its core business
activities for at least one year. An Affiliated Foreign Person that meets all of
the requirements of the foregoing definition of Eligible Person other than
subclause (a) thereof shall be deemed to be an Eligible Person
“ERISA” shall mean the Employee Retirement Income Security Act of 1974 and the
rules and regulations promulgated thereunder.
“Export Order” shall mean a documented purchase order or contract evidencing a
Buyer’s agreement to purchase the Items from Borrower for export from the United
States, which documentation shall include written information that is necessary
to confirm such purchase order or contract, including identification of the
Items, the name of the Buyer, the country of destination, contact information
for the Buyer and the total amount of the purchase order or contract; in the
case of Indirect Exports, such documentation shall further include a copy of the
written purchase order or contract from a foreign purchaser or other
documentation clearly evidencing a foreign purchaser’s agreement to purchase the
Items.
“Export-Related Accounts Receivable” shall mean those Accounts Receivable
arising from the sale of Items which are due and payable to Borrower in the
United States.

 

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“Export-Related Accounts Receivable Value” shall mean, at the date of
determination thereof, the aggregate face amount of Eligible Export-Related
Accounts Receivable less taxes, discounts, credits, allowances and Retainages,
except to the extent otherwise permitted by Ex-Im Bank in writing.
“Export-Related Borrowing Base” shall mean, at the date of determination
thereof, the sum of (a) (if Lender elects to include) the Export-Related
Inventory Value or Export-Related Historical Inventory Value multiplied by the
Advance Rate applicable to Eligible Export-Related Inventory set forth in
Section 5.B.(1.) of the Loan Authorization Agreement, plus (b) the
Export-Related Accounts Receivable Value multiplied by the Advance Rate
applicable to Eligible Export-Related Accounts Receivable set forth in
Section 5.B.(2.) of the Loan Authorization Agreement, plus (c) if permitted by
Ex-Im Bank in writing, the Retainage Value multiplied by the Advance Rate
applicable to Retainages set forth in Section 5.B.(3.) of the Loan Authorization
Agreement, plus (d) the Other Assets set forth in Section 5.B.(4.) of the Loan
Authorization Agreement multiplied by the Advance Rate agreed to in writing by
Ex-Im Bank, plus (e) if permitted by Ex-Im Bank in writing, the Export-Related
Overseas Accounts Receivable Value multiplied by the Advance Rate applicable to
Eligible Export-Related Overseas Accounts Receivable set forth in
Section 5.B.(5.) of the Loan Authorization Agreement, plus (f) if permitted by
Ex-Im Bank in writing, the Export-Related Overseas Inventory Value multiplied by
the Advance Rate applicable to Eligible Export-Related Overseas Inventory set
forth in Section 5.B.(6.) of the Loan Authorization Agreement, less (g) the
amounts required to be reserved pursuant to Sections 4.12 and 4.13 of this
Agreement for each outstanding Letter of Credit, less (h) such reserves and in
such amounts deemed necessary and proper by Lender from time to time.
“Export-Related Borrowing Base Certificate” shall mean a certificate in the form
provided or approved by Lender, executed by Borrower and delivered to Lender
pursuant to the Loan Documents detailing the Export-Related Borrowing Base
supporting the Credit Accommodations which reflects, to the extent included in
the Export-Related Borrowing Base, Export-Related Accounts Receivable, Eligible
Export-Related Accounts Receivable, Export-Related Inventory, Eligible
Export-Related Inventory, Export-Related Overseas Accounts Receivable, Eligible
Export-Related Accounts Receivable, Export-Related Overseas Inventory and
Eligible Export-Related Overseas Inventory balances that have been reconciled
with Borrower’s general ledger, Accounts Receivable Aging Report and Inventory
schedule.
“Export-Related General Intangibles” shall mean the Pro Rata Percentage of
General Intangibles determined as of the earlier of: (i) the date such General
Intangibles are liquidated and (ii) the date Borrower fails to pay when due any
outstanding amount of principal or accrued interest payable under the Loan
Documents that becomes the basis for a Payment Default on which a Claim is
filed.
“Export-Related Historical Inventory Value” shall mean with respect to a
Borrower, the relevant Export-Related Sales Ratio multiplied by the lowest of
(i) the cost of such Borrower’s Inventory as determined in accordance with GAAP,
or (ii) the market value of such Borrower’s Inventory as determined in
accordance with GAAP or (iii) the appraised or orderly liquidation value of such
Borrower’s Inventory, if Lender has loans and financial accommodations to such
Borrower for which it conducts (or contracts for the performance of) such an
appraised or orderly liquidation value.

 

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“Export-Related Inventory” shall mean the Inventory of Borrower located in the
United States that has been purchased, manufactured or otherwise acquired by
Borrower for sale or resale as Items, or to be incorporated into Items to be
sold or resold pursuant to Export Orders.
“Export-Related Inventory Value” shall mean, at the date of determination
thereof, the lowest of (i) the cost of Eligible Exported-Related Inventory as
determined in accordance with GAAP, or (ii) the market value of Eligible
Export-Related Inventory as determined in accordance with GAAP or (iii) the
lower of the appraised market value or orderly liquidation value of the Eligible
Export-Related Inventory, if Lender has other loans and financial accommodations
to a Borrower for which it conducts (or contracts for the performance of) such
an appraised or orderly liquidation value.
“Export-Related Overseas Accounts Receivable” shall mean those Accounts
Receivable arising from the sale of Items which are due and payable outside of
the United States either to a Borrower or an Affiliated Foreign Person.
“Export-Related Overseas Accounts Receivable Value” shall mean, with respect to
a Loan Facility, at the date of determination thereof, the aggregate face amount
of Eligible Export-Related Overseas Accounts Receivable less taxes, discounts,
credits, allowances and Retainages, except to the extent otherwise permitted by
Ex-Im Bank in writing.
“Export-Related Overseas Inventory” shall mean the Inventory of Borrower located
outside of the United States that has been purchased, manufactured or otherwise
acquired by such Borrower for sale or resale as Items, or to be incorporated
into Items to be sold or resold pursuant to Export Orders.
“Export-Related Overseas Inventory Value” shall mean, at the date of
determination thereof, the lowest of (i) the cost of Eligible Export-Related
Overseas Inventory as determined in accordance with GAAP, (ii) the market value
of Eligible Export-Related Overseas Inventory as determined in accordance with
GAAP or (iii) the appraised or orderly liquidation value of the Eligible
Export-Related Overseas Inventory, if Lender has other loans and financial
accommodations to Borrower or an Affiliated Foreign Person for which it conducts
(or contracts for the performance of) such a appraised or orderly liquidation.
“Export-Related Sales Ratio” shall mean with respect to a Borrower, the
percentage of such Borrower’s total sales revenue derived from the sale of
Eligible Export-Related Inventory over a rolling twelve-month period ending no
more than ninety (90) days prior to the date of the relevant Export-Related
Borrowing Base Certificate
“Extension” shall mean, with respect to a Loan Facility, an amendment to the
Loan Authorization Agreement extending the Final Disbursement Date on the same
terms and conditions as the Loan Facility for an aggregate period not to exceed
one hundred and twenty (120) days beyond the original Final Disbursement Date,
either as agreed to in writing by Ex-Im Bank or, in the case of Delegated
Authority, as notified by Lender to Ex-Im Bank pursuant to its authority under
the Delegated Authority Letter Agreement.

 

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“Fast Track Lender Agreement” shall mean the Fast Track Lender Agreement, if
any, between Ex-Im Bank and Lender.
“Final Disbursement Date” shall mean the last date on which Lender may make a
Disbursement set forth in Section 10 of the Loan Authorization Agreement
(including as amended by an Extension) or, if such date is not a Business Day,
the next succeeding Business Day; provided, however, to the extent that Lender
has not received cash collateral in the amount of the Letter of Credit
Obligations or an equivalent full indemnity from Borrower or Guarantor, as
applicable, with respect to Letter of Credit Obligations outstanding on the
Final Disbursement Date, the Final Disbursement Date with respect to an advance
to fund a drawing under such Letter of Credit shall be no later than thirty
(30) days after any such drawing which may be no later than the expiry date of
the Letter of Credit related thereto.
“GAAP” shall mean the generally accepted accounting principles issued in the
United States.
“General Intangibles” shall mean all intellectual property and other “general
intangibles” (as such term is defined in the UCC).
“Guarantor” shall mean any Person which is identified in Section 3 of the Loan
Authorization Agreement who shall guarantee (jointly and severally if more than
one) the payment and performance of all or a portion of the Loan Facility
Obligations.
“Guarantee Agreement” shall mean a valid and enforceable agreement of guarantee
executed by each Guarantor in favor of Lender.
“Indirect Exports” shall mean finished goods or services that are sold by a
Borrower to a Buyer located in the United States, are intended for export from
the United States, and are identified in Section 4.A.(2.) of the Loan
Authorization Agreement.
“Inventory” shall mean all “inventory” (as such term is defined in the UCC), now
or hereafter owned or acquired by Borrower, wherever located, including all
inventory, merchandise, goods and other personal property which are held by or
on behalf of Borrower for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work in process
or materials used or consumed or to be used or consumed in Borrower’s business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including other supplies.
“ISP” shall mean the International Standby Practices-ISP98, International
Chamber of Commerce Publication No. 590 and any amendments and revisions
thereof.
“Issuing Bank” shall mean the bank that issues a Letter of Credit, which bank is
Lender itself or a bank that Lender has caused to issue a Letter of Credit by
way of a guarantee or reimbursement obligation.
“Items” shall mean the finished goods or services which are intended for export
from the United States, either directly or as an Indirect Export, meet the U.S.
Content requirements in accordance with Section 2.01(b)(ii) of this Agreement
and are specified in Section 4.A. of the Loan Authorization Agreement.

 

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“Letter of Credit” shall mean a Commercial Letter of Credit or a Standby Letter
of Credit.
“Letter of Credit Obligations” shall mean all undrawn amounts of outstanding
obligations incurred by Lender, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance or guarantee by
Lender or Issuing Bank of Letters of Credit.
“Lien” shall mean any mortgage, security deed or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, security title, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement perfecting a
security interest under the UCC or comparable law of any jurisdiction) by which
property is encumbered or otherwise charged.
“Loan Agreement” shall mean a valid and enforceable agreement between Lender and
a Borrower setting forth, with respect to each Loan Facility, the terms and
conditions of such Loan Facility.
“Loan Authorization Agreement” shall mean, as applicable, the duly executed Loan
Authorization Agreement, Fast Track Loan Authorization Agreement, or the Loan
Authorization Notice, setting forth certain terms and conditions of each Loan
Facility, a copy of which is attached hereto as Annex A.
“Loan Authorization Notice” shall mean the Loan Authorization Notice executed by
Lender and delivered to Ex-Im Bank in accordance with the Delegated Authority
Letter Agreement setting forth the terms and conditions of each Loan Facility.
“Loan Documents” shall mean the Loan Authorization Agreement, the Loan
Agreement, this Agreement, each promissory note (if applicable), each Guarantee
Agreement, and all other instruments, agreements and documents now or hereafter
executed by the applicable Borrower, any Guarantor, Lender or Ex-Im Bank
evidencing, securing, guaranteeing or otherwise relating to the Loan Facility or
any Credit Accommodations made thereunder.
“Loan Facility” shall mean the Revolving Loan Facility, the Transaction Specific
Loan Facility or the Transaction Specific Revolving Loan Facility established by
Lender in favor of Borrower under the Loan Documents.
“Loan Facility Obligations” shall mean all loans, advances, debts, expenses,
fees, liabilities, and obligations, including any accrued interest thereon, for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or amounts are
liquidated or determinable) owing by Borrower to Lender, of any kind or nature,
present or future, arising in connection with the Loan Facility.

 

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“Loan Facility Term” shall mean, with respect to a Loan Facility, the number of
months or portion thereof from the Effective Date to the Final Disbursement Date
as set forth in the Loan Authorization Agreement as amended.
“Master Guarantee Agreement” shall mean the Master Guarantee Agreement between
Ex-Im Bank and Lender, as amended, modified, supplemented and restated from time
to time.
“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Borrower or any Guarantor, (b) any Borrower’s ability to pay or perform the Loan
Facility Obligations in accordance with the terms thereof, (c) the Collateral or
Lender’s Liens on the Collateral or the priority of such Lien, or (d) Lender’s
rights and remedies under the Loan Documents.
“Maximum Amount” shall mean the maximum Credit Accommodation Amount that may be
outstanding at any time under each Loan Facility, as specified in Section 5.A.
of the Loan Authorization Agreement.
“Other Assets” shall mean, with respect to a Loan Facility, such other assets of
a Borrower to be included in Primary Collateral, which may include cash and
marketable securities, or such other assets as Ex-Im Bank agrees to in writing,
and disclosed as Primary Collateral in Section 6.A. of the Loan Authorization
Agreement. The applicable Advance Rate (to be multiplied by the Other Asset
Value) shall be as agreed to by Ex-Im Bank in writing case by case by case and
set forth in Section 5.B.(4) of the Loan Authorization Agreement.
“Other Asset Value” shall mean, with respect to a Loan Facility, at the date of
determination thereof, the value of the Other Assets as determined in accordance
with GAAP.
“Other Collateral” shall mean any additional collateral that Lender customarily
would require as security for loan facilities on its own account and risk where
the permitted borrowing level is based principally on a borrowing base derived
from a borrower’s inventory and accounts receivable, but where such additional
collateral does not enter into the borrowing base calculation.
“Permitted Liens” shall mean (a) Liens for taxes, assessments or other
governmental charges or levies not delinquent, or, being contested in good faith
and by appropriate proceedings and with respect to which proper reserves have
been taken by Borrower; provided, that, the Lien shall have no effect on the
priority of the Liens in favor of Lender or the value of the assets in which
Lender has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (b) deposits or pledges securing obligations under worker’s
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) deposits or pledges securing bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of Borrower’s business; (d) judgment Liens that
have been stayed or bonded; (e) mechanics’, workers’, materialmen’s or other
like Liens arising in the ordinary course of Borrower’s business with respect to
obligations which are not due; (f) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided, that, any
such Lien shall not encumber any other property of Borrower; (g) security
interests being terminated concurrently with the execution of the Loan
Documents; and (h) Liens disclosed in Section 6.D. of the Loan Authorization
Agreement, provided that, except as otherwise permitted by Ex-Im Bank in
writing, such Liens in Section 6.D. shall be subordinate to the Liens in favor
of Lender on Primary Collateral.

 

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“Person” shall mean any individual, sole proprietorship, partnership, limited
liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, public benefit
corporation, entity or government (whether national, federal, provincial, state,
county, city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof), and shall include such Person’s successors
and assigns.
“Pro Rata Percentage” shall mean, with respect to a Loan Facility, as of the
date of determination thereof, the principal balance of the Credit
Accommodations outstanding as a percentage of the combined principal balance of
all loans from Lender to such Borrower including the then outstanding principal
balance of the Credit Accommodations plus unfunded amounts under outstanding
Letters of Credit.
“Principals” shall mean any officer, director, owner, partner, key employee, or
other Person with primary management or supervisory responsibilities with
respect to Borrower or any other Person (whether or not an employee) who has
critical influence on or substantive control over the transactions covered by
this Agreement.
“Retainage” shall mean that portion of the purchase price of an Export Order
that a Buyer is not obligated to pay until the end of a specified period of time
following the satisfactory performance under such Export Order.
“Retainage Accounts Receivable” shall mean those portions of Eligible
Export-Related Accounts Receivable or Eligible Export-Related Overseas Accounts
Receivable arising out of a Retainage.
“Retainage Value” shall mean, at the date of determination thereof, the
aggregate face amount of Retainage Accounts Receivable as permitted by Ex-Im
Bank in writing, less taxes, discounts, credits and allowances, except to the
extent otherwise permitted by Ex-Im Bank in writing.
“Revolving Loan Facility” shall mean the credit facility or portion thereof
established by Lender in favor of Borrower for the purpose of providing working
capital in the form of loans and/or Letters of Credit to finance the
manufacture, production or purchase and subsequent export sale of Items pursuant
to Loan Documents under which Credit Accommodations may be made and repaid on a
continuous basis based solely on credit availability on the Export-Related
Borrowing Base during the term of such credit facility
“Special Conditions” shall mean those conditions, if any, set forth in
Section 13 of the Loan Authorization Agreement.
“Specific Export Orders” shall mean those Export Orders specified in
Section 5.D. of the Loan Authorization Agreement as applicable for a Transaction
Specific Revolving Loan Facility or a Transaction Specific Loan Facility.

 

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“Standby Letters of Credit” shall mean those letters of credit subject to the
ISP or UCP issued or caused to be issued by Lender for Borrower’s account that
can be drawn upon by a Buyer only if Borrower fails to perform all of its
obligations with respect to an Export Order.
“Transaction Specific Loan Facility” shall mean a credit facility or a portion
thereof established by Lender in favor of Borrower for the purpose of providing
working capital in the form of loans and/or Letters of Credit to finance the
manufacture, production or purchase and subsequent export sale of Items pursuant
to Loan Documents under which Credit Accommodations are made based solely on
credit availability on the Export-Related Borrowing Base relating to Specific
Export Orders and once such Credit Accommodations are repaid they may not be
reborrowed.
“Transaction Specific Revolving Loan Facility” shall mean a Revolving Credit
Facility established to provide financing of Specific Export Orders.
“UCC” shall mean the Uniform Commercial Code, as the same may be in effect from
time to time in the relevant United States jurisdiction.
“UCP” shall mean the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 and any
amendments and revisions thereof.
“U.S.” or “United States” shall mean the United States of America including any
division or agency thereof (including United States embassies or United States
military bases located overseas), and any United States Territory (including
without limitation, Puerto Rico, Guam or the United States Virgin Islands).
“U.S. Content” shall mean, with respect to any Item, all the costs, including
labor, materials, services and overhead, but not markup or profit margin, which
are of U.S. origin or manufacture, and which are incorporated into an Item in
the United States.
“Warranty” shall mean Borrower’s guarantee to Buyer that the Items will function
as intended during the warranty period set forth in the applicable Export Order.
“Warranty Letter of Credit” shall mean a Standby Letter of Credit which is
issued or caused to be issued by Lender to support the obligations of Borrower
with respect to a Warranty or a Standby Letter of Credit which by its terms
becomes a Warranty Letter of Credit.
1.02 Rules of Construction. For purposes of this Agreement, the following
additional rules of construction shall apply, unless specifically indicated to
the contrary: (a) wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter; (b) the term “or” is not
exclusive; (c) the term “including” (or any form thereof) shall not be limiting
or exclusive; (d) all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations;
(e) the words “this Agreement”, “herein”, “hereof”, “hereunder” or other words
of similar import refer to this Agreement as a whole including the schedules,
exhibits, and annexes hereto as the same may be amended, modified or
supplemented; (f) all references in this Agreement to sections, schedules,
exhibits, and annexes shall refer to the corresponding sections, schedules,
exhibits, and annexes of or to this Agreement; and (g) all references to any
instruments or agreements, including references to any of the Loan Documents,
the Delegated Authority Letter Agreement, or the Fast Track Lender Agreement
shall include any and all modifications, amendments and supplements thereto and
any and all extensions or renewals thereof to the extent permitted under this
Agreement.

 

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1.03 Incorporation of Recitals. The Recitals to this Agreement are incorporated
into and shall constitute a part of this Agreement.
ARTICLE II
OBLIGATIONS OF BORROWER
Until payment in full of all Loan Facility Obligations and termination of the
Loan Documents, Borrower agrees as follows:
2.01 Use of Credit Accommodations. (a) Borrower shall use Credit Accommodations
only for the purpose of enabling Borrower to finance the cost of manufacturing,
producing, purchasing or selling the Items. Borrower may not use any of the
Credit Accommodations for the purpose of: (i) servicing or repaying any of
Borrower’s pre-existing or future indebtedness unrelated to the Loan Facility
unless approved by Ex-Im Bank in writing; (ii) acquiring fixed assets or capital
assets for use in Borrower’s business; (iii) acquiring, equipping or renting
commercial space outside of the United States; (iv) paying the salaries of non
U.S. citizens or non-U.S. permanent residents who are located in offices outside
of the United States; or (v) in connection with a Retainage or Warranty unless
approved by Ex-Im Bank in writing.
(b) In addition, no Credit Accommodation may be used to finance the manufacture,
purchase or sale of any of the following:
(i) Items to be sold to a Buyer located in a country as to which Ex-Im Bank is
prohibited from doing business as designated in the Country Limitation Schedule;
(ii) that part of the cost of the Items which is not U.S. Content unless such
part is not greater than fifty percent (50%) of the cost of the Items and is
incorporated into the Items in the United States;
(iii) defense articles or defense services;
(iv) Capital Goods unless in accordance with Section 2.14 of this Agreement; or
(v) without Ex-Im Bank’s prior written consent, any Items to be used in the
construction, alteration, operation or maintenance of nuclear power, enrichment,
reprocessing, research or heavy water production facilities.
2.02 Security Interests. Borrower agrees to cooperate with Lender in any steps
Lender shall take to file and maintain valid, enforceable and perfected security
interests in the Collateral.

 

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2.03 Loan Documents and Loan Authorization Agreement. (a) This Agreement and
each of the other Loan Documents applicable to Borrower have been duly executed
and delivered on behalf of Borrower, and are and will continue to be legal and
valid obligations of Borrower, enforceable against it in accordance with its
terms.
(b) Borrower shall comply with all of the terms and conditions of this
Agreement, the Loan Authorization Agreement and each of the other Loan Documents
to which it is a party.
(c) Borrower hereby represents and warrants to Lender that Borrower is an
Eligible Person.
2.04 Export-Related Borrowing Base Certificates and Export Orders. (a) In order
to receive Credit Accommodations under the Loan Facility, Borrower shall have
delivered to Lender an Export-Related Borrowing Base Certificate as frequently
as required by Lender but at least within the past month, together with a copy
of the Export Order(s) or, for Revolving Loan Facilities, if permitted by
Lender, a written summary of the Export Orders (when Eligible Export-Related
Inventory and Eligible Overseas Export-Related Inventory are entering the
Export-Related Borrowing Base) against which Borrower is requesting Credit
Accommodations. In addition, so long as there are any Credit Accommodations
outstanding under the Loan Facility, Borrower shall deliver to Lender an
Export-Related Borrowing Base Certificate at least once each month. Lender shall
determine if daily electronic reporting reconciled monthly may substitute for
monthly Export-Related Borrowing Base Certificates. If the Lender requires an
Export-Related Borrowing Base Certificate more frequently, Borrower shall
deliver such Export-Related Borrowing Base Certificate as required by Lender.
(b) If Lender permits summaries of Export Orders, Borrower shall also deliver
promptly to Lender copies of any Export Orders requested by Lender.
2.05 Schedules, Reports and Other Statements. With the delivery of each
Export-Related Borrowing Base Certificate required in Section 2.04 above,
Borrower shall submit to Lender in writing (a) an Inventory schedule for the
preceding month, as applicable, and (b) an Accounts Receivable Aging Report for
the preceding month. Borrower shall also furnish to Lender promptly upon request
such information, reports, contracts, invoices and other data concerning the
Collateral as Lender may from time to time specify.
2.06 Exclusions from the Export-Related Borrowing Base. In determining the
Export-Related Borrowing Base, Borrower shall exclude therefrom Inventory which
are not Eligible Export-Related Inventory or Eligible Export-Related Overseas
Inventory and Accounts Receivable which are not Eligible Export-Related Accounts
Receivable or Eligible Export-Related Overseas Accounts Receivable. Borrower
shall promptly, but in any event within five (5) Business Days, notify Lender
(a) if any then existing Export-Related Inventory or Export-Related Overseas
Inventory no longer constitutes Eligible Export-Related Inventory or Eligible
Export-Related Overseas Inventory, as applicable or (b) of any event or
circumstance which to Borrower’s knowledge would cause Lender to consider any
then existing Export-Related Accounts Receivable or Export-Related Overseas
Accounts Receivable as no longer constituting an Eligible Export-Related
Accounts Receivable or Eligible Export-Related Overseas Accounts Receivable, as
applicable.

 

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2.07 Borrowings and Reborrowings. (a) If the Loan Facility is a Revolving Loan
Facility or Transaction Specific Revolving Loan Facility, provided that Borrower
is not in default under any of the Loan Documents, Borrower may borrow, repay
and reborrow amounts under such Loan Facility up to the credit available on the
current Export-Related Borrowing Base Certificate subject to the terms of this
Agreement and each of the other Loan Documents until the close of business on
the Final Disbursement Date.
(b) If the Loan Facility is a Transaction Specific Loan Facility, provided that
Borrower is not in default under any of the Loan Documents, Borrower may borrow
(but not reborrow) amounts under the Loan Facility up to the credit available on
the current Export-Related Borrowing Base Certificate subject to the terms of
this Agreement and each of the other Loan Documents until the close of business
on the Final Disbursement Date.
2.08 Repayment Terms. (a) The Borrower on a Revolving Loan Facility shall pay in
full the outstanding Loan Facility Obligations no later than the first Business
Day after the Final Disbursement Date unless such Loan Facility is renewed or
extended by Lender consistent with procedures required by Ex-Im Bank.
(b) The Borrower on a Transaction Specific Loan Facility and a Transaction
Specific Revolving Loan Facility shall, within two (2) Business Days of the
receipt thereof, pay to Lender (for application against the outstanding Loan
Facility Obligations) all checks, drafts, cash and other remittances it may
receive in payment or on account of the Export-Related Accounts Receivable,
Export-Related Overseas Accounts Receivable or any other Collateral, in
precisely the form received (except for the endorsement of Borrower where
necessary). Pending such deposit, Borrower shall hold such amounts in trust for
Lender separate and apart and shall not commingle any such items of payment with
any of its other funds or property. Unless a Transaction Specific Loan Facility
or Transaction Specific Revolving Loan Facility is renewed or extended by Lender
consistent with procedures required by Ex-Im Bank, Borrower shall pay in full
all outstanding Loan Facility Obligations no later than the first Business Day
after the Final Disbursement Date, except for Eligible Export-Related Accounts
Receivables and Eligible Export-Related Overseas Accounts Receivable outstanding
as of the Final Disbursement Date and due and payable after such date, for which
the principal and accrued and unpaid interest thereon shall be due and payable
no later than the first Business Day after the date such Accounts Receivable are
due and payable.
2.09 Financial Statements. Borrower shall deliver to Lender the financial
statements required to be delivered by Borrower in accordance with Section 11 of
the Loan Authorization Agreement.
2.10 Additional Security or Payment. (a) Borrower shall at all times ensure that
the Export-Related Borrowing Base equals or exceeds the aggregate outstanding
amount of Disbursements. If informed by Lender or if Borrower otherwise has
actual knowledge that the Export-Related Borrowing Base is at any time less than
the aggregate outstanding amount of Disbursements, Borrower shall, within five
(5) Business Days, either (i) furnish additional Collateral to Lender, in form
and amount satisfactory to Lender and Ex-Im Bank or (ii) pay to Lender an amount
equal to the difference between the aggregate outstanding amount of
Disbursements and the Export-Related Borrowing Base.

 

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(b) For purposes of this Agreement, in determining the Export-Related Borrowing
Base there shall be deducted from the Export-Related Borrowing Base an amount
equal to (i) twenty-five percent (25%) of the undrawn amount of outstanding
Commercial Letters of Credit and Standby Letters of Credit and (ii) one hundred
percent (100%) of the undrawn amount of outstanding Warranty Letters of Credit
less the amount of cash collateral held by Lender to secure Warranty Letters of
Credit.
(c) Unless otherwise approved in writing by Ex-Im Bank, for Revolving Loan
Facilities (other than Transaction Specific Revolving Loan Facilities), Borrower
shall at all times ensure that the sum of the outstanding amount of
Disbursements and the undrawn amount of outstanding Commercial Letters of Credit
that is supported by Eligible Export-Related Inventory or Eligible
Export-Related Overseas Inventory (discounted by the relevant Advance Rate
percentages) in the Export-Related Borrowing Base does not exceed sixty percent
(60%) of the sum of the total outstanding amount of Disbursements and the
undrawn amount of all outstanding Commercial Letters of Credit. If informed by
Lender or if Borrower otherwise has actual knowledge that the sum of the
outstanding amount of Disbursements and the undrawn amount of outstanding
Commercial Letters of Credit that is supported by such Inventory exceeds sixty
percent (60%) of the sum of the total outstanding Disbursements and the undrawn
amount of all outstanding Commercial Letters of Credit, Borrower shall, within
five (5) Business Days, either (i) furnish additional non-Inventory Collateral
to Lender, in form and amount satisfactory to Lender and Ex-Im Bank, or (ii) pay
down the applicable portion of the outstanding Disbursements or (iii) reduce the
undrawn amount of outstanding Commercial Letters of Credit such that the above
described ratio is not exceeded.
(d) If informed by Lender or if Borrower otherwise has actual knowledge that the
conditions of Section 2.16(g) are at any time not being met, Borrower shall,
within five (5) Business Days, either (i) furnish additional Collateral to
Lender that is not Eligible Export-Related Overseas Accounts Receivable or
Eligible Export-Related Overseas Inventory, in form and amount satisfactory to
Lender and Ex-Im Bank, or (ii) remove from the Export-Related Borrowing Base the
portion of Eligible Export-Related Overseas Accounts Receivable or Eligible
Export-Related Overseas Inventory that supports greater than fifty percent (50%)
of the Export-Related Borrowing Base.
2.11 Continued Security Interest. Borrower shall not change (a) its name or
identity in any manner, (b) the location of its principal place of business or
its jurisdiction of organization or formation, (c) the location of any of the
Collateral or (d) the location of any of the books or records related to the
Collateral, in each instance without giving thirty (30) days prior written
notice thereof to Lender and taking all actions deemed necessary or appropriate
by Lender to continuously protect and perfect Lender’s Liens upon the
Collateral.
2.12 Inspection of Collateral and Facilities. (a) Borrower shall permit the
representatives of Lender and Ex-Im Bank to make at any time during normal
business hours inspections of the Collateral and of Borrower’s facilities,
activities, and books and records, and shall cause its officers and employees to
give full cooperation and assistance in connection therewith.

 

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(b) Borrower agrees to facilitate Lender’s conduct of field examinations at
Borrower’s facilities in accordance with the time schedule and content for such
examinations that Lender requests. Such field examinations shall address at a
minimum: (x) the value of the Collateral against which Credit Accommodations may
be provided, (y) the amount, if any, that the aggregate outstanding amount of
Disbursements exceeds the Export-Related Borrowing Base and (z) whether such
Borrower is in material compliance with the terms of each of the Loan Documents.
Such field examinations shall include an inspection and evaluation of the
Export-Related Inventory and Export-Related Overseas Inventory, a book audit of
Export-Related Accounts Receivable and Export-Related Overseas Accounts
Receivable, a review of the Accounts Receivable Aging Reports and a review of
Borrower’s compliance with any Special Conditions. Lenders who opt to use the
Export-Related Historical Inventory Value in the Export-Related Borrowing Base
calculation shall reconcile those numbers against the calculation for the
relevant time periods using the Export-Related Inventory Value. Whenever
Export-Related Accounts Receivable or Export-Related Inventory derived from
Indirect Exports are in the Export-Related Borrowing Base, Lender shall verify
compliance with Section 2.15 herein, including taking a random sampling of
ultimate foreign purchasers.
2.13 General Intangibles. Borrower represents and warrants that it owns, or is
licensed to use, all General Intangibles necessary to conduct its business as
currently conducted except where the failure of Borrower to own or license such
General Intangibles could not reasonably be expected to have a Material Adverse
Effect.
2.14 Economic Impact Approval. (a) For Loan Facilities up to and including $10
million, Borrower acknowledges that Capital Goods may not be included as Items,
and Export-Related Inventory, Export-Related Overseas Inventory, Export-Related
Accounts Receivable and Export-Related Overseas Accounts Receivable in
connection with the sale of such Capital Goods may not be included in the
Export-Related Borrowing Base, if such Capital Goods would enable a foreign
buyer to establish or expand production of a product where, as of the date of
the Economic Impact Certification covering such Item: (i) the Buyer is subject
to a Final Anti-Dumping (AD) or Countervailing Duty (CVD) order, or a Suspension
Agreement arising from a AD or CVD investigation, and such product is
substantially the same as the product that is the subject of the AD/CVD order or
suspension agreement; or (ii) the Buyer is the subject of a Section 201 injury
determination by the International Trade Commission (“ITC”) and such product is
substantially the same as a product that is the subject of the ITC injury
determination. Borrower may consult with Ex-Im Bank regarding the appropriate
application of this Section 2.14(a) and may, at its option, request that Ex-Im
Bank issue an Economic Impact Approval covering any Items listed in Section 4.A.
of the Loan Authorization Agreement. For Loan Facilities over $10 million
involving Items that are Capital Goods, Borrower shall obtain from Ex-Im Bank,
and abide by, an Economic Impact Approval covering all Items listed in
Section 4(A) of the Loan Authorization Agreement.
(b) Borrower shall provide Lender with a certification in the form of Annex B
(an “Economic Impact Certification”) covering the Items stated in Section 4(A)
of the Loan Authorization Agreement prior to Lender including such Items in the
Loan Authorization Agreement. Prior to Lender amending the Loan Authorization
Agreement to include additional Items, Borrower shall provide Lender with an
additional Economic Impact Certification covering such additional Items.

 

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2.15 Indirect Exports. Indirect Exports may be included as Items in a Loan
Facility provided that funds available under such Loan Facility’s Export-Related
Borrowing Base supported by Accounts Receivable and Inventory derived from
Indirect Exports at no time exceed ten percent (10%) of the Maximum Amount of
such Loan Facility, and provided, further that (a) the ultimate foreign buyer
for the Items must be located in a country in which Ex-Im Bank is not legally
prohibited from doing business in accordance with the Country Limitation
Schedule, and (b) the Borrower must make available to Lender verifiable evidence
of intent to export the Indirect Exports from the United States, which evidence
may be contained in the Export Orders and Accounts Receivable Aging Reports and
supporting documents. Lender must obtain written consent from Ex-Im Bank prior
to including funds derived from Indirect Exports in an Export-Related Borrowing
Base above the ten percent (10%) threshold.
2.16 Overseas Inventory and Accounts Receivable. Upon the prior written consent
of Ex-Im Bank, Export-Related Overseas Accounts Receivable and Export-Related
Overseas Inventory of a Borrower or of an Affiliated Foreign Person (as defined
below) may be included in the Export-Related Borrowing Base provided that
conditions required by Ex-Im Bank, including the following, are met:
(a) the Affiliated Foreign Person, if any, has been approved by Ex-Im Bank;
(b) the Affiliated Foreign Person, if any, is a Borrower under the relevant Loan
Facility;
(c) notwithstanding the Maximum Amount of the Loan Facility, all payments due
and payable on such Export-Related Overseas Accounts Receivable are collected
through a cash collateral account under Lender’s control;
(d) as of the Effective Date, or such later date when the Export-Related
Overseas Accounts Receivable and/or Export-Related Overseas Inventory are added
to the Loan Facility, Lender has obtained a valid and enforceable first priority
Lien in the Export-Related Overseas Accounts Receivable and Export-Related
Overseas Inventory, as applicable;
(e) as of the Effective Date, or such later date when the Export-Related
Overseas Accounts Receivable and/or Export-Related Overseas Inventory are added
to the Loan Facility, Lender has obtained a legal opinion confirming the
security interest in the Export-Related Overseas Accounts Receivable and
Export-Related Overseas Inventory;
(f) the Export-Related Overseas Accounts Receivable are due and payable in
United States Dollars or other currency acceptable to Ex-Im Bank; and
(g) at no time may the portion of the Export-Related Borrowing Base derived from
Eligible Export-Related Overseas Accounts Receivable and Eligible Export-Related
Overseas Inventory exceed fifty percent (50%) of the Export-Related Borrowing
Base.
For purposes hereof, an “Affiliated Foreign Person” shall mean a subsidiary or
affiliate of a Borrower on the same Loan Facility, which has duly executed as a
Borrower all of the applicable Loan Documents and any other documents required
by Ex-Im Bank, meets all of the requirements of the definition of Eligible
Person other than subclause (a) thereof and is in good standing in the country
of its formation or otherwise authorized to conduct business in such country.

 

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2.17 Country Limitation Schedule. Unless otherwise informed in writing by Lender
or Ex-Im Bank, Borrower shall be entitled to rely on the last copy of the
Country Limitation Schedule distributed from Lender to Borrower.
2.18 Notice of Certain Events. Borrower shall promptly, but in any event within
five (5) Business Days, notify Lender in writing of the occurrence of any of the
following:
(a) Borrower or any Guarantor (i) applies for, consents to or suffers the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of itself or of all or a substantial part of its
property or calls a meeting of its creditors, (ii) admits in writing its
inability, or is generally unable, to pay its debts as they become due or ceases
operations of its present business, (iii) makes a general assignment for the
benefit of creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as bankrupt
or insolvent, (vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails to have
dismissed within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) takes any action for the
purpose of effecting any of the foregoing;
(b) any Lien in any of the Collateral, granted or intended by the Loan Documents
to be granted to Lender, ceases to be a valid, enforceable, perfected, first
priority Lien (or a lesser priority if expressly permitted pursuant to Section 6
of the Loan Authorization Agreement) subject only to Permitted Liens;
(c) the issuance of any levy, assessment, attachment, seizure or Lien, other
than a Permitted Lien, against any of the Collateral which is not stayed or
lifted within thirty (30) calendar days;
(d) any proceeding is commenced by or against Borrower or any Guarantor for the
liquidation of its assets or dissolution;
(e) any litigation is filed against Borrower or any Guarantor which has had or
could reasonably be expected to have a Material Adverse Effect and such
litigation is not withdrawn or dismissed within thirty (30) calendar days of the
filing thereof;
(f) any default or event of default under the Loan Documents;
(g) any failure to comply with any terms of the Loan Authorization Agreement;
(h) any material provision of this Agreement or any other Loan Document for any
reason ceases to be valid, binding and enforceable in accordance with its terms;
(i) any event which has had or could reasonably be expected to have a Material
Adverse Effect; or
(j) the aggregate outstanding amount of Disbursements exceeds the applicable
Export-Related Borrowing Base.

 

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2.19 Insurance. Borrower will at all times carry property, liability and other
insurance, with insurers acceptable to Lender, in such form and amounts, and
with such deductibles and other provisions, as Lender shall require, and
Borrower will provide evidence of such insurance to Lender on the proper Acord
Form, so that Lender is satisfied that such insurance is, at all times, in full
force and effect. Each property insurance policy shall name Lender as loss payee
or mortgagee and shall contain a lender’s loss payable endorsement in form
acceptable to Lender and each liability insurance policy shall name Lender as an
additional insured. All policies of insurance shall provide that they may not be
cancelled or changed without at least thirty (30) days’ prior written notice to
Lender and shall otherwise be in form and substance satisfactory to Lender.
Borrower will promptly deliver to Lender copies of all reports made to insurance
companies.
2.20 Taxes. Borrower has timely filed all tax returns and reports required by
applicable law, has timely paid all applicable taxes, assessments, deposits and
contributions owing by Borrower and will timely pay all such items in the future
as they became due and payable. Borrower may, however, defer payment of any
contested taxes; provided, that Borrower (a) in good faith contests Borrower’s
obligation to pay such taxes by appropriate proceedings promptly and diligently
instituted and conducted; (b) notifies Lender in writing of the commencement of,
and any material development in, the proceedings; (c) posts bonds or takes any
other steps required to keep the contested taxes from becoming a Lien upon any
of the Collateral; and (d) maintains adequate reserves therefore in conformity
with GAAP.
2.21 Compliance with Laws. Borrower represents and warrants that it has complied
in all material respects with all provisions of all applicable laws and
regulations, including those relating to Borrower’s ownership of real or
personal property, the conduct and licensing of Borrower’s business, the payment
and withholding of taxes, ERISA and other employee matters, safety and
environmental matters.
2.22 Negative Covenants. Without the prior written consent of Ex-Im Bank and
Lender, Borrower shall not: (a) merge, consolidate or otherwise combine with any
other Person; (b) acquire all or substantially all of the assets or capital
stock of any other Person; (c) sell, lease, transfer, convey, assign or
otherwise dispose of any of its assets, except for the sale of Inventory in the
ordinary course of business and the disposition of obsolete equipment in the
ordinary course of business; (d) create any Lien on the Collateral except for
Permitted Liens; (e) make any material changes in its organizational structure
or identity; or (f) enter into any agreement to do any of the foregoing.
2.23 Cross Default. Borrower shall be deemed in default under the Loan Facility
if Borrower fails to pay when due any amount payable to Lender under any loan or
other credit accommodations to Borrower whether or not guaranteed by Ex-Im Bank.
2.24 Munitions List. If any of the Items are articles, services, or related
technical data that are listed on the United States Munitions List (part 121 of
title 22 of the Code of Federal Regulations), Borrower shall send a written
notice promptly, but in any event within five (5) Business Days, of Borrower
learning thereof to Lender describing the Items(s) and the corresponding invoice
amount.

 

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2.25 Suspension and Debarment, etc. On the date of this Agreement neither
Borrower nor its Principals are (a) debarred, suspended, proposed for debarment
with a final determination still pending, declared ineligible or voluntarily
excluded (as such terms are defined under any of the Debarment Regulations
referred to below) from participating in procurement or nonprocurement
transactions with any United States federal government department or agency
pursuant to any of the Debarment Regulations or (b) indicted, convicted or had a
civil judgment rendered against Borrower or any of its Principals for any of the
offenses listed in any of the Debarment Regulations. Unless authorized by Ex-Im
Bank, Borrower will not knowingly enter into any transactions in connection with
the Items with any person who is debarred, suspended, declared ineligible or
voluntarily excluded from participation in procurement or nonprocurement
transactions with any United States federal government department or agency
pursuant to any of the Debarment Regulations. Borrower will provide immediate
written notice to Lender if at any time it learns that the certification set
forth in this Section 2.24 was erroneous when made or has become erroneous by
reason of changed circumstances.
ARTICLE III
RIGHTS AND REMEDIES
3.01 Indemnification. Upon Ex-Im Bank’s payment of a Claim to Lender in
connection with the Loan Facility pursuant to the Master Guarantee Agreement,
Ex-Im Bank may assume all rights and remedies of Lender under the Loan Documents
and may enforce any such rights or remedies against Borrower, the Collateral and
any Guarantors. Borrower shall hold Ex-Im Bank and Lender harmless from and
indemnify them against any and all liabilities, damages, claims, costs and
losses incurred or suffered by either of them resulting from (a) any materially
incorrect certification or statement knowingly made by Borrower or its agent to
Ex-Im Bank or Lender in connection with the Loan Facility, this Agreement, the
Loan Authorization Agreement or any other Loan Documents or (b) any material
breach by Borrower of the terms and conditions of this Agreement, the Loan
Authorization Agreement or any of the other Loan Documents. Borrower also
acknowledges that any statement, certification or representation made by
Borrower in connection with the Loan Facility is subject to the penalties
provided in Article 18 U.S.C. Section 1001.
3.02 Liens. Borrower agrees that any and all Liens granted by it to Lender are
also hereby granted to Ex-Im Bank to secure Borrower’s obligation, however
arising, to reimburse Ex-Im Bank for any payments made by Ex-Im Bank pursuant to
the Master Guarantee Agreement. Lender is authorized to apply the proceeds of,
and recoveries from, any property subject to such Liens to the satisfaction of
Loan Facility Obligations in accordance with the terms of any agreement between
Lender and Ex-Im Bank.

 

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ARTICLE IV
MISCELLANEOUS
4.01 Governing Law. This Agreement and the obligations arising under this
Agreement shall be governed by, and construed in accordance with, the law of the
state governing the Loan Agreement.
4.02 Notification. All notices required by this Agreement shall be given in the
manner and to the parties provided for in the Loan Agreement.
4.03 Partial Invalidity. If at any time any of the provisions of this Agreement
becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, the validity nor the enforceability of the
remaining provisions hereof shall in any way be affected or impaired.
4.04 Waiver of Jury Trial. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION, SUIT, PROCEEDING OR OTHER LITIGATION BROUGHT TO RESOLVE
ANY DISPUTE ARISING UNDER, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
THE LOAN AUTHORIZATION AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT,
DOCUMENT OR INSTRUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OR OMISSIONS OF LENDER, EX-IM BANK, OR ANY OTHER PERSON,
RELATING TO THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
4.05 Consequential Damages. Neither Ex-Im Bank, Lender nor any agent or attorney
for any of them shall be liable to Borrower for consequential damages arising
from any breach of contract, tort or other wrong relating to the establishment,
administration or collection of the Loan Facility Obligations.

 

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IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed as of
the 4th day of January, 2011.

          FUELCELL ENERGY, INC.          (Name of Borrower)    
 
       
By:
  /s/ Joseph G. Mahler    
 
 
 
(Signature)    
Name:
  Joseph G. Mahler    
 
 
 
(Print or Type)    
Title:
  Sr. Vice President & CFO    
 
 
 
(Print or Type)    
 
        ACKNOWLEDGED:    
 
        JPMORGAN CHASE BANK, N.A.    
 
       
By:
  /s/ James P. Murphy    
 
 
 
(Signature)    
Name:
  James P. Murphy    
 
 
 
(Print or Type)    
Title:
  Authorized Signer    
 
 
 
(Print or Type)    
 
        JPMORGAN CHASE BANK, N.A.     Global Trade Services    
 
       
By:
  /s/ Randall Mascorro    
 
 
 
(Signature)    
Name:
  Randall Mascorro    
Title:
  Vice President    

 

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ANNEXES:

     
Annex A
- Loan Authorization Agreement, Fast Track Loan Authorization Agreement or Loan
Authorization
Notice, as applicable  
Annex B
- Economic Impact Certification

 

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[Two originals to be provided to Ex-Im Bank]

     
To:
  Export-Import Bank of the United States
 
  811 Vermont Avenue, N.W.
 
  Washington, D.C. 20571
 
  Attention: Vice President — United States Division

LOAN AUTHORIZATION NOTICE
We hereby notify the Export-Import Bank of the United States (“Ex-Im Bank”)
that, pursuant to the delegated authority granted by Ex-Im Bank to the
undersigned institution (the “Lender”) under the Delegated Authority Letter
Agreement referred to below between Lender and Ex-Im Bank, we have issued an
Ex-Im Bank Guarantee under the Master Guarantee Agreement between Ex-Im Bank and
Lender, of the Loan Facility identified below from Lender to Borrower identified
below. The Loan Facility is subject to the specific terms and conditions set
forth below. Unless otherwise defined, the capitalized terms used herein shall
have the meanings set forth in the Master Guarantee Agreement.

1.  
Documentation and Location of Loan Documents:
     
Name of Lender: JPMorgan Chase Bank, N.A.
     
Delegated Authority Letter Agreement Number: TX — DA — 05 — 010
     
Master Guarantee Agreement Number: TX — MGA — 05 — 010
     
Borrower Agreement Date: January 4, 2011
     
Effective Date of this Loan Facility: January 4, 2011
     
Location of Loan Documents: 2200 Ross Ave., 6th Floor, Dallas, Texas 75201
     
If Borrower was assisted by a city/state export agency, please provide the name
of the agency, contact person, and telephone number.

     
Name:
   
 
   
Address:
   
 
   
 
   
 
   
 
   
 
   
 
   
Attention:
   
 
   
Telephone:
   
 
   

Ex-Im Bank 12/31/05

 

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2.  
A. Borrower’s Name and Address: The full name, address, contact person,
telephone and telefax numbers of Borrower are as follows:

     
Name:
  FuelCell Energy, Inc.
Address:
  3 Great Pasture Rd.
 
  Danbury, CT 06813
Attention:
  Michael Bishop, VP and Corporate Controller
Telephone:
  203-825-6000 
Telecopier:
  203-825-6100 

  B.  
Is Borrower a Small Business as stipulated by SBA guidelines?
þ Yes o No
    C.  
Additionality: Please select appropriate answer(s).

  o     (1.)  
Borrower meets all small business criteria:

  (i)  
Maximum Amount is $2 million or less;
    (ii)  
Borrower qualifies as Small Business under SBA Guidelines;
    (iii)  
Borrower employs 100 people or fewer; and
    (iv)  
Borrower’s annual revenues do not exceed $10 million.

  þ     (2.)  
Repayment risk associated with foreign sale.
    þ     (3.)  
Borrower’s creditworthiness requires Guarantee.
    o     (4.)  
Lender’s internal lending limits reached.
    o     (5.)  
Lender’s statutory lending limits reached.
    o     (6.)  
Other (please specify)                                         .
    þ     (7.)  
Lender has adequately addressed each of the requirements of “Additionality” as
set forth in the Working Capital Guaranty Manual in its internal credit
memorandum.

3.  
Guarantor’s Name and Address: Are there Guarantors for the Loan Facility?

  o  
Yes
    þ  
No If no, attach waiver letter from Ex-Im Bank and/or ownership breakdown.

Ex-Im Bank 12/31/05

 

2

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The full name, address, telephone and telefax numbers of each Guarantor are as
follows:

     
Name:
   
 
   
Address:
   
 
   
 
   
 
   
 
   
 
   
Attention:
   
 
   
Telephone:
   
 
   
Telecopier:
   
 
   

4.  
The Items to be financed:

  A.     (1.)  
The Items: (Complete description of goods and services to be exported, e.g.
machine tools, electronic components, logs, etc.)

  SIC Code(s)/NAIC No(s): 335999   
Development and manufacture of high- efficiency stationary fuel cell power
plants

  (2.)  
Will Indirect Exports be included in the Export-Related Borrowing Base?

  þ  
Yes. If yes, please indicate which Items above will include Indirect Exports and
affirm:

  þ  
Funds available under the Export-Related Borrowing Base derived from Indirect
Exports shall at all times constitute no more than 10% of the Maximum Amount of
this Loan Facility in accordance with the standard stated in Section 4.15 of the
Master Guarantee Agreement; or
    o  
Funds available under the Export-Related Borrowing Base derived from Indirect
Exports might constitute more than 10% of the Maximum Amount of this Loan
Facility. Lender has obtained Ex-Im Bank’s prior written consent to exceed 10%
of the Maximum Amount. Attached is a copy of Ex-Im Bank’s written consent.

  o  
No.

  (3.)  
Have you obtained an Economic Impact Certification from the Borrower covering
all Items listed in 4.A.(1) in accordance with Section 4.09 of the MGA?

  þ  
Yes
    o  
No

Ex-Im Bank 12/31/05

 

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  B.  
Are Commercial Letters of Credit or Standby Letters of Credit (other than
Warranty Letters of Credit) to be issued under this Loan Facility?

  þ  
Yes If yes, approximately what percentage of the Loan Facility will be utilized
for Commercial Letters of Credit or Standby Letters of Credit? Up to 50%
    o  
No

  C.  
Are Warranty Letters of Credit expected to be issued under this Loan Facility?

  o  
Yes Lender has obtained Ex-Im Bank’s prior written consent for issuance of such
Warranty Letters of Credit. Attached is a copy of Ex-Im Bank’s written consent.
    þ  
No

  D.  
Are Retainage Accounts Receivable to be included in the Export-Related Borrowing
Base?

  o  
Yes Lender has obtained Ex-Im Bank’s prior written consent for inclusion of each
such Retainage Accounts Receivable. Attached is a copy of Ex-Im Bank’s written
consent.
    þ  
No

5.  
Maximum Amount, Advance Rates, Loan Facility Terms:

  A.  
Maximum Amount: $5,000,000.00
    B.  
Advance Rates by Categories of Primary Collateral:

  (1.)  
Inventory: The Advance Rate (to be multiplied by the Export-Related Inventory
Value or Export-Related Historical Inventory Value) for Collateral categorized
as Eligible Export-Related Inventory shall be:

Seventy-five percent ( 75% )

  (2.)  
Accounts Receivable: The Advance Rate (to be multiplied by the Export-Related
Accounts Receivable Value) for Collateral categorized as Eligible Export-Related
Accounts Receivable shall be:

Ninety percent ( 90% )
Ex-Im Bank 12/31/05

 

4

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  (3.)  
Retainage Accounts Receivable: The Advance Rate (to be multiplied by the
Retainage Value) for Collateral categorized as Retainage Accounts Receivable
shall be:

Zero percent ( 0% )

  (4.)  
Other Assets (as described in Section 6.A. below): The Advance Rate (to be
multiplied by the Other Assets Value) for Collateral categorized as Other Assets
shall be:

Zero percent ( 0% )

  (5.)  
Overseas Accounts Receivable: The Advance Rate (to be multiplied by the
Export-Related Overseas Accounts Receivable Value) for Collateral categorized as
Eligible Export-Related Overseas Accounts Receivable shall be:

Zero percent ( 0% )

  (6.)  
Overseas Inventory: The Advance Rate (multiplied by the Export-Related Overseas
Inventory Value) for Collateral categorized as Eligible Export-Related Overseas
Inventory shall be:

Zero percent ( 0% )

  C.  
Type of Loan Facility and Exports supported:

  (1.)  
Type of Loan Facility:
    þ  
The Loan Facility is a Revolving Loan Facility (other than a Transaction
Specific Revolving Loan Facility). (Complete subsections (2.), (3.) and (5.),
and, if applicable, (6.) below.)
    o  
The Loan Facility is a Transaction Specific Revolving Loan Facility. (Complete
subsections (3.), (4.), and (5.), and, if applicable, (6.) below.)
    o  
The Loan Facility is a Transaction Specific Loan Facility. (Complete subsections
(3.), (4.), and (5.), and, if applicable, (6.) below.)
    (2.)  
For a Revolving Loan Facility, identify the top three countries to which the
Items will be exported:
Country of Export: South Korea
Country of Export: Canada
Country of Export: Germany

  (3.)  
Estimated Total Export Sales each year to be supported by this Loan Facility: $
38,800,000.00

Ex-Im Bank 12/31/05

 

5

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  (4.)  
For a Transaction Specific Revolving Loan Facility or a Transaction Specific
Loan Facility, identify the Specific Export Order(s):

             
Country of Export:
                     
Contract Price:
  $         
 
           
Contract Number:
                     
Contract Date:
                     
 
                     
Parties:
                     
 
                     
 
                     

  (5.)  
Lender shall conduct field examinations:

  o  
At least every six (6) months starting on the date six (6) months following the
Effective Date of the Loan Facility.

  þ  
At least every six (6) months starting 4/30/11 (specify date no later than six
(6) months following the Effective Date of the Loan Facility; semi-annual field
examination schedule must include Borrower’s fiscal year end date if audited
financial statements will substitute for one field examination annually).

  (6.)  
For Loan Facilities with a Loan Facility Term greater than one (1) year, Lender
shall provide Ex-Im Bank an annual review:

  o  
On each Loan Facility Anniversary Date or
    o  
Annually starting                      (specify date no later than the first
anticipated Loan Facility Anniversary Date).

6.  
Security Interests:
     
Subject to the provisions of subsections D, E and F below in this Section 6,
Lender agrees to obtain and maintain the following valid, enforceable and
perfected security interests in the following Collateral, and the proceeds
thereof:

  A.  
First priority in the following (check all that apply):

  þ  
All Inventory.
    o  
All Export-Related Inventory.
    o  
All Export-Related Overseas Inventory.

Ex-Im Bank 12/31/05

 

6

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  o  
All Export-Related Inventory relating to Specific Export Order(s).
    o  
All Export-Related Overseas Inventory relating to Specific Export Order(s).
    þ  
All Accounts Receivable.
    o  
All Export-Related Accounts Receivable.
    o  
All Export-Related Overseas Accounts Receivable.
    o  
All Export-Related Accounts Receivable relating to Specific Export Order(s).
    o  
All Export-Related Overseas Accounts Receivable relating to Specific Export
Order(s).
    þ  
All General Intangibles.
    o  
All Export-Related General Intangibles.
    o  
All Other Assets. Please specify:
                                                            
    o  
All Other Collateral. Please
specify:                                                            

  B.  
Secondary Collateral: Any other assets of Borrower in which Lender is receiving
a Lien to secure any other financial accommodations provided by Lender to such
Borrower.
       
Please specify: Cash collateral being held at JPMC securing other facilities
    C.  
Guarantor Collateral: Any assets of a Guarantor or a third party in which Lender
is granted a Lien to secure any financial accommodations provided by Lender to
Borrower.
       
Please specify: N/A
    D.  
Permitted Liens:

Ex-Im Bank 12/31/05

 

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(1) Liens granted to the Connecticut Development Authority pursuant to: (a) the
Note in the amount of $4,000,000, the Loan Agreement, and the Security Agreement
all dated April 29, 2008; and (b) the Loan Agreement with the Connecticut
Development Authority Dated as of June 30, 2000, as amended.
       
(2) Liens granted to (i) Relational, LLC, (ii) Relational II, LLC, and(iii) Key
Equipment Finance Inc. for which UCC Financing Statements have been filed prior
to the date hereof, securing equipment leased or purchased by the Borrower;
       
(3) Liens granted or to be granted in connection with the financing of power
plants to be sold by the Borrower to entities controlled by the Borrower or the
Borrower’s distribution partners for projects selected by the State of
Connecticut Department of Public Utility Control (“DPUC”) for purposes of
providing 43.5 megawatts, including (but not limited to) projects for generating
approximately 27.3 megawatts of power which may be financed in whole or in part
by a United States Department of Energy Loan Guarantee.
       
(4) Liens on raw materials which secure trade debt arising from the purchase of
such raw materials and such trade debt is incurred by borrower in the ordinary
course of business;
       
(5) Liens and all associated rights of the Department of Energy and other
governmental agencies arising from so-called “march-in rights” to the technology
subject to a cooperative research and development agreement.
    E.  
The Liens of Lender on the Secondary Collateral shall be a first priority Lien
except for the following Liens: N/A
    F.  
The Liens of Lender on the Guarantor Collateral shall be a first priority Lien
except for the following Liens: N/A
    G.  
Are you separately collateralizing the Unguaranteed Portion10% portion of this
Loan Facility?
       
No þ
       
Yes o If yes, please specify separate collateral. _________________________.

   
Note: Lender cannot collateralize its retained 10% risk with cash, cash
equivalents or marketable securities from Borrower, any Guarantor, or any of
Borrower’s Affiliates (as defined in Section 5(b) of the Delegated Authority
Letter Agreement) or any third party guarantors.

Ex-Im Bank 12/31/05

 

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7.  
Terms of Sale:
     
The terms of sale for the Items under this Loan Facility shall be typical for
the industry but in no event shall allow for payment more than 180 days
following the original invoice date. The terms may include the following:

  þ  
Confirmed irrevocable letters of credit.
    þ  
Irrevocable letters of credit.
    þ  
Open account insured through Ex-Im Bank export credit insurance for
comprehensive commercial and political risk.
    þ  
Open account insured through non Ex-Im Bank export credit insurance for
comprehensive commercial and political risk.
    þ  
Cash payment received prior to shipment.
    þ  
Open account uninsured.
    þ  
Sight draft documents against payment (also known as “documentary collections”).
    o  
Other terms. [If checked, any such terms of sale must be fully described on an
attached addendum in order for this Notice to be considered complete.]

8.  
Interest Rate and Other Fees.

  A.  
Lender’s Interest Rate: JPMC CBFR or LIBOR + 1 1/2%
    B.  
Other Fees: Letter of Credit fees if applicable

9.  
Facility Fee: Lender will submit a completed and signed Schedule A together with
the Facility Fee amount determined in accordance with the applicable section of
Schedule A:

  A.  
within ten (10) Business Days of the Effective Date;
    B.  
with respect to a Revolving Loan Facility (other than a Transaction Specific
Revolving Loan Facility), within ten (10) Business Days of the first and second
anniversaries of the Effective Date, as applicable; and/or
    C.  
within ten (10) Business Days of the Effective Date of an Extension of the Final
Disbursement Date (such Extensions not to exceed one-hundred-twenty (120) days
in the aggregate), as applicable. Please note that Ex-Im Bank considers a
Renewal to be a new Loan Facility rather than an Extension.

Ex-Im Bank 12/31/05

 

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10.  
Final Disbursement Date: January 3, 2012.
  11.  
Financial Reporting Requirements: Borrower and each Guarantor shall deliver to
Lender the following financial statements:

  A.  
Year End Financial Statements.
       
Within one hundred and twenty (120) days of Borrower’s and each Guarantor’s
(other than individual Guarantor) fiscal year end or if such Person is required
to submit a Form 10-K at the time of filing of such Form 10-K, the income
statement, balance sheet and statement of cash flow as of such fiscal year-end
including in each case all footnotes and other disclosures, which financial
statements have been (check one):

  þ  
certified without qualification by an independent accounting firm acceptable to
Lender (the “Accountants”) (For Loan Facilities with a Maximum Amount of
$5,000,000 or more)
    o  
reviewed by the Accountants (For Loan Facilities with a Maximum Amount of
$2,000,000 or more but less than $5,000,000)
    o  
compiled by the Accountants (For Loan Facilities with a Maximum Amount of
$1,000,000 or more but less than $2,000,000)
    o  
internally prepared by management of such Person in accordance with GAAP,
certified as fairly presenting the financial condition of such Person as of the
date thereof by an authorized officer of such Person (For Loan Facilities with a
Maximum Amount of less than $1,000,000)

  B.  
Quarterly Financial Statements.
       
Within 45 days of Borrower’s and each Guarantor’s (other than an individual
Guarantor) fiscal quarter end or if such Person is required to submit a Form
10-Q at the time of filing of such Form 10-Q, the income statement, balance
sheet and statement of cash flow as of the end of such fiscal quarter which have
been internally prepared by management of such Person in accordance with GAAP,
and certified as fairly presenting the financial condition of such Person as of
the date thereof by an authorized officer of such Person.
    C.  
Individual Guarantors Financial Statements: Once each year, a personal financial
statement on a bank form or such other form generally accepted by Lender.

12.  
Country Limitation Schedule: (See Country Limitation Schedule dated October 28,
2010, attached hereto, which may be updated from time to time)
  13.  
See attached waiver letters dated August 2, 2010, November 10, 2010 and
December 13, 2010 and e-mail correspondence dated December 16, 2010 from the
Export-Import Bank of the United States for a listing of the approved waiver
items.

Ex-Im Bank 12/31/05

 

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--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Lender has caused this instrument to be executed and
delivered as of this 4th day of January, 2011.

         
Name of Lender:
  JPMorgan Chase Bank, N.A.    
 
   
 
   
By:
   
 
   
 
  (Signature)    
Name:
  Randall Mascorro    
Title:
  Vice President    

         
Address:
       
 
  2200 Ross Ave., 6th Floor   Telephone: 214-965-3632
 
  Dallas, Texas 75201   Telefax:      214-965-3671

Receipt acknowledged by:
Export-Import Bank of the United States

         
By:
   
 
(Signature)    
 
       
Name:
       
 
       
Title:
                      , Business Credit Division    
Date:
       
 
       

Ex-Im Bank hereby designates the Loan Facility referred to in this Loan
Authorization Notice as Guaranteed Loan Facility No.
                                        .
Ex-Im Bank 12/31/05

 

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