f8k042610ex10i_windtamer.htm


     

    Exhibit 10.1

     

    

    


    LOAN
AGREEMENT

    


    


    THIS LOAN AGREEMENT (including
any Schedule or Rider, as amended, supplemented or otherwise modified, this
“Agreement”) made as of April 26, 2010, by and between WindTamer Corporation, a
corporation organized and existing under the laws of New York, with its
principal place of business at 156 Court Street, Geneseo, New York 14454 (“Borrower”) and FIRST NIAGARA BANK, N.A., a
national banking association with a banking office at
6950 South Transit Road, P.O. Box 514, Lockport, New
York  14095-0514,  Attn:  Commercial Lending
(together with its successors and assigns, “Lender”).

     

    In
consideration of the premises and of the mutual covenants contained in this
Agreement, the parties agree as follows:

    


    ARTICLE
I.  Definitions

     

    1.1 Definitions.  As
used in this Agreement, unless otherwise specified, the following terms shall
have the following respective meanings:

     

    “Affiliate” - any Person who
now or hereafter has Control of, or is now or hereafter under common Control
with, Borrower or any Subsidiary or over whom or over which Borrower or any
Subsidiary now or hereafter has Control.

     

    “Collateral Documents” -
collectively, all of the documents listed in Item 1 on the Schedule, and any and
all other documents at any time executed and delivered in connection therewith
or with this Agreement (other than the Notes), and any and all amendments,
restatements, renewals or replacements thereof.

     

    “Control” - (a) the power to
vote at least 50% of the outstanding shares of any class of stock of a
corporation or equity, membership or ownership interest in any partnership,
limited partnership, limited liability company or other business entity or (b)
the beneficial ownership of at least 50% of (i) the outstanding shares of any
class of stock of a corporation or (ii) of any outstanding equity, membership or
ownership interest in any other Person.

     

    “GAAP” - generally accepted
accounting principles in the United States of America in effect from time to
time and consistently applied from period to period.

     

    “Guarantor” or “Guarantors” - individually,
each Person who guarantees payment of any Loan governed by this Agreement
including, without limitation, each of the Persons listed in Item 2 of the
Schedule, and collectively, all such Persons.

     

    “Guaranty” or “Guaranties” - any guaranty
agreement given by a Guarantor to Lender, as may be amended, restated,
supplemented or otherwise modified from time to time.

     

    “Lender Affiliate” – any bank
or non-bank subsidiary (other than Lender) of Lender or of First Niagara
Financial Group, Inc.

     

    “Loan” and collectively, “Loans” - as defined in Section
2.1 of this Agreement.

     

    “Material Adverse Effect” - a
material adverse effect on:  (a) the property, assets, financial
condition, business or operations of an Obligor; (b) the ability of Borrower to
perform any of its payment or other obligations under this Agreement, any Note,
or any Collateral Document to which it is a party; (c) the legality, validity or
enforceability of the obligations of Borrower under this Agreement, any Note, or
any Collateral Document to which it is a party; or (d) the ability of Lender to
exercise its rights and remedies with respect to, or otherwise realize upon, any
of the collateral or any of the security for the obligations of Borrower to
Lender or any Lender Affiliate under this Agreement, any Note, or any Collateral
Document.

     

    “Note” - as defined in Section 2.2
of this Agreement.

     

    
      
         


      

      
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    “Obligor” – any Borrower,
Guarantor or any other Person providing collateral support for Borrower’s
obligations hereunder.

     

    “Person” - any individual,
corporation, limited liability company, partnership, joint venture, trust,
unincorporated association, government or political subdivision or other entity,
body, organization or group.

     

    “Schedule” – The Schedule
attached to this Agreement and made a part hereof.

     

    “Subsidiary” - any corporation
of which at least 25% of the voting stock is owned by Borrower directly, or
indirectly through one or more Subsidiaries.

     

                          “USA Patriot Act” - the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.

    


    1.2 Accounting
Terms.  All
accounting terms not otherwise defined herein shall have the meaning assigned to
them in accordance with GAAP.

     

    1.3 UCC
Definitions.  Unless
otherwise defined in this Agreement, capitalized words shall have the meanings
set forth in the Uniform Commercial Code as in effect in the State of New
York.

     

    ARTICLE
II.  The
Financing

     

    2.1 Loans.  Lender
agrees, based on the terms and conditions and relying upon the representations
and warranties set forth in this Agreement, to lend to Borrower, and Borrower
agrees to borrow from Lender, one or more loans (each a “Loan” and collectively
the “Loans”) to be more fully described in the Notes and payable according to
the terms of the respective Notes.  As a condition to the making of
any Loan, Borrower shall execute and deliver to Lender a Note evidencing the
terms of repayment of such Loan.

     

    2.2 The
Notes.  Each
Loan shall be evidenced in part by, and payable as provided in, a note of
Borrower (each a “Note” and collectively the “Notes”).

     

    2.3 Charge
to Account. On the date
that any principal of, or interest on, the Loan, or of any fees, expenses or
charges payable under this Agreement are due, Borrower authorizes Lender to
debit any deposit account of Borrower maintained with Lender on such due date in
an amount equal to such unpaid principal, interest, fee, expense or charge, as
applicable; provided that Lender shall be under no obligation to so debit any
such deposit account.

     

    2.4 Conditions
Precedent. Lender shall
not be obligated to advance any Loan if any Event of Default shall occur or be
continuing.

     

    ARTICLE
III.  Affirmative
Covenants

     

    Borrower will:

     

    3.1 Future
Financial Statements.
Furnish to Lender (a) Borrower’s financial statements prepared in
accordance with GAAP, consistently applied, as and when indicated in Item 3 of
the Schedule; and (b) such additional information, reports or statements as
Lender may from time to time reasonably request regarding the financial and
business affairs of Borrower and its Affiliates.

     

    3.2 Taxes.  Promptly
pay and discharge all of its taxes, assessments and other governmental charges
prior to the date on which penalties are attached thereto, establish adequate
reserves for the payment of taxes and assessments and make all required
withholding and other tax deposits.  Nothing herein shall be
interpreted to require the payment of any tax, assessment or charge so long as
its validity is being contested in good faith and by appropriate proceedings
diligently conducted, and Borrower has established an adequate reserve for any
such expense.

     

    
      
         


      

      
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    3.3 Insurance.  (a)
Keep all its property so insurable insured at all times with responsible
insurance carriers against fire, theft and other risks (including, if required,
flood) in coverage, form and amount reasonably satisfactory to Lender and as is
customary in the case of other Persons engaged in the same or similar business
or having similar properties similarly situated; (b) promptly deliver to Lender
certificates of insurance in form and content acceptable to Lender for any of
those insurance policies required to be carried by Borrower pursuant hereto,
which shall be in the name of Lender and its successors and/or assigns, with
appropriate endorsements designating Lender as additional insured and mortgagee
or loss payee, or both, as requested by Lender; and (c) cause each such
insurance policy to require the insurer to provide Lender with at least thirty
(30) days’ prior written notice of cancellation.  If Borrower fails to
comply with this Section 3.3, Lender is authorized to obtain such insurance in
the name of Borrower or Lender at the expense of Borrower.

     

    3.4 Entity
Standing.  Maintain
its existing entity status in good standing, and maintain its existing rights
and franchises, in its jurisdiction of formation and remain or become duly
licensed or qualified and in good standing in each jurisdiction in which the
conduct of its business requires such qualification or licensing, except where
the failure to be so licensed or qualified would not have a Material Adverse
Effect.

     

    3.5 Guarantor
Financial Reporting.  Cause
each of the Guarantors to deliver to Lender the required information by the
reporting date indicated in Item 4 of the Schedule.

     

    3.6 Prohibited
Person Compliance.  Borrower
warrants, represents and covenants that neither Borrower nor any Guarantor nor
any of their respective Affiliates is or will be a Person (a) that is listed in
the Annex to, or is otherwise subject to the provisions of, Executive Order
13224 issued on September 24, 2001 (“EO13224”), (b) whose name appears on the
United States Treasury Department’s Office of Foreign Assets Control (“OFAC”)
most current list of “Specifically Designated National and Blocked Persons”
(which list may be published from time to time in various mediums including, but
not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf), (c) who
commits, threatens to commit or supports “terrorism”, as that term is defined in
EO13224, or (d) who is otherwise affiliated with any entity or Person listed
above (any and all parties or Persons described in subparts [a] - [d] above are
herein referred to as a “Prohibited Person”).  Borrower covenants and
agrees that neither Borrower, nor any Guarantor nor any of their respective
Affiliates will knowingly (i) conduct any business, nor engage in any
transaction or dealing, with any Prohibited Person, including, but not limited
to, the making or receiving of any contribution of funds, goods, or services to
or for the benefit of a Prohibited Person, or (ii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in
EO13224. Borrower further covenants and agrees to deliver (from time to time) to
Lender any such certification or other evidence as may be requested by Lender in
its sole and absolute discretion, confirming that (A) neither Borrower nor any
Guarantor is a Prohibited Person and (B) neither Borrower nor any Guarantor has
knowingly engaged in any business, transaction or dealings with a Prohibited
Person, including, but not limited to, the making or receiving of any
contribution of funds, goods, or services, to or for the benefit of a Prohibited
Person.

     

    3.7 Operating
Accounts.  Maintain
with Lender, as its primary financial institution, corporate deposit and
operating accounts.

     

    3.8 Other
Acts.  Execute
and deliver, or cause to be executed and delivered, to Lender all further
documents and perform all other acts and things which Lender deems necessary or
appropriate to protect or perfect any security interests in any property
directly or indirectly securing payment of any indebtedness of Borrower to
Lender.

     

    ARTICLE
IV.   Negative
Covenants

     

    Borrower, without the prior written
consent of Lender, will not:

     

    4.1 Borrowed
Money;
Guaranties.  Except
as may be listed in Item 5 of the Schedule, create, incur, assume or suffer to
exist any liability for borrowed money except to Lender.

     

    4.2 Encumbrances.  Except
for permitted encumbrances as listed in Item 5 of the Schedule, create, incur,
assume or suffer to exist any mortgage, lien, security interest, pledge or other
encumbrance on any of its property or assets, whether now owned or hereafter
owned or acquired.

     

    4.3 Sale of
Assets or Merger.  Convey,
sell, transfer, lease, or sell and lease back, all or any substantial portion of
its property, assets or business to any other Person, or merge or consolidate
with or into any other Person or into any joint venture or partnership with any
other Person.

     

    
      
         


      

      
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    4.4 Ownership
Interests.  Purchase,
redeem, acquire or retire any of Borrower’s ownership interests whether such
interests are in the form of stock, partnership or limited partnership
interests, limited liability company units or other ownership
interests.

     

    4.5 Investments
and Loans.  Make
or suffer to exist any investments in, or loans or advances to, any other Person
except (a) advance payments or deposits against purchases made in the ordinary
course of Borrower’s regular business; (b) direct obligations to the United
States of America; (c) any existing investments in, or existing advances to, any
Affiliate; and (d) temporary advances to employees to cover expenses incurred in
the ordinary course of Borrower’s business.

     

    4.6Distributions.  Pay or declare
any dividends or distributions on any of its equity interests.

     

    ARTICLE
V.  Financial and Other
Covenants

     

    5.1 Financial
and Other Covenants.  Borrower
will comply with each of the applicable financial and other covenants set forth
in Item 6 of the Schedule.

     

    ARTICLE
VI.  Default

     

    6.1 Events
of Default.  The
occurrence of any one or more of the following events shall constitute an event
of default (individually, “Event of Default,” or, collectively, “Events of
Default”):

     

    (a) Nonpayment.  Nonpayment when
due (pursuant to the terms of any Note or this Agreement) whether by
acceleration or otherwise of principal of, interest on, or any fee or premium
provided for hereunder or in any Note.

     

    (b) Negative
Covenants.  Default in the
observance of any of the covenants or agreements of Borrower contained in
Article IV or Article V of this Agreement.

     

    (c) Other
Covenants.  Default in the
observance of any of the covenants or agreements of Borrower contained in this
Agreement, other than in Article IV or Article V, or in any other agreement with
Lender or any Lender Affiliate, which is not remedied within twenty (20) days
after occurrence thereof.

     

    (d) Voluntary
Insolvency Proceedings.  If Borrower or
any general partner of Borrower shall (i) file a petition or request for
liquidation, reorganization, arrangement, adjudication as a bankrupt, or other
similar relief under the bankruptcy, insolvency or similar laws of the United
States of America or any state or territory thereof or any foreign jurisdiction,
now or hereafter in effect; (ii) consent to the filing of a petition in any
bankruptcy, liquidation, reorganization or insolvency proceeding; (iii) make a
general assignment for the benefit of creditors; (iv) consent to the appointment
of a receiver, trustee or officer performing similar functions for Borrower or
any of Borrower’s assets, including, without limitation, the appointment of or
taking possession by a “custodian” as defined in the federal Bankruptcy Code;
(v) make any, or send notice of any intended, bulk sale; or (vi) institute or
execute a consent to any other type of insolvency proceeding (under the federal
Bankruptcy Code or otherwise) or any formal or informal proceeding for the
dissolution or liquidation of, or settlement of claims against or winding up of
affairs of, Borrower.

     

    (e) Involuntary
Insolvency Proceedings.  The appointment
of a receiver, trustee, custodian or officer performing similar functions for
Borrower or any of Borrower’s assets, including, without limitation, the
appointment of or taking possession by a “custodian” as defined in the federal
Bankruptcy Code; or the filing against Borrower of a request or petition for
liquidation, reorganization, arrangement, or adjudication as a bankrupt or other
relief under the bankruptcy, insolvency or similar laws of the United States of
America or any state or territory thereof or any foreign jurisdiction, now or
hereafter in effect; or the institution against Borrower of any other type of
insolvency proceeding (under the federal Bankruptcy Code or otherwise) or of any
formal or informal proceeding for the dissolution or liquidation of, settlement
of claims against or winding up of affairs of Borrower, and the failure to have
such appointment vacated or such petition or proceeding dismissed within 60 days
after such appointment, filing or institution.

     

    
      
         


      

      
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    (f) Representations.  If any
certificate, statement, representation, warranty or financial statement
furnished by or on behalf of Borrower pursuant to or in connection with this
Agreement or any Note (including, without limitation, representations and
warranties contained herein) or as an inducement to Lender or any Lender
Affiliate to enter into this Agreement or any Note or any other lending
agreement with Borrower shall prove to have been false in any material respect
at the time as of which the facts therein set forth were certified, or to have
omitted any material contingent or unliquidated liability or claim against
Borrower, or if on the date of the execution of this Agreement there shall have
been any materially adverse change in any of the facts disclosed by any such
statement or certificate, which change shall not have been disclosed by Borrower
to Lender at or prior to the time of such execution.

     

    (g) Other
Indebtedness and Agreements.  Nonpayment by
Borrower of any indebtedness owing by Borrower when due (or, if permitted by the
terms of the applicable document, within any applicable grace period), whether
such indebtedness shall become due by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise, or failure to perform any
material term, covenant or agreement on its part to be performed under any
agreement or instrument (other than this Agreement) evidencing or securing or
relating to any indebtedness owing by Borrower when required to be performed if
the effect of such failure is to permit the holder to accelerate the maturity of
such indebtedness.

     

    (h) Judgments.  If any judgment
or judgments (other than any judgment for which it is fully insured) against
Borrower remains unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 20 days.

     

    (i) Guarantor
Default.  Any Guaranty
shall cease, for any reason, to be in effect without the prior consent of
Lender, or any Guarantor or Borrower shall so assert in writing; or any
Guarantor shall die or become incapacitated or incarcerated and Lender and
Borrower, and, if necessary, an authorized representative of the Guarantor or
the Guarantor’s estate, shall have failed to agree to a replacement guaranty,
cash collateral or other arrangement satisfactory to Lender as an adequate
substitution for the Guaranty of such Guarantor; or any Guarantor shall fail to
perform or observe any covenant contained in the Guaranty to which such
Guarantor is a party; or any representation, warranty or financial statement
made or furnished by a Guarantor in connection with this Agreement or the
applicable Guaranty shall prove to have been false in any material respect, or
to have omitted any material contingent or unliquidated liability; or there
shall occur with respect to any Guarantor any event described in Section 6.1(d)
or (e) hereof.

     

    (j) Challenge
to Collateral Documents.  If any Obligor,
directly or indirectly, shall challenge, or indicate their intention to
challenge, the validity and binding effect of any provision of any of the Notes
or the Collateral Documents or any of the Notes or the Collateral Documents
shall for any reason (except to the extent permitted by their express terms)
cease to be effective or cease to have the priority lien position required by
the terms thereof or by this Agreement.

     

    (k) Change of
Ownership.  If there is a
change of Control of Borrower or any Guarantor.

     

    (l) Termination
of Business.  Any Obligor
terminates its business or ceases to operate as a going concern.

     

    (m) Material
Adverse Change.  There shall occur
any event or condition in an Obligor’s business, operations or financial
condition that has, or in Lender’s judgment, is likely to have, a Material
Adverse Effect.

     

    6.2 Effects of an Event of
Default.

     

    (a) Upon the
happening of one or more Events of Default (except a default under either
Section 6.1(d) or 6.1(e) hereof), Lender may declare any obligations it or any
Lender Affiliate may have hereunder to be canceled and the principal of the
Loans then outstanding to be immediately due and payable, together with all
interest thereon and fees and expenses accruing under this Agreement without
presentation, demand or further notice of any kind to Borrower.

     

    (b) Upon
the happening of one or more Events of Default under Section 6.1(d) or 6.1(e)
hereof, Lender’s and Lender Affiliates’ obligations hereunder shall be cancelled
immediately, automatically and without notice, and Loans then outstanding shall
become immediately due and payable without presentation, demand or notice of any
kind to Borrower.

     

    
      
         


      

      
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    6.3 Remedies.  Upon
the occurrence and during the continuance of any Event of Default or upon any
termination of this Agreement as a result of an Event of Default, then Lender
and each Lender Affiliate shall have all of its rights under this Agreement or
otherwise under law.  In addition to, and without limitation of, any
rights of Lender and each Lender Affiliate under applicable law, if any Event of
Default occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
indebtedness at any time held or owing by Lender and each Lender Affiliate to or
for the credit or account of Borrower may be offset and applied toward the
payment of the indebtedness of Borrower to Lender and each Lender
Affiliate.  Lender may, in its sole discretion, exercise alternately
or cumulatively any of the remedies available hereunder or under any other
document securing the indebtedness, or at law or equity.  The failure
to exercise one or more of such remedies upon the happening of an Event of
Default shall not constitute a waiver of the right to exercise the same at any
subsequent time in respect of the same Event of Default or any other Event of
Default. Neither the acceptance by Lender of any payment hereunder which is less
than payment in full of all amounts due and payable at the time of such payment,
or any negotiation or discussion with Borrower, shall constitute a waiver of the
right to exercise one or more of such remedies at that time or at any subsequent
time or nullify any prior exercise of any remedy, except as and to the extent
otherwise provided by law.

     

    ARTICLE
VII.  Expenses

     

    Borrower shall reimburse Lender
promptly upon request by Lender for all of its and each Lender Affiliate’s
out-of-pocket expenses including, without limitation, reasonable counsel fees
and expenses, filing fees and recording fees incurred in connection with this
Agreement and with any indebtedness subject hereto, for any taxes which Lender
or any Lender Affiliates may be required to pay in connection with the execution
and delivery of this Agreement, any of the Notes or the Collateral Documents and
any Guaranty, and for any expenses, including reasonable counsel fees and
expenses, incident to the enforcement of any provision of this Agreement, the
Guaranties, the Notes or the Collateral Documents.

     

    ARTICLE VIII.   Other

     

    8.1 Amendments
and Waivers.  No
modification, rescission, waiver, release or amendment of any provision of this
Agreement shall be made except by written agreement subscribed by a duly
authorized officer of Lender.

     

    8.2 USA
Patriot Act.  Lender
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56), Lender is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the USA Patriot Act.

     

    8.3 General
Provisions.  All
notices and other communications required or permitted hereunder shall be in
writing and will be effective upon receipt if delivered to Borrower or Lender at
the address set forth in the first paragraph.  If this Agreement is
executed by more than one Borrower, the obligations hereunder are joint and
several.  The provisions hereof shall bind the successors and assigns
of the parties; provided however, Borrower cannot assign its rights or
obligations hereunder without the prior written consent of
Lender.  The terms of this Agreement and any related agreements or
other documents shall be cumulative (including any rights and remedies) except
to the extent that they are specifically inconsistent with each other, in which
case the terms of this Agreement shall prevail.

     

    8.4 Entire
Understanding. This
Agreement and any
Schedules hereto represent the entire understanding and agreement between the
parties hereto and supersede all prior negotiations and writings between the
parties, including specifically, but without limitation, the application for the
Loan, any commitment letter and correspondence related thereto.

     

    8.5 Governing
Law; Jurisdiction.  This
Agreement, the transaction described herein and the obligations of Lender and
Borrower shall be construed under, and governed by, the internal laws of the
State of New York without regard to principles of conflict of
laws.  Borrower and Lender, to the fullest extent permissible under
applicable law, and for all purposes of this Agreement and the related loan
documents, each hereby irrevocably submit to the non-exclusive jurisdiction of
the state or federal courts sitting in the city where Lender’s banking office is
located and irrevocably waive any objection to venue in any such
court.

     

    
      
         


      

      
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    8.6 WAIVER OF TRIAL BY
JURY.  BORROWER (a) KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY WAIVES EACH RIGHT BORROWER MAY HAVE TO A TRIAL BY JURY WITH RESPECT
TO, AND EACH RIGHT TO ASSERT ANY CLAIM FOR DAMAGES (INCLUDING, BUT NOT LIMITED
TO, PUNITIVE DAMAGES) IN, ANY ACTION OR OTHER LEGAL PROCEEDING, OF ANY NATURE
RELATING TO (i) THIS AGREEMENT, ANY OF THE LOANS, ANY OF THE NOTES OR COLLATERAL
DOCUMENTS, (ii) ANY TRANSACTION CONTEMPLATED IN ANY SUCH DOCUMENTS OR (iii) ANY
NEGOTIATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT, ANY OF THE
OBLIGATIONS, ANY OF THE NOTES OR COLLATERAL OR ANY OTHER COLLATERAL AND (b)
CERTIFIES THAT (i) NEITHER LENDER, ANY LENDER AFFILIATE NOR ANY REPRESENTATIVE
OF LENDER OR ANY LENDER AFFILIATE HAS REPRESENTED TO BORROWER THAT LENDER OR ANY
LENDER AFFILIATE WILL NOT SEEK TO ENFORCE THE WAIVER MADE BY BORROWER IN THIS
SECTION 8.6, AND (ii) IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AS NECESSARY AND APPROPRIATE BY
INDEPENDENT LEGAL COUNSEL.

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed by their duly authorized
officers as of the date first set forth above.

     

    
      	
              Borrower:

            	
              WindTamer
      Corporation

               

              By:  
      /s/ 
      William A. Schmitz                     

              Name:  William
      A. Schmitz

              Title:  Chief
      Executive Officer

            
	 
      	
               
      

               

            
	
              Lender:

            	
              FIRST
      NIAGARA BANK, N.A.

               

              By:  /s/  Sheila
      M. Studebaker                    

                     Sheila
      M. Studebaker, Vice President

            


    

    


     

    
      
         


      

      
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    SCHEDULE

    


    This Schedule is a part of a Loan
Agreement between FIRST NIAGARA
BANK, N.A. and WindTamer
Corporation (“Borrower”) dated as of April 26, 2010 (the
“Agreement”).

     

    
      	
              1. 

            	
              Collateral
      Documents (§ 1.1)

            
	 
      	 
      	 
      	 
      
	 
      	
              A.

            	
              Borrower

            	 
      	 
      
	 
      	
              Not
      Applicable

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              B.

            	
              Guarantors or Other Creditors (§
      1.1)

            
	 
      	 
      	 
      	 
      
	 
      	
              Pledge
      Security Agreements of deposit accounts from Michael T. Hughes, William A.
      Schmitz, and Molly M. Hedges

            
	 
      	 
      	 
      	 
      


    

    


    
      	2.  	
              Guarantors or Subordinated
      Creditors and Amounts (§1.1)

            
	 	
              Name

            	 	
              Amount
      or Unlimited

            	 	
              Indicate
      Guarantor (“G”) or
      

              Subordinated
      Creditor (“S”)

            
	 	
              Michael
      T. Hughes

            	 	$	850,000.00	 	
              Guarantor

            
	 	
              William
      A. Schmitz

            	 	$	100,000.00	 	
              Guarantor

            
	 	
              Holly
      M. Hedges

            	 	$	50,000.00	 	
              Guarantor

            


    

    


    
      	
              3. 

               

            	
              Borrower Financial Statements
      (§3.1)

            
	 
      	
              Type

            	 	
              Delivery Date

            
	 
      	
              Annual
      audited financial statements and federal tax returns

            	 	
              Within
      120 days of Fiscal Year End

            
	 
      	
              Quarterly
      internally prepared financial statements

            	 	
              Within
      45 days of quarter end

            


    

    


    
      	
              4. 

               

            	
              Guarantor
      Financial Reporting (§3.5)

            
	 	Type	 	
              Delivery Date

            
	 
      	
              Annual
      personal financial statements and federal tax returns

            	 	
              Within
      120 days of Fiscal Year End

            


       

      
        
           


        

        
          -1-

          
            

          

        

        
           


        

      

       

      	
              5. 

               

            	
              Permitted
      Borrowings and Encumbrances (§4.1 and §4.2)

            
	(a)   	
              Liens
      for taxes not yet due or which are being contested in good faith and by
      appropriate proceedings if adequate reserves with respect thereto are
      maintained on the books of Borrower inaccordance with
  GAAP;

            
	 	 
	(b)   	
              Carriers’,
      warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like liens
      arising in the ordinary course of business which are not overdue for a
      period of more than thirty (30) days or which are being contested in good
      faith and by appropriate proceedings if adequate reserves with respect
      thereto are maintained on the books of Borrower in accordance with
      GAAP;

            
	 	 
	(c)   	
              Pledges
      or deposits in the ordinary course of business made in connection with
      workmen’s compensation, unemployment insurance and other social security
      legislation;

            
	 	 
	
              (d)   

               

               

              (e)   

            	
              Deposits
      in the ordinary course of business to secure the performance of bids,
      trade contracts (other than for borrowed money), leases, statutory
      obligations, surety and appeal bonds, performance bonds and other
      obligations of a like nature; and

               

              Liens
      or security interests in favor of Lender.

            
	 
      	 
      
	
              6. 

               

            	
              Financial
      Covenants (§5.1)

            
	 
      	
              Not
      Applicable

            


    

     

    The undersigned have executed this
Schedule as of the date of the Agreement.

     

    
       

      
        	
                Borrower:

              	
                WindTamer
      Corporation

                 

                By:  
      /s/ 
      William A. Schmitz                     

                Name:  William
      A. Schmitz

                Title:  Chief
      Executive Officer

              
	 
      	
                 
      

                 

              
	
                Lender:

              	
                FIRST
      NIAGARA BANK, N.A.

                 

                By:  /s/  Sheila
      M. Studebaker                    

                       

              


      

      


       

    

     -2-