Document:

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-f8k042610ex10ii_windtamer.htm

     

    Exhibit
10.2

     

    

     

    COMMITTED
REVOLVING CREDIT NOTE

    (VARIABLE
RATE)

    

     

    
      	$1,000,000.00 	April 26,
    2010

    

     

    FOR VALUE RECEIVED, and
intending to be legally bound, WINDTAMER CORPORATION
(“Borrower”), a corporation organized under the laws of the State of New York,
with its principal place of business at 156 Court Street, Geneseo, New York
14454, promises to pay to FIRST
NIAGARA BANK, N.A., a national banking association with a banking office at
6950 South Transit Road, P.O. Box 28, Lockport, New York  14095-0028
(“Lender”) or order, on or before May 1, 2011 (“Maturity”), the lesser of the
principal sum of One Million and 00/100 Dollars ($1,000,000.00) or the aggregate
unpaid principal amount of all advances made by Lender to Borrower hereunder,
together with interest thereon until paid in full.

    

    1.           REVOLVING
CREDIT.  Borrower may, at its option, borrow, pay, reborrow and
repay the principal of this Note at any time prior to Maturity or such earlier
date as the obligations of Borrower to Lender under this Note shall become due
and payable.

    

    2.           REQUEST FOR
LOANS.  Advances made hereunder (each a “Loan”) are properly
requested orally or in writing not later than 4:00 p.m. on a Business Day on
which the Loan is to be made, unless otherwise provided herein.  Each
request for a Loan shall constitute, both when made and when honored, a
representation and warranty by Borrower that Borrower is entitled to obtain such
Loan.  The aggregate unpaid principal amount of Loans under this Note
shall not exceed the full amount of this Note.  Lender may, in its
sole discretion, make an advance to Borrower upon oral request, provided,
however, Lender reserves the right to require that advance requests be in
writing.  Each oral request shall be conclusively presumed to have
been made by a person authorized by Borrower to do so, and any credit by Lender
of a Loan to or for the account of Borrower shall conclusively establish
Borrower’s obligation to repay same.  Lender shall incur no liability
of any kind to any party by reason of making an advance upon an oral
request.

    
       

      3.   INTEREST RATE.  Each
Loan made hereunder shall bear interest on the unpaid principal balance at all
times at a per annum rate equal to the Prime Rate, as defined below, plus zero
percent (0%).  Accrued interest shall be payable monthly in arrears on
the 1st day
of each month commencing May 1, 2010 until paid in
full.

      
      

       

      INTEREST RATE.  Each
Loan made hereunder shall bear interest on the unpaid principal balance at all
times at a per annum rate equal to the Prime Rate, as defined below, plus zero
percent (0%).  Accrued interest shall be payable monthly in arrears on
the 1st day
of each month commencing May 1, 2010 until paid in full.

       

      “Prime
Rate” means that variable rate of interest announced from time to time by Lender
as its prime rate for calculating interest on certain loans.  The
Prime Rate may or may not be the most favorable charged by Lender to its
customers.  The interest rate on this Note shall change simultaneously
with changes to the Prime Rate.

    
    

    
    

    Notwithstanding
the foregoing, at no time prior to the Maturity will the rate at which interest
accrues be less than 3.25% per annum.

    

     (a)           Borrower
shall pay interest and fees, calculated on the basis of a 360-day year for the
actual number of days of each year (365 or 366, as applicable), on the
outstanding principal amount from and including the date of this Note to but not
including the date the outstanding principal amount is paid in
full.

     

    (b)           If
pursuant to the terms of this Note, Borrower is at any time obligated to pay
interest on the principal balance of this Note at a rate in excess of the
maximum interest rate permitted by applicable law, the applicable interest rate
shall be immediately reduced to such maximum rate and all previous payments in
excess of the maximum rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    (c)           After
the occurrence of an Event of Default, at Lender’s option, interest shall accrue
at a rate
 per annum
equal to the aggregate of 6% plus the rate otherwise applicable (the “Default
Rate”), and such rate shall continue to apply whether or not judgment shall be
entered on this Note.

    

    (d)           If
any interest rate index is not available, a similar rate based upon a comparable
index selected by Lender in its sole discretion will be utilized.

    

    4.           REPAYMENT.  At
Maturity or the earlier acceleration of this Note, Borrower shall pay the entire
principal balance, plus all accrued and unpaid interest and fees.

    

    5.           APPLICATION; BUSINESS
DAY.  Borrower shall make all payments on this Note to Lender
at its address stated above, or at such other place as the holder of this Note
may designate.  All payments shall be made absolutely net of, without
deduction or offset and free and clear of taxes, deductions, charges or
withholding of any kind.  Lender shall apply all payments received on
this Note to any accrued and unpaid interest then due and owing, then to the
reduction of principal of this Note, then to other sums due hereunder in such
order and in such amounts as Lender may determine from time to
time.  The sum or sums shown on Lender’s records shall be evidence of
the correct unpaid balances of principal and interest on this Note, absent
manifest error.  If any payment comes due on a day that is not a
Business Day, as defined below, Borrower may make the payment on the first
Business Day following the payment date and pay the additional interest accrued
to the date of payment.  “Business Day” means a day of the year on
which banks are not required or authorized by law to close in New York
State.

    

    6.           FEES.

    

    (a)           Late
Fee.  If any payment due under this Note is unpaid for ten (10)
days or more, Borrower shall pay, in addition to any other sums due under this
Note (and without limiting Lender’s other remedies on account thereof), a late
charge in an amount equal to
 6% of such unpaid
amount
 .

    

    (b)           Commitment
Fee.  On the date hereof, Borrower shall pay Lender a fee in
the amount of $5,000.00.

    

    7.           USE OF
PROCEEDS.  Any Loan made by Lender to Borrower and evidenced by
this Note shall be used by Borrower for temporary working capital.

    

    8.           MAINTAIN OPERATING
ACCOUNTS.  Borrower shall maintain with Lender, as its primary
financial institution, corporate deposit and operating accounts.  At
the option of Lender, all interest payments, principal payments and fees will
automatically be deducted from Borrower’s primary operating
account.

    

    9.           SUBJECT TO LOAN
AGREEMENT.  This Note is executed and delivered subject to the
terms of a Loan Agreement dated April 26, 2010 between Borrower and Lender (as
the same may be amended or supplemented from time to time, the “Loan Agreement”)
and reference is hereby made to the Loan Agreement for the provisions relating
to Lender’s rights of acceleration of the principal hereof upon the occurrence
of an Event of Default (as defined in the Loan Agreement) and Lender’s
remedies.

    

    10.           SETOFF. Without limiting
its rights of setoff under New York law generally, if the unpaid principal
amount of the Note, interest accrued on the unpaid principal amount thereof or
other amount owing by Borrower under this Note or the other loan documents shall
have become due and payable (at maturity, by acceleration or otherwise), Lender,
any assignee of Lender and the holder of any participation in any loans will
each have the right, in addition to all other rights and remedies available to
it, without notice to Borrower, to set-off against and to appropriate and apply
to such due and payable amounts any obligations owing to, and any other funds
held in any manner for the account of, Borrower by Lender or by such holder
including, without limitation, all funds in all deposit accounts (whether time
or demand, general or special, provisionally credited or finally credited, or
otherwise) now or in the future maintained by Borrower with Lender or such
holder.  Borrower consents to and confirms the foregoing arrangements
and confirms Lender’s rights, such assignee’s rights and such holder’s rights of
banker’s lien and set-off.  Nothing in this Note will be deemed a
waiver or prohibition of or restriction on Lender’s rights, such assignee’s
rights or any such holder’s rights of banker’s lien or set-off.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    11.           CAPITAL
REQUIREMENTS.  If the adoption of, any change in or any change
in the interpretation of any law, regulation or guideline by any applicable
governmental authority, central bank or similar agency exercising control over
financial institutions (a “Governmental Rule”) or the compliance by Lender with
the Governmental Rule requires that any loan or commitment hereunder be included
for purposes of calculating the appropriate amount of capital to be maintained
by Lender or First Niagara Financial Group, Inc. (“FNFG”) and the result of
which is to reduce the rate of return on Lender’s capital then, and in each such
case, Lender will deliver to Borrower a statement of the justification therefor
and the amount necessary to compensate Lender or FNFG for such reduced rate of
return.  Each determination by Lender shall be conclusive absent
obvious error and shall be payable by Borrower to Lender upon Lender’s
demand.  In determining any such amount, Lender may use reasonable
averaging and attribution methods.

    

    12.           PAYMENT OF FEES AND
EXPENSES.  Borrower agrees to pay, upon demand, costs of
collection of all amounts due under this Note, including, without limitation,
principal, interest and fees, or in connection with the enforcement of, or
realization on, any security for this Note, including, without limitation, to
the extent permitted by applicable law, reasonable attorneys’ fees and
expenses.

    

    13.           GOVERNING LAW.  This
Note shall be governed by the internal laws of the State of New York, without
regard to principles of the conflict of laws.

    

    14.           GENERAL
PROVISIONS.

    

    (a)           Borrower
waives presentment, demand, notice, protest and all other demands and notices in
connection with delivery, acceptance, performance or enforcement of this
Note.

    

    (b)           This
Note, together with any related loan and security agreements, guaranties, and
documents ancillary thereto contains the entire agreement between Lender and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by
Lender.

    

    (c)           Borrower
agrees that in any legal proceeding, a copy of this Note kept in Lender’s course
of business may be admitted into evidence as an original.

    

    (d)           This
Note is a binding obligation enforceable against Borrower and its permitted
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns.

    

    (e)           If
a court deems any provision of this Note invalid, the remainder of the Note
shall remain in effect.

    

    (f)           If
there is more than one Borrower, each of them shall be jointly and severally
liable for all amounts and obligations which become due under this Note and the
term “Borrower” shall include each as well as all of them.

    

    (g)           If
payment of this Note is secured by collateral, the collateral is specified in
the collateral records of Lender.

    

    (h)           No
failure by the holder hereof to exercise, and no delay in exercising, any right
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by such holder of any right or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right or
remedy.  The rights and remedies of the holder hereof as herein
specified are cumulative and not exclusive of any other rights or remedies which
such holder may otherwise have.

    

    (i)           All
notices, demands, or other communications hereunder must be in writing and will
be effective upon receipt when sent to the address set forth herein or such
other address as provided by such party.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    15.           JURISDICTION AND
VENUE.  BORROWER KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY (A) CONSENTS IN EACH ACTION AND OTHER LEGAL PROCEEDING COMMENCED BY
LENDER AND ARISING OUT OF OR OTHERWISE RELATING TO THIS NOTE OR ANY COLLATERAL
RELATED HERETO TO THE NONEXCLUSIVE PERSONAL JURISDICTION OF ANY COURT THAT IS
EITHER A COURT OF RECORD OF THE STATE OF NEW YORK OR A COURT OF THE UNITED
STATES LOCATED IN THE STATE OF NEW YORK, (B) WAIVES EACH OBJECTION TO THE LAYING
OF VENUE OF ANY SUCH ACTION OR OTHER LEGAL PROCEEDING, (C) WAIVES PERSONAL
SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING, AND (D)
CONSENTS TO THE MAKING OF SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL
PROCEEDING BY REGISTERED MAIL DIRECTED TO BORROWER AT THE LAST ADDRESS OF
BORROWER SHOWN IN THE RECORDS RELATING TO THIS NOTE MAINTAINED BY LENDER, WITH
SUCH SERVICE OF PROCESS TO BE DEEMED COMPLETED FIVE (5) DAYS AFTER THE MAILING
THEREOF.

    

    16.           WAIVER OF JURY
TRIAL.  BORROWER 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 (A) THIS NOTE, ANY RELATED LOAN DOCUMENT OR ANY COLLATERAL RELATED
HERETO, (B) ANY TRANSACTION CONTEMPLATED BY ANY SUCH DOCUMENTS OR (C) ANY
NEGOTIATION, PERFORMANCE OR ENFORCEMENT OF THIS NOTE, OR ANY COLLATERAL RELATED
HERETO.  BORROWER CERTIFIES THAT NEITHER LENDER NOR ANY REPRESENTATIVE
OF LENDER HAS REPRESENTED TO BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE
WAIVER MADE BY BORROWER IN THIS PARAGRAPH.  BORROWER ACKNOWLEDGES THAT
IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL AS NECESSARY AND
APPROPRIATE.

     

    
      
        	 	
                WINDTAMER
      CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	 /s/  Willaim A. Schmitz	 
	 	 	Name:  William
      A. Schmitz	 
	 	 	Title:  Chief
      Executive Officer	 
	 	 	 	 

      

    

    
Rev.
03/30/2010

    

    Borrower’s signature must be
witnessed by an authorized representative of Lender or notarized prior to
returning to Lender:

    

    Witnessed
By:

    

    
 

    /s/ 
Sheila M. Studebaker            

    Print
Name:  Sheila M. Studebaker

    Print
Title:  Vice President

    First
Niagara Bank, N.A.

    

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

     

     

    STATE
OF  NEW
YORK                                       )

     

                      )           SS:

     

    COUNTY
OF  MONROE
                                      )

    

    On
the 26TH  day of
April in the year 2010, before me, the undersigned, personally appeared William
A. Schmitz, known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

     

    

     

    _          /s/  Katherine
H. Karl                

       

    

                                    Notary
Public

     

     

     

     

     

    5

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