Document:

Prepared by MerrillDirect

EXHIBIT 10.31

PUT PROMISSORY NOTE

 

$945,000December 27, 2000

New York,
New York

 

 1. Promise
to Pay Principal. FOR VALUE RECEIVED,
MECHANICAL TECHNOLOGY INCORPORATED, a corporation organized under the laws of
the state of New York (the "Payor"), hereby unconditionally promises
to pay to the order of FIRST ALBANY COMPANIES INC., a corporation organized
under the laws of the State of New York (the "Payee"), the
principal sum of NINE HUNDRED FORTY FIVE THOUSAND DOLLARS ($945,000), or such
lesser amount as shall equal the unpaid principal amount of this Note, on
January 3, 2002.

2. Interest.
The Payor hereby unconditionally promises to pay to the Payee interest on the
unpaid principal amount of this Note for the period from and including the date
of this Note to but excluding the date this Note is paid in full at the Prime
Rate (as such term is defined below) as in effect from time to time.
Notwithstanding the foregoing, the Payor hereby promises to pay to the Payee
interest on any principal or interest payable by the Payor under this Note that
shall not be paid in full when due, for the period from and including the due
date of such payment to but excluding the date the same is paid in full, at a
rate per annum equal to the lesser of (a) the Prime Rate plus 2% and (b) the highest interest rate
then permitted by law (the "Post-Default Rate"). Accrued interest
shall be due and payable (a) on January 3, 2002 and (b) upon the payment
or prepayment of any principal of this Note (but only on the principal amount
so paid or prepaid); provided
that any interest accruing at the Post-Default Rate shall also be payable from
time to time upon demand. Interest shall be compounded quarterly on each March
31, June 30, September 30 and December 31 (commencing with the first such date
after the date of this Note). Interest payable under this Note shall be
computed on the basis of a year of 365 days for the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.

 3. Amounts
Owing. The Payee shall maintain records of the amounts owing under this
Note, and such records shall, absent manifest error, be conclusive evidence of
such amounts. Prior to any sale, assignment or transfer of this Note, each
payment of principal theretofore made under this Note, together with each
reduction in the principal amount of this Note effected under Paragraph 15 of
this Note, shall be endorsed by the Payee on Annex A hereto (or any
continuation of said Annex).

4. Manner
of Payment. All payments of principal and interest to be made by the Payor
under this Note shall be made in Dollars, in immediately available funds, by
wire transfer to an account at a commercial bank located in New York, New York
(which account shall be identified in a notice to the Payor), not later than
6:00 p.m. New York time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). Except as otherwise expressly
provided in Paragrpah 15 of this Note, all amounts payable under this Note
shall be paid free and clear of, and without reduction by reason of, any
deduction, set-off or counterclaim. The Payor shall, at the time of making each
payment under this Note, specify to the Payee the amounts payable by the Payor
under this Note to which such payment is to be applied, in which case such
payment shall be so applied (and in the event that the Payor fails to so
specify, such payment shall be applied in such manner as is determined to be
appropriate by the Payee).

5. Payments
on Business Days. If the due date of any payment under this Note would
otherwise fall on a day that is not a Business Day, such due date shall be
extended to the next succeeding Business Day, and interest shall be payable on
any principal so extended for the period of such extension.

6. Prepayments.
At any time or from time to time, the Payor shall have the right to prepay all
or any portion of the principal amount owing under this Note, provided that each prepayment shall be in
a principal amount of not less than $100,000.

7. Right
of Set-Off. The Payor agrees that, in addition to (and without limitation
of) any right of set-off or counterclaim the Payee may otherwise have, the
Payee shall be entitled, at its option, to offset amounts owing by the Payee to
the Payor, in Dollars or in any other currency (regardless of whether such
amounts are then due to the Payor), against any amount payable by the Payor to
the Payee under this Note that is not paid when due; provided that nothing contained herein shall require the
Payee to exercise any such right.

8. Representations
and Warranties. The Payor hereby represents and warrants to the Payee as
follows:

(a) No Breach. None of the execution and delivery
of this Note, the making of the extension of credit evidenced hereby, the
consummation of the transactions herein contemplated and compliance with the
terms and provisions hereof will conflict with or result in a breach of, or
require any consent under, any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
any agreement or instrument to which the Payor is a party or by which the Payor
is bound or to which the Payor is subject, or constitute a default under, or
result in the creation of any lien under, any such agreement or instrument.

(b) Action; Execution and Delivery; Enforceability.
The Payor has all necessary power and authority to execute, deliver and perform
its obligations under this Note, and this Note has been duly and validly
executed and delivered by the Payor and constitutes its legal, valid and
binding obligation, enforceable against the Payor in accordance with its terms.

(c) Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution, delivery or
performance by the Payor of this Note or for the validity or enforceability
hereof.

9. Certain
Expenses. The Payor agrees to pay or reimburse the Payee for paying:
(a) all costs and expenses of the Payee (including, without limitation,
reasonable counsels' fees) in connection with any enforcement or collection
proceedings hereunder; and (b) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Note or any other document referred to herein.

10. Default;
Remedies; Expenses. If one or more of the following events (herein called
"Events of Default")
shall occur and be continuing:

(a) the Payor shall default in the payment of any
Obligations when the same shall become due (whether at stated maturity or
otherwise); or

(b) the Payor shall default in the payment when due of
any principal of or interest on any of its other Indebtedness; or any event
specified in any note, agreement, indenture or other document evidencing or
relating to any such Indebtedness shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become due, or
to be prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity; or

(c) any representation, warranty or certification made
or deemed made herein or in the Pledge Agreement by the Payor shall prove to
have been false or misleading as of the time made or furnished in any material
respect; or

(d) the Payor shall (i) apply for or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial part of
its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code,
(iv) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Bankruptcy Code or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or

(e) a proceeding or case shall be commenced, without
the application or consent of the Payor, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator or the like of the Payor or of all or any substantial part of its
property or (iii) similar relief in respect of the Payor under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of 45 or
more days; or an order for relief against the Payor shall be entered in an
involuntary case under the Bankruptcy Code; or

(f) the liens created by the Pledge Agreement shall at
any time not constitute a valid and perfected lien on the collateral intended
to be covered thereby in favor of the Payee, free and clear of all other liens,
or the Pledge Agreement shall for whatever reason be terminated or cease to be
in full force and effect, or the enforceability thereof shall be contested by
the Payor;

THEREUPON: (1) in the case of an Event
of Default other than one referred to in clause (d) or (e) of this
Paragraph 10, the Payee may, by notice to the Payor, declare the principal
amount then outstanding of, and the accrued interest on, this Note and all
other amounts payable by the Payor hereunder and under the Pledge Agreement to
be forthwith due and payable, whereupon such amounts shall be immediately due
and payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Payor; and (2) in
the case of the occurrence of an Event of Default referred to in
clause (d) or (e) of this Paragraph 10, the principal amount then
outstanding of, and the accrued interest on, this Note and all other amounts
payable by the Payor hereunder and under the Pledge Agreement shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Payor.

11. Definitions.
As used herein, the following terms shall have the following respective
meanings:

"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.

"Business Day" shall mean any day on which
commercial banks are not authorized or required to close in New York, New York.

"Dollars" and "$" shall mean lawful money of the
United States of America.

"Federal Funds Effective Rate" shall mean, for any
period, a fluctuating interest rate equal for each day during such period to
the weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by KeyBank, from
three Federal Funds brokers of recognized standing selected by KeyBank.

"Indebtedness" shall mean, for any Person: (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business; (c)
Indebtedness of others secured by a lien on the property of such Person, whether
or not the respective indebtedness so secured has been assumed by such Person;
(d) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person; (e) capital lease obligations of such Person; and (f)
Indebtedness of others guaranteed by such Person.

"KeyBank" shall mean KeyBank National Association, a
national banking association, and its successors.

"Obligations" shall mean all amounts owing under
this Note (whether for principal, interest or any other amount) and all amounts
owing to the Payee under the Pledge Agreement.

"Person" shall mean any individual, corporation,
company, voluntary association, partnership, limited liability company, joint
venture, trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).

"Pledge Agreement" shall mean the Put Pledge
Agreement dated as of the date of this Note between the Payor and the Payee, as
the same shall be amended, modified and supplemented and in effect from time to
time.

"Prime Rate" shall mean, for any period, a
fluctuating interest rate per annum as shall be in effect from time to time
which rate per annum shall at all times be equal to the greater of (i) the rate
of interest established by KeyBank in Cleveland, Ohio, from time to time, as
its prime rate, whether or not publicly announced, which interest rate may or
may not be the lowest rate charged by it for commercial loans or other extensions
of credit, and (ii) the Federal Funds Effective Rate in effect from time to
time plus 1/2 of 1% per annum.

12. Waiver.

No
failure on the part of the Payee to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under this
Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

13. Notices.

All
notices and other communications in respect of this Note (including, without
limitation, any modifications of, or requests, waivers or consents under, this
Note) shall be given or made in writing (including, without limitation, by
telecopy) to the Payor or the Payee, as applicable, at the "Address for
Notices" specified below its name on the signature pages hereof or, as to
either the Payor or the Payee, at such other address as shall be designated by
such party in a notice to the other party. Except as otherwise provided in this
Note, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.

14. Amendments;
Successors; Assignments. This Note may not be amended except by an
instrument in writing signed by each of the Payor and the Payee. This Note
shall be binding upon and inure to the benefit of the Payor and the Payee and
their respective successors and permitted assigns. The Payor shall not assign
any of its rights or obligations under this Note without the prior consent of
the Payee. The Payee may at any time and from time to time, without the consent
of the Payor, assign all or any portion of its rights under this Note to one or
more persons or entities, and, upon the Payee giving notice of such assignment
to the Payor specifying the interest hereunder being assigned and the person or
entity to which such interest is being assigned, each reference herein to the
Payee shall (solely in respect of the interest so assigned) constitute a
reference to such assignee (as if such assignee were named herein) rather than
the Payee. The Payee shall be entitled to have this Note subdivided, by
exchange of this Note for promissory notes of lesser denominations or
otherwise, to the extent necessary to reflect any such assignment.

15. Equity
Conversion Provisions. If, at any time prior to the date on which the
outstanding principal amount of and accrued and unpaid interest on this Note is
paid in full, the Payor effects one or more Qualified Rights Offerings, or
issues additional Capital Stock in one or more Qualified Stock Offerings (each
such event, an "Equity
Event") then, with the consent of the Payor (which consent
may be withheld by the Payor in its sole discretion), the Payee may apply all
or a portion of the outstanding principal amount of and accrued and unpaid
interest on this Note toward the purchase price of Equity Rights in such
Qualified Rights Offering or toward the purchase price of Capital Stock in such
Qualified Stock Offering (as the case may be) on and subject to the following
terms:

(a) The Payee would participate in such Equity Event
on a pari passu basis with the
other participants therein and on economic terms identical to the economic
terms on which such other participants are acquiring the related Equity
Interests, except that the amount that would otherwise be payable in cash by
the Payee to acquire such Equity Interests would be paid for by the Payee by
means of a reduction in the outstanding principal amount of this Note and
accrued and unpaid interest hereon.

(b) Each such reduction shall be applied first to reduce the amount of accrued and
unpaid interest then owing on this Note and then
to reduce the then outstanding principal amount of this Note (in each case
determined as of the date on which such Equity Interests are issued in connection
with such Equity Event).

As used
in this Paragraph 15, the following terms shall have the following respective
meanings:

"Equity Interests" shall mean Equity Rights issued
in a Qualified Rights Offering and Capital Stock issued in a Qualified Stock
Offering.

"Equity Rights" shall mean any rights to acquire any
Capital Stock.

"Capital Stock" shall mean any capital stock of the
Payor.

"Qualified Rights Offering" shall mean an offering
by the Payor of Equity Rights after the date hereof.

"Qualified Stock Offering" shall mean an offering by
the Payor of any Capital Stock after the date hereof, provided that such Capital Stock is
offered in a registered public offering or private placement. 

 16.
Governing Law; Submission to Jurisdiction; Venue. This Note shall be
governed by, and construed in accordance with, the law of the State of New
York. The Payor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
State court sitting in New York County for the purposes of all legal
proceedings arising out of or relating to this Note or the transactions
contemplated hereby. The Payor irrevocably waives, to the fullest extent
permitted by applicable law, any objection which he may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.

17. Waiver
of Jury Trial.

EACH OF THE PAYOR AND THE PAYEE, BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS NOTE, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

[remainder of page intentionally blank]

 

 

IN WITNESS WHEREOF, the undersigned has
caused this Note to be duly executed and delivered as of the day and year first
above written.

 

MECHANICAL TECHNOLOGY INCORPORATED

 

By_s/Cynthia A. Scheuer______________________

Name: Cynthia A. Scheuer

Title: Vice President and Chief Financial Officer

Address for Notices:

Mechanical Technology Incorporated

30 South Pearl Street

Albany, New York 12205

Attention: Chief Financial Officer

Telephone No.: (518) 433-2170 

Telecopier No.: (518) 433-2171

 

ACCEPTED
AND AGREED:

FIRST
ALBANY COMPANIES INC.

 

 

By_s/George
M. McNamee______

Name:
George M. McNamee

Title:
Chairman and Co-Chief Executive Officer 

Address
for Notices

First
Albany Companies Inc.

30 South
Pearl Street

Albany,
New York 12205

Attention:
Chief Financial Officer

Telephone
No.: (518) 447-8059

Telecopier
No.: (518) 447-8068

ANNEX A

 

 

Amount of
Date of Notation

Payment  
Payment   Made ByPrepared by MerrillDirect

EXHIBIT 10.32

STOCK PLEDGE AGREEMENT

THIS STOCK PLEDGE AGREEMENT, dated as of
December 27, 2000 (herein as amended or otherwise modified, the "Agreement"), by MECHANICAL TECHNOLOGY INCORPORATED, a New
York corporation (herein, together with its successors and assigns, the "Pledgor" or the
"Borrower"),
with FIRST ALBANY COMPANIES INC.,
a corporation organized under the laws of the State of New York (herein,
together with its successors and assigns, the "Lender"). Terms
used in this Agreement and not otherwise defined shall have the meanings
assigned to them in the Put Note referred to below.

On the
date hereof, for value received, the Pledgor has issued to the Lender a
promissory note in the original principal amount of $945,000 (the "Put Note"). To
induce the Lender to extend credit to the Pledgor under the Put Note, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Pledgor has agreed to pledge to the Lender, and grant
to the Lender a security interest in, 200,000 shares of common stock of Plug
Power Inc., a Delaware corporation (together with its successors and assigns,
the "Company")
(the "Pledged
Shares") and the other Pledged Collateral referred to below
to secure all of its obligations under the Put Note. Accordingly, the parties
hereto hereby agree as follows:

1. The Pledgor hereby pledges to the
Lender, and grants to the Lender a security interest in the Pledged Shares, the
certificates representing the Pledged Shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares, including, without limitation, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions and
replacements of all of the foregoing (collectively, the "Pledged Collateral"):

2. Security for Secured Obligations. This
Agreement secures the payment of (i) all obligations of the Borrower now
or hereafter existing under the Put Note, whether for principal, interest,
fees, expenses or otherwise and (ii) all obligations of the Pledgor now or
hereafter existing under this Agreement (all such obligations of the Borrower
referred to in this Section 2 being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts which constitute part of the Secured Obligations and would be owed
by the Borrower but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.

3. Delivery of Pledged Collateral; Removal of Legends; Use of
Securities Account. (a) All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and
held by or on behalf of the Lender pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Lender. The Lender shall have the right, in its discretion,
at any time during the continuance of an Event of Default and without notice to
the Pledgor, to transfer to or to register in the name of the Lender or any of
its nominees any or all of the Pledged Collateral, subject only to the
revocable rights specified in Section 6(a). In addition, the Lender shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.

(b) If
any Pledged Collateral is subject to any contractual restriction on transfer
arising under any agreement to which the Pledgor is a party with the issuer,
other shareholders and/or any underwriters, and any certificate or certificates
for such Pledged Collateral contain a legend which makes reference to such
restrictions, the Pledgor will, from time to time and as promptly as
circumstances permit, take all such actions as are within its power to request
and obtain the removal of such legend from certificates for the maximum number
of shares as to which it is entitled to have such legend removed.

(c) If
after the date hereof any or all of the Pledged Collateral may be held in book
entry form and the Pledgor desires that such Pledged Collateral be held in such
form in an account which the Pledgor has with a broker which is a member firm
of the National Association of Securities Dealers, then the Lender will
cooperate with the Pledgor in transferring such Pledged Collateral to such
account, provided
that there is in place an "account control agreement" reasonably
satisfactory to the Lender which is sufficient to perfect its security interest
in the Pledged Collateral held in such account and all proceeds thereof.

4. Representations and Warranties. The
Pledgor represents and warrants that:

(a) The
Pledged Shares have been duly authorized and validly issued and are fully paid
and non-assessable.

(b) The
Pledgor (i) is the legal and beneficial owner of the Pledged Collateral free
and clear of any lien, security interest, option or other charge or encumbrance
except for the security interest created by this Agreement and (ii) has legally
and beneficially owned the Pledge Shares since June 27, 1997.

(c) The pledge
of the Pledged Shares pursuant to this Agreement creates a valid and perfected
first priority security interest in the Pledged Collateral, securing the
payment of the Secured Obligations.

(d) No
consent of any other person or entity and no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required (i) for the pledge by the Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery or performance
of this Agreement by the Pledgor, (ii) for the perfection or maintenance
of the security interest created hereby (including the first priority nature of
such security interest) or (iii) for the exercise by the Lender of the voting
or other rights provided for in this Agreement or the remedies in respect of
the Pledged Collateral pursuant to this Agreement (except as may be required in
connection with any disposition of any portion of the Pledged Collateral by
laws affecting the offering and sale of securities generally).

(e) The
Pledged Shares constitute as of such date the percentage of the issued and
outstanding shares of stock of the issuer thereof indicated on Schedule I.

(f) There
are no conditions precedent to the effectiveness of this Agreement that have
not been satisfied or waived.

(g) The
Pledgor has, independently and without reliance upon the Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.

5. Further Assurances. (a) The Pledgor
agrees that at any time and from time to time, at the expense of the Pledgor,
the Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that the Lender may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Lender to exercise and enforce its rights and remedies hereunder with respect
to any Pledged Collateral.

(b) If
the Pledgor registers shares of common stock of the Company with the intention
of retaining ownership, the Pledgor agrees to register or cause to be
registered that portion of the Pledged Collateral subject to SEC Rule 144 as
soon as it is feasible.

6. Voting Rights; Dividends; etc. (a) So
long as no Event of Default shall have occurred and be continuing:

(i) The Pledgor shall be entitled to exercise or
refrain from exercising any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement.

(ii) The Pledgor shall be entitled to receive and
retain any and all dividends and distributions paid in respect of the Pledged
Collateral, provided,
however, that any and all

(A) dividends and distributions paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, Pledged
Collateral, and

(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, 

shall be, and shall be forthwith delivered to the
Lender to hold as, Pledged Collateral and shall, if received by the Pledgor, be
received in trust for the benefit of the Lender, be segregated from the other
property or funds of the Pledgor, and be forthwith delivered to the Lender as
Pledged Collateral in the same form as so received (with any necessary
endorsement or assignment).

(iii) The Lender shall execute and deliver (or cause
to be delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purposes of enabling the Pledgor to
receive dividends or distributions that it is authorized to receive and retain
pursuant to paragraph (ii) above.

(b) Upon
the occurrence and during the continuance of an Event of Default:

(i) All rights of the Pledgor (x) to exercise or
refrain from exercising the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 6(a)(i) shall, upon
notice to the Pledgor by the Lender, cease and (y) to receive the
dividends and distributions which it would otherwise be authorized to receive
and retain pursuant to Section 6(a)(ii) shall automatically cease, and all such
rights shall thereupon become vested in the Lender who shall thereupon have the
sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Pledged Collateral such dividends
and distributions.

(ii) All dividends and distributions which are
received by the Pledgor contrary to the provisions of paragraph (i) of this
Section 6(b) shall be received in trust for the benefit of the Lender, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Lender as Pledged Collateral in the same form as so received (with any
necessary endorsement).

(iii) The Lender, in its sole and absolute discretion,
shall either (x) apply in any manner any Pledged Collateral consisting of cash
received by or on behalf of the Lender under this Section 6(b) to the payment
of principal of and interest on the Put Note and other obligations hereunder
and under the Put Note or (y) deposit and hold such Pledged Collateral
consisting of cash in the Debt Service Reserve Account as additional Pledged
Collateral.

7. Transfers and Other Liens. The Pledgor
agrees that it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral and any such sale, assignment or disposition will be
null and void; or (ii) create or permit to exist any lien, security interest,
option or other charge or encumbrance upon or with respect to any of the
Pledged Collateral, except
for the security interest under this Agreement.

8. Lender Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Lender the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Lender's discretion to take any action
and to execute any instrument which the Lender may deem necessary or advisable
to accomplish the purposes of this Agreement (subject to the rights of the
Pledgor under Section 6), including, without limitation, to receive,
indorse and collect all instruments made payable to the Pledgor representing
any dividend, or other distribution in respect of the Pledged Collateral or any
part thereof and to give full discharge for the same, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.

9. Lender May Perform. If the Pledgor fails
to perform any agreement contained herein, the Lender may itself perform, or
cause performance of, such agreement, and the expenses of the Lender incurred
in connection therewith shall be payable by the Pledgor under Section 14.

10. The Lender's Duties. The powers
conferred on the Lender hereunder are solely to protect its interest in the
Pledged Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Lender
shall have no duty as to any Pledged Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the Lender has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Pledged Collateral. The Lender shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Lender accords its own property.

11. Remedies upon Default. If any Event of
Default shall have occurred and be continuing:

(a) The
Lender may exercise in respect of the Pledged Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the Uniform Commercial
Code in effect in the State of New York at that time (the "Code") (whether
or not the Code applies to the affected Collateral), and may also, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Lender's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Lender may deem
commercially reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Lender shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.

(b) Any
cash held by the Lender as Pledged Collateral and all cash proceeds received by
the Lender in respect of any sale of, collection from, or other realization
upon all or any part of the Pledged Collateral may, in the discretion of the
Lender, be held by the Lender as collateral for, and/or then or at any time
thereafter be applied (after payment of any amounts payable to the Lender
pursuant to Section 14) in whole or in part by the Lender against, all or any
part of the Secured Obligations in such order as the Lender shall elect. Any
surplus of such cash or cash proceeds held by the Lender and remaining after
payment in full of all the Secured Obligations shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.

(c) The
Pledgor recognizes that Lender may be unable to effect a public sale of all or
part of the Pledged Collateral by reason of certain provisions contained in the
1933 Act or in the rules and regulations promulgated thereunder or in
applicable state securities or blue sky laws, but may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Pledged Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges and agrees that private sales so made
may be at prices and on other terms less favorable to the seller than if the
Pledged Collateral were sold at a public sale, and that the Lender has no
obligation to delay the sale of the Pledged Collateral for the period of time
necessary to permit the registration of the Pledged Collateral for public sale
under the 1933 Act and under applicable state securities or Blue Sky laws. The
Pledgor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.

12. Registration Rights. (a) If the Lender
shall determine to exercise its right to sell all or any of the Pledged
Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the
Lender, the Pledgor will, at its own expense:

(i) execute and deliver, and use its best efforts to
cause the Company to execute and deliver, all such instruments and documents,
and do or cause to be done all such other acts and things, as may be necessary
or, in the opinion of the Lender, advisable to register such Pledged Collateral
under the provisions of the 1933 Act (as defined in the Credit Agreement), and
to cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the opinion of the Lender, are necessary or
advisable, all in conformity with the requirements of the 1933 Act and the
rules and regulations of the SEC (as so defined) applicable thereto;

(ii) endeavor to qualify the Pledged Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as requested by
the Lender;

(iii) use its best efforts to cause the Company to
make available to its security holders, as soon as practicable, an earning
statement which will satisfy the provisions of Section 11(a) of the 1933 Act;
and

(iv) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Pledged Collateral or any
part thereof valid and binding and in compliance with applicable law.

(b) The
Pledgor agrees that it shall take any and all actions necessary (including
using its best efforts to cause the Registration Rights Agreement (as defined
below) to be amended so that the Lender will be a party to such agreement) to
ensure that the portion of the Pledged Collateral that is deemed to be
Registrable Securities (as defined in the Registration Rights Agreement dated
November 1, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Registration
Rights Agreement") among each of the Holders executing a
signatory page thereto and the Company) shall have "piggy-back" registration
rights of the Pledgor pursuant to Section 2 of the Registration Rights
Agreement. The Pledgor further agrees that, upon request of the Lender, as
between the Pledged Collateral and all other shares of the Company legally and
beneficially owned by the Pledgor, the Pledgor shall cause the Pledged
Collateral to be registered pursuant to Section 2 of the Registration Rights
Agreement prior to any other such shares (other than shares then pledged to
KeyBank to secured obligations under the Credit Agreement).

13. Instructions from Lender. The Pledgor
hereby authorizes and instructs each issuer of any Pledged Shares pledged
hereunder to (i) comply with any instruction received by it from the Lender in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from the Pledgor, and the Pledgor agrees that
each such issuer shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Shares directly to the Lender.

14. Expenses. The Pledgor will upon demand
pay to the Lender the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
which the Lender may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Lender hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.

15. Amendments, etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

16. Addresses for Notices. All notices and
other communications provided for hereunder shall be in writing (including
telecopier, electronic e-mail, telegraphic, telex or cable communication) and
mailed, telecopied, e-mailed, telegraphed, telexed, cabled or delivered to it,
at its address specified on the signature page hereto, or, as to either party,
at such other address as shall be designated by such party in a written notice
to the other party. All such notices and other communications shall be
effective when received.

17. Continuing Security Interest. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until the payment in full of
the Put Note and all other Secured Obligations, (ii) be binding upon the
Pledgor, and its successors and assigns, and (iii) inure to the benefit of, and
be enforceable by, the Lender and its successors, transferees and assigns. Upon
the payment in full of the Put Note and all other Secured Obligations, the
security interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgor. Upon any such termination, the Lender
will, at the Pledgor's expense, return to the Pledgor such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof and execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.

18. Governing Law; UCC Terms. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. Unless otherwise defined herein, terms defined in
Article 9 of the Code are used herein as therein defined.

19. Counterparts. This Agreement may be
executed in any number of counterparts, and by different parties on separate
counterparts, each of which shall be an original, but all of which together
shall constitute one agreement.

IN WITNESS WHEREOF,
the Pledgor and the Lender have caused this Agreement to be duly executed and
delivered as of the date first above written.

MECHANICAL TECHNOLOGY INCORPORATED,

as Pledgor

 

 

By_s/Cynthia A. Scheuer____________________

Name: Cynthia A. Scheuer

Title: Vice President and Chief Financial Officer

Address for Notices:

Mechanical Technology Incorporated

30 South Pearl Street

Albany, New York 12205

Attention: Chief Financial Officer

Telephone No.: (518) 433-2170 

Telecopier No.: (518) 433-2171

 

FIRST ALBANY COMPANIES INC.,

as Lender

 

 

By s/George M. NcNamee____________________

Name: George M. McNamee

Title: Chairman and Co-Chief Executive Officer

Address for Notices

First Albany Companies Inc.

30 South Pearl Street

Albany, New York 12205

Attention: Chief Financial Officer

Telephone No.: (518) 447-8059

Telecopier No.: (518) 447-8048

 

SCHEDULE I

	
  Stock
  Issuer
  	
  Class
  of Stock
  	
  Stock
  Certificate
  No.
  	
  Par
  Value
  	
  Number
  of
  Shares
  	
  Percentage
  of
  Outstanding
  Shares
  
	
  Plug Power Inc.
   
   
  	
  Common Stock
  	
   
  	
  $0.01
  	
  200,000
  	
  %

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