I think $12- $15 million would be a fair price under current conditions and a steal for Samsung, but the company is probably worth much more than $2-$4 a share? I know Samsung wants a couple of plants if they can get Hydrogen to build and deliver them?
Form 8-K for HYDROGEN CORP
28-Aug-2008
Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati
Item 1.01. Entry into a Material Definitive Agreement.
On August 22, 2008 (the "Closing Date"), HydroGen Corporation (the "Company"), HydroGen, L.L.C., the Company's wholly-owned subsidiary ("HydroGen, L.L.C."), Samsung C&T Corporation ("Samsung") and Federated Kaufmann Fund, a portfolio of Federated Equity Funds ("Federated Kaufmann" and, together with Samsung, the "Lenders"), and Federated Kaufmann, as Agent for the Lenders, entered into a Loan and Security Agreement (the "Loan and Security Agreement"). In connection with the Loan and Security Agreement and on the Closing Date, the Company issued to each Lender a warrant to purchase up to 400,000 shares of common stock of the Company (the "Closing Warrants"). Also, in connection with the Loan and Security Agreement and on the Closing Date, the Company and Federated Kaufmann, as Agent for the Lenders, entered into a General Continuing Guaranty (the 'Guaranty") pursuant to which the Company has guarantied all of the obligations of HydroGen, L.L.C. under the Loan and Security Agreement and a Membership Interest Pledge Agreement (the "Pledge Agreement") pursuant to which the Company has pledged one hundred percent (100%) of its membership interest in HydroGen, L.L.C. Set forth below is a brief description of the material terms of each of the Loan and Security Agreement, Guaranty, Pledge Agreement and Closing Warrant. The descriptions below of these agreements are qualified in their entirety by reference to the full text of the Loan and Security Agreement, Guaranty, Pledge Agreement, and Closing Warrant, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, and are incorporated by reference herein.
Loan and Security Agreement
Pursuant to the Loan and Security Agreement, each Lender has agreed to loan to HydroGen, L.L.C. $ 1 million in two equal installments. On the Closing Date, each Lender provided $500,000, for an aggregate amount of $1 million, to HydroGen, L.L.C. Also, on the Closing Date, each Lender deposited $500,000, for an aggregate amount of $1 million, in a segregated account to be released to HydroGen, L.L.C. upon the satisfaction of the following two conditions: (1) each of the Lenders has been notified that HydroGen, L.L.C.'s demonstration facility at ASHTA Chemicals, Inc. has been successfully started up to 10 amps and 5 psig, has completed acid addition, and has achieved stable fuel cell segment voltages sufficient to initiate increased power level operation, and (2) Federated Kaufmann has received either (a) a letter from a financial advisor to HydroGen, L.L.C. indicating that one or more persons has indicated a willingness to close an equity or debt transaction with HydroGen, L.L.C or the Company on or prior to December 15, 2008, which will allow the loan to be repaid in full on or prior to the Maturity Date (as defined below), or (b) a letter from Samsung indicating Samsung's willingness to close an equity transaction with HydroGen, L.L.C. or the Company on or prior to December 15, 2008 and stating the cash purchase price it is willing to pay in connection with such transaction in an amount equal to or greater than a minimum cash purchase price mutually agreed upon by Samsung and Federated Kaufmann as an acceptable minimum price. Any such letter from Samsung shall not be a binding commitment on the part of Samsung to pursue a transaction with the Company or HydroGen, L.L.C. or to pursue a transaction at any specific transaction price. If HydroGen, L.L.C. is unable to meet the two conditions to release the second installment of the loan on or before September 30, 2008, the amount of the loan proceeds in the segregated account shall be returned to Samsung and Federated Kaufmann.
The obligation of HydroGen, L.L.C. to repay the loan is evidenced by separate notes issued to each of the Lenders (see Exhibit 10.5 hereto). The principal amount of the loan and any accrued and unpaid interest shall become due and payable on December 15, 2008; provided that if on or before December 15, 2008, HydroGen, L.L.C. has executed a definitive agreement with a third-party to consummate a transaction with either HydroGen, L.L.C. or the Company for an amount that will result in full repayment of the loan, and such transaction requires shareholder approval as a closing condition, then said maturity date shall be extended until the earlier of (i) February 1, 2009 and (ii) ten (10) days from the date on which the transaction was put to a vote of shareholders of the Company (the "Maturity Date").
Interest on the unpaid principal balance of the loan shall accrue at a rate equal to twelve percent (12%) per annum and shall be payable in arrears on October 15, 2008 and on the Maturity Date, or together with any prepayment of the loan. Following and during the continuation of an Event of Default (as defined in the Loan and Security Agreement) and as elected by the Lenders as evidenced by written notice to HydroGen, L.L.C., interest on the unpaid principal balance of the loan (from the date of such notice until such Event of Default has been cured or waived by the Lenders) shall accrue at a rate equal to eighteen percent (18%) per annum.
As collateral security for the payment and performance of HydroGen, L.L.C.'s obligations under the Loan and Security Agreement, HydroGen, L.L.C. and the Company grant and convey to the Agent for the benefit of the Lenders a first priority continuing security interest in and lien upon all now owned and . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The material terms and conditions of the Loan and Security Agreement, Guaranty, Pledge Agreement, and Closing Warrant are set forth in Item 1.01 of this Current Report on Form 8-K and are incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The material terms and conditions of the Closing Warrant are set forth in Item 1.01 of this Current Report on Form 8-K and are incorporated by reference into this Item 3.02.
Item 8.01. Other Events.
On August 28, 2008, the Company issued a press release announcing that it had entered into the Loan and Security Agreement and provided an operational update. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report and is incorporated by reference herein.
The information in this Item 8.01, including that incorporated herein by reference, is being furnished and shall not be deemed filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Loan and Security Agreement, dated as of August 22, 2008, by and
among HydroGen, L.L.C., HydroGen Corporation, Federated Kaufmann
Fund, a portfolio of Federated Equity Funds, as Agent, Samsung C&T
Corporation, and Federated Kaufmann Fund.
10.2 General Continuing Guaranty, dated as of August 22, 2008, by and
between Federated Kaufmann Fund, a portfolio of Federated Equity
Funds, as Agent, and HydroGen Corporation.
10.3 Membership Interest Pledge Agreement, dated as of August 22, 2008,
by and between Federated Kaufmann Fund, a portfolio of Federated
Equity Funds, as Agent, and HydroGen Corporation.
10.4 Form of Warrant issued to Samsung C&T Corporation and Federated
Kaufmann Fund.
10.5 Form of Secured Term Loan Note issued to Samsung C&T Corporation and
Federated Kaufmann Fund.
99.1 Press release of HydroGen Corporation dated August 28, 2008. |
