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Long-Term Debt
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
Long-Term Debt

 

10.  Long-Term Debt

 

NY Green Bank Loan

 

On December 23, 2016, the Company, and its subsidiaries Emerging Power Inc. and Emergent Power Inc. entered into a loan and security agreement with NY Green Bank, a Division of the New York State Energy Research & Development Authority, (NY Green Bank), pursuant to which NY Green Bank made available to the Company a secured term loan facility in the amount of $25.0 million (Term Loan Facility), subject to certain terms and conditions.  The Company borrowed $25.0 million upon closing and incurred costs of $1.2 million.  At December 31, 2016, the outstanding principal balance under the Term Loan Facility was $25.0 million.  The fair value of the Term Loan Facility approximates the carrying value as of December, 31, 2016. 

 

Advances under the Term Loan Facility bear interest at a rate equal to the sum of (i) the LIBOR rate for the applicable interest period, plus (ii) the credit default swap index coupon for the applicable interest period, plus (iii) 6.00% per annum. The interest rate at December 31, 2016 was approximately 11.3%.  The term of the loan is three years, with a maturity date of December 23, 2019.  Estimated principal payments will approximately be $3.0 million, $8.4 million, and $13.6 million during the years ended December 31, 2017, 2018, and 2019, respectively.  These payments will be funded by restricted cash released, as described in Note 17, Commitments and Contingencies.

 

Interest and a varying portion of the principal amount is payable on a quarterly basis and the entire then outstanding principal balance of the Term Loan Facility, together with all accrued and unpaid interest, is due and payable on the maturity date.  On the maturity date, the Company may also be required to pay additional fees of up to $1.0 million if the Company is unable to meet certain goals related to the deployment of fuel cell systems in the State of New York and increasing the Company’s number of full-time employees in the State of New York.

 

The Term Loan Facility is secured by substantially all of the Company’s and the guarantor  subsidiaries’ assets, including, among other assets, all intellectual property, all securities in domestic subsidiaries and 65% of the securities in foreign subsidiaries, subject to certain exceptions and exclusions.

 

The Term Loan Facility contains covenants, including, among others, (i) the provision of annual and quarterly financial statements, management rights and insurance policies and (ii) restrictions on incurring debt, granting liens, making acquisitions, making loans, paying dividends, dissolving, and entering into leases and asset sales.  The Term Loan Facility also provides for events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control, judgment and material adverse effect defaults at the discretion of the lender.

 

The Term Loan Facility provides that if there is an event of default due to the Company’s insolvency or if the Company fails to perform, in any material respect, the servicing requirements for fuel cell systems under certain customer agreements, which failure would entitle the customer to terminate such customer agreement, replace the Company or withhold the payment of any material amount to the Company under such customer agreement, then the NY Green Bank has the right to cause a wholly owned subsidiary of the Company to replace the Company in performing the maintenance services under such customer agreement.

 

Hercules Capital, Inc. Loan

 

On June 27, 2016, Plug Power Inc. and its subsidiaries Emerging Power Inc. and Emergent Power Inc. entered into a loan and security agreement with Hercules Capital, Inc. (Hercules) pursuant to which Hercules agreed to make available to the Company a secured term loan facility in the amount of up to $40.0 million (the Hercules Term Loan Facility), subject to certain terms and conditions.  The Company borrowed $25.0 million on the date of closing and incurred transaction costs of $1.4 million. 

 

On December 22, 2016, the Company prepaid in full its obligations under the Hercules Loan and Security Agreement and the Hercules Term Loan Facility was terminated.  The Company used the net proceeds of preferred and common stock public offerings, together with existing cash, to repay the principal amount outstanding under the Hercules Term Loan Facility of $25.0 million and pay the interest, fees and expenses related to such repayment of $4.0 million. In addition, the Company recorded accelerated amortization of debt issuance costs of $1.1 million.  The interest, fees, expenses and amortization have been included within interest and other (expense) income, net on the consolidated statements of operations.