Exhibit (10)(ii)
USTrust Bank USTrust
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
LINE OF CREDIT AGREEMENT
FOR THE ACQUISITION OF EQUIPMENT
November 13, 1998
Thermodynetics, Inc.
000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Treasurer
Gentlemen:
We (hereinafter "Bank") are pleased to advise you (hereinafter referred to
as the "Borrower") that Bank has established a line of credit of up to Three
Hundred Thousand ($300,000.00) Dollars (hereinafter the "Credit Limit") for
Borrower to be used exclusively for the purchase of new or used equipment;
subject to Bank's periodic review. This line of credit will be subject to the
following terms and conditions:
1. Any advances, extensions of credit, or loan of funds pursuant to this
line of credit (hereinafter collectively and separately referred to as the
"Loan") will be made only if in the opinion of Bank there has been no material
adverse change of circumstances and if there exists no Event(s) of Default (as
hereinafter defined). No advances, extensions of credit or loan of funds will be
made on or after July 31, 1999. Any sums repaid hereunder shall not be
readvanced.
2. Borrower may draw upon this line of credit from time to time by
presenting to Bank for each Loan: (i) an invoice from the vendor of such
equipment in a form reasonably acceptable to Bank, which includes, without
limitation, the purchase price of such equipment, including all accessions
thereto, net of all discounts, rebates, and other dealer or manufacturer
incentives; (ii) a certificate of origin, xxxx of sale, or other documentation
satisfactory to Bank indicating whether the equipment being purchased is new or
used equipment (hereinafter referred to as the "Equipment Documentation"); and
(iii) an Equipment Documentation Certification in the form of Exhibit A annexed
hereto. Draws under this Line of Credit Agreement must be equal to or exceed the
sum of Fifty Thousand ($50,000.00) Dollars.
3. Interest will be charged to Borrower at a rate which is the daily
equivalent to the Base Lending Rate in effect from time to time, plus one (1%)
percent per annum, or such other rate as Bank and Borrower may from time to time
agree to, upon any balance owing to Bank at the close of each day. The rate of
interest payable by Borrower shall be changed effective as of that date in which
a change in the Base Lending Rate becomes effective. Interest shall be computed
on the basis of the actual number of days elapsed over a year of three hundred
sixty (360) days. Such interest shall be payable monthly in arrears on the first
(1st) day of each month, commencing on the first of such dates next succeeding
the date hereof. Upon the occurrence of an Event of Default hereunder, interest
on unpaid balances shall thereafter be payable at a fluctuating interest rate
per annum equal to three (3%) percent greater than the rate of interest
specified herein.
The term "Base Lending Rate" as used herein shall mean the rate of interest
announced by Bank from time to time, at its head office, as its Base Lending
Rate, it being understood that such rate is a reference rate, and not
necessarily the lowest rate of interest charged by Bank.
4. The aggregate principal amount of any Loan made hereunder shall be
payable in forty-eight (48) successive equal monthly installments over a term
that begins on the first day of the first month which is more than six (6)
months from the date of such Loan with the proviso that all Loans shall become
due and payable upon the termination of an Amended and Restated Loan and
Security Agreement (Accounts Receivable and Inventory) dated October 31, 1994,
as amended, between Bank and Turbotec Products, Inc. (the "Loan Agreement").
5. The Loan may, but need not, be evidenced by notes in a form reasonably
satisfactory to Bank, but in the absence of notes, shall be conclusively
evidenced by Bank's records of disbursements. The Loan, together with interest
thereon, is secured by all collateral at any time granted to Bank by Borrower,
or any guarantor of Borrower to secure any obligations of Borrower to Bank, and
includes, without limitation, that certain Security Agreement, Inventory,
Accounts, Equipment and Other Property dated September 4, 1992, executed by
Borrower in favor of Bank (the "Security Agreement").
6. The aggregate principal amount of any Loan made against any Equipment
Documentation shall not exceed the lesser of (i) the Credit Limit, less any
previous Loan, or (ii) eighty (80%) percent of the net purchase price (exclusive
of any soft costs, transportation or installation charges) of the equipment
referred to therein.
7. Borrower will pay or reimburse Bank for all reasonable expenses,
including reasonable attorneys' fees, which Bank may in any way incur in
connection with this agreement or any other agreement between Borrower and Bank
or with any Loan or which result from any claim or action by any third person
against Bank which would not have been asserted were it not for Bank's
relationship with Borrower hereunder or otherwise.
8. Upon the occurrence of any one or more of the following events
(hereinafter "Events of Default"), any and all obligations of Borrower to Bank
shall become immediately due and payable, at the option of Bank and without
notice or demand:
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(a) The failure by Borrower to pay when due any principal, interest or
other amounts due under this Line of Credit Agreement.
(b) The termination of the Loan Agreement or the occurrence of an
Event of Default as described in the Loan Agreement or in the Security
Agreement.
(c) The occurrence of any such Event of Default shall also constitute,
without notice or demand, a default under all other agreements between Bank
and Borrower and instruments and papers given Bank by Borrower, whether
such agreements, instruments, or papers now exist or hereafter arise.
9. Borrower agrees that notwithstanding anything contained herein, the Loan
Agreement or otherwise, if Turbotec Products, Inc. shall pay off all amounts due
under the Loan Agreement and shall release Bank from its obligation, if any, to
make advances under the Loan Agreement or any successor agreement, Bank shall
have the right to terminate this line of credit and demand the immediate payment
of the balance due under this Line of Credit Agreement and any secured term note
issued pursuant to this Line of Credit Agreement.
10. The execution, delivery and performance of this Line of Credit
Agreement, any note or any other instrument or document at any time required in
respect hereof or of the Loan are within the corporate powers of Borrower, and
not, to the best of Borrower's knowledge, in contravention of law, the Articles
of Organization or By-Laws of Borrower or any amendment thereof, or of any
indenture, agreement or undertaking to which Borrower is a party or may
otherwise be bound, and each such instrument and document represents a valid and
binding obligation of Borrower and is fully enforceable according to its terms.
Borrower will, concurrently with the execution of this Line of Credit Agreement,
furnish Bank with the opinion of counsel for Borrower with respect to any or all
of the foregoing or other matters, such opinion to be in substance and form
reasonably satisfactory to Bank.
11. This Line of Credit Agreement is supplementary to each and every other
agreement between Borrower and Bank and shall not be so construed as to limit or
otherwise derogate from any of the rights or remedies of Bank or any of the
liabilities, obligations or undertakings of Borrower under any such agreement,
nor shall any contemporaneous or subsequent agreement between Borrower and Bank
be construed to limit or otherwise derogate from any of the rights or remedies
of Bank or any of the liabilities, obligations or undertakings of Borrower
hereunder unless such other agreement specifically refers to this Line of Credit
Agreement and expressly so provides.
12. This Line of Credit Agreement and the covenants and agreements herein
contained shall continue in full force and effect and shall be applicable not
only in respect of the Loan, but also to all other obligations, liabilities and
undertakings of Borrower to Bank whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising or acquired,
until all such obligations, liabilities and undertakings have been paid or
otherwise satisfied in full. No delay or omission on the part of Bank in
exercising any right hereunder shall operate as a waiver of such right or any
other right and waiver on any one or more occasions shall not be construed as a
bar to or waiver of any right or remedy of Bank on any future occasion. This
Line of Credit Agreement is intended to take effect as a sealed instrument,
shall
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be governed by and construed according to the laws of the Commonwealth of
Massachusetts, shall be binding upon Borrower's successors and assigns and shall
inure to the benefit of Bank's successors and assigns.
13. THE BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT THEY MAY HAVE OR HEREAFTER HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS LINE OF CREDIT AGREEMENT. The Borrower hereby certifies that neither Bank
nor any of its representatives, agents or counsel has represented, expressly or
otherwise, that Bank would not, in the event of any such suit, action or
proceeding, seek to enforce this waiver of right to trial by jury. The Borrower
acknowledges that it has read the provisions of this Line of Credit Agreement
and in particular, this Section; has consulted legal counsel; understands the
right it is granting in this Line of Credit Agreement and is waiving in this
Section in particular; and makes the above waiver knowingly, voluntarily and
intentionally.
14. The Borrower and Bank agree that any action or proceeding to enforce or
arising out of this Line of Credit Agreement may be commenced in any court of
the Commonwealth of Massachusetts sitting in the counties of Suffolk or
Middlesex, or in the District Court of the United States for the District of
Massachusetts, and the Borrower waives personal service of process and agrees
that a summons and complaint commencing an action or proceeding in any such
court shall be properly served and confer personal jurisdiction if served by
registered or certified mail to the Borrower, or as otherwise provided by the
laws of the Commonwealth of Massachusetts or the United States of America.
Very truly yours,
USTRUST
By:____________________________________
Xxxxx X. Xxxxxx, Xx., Vice President
UNDERSTOOD AND AGREED TO:
THERMODYNETICS, INC.
By:_______________________________
Xxxxxx X. Xxxxxxxxx, Treasurer
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EXHIBIT A
EQUIPMENT DOCUMENTATION CERTIFICATION
The undersigned, the __________________ of Thermodynetics, Inc. (the
"Borrower"), hereby certifies to USTrust that:
1. The attached copy of the Equipment Documentation (as defined in
Paragraph 2 of the Borrower's Line of Credit Agreement for the
Acquisition of Equipment dated November _____, 1998), is a true,
correct and complete copy of the Equipment Documentation;
2. The net purchase price (exclusive of soft cost, transportation and
installation charges) of the equipment referred to in the attached
Equipment Documentation is in the amount of $________________;
3. The soft cost, transportation and installation charges of the
equipment referred to in the attached Equipment Documentation is in
the amount of $______________;
4. The total purchase price of the equipment referred to in the attached
Equipment Documentation (the net purchase price, plus the soft cost,
transportation and installation charges) is in the amount of
$___________; and
5. The aggregate principal amount of the Loan requested in connection
with the attached Equipment Documentation does not exceed the lesser
of (i) the Credit Limit, less any previous Loan, or (ii) eighty (80%)
percent of the net purchase price of the equipment set forth in Item 2
above.
Capitalized terms not otherwise defined herein shall have the meanings
assigned to them in Borrower's Line of Credit Agreement for the Acquisition of
Equipment dated November ___, 1998.
_________________________________________
Name:
Title:
Date: ______________, 199__
