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Exhibit 10.13
May 28, 1997
Connecticut Development Authority
000 Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxxx 00000
Re: 100% Participation in $500,000 Term Loan from American Commercial Finance
Corporation to Industrial Technologies, Inc. and Intec Europe, Ltd.
Gentlemen:
The undersigned, Industrial Technologies, Inc., a Delaware corporation,
and Intec Europe, Ltd., a Delaware corporation (collectively, the "Borrowers"),
and Intec Corp., a Delaware corporation (the "Guarantor"), hereby acknowledge
that the Connecticut Development Authority (the "Authority") has, on the date
hereof, purchased a one hundred percent (100%) participation (the
"Participation") in that certain term loan in the amount of $500,000.00 to be
made available by American Commercial Finance Corporation (the "Lender") to the
Borrowers on the date hereof (the "Term Loan") pursuant to the terms of a
certain Letter Agreement of even date herewith and the terms of that certain
Commercial Revolving Loan, Demand Loan and Security Agreement dated as of
November 1, 1996, and as amended from time to time thereafter, each by and among
the Borrowers, the Guarantor and the Lender (collectively, the "Loan and
Security Agreement").
To induce the Authority to purchase the Participation in the Term Loan
from the Lender, each of the undersigned hereby agrees as follows:
1. Until the Term Loan has been paid and satisfied in full:
(a) The Authority shall own an undivided one hundred percent (100%)
interest in the Term Loan.
(b) The Authority shall be the beneficiary of any and all liens and
security interests in the Collateral (as such term is defined in the Loan and
Security Agreement) granted by the Borrowers and the Guarantor to the Lender to
secure the Term Loan.
(c) The Authority shall be entitled to receive and review any and
all financial information and other documentation relating to the Borrowers and
the
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Connecticut Development Authority
May 28, 1997
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Guarantor now or hereafter in the possession of the Lender and all information
and documentation hereafter delivered to the Lender by any of the undersigned
in connection with the Term Loan and pursuant to the Loan and Security
Agreement.
(d) The Borrowers and the Guarantor shall promptly file when due
and furnish to the Authority copies of their respective State of Connecticut
Employee Quarterly Earnings Reports (Form UC-5A).
2. The Borrowers and the Guarantor acknowledge that the Participation
in the Term Loan has been purchased by the Authority and the
Guarantor from the Lender for the benefit of the Borrowers subject
to the terms of Section 32-5a of the Connecticut General Statutes,
as amended by Public Act 93-218 and Public Act 93-360. Section
32-5a:
(i) provides that a business organization receiving financial
assistance from the Authority shall not relocate outside the
State of Connecticut for (A) ten (10) years after receiving
such assistance from the Authority or (B) during the term
that any loan or loan guarantee constituting such financial
assistance is outstanding, whichever is longer (such period
being hereafter referred to as the "Benefit Period"), unless
the full amount of the assistance is repaid to the Authority
and a penalty equal to five percent (5%) of the total
assistance received is paid to the Authority; and
(ii) provides that if such business organization relocates within
the State of Connecticut during the Benefit Period, such
business organization shall offer employment at the new
location to its employees from the original location if such
employment is available.
Notwithstanding anything herein, in the Loan and Security Agreement or in
the other loan and collateral documents evidencing the Term Loan (the "Loan
Documents") to the contrary, if (i) at any time within the Benefit Period either
of the Borrowers relocates (as such term is defined in Section 32-5a of the
Connecticut General Statutes, and regulations related thereto, as the same may
be amended from time to time) outside of the State of Connecticut (an
"Out-of-State Relocation") or relocates within the State of Connecticut and does
not offer employment as provided above, then:
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Connecticut Development Authority
May 28, 1997
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(1) such event shall constitute an immediate event of default
under the Term Loan and the Loan Documents; and
(2) with respect to an Out-of-State Relocation, the Borrowers
hereby jointly and severally agree that they shall pay to the
Authority an amount equal to the full amount of the
Participation and a penalty equal to seven and one-half
percent (7.5%) of the original amount of Participation, such
penalty to be due and payable whether or not the Authority
has funded all or any portion of the Participation and
regardless of whether the Term Loan has been paid and
satisfied in full at such time; provided that the Authority's
right to receive payment of the full amount of the
Participation shall be subordinate.
3. The joint and several obligations of the undersigned to the
Authority hereunder shall survive the repayment of the Term Loan.
INDUSTRIAL TECHNOLOGIES, INC.
By: /s/ X.X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Its President and Chief Executive Officer
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
Its Vice President and Chief Financial
Officer
INTEC EUROPE, LTD.
By: /s/ X.X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Its President and Chief Executive Officer
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
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Connecticut Development Authority
May 28, 1997
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Its Vice President and Chief Financial
Officer
INTEC CORP.
By: /s/ X.X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
Its President and Chief Executive Officer
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
Its Vice President and Chief Financial
Officer
ACKNOWLEDGMENT OF AUTHORITY
The Authority acknowledges that the Guarantor has been unable to obtain a
certificate of good standing from the State of Delaware, and that the Guarantor
is making every effort to obtain such good standing certificate, but that the
Guarantor will not be able to obtain such certificate before the anticipated
funding of the Term Loan on the date hereof. Accordingly, the Authority hereby
waives the requirement that the Guarantor obtain such certificate of good
standing in advance of funding the Term Loan; provided, however, that the
Guarantor and the Borrowers shall continue to diligently pursue obtaining such
certificate and shall provide a copy of same to the Authority upon obtaining
same.
CONNECTICUT DEVELOPMENT
AUTHORITY
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Xxxxx X. Xxxx
Its Loan Closing Administrator
Duly Authorized
