EX-10.7
ASSIGNMENT AND ASSUMPTION AGREEMENT
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This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") is made and
entered into as of the 25th day of April, 2006, by and among:
CITIZENS BANK OF MASSACHUSETTS, a Massachusetts state chartered bank
with offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as successor by merger
to USTrust (the "BANK");
TURBOTEC PRODUCTS, INC., a Connecticut corporation having a principal
place of business at 000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx (the "TURBOTEC");
and
THERMODYNETICS, INC., a Delaware corporation having a principal place
of business at 000 Xxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("THERMO").
W I T N E S S E T H:
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WHEREAS, the Bank has entered into certain loan arrangements
(collectively, the "LOAN ARRANGEMENTS") with the Thermo, which Loan Arrangements
are evidenced by, among other documents, instruments and agreements, the
following:
(a) Line of Credit Agreement for the Acquisition of Equipment (the
"1999 ELOC") dated June 25, 1999 between Thermo and the Bank,
as amended by that certain Letter Agreement dated September
29, 2000 and that certain Letter Agreement dated November 28,
2000;
(b) Line of Credit Agreement for the Acquisition of Equipment (the
"2001 ELOC") dated November 1, 2001 between Thermo and the
Bank, as amended by that certain Letter Agreement dated
January 23, 2002;
(c) Line of Credit Agreement for the Acquisition of Equipment (the
"2003 ELOC") dated January 14, 2003 between Thermo and the
Bank, as amended by that certain letter agreement dated
December 15, 2003;
(d) Line of Credit Agreement for the Acquisition of Equipment (the
"2004 ELOC") dated October 20, 2004 between Thermo and the
Bank; and
(e) Secured Term Note dated January 23, 2002 (the "TERM NOTE")
made by Thermo payable to the Bank in the original principal
amount of $700,000.00.
Hereinafter, the foregoing documents, instruments and agreement
referred to in items (a) through (e) above, together with all other
documents, instruments and agreements which evidence the Loan
Arrangements, including without limitation, this Agreement, shall be
referred to collectively as the "LOAN DOCUMENTS"). Hereinafter the 1999
ELOC, the 2001 ELOC, the 2003 ELOC, and the 2004 ELOC shall be
collectively referred to as the "ELOC NOTES".
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WHEREAS, Thermo and Turbotec have informed the Bank that a subsidiary
Thermo intends to conduct a public offering (hereinafter, the "OFFERING") of its
stock and has requested that, in connection therewith, the Bank consent to
Turbotec's assumption of certain obligations of Thermo to the Bank; and
WHEREAS, Turbotec has determined that it is in its best interest to
assume and repay certain obligations of the Thermo under the Loan Documents to
the Bank; and
WHEREAS, the Bank is willing to consent to the assumption of the
obligations of Thermo by Turbotec, but only in accordance with the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Loan Documents and this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. ACKNOWLEDGMENT OF INDEBTEDNESS. Turbotec hereby acknowledge and agree
that, in accordance with the terms and conditions of the Loan
Documents, Turbotec shall be liable as of the date of execution of this
Agreement, to the Bank as follows:
(a) ELOC Notes:
i. Principal: $461,326.18
(b) Term Note:
i. Principal $104,983.00
(c) In addition, the Borrower is and shall remain liable to the
Bank for all accrued and unpaid interest as of April 25, 2006,
and all interest, reasonable fees, costs, expenses, and costs
of collection (including reasonable attorneys' fees and
expenses) heretofore or hereafter incurred in connection with
the Loan Documents, including, without limitation, all
reasonable attorney's fees and expenses incurred in connection
with the negotiation and preparation of this Agreement and all
documents, instruments, and agreements incidental hereto.
2. ASSUMPTION OF THE OBLIGATIONS. Turbotec hereby assumes the payment and
performance of the obligations and liabilities of Thermo under the Loan
Documents, including, without limitation, the repayment of the
principal and interest due under the ELOC Notes and the Term Note, as
if Turbotec were the borrower thereunder. Turbotec hereby agrees to
comply with all of the terms and conditions of the Loan Documents, and
further agrees that in all respects, the terms "BORROWER" in the Loan
Documents shall mean and refer to Turbotec as fully and as effectually
as if Turbotec was named "BORROWER" therein. The parties hereto
acknowledge that this transaction is in the nature of an assumption.
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3. RELEASE OF THERMO. The parties hereto acknowledge and agree that Thermo
shall be released from all obligations and liabilities under the Loan
Documents, including, without limitation, the repayment of the
principal and interest due under the ELOC Notes and the Term Note.
4. RELEASE OF TURBOTEC. The parties hereto acknowledge and agree that
Turbotec shall be released from all obligations and liabilities under
the Commercial Note.
5. ACKNOWLEDGEMENT OF THERMO'S OBLIGATIONS. The parties hereto acknowledge
and agree that Turbotec is not assuming any obligations of Thermo
pursuant to the following documents, instruments and agreements:
(d) Security Agreement (Inventory, Accounts, Equipment and other
Personal Property) dated September 4, 1992 between Thermo and
the Bank;
(e) Secured Term Note dated January 23, 2002 made by Thermo
payable to the Bank in the original principal amount of
$2,025,000.00;
(f) Commercial Promissory Note dated November 10, 2005 made by
Thermo and Turbotec payable to the Bank in the original
principal amount of $183,000.00; and
(g) Open-End Mortgage dated January 23, 2002 granted by Thermo to
the Bank and encumbering certain property located on 000
Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, as amended by that certain
Amendment to and Confirmation of Open End Mortgage dated
November 10, 2005.
6. FURTHER ASSURANCES. At the request of the Bank, Turbotec agrees to
endorse the ELOC Notes and the Commercial Note and to execute and
deliver, or cause to be executed and delivered, all other documentation
as the Bank shall reasonably require to effectuate the provisions
hereof.
7. RATIFICATION OF LOAN DOCUMENTS. Turbotec hereby ratifies and confirms
all and singular the terms and conditions of the Loan Documents,
including, without limitation, the terms and conditions of the ELOC
Notes and the Term Note, and each acknowledges, confirms, and agrees
that, except as specifically modified herein, the ELOC Notes and the
Term Note, and all of the terms and conditions of the Loan Documents
shall remain in full force and effect as originally written and
Turbotec hereby ratify and confirm all terms and conditions thereof.
8. WAIVER OF CLAIMS. Turbotec and Thermo each hereby acknowledge and agree
that they have no offsets, defenses, claims, or counterclaims against
the Bank with respect to the Loan Documents or otherwise and that, to
the extent that each of Turbotec and Thermo has or ever had any such
offsets, defenses, claims, or counterclaims, Turbotec and Thermo each
hereby specifically WAIVES AND RELEASES any and all rights to such
offsets, defenses, or counterclaims.
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7. MISCELLANEOUS.
(a) This Agreement may be executed in several counterparts and by
each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which
together shall constitute one instrument.
(b) This Agreement expresses the entire understanding of the
parties with respect to the transactions contemplated hereby.
No prior negotiations or discussions shall limit, modify, or
otherwise affect the provisions hereof.
(c) Any determination that any provision of this Agreement or any
application hereof is invalid, illegal or unenforceable in any
respect and in any instance shall not effect the validity,
legality, or enforceability of such provision in any other
instance, or the validity, legality or enforceability of any
other provisions of this Agreement.
(d) Turbotec is liable for and shall pay on demand all costs and
expenses of the Bank previously incurred, or to be incurred,
including, without limitation, attorneys' fees and costs in
connection with the preparation, negotiation, execution and
delivery of this Agreement.
(e) This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts and
shall take effect as a sealed instrument.
(f) This Agreement shall be deemed to be a Loan Document.
{Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Assumption Agreement
to be executed as of the 25th day of April, 2006.
TURBOTEC PRODUCTS, INC.
By:______/s/_________________________
Name:
Title:
THERMODYNETICS, INC.
By: ____/s/___________________________
Name:
Title:
CITIZENS BANK OF MASSACHUSETTS
By: _____/s/__________________________
Name: Xxxxx Xxxxxx
Title: Vice President
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