Document:

Form of Revolving Credit Agreement

EXHIBIT 10.1

REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement (this “Agreement”) dated as of March 9 2020, is between __Christian Meissner___ (the “Lender”), and PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Borrower”).

WHEREAS, the Lender desires to advance the Borrower funds on a secured basis up to $250,000;

WHEREAS, the Borrower’s obligation to repay the credit facility described in this Agreement is contained in that certain 5% Senior Secured Revolving Promissory Note in the original principal amount of up to $250,000.00 of even date herewith and any additional promissory notes now or hereafter executed and delivered by the Borrower to the Lender and any renewals, modifications, amendments and extensions thereof (collectively the “Note”).

NOW THEREFORE, in consideration of the premises and TEN and NO/100 ($10.00) DOLLARS and for other good and valuable consideration, the receipt of which is hereby acknowledged by each party from the other, the parties covenant and agree as follows:

1.

FACILITY, LINE OF CREDIT AMOUNT AND TERMS

1.1

Line of Credit Amount.

(a)

During the availability period described below, the Lender, at its sole discretion will provide a line of credit to the Borrower. The amount of the line of credit (the “Facility Commitment”) is up to $250,000. 

(b)

This is a revolving line of credit. During the availability period and subject to the limits set forth herein, the Borrower may repay principal amounts and reborrow them subject to the terms and conditions of the Note.

1.2

Availability Period.

The line of credit is available commencing on the date hereof and expiring September 30, 2020, or such earlier date as the availability may terminate as provided in this Agreement (the “Facility Expiration Date”).

1.3

Repayment Terms.

(a)

Except as otherwise provided under the Note, the Borrower will pay interest on the Facility Expiration Date.

(b)

Except as otherwise provided under the Note, the Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility Expiration Date.

1.4

Interest Rate. 

The interest rate is a rate per year as provided under the Note (the “Applicable Rate”).

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2.

EXPENSES

Each party is responsible for its own costs and expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement.  Expenses include, but are not limited to, reasonable attorneys’ fees and the cost of periodic field examinations of the Borrower’s books and records, at such intervals as the Lender may reasonably require. 

3.

DISBURSEMENTS, PAYMENTS AND COSTS

3.1

Disbursements and Payments.

(a)

Each payment by the Borrower will be made in U.S. Dollars and immediately available funds as reasonably specified by the Lender.

(b)

Each disbursement by the Lender and each payment by the Borrower will be evidenced by records kept by the Lender. In addition, the Lender may, at its discretion, require the Borrower to sign one or more promissory notes.

3.2

Interest Calculation.

Except as otherwise stated in this Agreement or the Note, all interest and fees, if any, will be computed on the basis of a 365-day year and the actual number of days elapsed. Installments of principal, which are not paid when due under this Agreement, shall continue to bear interest until paid.

4.

CONDITIONS

Before the Lender is required to extend any credit to the Borrower under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Lender, including any items specifically listed below.  

4.1

Authorizations.

Evidence that the execution, delivery and performance by the Borrower of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.

4.2

Conditions to Each Extension of Credit Under the Facility.

Nothing provided herein shall require Lender to extend any credit to the Borrower or the Borrower to draw down on the Facility Commitment.

4.3

Subordination Agreement.

Borrower shall enter into a Subordination Agreement with Joseph V. Vittoria, the Borrower’s senior secured lender (“JVV”), whereby JVV shall agree to subordinate that certain Senior Secured Promissory Note dated March 25, 2019, in the principal amount of $9,129,430.50 to the Note.

4.4

Security Agreement.  

The Borrower and Lender shall enter into a security agreement providing the Lender with a first priority lien on the Borrower’s assets (the “Security Agreement”).

 

5.

LENDER’S REPRESENTATIONS AND WARRANTIES

5.1

The Lender is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D.

5.2

The Lender has been provided access via the Securities and Exchange Commission (the “Commission”) public website at www.sec.gov with access to copies of the Borrower’s Annual Report on Form 10-K for the period ended December 31, 2018, the Borrower’s Quarterly Report for the period ended September 30, 2019 and the Borrower’s other filings with the Commission (collectively, the “SEC Reports”), and represents and warrants that it has read and reviewed these reports (including the “Risk Factors” contained therein), with the Borrower’s other filings with the Commission. The Lender acknowledges that the Borrower has made available to the undersigned or provided the undersigned the opportunity to review all SEC Reports and this Agreement, and has allowed the Lender an opportunity to ask questions and receive answers thereto and to verify and clarify any information contained in the SEC Reports and this Agreement. The Lender further acknowledges that the undersigned has received all information concerning the Borrower, the Borrower’s business and all other information necessary for the undersigned to invest in the Borrower.

6.

BORROWER’S REPRESENTATIONS AND WARRANTIES

When the Borrower signs this Agreement, and until the Lender is repaid in full, the Borrower makes the following representations and warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties by the Borrower as of the date of the request:

6.1

Formation.

Borrower is duly formed and existing under the laws of the state of Delaware.

6.2

Authorization.

This Agreement and any instrument or agreement required hereunder, are within Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational documents.

6.3

Enforceable Agreement.

This Agreement is a legal, valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable.

6.4

No Conflicts.

This Agreement does not conflict with any law, agreement, or obligation by which Borrower is bound.

6.5

SEC Reports.

The SEC Reports have been made available to the Borrower via www.sec.gov. Since January 1, 2016, none of the SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material faced or omitted to state a material fact required to be stated therein or necessary in order to 

 

make the statements therein, in light of the circumstances under which they were made, not materially misleading. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Borrower confirms that neither it nor, to its knowledge, any other person acting on its behalf has provided the Lender or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information.

6.6

No Event of Default.

There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement and/or the Note.

7.

COVENANTS

The Borrower agrees, so long as credit is available under this Agreement and until the Lender is repaid in full:

7.1

Use of Proceeds.

To use the proceeds of the Facility for the satisfaction of all amounts due under that certain Kabbage Business Loan Agreement dated October 24, 2019 (the “Kabbage Loan”) and working capital, unless otherwise agreed to in writing by Lender.

7.2

Loans.

Not to make any loans, advances or other extensions of credit to any individual or entity, except for:

(a)

Loans, advances and extension of credit in accordance with the Borrower’s business.

(b)

Existing extensions of credit disclosed to the Lender in writing.

(c)

Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities.

7.3

Notices to Lender.

To notify the Lender in writing of:

(a)

Any lawsuit over Fifty Thousand Dollars ($50,000.00) against the Borrower.

(b)

Any substantial dispute between any governmental authority and the Borrower.

(c)

Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.

(d)

Any material adverse change in the Borrower’s business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit.

(e)

Any change in the Borrower’s name, legal structure, place of business, or chief executive office if the Borrower has more than one place of business.

 

(f)

Any actual contingent liabilities of the Borrower, and any such contingent liabilities which are reasonably foreseeable, where such liabilities are in excess of Fifty Thousand Dollars ($50,000.00) in the aggregate.

7.4

Compliance with Laws.

To comply with the laws, regulations, and orders of any government body with authority over the Borrower’s business. The Lender shall have no obligation to make any advance to the Borrower except in compliance with all applicable laws and regulations and the Borrower shall fully cooperate with the Lender in complying with all such applicable laws and regulations.

7.5

Cooperation.

To take any action reasonably requested by the Lender to carry out the intent of this Agreement.

7.6

Continuing Obligation.

The Borrower’s obligations to the Lender under this Article, except the obligation to give notices to the Lender, shall survive termination of this Agreement and repayment of the Borrower’s obligations to the Lender under this Agreement.

8.

DEFAULT AND REMEDIES

If any of the following events of default occurs, the Lender may do one or more of the following: declare the Borrower in default, stop making any additional credit available to the Borrower, and require the Borrower to repay its entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Lender has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Lender shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled “Bankruptcy,” below, with respect to the Borrower, then the entire debt outstanding under this Agreement will automatically be due immediately.

8.1

Failure to Pay.

The Borrower fails to make a payment under this Agreement and/or the Note when due. 

8.2

Default under Related Documents.

Any default occurs under the Note or other document required by or delivered in connection with this Agreement or any such document is no longer in effect.

9.

ENFORCING THIS AGREEMENT; MISCELLANEOUS

9.1

Successors and Assigns.

This Agreement is binding on the Borrower’s and the Lender’s successors and assignees. The Borrower agrees that it may not assign this Agreement without the Lender’s prior consent.

 

9.2

Governing Law; Consent to Jurisdiction. 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.  THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE COUNTY OF PALM BEACH, STATE OF FLORIDA AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF PALM BEACH, STATE OF FLORIDA.

9.3

Severability; Waivers.

If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Lender retains all rights, even if it makes a loan after default. If the Lender waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in wilting.

9.4

Attorneys’ Fees.

The Borrower shall reimburse the Lender for any reasonable costs and attorneys’ fees incurred by the Lender in connection with the enforcement or preservation of any rights or remedies under this Agreement and any other documents executed in connection with this Agreement including but not limited to the Note, and in connection with any amendment, waiver, “workout” or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable attorneys’ fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator. In the event that any case is commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute, the Lender is entitled to recover costs and reasonable attorneys’ fees incurred by the Lender related to the preservation, protection, or enforcement of any rights of the Lender in such a case. As used in this paragraph, “attorneys’ fees” includes the allocated costs of the Lender’s in-house counsel.

9.5

Entire Agreement. 

This Agreement contains the entire agreement of the Lender and the Borrower with respect to the Facility Commitment. If the parties hereto are parties to any prior agreement, either written or oral, relating to the Facility Commitment, the terms of this Agreement shall amend and supersede the terms of such prior agreements as to transactions on or after the effective date of this Agreement.

9.6

Notices.

Unless otherwise provided in this Agreement or in another agreement between the Lender and the Borrower, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Lender and the Borrower may specify from time to time in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.

 

9.7

Headings.

Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.

9.8

Counterparts.

This Agreement may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement.

9.9

Limitation of Interest and Other Charges.

Notwithstanding any other provision contained in this Agreement, the Lender does not intend to charge and the Borrower shall not be required to pay any amount of interest or other fees or charges that is in excess of the maximum permitted by applicable law. Any payment in excess of such maximum shall be refunded to the Borrower or credited against principal, at the option of the Lender. It is the express intent hereof that the Borrower not pay and the Lender not receive, directly or indirectly, interest in excess of that which may be lawfully paid under applicable law including the usury laws in force in the State of Delaware.

9.10

Incorporation of Recitals.

The Recitals stated above are hereby incorporated by reference into and made a part of this Agreement.

This Agreement is executed as of the date stated at the top of the first page.

			
	PURADYN FILTER TECHNOLOGIES INCORPORATED

	 
	 

	 
	 
	 

	 
	 
	 

	/s/ Edward Vittoria

	 
	/s/ Christian Meissner

	Name: Edward Vittoria

	 
	Name:  Christian Meissner

	Title:  CEO

	 
	 

	 
	 
	 

	Address for notices to Borrower:

	 
	Address for notices to Lender:

	 
	 
	 

	22017 High Ridge Road 

	 
	 

	Boynton Beach, FL 33426Form of 5% Senior Secured Revolving Note

 

EXHIBIT 10.2

5% SENIOR SECURED REVOLVING NOTE

		
	 
	March 9, 2020

	 
	 

FOR VALUE RECEIVED, the undersigned, PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Company”), hereby unconditionally promises to pay Christian Meissner (the “Holder”), on the Maturity Date (as defined in Section 1 hereof) to the order of the Holder, in lawful money of the United States of America and in immediately available funds, the principal amount of up to two hundred and fifty thousand dollars ($250,000.00) U.S. Dollars (the “Principal Amount”). Interest shall accrue the rate of 5% per annum (“Interest”) based on a 365 day year and shall be payable on the Maturity Date (as defined below).  

This Note is made by the Company in favor of the Holder and issued, from time to time (collectively, the “Notes”) pursuant to that certain Revolving Credit Agreement by and between the Company and the Holder, of even date herewith, including all attachments, schedules and exhibits thereto (the “Revolving Credit Agreement”). Capitalized terms used and not otherwise defied herein shall have the meanings set forth in the Revolving Credit Agreement. Such advances shall be in the discretion of the Holder and in increments in the ordinary course of $25,000.00. The Company may, from time to time, borrow, repay and reborrow under the terms of this Note up to but not exceeding the principal amount of this Note upon delivery to the Holder of a request of such advance of the proceeds of this Note. The amounts advanced to the Company by the Holder as set forth on Schedule A annexed to this Note shall represent the sums due the Holder by the Company hereunder.  

1.

Maturity; Acceleration.  This Note shall mature on September 30, 2020 (the “Maturity Date”) or such earlier date in the Event of Default (as defined below) and any and all amounts due under this Note shall be immediately due and payable. 

2.

Secured.  The indebtedness evidenced by this Note and the payment of the Principal Amount and Interest is secured by a first priority on the Company’s assets. 

3.

Events of Default.  The term “Event of Default” shall mean any of the events set forth in this Section 3:  

(a)

the Company shall default in the performance of, or violate any material covenants and agreements contained in this Note, the Revolving Credit Agreement or the Security Agreement (as defined under the Revolving Credit Agreement), including without limitation, the failure to pay amounts due under this Note on its Maturity Date;

(b)

any representation, warranty or certification made by or on behalf of the Company in this Note, the Revolving Credit Agreement or the Security Agreement shall have been incorrect in any material respect when made; 

(c)

there shall be a dissolution, termination of existence, suspension or discontinuance of the Company’s business for a continuous period of 60 days or it ceases to operate as going concern;

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(d)

if the Company shall:

(i)

admit in writing its inability to pay its debts generally as they become due;

(ii)

file a petition in bankruptcy or a petition to take advantage of any insolvency act;

(iii)

convey any material portion of the assets of the Company to a trustee, mortgage or liquidating agent or make an assignment for the benefit of creditors;

(iv)

consent to the appointment of a receiver, trustee, custodian or similar official, for the Company or any material portion of the property or assets of the Company;  

(v)

on a petition in bankruptcy filed against it, be adjudicated a bankrupt; or

(vi)

file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any State, district or territory thereof;

(e)

if a court of competent jurisdiction shall enter an order, judgment, or decree appointing, without the consent of the Company, a receiver of the whole or any substantial part of the Company’s assets, and such order, judgment or decree shall not be vacated or set aside or stayed within 60 days from the date of entry thereof; 

(f)

if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the whole or any substantial part of the Company’s assets and such custody or control shall not be terminated or stayed within 60 days from the date of assumption of such custody or control; 

(g)

the Company shall default in any of its obligations under any other promissory note, indenture or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company in an amount exceeding $100,000, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; or

(h)

upon the (i) the merger or consolidation of Company (other than one in which stockholders of Company own a majority by voting power of the outstanding shares of the surviving or acquiring corporation); or (ii) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of Company). 

If any Event of Default described in clause (d) of Section 3 shall occur, the Principal Amount of this Note, together with all accrued and unpaid Interest shall automatically be and become immediately due and payable, without notice or demand.

If any Event of Default (other than any Event of Default described in clause (d) of Section 3) shall occur for any reason, whether voluntary or involuntary, the Holder,  may, upon written notice to the Company, declare all or any portion of the outstanding Principal Amount, together with all accrued and unpaid Interest, to be due and payable, whereupon the full unpaid Principal Amount hereof, 

2

 

together with all accrued and unpaid Interest shall be so declared due and payable shall be and become immediately due and payable if default is not cured by the Company within 10 business days of receipt of written notice, without further notice, demand, or presentment. 

4.

Remedies.  In case any one or more of the Events of Default specified in Section 4 hereof shall have occurred and be continuing, the Holder may proceed to protect and enforce the Holder’s rights either by suit in equity and/or by action at law, whether for the specific performance of any covenant or agreement contained in this Note or in aid of the exercise of any power granted in this Note or may proceed to enforce the payment of all sums due upon this Note or to enforce any other legal or equitable right of the Holder. Furthermore, during the existence of an Event of Default, Interest shall accrue at the lesser of (i) the rate of 18% per annum or (ii) the maximum amount permitted by law.

5.

Affirmative Covenants.  The Company covenants and agrees that, while any amounts under this Note are outstanding, it shall:

(a)

Do all things necessary to preserve and keep in full force and effect its corporate existence, including, without limitation, all licenses or similar qualifications required by it to engage in its business in all jurisdictions in which it is at the time so engaged; and continue to engage in business of the same general type as conducted as of the date hereof; and continue to conduct its business substantially as now conducted or as otherwise permitted hereunder;

(b)

Pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property before the same shall become delinquent or in default, which, if unpaid, might reasonably be expected to give rise to liens or charges upon such properties or any part thereof, unless, in each case, the validity or amount thereof is being contested in good faith by appropriate proceedings and the Company has maintained adequate reserves with respect thereto;

(c)

Comply in all material respects with all federal, state and local laws and regulations, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations and requirements applicable to it of all governmental bodies, departments, commissions, boards, companies or associations insuring the premises, courts, authorities, officials or officers which are applicable to the Company or any of its properties, except where the failure to so comply would not have a Material Adverse Effect (as defined in this Section 5); and

(d)

Keep proper records and books of account with respect to its business activities.

For purposes hereof, “Material Adverse Effect” shall be an event, matter, condition or circumstance which has or would reasonably be expected to have a material adverse effect on the business, operations, economic performance, assets, financial condition, material agreements or results of operations of the Company and its subsidiaries, taken as a whole.   

6.

Prepayment of Note.  The Company may prepay this Note in whole or in part at any time without penalty. 

7.

Amendments and Waivers.  The terms of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the Holder. 

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8.

Notices.

(a)

Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Revolving Credit Agreement.

(b)

Any party may give any notice, request, consent or other communication under this Note using any other means (including personal delivery, messenger service, telecopy, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party for whom it is intended.  Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 8.

9.

Severability.  The unenforceability or invalidity of any provision or provisions of this Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable.

10.

Governing Law.  This Note shall be governed by and construed under the laws of the State of Florida applicable to agreements made and to be performed entirely within such jurisdiction.  

11.

Waivers.  The non-exercise by either party of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

12.

Attorneys’ Fees; Costs.  If any Event of Default occurs, the Company promises to pay all costs of enforcement and collection, including but not limited to, Holder’s  attorneys’ fees, whether or not any action or proceeding is brought to enforce the provisions hereof. 

13.

Successor and Assigns.  This Note shall be binding upon the Company and its successors and permitted assigns and shall inure to the benefit of the Holder and its successors and assigns.  The Company may not assign or delegate any of its duties or obligations under this Note without the written consent of the Holder.  

IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute this Note as of the date first written above. 

		
	COMPANY:  

	 
	 

	PURADYN FILTER TECHNOLOGIES INCORPORATED 

	 
	 

	 
	 

	By: 

	/s/ Edward S. Vittoria

	Name:

	Edward Vittoria

	Its:

	Chief Executive Officer

 

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SCHEDULE A TO 5% SENIOR SECURED REVOLVING  NOTE

					
	Date Made, Renewed or Paid

	Type of Loan

	Amount of Principal Renewed or Paid

	Unpaid Principal Balance of Revolving Credit Note

	Name of Person Making Notation

	

	REVOLVING

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