Document:

EXHIBIT
10.1

    

    REVOLVING
LINE OF CREDIT AGREEMENT

    (Amended
as of February 22, 2010)

    

    This
Revolving Line of Credit Agreement (the “Agreement”) is made and entered into in
this 17th day of December, 2009 by and between John Hatsopoulos (“Lender”),
residing at 3 Woodcock Lane, Lincoln, Massachusetts 01773 and American DG Energy
Inc., a corporation organized under the laws of Delaware (“Borrower”), with
offices located at 45 First Avenue, Waltham, Massachusetts 02451.

     

    In
consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:

     

    
      	
               
      

            	
              1.

            	
              LINE
      OF CREDIT. During the term hereof, the Lender will from time to time, at
      the written request of the Borrower, lend to the Borrower such funds as
      may from time to time be requested by the Borrower (the “Credit Line”).
      The aggregate principal amount of such funds outstanding at any time shall
      not exceed Five Million U.S. Dollars ($5,000,000.00) (the “Credit Limit”).
      At the time of the first advance of funds under this Agreement, the
      Borrower shall execute and deliver to Lender the Promissory Note in the
      form attached to this Agreement. All sums advanced on the Credit Line or
      pursuant to the terms of this Agreement (each an “Advance”) shall become
      part of the principal of said Promissory
Note.

            

    

    

    
      	
               
      

            	
              2.

            	
              INTEREST.
      All sums advanced pursuant to this Agreement shall bear interest from the
      date each Advance is made until paid in full at the Bank Prime Rate as
      quoted from time to time in the Wall Street Journal plus one and one half
      percent (1.5%) per annum (the “Effective
Rate”).

            

    

    

    
      	
               
      

            	
              3.

            	
              TERM.
      The term of this Agreement shall commence as of the date first set forth
      above and shall terminate on December 31, 2012 (the “Maturity
      Date”).

            

    

    

    
      	
               
      

            	
              4.

            	
              PERMITTED
      USES OF FUNDS. Any funds advanced to the Borrower may be used solely in
      connection with the development and installation of current and new energy
      systems such as cogeneration systems and chillers and not for general
      corporate purposes including operational expenses such as payroll,
      maintenance, travel, entertainment, or sales and
  marketing.

            

    

    

    
      	
               
      

            	
              5.

            	
              ADVANCES.
      Any request for an Advance may be made from time to time and in such
      amounts as Borrower may choose; provided, however, any requested Advance
      will not, when added to the outstanding principal balance of all previous
      Advances, exceed the Credit Limit. Requests for Advances may be made
      orally or in writing by such officer of Borrower authorized by it to
      request such Advances. Until such time as Lender may be notified
      otherwise, Borrower hereby authorizes its President or Chief Financial
      Officer to request Advances. Lender shall transfer the amount of any
      Advance requested by Borrower in accordance with this Agreement unless an
      event of default has occurred and is continuing hereunder either at the
      time of a request for an Advance or the date the Advance is to be made, or
      if an event has occurred or condition exists which, with the giving of
      notice or passing of time or both, would constitute an event of default
      hereunder as of such dates. Borrower shall use all funds loaned by Lender
      hereunder in connection with Borrower’s
  business.

            

    

    

    
      	
               
      

            	
              6.

            	
              REPAYMENT.
      Borrower shall pay accrued interest on the outstanding principal balance
      on a quarterly basis, in arrears, commencing at the end of each calendar
      quarter during which an Advance has been made or remains outstanding and
      unpaid, and continuing every quarter thereafter until the balance due
      hereunder is paid in full. The entire unpaid principal balance, together
      with any accrued interest and other unpaid charges or fees hereunder,
      shall be due and payable on the Maturity Date. All payments shall be made
      to Lender at such place as Lender designates from time to time. All
      payments received hereunder shall be applied first to any costs or
      expenses incurred by Lender in collecting such payment or to any other
      unpaid charges or expenses due hereunder; second to accrued interest; and
      third to principal. Borrower may prepay principal at any time without
      penalty.

            

    

    

    
      	
               
      

            	
              7.

            	
              SECURITY.
      Borrower shall grant to Lender a first priority security interest in
      accounts receivable of Borrower relating to projects or contracts entered
      into on or after the date of any Advance hereunder in an amount equal to
      not less than One Hundred and Ten Percent (110%) of the amount of the
      aggregate outstanding and unpaid Advances plus any accrued and unpaid
      interest with respect to such Advances. Borrower shall execute and deliver
      any agreements and documents reasonably requested by Lender to effectuate
      the grant and perfection of security interests in accounts receivable
      referred to above.

            

    

    

    
      	
               
      

            	
              8.

            	
              REPRESENTATIONS
      AND WARRANTIES. In order to induce Lender to enter into this Agreement and
      to make the advances provided for herein, Borrower represents and warrants
      to Lender as follows:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              a.

            	
              Borrower
      is duly organized, validly existing, and in good standing under the laws
      of the State of Delaware with the power to own its assets and to transact
      business in Massachusetts, and in such other states where its business is
      conducted.

            

    

    

    
      	
               
      

            	
              b.

            	
              Borrower
      has the authority and power to execute and deliver any document required
      hereunder and to perform any condition or obligation imposed under the
      terms of such documents.

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      execution, delivery and performance of this Agreement and each document
      incident hereto will not violate any provision of any applicable law,
      regulation, order, judgment, decree, article of incorporation, by-law,
      indenture, contract, agreement, or other undertaking to which Borrower is
      a party, or which purports to be binding on Borrower or its assets, and
      will not result in the creation or imposition of a lien on any of its
      assets.

            

    

    

    
      	
               
      

            	
              d.

            	
              There
      is no action, suit, investigation, or proceeding pending or, to the
      knowledge of Borrower, threatened, against or affecting Borrower or any of
      its assets which, if adversely determined, would have a material adverse
      affect on the financial condition of Borrower or the operation of its
      business.

            

    

    

    
      	
               
      

            	
              9.

            	
              EVENTS
      OF DEFAULT. An event of default will occur if any of the following events
      occurs:

            

    

    

    
      	
               
      

            	
              a.

            	
              Borrower’s
      failure to pay any principal or interest hereunder within ten (10) days
      after the same becomes due.

            

    

    

    
      	
               
      

            	
              b.

            	
              Any
      representation or warranty made by Borrower in this Agreement or in
      connection with any borrowing or request for an Advance hereunder, or in
      any certificate, financial statement, or other statement furnished by
      Borrower to Lender is untrue in any material respect at the time when
      made.

            

    

    

    
      	
               
      

            	
              c.

            	
              Default
      by Borrower in the observance or performance of any other covenant or
      agreement contained in this
Agreement.

            

    

    

    
      	
               
      

            	
              d.

            	
              Filing
      by Borrower of a voluntary petition in bankruptcy seeking reorganization,
      arrangement or readjustment of debts, or any other relief under the
      Bankruptcy Code as amended or under any other insolvency act or law, state
      or federal, now or hereafter
existing.

            

    

    

    
      	
               
      

            	
              e.

            	
              Filing
      of an involuntary petition against Borrower in bankruptcy seeking
      reorganization, arrangement or readjustment of debts, or any other relief
      under the Bankruptcy Code as amended, or under any other insolvency act or
      law, state or federal, now or hereafter existing, and the continuance
      thereof for sixty (60) days undismissed, unbonded, or
      undischarged.

            

    

    

    
      	
               
      

            	
              9.

            	
              REMEDIES.
      Upon the occurrence of an event of default as defined above, Lender may
      (i) declare the entire unpaid principal balance, together with accrued
      interest thereon, to be immediately due and payable without presentment,
      demand, protest, or other notice of any kind, and (ii) suspend or
      terminate any obligation that Lender may have hereunder to make additional
      Advances. To the extent permitted by law, Borrower waives any rights to
      presentment, demand, protest, or notice of any kind in connection with
      this Agreement. No failure or delay on the part of Lender in exercising
      any right, power, or privilege hereunder will preclude any other or
      further exercise thereof or the exercise of any other right, power, or
      privilege. The rights and remedies provided herein are cumulative and not
      exclusive of any other rights or remedies provided at law or in equity.
      Borrower agrees to pay all costs of collection incurred by reason of the
      default, including court costs and reasonable attorney’s
    fees.

            

    

    

    
      	
            	
              10.

            	
              NOTICE.
      Any notices or other communications required or permitted under this
      Agreement shall be sufficiently given if delivered personally, sent by
      registered or certified mail, postage prepaid, or sent by Federal Express
      or similar courier service to the other party at its address first set
      forth above or at such other address as either party may specify by
      written notice to the other party. Unless otherwise specified herein, such
      notices or other communications shall be deemed received (a) on the date
      delivered, if delivered personally; (b) three business days after being
      sent, if sent by registered or certified mail; or (c) the next business
      day, if delivered by Federal Express or similar courier
      service.

            

    

    

    
      	
            	
              11.

            	
              GOVERNING
      LAW. This Agreement shall be governed by and construed in accordance with
      the laws (other than the conflict of laws rules) of the Commonwealth of
      Massachusetts.

            

    

    

    
      	
            	
              12.

            	
              TITLES
      AND CAPTIONS. All section titles or captions contained in this Agreement
      are for convenience only and shall not be deemed part of the context nor
      affect the interpretation of this
Agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	
              13.

            	
              ENTIRE
      AGREEMENT. This Agreement contains the entire understanding between and
      among the parties and supersedes any prior understandings and agreements
      among them respecting the subject matter of this
  Agreement.

            

    

    

    
      	
            	
              14.

            	
              AGREEMENT
      BINDING. This Agreement shall be binding upon the heirs, executors,
      administrators, successors and assigns of the parties
    hereto.

            

    

    

    
      	
            	
              15.

            	
              FURTHER
      ACTION. The parties hereto shall execute and deliver all documents,
      provide all information and take or forbear from all such action as may be
      necessary or appropriate to achieve the purposes of the
      Agreement.

            

    

    

    
      	
            	
              16.

            	
              PARTIES
      IN INTEREST. Nothing herein shall be construed to be to the benefit of any
      third party, nor is it intended that any provision shall be for the
      benefit of any third party.

            

    

    

    IN
WITNESS WHEREOF, the undersigned have executed this Revolving Line of Credit
Agreement as of the day and year first set forth above.

    

    
      
        	
                LENDER:

              	 
      	
                BORROWER:

              
	 
      	 
      	 
      
	
                 
        

              	 
      	

                AMERICAN
      DG ENERGY INC.

              
	 
      	 
      	 
      
	
                /s/
      JOHN N. HATSOPOULOS

              	 
      	
                /s/
      ANTHONY S. LOUMIDIS

              
	 
      	 
      	 
      
	
                Name:

              	
                John
      N. Hatsopoulos

              	 
      	
                Name:

              	
                Anthony
      S. Loumidis

              
	 
      	 
      	 
      	
                Title:

              	
                Chief
      Financial Officer

              

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AMERICAN
DG ENERGY INC.

    PROMISSORY
NOTE

    

    
      	
              U.S.
      $_______________

            	
              _____________,
      2010

            

    

    

    FOR VALUE
RECEIVED, American DG Energy Inc., a corporation organized under the laws of
Delaware (“Borrower”), with offices located at 45 First Avenue, Waltham,
Massachusetts 02451, agrees to pay to John N. Hatsopoulos (“Lender”), residing at 3
Woodcock Lane, Lincoln, Massachusetts 01773, or order, the principal sum of
______________ U.S. Dollars ($_____________), on demand,
together with interest from the date hereof on the unpaid principal balance at
the rate specified below, until repaid in full. Prepayment of principal,
together with accrued interest, may be made at any time without penalty.
Interest hereon shall accrue from the date hereof at the Bank Prime Rate as
quoted from time to time in the Wall Street Journal plus one and one half
percent (1.5%) per annum. Accrued interest shall be due and payable quarterly in
arrears on the last day of each calendar quarter.

    

    In the
event that any amount of principal hereof, or (to the extent permitted by
applicable law) any interest hereon or any other amount payable hereunder is not
paid in full when due (whether as scheduled, on demand, by acceleration or
otherwise), Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on such unpaid amount to
Lender, from the date such amount becomes due until the date such amount is paid
in full, payable on demand of Lender at a rate per annum equal at all times to
12% per annum (the “Default Rate”). Additionally, and without limiting the
foregoing, following the occurrence and during the continuance of any Event of
Default (as defined below), at the option of Lender, the interest rate shall be
the Default Rate. Such interest on overdue amounts shall be payable on demand.
All computations of interest shall be made on the basis of a year of 360 days
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest is payable. Each
determination by Lender of any applicable rate of interest, and of any change
therein, in the absence of manifest error shall be conclusive and binding on the
parties hereto.

    

    Payment
shall be made in lawful tender of the United States unconditionally in full
without set-off, counterclaim or, to the extent permitted by applicable law,
other defense, all of which rights of Borrower are hereby expressly waived by
Borrower. All payments hereunder shall be made to Lender at Lender’s address set
forth above (or to such other place as Lender shall designate in a written
notice to Borrower), and, unless Borrower has obtained Lender’s written consent
to another form of payment, such payment shall be made by wire transfer of
immediately available funds by no later than 12:00 noon (Boston time) on the due
date of the payment, in accordance with Lender’s payment
instructions.

    

    Whenever
any payment hereunder shall be stated to be due, or whenever any interest
payment date or any other date specified hereunder would otherwise occur, on a
day other than a Business Day (as defined below), then such payment shall be
made, and such interest payment date or other date shall occur, on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest hereunder. As used herein,
“Business Day” means a day (i) other than Saturday or Sunday, and (ii) on which
commercial banks are open for business in Boston, Massachusetts.

    

    Borrower
represents and warrants to Lender that:

    (i)          
Organization and
Powers. Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has all requisite
power and authority to own its assets and carry on its business and to execute,
deliver and perform its obligations under this Note.

    

    (ii)         
Authorization; No
Conflict. The execution, delivery and performance by Borrower of this
Note have been duly authorized by all necessary corporate action of Borrower and
do not and will not (A) contravene the terms of the organizational documents of
Borrower; or (B) result in a breach of or constitute a default under any
material lease, instrument, contract or other agreement to which Borrower is a
party or by which it or its properties may be bound or affected; or (C) violate
any provision of any law, rule, regulation, order, judgment, decree or the like
binding on or affecting Borrower.

    

    (iii)        
Binding
Obligations. This Note constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms.

    

    (iv)        Consents. No
authorization, consent, approval, license, exemption of, or filing or
registration with, any governmental authority or agency, or approval or consent
of any other person or entity is required for the due execution, delivery or
performance by Borrower of this Note.

    

    Any of
the following events which shall occur shall constitute an “Event of
Default”:

    (a)         Payments. Borrower
shall fail to pay when due any amount of principal hereof, or interest hereon or
other amount payable hereunder, and such failure shall continue unremedied for
five (5) days.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)        
Representations and
Warranties. Any representation or warranty by Borrower under or in
connection with this Note shall prove to have been incorrect in any material
respect when made or deemed made.

    

    (c)         
Insolvency. (i)
Borrower shall (A) admit in writing its inability to, or shall fail generally or
be generally unable to, pay its debts (including its payrolls) as such debts
become due, (B) make a general assignment for the benefit of creditors, (C) be
dissolved, liquidated, wound up or cease its corporate existence, or (D)
commence any voluntary proceeding or case seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, intervention,
suspension of payments, or composition of it or its debt under any law relating
to bankruptcy, insolvency, suspension of payments or reorganization or relief of
debtors, or seeking appointment of a receiver, trustee, intervenor or
liquidator, or other similar official for it or for any substantial part of its
property, (ii) an involuntary proceeding or case shall be commenced against
Borrower seeking any of the foregoing relief and remain undismissed for a period
of 30 days; (iii) an order for relief or other order or adjudication shall be
entered against Borrower under any such bankruptcy, insolvency or similar law;
(iv) any receiver, trustee, or other official or Person shall be appointed to
take possession of any property of Borrower; or (v) Borrower shall take any
corporate action to authorize, or shall consent to, any of the actions or events
set forth above in this paragraph.

    

    If any
Event of Default shall occur and be continuing, Lender may, by notice to
Borrower, declare the entire unpaid principal amount of this Note, all interest
accrued and unpaid hereon and all other amounts due hereunder to be forthwith
due and payable, whereupon the principal hereof, all such accrued interest and
all such other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Borrower, provided that if an event described in
paragraph (c) above shall occur, the result which would otherwise occur only
upon giving of notice by Lender to Borrower as specified above shall occur
automatically, without the giving of any such notice.

    

    Borrower
agrees to pay on demand the costs and expenses of Lender, and fees and
disbursements of counsel, in connection with any Event of Default, the
enforcement or attempted enforcement of, and preservation of any rights or
interests under, this Note, and any out-of-court workout or other refinancing or
restructuring or any bankruptcy or insolvency case or proceeding.

    

    No single
or partial exercise of any power under this Note shall preclude any other or
further exercise of such power or exercise of any other power. No delay or
omission on the part of Lender in exercising any right under this Note shall
operate as a waiver of such right or any other right thereunder.

    

    All
notices and other communications provided for hereunder shall, unless otherwise
stated herein, be in writing and mailed, sent or delivered to the respective
parties hereto at or to their respective addresses set forth herein, or at or to
such other address as shall be designated by any party in a written notice to
the other party hereto. All such notices and communications shall be effective:
(i) if delivered by hand, when delivered; (ii) if sent by overnight courier
service, when delivered; and (iii) if sent by mail, upon the earlier of the date
of receipt or five Business Days after deposit in the mail, first class (or air
mail, with respect to communications to be sent to or from the United States),
postage prepaid.

    

    This Note
shall be binding on Borrower and its successors and assigns, and shall be
binding upon and inure to the benefit of Lender, any future holder of this Note
and their respective successors and assigns. Borrower may not assign or transfer
this Note or any of its obligations hereunder without Lender’s prior written
consent.

    

    This Note
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.

    

    Borrower
hereby (a) submits to the non-exclusive jurisdiction of the courts of the
Commonwealth of Massachusetts and the Federal courts of the United States
sitting in the District of Massachusetts (collectively, the “Massachusetts
Courts”), for the purpose of any action or proceeding arising out of or relating
to this Note, (b) irrevocably waives (to the extent permitted by applicable law)
any objection which it now or hereafter may have to the laying of venue of any
such action or proceeding brought in any of the Massachusetts Courts, and any
objection on the ground that any such action or proceeding in any Massachusetts
Court has been brought in an inconvenient forum, and (c) agrees that (to
the extent permitted by applicable law) a final judgment in any such action or
proceeding brought in a Massachusetts Court shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
permitted by law.

    

    IN
WITNESS WHEREOF, Borrower signing below by its duly authorized legal
representative(s) has executed this Note as of the date first above
mentioned.

    

    
      
        
          	
                  AMERICAN
      DG ENERGY INC.

                	 
      
	 
      	 
      
	
                  By:

                	 
      	 
      
	
                  Name:

                	
                  Anthony
      S. Loumidis

                	 
      
	
                  Title:

                	
                  Chief
      Financial OfficerExhibit
10.1

     

    April 7,
2010

     

    Mr. James
Dyke

    31 Beech
Tree Lane

    Monroe,
CT  06468

     

    Dear
Jim:

     

    I am
really excited and anxious to have you join our Psychemedics team.  We
have a tremendous opportunity for growing our business and truly making a
difference.  Your talents will make a significant contribution towards
achieving our objectives and, in so doing, achieving your own personal
objectives— and we’ll all have a lot of fun achieving both!

     

    Please
accept the following as a formal offer:

     

    
      	
               
      

            	
              ·

            	
              You
      will be Vice President- Sales, an Officer of our company and a key member
      of our management team.  You will be responsible for all sales
      activities including developing and implementing our sales plans and
      strategies; managing, recruiting and training our sales team; and
      establishing high level relationships with our clients and
      prospects.  Your primary objective will be to accelerate our
      sales growth.  You will also work directly with me and other
      members of our management team in developing the direction, plans and
      strategies for growing our company.  This position will allow
      you to use the full range of your sales, management and people skills, and
      your creative talents.

            

    

    
      	
               
      

            	
              ·

            	
              Your
      base salary will be $215,000
annually.

            

    

    
      	
               
      

            	
              ·

            	
              You
      will be eligible for incentive compensation based on achieving a number of
      levels of new business according to the attached
      schedule.  Incentive compensation will be paid out on a
      quarterly basis.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              ·

            	
              You
      will be provided an initial grant of 7500 Restricted Stock Units (RSUs)
      which will be governed by our 2006 Equity Incentive Plan.  These
      RSUs vest over 4 years beginning 1 year
hence.

            

    

    
      	
               
      

            	
              ·

            	
              You
      will also participate in and be eligible for annual equity awards as a
      member of our management team in the following years of your
      employment.

            

    

    
      	
               
      

            	
              ·

            	
              We
      will guarantee salary for the first 12 months unless, of course, you leave
      voluntarily or the company would terminate your employment “for cause” as
      defined in the Change of Control
Agreement.

            

    

    
      	
               
      

            	
              ·

            	
              You
      will be granted a Change of Control Agreement that is the same as that in
      effect for the other Vice Presidents providing for one year’s severance in
      the event of termination, except “for cause”, after a change of
      control.  These severance payments would not be payable for any
      month in which you received severance under the preceding
      bullet.

            

    

    
      	
               
      

            	
              ·

            	
              You
      will be enrolled in our medical, dental, life and long-term disability,
      and 401K programs.

            

    

    
      	
               
      

            	
              ·

            	
              Any
      moving expenses, should they be required in the future, will include: the
      physical moving of your furniture, etc, house-hunting trips and temporary
      interim housing will be covered per our discussion.  Real estate
      commissions are not covered in this
agreement.

            

    

    
      	
               
      

            	
              ·

            	
              You
      will be granted 4 weeks vacation.

            

    

    

    As you
know, this offer is contingent upon passing our own drug test and signing our
non-compete agreement.

    

    Jim, I am
extremely excited about having you on our team from both a professional and
personal point-of-view.  I look forward to working with you as we grow
our exciting business.

    

    
      
        	
                Best
      regards,

              	 
      	
                Agreed,

              
	 
      	 
      	 
      
	
                /s/
      Ray Kubacki

              	
                  

              	
                /s/
      James Dyke

              

      

    
 

    
      
         

      

      
        2

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