UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
 
FORM 8-K
   
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported) December 28, 2016 (December 22, 2016)
 
AMERICAN DG ENERGY INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
(State or Other Jurisdiction of Incorporation)
 
001-34493
 
04-3569304
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
45 First Avenue
 
 
Waltham, Massachusetts
 
02451
(Address of Principal Executive Offices)
 
(Zip Code)
 

(781) 622-1120
(Registrant’s Telephone Number, Including Area Code)
  
_______________________________________________
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





Item 1.01 Entry Into a Material Definitive Agreement.

On December 22, 2016, American DG Energy (the “Company”) entered into a Revolving Line of Credit Agreement (the “Credit Agreement”) with John N. Hatsopoulos for $3,000,000 and took down $850,000 from that line of credit. Mr. Hatsopoulos is the Co-Chief Executive Officer of the Company and a member of the board of directors. The Credit Agreement bears an interest of 6% per annum and the interest is to be paid on the last day of each quarter of the year and shall be paid in cash. The Credit Agreement matures on May 25, 2018. If the Company defaults on the Credit Agreement the Company shall pay interest of 12% per annum on the amount the Company has defaulted on.
On December 23, 2016 the Company also entered into a Debt Repayment Agreement with Trifon Natsis and Despina Pantopoulou Natsis (the “Debt Holders”). This Debt Repayment Agreement terminates the Company’s debt obligations as set out in an amended note agreement that was executed between the Company and the Debt Holders on August 9, 2016 (the “Note”). Under the Debt Repayment Agreement the Debt Holders agreed to accept payment from the Company of $3,058,943.00 as full repayment of the Note, thus terminating all obligations the Company had under the Note.

The foregoing descriptions are qualified by their entirety by reference to the full text of the Credit Agreement, the Debt Repayment Agreement, and the Note attached hereto respectively as Exhibit 10.1, 10.2, and 10.3 and incorporated herein by reference.

Item 1.02. Termination of a Material Definitive Agreement
The information contained in Item 1.01, Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3 are hereby incorporated by reference into this Item 1.02.

Item 2.01. Completion of Acquisition or Disposition of Assets
The information contained in Item 1.01, Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3 are hereby incorporated by reference into this Item 2.01.

Item 2.03. Creation of a Direct Financial Obligation or an obligation under an Off-Balance Sheet Arrangement of a Registrant
The information contained in Item 1.01, Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3 are hereby incorporated by reference into this Item 2.03.






Item 9.01. Financial Statements and Exhibits

(d) Exhibits
The following exhibits are filed:

Exhibit          Description
10.1
Form of Line of Credit Agreement with Mr. John Hatsopoulos
10.2
Form of Debt Repayment Agreement
10.3
Form of Note incorporated by reference from Exhibit 10.1 of the SEC Form 8-K filed by the Company on August 10, 2016.






SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
Date:
December 28, 2016
AMERICAN DG ENERGY INC.
 
 
By: /s/ Bonnie Brown
 
 
Bonnie Brown, Chief Financial Officer





PROMISSORY NOTE - LINE OF CREDIT

U.S. $3,000,000.00    December 22, 2016

FOR VALUE RECEIVED, Tecogen 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 Three Million U.S. Dollars ($3,000,000), or so much of that sum as may be advanced under this Revolving Line of Credit Agreement between Borrower and Lender, as amended from time to time (the “Credit Agreement”), through May 25, 2018 (the “Maturity Date”), together with interest from the date hereof on the unpaid principal balance according to the terms of this Credit Agreement, until repaid in full.

1.
Credit . To draw on this Credit Agreement, Borrower shall notify the Lender in writing of its intent to draw on this Credit Agreement. In such notice, Borrower must state an amount it wishes to withdraw and a date it desires to receive such funds. Upon receiving such notice, the Lender shall within 3 business days of the date requested, by check or wire transfer in U.S. Dollars, pay to the Borrower such amount requested.

2.
Interest . Interest will be paid at a rate of Six Percent (6.00%) per annum (calculated on the basis of a 360-day year) (the “Rate”).

3.
Interest Payment . Interest is to be paid in advance on the first (1st) day of each quarter of the year, (March 31 st , June 30 th , September 30 th , December 31 st ), (each, an “Interest Payment Date”) and shall be paid in cash.

4.
Payment at Maturity . The outstanding principal amount of this Line of Credit, together with all due and unpaid interest, shall be due and payable in cash on the date that is the earlier of (i) the third (3rd) anniversary of the date of this Credit Agreement or (ii) the next Business Day.

5.
Prepayment. Prepayment of principal, together with accrued interest, may be made at any time without penalty.

6.
Default . 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.

7.
Payment in general . 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.

8.
Borrower Representations . Borrower represents and warrants to Lender that:





a.
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.

b.
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.

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

d.
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.

9.
Lender Representations . Lender represents and warrants to Borrower that he currently has available and will keep available the funds necessary to supply the Borrower with the funds contemplated in this Credit Agreement.

10.
Miscellaneous.
a.
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.
b.
Any notices or other communications required or permitted under this Note 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.
c.
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.
d.
This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
e.
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., (BORROWER)

By:     ______________________ ______
Name: Bonnie J. Brown
Title:    Chief Financial Officer


JOHN N. HATSOPOULOS (LENDER)

By:     ________________________ ___




Name: John N. Hatsopoulos
Title:    Chief Executive Officer






Debt Repayment Agreement
American DG Energy, a Delaware corporation located at 45 First Avenue, Waltham, MA 02451, (the “Company”), and Trifon and Despina Pantopoulou Natsis (the “Debt Holders”) (hereinafter referred to jointly as the “Parties”), entered into a convertible debt agreement executed on August 9, 2016 (the “Debt Agreement”) for the debt amount of $3,416,681.00 (the “Debt”).

WHEREAS, the Company wishes to repay the Debt to the Debt Holders and the Debt Holders desire cash;

THEREFORE, the Parties agree to the following:
1.
The Debt Holders accept from the Company the amount of $3,058,943 on December 23, 2016 as full repayment of the Debt. The Debt Holders acknowledge and agree that with the repayment of $3,058,943 from the Company on December 23, 2016, that the Company has repaid the Debt in full and the Company no longer has any outstanding debt or obligations to the Debt Holders.

Entire Agreement: This Debt Repayment Agreement (the “Agreement”) constitutes the sole and entire agreement between the Parties with respect to the subject matter of this Agreement, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to the subject matter.

Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

Debt Holders                         American DG Energy Inc.
Signed By:________________                Signed By:_________________
Name:                             Name:
Title:                             Title: