CAPSTONE TURBINE CORPORATION (NASDAQ:CPST) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On October 18, 2017, Capstone Turbine Corporation (the “Company”) announced that it had granted Turbine International, LLC. (“TI”) and its affiliate, MTE Service, the sole distribution rights for Capstone products and services in the Russian oil and gas sector in exchange for approximately $6.3 million in cash.
Accounts Receivable Agreement and Promissory Note
In connection with appointment of TI as the Company’s distributor in the Russian oil and gas sector, on October 13, 2017, the Company and TI entered into an Accounts Receivable Assignment Agreement (the “Accounts Receivable Agreement”) and Promissory Note (the “Promissory Note”). to the terms of the Accounts Receivable Agreement, the Company assigned to TI its right, title and interest to receivables owed to the Company from the Company’s distributor BPC Engineering. As consideration for the assignment of the BPC Receivable, TI will pay the Company$2.5 million in three payments by February 1, 2018. The first payment of $0.1 million was paid on September 13, 2017. Under the terms of the Promissory Note, TI agreed to pay the Company $3.8 million to be paid over a three-year period in 35 equal monthly installments starting in August 2018.
The descriptions of the Accounts Receivable Agreement and Promissory Note does not purport to be complete and is qualified in its entirety by the reference to the full text of the Accounts Receivable Agreement and Promissory Note, a copy of which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively.
On October 13, 2017, the Company and Hispania Petroleum, S.A. (the “Guarantor”), entered into a Guaranty Agreement (the “Guaranty Agreement”) which guarantees TI’s obligations under the Accounts Receivable Agreement and Promissory Note.
The foregoing summary of the terms of the Guaranty Agreement is not intended to be complete and is qualified in its entirety by the terms of the Guaranty Agreement, a copy of which is attached hereto as Exhibit 10.3.
Item 9.01 Financial Statements and Exhibits.