CHANGES IN TERMS AGREEMENT
PRINCIPAL LOAN DATE MATURITY LOAN NO
$1,050,000.00 12-17-1998 11-31-1999 12348
CALL COLLATERAL ACCOUNT OFFICER INITIALS
510 07 13505 12 RH
Borrower: Hadron, Inc.; XX.XX. Lender: Century National Bank
0000 Xxxxxxxx Xxxx, Xxxxxx Xxxxxx
Xxxxx 000 0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 XxXxxx, XX 00000
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR
AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT
ANY FURTHER NOTICE.
Principal Amount: $1,050,000.00
Date of Agreement: December 17, 1998
DESCRIPTION OF EXISTING INDEBTEDNESS. All of the indebtedness evidenced by
that certain PROMISSORY NOTE dated June 25, 1997 from HADRON, INC. and
SYCOM SERVICES, INC. and ENGINEERING & INFORMATION SERVICES, INC. to
lender, together with all modifications of and renewals, replacements
and substitutions for the note of credit agreement.
DESCRIPTION OF COLLATERAL. All of the right, title and interest granted
to Lender, including but not limited to those granted under the following:
(a) that certain COMMERCIAL SECURITY AGREEMENT dated June 25, 1997 from
ENGINEERING & INFORMATION SERVICES, INC. to lender; (b) that certain
COMMERCIAL SECURITY AGREEMENT dated June 25, 1997 from SYCOM SERVICES, INC.
to lender together with a Financing Statement recorded July 1, 1997 with the
Delaware Department of State, Division of Corporations bearing file #9722223
and a Financing Statement recorded with the Clerk of the Court of the City
of Alexandria, Virginia bering file #47738; (c) that certain COMMERCIAL
SECURITY AGREEMENT dated December 31, 1996 from HADRON, INC. to lender,
together with a Financing Statement recorded January 29, 1997 with the
Recorder of Deeds of the District of Columbia bearing file #970001513
and a Financing Statement recorded Janaury 15, 1997 with the Clerk of the
Court of the City of Alexandria, Virginia bearing file #47097 and a
Financing Statement recorded January 13, 1997 with the Virginia State
Corporation Commission bearing file #9701137825 and a Financing
Statement recorded Janaury 7, 1997 with the Maryland State Department
of Assessments and Taxation in Liber 3887 at Folio 1167 and bearing ID
#170107380; (e) that certain COMMERICIAL SECURITY AGREEMENT Dated
June 25, 1997 from HADRON, INC. to Lender; (f) that certain COMMERICAL
SECURITY AGREEMENT dated June 25, 1997 from HADRON, INC. to Lender; (g) that
certain ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL dated November
13, 1991 from Xxxxxx X. Xxxxxxx to Lender covering Policy #003009191, as
acknowledged by Chubb Life Insurance Company of America on July 9, 1992; (h)
that certain ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL dated
November 13, 1992; (i) that certain ASSIGNMENT OF LIFE INSURANCE POLICY
AS COLLATERAL dated December 18, 1991 from Xxxxxxxxxxx X. Xxxxxxx to Lender
covering Policy #6001582, as acknowledged by Chubb Security Corporation
on September 12, 1992; and (j) that certain ASSIGNMENT OF LIFE
INSURANCE POLICY AS COLLATERAL dated December 18, 1991 from Xxxxxx X. Xxxxxxx
to Lender covering Policy #6001581, as acknowledged by Chubb
Securities Corporation on September 12, 1992.
DESCRIPTION OF CHANGE IN TERMS.
1. The prinicipal amount is hereby increased from $800,000.00 to
$1,050,000.00.
2. The interest rate to be applied the unpaid balance of this
agreement will be at a rate of 1.00 percentage point over the index.
3. The maturity date is hereby extended to November 30, 1999.
PROMISE TO PAY. Hadron, Inc., promises to pay to Century National
Bank ("Lender"), or order, In lawful money of the United States of
America, the principal amount of One Million Fifty Thousand & 00/100
Dollars ($1,050,000.00) or so much as may be outstanding, together
with Interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each
advance until repayment of each advance.
PAYMENT. Borrower will pay this loan on demand, or If no demand Is
made, In one payment of all outstanding principal plus all accrued
unpaid Interest on November 30, 1999. In addition, Xxxxxxxx will
pay regular monthly payments of accrued unpaid Interest beginning
July 31, 1997, and all subsequent Interest payments are due on the
last day of each month after that. Interest on this Note is
computed on a 365/360 simple interest basis; that is, by applying
the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.
Borrower will pay Lender at Xxxxxx's address shown above or at such
other place as Lender may designate In writing. Unless otherwise
agreed or required by applicable law, payments will be applied
first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject
to change from time to time based on changes in an Index which is
the Wall Street Journal Prime Rate (the "Index). As used herein
"Prime Rate" refers to on index listed from time to time in the
WALL STREET JOURNAL listing of Money Rates a.-id shall be the
higher of all such rates in effect at any one time. Lender will
tell Borrower the current Index rate upon Xxxxxxxx's request.
Borrower understands that Lender may make loans based on other
rates as wall. The interest rate change will not occur more often
than each day. The Index currently is 7.750% per annum. The
Interest rate to be applied to the unpaid principal balance of this
Note will be at a rate of 1.000 percentage point over the Index,
resulting in an initial rate of 8.750% per annum. NOTICE: Under
no circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law.
PREPAYMENT. Xxxxxxxx agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary
or as a result of default), except as otherwise required by law.
Except for the foregoing, Borrower may pay without penalty all or
a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Xxxxxx in writing, relieve
Xxxxxxxx of Xxxxxxxx's obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal
balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will
be charged 5.000% of the regularly scheduled payment or $5.00,
whichever is greater.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to comply with or to perform when due any other
term, obligation, covenant, or condition contained In this Note or
any agreement related to this Note, or in any other agreement or
loan Borrower has with Lender. (c) Borrower defaults under any
loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower's property or
Borrower's ability to repay this Note or perform Borrower's
obligations under this Note or any of the Related Documents. (d)
Any representation or statement made or furnished to Lender by
Borrower or on Xxxxxxxx's behalf is false or misleading in any
material respect either now or at the time made or furnished. (e)
Xxxxxxxx becomes insolvent, a receiver is appointed for any part of
Xxxxxxxx's property, Xxxxxxxx makes an assignment for the benefit
of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any
creditor tries to take any of Xxxxxxxx's property on or in which
Xxxxxx has a lien or security interest. This includes a
garnishment of any of Xxxxxxxx's accounts with Xxxxxx. (g) Any
guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition,
or Xxxxxx believes the prospect of payment or performance of the
Indebtedness is impaired. (i) Lender in good xxxxx xxxxx itself
insecure.
If any default, other than a default in payment, is curable and if
Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure
of such default: (a) cures the default within fifteen (15) days; or
(b) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Xxxxxx's sole discretion to
be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest, together with all other applicable fees, costs and
charges, if any, immediately due and payable, without notice, and
then Borrower will pay that amount. Furthermore, subject to any
limits under applicable law, upon default, Xxxxxxxx also agrees to
pay Xxxxxx's reasonable attorneys' fees equal to 15.000% of the
principal balance due on the Note, and all of Xxxxxx's other
collection expenses, whether or not there is a lawsuit and
including without limitation legal expenses for bankruptcy
proceedings. This Note shall be governed by, construed and
enforced in accordance with the laws of the District of Columbia.
Xxxxxx and Xxxxxxxx hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either party against
the other.
CONFESSION OF JUDGMENT. Upon a default in payment of the
Indebtedness at maturity, whether by acceleration or otherwise,
Borrower hereby irrevocably authorizes and empowers Xxxxxx X.Xxxxxxxxxx
as Xxxxxxxx's attorney-in-fact to appear in the Fairfax County
clerk's officer and to confess judgment against Borrower for the
unpaid amount of this Note as evidenced by an affidavit signed by
an officer of Lender setting forth the amount then due, plus
attorney's fees as provided in this Note, plus costs of suit, and
to release all errors, and waive all rights of appeal. If a copy
of this Note, verified by an affidavit, shall have been filed in
the proceeding, it will not be necessary to file the original as a
warrant of attorney. Borrower waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in
effect. No single exercise of the foregoing warrant and power to
confess judgment will be deemed to exhaust the power, whether or
not any such exercise shall be held by any court to be invalid,
voidable, or void; but the power will continue undiminished and may
be exercised from time to time as Lender may elect until all
amounts owing on this Note have been paid in full.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $12.00
if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys,
delivers, pledges, and transfers to Lender all Borrower's right,
title and interest in and to, Xxxxxxxx's accounts with Lender
(whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and
all accounts Borrower may open in the future, excluding however all
IRA and Xxxxx accounts, and all trust accounts for which the grant
of a security interest would be prohibited by law. Borrower
authorizes Xxxxxx, to the extent permitted by applicable law, to
charge or setoff all sums owing on this Note against any and all
such accounts, and at Xxxxxx's option, to administratively freeze
all such accounts to allow Lender to protect Xxxxxx's charge and
setoff rights provided on this paragraph.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested orally by Borrower or as
provided in this paragraph. All oral requests shall be confirmed
in writing on the day of the request. All communications,
instructions, or directions by telephone or otherwise to Lender are
to be directed to Xxxxxx's office shown above. The following party
or parties are authorized as provided in this paragraph to request
advances under the line of credit until Xxxxxx receives from
Borrower at Xxxxxx's address shown above written notice of
revocation of their authority: Xxxxxxxxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer. Advance requests on the line of credit
must be in a minimum amount of $5,000.00. Xxxxxxxx agrees to be
liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of
Xxxxxxxx's accounts with Xxxxxx. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on
this Note or by Xxxxxx's internal records, including daily computer
print-outs. Lender will have no obligation to advance funds under
this Note if: (a) Borrower or any guarantor is in default under the
terms of this Note or any agreement that Borrower or any guarantor
has with Lender, including any agreement made in connection with
the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender; or (e) Lender in
good xxxxx xxxxx itself insecure under this Note or any other
agreement between Lender and Borrower.
CONTINUING VALIDITY. Except as expressly changed by this Agreement,
the terms of the original obligation of obligations, including all
agreement evidenced or secruing the obligation(s), remain unchanged
and in ful force and effect. Consent by Xxxxxx to this Agreement
does not waive Xxxxxx's right to strict performance of the obligation(s).
It is the intention of Lender to retain as liable parties all makers
and endorsers of the orginial obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing.
Any maker or endorser, including accommodation makers, signing
below acknowledge that this Agreement is given conditionally, based
on the represenation to Lender that the non-signing party consents
to the changes and provisions of this Agreement or otherwise will not
be released by it. This waiver applies not only to any initial
extension, modification or release, but also to all such subsequent
actions.
LINE OF CREDIT REST PROVISION. Borrower hereby agrees to maintain
the line of credit balance at a $0 (Zero dollars) principal balance
for a period of 30 consecutive days at any time between December 18,
1998 and November 30, 1999.
MISCELLANEOUS PROVISIONS. This Agreement is payable on demand. The
inclusion of specific default provisions or rights of Lender shall not
preclude Lender's right to declare payment of this Agreement on its
demand. Lender may delay or forgo enforcing any of its rights or
remedies under this Agreement without losing them. Borrower and
any other person who signs, guarantees or endorses this Agreement,
to the extent allowed by law, waives presentment, demand
for payment, protest and notice of dishonor. Upon any change in
the terms of the Agreement, and unless otherwise expressly
stated in writing, no party who signs this Agreement, whether
as maker, guarantor, accommodation maker or endorser, shall
be released from libility. All such parties agree that
Lender may renew or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Xxxxxx's
security interest in the collateral; and toake any other action
deemed necessary by Xxxxxx without the consent of or notice to
anyone. All such parties also agree that Xxxxxx may modify this
loan without the consent of or notice to anyone other than the
party with whom thie modification is made.
PRIOR TO SIGNING THIS AGREEMENT, XXXXXXXX READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. XXXXXXXX AGREES TO THE TERMS OF THE AGREEMENT AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.
BORROWER:
HADRON, INC.
By: /S/ XXXXXXXXXXX X. XXXXXXX -(SEAL)
Xxxxxxxxxxx X. Xxxxxxx,
Chairman and Chief Executive Officer
