CHANGE IN TERMS AGREEMENT
EXHIBIT 10.38
| Principal $1,000,000.00 |
Loan Date 09-30-2005 |
Maturity 09-30-2006 |
Loan No. 000000000000 |
Call / Coll 4A / 60 |
Account | Officer *** |
Initials |
References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any
particular loan or item. Any item above containing “***” has been omitted due to text length limitations.
particular loan or item. Any item above containing “***” has been omitted due to text length limitations.
Borrower:
|
SYNERGETICS, INC. (MISSOURI CORPORATION) | Lender: | Union Planters Bank NA | |||
| (TIN: 00-0000000) | Xxxxxxx Commercial Lending | |||||
| 0000 XXXXXXXXX XXXXXX XXXXX | 0000 Xxxxxxxx Xxxxxx Xxxxx 000 | |||||
| X’XXXXXX, XX 00000 | Xx. Xxxxx, XX 00000 |
| Principal Amount: $1,000,000.00 | Initial Rate: 6.750% | Date of Agreement: September 30, 2005 |
DESCRIPTION OF EXISTING INDEBTEDNESS. A CERTAIN PROMISSORY NOTE (THE “NOTE”) FROM BORROWER(S)
TO LENDER DATED (11/03/03) IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,000,000.00. AS OF (09/29/05) THE
BALANCE OF THE NOTE WAS $703,278.91.
DESCRIPTION OF COLLATERAL. SECURITY AGREEMENT DATED 9/30/05 AND BUSINESS LOAN AGREEMENT DATED
09/30/05 AND A SECURITY AGREEMENT DATED 8/16/95.
DESCRIPTION OF CHANGE IN TERMS. RENEW LOAN NO. 519900828192 AND EXTEND MATURITY DATE TO 09/30/06.
PROMISE TO PAY. SYNERGETICS, INC. (MISSOURI CORPORATION) (“Borrower”) promises to pay to Union
Planters Bank NA (“Lender”), or order, in lawful money of the United States of America, the
principal amount of One Million & 00/100 Dollars ($1,000.000.00) 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 in one payment of all outstanding principal plus all accrued
unpaid interest on September 30, 2006. In addition, Borrower will pay regular monthly payments of
all accrued unpaid interest due as of each payment date, beginning October 30, 2005, with all
subsequent interest payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any unpaid collection costs; and then to any late charges.
Interest on this Agreement 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 Lender’s address shown above or at such other place as Lender may designate in
writing.
VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to change from time to time
based on changes in an independent index which is the highest base rate on corporate loans at large
U.S. Money Center Commercial Banks that The Wall Street Journal publishes as the prime rate (the
“Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this loan, Lender may designate a substitute index
after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower’s
request. The interest rate change will not occur more often than each day. Borrower understands
that Lender may make loans based on other rates as well. The Index currently is 6.750% per annum.
The interest rate to be applied to the unpaid principal balance of the Note will be at a rate equal
to the Index, resulting in an initial rate of 6.750% per annum. NOTICE: Under no circumstances
will the interest rate on the Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. 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 Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked
“paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender
may accept it without losing any of Lender’s rights under this Agreement, and Borrower will remain
obligated to pay any further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the payment
constitutes “payment in
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full” of the amount owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to: Union Planters Corporation,
Attn: Payment Disputes, X.X. Xxx 000 Xxxxxxx, XX 00000.
LATE CHARGE. If a payment is more than 11 days late, Borrower will be charged 6.000% of the unpaid
portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its
option, may, if permitted under applicable law, increase the variable interest rate on this
Agreement to 3.000 percentage points over the Index. The interest rate will not exceed the maximum
rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any payment when due under the Indebtedness.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Agreement or in any of the Related Documents or to
comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
False Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrowers behalf under this Agreement or the Related Documents is false or
misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property,
any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Borrower or by any governmental agency against any collateral securing the Indebtedness.
This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness
evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not
be required to, permit the Guarantor’s estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any
Event of Default.
Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the
common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower’s financial condition, or
Lender believes the prospect of payment or performance of the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. 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 Agreement within the
preceding twelve (12) months, it may be cured if Borrower, after receiving written notice
from Lender demanding cure of such default: (1) cures the default within fifteen (15) days;
or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender’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.
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LENDERS RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this
Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount.
COLLATERAL. Borrower acknowledges this Agreement is secured by SECURITY AGREEMENT DATED 9/30/05
AND BUSINESS LOAN AGREEMENT DATED 09/30/05 AND A SECURITY AGREEMENT DATED 8/16/95.
ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if
Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses whether or not there is
a lawsuit, including attorneys’ fees and expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.
GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of Missouri without regard to its
conflicts of law provisions. This Agreement has been accepted by Lender in the State of Missouri.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of St. Louis County, State of Missouri.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 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. To the extent permitted by applicable law, Lender reserves a right of setoff in
all Borrower’s accounts with Lender (whether checking, savings, or some other account). This
includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any XXX or Xxxxx accounts, or any trust accounts for
which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the indebtedness against any and all such
accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to
protect Lender’s charge and setoff rights provided in this paragraph.
LINE OF CREDIT. This Agreement evidences a straight line of credit. Once the total amount of
principal has been advanced, Borrower is not entitled to further loan advances. Advances under
this Agreement may be requested either orally or in writing by Borrower or as provided in this
paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All
communications, instructions, or directions by telephone or otherwise to Lender are to be directed
to Lender’s office shown above. The following person currently is authorized to request advances
and authorize payments under the line of credit until Lender receives from Borrower, at Lender’s
address shown above, written notice of revocation of his or her authority: XXXXX X. XXXXXXXX,
President of SYNERGETICS, INC. (MISSOURI CORPORATION). Borrower 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 Borrower’s accounts with Lender. The unpaid principal balance owing on this Agreement at
any time may be evidenced by endorsements on this Agreement or by Lender’s internal records,
including daily computer print-outs. Lender will have no obligation to advance funds under this
Agreement if: (A) Borrower or any guarantor is in default under the terms of this Agreement or any
agreement that Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Agreement; (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 Agreement or any other loan with Lender; (D) Borrower has
applied funds provided pursuant to this Agreement for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure.
ARBITRATION. Borrower and Lender agree that all disputes, claims and controversies between them
whether individual, joint, or class in nature, arising from this Agreement or otherwise, including
without limitation contract and tort disputes, shall be arbitrated pursuant to the Rules of the
American Arbitration Association in effect at the time the claim is filed, upon request of either
party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This includes, without limitation,
obtaining injunctive relief or a temporary restraining order; invoking a power of sale under any
deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including taking or disposing of such property
with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any
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disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or
exercise of any right, concerning any Collateral, including any claim to rescind, reform, or
otherwise modify any agreement relating to the Collateral, shall also be arbitrated, provided
however that no arbitrator shall have the right or the power to enjoin or restrain any act of any
party. Judgment upon any award rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Agreement shall preclude any party from seeking equitable relief
from a court of competent jurisdiction. The statute of limitations, estoppel, waiver, laches, and
similar doctrines which would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration proceeding shall
be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall
apply to the construction, interpretation, and enforcement of this arbitration provision.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original
obligation or obligations, including all agreements evidenced or securing the obligation(s), remain
unchanged and in full force and effect. Consent by Lender to this Agreement does not waive
Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make
any future change in terms. Nothing in this Agreement will constitute a satisfaction of the
obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers
of the original obligation(s), including accommodation parties, unless a party is expressly
released by Lender in writing. Any maker or endorser, including accommodation makers, will not be
released by virtue of this Agreement. If any person who signed the original obligation does not
sign this Agreement below, then all persons signing below acknowledge that this Agreement is given
conditionally, based on the representation 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.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of
Borrower’s interest, this Agreement shall be binding upon and inure to the benefit of the parties,
their successors and assigns. If ownership of the Collateral becomes vested in a person other than
Borrower, Lender, without notice to Borrower, may deal with Borrower’s successors with reference to
this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower
from the obligations of this Agreement or liability under the Indebtedness.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if
we report any inaccurate information about your account(s) to a consumer reporting agency. Your
written notice describing the specific inaccuracy(ies) should be sent to us at the following
address: Union Planters Corporation Attn: Credit Dispute Dept. X.X. Xxx 000 Xxxxxxx, XX 00000.
MISCELLANEOUS PROVISIONS. 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, waive presentment, demand for payment, and
notice of dishonor. Upon any change in the terms of this 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 liability. 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 Lender’s security interest in the
collateral; and take any other action deemed necessary by Lender without the consent of or notice
to anyone. All such parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made. The obligations under
this Agreement are joint and several.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT
OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE
LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT
YOU (BORROWER(S)) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT
OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the other.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
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