Exhibit 10.37
First National Bank
CHANGE IN TERMS AGREEMENT
Borrower:
Advanced Remote Communication Solutions, Inc. a Lender:First National Bank
California corporation fka Boalracs, Inc-, a 000 Xxxx X Xxxxxx
Xxxxxxxxxx corporation P.O. Box 85625
Enerdyne Technologies, Inc., a California Xxx Xxxxx, XX 00000
corporation
00000 Xxxxxxxx Xxxxxx Xxxx,
Xxx Xxxxx, XX 00000
Principal Amount: $2,250,000.00 Initial Rate: 7.000% Date of
Agreement:November 5, 2001
DESCRIPTION OF EXIS71NG INDEBTEDNESS.
Promissory Note dated December 29,1998 in the original amount of $750,000.00
originally maturing December 29, 2000 as modified by various Change
In Terms Agreements dated February 4, 2", February 28, 2000, March 13, 2001, May
18, 2001, August 3, 2001, and waiver letter dated February 20, 2001.
DESCRIPTION OF COLLATERAL
Various Commercial Security Agreements and Commercial Pledge Agreements granting
Lender a security interest in various assets as stated in those specific
agreements.
DESCRIPTION OF CHANGE IN TERMS. 1. The Principal Amount of the revolving line of
credit is increased from $2,000,000.00 to $2,250,000.00.
2. The interest rate is modified as outlined in this Agreement
The Loan Agreement dated December 29,1998 as amended from time to time, is
further modified as; follows:
1. Borrowing Base. The words *Borrowing Base' shall mean as determined by Lender
from tirne to time, the lessor of (a) $2,250,000.00; or (b) the sum of (1) 80%
of Eligible Domestic Accounts, plus (ii) 80% of Eligible Insured Foreign
Accounts, less $30,000.00, not to exceed! $750,000.00, plus (Iii) the lessor of
(1) $300,000.00; or (2) up to 50% of the aggregate amount of Eligible Domestic
Inventory less related trade accounts payable. In determining the amount of the
Borrowing Base, all Eligible Domestic Accounts, Eligible Foreign Accounts and
Eligible Domestic Inventory of all Borrowers shall be included.
2 Insured Foreign Account The words 'Insured Foreign Account' mean a trade
account, account receivable, or other right to payment for goods sold or
services rendered owing to Borrower (or to a third party grantor acceptable to
Lender), insured by Lumbermens Mutual Casualty Company or any other private
insurance policy acceptable to Lender. Accounts must be denominated in an
approved currency, sold under approved terms, to an approved buyer, in an
approved country, within approved debtor limits, and subject to delinquency
exclusion.
3. Export Credit Insurance Policy ("Policy'). Borrower shall maintain coverage
under Policy number 3DY 011 725 - 00 or obtain a Policy acceptable to Lender for
comprehensive commercial and political risks and shall assign such Policy to
Lender. Coverage under such Policy shall be in full force and affect as of the
date of each Disbursement and until all amounts outstanding under the Note have
been repaid. The proceeds of such Policy paid to Lender pursuant to the
assignment shall be applied first toward reducing any amount then outstanding on
the Note. In addition, Borrower shall comply with all terms, conditions, and
provisions contained in such Policy.
4. Additional Limits on Eligible Foreign Accounts. Accounts must be less than
sixty (60) days past due. No sales to Accounts which are already delinquent
sixty (60) days or more.
PROMISE TO PAY. Advanced Remote Communication Solutions, Inc, a California
corporation like Boatracs, Inc., a California corporation; and Enerdyne
Technologies, Inc., a California corporation (*Borrower') jointly and severally
promise to pay to First National Bank ("Lendee" or order, In lawful money of the
United States of America, the principal amount of Two Million Two Hundred Fifty
Thousand & O0/100 Dollars ($2,250,000.00) 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 December 29, 20O1. In addition, Borrower
will pay regular monthly payments of all accrued unpaid Interest due as of each
payment date, beginning November 29, 2001, with all subsequent Interest payments
to be due on the same day of each month after that. 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 Lenders 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 Index which is Lenders Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Borrowws 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 5.500% per
annum. The Interest rate to be applied to the unpaid principal balance of the
Note will be at the rate of 1.500 percentage points over the Index, resulting in
an initial rate of 7.00% per annurn. Notwithstanding the foregoing, the variable
Interest rate or rates provided for in the Note will be subject to the following
minimum and maximurn rates. NOTICE: Under no circumstances will the interest
rate on the Note be less than 6.500% per annum or more than the maximurn rate
allowed by applicable law.
PREPAYMENT. Borrower 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 Larder 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 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: First National Bank, 000
Xxxx X Xxxxxx X.X. Xxx 00000, Xxx Xxxxx, XX 00000.
CHANGE IN TERMS AGREEMENT
Loan No: 0000000000 (Continued)
Page 2
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $10.00,
whichever is greater.
INTEREST AFTER DEFAULT. Upon Borrower's failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, Lender,
at its option, may, be permitted under applicable law, increase the variable
interest rate on this Agreement to 6.500 percentage points over the Index.
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 Borrower's behalf under this Agreement or the Related
Documents is false or misleading in any material respect either now or at the
time made or fumished 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 " 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
Borrowees 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 it 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.
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.
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 (and no
event of default will have occurred) if Borrower, after receiving written notice
from Lender demanding cure of such default (1) cures the default within ten (10)
days; or (2) if the cure requires more than ten (10) days, immediately initiates
steps which Lender deems in Lenders 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, Lender may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due, and
than Borrower will pay that amount.
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, expenses for bankruptcy proceedings(including efforts to modify
or vacate any automatic stay or injunction), and appeals. 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. (Initial Here)
GOVERNING LAW. This Agreement will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California. This
Agreement has been accepted by Lender In the State of California.
CHOICE OF VENUE. It there is a lawsuit, Borrower agrees upon Lenders request to
submit to the jurisdiction of the courts of San Diego County, State of
California.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $6.00 it Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances
under this Agreement 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, instructons, or directions by telephone or otherwise
to Lender are to be directed to Lenders office shown above. The following
persons currently are 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 their authority: Xxxxxxx
Xxxxxxxxx; and Xxxx Kemus. 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 Lenders internal records, including daily computer print-outs.
Lender will have no obligatbn 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 guarantors
guarantee of this Agreement or any other loan with Lender, or (D) Borrower has
applied funds provided pursuant to this Agreement for purposes other than those
authorized by Lender.
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 Agreemerl: 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 obligationi(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 Agreementis given conditionally, based on
the representation to Lender that the not-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 extenson, modification or release, but
also to all such subsequent actions.
MODIFIED AND RESTATED PROVISIONS. The provisions entitled 'Payment Default* and
"Adverse Change" as stated in this Change in Terms
CHANGE IN TERMS AGREEMENT
Loan No: 0000000000 (Continued)
Page 3
Agreement are modified and restated as follows:
Payment Default Borrower fails to make any payment when due under the
Indebtedness within five (5) days of the original due date,
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender reasonably believes the prospect of Payment of
performance of the Indebtedness is impaired, unless, in the event of an
involuntary bankruptcy, proceeding, attachment, garnishment or appointment of
receiver, such proceeding shall be dismissed or vacated within sixty (60) days.
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. 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, arid, in cloing so, cure any Event of Default
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on
transfer of Borrowers interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. It 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 d we report any inaccurate information about your accounfis) to
a consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: First National
Bank X.X. Xxx 00000 (XX-00-00) Xxx Xxxxx, XX 00000-0000
MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Agreement without losing them. Each Borrower understands
and agrees that with or without notice to Borrower, Lender may with respect to
any other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the order or
manner of sale thereof, including without limitation, any non-judicial sale
permitted by the terms of the controlling security agreements, as Lender in its
discretion may determine; (e) release, substitute, agree not to xxx, or deal
with any one or more of Borrowers sureties, endorsers or other guarantors on any
terms or in any manner Lender may choose; and (f) detemine how, when and what
application of payments and credits shall be made on any other indebtedness
owing by such other Borrower, Borrower and any other person who signs,
guarantees or endorses this Agreement, to the extent allowed by law, waive any
applicable statute of limitations, 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. AlI such parties also
agree that Lender may modify this loan without the consent of or notice toanyone
other than the party with whom the modification is made. The obligations under
this Agreement are joint and several.
PRIOR TO SIGNING THIS AGREEMENT, EACH BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
EACH BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:
ADVANCED REMOTE COMMUNICATION SOLUTIONS,INC. A CALIFORNIA FKA BOATRACS, INC., A
CALIFORNIA CORPORAT10N
By:
/s/Xxxxxxx Xxxxxxxxx, Chairman of the Board/CEO of
Advanced Remote Communication Solutions, Inc. a
California corporation fka Boatracs, Inc., a
California corporation
By:
/s/ Xxxx Xxxxxx, CFO/Secretary of Advanced Remote Communication
Solutions, Inc., A California Corporation FKA Boatracs, Inc., a California
Corporation
ENERDYNE TECHNOLOGIES, INC., A CALIFORNIA CORPORATION
By:
/s/ Xxxxxxx Xxxxxxxxx, Chairman of the Board/CEO of
Enerdyne Technologies, Inc., a California Corporation
By:
/s/ Xxxx Xxxxxx, CFO/Secretary of Enerdyne Technologies, Inc., a
California Corporation
