FIRST ALLONGE TO PROMISSORY NOTE
EXHIBIT
10.7
FIRST
ALLONGE TO PROMISSORY NOTE
This
FIRST ALLONGE dated as of August 4, 2006 between E-OIR TECHNOLOGIES, INC.,
a
Virginia corporation (the “Maker”),
and
Xxxxxx X. Xxxxxx (the “Payee”),
to
the Promissory Note dated as of June 29, 2004 in the amount of Six Hundred
Sixty-Two Thousand Two Hundred and Eighty-Eight Dollars ($662,288.00) (as the
same may be further amended, modified or supplemented from time to time, the
“NOTE”),
payable to the order of the Payee and made by the Maker.
RECITALS
WHEREAS,
the Maker is obtaining certain secured loans from Silicon Valley Bank, a
California-chartered bank (the “Bank”);
WHEREAS,
the Payee has agreed to subordinate any security interest, indebtedness or
lien
that Payee may have in any property of the Maker;
WHEREAS,
the Maker and the Payee have agreed to remove certain forfeiture provisions
set
forth in the Note;
WHEREAS,
the Maker and the Payee have agreed to amend the Note to revise the amount
of
principal currently outstanding and to modify the payments of principal and
interest due under the Note by amending the Note Payment Schedule attached
to
the Note as Exhibit A;
NOW,
THEREFORE, for valuable consideration, the receipt and adequacy of which are
acknowledged, the Maker and the Payee hereby agree, with effect from the date
first set forth above, as follows:
1.
The
Note is hereby amended as follows:
1.1
The
first paragraph of the Note is hereby deleted and replaced with the
following:
FOR
VALUE
RECEIVED, E-OIR TECHNOLOGIES, INC., a Virginia corporation (the “Maker”), hereby
promises to pay to Xxxxxx X. Xxxxxx (the “Payee”), at
__________________________________, or at any other place designated by
the Payee in writing, in lawful money of the United States of America, the
principal sum of Six Hundred Eight Thousand Nine Hundred Fifty-Four Dollars
and
Forty-Six Cents ($608,954.46), plus interest on the principal balance remaining
outstanding from time to time at the rate of six percent (6%) per annum
compounded monthly, in the quarterly installment amounts and on the dates set
forth in the amortization schedule attached hereto as Exhibit A. All payments
shall be applied first to accrued but unpaid interest owing hereunder and
thereafter to reduce the principal balance hereof.
1.2
The
following paragraphs of the Note are deleted:
“Upon
the
occurrence of any of the following, Payee's right to receive payments under
this
Note shall terminate and be automatically assigned to each of the Sellers other
than Payee then entitled to payments pursuant to a Buyer Note (as such term
is
defined in the Purchase Agreement, the “Buyer
Note”
or
“Buyer
Notes”)
other
than the Payee, pro rata as set forth below (the "Assignees"),
and
all then unpaid amounts due hereunder, but no amounts previously paid hereunder,
shall be paid to the Assignees thereafter:
1.
The
Payee shall voluntarily terminate Payee's employment with Maker prior to the
scheduled maturity date of this Note; provided that the death or permanent
disability of the Payee shall not be considered termination of Payee's
employment hereunder; or
2.
The
Maker shall terminate the Payee's employment with Maker for cause prior to
the
scheduled maturity date of this Note; and for purposes of this Note, "cause"
shall mean:
a.
repeated, willful and material failure to perform the Payee's duties as an
officer or employee of the Maker, and Payee has failed to cure such breach
or
default within 30 days after receipt of written notice of thereof from the
Maker; or
b.
engaging in criminal fraud, misappropriation or embezzlement in connection
with
the Maker's business; or
c.
Payee's conviction or a plea of nolo
contendere
(no
contest) to criminal misconduct of a nature that impairs or impugns the Payee's
ability to perform Payee's duties for the Maker;
provided
that
the
permanent disability of the Payee shall not be considered “cause" for purposes
of the foregoing; and
provided
further that
resignation following a material, adverse change to the Payee's compensation,
benefits, responsibilities, status, seniority or working conditions (including
forced relocation outside of Payee's then-current place of residence) shall
not
be deemed voluntary termination by Payee.
Each
Assignee shall be assigned a pro rata portion of the payments due hereunder
at
the time of assignment based on the percentage of the total initial face amount
of all then unassigned Buyer Notes represented by the initial face amount of
the
Buyer Note held by such Assignee. In the event any Assignee loses the right
to
receive payments from a Buyer Note issued to such Assignee, such Assignee's
assigned portion of the right to receive payments under this Note shall be
redistributed to the then remaining Assignees as set forth above. Payments
made
pursuant to this Note are "wages" as that term is defined in Section 3401(a)
of
the U.S. Internal Revenue Code of 1986, as amended, and Maker shall withhold
from payments hereunder the appropriate amount of federal, state and local
withholding taxes.”
2
1.3
The
Payment Schedule set forth in Exhibit A is hereby deleted in its entirety and
replaced with the attached Exhibit A.
2.
The
Note is, and shall continue to be, in full force and effect as modified hereby,
and is hereby in all respects ratified and confirmed. The Payee is hereby
authorized to attach this Allonge to the Note.
IN
WITNESS the execution hereof under seal as of the day and year first
above
written.
.
E-OIR
TECHNOLOGIES, INC.
By:
/s/
Xxxx
Xxxxxxx
Name:
Xxxx
Xxxxxxx
Title:
Chief
Financial Officer
PAYEE:
/s/
Xxxxxx X. Mackin____ ____
Name:
Xxxxxx X. Xxxxxx
3
EXHIBIT
A
Note
Payment Schedule
Payment
Date
|
Total
Payment
|
|||
1-Oct-06
|
$
|
9,582.06
|
||
1-Jan-07
|
$
|
9,582.06
|
||
1-Apr-07
|
$
|
9,582.06
|
||
1-Jul-07
|
$
|
425,202.52
|
||
1-Oct-07
|
$
|
3,316.53
|
||
1-Jan-08
|
$
|
3,316.52
|
||
1-Apr-08
|
$
|
3,316.53
|
||
1-Jul-08
|
$
|
113,316.53
|
||
1-Oct-08
|
$
|
1,658.26
|
||
1-Jan-09
|
$
|
1,658.26
|
||
1-Apr-09
|
$
|
1,658.26
|
||
1-Jul-09
|
$
|
111,658.26
|
4