Exhibit 10.4
ARC International Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
April 14, 1999
Xxxxxx X. Xxxxxx
c/o ARC International Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Xxxx X. Xxxxxxx
President
Ballantyne of Omaha, Inc.
0000 XxXxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Re: BALLANTYNE TERM LOAN/XXXXXX TERM LOAN
Dear Xxxxxx and Xxxx:
In order to, among other things, facilitate compliance by ARC International
Corporation, an Ontario, Canada corporation ("ARC"), and certain of its
affiliates with their respective ongoing obligations owing to Penfund Management
Limited, each of the undersigned hereby make the following irrevocable
agreements:
- Ballantyne of Omaha, Inc., a Delaware corporation ("Ballantyne"), shall
make, upon the written request (the "Borrowing Notice") of Xxxxxx X. Xxxxxx
made no later than 1:00 p.m. (Omaha time) on January 15, 2000, a term loan
(the "Ballantyne Term Loan") to Xx. Xxxxxx in immediately available funds
to such account as shall be specified by Xx. Xxxxxx in the Borrowing Notice
in the amount of $500,000.00 (U.S.). The Ballantyne Term Loan shall be
evidenced by a promissory note from Xx. Xxxxxx containing the terms
specified on SCHEDULE A attached hereto.
- In the event that the Ballantyne Term Loan is made to Xx. Xxxxxx, the
proceeds of such loan shall immediately be used by Xx. Xxxxxx to make a
term loan (the "Xxxxxx Term Loan") in the amount of $500,000.00 (U.S.) to
ARC. The Xxxxxx Term Loan shall be evidenced by a promissory note from ARC
containing the terms specified on SCHEDULE B attached hereto.
- In the event that the Xxxxxx Term Loan is made to ARC, the proceeds of such
loan shall immediately be used by ARC to make a capital contribution to ARC
Sports Ltd., an Ontario, Canada corporation, in the amount of $500,000.00
(U.S.).
(Remainder of page left intentionally blank)
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Please confirm your agreement with the foregoing by countersigning
this letter agreement in the space provided below.
Very truly yours,
ARC International Corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Vice President - Finance
Acknowledged and Agreed to:
Ballantyne of Omaha, Inc.
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx
President
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Individually
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SCHEDULE A
BALLANTYNE TERM LOAN
Lender: Ballantyne of Omaha, Inc.
Obligator: Xxxxxx X. Xxxxxx
Term: One year
Principal Payment
Date: At maturity
Interest Rate: One percent (1%) above the interest rate in
effect from time to time under Ballantyne of
Omaha, Inc.'s credit facility with Norwest
Bank Nebraska N.A.
Interest Payment
Dates: Monthly in arrears commencing on the first
business day of the month immediately
succeeding the month in which the Ballantyne
Term Loan is made
Collateral: All sums due and payable to Xx. Xxxxxx under
his consulting agreement with Xxxxxxxxxx
shall be retained by Xxxxxxxxxx and applied
toward reduction of the principal amount of
the Ballantyne Term Note
Events of Default: (i) Failure to make any payment of interest
or principal within five business days after
the same shall have become due and payable
(ii) Personal bankruptcy of Xx. Xxxxxx
(iii) Bankruptcy or insolvency of ARC
International Corporation
(iv) Failure of Xx. Xxxxxx or ARC to comply
with the terms and conditions set forth in
the letter agreement to which this schedule
is attached
Remedy Upon
Event of Default: (i) Acceleration of outstanding principal and
interest
(ii) Principal and interest remaining overdue
after expiration of five business day grace
period shall bear interest at the rate of
twelve percent (12%) per annum until paid
Prepayment
Penalty: None
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SCHEDULE B
XXXXXX TERM LOAN
Lender: Xxxxxx X. Xxxxxx
Obligator: ARC International Corporation
Term: One year
Principal Payment
Date: At maturity
Interest Rate: One percent (1%) above the interest rate in
effect from time to time under Ballantyne of
Omaha, Inc.'s credit facility with Norwest
Bank Nebraska N.A.
Interest Payment
Dates: Monthly in arrears commencing on the first
business day of the month immediately
succeeding the month in which the Xxxxxx Term
Loan is made
Collateral: None
Events of Default: (i) Failure to make any payment of interest
or principal within five business days after
the same shall have become due and payable
(ii) Personal bankruptcy of Xx. Xxxxxx
(iii) Bankruptcy or insolvency of ARC
International Corporation
(iv) Failure of Xx. Xxxxxx or ARC to comply
with the terms and conditions set forth in
the letter agreement to which this schedule
is attached
Remedy Upon
Event of Default: (i) Acceleration of outstanding principal and
interest
(ii) Principal and interest remaining overdue
after expiration of five business day grace
period shall bear interest at the rate of
twelve percent (12%) per annum until paid
Prepayment
Penalty: None
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