EXHIBIT 10.21
Private Client Group
Xxxxxxx Xxxxx Business
Financial Services Inc.
00 Xxxx Xxxxxx Xxxxxx 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
312/845-1020
FAX 312/000-0000
October 8, 1997
XXXXXXX XXXXX
Pacific Mountain Computer Products, Inc.
00000 Xxxxxx Xxxxxx, Xxxxxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Re: WCMA Term-Out
Dear Xx. Xxxxxx:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx
Xxxxx Business Financial Services Inc. ("MLBFS") and Pacific Mountain
Computer Products, Inc. ("Customer") with respect to: (i) that certain WCMA
NOTE, LOAN AND SECURITY AGREEMENT NO. 839-07G75 between MLBFS and Customer
(including any previous amendments and extensions thereof, and (ii) all
other agreements between MLBFS and Customer or any party who has guaranteed
or provided collateral for Customer's obligations to MLBFS ("Guarantor") in
connection therewith (collectively, the "Loan Documents"). Capitalized
terms used herein and not defined herein shall have the meaning set forth
in the Loan Documents.
The WCMA Line of Credit has expired and will not be renewed. Subject to
the terms hereof, the parties have agreed that the balance outstanding
under the WCMA Line of Credit may be paid in accordance with the terms of a
certain Collateral Installment Note executed by Customer concurrently
herewith (the "New Note").
Accordingly, the Loan Documents are hereby amended effective as of the
"Effective Date" as follows:
1. Customer acknowledges and agrees that it has no further right to, and
will not, directly or indirectly borrow funds under the Loan Documents, by
check, wire transfer, Visa charge, FTS, or otherwise, and that the WCMA
Line of Credit has been in all respects terminated.
2. The WCMA Note included in the Loan Documents is hereby superseded and
replaced as of the Effective Date by the New Note; it being understood that
as of the Effective Date all indebtedness of Customer under the WCMA Note
included in the Loan Documents shall be deemed evidenced by and owing under
the New Note.
3. As used in the Loan Documents, the term "Obligations" shall include,
without limitation, the obligations of Customer under the New Note.
Customer hereby agrees to pay the New Note in accordance with its terms.
4. Any failure of Customer to strictly comply with the payment and other
requirements of the New Note and this Letter Agreement shall constitute an
Event of Default under the Loan Documents.
Pacific Mountain Computer Products, Inc.
October 8, 1997
Page No. 2
5. It is expressly understood and agreed that: (i) the New Note is being
accepted by MLBFS as part of a restructure of existing indebtedness, and
(ii) in no event shall the New Note or any such acceptance by MLBFS be
construed as a novation or as otherwise creating any new indebtedness.
6. Concurrently with its execution hereof, Customer shall pay to MLBFS a
non-refundable documentation fee in an amount equal to $600.00 and a
restructure fee in an amount equal to $500.00. No such fee(s) shall be paid
by check drawn upon or other charge to Customer's WCMA Account.
7. Customer hereby agrees to and shall continue in its best efforts to
obtain outside financing (with "outside financing" defined as financing
with a third party other than MLBFS) and will not request an extension or
restructure of its New Note at its maturity.
Except as expressly modified hereby, the Loan Documents shall continue in
full force and effect upon all of their terms and conditions. Without
limiting the foregoing, except as expressly amended hereby nothing herein
shall be deemed to supersede the security agreement included in the Loan
Documents.
By its execution of this Letter Agreement, the below-named Guarantor hereby
consents to the foregoing modifications to the Loan Documents, and hereby
agrees that the "Obligations" under its Unconditional Guaranty and/or
agreement providing collateral shall extend to and include the Obligations
of Customer under the Loan Documents, as amended hereby.
Customer and said Guarantor acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (i) no default or
Event of Default has occurred and is continuing under the Loan Documents;
(ii) each of the warranties of Customer in the Loan Documents are true and
correct as of the date hereof and shall be deemed remade as of the date
hereof; (iii) neither Customer nor said Guarantor has any claim against
MLBFS orany of its affiliates arising out of or in connection with the Loan
Documents or any other matter whatsoever; and (iv) neither Customer nor
said Guarantor has any defense to payment of any amounts owing, or any
right of counterclaim for any reason under, the Loan Documents.
Provided that no further Event of Default, or event which with the giving
of notice, passage of time, or both, would constitute an Event of Default,
shall then have occurred and be continuing under the terms of the Loan
Documents, the amendments and agreements in this Letter Agreement will
become effective on the date (the "Effective Date") upon which: (i)
Customer and the Guarantor shall have executed and returned the duplicate
copy of this Letter Agreement and the other documents enclosed herewith,
including the original Note, together with Customer's check(s) for $600.00
for the documentation fee and $500.00 for the restructure fee referred to
above; (ii) an officer of MLBFS shall have reviewed and approved this
Letter Agreement and such other documents as being consistent in all
respects with the original internal authorization hereof; and (iii) to the
extent applicable, MLBFS shall have entered such amendments and agreements
in its computer system (which MLBFS agrees to do promptly after the receipt
of such executed duplicate copy and other documents and fee).
Notwithstanding the foregoing, if for any reason other than the sole fault
of MLBFS the Effective Date shall not occur within 7 days from the date of
this Letter
Pacific Mountain Computer Products, Inc.
October 8, 1997
Page No. 3
Agreement, then all of said amendments and agreements herein will, at the
sole option of MLBFS, be void.
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Xxxxx Xxxxxxx
Special Assets Supervisor
Accepted:
Pacific Mountain Computer Products, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board
Approved:
Leasing Edge
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: President & CEO
TJ Computer Services, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: President & CEO
TJ Systems Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title President & CEO
XXXXXXX XXXXX
=================================================================
$443,847.79 October 8, 1997
COLLATERAL INSTALLMENT NOTE
FOR VALUE RECEIVED, PACIFIC MOUNTAIN COMPUTER PRODUCTS, INC., a
corporation organized and existing under the laws of the State of
California ("Customer"), hereby promises to pay to the order of XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC. ("MLBFS"), in lawful money of the
United States, the principal sum of $443,847.79 or, if more or less, the
aggregate amount owed by Customer to MLBFS pursuant to the "Loan Documents"
on the "Effective Date", as those terms are defined in the Letter Agreement
referred to below (the "Term Loan Amount"); together with interest on the
unpaid balance of the Term Loan Amount, from the Effective Date until
payment,
at the Interest Rate.
(i) Said indebtedness shall be payable in 3 consecutive monthly
installments commencing on the first day of the calendar week following the
calendar week (with a"calendar week" defined as a Monday through Sunday
period) in which the Effective Date shall occur, and continuing on the
first day of each calendar month thereafter until this Note shall be paid
in full. Installments one through 2 shall be in an amount equal to the sum
of (i) accrued interest at the Interest Rate and (ii) $25,000.00, and the
final installment shall be in an amount equal to the then balance of the
principal of and interest on this Note. As used herein, the term "Interest
Rate" shall mean the sum of (i) 1.00% per annum, and (ii) the Prime Rate.
"Prime Rate" shall mean, as of the date of any determination, the interest
rate then most recently published in the"Money Rates" section of the Wall
Street Journal as the Prime Rate (or if more than one rate is published as
the Prime Rate, then the highest of such rates). The Interest Rate will
change as of the date of publication in the Wall Street Journal of a Prime
Rate that is different from that published on the preceding Business Day.
In the event that The Wall Street Journal shall, for any reason, fail or
cease to publish the Prime Rate, MLBFS will choose a reasonably comparable
index or source to use as the basis for the Interest Rate. Each payment
received hereunder shall be applied first to interest at the Interest Rate,
with the balance applied on account of the Term Loan Amount. Any part of
the principal hereof or interest hereon not paid within 5 days of the
overdue amount of (ii) the maximum amount permitted by law. All interest
shall be computed on the basis of actual days elapsed over a 360-day year.
All sums payable hereunder shall be payable at the office of MLBFS at 00
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place or
places as the holder hereof may from time to time appoint in writing.
Customer may prepay this Note at any time in whole or in part without
premium or penalty. Any partial prepayment shall be applied to
installments of the Term Loan Amount in inverse order of maturity.
This Note is the "New Note" referred to in that certain Letter Agreement
between MLBFS and Customer dated as of the date hereof (the "Letter
Agreement") and is entitled to all of the benefits of the "Loan Documents",
as that term is defined in and amended by the Letter Agreement.
Capitalized terms used herein and not defined herein shall have the meaning
set forth in the Letter Agreement or Loan Documents. If Customer shall
fail to pay when due any installment or other sum due hereunder, or if any
other "Event of Default", as that term is defined in the Loan Documents,
shall occur, then at the option of the holder hereof, and in addition to
all other rights and remedies available to such holder under the Loan
Documents and otherwise, the entire Term Loan Amount at such time remaining
unpaid, together with accrued interest thereon may be declared to be and
thereby become immediately due and payable.
It is expressly understood, however, that nothing contained in the Letter
Agreement, Loan Documents, any other agreement, instrument or document
executed by Customer, or otherwise, shall affect or impair the right, which
is unconditional and absolute, of the holder hereof to enforce payment of
all sums due under this Note at or after maturity, whether by acceleration
or otherwise, or shall affect the obligation of Customer, which is also
unconditional and absolute, to pay the sums payable under this Note in
accordance with its terms.
Customer hereby waives presentment, demand for payment, protest and notice
of protest, notice of dishonor and all other notices and formalities in
connection with this Note. Wherever possible each provision of this Note
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Note. Notwithstanding
anything herein to the contrary, in no event shall any interest charged
hereunder exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that MLBFS has received
interest hereunder in excess of the highest rate applicable hereto, MLBFS
shall promptly refund such excess interest to Customer without charge or
penalty. This Note shall be construed in accordance with the laws of the
State of Illinois and may be enforced by the holder hereof in any
jurisdiction in which the Loan Documents may be enforced.
IN WITNESS WHEREOF, Customer has caused this Note to be executed pursuant
to due authorization as of the day and year first above written.
PACIFIC MOUNTAIN COMPUTER PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------------------
Signature (1) Signature (2)
Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
------------------------------------------------------------
Printed Name Printed Name
Chairman of the Board CFO, Treasurer & Secretary
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Title Title
