CHANGE IN TERMS AGREEMENT
Principal Amount: $3,000,000.00
Initial Rate: 3.681%
Date of Agreement: December 24, 2001
DESCRIPTION OF EXISTING INDEBTEDNESS. This is a modification of 0955169868-
0000061660.
DESCRIPTION OF COLLATERAL. Accounts Receivable, Inventory and all Domestic
Assets as further described in Loan and Security Agreement dated
December 14, 1999.
DESCRIPTION OF CHANGE IN TERMS. Extend the maturity date to
December 14, 2003.
PROMISE TO PAY. Technology Research Corporation; and Technology Research
Corporation/Honduras, SA. do CV. ("Borrower") jointly and severally promise
to pay to SouthTrust Bank ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Three Million & 00/100 Dollars
($3,000,000.00) 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 December 14, 2003. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due
as of each payment date, beginning January 24, 2002, 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 independent index which is
the published thirty (30) day London Interbank Offered Rates ("LIBOR") (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 Xxxxxxxx's request. The interest
rate change will not occur more often than each clay. The frequency of the
rate change is further defined below in paragraph titled "VARIABLE RATE
CHANGE FREQUENCY". Borrower understands that Lender may make loans based on
other rates as well. The Index currently is 1.931% per annum. The interest
rate to be applied to the unpaid principal balance of the Note will be at a
rate of 1.750 percentage points over the Index, resulting in an initial rate
of 3.681% per annum. NOTICE: Under no circumstances will the effective rate
of interest on the Note be more than the maximum rate allowed by applicable
law. See "Optional Interest Rate" Provision on page 2 of "Change in Terms
Agreement".
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
Xxxxxx in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to
make payments of accrued unpaid interest. Rather, early payments will reduce
the principal balance due. Xxxxxxxx agrees not to send Lender payments marked
"paid in full", "without recourse", or similar language. If Borrower sends
such a payment, Xxxxxx may accept it without losing any of Xxxxxx'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: SouthTrust Bank, Tampa Middle
Market - H'Boro, Tampa, FL.
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 greeter.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, at Xxxxxx's option, and if permitted by applicable law, Lender may
add any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Agreement. Upon default,
the total sum due under this Agreement xxxx xxxx Interest from the date of
acceleration or maturity at the variable interest rate on this Agreement.
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.
Default in Favor of Third Parties. Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to perform Borrower's
obligations under this Agreement or any of the Related Documents.
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 furnished or becomes false or misleading at any time
thereafter.
insolvency. The dissolution or termination of Xxxxxxxx's existence as a going
business, the insolvency of Xxxxxxxx, the appointment of a receiver for any
part of Xxxxxxxx'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 Xxxxxxxx's accounts, including deposit accounts, with Lender.
However, this Event of Default shall not apply if there is a good faith
dispute by Xxxxxxxx as to the validity or reasonableness of the claim which
is the basis of the creditor or forfeiture proceeding and if Borrower gives
Xxxxxx 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.
Change In Ownership. Any change in ownership of twenty-five percent 125%l or
more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Xxxxxx 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
(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 fifteen (15) days; or (2) if the cure requires more than fifteen
(15) days, immediately initiates steps which Lender deems in Xxxxxx's
sole discretion to be sufficient to cure the default and thereafter continues
and completes all reasonable and necessary stops sufficient to produce
compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.
CHANGE IN TERMS AGREEMENT
Loan No: 0000061660 (Continued) Page 2
ATTORNEYS' FEES; EXPENSES. Xxxxxx may lire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower will pay Lender the amount of
these costs and expenses, which includes, subject to any limits under
applicable law, Lenders reasonable attorneys' fees and Xxxxxx's legal expenses
whether or not there is a lawsuit, including reasonable attorneys' fees and
legal expenses for bankruptcy proceedings including efforts to modify or vacate
any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Xxxxxxxx also will pay any court costs, in addition to all other sums
provided by law.
JURY WAIVER. Xxxxxx and Borrower hereby. waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either Xxxxxx 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 Florida. This
Agreement has been accepted by Xxxxxx in the State of Florida.
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 IRA or Xxxxx accounts, or any trust
accounts for which setoff would be prohibited by law. Xxxxxxxx authorizes
Xxxxxx, 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
Xxxxxx's option, to administratively freeze all such accounts to allow Lender
to protect Lenders charge and setoff rights provided in this paragraph.
COLLATERAL. Borrower acknowledges this Agreement is secured by Accounts
Receivable, Inventory and all Domestic Assets.
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, instructions, or directions by telephone or
otherwise to Lender are to be directed to Xxxxxx's office shown above. The
following persons currently are authorized to request advances and authorize
payments under the line of credit until Xxxxxx receives from Borrower, at
Xxxxxx's address shown above, written notice of revocation of their
authority: Xxxxx X Xxxxxx, OFO of Technology Research Corporation; and Xxxxx
X Xxxxxx, Secretary of Technology Research Corporation/Honduras, S.A. de C.V.
Xxxxxxxx agrees to be liable for all sums either: IA) advanced in accordance
with the instructions of an authorized person or (B) credited to any of
Xxxxxxxx's accounts with Xxxxxx. The unpaid principal balance owing on this
Agreement at any time may be evidenced by endorsements on this Agreement or
by Xxxxxx'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; ICI 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 (El Lender in good faith believes
itself insecure.
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 Xxxxxx to this Agreement does not waive Xxxxxx'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
Xxxxxx 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.
VARIABLE RATE FREDUENCY. The interest rate change will occur each month on
the anniversary date based on the Index Rate for that day.
FINANCIAL STATEMENTS. Until this loan is paid in full, Borrower will furnish
to Lender, as soon as available but in any event within 120 days after the
end of each fiscal year, Borrowers balance sheet and statements of income,
cash flows and changes in capital for the fiscal year just ended, setting
forth in comparative form the corresponding figures for the prior year,
together with accompanying schedules and footnotes, If the financial
statements were compiled or certified by a public accountant, Borrower will
also furnish Lender the accountant's letter accompanying the financial
statements, Xxxxxxxx will furnish to Lender, as soon as available but in any
event within 30 days after the end of the first three quarters of Borrower's
fiscal year, Xxxxxxxx's balance sheet and profit and loss statement for the
quarter just ended, All financial reports provided to Lender will be
certified in writing by the chief executive officer, chief financial officer,
managing partner or comparable financial officer of Borrower to be true and
complete to the best of his or her knowledge and belief and to have been
prepared in accordance with generally accepted accounting principles applied
on a basis consistent with the financial statements previously furnished to
Lender or, if not so prepared, setting forth the manner in which the
financial statements depart therefrom. Borrower will furnish Lender, within
30 days after Xxxxxx's request therefore, a copy of the federal income tax
return most recently filed by Xxxxxxxx. Borrower will cause each guarantor or
endorser of this loan to furnish to Lender, within 30 days after Xxxxxx's
request therefore, a current financial statement of such guarantor or
endorser in form acceptable to Lender and a copy of the federal income tax
return most recently filed by such guarantor or endorser.
CHANGE IN OWNERSHIP. Any aggregate change of twenty-five (25%) or more in the
ownership of the common stock or other ownership interest in Borrower in any
period of 12 consecutive months shall constitute a default under this loan.
OBLIGATION TO DEVELOP BUSINESS PLAN. Before approving this loan, Xxxxxx
required Borrower to furnish Lender with financial statements and other
information concerning the financial history and future prospects of
Borrowers business. Xxxxxx requested and reviewed that information solely to
enable it to make a decision whether to extend credit. Borrower understands
that Xxxxxx has not necessarily approved Xxxxxxxx's business plan and has not
undertaken any duty or obligation to advise Borrower on business matters now
or in the future, Lender is not a financial or business advisor, and Borrower
will not look to Lender for business advice. Xxxxxx's role is solely that of
a Xxxxxx, and Xxxxxxxx's relationship with Xxxxxx is that of debtor and
creditor. Xxxxxx expressly disclaims any fiduciary or other duties or
obligations to Borrower except those expressly provided in the written loan
documents signed by Xxxxxx.
NO ORAL AGREEMENTS. Lender's agreement to lend, Xxxxxxxx's obligation to
repay the loan, and all other agreements between Lender and Borrower have
been reduced to writing. This instrument and the other documents signed
concurrently with it contain the entire agreement between Xxxxxx and
Borrower, Any prior conversations and discussions that Xxxxxx or Borrower may
have had concerning the transaction are not binding unless reflected in the
written loan documents. Xxxxxxxx acknowledges that the loan documents reflect
everything the Lender has agreed to do or not to do in connection with this
transaction.
COMMERCIAL PURPOSES. Borrower intends to use the loan proceeds solely for
business or commercial related purposes and under no circumstances will such
proceeds be used for persona), family or household purposes.
FURTHER ASSURANCE AND COMPLIANCE AGREEMENT. Borrower(s) and Guarantor(s)
agree to cooperate, adjust, initial, re-execute and re-deliver any and all
closing documents, including but not limited to any notes, security documents
and closing statements if deemed necessary of desirable in the sole
discretion of the Bank in order to consummate or complete the Loan from the
Bank to Borrower or to perfect the Bank's lien. It is the intention of the
Borrower that all documentation for the Loan shall be an accurate reflection
of the Bank's requirements. The Borrower(s) agree and covenant to assure that
the Loan and documentation will conform to the Bank's requirements. The Bank
is relying upon this agreement and the covenants contained herein in closing
this transaction and funding the Loan to Borrower. ;;Bank shall have the
right to bring suit to enforce the obligations incurred in connection with
this Agreement, and in the event any suit is brought to enforce this
Agreement, the Bank shall be entitled to recover from the Borrower(s) or
Guarantor(s) all costs and expenses incurred, including a reasonable attorney
fee.
OPTIONAL INTEREST RATE. The optional interest rate as described in the
original Note dated December 14, 1999 and original Loan and Security
Agreement dated December 14, 1999.
PRIOR NOTE. This is a modification of 0955169B68-0000061660.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement
on transfer of Xxxxxxxx's interest, this Agreement shall be binding upon anti
inure to the benefit of the parties, their successors and assigns. if
ownership of the Collateral becomes vested in a person other than Xxxxxxxx,
Lender, without notice to Xxxxxxxx, may deal with Xxxxxxxx'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:
SouthTrust Bank, Tampa Middle Market - H'Boro, Tampa, FL
MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,
this fact will not affect the rest of the Agreement. Borrower
CHANGE IN TERMS AGREEMENT
Loan No: 0000061660 (Continued) Page 3
does not agree or intend to pay, and Xxxxxx does not agree or intend to
contract for, charge, collect, take, reserve or receive (collectively
referred to herein as charge or collect"), any amount in the nature of
interest or in the nature of a fee for this loan, which would in any way or
event (including demand, prepayment, or acceleration) cause Lender to charge
or collect more for this loan than the maximum Lender would be permitted to
charge or collect by federal law or the law of the State of Florida (as
applicable). Any such excess interest or unauthorized fee shall, instead of
anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be
refunded to Borrower. 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; (a) release,
substitute, agree not to sue, 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 If) determine 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 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 Xxxxxx's security interest in the collateral; and take any
other action deemed necessary by Xxxxxx without the consent of or notice to
anyone. All such parties also agree that Xxxxxx 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 arid
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.
CIT SIGNERS:
TECHNOLOGY RESEARCH CORPORATION
By: /S/ Xxxxx X. Xxxxxx
Xxxxx X Xxxxxx, CFO of Technology Research Corporation
TECHNOLOGY RESEARCH CORPORATION, HONDURAS, SA. DE C.V.
By: /S/ Xxxxx X. Xxxxxx
Xxxxx X Xxxxxx, Secretary of Technology Research Corporation/
Honduras, S.A. de C.V.
