Exhibit 10.36
First National Bank
CHANGE IN TERMS AGREEMENT
Borower:
Advanced Remote Communication Solutions, Inc. a Lender: First National Bank
California corporation fka Boatracs, 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, #000
Xxx Xxxxx, XX 00000
Principal Amount: $2,000,000.00 Initial Rate: 8.250% Date of
Agreement: August 3, 2001
DESCRIPT10N OF EXISTING 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, 2000, February 28,
2000, March 13, 2001, May 18, 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 is increased from $1,750,000.00 to $2,000,000.00.
2. The interest rate is decreased from Prime + 2% to Prime + 1.50% as further
outlined in this Agreement
The Loan Agreement dated December 29, 1998 (the "Loan Agreement"), as amended
from time to time, is further modified as follows:
The Eligible Inventory as defined in the Loan Agreement shall exclude work
in process.
PROMISE TO PAY. Advanced Remote Communication Solutions, Inc. a California
corporation fka Boatracs, Inc., a California corporation; and Enerdyne
Technologies, Inc., a California corporation ('Borrower") jointly and severally
promise to pay to First National Bank ("Lender"), or order, in lawful money of
the United States of America, the principal amount of Two Million & 00
Dollars ($2,000,000.00) 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 29, 2001. In addition, Borrower
will pay regular monthly payments of all accrued unpaid Interest due as of each
payment date, beginning August 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 Lender's 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 Lender's 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 Borrower's 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 6.7501/6 per
annum. The Interest rate to be applied to the unpaid principal balance of the
Note will be at a rate of 1.500 percentage points over the Index, resulting In
an Initial rate of 8.2500/6 per annum. NOTICE: Under no circumstances will the
interest rate on the Note be more than the maximum 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 Lender 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 Lenders rights under this Agreement, and Borrower will remain
obligated to pay any further amount owed to Lender. AlI 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.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.0000/6 of the unpaid portion of the regularly scheduled payment or $10.00,
whichever Is greater.
INTEREST AFTER DEFAULT. Upon Borrowers failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, Lender,
at its option, may, it 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:
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 of 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 Borrower's existence as a going
business, the insolvency of Borrower, the appointment
of a receiver.
CHANGE IN TERMS AGREEMENT
Loan No: 0000000000 (Continued)
Page 2
or any part of Borrower'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
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall riot 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 if 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 dispute.
Events Affecting Guarantor.
Change In Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.
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 Lender's 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
then 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. If there is a lawsuit, Borrower agrees upon Lender's 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 if Borrower
makes a payment on Borrowers 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 my 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 Lender's 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 Xxxxxx. 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 Lender'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; (C) 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; 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 affect.
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 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 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 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 riot be released by it. This waiver applies not only to any
initial extension, 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 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 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.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on
transfer of Borrower's interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Borrower, Lender, without
notice to Borrower, may deal with Borrowers 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: 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) after, compromise, renew, extend,
accelerate, or otherwise change one
CHANGE IN TERMS AGREEMENT
Loan No: 0000000000 (Continued)
Page 3
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 now collateral; (d)
apply such security and direct the order or manner of sale thereof, including
without limitation, any non-judicial sale permitted by the term of the
controlling security agreements, as Lender in its discretion may determine; (a)
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) 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 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. Al 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. AJI such parties
also agree that Lender 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 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 CORPORATION FKA
BOATRACS, INC.,
A CALIFORNIA CORPORATION
BY:
/s/ XxxxxxX Xxxxxxxxx, Chairman of the Board/CEO of
Advanced Remote Communication Solutions, Inc.. a
California corporation fka Boatracs, Inc.,
California corporation
By:
/s/ Xxxx Xxxxxx, 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
Enerdyne Technologies ,Inc.,a California
Technologies, Inc.
By:/s/ Xxxx Xxxxxx, CFO/Secretary of Enerdyne Technologies, Inc.,
a California Corporation
