EXHIBIT 10.74
November 14, 2001
Xx. Xxxxxx X. Xxxx
Applied Data Communications
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Re: Interim Capital Inc. Factoring and Security Agreement
Contract No. ADCM - 0014 Dated: July 29, 1994
Dear Xx. Xxxx:
In reference to the above mentioned contract any and all prior extensions of
payments, waivers of default and standstills for debt have been previously or
are now voided and therefore no longer in effect.
In accordance with the above-mentioned contract, we are notifying ADC of the
following:
1. Default - Section XI Para. 6
ADC is in default of its contract under Section and Paragraph
indicated
2. Repurchase - Sections V-E and XI-12
ADC is required to repurchase the attached list of invoices (Exhibit
A) Schedule A14-362 thru Schedule A14-842 for the amount of
$1,429,068.77.
See Note dated 11/14/01 (Exhibit B) attached.
3. Reserve Account - Sections IV-E, VI-C, IX
The Reserve Account will be applied in accord with the sections
indicated.
4. Payment - Section V-E
Payment of $1,429,068.77 is to be made in accordance with this
section, with the following two exceptions only:
a. The seven (7) day payment period is extended to one (1) year. Any
additional extensions of the seven (7) day pay period is at the
option of Interim Capital, Inc. and must be in writing.
[Extensions of this yearly option will not unreasonably be
withheld by Interim Capital or Successors. JF WK]
b. Payment of the above amount shall be in monthly installments of
5% of ADC's monthly collections up to a $50,000 maximum per
month. Any balance remaining will be due at the end of one (1)
year.
Payments to commence ninety (90) days after November 14, 2001.
ADC to furnish monthly accounting of all collections with payments.
5. Purchasers Rights - Section IV-B
Interim Capital shall exercise its right to sell, assign, or transfer
etc. the attached list of invoices (Exhibit C), Schedules X00-000 xxxx
X00-000 for the amount of $104,156.37.
6. In reference to the above mentioned contract many other sections apply
to all of the above, thus this contract shall remain in full force and
applicable in its entirety until Interim Capital, Inc. has been paid
in full, except as herein stated in item 4a and 4b above.
Sincerely,
/s/ XXXX X. XXXXX
Xxxx X. Xxxxx
Encl.
PROMISSORY NOTE
Amount $1,429,068.77 Orange County, California
This Promissory Note is being executed in conjunction with that certain
Repurchase Letter dated November 14, 2001 between interim Capital, Inc.
("Interim") and Applied Data Communications, Inc. ("ADC") executed on November
14, 2001.
ADC shall pay to Interim, or order, the sum of One Million Four Hundred Twenty
Nine and Sixty-Eight Dollars and Seventy-Seven Cents ($1,429,068.77) with
interest thereon from the date hereof at the rate of eight percent (8%) per
annum. Payments shall commence ninety (90) days after execution of this
Promissory Note and shall consists of monthly installments equal to five percent
(5%) of ADC's total collections (including factored invoices) for the thirty
(30) days preceding each installment's due date, up to a maximum of $50,000.00
per installment. All sums remaining unpaid shall become due on (1) year from the
date of execution of the Promissory Note.
Concurrently with each installment payment, ADC shall furnish to Interim a
detailed accounting of all collections received within the past 30 days. In the
event ADC fails to make any payment hereunder, or provide an accounting. Interim
shall provide written notice of default deposited in the United States mail
Postage prepaid the addresses described below. If ADC fails to cure any default
within ten days of written notice. ADC shall be considered in default hereunder.
At the option of Interim, or any assignee, the whole amount of principal and
interest shall become immediately due and payable upon the occurrence of any of
the following events.:
(a) Failure to cure a default;
(b) The filing of a petition in bankruptcy by ADC, or the initiation of
any proceedings under any bankruptcy or insolvency laws against ADC;
or
(c) The making of a general assignment for the benefit of creditors by
ADC.
Interim's failure to exercise the option to accelerate the debt with regard to
any default shall not be construed as a waiver of the provisions hereof as
regards to the same or any subsequent occurrence.
All payments and notices under this Note shall be delivered to the appropriate
party at the following addresses:
Xxxx X. Xxxx
Interim Capital, Inc.
0000 Xxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Applied Data Communications, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxx, XX 00000-0000
Xxxxxx X. Xxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxx, XX 000000000
This Promissory Note may be prepaid in whole or in part any time without
penalty. This Promissory Note has been executed and delivered by ADC and Xxxxxx
X. Xxxx in the state of California and is to be governed by and construed in
accordance with the laws of the state of California. In any action brought or
arising out of this Promissory Note, ADC and Xxxxxx X. Xxxx hereby consent to
the jurisdiction of any competent court within the state of California.
If a payment under this Note is not made in full when due, whether on a due
date, at maturity of by acceleration, ADC and Xxxxxx X. Xxxx promise to pay all
costs of collection, including without limitation, reasonable attorney's fees
whether or not suit is filed. The provisions hereof shall be binding upon and
inure to the benefit of the parties hereto, their personal representatives,
heir, executor, administrator, successors and or assigns.
Date: 11-14-01 APPLIED DATA COMMUNICATIONS, INC.
--------------
/s/ XXXXXX X. XXXX
----------------------------------------
XXXXXX X. XXXX
President
PERSONAL GUARANTY
-----------------
In order to induce Interim to enter into the foregoing agreement and in
consideration thereof, the undersigned hereby personally, jointly and severally
guarantees to Interim full and prompt payment by ADC of all sums payable under
this Promissory Note. The undersigned further guarantees to indemnify Interim
against any and all loss, damages, claims, liability and/or expenses (including
attorney's fees) resulting form the failure of ADC to perform any term of the
within Promissory Note. The undersigned further agrees that in the event of
default, action may be brought directly against the undersigned irrespective of
whether any action has been taken against ADC. This guaranty shall be construed
an[d] enforced in accordance with the laws of the state of California and the
undersigned consents to the jurisdiction of the courts of the state of
California with respect to this guarantee.
Date: 11-14-01 /s/ XXXXXX X. XXXX
-------------- -----------------------------------
XXXXXX X. XXXX, Personally
A14-614 2/28/2000 CMT 16,403.00 33,250.00 16,625.00 9,975.00 26,600.00
A14-614 2/28/2000 CRT 16,404.00 21,000.00 10,500.00 6,300.00 16,800.00
A14-615 3/1/2000 Therapy Entertainment 16,406.00 825.00 413.00 247.50 660.50
A14-615 3/1/2000 CRT 16,413.00 14,000.00 7,000.00 4,200.00 11,200.00
A14-683 3/30/2000 Language Force 16,615.00 26,400.00 13,200.00 7,656.00 20,856.00
A14-646 04/19/00 CVC 16,686.00 46,800.00 23,400.00 3,572.00 36,972.00
A14-664 5/17/2000 Third Wave 16,845.00 612.45 306.00 171.49 477.49
A14-664 5/17/2000 CD Cyclone 16,848.00 950.00 475.00 266.00 741.00
A14-664 5/17/2000 CMMG 16,850.00 9,500.00 4,750.00 2,660.00 7,410.00
A14-664 5/17/2000 CMMG 16,851.00 9,500.00 4,750.00 2,660.00 7,410.00
A14-672 6/6/2000 CRT 16,935.00 39,600.00 19,800.00 0,692.00 30,492.00
A14-672 6/6/2000 American Sound 16,938.00 7,740.00 3,870.00 2,089.00 5,959.80
A14-679 6/28/2000 CRT 17,027.00 18,000.00 9,000.00 4,680.00 13,680.00
A14-679 6/28/2000 OT Studios 17,031.00 4,900.00 2,450.00 1,274.00 3,724.00
A14-679 6/28/2000 Third Wave 17,033.00 726.59 363.00 188.91 551.91
A14-790 4/20/2001 Xxxxxx.xxx 18,321.00 39,776.44 27,844.00 6,364.23 34,208.23
A14-790 4/20/2001 Xxxxxx.xxx 18,322.00 23,382.04 16,367.00 3,741.13 20,108.13
A14-814 7/2/2001 Stomp 18,632.00 19,008.00 13,306.00 2,661.12 15,967.12
A14-819 7/13/2001 Stomp 18,684.00 19,500.00 13,650.00 2,730.00 16,380.00
A14-820 7/16/2001 Paramount Software 18,686.00 6,765.54 4,736.00 897.52 5,612.52
A14-820 7/16/2001 Cassette Express 18,687.00 2,250.00 1,575.00 292.54 1,867.50
A14-820 7/16/2001 Dot Printer 18,662.00 15,770.00 11,039.00 2,050.10 13,089.00
A14-824 7/26/2001 Staples 18,730.00 12,788.00 8,952.00 1,662.44 10,614.44
A14-824 7/26/2001 Staples 18,731.00 26,271.00 18,390.00 3,415.23 21,805.23
A14-833 8/30/2001 Nihon Kokden 18,876.00 512.50 359.00 61.50 420.50
A14-831 8/22/2001 Staples 18,839.00 23,074.00 16,152.00 2,768.88 18,920.88
A14-842 10/11/2001 TFP 19,008.00 80.00 56.00 5.20 61.20
Re: Interim Capital Factoring & Security Agreement
Contract No. ADCM-0014 dated July 29, 1994
Amendment to Interim Capital's Default & Repurchase Notice Dated 11/14/01 and
ACD Promissory Note Dated 11/14/01
It is the intent of this written notice to amend the above mentioned Contract;
Default & Repurchase Notice and Promissory note as follows:
1. An ADC check is due weekly, rather than monthly, on every Tuesday of
each month until the note & interest is paid in full.
2. First payment due Tuesday 2/26/02.
3. Report of weekly collection receipts are to be furnished with check to
Xxxx Xxxx of Interim Capital Inc.
4. All payments are to paid by negotiable ADC checks.
5. The first Tuesday a check is not received or a check is not negotiable
(not good), the note will go into default, without default notice.
Default notice is waived because of weekly payment schedules.
6. Default must be cured by the following Tuesday (7 days).
7. Default penalty as defined in the note remains in effect. In addition
the 1-year extension of payment granted will be cancelled along with
yearly renewal of extension. If default is not cured timely (within 7
days).
8. 5% applies to all collections, including any and all income from
acquisitions, mergers or ADC equity positions taken in another company
or entity.
9. If default is not cured timely (item 6 above), the entire note balance
and all interest are due and payable.
10. DELETED
11. This does not in any way void any conditions of Interim Capital Inc.'s
Factoring and Security Agreement Contract ADCM-0014 dated July 29,
1994.
/s/ Xxxxxx Xxxx 3/14/02
--------------------------- --------- ---------------------- --------
Xxxxxx X. Xxxx CEO Date Xxxx X. Xxxxx Date
Applied Data communications Interim Capital, Inc.
/s/ Xxxxx Xxxxx
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Witness Witness
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