CHANGE IN TERMS AGREEMENT
Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$275,000.00 12-13-2001 5-01-2004 1760600195 9093 120112 RR
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing "***" has been omitted due to text length limitations.
BORROWER: Acceleration Software International Lender: American Marine Bank
Corporation Silverdale office
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PRINCIPAL AMOUNT: $275,000.00 INTEREST RATE: 7.750% DATE OF AGREEMENT:
May 1, 2003
DESCRIPTION OF EXISTING INDEBTEDNESS: Promissory Note dated June 21, 2001 in the
original amount of $275,000.00, Change In Terms Agreements dated December 13,
2001 and May 24, 2002 and Extension Agreement dated January 31, 2003 and Change
in Terms Agreement with a maturity of December 15, 2002 and Extension Agreement
dated January 31, 2003 to extend the maturity date to April 15, 2003, in favor
of American Marine Bank dba Silverdale Bank, signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
President of Acceleration Software International Corporation.
DESCRIPTION OF COLLATERAL. All Inventory, Chattel Paper, Accounts, Equipment &
General Intangibles and Assignment of Certificate of Deposit #60941.
DESCRIPTION OF CHANGE IN TERMS. To change the maturity date from April 15, 2003
to May 1, 2004. A Loan Fee in the amount of $2,750.00 and Interest to May 1,
2003 in the amount of $2,817.80 with a total amount of $5,567.80 will be paid by
▇▇▇▇▇▇▇▇.
PROMISE TO PAY. Acceleration Software International Corporation ("Borrower")
promises to pay to American Marine Bank ("Lender"), or order, in lawful money of
the United States of America, the principal amount of Two Hundred Seventy-Five
Thousand & 00/100 Dollars ($275,000.00), together with interest at the rate of
7.750% per annum on the unpaid principal balance from May 1, 2003, until paid in
full.
PAYMENT. Borrower will pay this loan in 11 regular payments of $3,000.00 each
and one irregular last payment estimated at $262,842.98. ▇▇▇▇▇▇▇▇'s first
payment is due June 1, 2003, and all subsequent payments are due on the same day
of each month after that. ▇▇▇▇▇▇▇▇'s final payment will be due on May 1, 2004,
and will be for all principal and all accrued interest not yet paid. Payments
include principal and interest. Interest on this Agreement is computed on a
365/365 simple interest basis: that is, by applying the ratio of the annual
interest rate over the number of days in a year, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
is outstanding. Borrower will pay Lender at ▇▇▇▇▇▇'s address shown above or at
such other place as Lender may designate in writing.
PREPAYMENT. ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ in writing, relieve ▇▇▇▇▇▇▇▇ of
▇▇▇▇▇▇▇▇'s obligation to continue to make payments under the payment schedule.
Rather, early payments will reduce the principal balance due and may result in
Borrower's making fewer payments. ▇▇▇▇▇▇▇▇ agrees not to send Lender payments
marked "paid in full", "without recourse", or similar language. If Borrower
sends such a payment, ▇▇▇▇▇▇ may accept it without losing any of ▇▇▇▇▇▇'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: American Marine Bank, Silverdale Office, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $50.00, whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the interest rate on this Agreement 5.000 percentage points. The
interest rate will not exceed the maximum rate permitted by applicable law.
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 ▇▇▇▇▇▇▇▇'s existence as a
going business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a
receiver for any part of ▇▇▇▇▇▇▇▇'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 ▇▇▇▇▇▇▇▇'s accounts, including
deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by ▇▇▇▇▇▇▇▇ as to the validity
or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ 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. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness evidenced by this
Note. In the event of a death, Lender, at its option, may, but shall
not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or ▇▇▇▇▇▇ believes the prospect of payment or
performance of the Indebtedness is impaired.
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 provisions 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 ▇▇▇▇▇▇'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, ▇▇▇▇▇▇ 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, ▇▇▇▇▇▇'s attorneys'
fees and ▇▇▇▇▇▇'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. If not
prohibited by applicable law, ▇▇▇▇▇▇▇▇ also will pay any court costs, in
addition to all other sums provided by law.
GOVERNING LAW. This Agreement will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Washington. This
Agreement has been accepted by ▇▇▇▇▇▇ in the State of Washington.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $22.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with ▇▇▇▇▇▇ (whether
CHANGE IN TERMS AGREEMENT
(CONTINUED)
Loan No.: 1760600195 PAGE 2
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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 ▇▇▇▇▇ accounts, or any trust
accounts for which setoff would be prohibited by law. Borrower authorizes
▇▇▇▇▇▇, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Agreement is secured by Borrower
acknowledges this agreement is secured by the following collateral described in
the security instruments listed herein, all the terms and conditions of which
are hereby incorporated and made a part of this Agreement:
A) Inventory, chattel paper, accounts, equipment, and general intangibles
described in a Commercial Security Agreement dated June 21, 2001.
B) Deposit accounts described in an Assignment of Deposit Account dated June 21,
2001.
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 ▇▇▇▇▇▇ to this Agreement does not waive ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ 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.
PRIOR NOTE. Promissory Note dated June 21, 2001 in the original amount of
$25,000.00.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on
transfer of ▇▇▇▇▇▇▇▇'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 ▇▇▇▇▇▇▇▇, Lender, without
notice to ▇▇▇▇▇▇▇▇, may deal with ▇▇▇▇▇▇▇▇'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: American Marine
Bank, Silverdale Office, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Agreement without losing them. 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 ▇▇▇▇▇▇'s security interest in the collateral; and
take any other action deemed necessary by ▇▇▇▇▇▇ without the consent of or
notice to anyone. All such parties also agree that ▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT. ▇▇▇▇▇▇▇▇ AGREES TO THE TERMS OF THE AGREEMENT.
CIT SIGNERS:
ACCELERATION SOFTWARE INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President of Acceleration Software
International Corporation