EXHIBIT 10.37
TERM NOTE
$374,999.99 Los Angeles, California
June 30, 1999
FOR VALUE RECEIVED, the undersigned AUTO-GRAPHICS, INC.
(Borrower) promises to pay to the order of WELLS FARGO BANK,
NATIONAL ASSOCIATION (Bank) at its office at 333 South Grand
Avenue, 9th Floor, Los Angeles, CA 90071, or at such other place
as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the
principal sum of Three Hundred Seventy-Four Thousand Nine Hundred
Ninety Nine and 99/100 Dollars ($374,999.99), with interest
thereon as set forth herein.
INTEREST:
(a) Interest. The outstanding principal balance of this
Note shall bear interest (computed on the basis of a 360-day
year, actual days elapsed) for the designated periods at a rate
per annum equal to the corresponding percentages above the Prime
Rate in effect from time to time, as follows:
Period % Above Prime Rate
- ------------------------------- --------------------------
June 30, 1999 to and including
September 29, 1999 One Percent (1.00%)
September 30, 1999 to and One and One-Quarter Percent
including December 30, 1999 (1.25%)
December 31, 1999 to and One and One-Half Percent
including March 30, 2000 (1.50%)
On and after March 31, 2000 One and Three-Quarters
Percent (1.75%)
Notwithstanding the foregoing, should Borrower deliver evidence
satisfactory to Bank in its sole discretion that Borrower has
received New Capital (defined below) at the times and in the
cumulative amounts shown below, the outstanding principal balance
of this Note shall bear interest (computed on the basis of a
360-day year, actual days elapsed) for the designated periods at
a rate per annum equal to the corresponding percentages above the
Prime Rate in effect from time to time, as follows:
Deadline for Cumulative Period % Above Prime
Receipt of New Amount of New Rate
Capital Capital
- -------------- ------------- ------------- --------------
September 30, $250,000.00 September 30, One Percent
1999 (the First 1999 to and (1%)
Milestone) including
December 30,
1999
December 31, $350,000.00 December 31, One Percent
1999 (the Second 1999 to and (1%) if
Milestone) including Borrower met
March 30, 2000 the First
Milestone
One and One-
Quarter
Percent
(1.25%)if
Borrower did
not meet the
First
Milestone
March 31, 2000 $1,000,000.00 On and after One Percent
March 31, 2000 (1%) if
Borrower met
both
the First
Milestone and
the Second
Milestone
One and One-
Quarter
Percent
(1.25%)if
Borrower met
either the
First
Milestone or
the Second
Milestone, but
not both
One and One-
Half Percent
(1.50%) if
Borrower
received
neither the
First
Milestone nor
the Second
Milestone
As used herein, New Capital shall mean cash and cash
equivalents received and deposited by Borrower on or after June
30, 1999 in the form of a capital contribution in immediately
available funds (prior to the deduction of any and all selling
commissions and other costs and expenses, including legal fees
attributable to the offering). The Prime Rate is a base rate
that Bank from time to time establishes and which serves as the
basis upon which effective rates of interest are calculated for
those loans making reference thereto. Each change in the rate
of interest hereunder shall become effective on the date each
Prime Rate change is announced within Bank.
(b) Payment of Interest. Interest accrued on this Note
shall be payable on the last day of each month, commencing July
31, 1999.
(c) Default Interest. From and after the maturity date of
this Note, or such earlier date as all principal owing hereunder
becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest
until paid in full at an increased rate per annum (computed on
the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time
applicable to this Note.
REPAYMENT AND PREPAYMENT:
(a) Repayment. Principal shall be payable on the last day
of each month in installments of Sixteen Thousand Dollars
($16,000.00) each, commencing July 31, 1999, and continuing up to
and including May 31, 2000, with a final installment consisting
of all remaining unpaid principal due and payable in full on June
1, 2000.
(b) Application of Payments. Each payment made on this
Note shall be credited first, to any interest then due and
second, to the outstanding principal balance hereof.
(c) Prepayment. Borrower may prepay principal on this Note
at any time, in any amount and without penalty. All prepayments
of principal shall be applied on the most remote principal
installment or installments then unpaid.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms
and conditions of that certain Credit Agreement between Borrower
and Bank dated as of May 12, 1997, as amended from time to time
(the Credit Agreement). Any default in the payment or
performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute
an Event of Default under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default,
the holder of this Note, at the holder's option, may declare all
sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice
of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly waived by each Borrower.
Each Borrower shall pay to the holder immediately upon demand
the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees (to include
outside counsel fees and all allocated costs of the holder's
in-house counsel), expended or incurred by the holder in
connection with the enforcement of the holder's rights and/or the
collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any
way related to this Note, including without limitation, any
action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to any Borrower or any other person
or entity.
(b) Obligations Joint and Several. Should more than one
person or entity sign this Note as a Borrower, the obligations of
each such Borrower shall be joint and several.
(c) Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
This Note replaces and supersedes in its entirety that
certain promissory note executed by Borrower in favor of Bank in
the original principal amount of $375,000.00 and dated as of June
1, 1998, which is hereby cancelled.
IN WITNESS WHEREOF, the undersigned has executed this Note
as of the date first written above.
AUTO-GRAPHICS, INC.
By: ss/Robert S. Cope
Robert S. Cope
Title: President/CEO