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Exhibit 10.11(J)
CHANGE IN TERMS AGREEMENT
<Table>
<Caption>
Principal Loan Date Maturity Loan No. Cell/Call Accounts Officer Initials
$3,356,768.76 11-10-2002 06-10-2005 0400706081 016/1111 [20] 44 019
</Table>
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.
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Borrower: FAFCO, INC. Lender: Butte Community Bank
435 OTTERSON DRIVE CHICO OFFICE
CHICO, CA 95928 2041 FOREST AVE
CHICO, CA 92928
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PRINCIPAL AMOUNT: $3,356,768.76 INTEREST RATE: 8.000%
DATE OF AGREEMENT: NOVEMBER 10, 2002
DESCRIPTION OF EXISTING INDEBTEDNESS. THIS IS A FIXED RATE (9.050%)
NONDISCLOSABLE DRAW DOWN LINE OF CREDIT TO A CORPORATION FOR $3,400,000.00 DUE
ON JUNE 10, 2005.
DESCRIPTION OF COLLATERAL. 1ST D/T 435 OTTERSON DRIVE, CHICO, CA 95928.
DESCRIPTION OF CHANGE IN TERMS. INTEREST RATE TO BE CHANGED FROM 9.050% TO
8.000% FIXED, ON THE CURRENT PRINCIPAL BALANCE OF $3,356,768.76. ON JUNE 10,
2005, INTEREST RATE TO BE CHANGED TO PRIME RATE (AS PUBLISHED BY BUTTE
COMMUNITY BANK) PLUS .350% AND FIXED FOR THE NEXT FIVE YEAR PERIOD. EACH
SUBSEQUENT FIVE YEAR PERIOD WILL BE ADJUSTED TO PRIME RATE (AS PUBLISHED BY
BUTTE COMMUNITY BANK) PLUS .350% AND FIXED FOR FIVE YEARS. A DOCUMENTATION FEE
OF $250.00 TO BE PAID IN CASH. ALL OTHER TERMS AND CONDITIONS ARE TO REMAIN THE
SAME.
PROMISE TO PAY. FAFCO, INC. ("Borrower") promises to pay to Butte Community
Bank ("Lender"), or order, in lawful money of the United States of America, the
principal amount of Three Million Three Hundred Fifty-six Thousand Seven
Hundred Sixty-eight & 76/100 Dollars ($3,356,768.76) or so much as may be
outstanding, together with interest at the rate of 8.000% 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 June 10, 2005. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due
as of each payment date, beginning December 10, 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 Lender's address shown above or at such other place as Lender may designate
in writing.
PREPAYMENT; MINIMUM INTEREST CHARGE. 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. In any event, even upon
full prepayment of this Agreement, Borrower understands that Lender is entitled
to a minimum interest charge of $50.00. Other than Borrower's obligation to pay
any minimum interest charge, 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
Lender'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: Butte Community Bank, NOTE
DEPARTMENT, 1390 RIDGEWOOD DRIVE CHICO, CA 95973.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon Borrower's failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, the
total sum due under this Agreement will bear interest from the date of
acceleration or maturity at the 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.
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 Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a
receiver for 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 not
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 for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of
any of the indebtedness or any guarantor, endorser, surety, or
accommodation party 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 Lender 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 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.
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 BUTTE County, State of California.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
COLLATERAL. Borrower acknowledges this Agreement is secured by the following
collateral described in the security instrument listed herein: a Deed of Trust
dated November 10, 2002, to a trustee in favor of Lender on real property
located in BUTTE County, State of California. That agreement
CHANGE IN TERMS AGREEMENT
Loan No: 0400706081 (CONTINUED) PAGE 2
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contains the following due on sale provision: Lender may, at Lender's option,
declare immediately due and payable all sums secured by the Deed of Trust upon
the sale or transfer, without Lender's prior written consent, of all or any
part of the Real Property, or any interest in the Real Property. A "sale or
transfer" means the conveyance of Real Property or any right, title or interest
in the Real Property; whether legal, beneficial or equitable; whether voluntary
or involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of an interest in the Real Property. If
any Borrower is a corporation, partnership or limited liability company,
transfer also includes any change in ownership of more than twenty-five percent
(25%) of the voting stock, partnership interests or limited liability company
interests, as the case may be, of such Borrower. However, this option shall not
be exercised by Lender if such exercise is prohibited by applicable law.
LINE OF CREDIT. This Agreement evidences a straight line of credit. Once the
total amount of principal has been advanced, Borrower is not entitled to further
loan advances. Advances under this Agreement may be requested orally by
Borrower or as provided in this paragraph. Lender may, but need not, require
that all oral requests be confirmed in writing. 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; ALEX N. WATT, Executive VP/Secretary
of FAFCO, INC.; NANCY I. GARVIN, Vice President of Finance of FAFCO, INC.; and
FREEMAN A. FORD, President of FAFCO, INC. Borrower agrees to be liable for all
sums either: 1. advanced in accordance with the instructions of an authorized
person or 2. 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.
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 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 not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.
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 Borrower'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: Butte Community
Bank, CHICO OFFICE, 2041 FOREST AVE, CHICO, CA 95928.
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 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. 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 Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All 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, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
CIT SIGNERS:
FAFCO, INC.
BY: /S/ Nancy I. Garvin
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NANCY I. GARVIN, VICE PRESIDENT OF FINANCE OF
FAFCO, INC.
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