Exhibit 10.38
EIGHTH AMENDED AND RESTATED
REVOLVING PROMISSORY NOTE
(Exim Bank-Guaranteed Line of Credit)
Facility Amount: Effective Date: November 30, 2003
U.S. $2,000,000.00 Dallas, Texas
Bank: Borrower:
BANK OF AMERICA, N.A. DREW SCIENTIFIC, INC./d/b/a DANAM
ELECTRONICS
Commercial Banking Group
901 Main Street, 7th Floor 4230 Shilling Way
TX1-492-07-01 Dallas, Texas 75237
Dallas, Texas 75202
Dallas County Dallas County
This Eighth Amended and Restated Revolving Promissory Note effective as of
November 30, 2003(this "NOTE") is an amendment and restatement of that certain
Seventh Amended and Restated Revolving Promissory Note dated effective as of
September 30, 2003 in the principal amount of $2,000,000 by Borrower in favor of
Bank (the "ORIGINAL NOTE"). This Note represents an extension of the maturity
date of the Original Note. The Borrower was formerly known as "MWI, Inc." and
has changed its name to Drew Scientific, Inc., pursuant to Articles of Amendment
adopted effective October 1, 2002.
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and jointly and
severally, if more than one) promises to pay to the order of Bank, its
successors and assigns, without setoff, at its offices indicated at the
beginning of this Note, or at such other place as may be designated by Bank, the
principal amount of Two Million and No/100 Dollars ($2,000,000.00), or so much
thereof as may be advanced from time to time in immediately available funds,
together with interest computed daily on the outstanding principal balance
hereof, at an interest rate, and in accordance with the payment schedule, set
forth in that certain Amended and Restated Loan Agreement (Ex-Im Bank-
Guaranteed Line of Credit) dated effective September 30, 2001 by and between
Bank and Borrower, as amended by that certain First Amendment to Amended and
Restated Loan Agreement dated as of January 7, 2002, as further amended by that
certain Second Amendment to Amended and Restated Loan Agreement dated as of July
8, 2002 (but effective on June 30, 2002) and as further amended by that certain
Third Amendment to Amended and Restated Loan Agreement (Ex-Im Bank Guaranteed
Line of Credit) effective on August 30, 2002, as further amended by that certain
Fourth Amendment to Amended and Restated Loan Agreement (Ex-Im Bank Guaranteed
Line of Credit) effective on September 30, 2002, and as further amended by the
certain Fifth Amendment to Amended and Restated Loan Agreement (Ex-Im
Bank-Guaranteed Line of Credit) effective as of September 30, 2003, and as
further amended by that certain Sixth Amendment to Amended and Restated Loan
Agreement (Ex-Im Bank-Guaranteed Line of Credit) effective as of November 30,
2003 (collectively, the "LOAN AGREEMENT").
1. MATURITY DATE; PAYMENT SCHEDULE; MANDATORY PRINCIPAL PAYMENT. Principal shall
be paid in full in a single payment on May 31, 2004. Interest thereon shall be
paid monthly, commencing on December 1, 2003 and continuing on the same day of
each successive month thereafter, with a final payment of all unpaid interest on
the last day of the Availability Period (as defined in the Loan Agreement). In
addition to the principal payment schedule set forth above, each advance
hereunder shall be due and payable on the earlier of the following: (i)
immediately upon Borrower's receipt of payment from an account debtor
against the corresponding account receivable, (ii) 180 days after the making of
such advance or (iii) the last day of the Availability Period. Total or partial
prepayments may be made at any time. If Borrower is in default under this Note
or the Loan Agreement, Bank may demand payment of the balance outstanding under
this Note in full immediately. All payments received hereunder shall be applied
in the order set forth in the Loan Agreement.
2. REVOLVING FEATURE. Borrower may borrow, repay and reborrow hereunder at any
time, up to a maximum aggregate amount outstanding at any one time equal to the
Maximum Amount (as defined in the Loan Agreement), provided that Borrower is not
in default under any provision of this Note or the Loan Agreement, and provided
that the borrowings hereunder do not exceed any borrowing base or other
limitation on borrowings by Borrower. Bank shall incur no liability for its
refusal to advance funds based upon its determination that any conditions of
such further advances have not been met. Bank records of the amounts borrowed
from time to time shall be conclusive proof thereof. In addition, Bank may
refuse to make additional advances or reduce the amount of advances available as
provided in the Loan Agreement.
3. SUBJECT TO LOAN AGREEMENT. This Note shall be governed by the Loan Agreement,
and all provisions regarding advances, interest, prepayment, late payments,
events of default, remedies and governing law are set forth in the Loan
Agreement.
4. COMMERCIAL PURPOSES. BORROWER REPRESENTS TO BANK THAT THE PROCEEDS OF THIS
LOAN ARE TO BE USED PRIMARILY FOR BUSINESS, COMMERCIAL OR AGRICULTURAL PURPOSES.
BORROWER ACKNOWLEDGES HAVING READ AND UNDERSTOOD, AND AGREES TO BE BOUND BY, ALL
TERMS AND CONDITIONS OF THIS NOTE AND HEREBY EXECUTES THIS NOTE UNDER SEAL AS OF
THE DATE HERE ABOVE WRITTEN.
5. NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
6. JUDICIAL PROCEEDINGS; WAIVERS. BORROWER AND BANK ACKNOWLEDGE AND AGREE THAT
(a) ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY BORROWER OR BANK OR ANY SUCCESSOR OR ASSIGN OF BORROWER OR BANK,
ON OR WITH RESPECT TO THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE
COLLATERAL OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO SHALL
BE TRIED ONLY BY A COURT AND NOT BY A JURY, AND EACH PARTY WAIVES THE RIGHT TO
TRIAL BY JURY; (b) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY
SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; AND (c) THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE,
AND BANK WOULD NOT EXTEND CREDIT IF THE WAIVERS SET FORTH IN THIS SECTION WERE
NOT A PART OF THIS NOTE.
EFFECTIVE DATE: NOVEMBER 30, 2003
EXECUTION DATE: DECEMBER 5, 2003
2
DREW SCIENTIFIC, INC./d/b/a DANAM ELECTRONICS
By:/s/ Keith Raymond Drew
--------------------------------
Keith Raymond Drew
President and Chief Executive Officer
and
By:/s/ James B. Acock
------------------------------
Print Name: James B. Acock
Title: Treasurer, Secretary and Chief
Financial Officer
Receipt of delivery of this Note is hereby acknowledged by:
Bank of America, N.A.
By:/s/ John Clarke
--------------------------
John Clarke
Title: VP