Sample Business Contracts

Changes In Terms Agreement - Citizens Bank New Hampshire and Omtool Ltd.

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                           CHANGES IN TERMS AGREEMENT

<S>          <C>          <C>           <C>        <C>     <C>          <C>         <C>      <C>
$250,000.00               12-31-1999    00000002   04A0      ACASEQ     7200060780    755
                             DOCUMENT TO ANY PARTICULAR LOAN OR ITEM.

Borrower:  OmTool Ltd. (TIN: 020447481)   Lender:  Citizens Bank New Hampshire
           8A Industrial Way                       Manchester Lending Division
           Salem, NH  03079                        875 Elm Street
                                                   Manchester, NH  03101


Principal Amount:  $250,000.00              Date of Agreement:  January 27, 1997

DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory Note dated August 30, 1996, by
Borrower to Lender, formerly known as First NH Bank, in the original face amount
of $250,000.00. Said obligation has an outstanding principal balance as of the
date hereof in the amount of $250,000.00.

DESCRIPTION OF COLLATERAL. Assets as described in a Loan and Security Agreement
dated August 30, 1996, by Borrower, as grantor, to Lender, formerly known as
First NH Bank, as secured party, and perfected by the filing of UCC-1 Financing
Statements with the New Hampshire Secretary of State and the Salem Town Clerk.

DESCRIPTION OF CHANGE IN TERMS. The Borrower and Lender hereby agree to amend
the indebtedness by changing the maturity date and monthly payment amount.

PROMISE TO PAY. Omtool, Ltd. ("Borrower") promises to pay to Citizens Bank New
Hampshire ("Lender"), or order, in lawful money of the United States of America,
the principal amount of Two Hundred Fifty Thousand & 00/100 Dollars
($250,000.00), together with interest on the unpaid principal balance from
December 31, 1996, until paid in full.

PAYMENT. Subject to any payment changes resulting from changes in the index,
Borrower will pay this loan in 35 payments of $7,933.47 each payment and an
irregular last payment estimated at $7,933.19. Borrower's first payment is due
January 31, 1997, and all subsequent payments are due on the same day of each
month after that. Borrower's final payment will be due on December 31, 1999, 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
365/360 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. Unless otherwise agreed or
required by

<PAGE>   2

applicable law, payments will be applied first to accrued unpaid interest, then
to principal, and any remaining amount to any unpaid collection costs and late

VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to change
from time to time based on changes in an independent index which is the Wall
Street Journal Prime Rate (the "Index"). The Index is not necessarily the lowest
rate charged by Lender or its loans. If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute index after notice to
Borrower. Lender will tell Borrower the current index rate upon Borrower's
request. Borrower understands that Lender may make loans based on other rates as
well. The interest rate change will not occur more often than each day. In the
event that the published index indicates a range of rates, the index will be the
highest of the published range. The index currently is 8.250% per annum. The
interest rate to be applied to the unpaid principal balance of this Agreement
will be at a rate of 0.500 percentage points over the index, resulting in an
initial rate of 8.750% per annum. NOTICE: Under no circumstances will the
interest rate on this Agreement be more than the maximum rate allowed by
applicable law. Whenever increases occur in the interest rate, Lender, at its
option, may do one or more of the following: (a) increase Borrower's payments to
ensure Borrower's loan will pay off by its original final maturity date, (b)
increase Borrower's payments to cover accruing interest, (c) increase the number
of Borrower's payments, and (d) continue Borrower's payments at the same amount
and increase Borrower's final payment.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than its due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
under the payment schedule. Rather, they will reduce the principal balance due
and may result in Borrower making fewer payments.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment of $35.00, whichever is greater.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this
Agreement or any agreement related to this Agreement, or in any other agreement
or loan Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or misleading
in any material respect either now or at the time made or furnished. (d)
Borrower becomes insolvent, a receiver is appointed for any part of Borrower's
property, Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any guarantor dies or
any of the other events described in this default section occurs with respect to
any guarantor of this Agreement. (g) A material adverse change occurs in
Borrower's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired. (h) Lender in good faith deems
itself insecure.

<PAGE>   3

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due,
without notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, do one or both of the following: (a) increase
the variable interest rate on this Agreement to 3.500 percentage points over the
index, and (b) add any unpaid accrued interest to principal and such sum will
bear interest therefrom until paid at the rate provided in this Agreement
(including any increased rate). The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Agreement if Borrower does not pay. Borrower also 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 and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Agreement has been delivered to
Lender and accepted by Lender in the State of New Hampshire. If there is a
lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of
the courts of Hillsborough County, the State of New Hampshire. Lender and
Borrower hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the other. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Hampshire.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Agreement against any
and all such accounts.

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 the 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

<PAGE>   4

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, protest 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.

Borrower expressly agrees that the interest rates specified. In this Agreement
shall be the applicable interest rates due (a) on amounts outstanding during the
term of this Agreement, notwithstanding the rate of interest prescribed by
statute from time to time, and (b) with respect to any amounts outstanding on
and after the maturity date of this Agreement.



Omtool, Ltd.

By:  _________________________
        Robert Voelk, CEO


Citizens Bank New Hampshire

      Authorized Officer