0000725897-01-500021.txt : 20011030
0000725897-01-500021.hdr.sgml : 20011030
ACCESSION NUMBER: 0000725897-01-500021
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20011001
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011026
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CIRCUIT RESEARCH LABS INC
CENTRAL INDEX KEY: 0000725897
STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
IRS NUMBER: 860344671
STATE OF INCORPORATION: AZ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-11353
FILM NUMBER: 1767328
BUSINESS ADDRESS:
STREET 1: 2522 W GENEVA DR
CITY: TEMPE
STATE: AZ
ZIP: 85282
BUSINESS PHONE: 6024380888
MAIL ADDRESS:
STREET 1: 2522 W GENEVA DR
CITY: TEMPE
STATE: AZ
ZIP: 85282
8-K
1
body.txt
8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 1, 2001
Date of Report (Date of earliest event reported)
Circuit Research Labs, Inc.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Arizona 0-11353 86-0344671
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2522 West Geneva Drive
Tempe, Arizona 85282
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(602) 438-0888
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Item 5. Other Events.
Amendment to Credit Agreement with Harman Acquisition Corp.
As previously disclosed in the Registrant's current report
on Form 8-K filed June 15, 2000, as amended by the Registrant's
current report on Form 8-K/A filed October 12, 2000, the
Registrant acquired the assets of Orban, Inc., a wholly-owned
subsidiary of Harman International Industries, Inc. ("Harman"),
on May 31, 2000. Including the $250,000 previously paid to
Harman as non-refundable deposits in 1999, the total stated
purchase price was $10.5 million, of which $2 million was paid in
cash and the balance of which was financed by Harman. In
conjunction with the Asset Sale Agreement between the Registrant
and Harman, the parties entered into a Credit Agreement to
establish the terms and conditions of the $8.5 million loan from
Harman to the Registrant. The loan is evidenced by one short-
term promissory note, in the amount of $3.5 million, and one long-
term promissory note, in the amount of $5 million. The long-term
note originally bore interest at 8% per annum and required
quarterly principal payments beginning March 31, 2001, with a
balloon payment of $3 million due on March 31, 2003. The short-
term note bore interest at 8% per annum for the period from June
1, 2000 to July 31, 2000 and 10% per annum from August 1, 2000 up
to its September 30, 2000 maturity date. The notes are
collateralized by, among other things, all receivables, inventory
and equipment, investment property, including the Registrant's
stock in its wholly-owned subsidiary, CRL Systems, Inc., and
intellectual property of the Registrant and CRL Systems, Inc.
The Registrant received several payment extensions on the
promissory notes. First, in exchange for $150,000 cash and an
increase in the interest rates to 12% per annum for both
promissory notes, Harman extended the maturity date of the short-
term note to November 30, 2000. The maturity date of the short-
term note was subsequently extended several times without fees or
other significant changes to the original terms of the note and
is due April 30, 2002. Additionally, the first principal payment
on the long-term note of $250,000, originally due March 31, 2001,
was extended to September 30, 2001 with the remaining quarterly
principal payments deferred until April 30, 2002.
On October 1, 2001, the Registrant and Harman entered into
an Amendment to Credit Agreement (the "Amended Credit Agreement")
under which both the short-term and the long-term promissory
notes were amended and restated. Under the Amended Credit
Agreement, both promissory notes were converted to demand notes
payable on the demand of Harman. Interest only payments remain
payable from time to time for both notes. Additionally, under
the Amended Credit Agreement, the first principal payment on the
long-term note of $250,000, the due date of which had been
extended to September 30, 2001, was increased to $1,250,000 and
is now due April 30, 2002, unless Harman demands payment at an
earlier date.
Copies of the Amended Credit Agreement and the amended and
restated short-term and long-term promissory notes are filed as
exhibits to this report. Reference is made to these documents
for a full statement of the terms and conditions of the
Registrant's agreement with Harman.
Item 7. Exhibits
10.1 Amendment to Credit Agreement, dated as of October 1,
2001, by and between CRL Systems, Inc., as Borrower,
and Harman Acquisition Corp. (formerly known as Orban,
Inc.), as Lender.
10.2 Amended and Restated Tranche A Note, dated as of
October 1, 2001, from CRL Systems, Inc. to Harman
Acquisition Corp. (formerly known as Orban, Inc.) in
the amount of $5,000,000.
10.3 Amended and Restated Tranche B Note, dated as of
October 1, 2001, from CRL Systems, Inc. to Harman
Acquisition Corp. (formerly known as Orban, Inc.) in
the amount of $3,500,000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CIRCUIT RESEARCH LABS, INC.
Date: October 25, 2001 By : /s/ Charles Jayson Brentlinger
------------------------------
Charles Jayson Brentlinger
President and Chief Executive Officer
EX-10
3
credit.txt
EXHIBIT 10.1 - AMENDMENT TO CREDIT AGREEMENT
EXHIBIT 10.1
AMENDMENT TO CREDIT AGREEMENT
-----------------------------
This Amendment to Credit Agreement (this "Amendment") dated as of October
01, 2001 is entered into by and between CRL Systems, Inc., a Nevada corporation
("Borrower") and Harman Acquisition Corp. (f/k/a Orban, Inc.), a Delaware
corporation ("Lender").
RECITALS
A. The parties hereto entered into a Credit Agreement dated May 31, 2000
(the "Original Credit Agreement").
B. Pursuant to Section 2.1 of the Original Credit Agreement, Borrower
agreed to pay $250,000 of the principal amount of the Tranche A Note to Lender
on each of March 31, 2001, June 30, 2001, September 30, 2001, December 31, 2001
and March 31, 2002 (the "Quarterly Payments").
C. Pursuant to Section 2.2 of the Original Credit Agreement, Borrower
agreed to pay the full principal amount of the Tranche B Note to Lender on
September 30, 2000 (the "Tranche B Maturity Date").
D. The parties hereto amended the Original Credit Agreement by entering
into the First Extension Agreement, dated September 29, 2000 (the "First
Extension Agreement"), the Second Extension Agreement, dated November 28, 2000,
the Third Extension Agreement, dated January 18, 2001, the Fourth Extension
Agreement, dated February 22, 2001, the Tranche A Extension Agreement, dated
March 30, 2001, and the Tranche A Note and Tranche B Note Extension Agreement,
dated April 16, 2001 (the "Extension Agreements"). The Original Credit
Agreement as amended, by the Extension Agreements is herein referred to as the
"Credit Agreement".
E. The Extension Agreements, among other things, (i) deferred the
payments of the Quarterly Payments until April 30, 2002, (ii) extended the
Tranche B Maturity Date to April 30, 2002, (iii) increased the interest rate on
the Tranche A Note and the Tranche B Note to 12% per annum and (iv) provided
that Borrower shall pay $250,000 to Lender on September 30, 2001 in satisfaction
of the September 30, 2001 payment required to be paid by Borrower to Lender in
accordance with Section 2.1 of the Credit Agreement (the "September 2001
Payment").
F. Lender and Borrower desire, subject to the conditions set forth in
this Amendment, to further amend the Credit Agreement and to amend and restate
the Tranche A Note and the Tranche B Note in order to among other things, extend
the payment date for the September 2001 Payment and make the Notes payable on
Lender's demand.
NOW THEREFORE, IN CONSIDERATION of the mutual covenants and agreements
contained in this Amendment and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Amendment hereby agree as follows:
AGREEMENT
1. Section 1.1 of the Credit Agreement is hereby amended by deleting the
definitions of the following defined terms in their respective entireties and
substituting the following definitions for such defined terms:
"Tranche A Note": the Amended and Restated Tranche A Note, dated
October 01, 2001, issued by Borrower in favor of Lender.
"Tranche B Maturity Date": April 30, 2002.
"Tranche B Note": the Amended and Restated Tranche B Note, dated
October 01, 2001, issued by Borrower in favor of Lender.
2. Section 2.1 of the Credit Agreement is hereby amended by deleting
Section 2.1 in its entirety and substituting the following language:
"2.1 Repayment of Tranche A Note. The Borrower hereby unconditionally
promises to pay to the Lender the principal amount of the Tranche A Note on
Lender's demand, or if no such demand is sooner made, on the dates and in
the principal amounts set forth below (or such earlier date on which the
Tranche A Note becomes due and payable pursuant to Section 8.1):
Date Amount
---- ------
April 30, 2002 $1,250,000
June 30, 2002 $ 250,000
September 30, 2002 $ 250,000
December 31, 2002 $ 250,000
March 31, 2003 $3,000,000
The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Tranche A Note from time to time outstanding from
the Closing Date until payment in full thereof at the rate per annum set
forth in the First Extension Agreement and on demand, or if no such demand
is sooner made on the dates set forth in Sections 3.3 and 3.4."
3. Section 2.2 of the Credit Agreement is hereby amended by deleting
Section 2.2 in its entirety and substituting the following language:
"2.2 Repayment of Tranche B Note. The Borrower hereby unconditionally
promises to pay to the Lender the principal amount of the Tranche B Note on
Lender's demand, or if no such demand is sooner made, on the Tranche B
Maturity Date (or such earlier date on which the Tranche B Note becomes
due and payable pursuant to Section 8. 1). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Tranche B Note
from time to time outstanding thereof at the rate per annum set forth in
the First Extension Agreement and on demand, or if no such demand is sooner
made, on the dates set forth in Sections 3.3 and 3.4."
2
4. The Credit Agreement is hereby amended by adding in its entirety a new
Section 2.3 with the following language:
"2.3 Payment Upon Demand. Notwithstanding anything to the contrary
contained in the Credit Agreement or any Loan Document and in lieu of any
grace or notice provisions contained therein, upon Lender's demand for
payment under the Notes, Borrower shall have 10 days to pay in full all
amounts demanded by Lender and payable hereunder. The Borrower agrees that
the Lender may demand payment of the Notes (or either of them) at any time,
regardless of whether or not a Default or Event of Default exists."
5. The last clause of Section 8.1 of the Credit Agreement following
paragraph (1) thereof is hereby amended by deleting such clause in its entirety
and substituting the following language:
"then, and in any such event, (A) if such event is an Event of Default
specified in paragraph (a) of this Section 8.1 or in clause (i) or (ii) of
paragraph (f) of this Section 8.1 with respect to any Loan Party or any of
its Subsidiaries, automatically the Notes (with accrued interest thereon)
and all other amounts owing under this Agreement shall immediately become
due and payable, and (B) if such event is any other Event of Default, the
Lender may, by notice to the Borrower, declare all of the Notes (with
accrued interest thereon) and all other amounts owing under this Agreement
to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Nothing contained in this Section 8.1 shall limit
or impair the demand nature of the Notes."
6. Borrower acknowledges that failure of Borrower to fulfill any of its
obligations under this Agreement shall be deemed an Event of Default under the
Credit Agreement.
7. Borrower and Parent agree that the Obligations are valid and
enforceable obligations of Borrower and hereby confirms, acknowledges and
ratifies the existence of the Obligations and Borrower's obligations to Lender
with respect thereto as set forth in the Credit Agreement, and all other
obligations of Borrower and the Company to Lender under the Loan Documents.
8. Borrower represents and warrants to Lender as follows:
a. The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada.
b. The execution, delivery and performance by the Borrower of this
Amendment are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action and do not violate, contravene or create a
breach, violation or default under (i) the Borrower's charter or by-laws, (ii)
any Requirement of Law or any Contractual Obligation binding on or affecting the
Borrower, or result in, or require, the creation or imposition of any mortgage,
deed of trust, pledge, Lien, security interest or other charge, encumbrance or
preferential arrangement of any nature (other than as contemplated by the Loan
3
Documents) upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower.
c. No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority is required for the due execution,
delivery and performance by the Borrower of this Amendment.
d. There is no pending or threatened action or proceeding affecting
the Borrower or any of its Subsidiaries before any court, Governmental Authority
or arbitrator, which could materially and adversely affect the financial
condition or operations of the Borrower or any Subsidiary or which purports to
affect the legality, validity or enforceability of this Amendment.
e. The representations and warranties made by the Borrower in the
Loan Documents and the Extension Agreements are true and correct on and as of
the date of this Amendment with the same force and effect as if made on and as
of the date of this Amendment.
9. The Borrower agrees to pay or reimburse the Lender on demand for all
of its out-of-pocket costs and reasonable expenses incurred in connection with
this Amendment, and any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Lender.
10. In consideration of (i) the modification of certain provisions of the
Credit Agreement, as herein provided, and (ii) the other benefits received by
Borrower hereunder and in connection herewith, each of Borrower and Parent
hereby unconditionally and irrevocably RELEASES, RELINQUISHES and fully and
forever DISCHARGES Lender, all respective subsidiaries and affiliates of Lender,
and all of Lender's and any such subsidiary's or affiliate's respective agents,
officers, directors, employees, representatives, heirs, successors and assigns
(collectively, the "Released Lender Parties") from and against any and all
claims, demands, remedies, liabilities, suits, damages, actions and causes of
action of any and every kind or character, past or present, whether now known,
suspected or claimed, and whether arising under statute, common law or in equity
(collectively, the "Borrower Claims") which Borrower ever had or may have
against the Released Lender Parties at any time on or prior to the date of this
Agreement arising out of or in connection with this Agreement, the Credit
Agreement as amended hereby and any other Loan Documents or the actual or
attempted enforcement by Lender of any rights or remedies relating to any of the
foregoing. Borrower covenants and agrees never to commence, prosecute or cause
to be prosecuted against any of the Released Lender Parties any action or other
proceeding based upon any Borrower Claims. The agreements of Borrower set forth
in this Section 10 shall survive the expiration or other termination of this
Agreement.
11. The Borrower and Parent hereby irrevocably and unconditionally waive
all protections that the Borrower could assert against the Lender or any of its
affiliates, successors or assigns, as a result of the running of any present and
future statute of limitations, laches or other limitations period, and hereby
agree that all present and future statute of limitations applicable to the Loan
Documents and the Notes shall be suspended until 120 days following the receipt
by Lender of payment in full of the Obligations.
4
12. THIS AMENDMENT, THE EXTENSION AGREEMENTS, THE NOTES AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT OF THE BORROWER AND THE LENDER WITH
RESPECT TO THE SUBJECT MATTER HEREOF, AND THERE ARE NO PROMISES, UNDERTAKINGS,
REPRESENTATIONS OR WARRANTIES BY THE LENDER RELATIVE TO THE SUBJECT MATTER
HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN, THE EXTENSION AGREEMENTS,
THE NOTES OR THE OTHER LOAN DOCUMENTS.
13. Except as expressly amended, modified and supplemented by this
Amendment, the terms, conditions and obligations contained in the Loan Documents
and the Extension Agreements remain in full force and effect and are hereby
ratified and confirmed. The execution, delivery and effectiveness of this
Amendment will not, operate as a waiver of any right, power or remedy of Lender
under any of the Loan Documents or the Extension Agreements nor constitute a
waiver of any provision of any of the Loan Documents or the Extension
Agreements.
14. This Amendment will be deemed to be a contract made under the Laws of
the State of New York and for all purposes will be governed by and interpreted
in accordance with the laws prevailing in the State of New York, without regard
to principles of conflict of laws.
15. This Amendment may be executed in several counterparts each of which
when so executed will be deemed to be an original and all of which will together
constitute one and the same agreement. This Amendment will become effective
when this Amendment is executed by each of the parties hereto.
16. Capitalized terms used but not defined in this Amendment have the
meanings ascribed to them in the Credit Agreement and the Extension Agreements.
5
IN WITNESS WHEREOF, Borrower and Harman Acquisition Corp. have executed
this Agreement as of the first date written above.
CRL SYSTEM, INC.
By: /s/ C. Jayson Brentlinger
-------------------------
Name: C. Jayson Brentlinger
Title: President, CEO, Chairman
HARMAN ACQUISITION CORP.
By: /s/ Frank Meredith
------------------
Name: Frank Meredith
Title: CFO
Agreed to and accepted by
CIRCUIT RESEARCH LABS, INC.
By: /s/ C. Jayson Brentlinger
-------------------------
Name: C. Jayson Brentlinger
Title: President, CEO, Chairman
6
EX-10
4
notea.txt
EXHIBIT 10.2 - AMENDED AND RESTATED TRANCHE A NOTE
EXHIBIT 10.2
AMENDED AND RESTATED TRANCHE A NOTE
$5,000,000 October 01, 2001
This Amended and Restated Tranche A Note (this "Note") amends and
restates, and carries forward and without interruption or novation, the
indebtedness evidenced by, the Tranche A Note, dated May 31, 2000 (the "Original
Tranche A Note") issued by CRL Systems, Inc., a Nevada corporation (the
"Borrower") in favor of Harman Acquisition Corp. (f/k/a Orban Inc.), a Delaware
corporation (the "Lender").
FOR VALUE RECEIVED, Borrower hereby unconditionally promises to pay to
the order of Lender, at the Lender's Payment Office, in lawful money of the
United States of America and in immediately available funds, the principal
amount of Five Million Dollars ($5,000,000) ON DEMAND, OR IF NO DEMAND IS
SOONER MADE, ON THE DATES AND IN THE AMOUNTS SPECIFIED IN THE CREDIT AGREEMENT.
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding, at the rates
specified in the Credit Agreement, ON DEMAND, OR IF NO DEMAND IS SOONER MADE, ON
THE DATES SPECIFIED IN THE CREDIT AGREEMENT. Notwithstanding anything to the
contrary set forth in the Credit Agreement dated as of May 31, 2000, as amended
by the First Extension Agreement, dated September 29, 2000, the Second
Extension Agreement, dated November 28, 2000, the Third Extension Agreement,
dated January 18, 2001, the Fourth Extension Agreement, dated February 22, 2001,
the Tranche A Extension Agreement, dated March 30, 2001, the Tranche A Note and
Tranche B Note Extension Agreement, dated April 16, 2001 and the Amendment to
the Credit Agreement, dated as of October 1, 2001 and as further amended,
restated, supplemented or otherwise modified from time to time (collectively,
the "Credit Agreement"), the principal amount of this Note together with all
interest accrued thereon shall be payable ON DEMAND, REGARDLESS OF WHETHER OR
NOT A DEFAULT OR EVENT OF DEFAULT EXISTS UNDER THE CREDIT AGREEMENT.
The holder of this Note is authorized to endorse on the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date and amount of each payment or
prepayment of principal thereof. Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure to make
any such endorsement (or any error therein) shall not affect the obligations of
the Borrower in respect of this Note or the Credit Agreement.
This Note (a) is the Tranche A Note referred to in the Credit Agreement,
between the Borrower and the Lender, (b) is subject to the provisions of the
Credit Agreement, and (c) is subject to optional and mandatory prepayment in
whole or in part as provided in the Credit Agreement. This Note is secured and
guaranteed as provided in the Security Documents. Reference is hereby made to
the Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
Without impairing the demand nature of this Note, upon the occurrence of
any one or more Events of Default, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest, notice of acceleration and intent to accelerate,
and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
CRL SYSTEMS, INC.
/s/ C. Jayson Brentlinger
------------------------------------
C. Jayson Brentlinger, President and
Chairman of the Board
2
Schedule to Tranche A Note
--------------------------------------------------------------------------------
Date of Principal Amount of Unpaid Principal Notation Made By
Payment on Note Principal Paid Balance of Note
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3
EX-10
5
noteb.txt
EXHIBIT 10.3 - AMENDED AND RESTATED TRANCHE B NOTE
EXHIBIT 10.3
AMENDED AND RESTATED TRANCHE B NOTE
$3,500,000 October 01, 2001
This Amended and Restated Tranche B Note (this "Note") amends and restates,
and carries forward, and without interruption or novation, the indebtedness
evidenced by, the Tranche B Note, dated May 31, 2000 (the "Original Tranche B
Note"), and issued by CRL Systems, Inc., a Nevada corporation (the "Borrower")
in favor of Harman Acquisition Corp. (f/k/a Orban, Inc.), a Delaware corporation
(the "Lender").
FOR VALUE RECEIVED, the Borrower hereby unconditionally promises to pay to
the order of the Lender, at the Lender's Payment Office, in lawful money of the
United States of America and in immediately available funds, the principal
amount of Three Million Five Hundred Thousand Dollars ($3,500,000) ON DEMAND, OR
IF NO DEMAND IS SOONER MADE, ON THE DATES AND IN THE AMOUNTS SPECIFIED IN THE
CREDIT AGREEMENT. The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time outstanding,
at the rates specified in the Credit Agreement ON DEMAND, OR IF NO DEMAND IS
SOONER MADE, ON THE DATES SPECIFIED IN THE CREDIT AGREEMENT. Notwithstanding
anything to the contrary set forth in the Original Tranche B Note or the Credit
Agreement, dated May 31, 2000, as amended by the First Extension Agreement,
dated September 29, 2000, the Second Extension Agreement, dated November 28,
2000, the Third Extension Agreement, dated January 18, 2001, the Fourth
Extension Agreement, dated February 22, 2001, the Tranche A Extension Agreement,
dated March 30, 2001, the Tranche A Note and Tranche B Note Extension Agreement,
dated April 16, 2001 and the Amendment to the Credit Agreement, dated as of
October 01, 2001 and as further amended, restated, supplemented or otherwise
modified from time to time (collectively, the "Credit Agreement"), the principal
amount of this Note together with all interest accrued thereon shall be payable
ON DEMAND, REGARDLESS OF WHETHER OR NOT A DEFAULT OR EVENT OF DEFAULT EXISTS
UNDER THE CREDIT AGREEMENT.
The holder of this Note is authorized to endorse on the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date and amount of each payment or
prepayment of principal thereof. Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure to make
any such endorsement (or any error therein) shall not affect the obligations of
the Borrower in respect of this Note or the Credit Agreement.
This Note (a) is the Tranche B Note referred to in the Credit Agreement,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Security
Documents. Reference is hereby made to the Security Documents for a description
of the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Without impairing the demand nature of this Note, upon the occurrence of
any one or more Events of Default, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest, notice of acceleration and intent to accelerate,
and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
CRL SYSTEMS, INC.
/s/ C. Jayson Brentlinger
------------------------------------
C. Jayson Brentlinger, President and
Chairman of the Board
Schedule to Tranche B Note
--------------------------------------------------------------------------------
Date of Principal Amount of Unpaid Principal Notation Made By
Payment on Note Principal Paid Balance of Note
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------