EX-10.1 2 hi3042ex101.txt EXHIBIT 10.1 July 7, 2005 Mr. Mack Traynor, President Tim Clayton, CFO HEI, Inc. 1495 Steiger Lake Lane Victoria, MN 55386 Dear Mack: We have enjoyed working with you and your staff during the last couple of years, and congratulate you and your colleagues on the progress made toward HEI's rebuilding. Thank you for giving us the opportunity to continue to provide HEI with a revolving credit facility. Pursuant to our discussions, we are proposing to amend the terms of the credit facility as detailed below. The terms and conditions are intended as a proposal only and not as a commitment to provide the proposed credit facilities. MAXIMUM CLIENT ACCOUNT LIMIT: $5,000,000 DISCOUNT: Prime plus 2.75% on net funds employed and an immediate discount of .85% for processing. MONTHLY MINIMUM: $1,500.00. PART PAYMENT: 90% of invoice amount, subject to the completion of appropriate verification due diligence. FACILITY FEE: $3,000 TERMS OF CONTRACT: HEI, Inc. will commit to Partner Plus to extend its Accounts Receivable Agreement renewal period to September 1, 2006. ACCOUNT RELATIONSHIP: That the primary deposit relationship for HEI, Inc. be maintained with Beacon Bank while this credit facility is in place COLLATERAL: Security interest in all accounts, inventory, and general intangibles GUARANTY: Validity guaranty from key officers The services will also include the management of outstanding accounts receivable balances, assistance in the development of underwriting policies, credit approval procedures, and a full complement of accounts receivable and cash receipts reporting. All other terms and conditions will be covered in the Accounts Receivable Agreement. We appreciate your continued interest in Beacon Bank and Partner Plus, and look forward to continuing our finance relationship. Sincerely, /S/ Dave L. Peterka /S/ Karen Turnquist ------------------------ ------------------- Dave L. Peterka Karen Turnquist Executive Vice President Partner Plus Agreed and Accepted on July 7, 2005 HEI, Inc. By: Mack V. Traynor ------------------------------------- Title: President and Chief Executive Officer