Exhibit 10.24
CREDIT
AGREEMENT
THIS
CREDIT AGREEMENT (this “Agreement”) is entered into as of December 1, 2006 by
and between ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ COMPUTER CORPORATION, a Utah corporation (“Borrower”),
and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION (“Bank”).
RECITALS
Borrower
has requested that Bank extend or continue credit to Borrower as described
below, and Bank has agreed to provide such credit to Borrower on the terms and
conditions contained herein.
NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Bank and Borrower hereby agree as follows:
ARTICLE
I
CREDIT
TERMS
SECTION
1.1. STANDBY
LETTER OF CREDIT A.
(a) Standby
Letter of Credit A. Bank has made or
cause an affiliate to issue a standby letter of credit for the account of
Borrower and for the benefit of Guangdong Provincial Machinery and Electric
Equipment Tendering Co. Guangzhou, China to finance a planetarium playback
system (the “Standby Letter of Credit A”) in the principal amount of Three
Hundred Twenty Eight Thousand Seven Hundred Fifty Dollars ($328,750.00). The Standby Letter of Credit A has an
expiration date of March 31, 2007 and is subject to the additional terms of the
Letter of Credit agreement, application and any related documents required by
Bank in connection with the issuance thereof (the “Letter of Credit Agreement”).
(b) Repayment of
Drafts. Each drawing paid under the
Standby Letter of Credit A shall be repaid by Borrower in accordance with the
provisions of the Letter of Credit Agreement.
SECTION
1.2. STANDBY
LETTER OF CREDIT B
(a) Standby
Letter of Credit B. Bank has made or
cause an affiliate to issue a standby letter of credit for the account of
Borrower and for the benefit of Nashik Municipal Corporation, Nashik, India to
finance the installation and commissioning of a multi channel digital
planetarium system with science center (the “Standby Letter of Credit B”) in
the principal amount of Twenty Thousand One Hundred Sixty Seven Dollars and
Seventy Five Cents ($20,167.75). The Standby Letter of Credit B has an
expiration date of September 30, 2007 and is subject to the additional terms of
the Letter of Credit agreement, application and any related documents required
by Bank in connection with the issuance thereof (the “Letter of Credit
Agreement”).
(b) Repayment of
Drafts. Each drawing paid under the
Standby Letter of Credit B shall be repaid by Borrower in accordance with the
provisions of the Letter of Credit Agreement.
SECTION
1.3. STANDBY
LETTER OF CREDIT C.
(a) Standby Letter
of Credit C. Bank has made or cause an
affiliate to issue a standby letter of credit for the account of Borrower and
for the benefit
of
Gorakhpur Development Authority Uttah Praadesh, India to finance a contract
between Gorakhpur and ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Computer Corporation (the “Standby
Letter of Credit C”) in the principal amount of One Hundred Fifty Thousand Five
Hundred Seventy Five Dollars ($150,575.00). The Standby Letter of Credit C has
an expiration date of December 1, 2007 and is subject to the additional terms
of the Letter of Credit agreement, application and any related documents
required by Bank in connection with the issuance thereof (the “Letter of Credit
Agreement”).
(b) Repayment of
Drafts. Each drawing paid under the
Standby Letter of Credit C shall be repaid by Borrower in accordance with the
provisions of the Letter of Credit Agreement.
SECTION
1.4. FOREIGN
EXCHANGE FACILITY.
(a) Foreign
Exchange Facility. Subject to the terms
and conditions of this Agreement, Bank hereby agrees to make available to
Borrower a facility (the “Foreign Exchange Facility”) under which Bank, from
time to time up to and including December 1, 2007, will enter into foreign
exchange contracts for the account of Borrower for the purchase and/or sale by
Borrower in United States dollars of foreign currencies designated by Borrower;
provided however, that the maximum amount of all outstanding foreign exchange
contracts shall not at any time exceed an aggregate of Two Hundred Thousand
United States Dollars (US$200,000.00).
No foreign exchange contract shall be executed for a term which extends
beyond December 1, 2007. Borrower shall
have a “Delivery Limit” under the Foreign Exchange Facility not to exceed at
any time the aggregate principal amount of Six Thousand United States Dollars
(US$6,000.00), which Delivery Limit reflects the maximum principal amount of
Borrower’s foreign exchange contracts which may mature during any two (2) day
period. All foreign exchange
transactions shall be subject to the additional terms of a Foreign Exchange
Agreement dated as of December 1, 2004 (“Foreign
Exchange Agreement”), all terms of which are incorporated herein by this
reference.
(b) Settlement. Each foreign exchange contract under the
Foreign Exchange Facility shall be settled on its maturity date by Bank’s debit
to any deposit account maintained by Borrower with Bank.”
SECTION
1.5. INTEREST/FEES.
(a) Interest. The
outstanding principal balance of each credit subject hereto shall bear
interest, and the amount of each drawing paid under the Standby Letter of
Credit shall bear interest from the date such drawing is paid to the date such
amount is fully repaid by Borrower, at the rate of interest set forth in each
promissory note or other instrument or document executed in connection
therewith.
(b) Letter of
Credit Fees. Borrower shall pay to Bank
(i) fees upon the issuance of each Performance Letter of Credit, as
determined by Bank, equal to one percent (1%) per annum (computed on the basis
of a 360-day year, actual days elapsed) of the face amount thereof, and
(ii) fees upon the issuance of each Financial Letter of Credit, as
determined by Bank, equal to one percent (1.5%) per annum (computed on the
basis of a 360-day year, actual days elapsed) of the face amount thereof, and
(iii) fees upon the payment or negotiation of each drawing under any
Letter of Credit and fees upon the occurrence of any other activity with
respect to any Letter of Credit (including without limitation, the transfer,
amendment or cancellation of any Letter of Credit) determined in
accordance
with Bank’s standard fees and charges then in effect for such activity.
SECTION
1.6. COLLATERAL.
As
security for all indebtedness of Borrower to Bank subject hereto and arising
pursuant to any deposit or treasury management services provided by Bank to
Borrower, Borrower hereby grants to Bank security interests of first priority
in all Borrower’s interest in that certain money market savings account
#3801563101, over which Borrower shall have no control (the “Cash Collateral
Account”). All of the foregoing shall be
evidenced by and subject to the terms of such security agreements, financing
statements, and other documents as Bank shall reasonably require, all in form
and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and
expenses incurred by Bank in connection with any of the foregoing security.
The
balance in the Cash Collateral Account shall at all times be equal to or
greater than one hundred percent (100%) of the aggregate of (i) all issued and
outstanding, unpaid and unreimbursed Letters of Credit, plus (ii) such amounts
as Bank may determine, in its sole discretion, are required to adequately
secure Borrower’s liability and performance of any foreign exchange spot
contracts under the Foreign Exchange Facility and deposit and treasury
management services provided to Borrower by Bank. In the event that the balance of the Cash
Collateral Account, for any reason and at any time, is less than the required
amount, Debtor shall, within five (5) Business Days after Bank gives Borrower
verbal or written notice of such deficiency, deposit additional monies into the
Cash Collateral Account in amounts sufficient to achieve the required amount. As used herein, “Business Day” means any day
except a Saturday, Sunday or any other day on which commercial banks in Utah
are authorized or required by law to close.
All
of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds or mortgages, and other
documents as Bank shall reasonably require, all in form and substance
satisfactory to Bank. Borrower shall pay
to Bank immediately upon demand the full amount of all charges, costs and
expenses (to include fees paid to third parties and all allocated costs of Bank
personnel), expended or incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees and
costs of appraisals, audits and title insurance.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement
and shall continue in full force and effect until the full and final payment,
and satisfaction and discharge, of all obligations of Borrower to Bank subject
to this Agreement.
SECTION
2.1. LEGAL
STATUS. Borrower is a corporation duly
organized and existing and in good standing under the laws of Utah, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so
licensed could have a material adverse effect on Borrower.
SECTION
2.2. AUTHORIZATION
AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the “Loan
Documents”) have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.
SECTION
2.3. NO
VIOLATION. The execution, delivery and
performance by Borrower of each of the Loan Documents do not violate any
provision of any law or regulation, or contravene any provision of the Articles
of Incorporation or By-Laws of Borrower, or result in any breach of or default
under any contract, obligation, indenture or other instrument to which Borrower
is a party or by which Borrower may be bound.
SECTION
2.4. LITIGATION. There are no pending, or to the best of
Borrower’s knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.
SECTION
2.5. CORRECTNESS
OF FINANCIAL STATEMENT. The annual
financial statement of Borrower dated December 31, 2005, and all interim
financial statements delivered to Bank since said date, true copies of which
have been delivered by Borrower to Bank prior to the date hereof, (a) are
complete and correct and present fairly the financial condition of Borrower,
(b) disclose all liabilities of Borrower that are required to be reflected or
reserved against under generally accepted accounting principles, whether
liquidated or unliquidated, fixed or contingent, and (c) have been prepared in
accordance with generally accepted accounting principles consistently applied. Since the dates of such financial statements
there has been no material adverse change in the financial condition of
Borrower, nor has Borrower mortgaged, pledged, granted a security interest in
or otherwise encumbered any of its assets or properties except in favor of Bank
or as otherwise permitted by Bank in writing.
SECTION
2.6. INCOME TAX
RETURNS. Borrower has no knowledge of
any pending assessments or adjustments of its income tax payable with respect
to any year.
SECTION
2.7. NO
SUBORDINATION. There is no agreement,
indenture, contract or instrument to which Borrower is a party or by which
Borrower may be bound that requires the subordination in right of payment of
any of Borrower’s obligations subject to this Agreement to any other obligation
of Borrower.
SECTION
2.8. PERMITS,
FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is
now engaged in compliance with applicable law.
SECTION
2.9. ERISA. Borrower is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended or recodified from time to time (“ERISA”);
Borrower has not violated any provision of any defined employee pension benefit
plan (as defined in ERISA) maintained or contributed to by Borrower (each, a
“Plan”);
no Reportable Event as defined in ERISA has occurred and is continuing with
respect to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.
SECTION
2.10. OTHER OBLIGATIONS. Borrower is not in default on any obligation
for borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
SECTION
2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in
writing prior to the date hereof, Borrower is in compliance in all material
respects with all applicable federal or state environmental, hazardous waste,
health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower’s operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may
be amended, modified or supplemented from time to time. None of the operations of Borrower is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of
any toxic or hazardous waste or substance into the environment. Borrower has no material contingent liability
in connection with any release of any toxic or hazardous waste or substance
into the environment.
ARTICLE
III
CONDITIONS
SECTION
3.1. CONDITIONS
OF INITIAL EXTENSION OF CREDIT. The
obligation of Bank to extend any credit contemplated by this Agreement is
subject to the fulfillment to Bank’s satisfaction of all of the following
conditions:
(a) Approval of
Bank Counsel. All legal matters
incidental to the extension of credit by Bank shall be satisfactory to Bank’s
counsel.
(b) Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and
each promissory note or other instrument or document required hereby.
(ii) Certificate of
Incumbency.
(iii) Corporate
Resolution: Borrowing.
(iv) S/A; Borrower:
Specific Rights to Payment.
(v)
Foreign Exchange Agreement.
(vi) Such other
documents as Bank may require under any other Section of this Agreement.
(c) Financial
Condition. There shall have been no
material adverse change, as determined by Bank, in the financial condition or
business of Borrower, nor any material decline, as determined by Bank, in the
market value of any collateral required hereunder or a substantial or material
portion of the assets of Borrower.
(d) Insurance. Borrower shall have delivered to Bank
evidence of insurance coverage on all Borrower’s property, in form, substance,
amounts, covering risks and issued by companies satisfactory to Bank, and where
required by Bank, with loss payable endorsements in favor of Bank.
SECTION
3.2. CONDITIONS
OF EACH EXTENSION OF CREDIT. The
obligation of Bank to make each extension of credit requested by Borrower
hereunder shall be subject to the fulfillment to Bank’s satisfaction of each of
the following conditions:
(a) Compliance. The representations and warranties contained
herein and in each of the other Loan Documents shall be true on and as of the
date of the signing of this Agreement and on the date of each extension of
credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and
on each such date, no Event of Default as defined herein, and no condition,
event or act which with the giving of notice or the passage of time or both
would constitute such an Event of Default, shall have occurred and be
continuing or shall exist.
(b) Documentation. Bank shall have received all additional
documents which may be required in connection with such extension of credit.
(c) Additional
Letter of Credit Documentation. Prior to
the issuance of each Letter of Credit, Bank shall have received a Letter of Credit Agreement,
properly completed and duly executed by Borrower.
ARTICLE
IV
AFFIRMATIVE
COVENANTS
Borrower
covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated
or unliquidated) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject
hereto, Borrower shall, unless Bank otherwise consents in writing:
SECTION
4.1. PUNCTUAL
PAYMENTS. Punctually pay all principal,
interest, fees or other liabilities due under any of the Loan Documents at the
times and place and in the manner specified therein.
SECTION
4.2. ACCOUNTING
RECORDS. Maintain adequate books and
records in accordance with generally accepted accounting principles
consistently applied, and permit any representative of Bank, at any reasonable
time, to inspect, audit and examine such books and records, to make copies of
the same, and to inspect the properties of Borrower.
SECTION
4.3. FINANCIAL
STATEMENTS. Provide to Bank all of the
following, in form and detail satisfactory to Bank:
(a) not later
than 120 days after and as of the end of each fiscal year, an audited financial
statement of Borrower, prepared by a certified public accountant acceptable to
Bank, to include balance sheet, income statement and statement of cash flows;
(b) not later
than 45 days after and as of the end of each quarter, a financial statement of
Borrower, prepared by Borrower, to include balance sheet and income statement;
(c) from time to
time such other information as Bank may reasonably request.
SECTION
4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower’s
continued existence and with the requirements of all laws, rules, regulations
and orders of any governmental authority applicable to Borrower and/or its
business.
SECTION
4.5. INSURANCE. Maintain and keep in force, for each business
in which Borrower is engaged, insurance of the types and in amounts customarily
carried in similar lines of business, including but not limited to fire,
extended coverage, public liability, flood, property damage and workers’
compensation, with all such insurance carried with companies and in amounts
satisfactory to Bank, and deliver to Bank from time to time at Bank’s request
schedules setting forth all insurance then in effect.
SECTION
4.6. FACILITIES. Keep all properties useful or necessary to
Borrower’s business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.
SECTION
4.7. TAXES AND
OTHER LIABILITIES. Pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both
real or personal, including without limitation federal and state income taxes
and state and local property taxes and assessments, except (a) such as Borrower
may in good faith contest or as to which a bona fide dispute may arise, and (b)
for which Borrower has made provision, to Bank’s satisfaction, for eventual
payment thereof in the event Borrower is obligated to make such payment.
SECTION
4.8. LITIGATION. Promptly give notice in writing to Bank of
any litigation pending or threatened against Borrower.
SECTION
4.9. NOTICE TO
BANK. Promptly (but in no event more
than five (5) days after the occurrence of each such event or matter) give
written notice to Bank in reasonable detail of:
(a) the occurrence of any Event of Default, or any condition, event
or act which with the giving of notice or the passage of time or both would
constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower’s property.
ARTICLE
V
NEGATIVE
COVENANTS
Borrower
further covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower will not without Bank’s prior written consent:
SECTION
5.1. USE OF
FUNDS. Use any of the proceeds of any
credit extended hereunder except for the purposes stated in Article I hereof.
SECTION
5.2. OTHER
INDEBTEDNESS. Create, incur, assume or
permit to exist any indebtedness or liabilities resulting from borrowings,
loans or advances, whether secured or unsecured, matured or unmatured,
liquidated or unliquidated, joint or several, except (a) the liabilities of
Borrower to Bank, and (b) any other liabilities of Borrower existing as
of, and disclosed to Bank prior to, the date hereof.
SECTION
5.3. MERGER,
CONSOLIDATION, TRANSFER OF ASSETS. Merge
into or consolidate with any other entity; make any substantial change in the
nature of Borrower’s business as conducted as of the date hereof; acquire all
or substantially all of the assets of any other entity; nor sell, lease,
transfer or otherwise dispose of all or a substantial or material portion of
Borrower’s assets except in the ordinary course of its business.
SECTION
5.4. LOANS,
ADVANCES, INVESTMENTS. Make any loans or
advances to or investments in any person or entity, except any of the foregoing
existing as of, and disclosed to Bank prior to, the date hereof.
ARTICLE
VI
EVENTS
OF DEFAULT
SECTION
6.1. The
occurrence of any of the following shall constitute an “Event of Default” under
this Agreement:
(a) Borrower
shall fail to pay when due any principal, interest, fees or other amounts
payable under any of the Loan Documents.
(b) Any
financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this
Agreement or any other Loan Document shall prove to be incorrect, false or
misleading in any material respect when furnished or made.
(c) Any default
in the performance of or compliance with any obligation, agreement or other
provision contained herein or in any other Loan Document (other than those
referred to in subsections (a) and (b) above), and with respect to any such
default which by its nature can be cured, such default shall continue for a
period of twenty (20) days from its occurrence.
(d) Any default
in the payment or performance of any obligation, or any defined event of
default, under the terms of any contract or instrument (other than any of the
Loan Documents) pursuant to which Borrower, any guarantor hereunder or any
general partner or joint venturer in Borrower if a partnership or joint venture
(with each such guarantor, general partner and/or joint venturer referred to
herein as a “Third Party Obligor”) has incurred any debt or other liability to
any person or entity, including Bank.
(e) The filing
of a notice of judgment lien against Borrower or any Third Party Obligor; or
the recording of any abstract of judgment against Borrower or any Third Party
Obligor in any county in which Borrower or such Third Party Obligor has an
interest in real property; or the service of a notice of levy and/or of a writ
of attachment or execution, or other like process,
against
the assets of Borrower or any Third Party Obligor; or the entry of a judgment
against Borrower or any Third Party Obligor.
(f) Borrower or
any Third Party Obligor shall become insolvent, or shall suffer or consent to
or apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
Borrower or any Third Party Obligor shall file a voluntary petition in
bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act,
Title 11 of the United States Code, as amended or recodified from time to time
(“Bankruptcy Code”), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower or any Third Party Obligor, or Borrower
or any Third Party Obligor shall file an answer admitting the jurisdiction of
the court and the material allegations of any involuntary petition; or Borrower
or any Third Party Obligor shall be adjudicated a bankrupt, or an order for
relief shall be entered against Borrower or any Third Party Obligor by any
court of competent jurisdiction under the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors.
(g) There shall
exist or occur any event or condition which Bank in good faith believes
impairs, or is substantially likely to impair, the prospect of payment or
performance by Borrower of its obligations under any of the Loan Documents.
(h) The death or
incapacity of Borrower or any Third Party Obligor if an individual. The dissolution or liquidation of Borrower or
any Third Party Obligor if a corporation, partnership, joint venture or other
type of entity; or Borrower or any such Third Party Obligor, or any of its
directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of Borrower or such Third Party Obligor.
(i) Any change
in ownership of an aggregate of twenty-five percent (25%) or more of the common
stock of Borrower.
SECTION
6.2. REMEDIES. Upon the occurrence of any Event of
Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary
notwithstanding, shall at Bank’s option and without notice become immediately
due and payable without presentment, demand, protest or notice of dishonor, all
of which are hereby expressly waived by Borrower; (b) the obligation, if
any, of Bank to extend any further credit under any of the Loan Documents shall
immediately cease and terminate; and (c) Bank shall have all rights,
powers and remedies available under each of the Loan Documents, or accorded by
law, including without limitation the right to resort to any or all security
for any credit subject hereto and to exercise any or all of the rights of a
beneficiary or secured party pursuant to applicable law. All rights, powers and remedies of Bank may
be exercised at any time by Bank and from time to time after the occurrence of
an Event of Default, are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided by law or equity.
ARTICLE
VII
MISCELLANEOUS
SECTION
7.1. NO WAIVER. No delay, failure or discontinuance of Bank
in exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive
or otherwise affect any other or further exercise thereof or the exercise of
any other right, power or remedy. Any
waiver, permit, consent or approval of any kind by Bank of any breach of or
default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.
SECTION
7.2. NOTICES. All notices, requests and demands which any
party is required or may desire to give to any other party under any provision
of this Agreement must be in writing delivered to each party at the following
address:
BORROWER: ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇ COMPUTER CORPORATION
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
BANK: ▇▇▇▇▇ FARGO
BANK, NATIONAL ASSOCIATION
Utah
RCBO
▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
or
to such other address as any party may designate by written notice to all other
parties. Each such notice, request and
demand shall be deemed given or made as follows: (a) if sent by hand delivery, upon
delivery; (b) if sent by mail, upon the earlier of the date of receipt or
three (3) days after deposit in the U.S. mail, first class and postage prepaid;
and (c) if sent by telecopy, upon receipt.
SECTION
7.3. COSTS,
EXPENSES AND ATTORNEYS’ FEES. Borrower
shall pay to Bank immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys’ fees (to
include outside counsel fees and all allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in connection with (a) the
negotiation and preparation of this Agreement and the other Loan Documents,
Bank’s continued administration hereof and thereof, and the preparation of any
amendments and waivers hereto and thereto, (b) the enforcement of Bank’s
rights and/or the collection of any amounts which become due to Bank under any
of the Loan Documents, and (c) the prosecution or defense of any action in
any way related to any of the Loan Documents, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to Borrower or any other person
or entity.
SECTION
7.4. SUCCESSORS,
ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
legal representatives, successors and assigns of the parties; provided however,
that Borrower may not assign or transfer its interests or rights hereunder
without Bank’s prior written consent.
Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank’s rights and
benefits under each of the Loan Documents.
In connection therewith, Bank may disclose all documents and information
which Bank
now
has or may hereafter acquire relating to any credit subject hereto, Borrower or
its business, or any collateral required hereunder.
SECTION
7.5. ENTIRE
AGREEMENT; AMENDMENT. This Agreement and
the other Loan Documents constitute the entire agreement between Borrower and
Bank with respect to each credit subject hereto and supersede all prior
negotiations, communications, discussions and correspondence concerning the
subject matter hereof. This Agreement
may be amended or modified only in writing signed by each party hereto.
SECTION
7.6. NO THIRD
PARTY BENEFICIARIES. This Agreement is
made and entered into for the sole protection and benefit of the parties hereto
and their respective permitted successors and assigns, and no other person or
entity shall be a third party beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any other of the
Loan Documents to which it is not a party.
SECTION
7.7. TIME. Time is of the essence of each and every
provision of this Agreement and each other of the Loan Documents.
SECTION
7.8. SEVERABILITY
OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
SECTION
7.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to
be an original, and all of which when taken together shall constitute one and
the same Agreement.
SECTION
7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah.
SECTION
7.11. ARBITRATION.
(a) Arbitration. The parties hereto agree, upon demand by any
party, to submit to binding arbitration all claims, disputes and controversies
between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise in any way
arising out of or relating to (i) any credit subject hereto, or any of the Loan
Documents, and their negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.
(b) Governing
Rules. Any arbitration proceeding will
(i) proceed in a location in Utah selected by the American Arbitration
Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of
the United States Code), notwithstanding any conflicting choice of law
provision in any of the documents between the parties; and (iii) be conducted
by the AAA, or such other administrator as the parties shall mutually agree
upon, in accordance with the AAA’s commercial dispute resolution procedures,
unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed
interest, arbitration fees and costs in which case the arbitration shall be
conducted in accordance with the AAA’s optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the
optional procedures for large, complex commercial disputes to be referred to
herein, as applicable, as the “Rules”).
If
there is any inconsistency between the terms hereof and the Rules, the terms
and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. §91 or any similar applicable state law.
(c) No Waiver of
Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit
the right of any party to (i) foreclose against real or personal property
collateral; (ii) exercise self-help remedies relating to collateral or proceeds
of collateral such as setoff or repossession; or (iii) obtain provisional or
ancillary remedies such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency of any
arbitration proceeding. This exclusion
does not constitute a waiver of the right or obligation of any party to submit
any dispute to arbitration or reference hereunder, including those arising from
the exercise of the actions detailed in sections (i), (ii) and (iii) of this
paragraph.
(d) Arbitrator
Qualifications and Powers. Any
arbitration proceeding in which the amount in controversy is $5,000,000.00 or
less will be decided by a single arbitrator selected according to the Rules,
and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must
actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed
in the State of Utah or a neutral retired judge of the state or federal
judiciary of Utah, in either case with a minimum of ten years experience in the
substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will
determine whether or not an issue is arbitratable and will give effect to the
statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator
will decide (by documents only or with a hearing at the arbitrator’s discretion)
any pre-hearing motions which are similar to motions to dismiss for failure to
state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in
accordance with the substantive law of Utah and may grant any remedy or relief
that a court of such state could order or grant within the scope hereof and
such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to
award recovery of all costs and fees, to impose sanctions and to take such
other action as the arbitrator deems necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the Utah Rules of Civil
Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(e) Discovery. In any arbitration proceeding, discovery will
be permitted in accordance with the Rules.
All discovery shall be expressly limited to matters directly relevant to
the dispute being arbitrated and must be completed no later than 20 days before
the hearing date. Any requests for an
extension of the discovery periods, or any discovery disputes, will be subject to
final determination by the arbitrator upon a showing that the request for
discovery is essential for the party’s presentation and that no alternative
means for obtaining information is available.
(f) Class
Proceedings and Consolidations. No party
hereto shall be entitled to join or consolidate disputes by or against others
in any arbitration, except parties who have executed any Loan Document, or to
include in any arbitration any dispute as a representative or member of a
class, or to act in any arbitration in the interest of the general public or in
a private attorney general capacity.
(g) Payment Of
Arbitration Costs And Fees. The
arbitrator shall award all costs and expenses of the arbitration proceeding.
(h) Real
Property Collateral; Judicial Reference.
Notwithstanding anything herein to the contrary, no dispute shall be
submitted to arbitration if the dispute concerns indebtedness secured directly
or indirectly, in whole or in part, by any real property unless (i) the holder
of the mortgage, lien or security interest specifically elects in writing to
proceed with the arbitration, or (ii) all parties to the arbitration waive any
rights or benefits that might accrue to them by virtue of the single action
rule statute of Utah, thereby agreeing that all indebtedness and obligations of
the parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any such dispute is not submitted to
arbitration, the dispute shall be referred to a master in accordance with Utah
Rule of Civil Procedure 53, and this general reference agreement is intended to
be specifically enforceable. A master
with the qualifications required herein for arbitrators shall be selected
pursuant to the AAA’s selection procedures.
Judgment upon the decision rendered by a master shall be entered in the
court in which such proceeding was commenced in accordance with Utah Rule of
Civil Procedure 53(e).
(i) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results thereof,
except for disclosures of information by a party required in the ordinary
course of its business or by applicable law or regulation. If more than one agreement for arbitration by
or between the parties potentially applies to a dispute, the arbitration
provision most directly related to the Loan Documents or the subject matter of
the dispute shall control. This
arbitration provision shall survive termination, amendment or expiration of any
of the Loan Documents or any relationship between the parties.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
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COMPUTER
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▇▇▇▇▇ FARGO BANK,
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CORPORATION
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NATIONAL ASSOCIATION
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By:
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/s/ ▇▇▇▇ ▇.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇
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Title: Chief
Financial Officer
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▇▇▇▇ ▇▇▇▇▇, Relationship Manager
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