STAND-ALONE REVOLVING NOTE
$ 250,000.00 February 6, 2006
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FOR VALUE RECEIVED, the undersigned borrower (the "Borrower"), promises
to pay to the order of U.S. Bank N.A. (the "Bank"), the principal sum of TWO
HUNDRED FIFTY THOUSAND AND NO/100 Dollars ($250,000.00), payable SEPTEMBER 30,
2006 (the "Maturity Date").
The Bank will make advances to the Borrower from time to time up to the
aggregate amount of $250,000.00, less letters of credit issued by Bank. The
Borrower may, prior to the Maturity Date or termination as described below,
borrow, repay and reborrow such amount from the Bank.
1. Interest.
The unpaid principal balance will bear interest at an annual rate equal
to the prime rate announced by the Bank.
The interest rate hereunder will be adjusted each time that the prime
rate changes.
2. Payment Schedule.
Interest is payable beginning MARCH 15, 2006, and on the same date of
each consecutive month thereafter (except that if a given month does not have
such a date, the last day of such month), plus a final interest payment with the
final payment of principal.
3. Paid-In-Full Period. ______ If checked here, all revolving loans
under this Stand-Alone Revolving Note (the "Note") must be paid in full for a
period of at least n/a consecutive days during each fiscal year.
4. Closing Fee. ______ If checked here, the Borrower will pay the Bank
a one-time closing fee of $416.67 contemporaneously with the execution of this
Note. This fee is in addition to all other fees, expenses and other amounts due
hereunder.
5. Late Payment Fee. Subject to the applicable law, if any payment is
not made on or before its due date, the Bank may collect a delinquency charge of
5.00% of the unpaid amount. Collection of the late payment fee shall not be
deemed to be a waiver of the Bank's right to declare a default hereunder.
6. Calculation of Interest. Interest will be computed for the actual
number of days principal is unpaid, using a daily factor obtained by dividing
the stated interest rate by 360.
7. Default Interest Rate. Notwithstanding any provision of this Note to
the contrary, upon any default or at any time during the continuation thereof
(including failure to pay upon maturity), the Bank may, at its option and
subject to applicable law, increase the interest rate on this Note to a rate of
5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding
the foregoing and subject to applicable law, upon the occurrence of a default by
the Borrower or any guarantor involving bankruptcy, insolvency, receivership
proceedings or an assignment for the benefit of creditors, the interest rate on
this Note shall automatically increase to a rate of 5% per annum plus the rate
otherwise payable hereunder.
8. Maximum Rate. In no event will the interest rate hereunder exceed
that permitted by applicable law. If any interest or other charge is finally
determined by a court of competent jurisdiction to exceed the maximum amount
permitted by law, the interest or charge shall be reduced to the maximum
permitted by law, and the Bank may credit any excess amount previously collected
against the balance due or refund the amount to the Borrower.
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9. Financial Information. (Text eligible) principles of accounting
consistently applied throughout the accounting periods involved; (ii) provide
the Bank with such information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may reasonably request; and
(iii) without request, provide the Bank with annual financial statements
prepared by an accounting firm acceptable to the Bank within 120 days of the end
of each fiscal year.
10. Credit Balances; Set off. As additional security for the payment of
the obligations described in this Note or any document securing or related to
the loan evidenced by this Note (collectively the "Loan Documents"), and any
other obligations of the Borrower to the Bank of any nature whatsoever
(collectively the "Obligations"), the Borrower hereby grants to the Bank as
security interest in, a lien on and an express contractual right to set off
against all depository account balances, cash and any other property of the
Borrower now or hereafter in the possession of the Bank and the right to refuse
to allow withdrawals from any account (collectively "Setoff"). The Bank may, at
any time upon occurrence of a default hereunder (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between the
Borrower and the Bank) Setoff against the Obligations whether or not the
Obligations (including future installments) are then due or have been
accelerated, all without any advance or contemporaneous notice or demand of any
kind to the Borrower, such notice and demand being expressly waived.
11. Advances and Paying Procedure. The Bank is authorized and directed
to credit any of the Borrower's accounts with the Bank (or to the account the
Borrower designates in writing) for all loans made hereunder, and the Bank is
authorized to debit such account or any other account of the Borrower with the
Bank for the amount of any principal, interest or expenses due under the Note or
other amount due hereunder on the due date with respect thereto. Payments due
under the Note and other Loan Documents will be made in lawful money of the
United States. All payments may be applied by the Bank to principal, interest
and other amounts due under the Loan Documents in any order which the Bank
elects. If, upon any request by the Borrower to the Bank to issue a wire
transfer, there is an inconsistency between the name of the recipient of the
wire and its identification number as specified by the Borrower, the Bank may,
without liability, transmit the payment via wire based solely upon the
identification number.
12. Defaults. Notwithstanding any cure periods described below, the
Borrower shall immediately notify the Bank in writing when the Borrower obtains
knowledge of the occurrence of any default specified below. Regardless of
whether the Borrower has given the required notice, the occurrence of one or
more of the following shall constitute a default:
(a) Nonpayment. The Borrower shall fail to pay (i) any
interest due on this Note or any fees, charges, costs or expenses under the Loan
Documents by 5 days after the same becomes due; or (ii) any principal amount of
this Note when due.
(b) Nonperformance. The Borrower or any guarantor of the
Borrower's Obligations to the Bank ("Guarantor") shall fail to perform or
observe any agreement, term, provision, condition, or covenant (other than a
default occurring under (a), (c), (d), (e), (f) or (g) of this paragraph 12)
required to be performed or observed by the Borrower or any Guarantor hereunder
or under any other Loan Document or other agreement with or in favor of the
Bank.
(c) Misrepresentation. Any financial information, statement,
certificate, representation or warranty given to the Bank by the Borrower or any
Guarantor (or any of their representatives) in connection with entering into
this Note or the other Loan Documents and/or any borrowing thereunder, or
required to be furnished under the terms thereof, shall prove untrue or
misleading in any material respect (as determined by the Bank in the exercise of
its judgment) as of the time when given.
(d) Default on Other Obligations. The Borrower or any
Guarantor shall be in default under the terms of any loan agreement, promissory
note, lease, conditional sale contract or other agreement, document or
instrument evidencing, governing or securing any indebtedness owing by the
Borrower or any Guarantor to the Bank or any indebtedness in excess of $10,000
owing by the Borrower to any third party, and the period of grace, if any, to
cure said default shall have passed.
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(e) Judgments. Any judgment shall be obtained against the
Borrower or any Guarantor which, together with all other outstanding unsatisfied
judgments against the Borrower (or such Guarantor), shall exceed the sum of
$10,000 and shall remain unvacated, unbonded or unstayed for a period of 30 days
following the date of entry thereof.
(f) Inability to Perform; Bankruptcy/Insolvency. (i) The
Borrower or any Guarantor shall die or cease to exist; or (ii) any Guarantor
shall attempt to revoke any guaranty of the Obligations described herein, or any
guaranty becomes unenforceable in whole or in part for any reason; or (iii) any
bankruptcy, insolvency or receivership proceedings, or an assignment for the
benefit of creditors, shall be commenced under any Federal or state law by or
against the Borrower or any Guarantor; or (iv) the Borrower or any Guarantor
shall become the subject of any out-of-court settlement with its creditors; or
(v) the Borrower or any Guarantor is unable or admits in writing its inability
to pay its debts as they mature; or (vi) if the Borrower is a limited liability
company, any member thereof shall withdraw or otherwise become disassociated
from the Borrower.
(g) Adverse Change; Insecurity. (i) There is a material
adverse change in the business, properties, financial condition or affairs of
the Borrower or any Guarantor, or in any collateral securing the Obligations; or
(ii) the Bank in good xxxxx xxxxx itself insecure.
13. Termination of Loans; Additional Bank Rights. Upon the occurrence
of any of the events identified in paragraph 12, the Bank may at any time
(notwithstanding any notice requirements or grace/cure periods under this or
other agreements between the Borrower and the Bank) (i) immediately terminate
its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;
and/or (iii) take such other steps to protect or preserve the Bank's interest in
any collateral, including without limitation, notifying account debtors to make
payments directly to the Bank, advancing funds to protect any collateral and
insuring collateral at the Borrower's expenses; all without demand or notice of
any kind, all of which are hereby waived.
14. Acceleration of Obligations. Upon the occurrence of any of the
events identified in paragraph 12(a) through 12(e) and 12(g), any the passage of
any applicable cure periods, the Bank may at any time thereafter, by written
notice to the Borrower, declare the unpaid principal balance of any Obligations,
together with the interest accrued thereon and other amounts accrued hereunder
and under the other Loan Documents, to be immediately due and payable; and the
unpaid balance shall thereupon be due and payable, all without presentation,
demand, protest or further notice of any kind, all of which are hereby waived,
and notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents. Upon the occurrence of any event under paragraph 12(f),
the principal unpaid balance of any Obligations, together with all interest
accrued thereon and other amounts accrued hereunder and under the other Loan
Documents, shall thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which are hereby
waived, and notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents. Nothing contained in paragraph 12 or 13 or this
paragraph shall limit the Bank's right to Setoff as provided in this Note.
15. Collateral. This Note is secured by any and all security interests,
pledges, mortgages/deeds of trust (except any mortgage/deed of trust expressly
limited by its terms to a specific obligation of Borrower to Bank) or liens now
or hereafter in existence granted to the Bank to secure indebtedness of the
Borrower to the
Bank (unless prohibited by law), including, without limitation, as described in
the following documents:
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16. Guaranties. This Note is guarantied by each and every guaranty now
or hereafter in existence guarantying the indebtedness of the Borrower to the
Bank (except for an guaranty expressly limited by its terms to a specific
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separate obligation of Borrower to the Bank) including, without limitation, the
following:
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17. Additional Bank Rights. Without affecting the liability of any
Borrower, endorser, surety or guarantor, the Bank may, without notice, renew or
extend the time for payment, accept partial payments, release or impair any
collateral security for the payment of this Note, or agree not to sue any party
liable on it.
18. Warranties. The Borrower makes the following warranties: (A) This
Note and the other Loan Documents are the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with their
terms. (B) The execution, delivery and performance of this Note and all other
Loan Documents to which the Borrower is a party (i) are within the borrower's
power; (ii) have been duly authorized by all appropriate entity action; (iii) do
not require the approval of any governmental agency; and (iv) will not violate
any law, agreement or restriction by which the Borrower is bound. (C) if the
Borrower is not an individual, the Borrower is validly existing and in good
standing under the laws of its state of organization, has all requisite power
and authority and possesses all licenses necessary to conduct its business and
own its properties.
19. Waivers; Relationship to Other Documents. All Borrowers, endorsers,
sureties and guarantors waive presentment, protest, demand, and notice of
dishonor. No delay on the part of the Bank in exercising any right, power or
privilege hereunder or under any of the other Loan Documents will operate as a
waiver thereof, nor will any single or partial exercise or any right, power or
privilege hereunder preclude other or further exercise thereof or the exercise
of any other right, power or privilege. The warranties, covenants and other
obligations of the Borrower (and rights and remedies of the Bank) in this Note
and all related documents are intended to be cumulative and to supplement each
other.
20. Expenses and Attorneys' Fees. Upon demand, the Borrower will
immediately reimburse the Bank and any participant in the Obligations
("Participant") for all attorneys' fees and all other costs, fees and
out-of-pocket disbursements incurred by the Bank or any Participant in
connection with the preparation, execution, delivery, administration, defense
and enforcement of this Note or any of the other Loan Documents, including
attorneys' fees and all other costs and fees (a) incurred before or after
commencement of litigation or at trial, on appeal or in any other proceeding,
(b) incurred in any bankruptcy proceeding and (c) related to any waivers or
amendments with respect thereto (examples of costs and fees include but are not
limited to fees and costs for: filing, perfecting or confirming the priority of
the Bank's lien, title searches or insurance, appraisals, environmental audits
and other reviews related to the Borrower, any collateral or the loans, if
requested by the Bank). The Borrower will also reimburse the Bank and any
Participant for all costs of collection before and after judgment, and the costs
of preservation and/or liquidation of any collateral.
21. Applicable Law and Jurisdiction; Interpretation; Joint Liability;
Severability. This Note and all other Loan Documents shall be governed by and
interpreted in accordance with the internal laws of the State of Utah, except to
the extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR
FEDERAL JURISDICTION OF THE BANK'S BRANCH WHERE THE LOAN WAS ORIGINATED, AND
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS,
CLAIMS DISPUTES OR PROCEEDINGS RELATING TO THIS NOTE, THE COLLATERAL, ANY OTHER
LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR
INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein shall affect the Bank's
rights to serve process in any manner permitted by law, or limit the Bank's
right to bring proceedings against the Borrower in the competent courts of any
other jurisdiction or jurisdictions. This Note, the other Loan Documents and any
amendments hereto (regardless of when executed) will be deemed effective and
accepted only upon the Bank's receipt of the executed originals thereof. If
there is more than one Borrower, the liability of the Borrowers shall be joint
and several, and the reference to "Borrower" shall be deemed to refer to all
Borrowers. Invalidity of any provision of this Note shall not affect the
validity of any other provision.
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22. Successors. The rights, options, powers and remedies granted in
this Note and the other Loan Documents shall be binding upon the Borrower and
the Bank and their respective successors and assigns, and shall inure to the
benefit of the Borrower and the Bank and the successors and assigns of the Bank,
including without limitation any purchaser of any or all of the rights and
obligations of the Bank under the Note and the other Loan Documents. The
Borrower may not assign its rights or obligations under this Note or any other
Loan Documents without the prior written consent of the Bank.
23. Disclosure. The Bank may, in connection with any sale or potential
sale of all or any interest in the Note and other Loan Documents, disclose any
financial information the Bank may have concerning the Borrower to any purchaser
or potential purchaser.
From time to time, the Bank may, in its discretion and without obligation to the
Borrower, any Guarantor or any other third party, disclose information about the
Borrower and this loan to any Guarantor, surety or other accommodation party.
This provision does not obligate the Bank to supply any information or release
the Borrower from its obligation to provide such information, and the Borrower
agrees to keep all Guarantors, sureties or other accommodation parties advised
of its financial condition and other matters which may be relevant to their
obligations to the Bank.
24. Copies, Entire Agreement; Modification. The Borrower hereby
acknowledges the receipt of a copy of this Note and all other Loan Documents.
This Note is a "transferable record" as defined in applicable law relating to
electronic transactions. Therefore, the holder of this Note may, on behalf of
Xxxxxxxx, create a microfilm or optical disk or other electronic image of this
Note that is an authoritative copy as defined in such law. The holder of this
Note may store the authoritative copy of such note in its electronic form and
then destroy the paper original as part of the holder's normal business
practices. The holder, on its own behalf, may control and transfer such
authoritative copy as permitted by such law.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND
SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRTTEN CONTRACT MAY BE XXXXXX ENFORCED. THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL
ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT
BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW
IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER
OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED
MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.
25. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER
AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK
EACH REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY GIVEN.
26. Attachments. All documents attached hereto, including any
appendices, schedules, riders, and exhibits to this Stand-Alone Revolving Note,
are hereby expressly incorporated by reference.
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(Individual Borrower) Arkona, Inc
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Borrower Name (Organization)
a Delaware Corporation
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Borrower Name N/A By /s/ Xxxx Xxxx
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Name and Title Xxxx Xxxx, Chairman and CEO
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Borrower Name N/A By
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Name and Title
Borrower Address:
00000 X. Xxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Borrower Telephone No.: 000-000-0000
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