Exhibit 10.1
usbank
TERM LOAN AGREEMENT
This Term Loan Agreement (the
"Agreement')
is made and entered into by and between the undersigned borrower (the
"Borrower")
and the undersigned bank (the
"Bank")
as
of the date set forth on the last page of this Agreement.
ARTICLE I. LOANS
1.1
Terms for Advance(s). [Choose One:]
x
Single Advance Term Loan.
As of the date hereof, the Borrower has obtained a term loan from the Bank in the amount of
S
445,712
.33
(the
"Loan Amount').
The term loan is evidenced by a single promissory note of the
Borrower to the order of the Bank in the principal amount of the Loan Amount and dated as of the date hereof (the
"Note").
o
Multiple Advance Term Loan.
Prior to
n/a
or the earlier termination hereof,
the
Borrower may obtain advances from the Bank in an aggregate amount not exceeding $
n
/
a
(the
"Loan
Amount).
The term loans will be evidenced by a single promissory note of the Borrower to the Bank in the principal amount of the Loan Amount and dated as of the date hereof (the
"Note").
Although the Note will be expressed as payable in the full Loan Amount, the Borrower will be obligated to pay only the amounts actually disbursed hereunder, together with accrued interest on the outstanding balance at the rates and on the dates specified therein and
such other charges provided for herein.
1.2
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. 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.
1.3
Closing Fee.
The Borrower will pay the Bank a one-time closing fee of $
n/a
contemporaneously
with
execution of this Agreement. This fee is in addition to all other fees, expenses and other amounts due hereunder.
1.4
Compensating Balances.
The Borrower will maintain
on deposit with the Bank in non-interest bearing accounts average daily collected balances, in excess of that required to support account activity and other credit facilities extended to the Borrower by the Bank,
an amount at least equal to the sum of (i) $
n/a
and (ii)
n/a
%
of the Loan Amount as computed on a
monthly basis. If the Borrower fails to keep and maintain such balances, it will pay a deficiency fee, payable within five days after receipt of a statement therefor calculated on the amount by which the Borrower's average daily balances are less than the requirements set forth above, computed at a rate equal to the rate set forth in the Note.
1.5
Expenses and Attorneys' Fees.
Upon demand,
the Borrower will immediately reimburse the Bank and any participant in the Obligations (defined below)
("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 Agreement or any of the other Loan Documents (defined below), 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, including all attorneys' fees, before and after judgment, and the costs of preservation and/or liquidation of any collateral.
1.6
Conditions to Borrowing.
The Bank will not be
obligated to make (or continue to make) advances hereunder unless (i) the Bank has received executed originals of the Note and all other documents or agreements applicable to the loans described herein, including but not limited to the documents specified in Article III (collectively with this Agreement the
"Loan Documents'),
in form and content satisfactory to the Bank; (ii) if the loan is secured, the Bank has received confirmation satisfactory to it that
the Bank has a properly perfected security interest, mortgage or lien, with the proper priority; (iii) the Bank has received certified copies of the Borrower's governance documents and certification of entity status satisfactory to the Bank and all other relevant documents; (iv) the Bank has received a certified copy of a resolution or authorization in form and content satisfactory to the Bank authorizing the loan and all acts contemplated by this Agreement and all related documents, and confirmation of proper
authorization of all guaranties and other acts of third parties contemplated hereunder; (v) if required by the Bank, the Bank has been provided with Opinion of the Borrower's counsel in form and content satisfactoryto the Bank confirming the matters outlined in Section 2.2 and such other matters as the Bank requests; (vi) no default exists under this Agreement or under any other Loan Documents, or under any other agreements by and between the Borrower and the Bank; and (vii) all proceedings taken in connection
with the transactions contemplated by this Agreement (including any required environmental assessments),and all instruments, authorizations and other documents applicable thereto, are satisfactoryto the Bank and its counsel.
ARTICLE II. WARRANTIES AND COVENANTS
While any part of the credit granted to the Borrower under this Agreement or the other Loan Documents is available or any obligations under any of the Loan Documents are unpaid or outstanding, the Borrower continuously warrants and agrees as follows:
2.1
Accuracy of Information.
All information,
certificates or statements given to the Bank pursuant to this Agreement and the other Loan Documents will be true and complete when given.
2.2
Organizationand Authority;Litigation.
This
Agreement and the other Loan Documents are the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms. The execution, delivery and performance of this Agreement 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. 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. There is no litigation or administrative proceeding threatened or pending against the Borrower which would, if adversely determined, have a material adverse effect on the Borrower's financial condition or its property.
2.3
Existence; Business Activities; Assets; Change of Control.
The Borrower will (i) preserve its existence, rights and franchises; (ii)
not
make any material change in the nature or manner of its business activities; (iii) not liquidate, dissolve, acquire another entity or merge
or consolidate with or into another entity or change its form of organization; (iv) not amend its organizational documents in any manner
that may conflict with any term or condition of the Loan Documents; and
(v) not sell, lease, transfer or otherwise dispose of all or
substantially all of its assets. Other than the transferto a trust beneficially controlled by the transferor, no event shall occur which causes
or results in a transfer of majority ownership of the Borrower while any Obligations are outstanding or while the Bank has any obligation to
provide
funding to the Borrower.
2.4
Use of Proceeds; Margin Stock; Speculation.
Advances
by the Bank hereunder will be used exclusively by the Borrower for the purposes represented to the Bank. The Borrower will not, without the prior written consent of the Bank, redeem, purchase, or retire any of the capital stock or declare or pay any dividends, or make any other payments or distributions of a similar type or nature including withdrawal distributions. The Borrower will not use any of the loan proceeds to purchase or carry "margin" stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System). No part of any of the proceeds will be used for speculative investment purposes, including, without limitation, speculating or hedging in the commodities and/or futures market.
2.5
Environmental Matters.
Except as disclosed
in a written schedule attached to this Agreement (if no schedule is attached, there are no exceptions), there exists no uncorrected violation by the Borrower of any federal, state or local laws (including statutes, regulations, ordinances or other governmental restrictions and requirements) relating to the discharge of air pollutants, water pollutants or process waste water or otherwise relating to the environment or Hazardous Substances as hereinafterdefined, whether such laws currently exist or are enacted
in the future (collectively
"Environmental Laws").
The term
"Hazardous Substances"
will mean any hazardous or toxic wastes, chemicals or other substances, the generation, possession or existence of which is prohibited or governed by any Environmental Lawa The Borrower is not subject to any judgment, decree, order or citation, or a party to (or threatened with) any litigation or administrative proceeding,
which asserts that the Borrower (i) has violated any Environmental Laws; (ii) is required to clean up, remove or take remedial or other action with respect to any Hazardous Substances (collectively
"Remedial Action
");or (iii) is required to pay all or a portion of the cost of any Remedial Action, as a potentially responsible party. Except as disclosed on the Borrower's environmental questionnaire provided to the Bank, there are not now, nor to the Borrower's
knowledge after reasonable investigation have there ever been, any Hazardous Substances (or tanks or other facilities for the storage of Hazardous Substances) stored, deposited, recycled or disposed of on, under or at any real estate owned or occupied by the Borrower during the periods that the Borrower owned or occupied such real estate, which if present on the real estate or in soils or ground water, could require Remedial Action. To the Borrower's knowledge, there are no proposed or pending changes in Environmental
Laws which would adversely affect the Borrower or its business, and there are no conditions existing currently or likely to exist while the Loan Documents are in effect which would subject the Borrower to Remedial Action or other liability. The Borrower currently complies with and will continue to timely comply with all applicable Environmental Laws; and will provide the Bank, immediately upon receipt, copies of any correspondence, notice, complaint, order or other document from any source asserting or alleging
any circumstance or condition which requires or may require a financial contribution by the Borrower or Remedial Action or other response by or on the part of the Borrower under Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from the Borrower for an alleged violation of Environmental Laws.
2.6
Compliance with Laws.
The Borrower has
complied with all laws applicable to its business and its properties, and has all permits, licenses and approvals required by such laws, copies of which have been provided to the Bank.
2.7
Restriction on Indebtedness.
The Borrower
will not create, incur, assume or have outstanding any indebtedness for borrowed money (including capitalized leases) except (i) any indebtedness owing to the Bank and its affiliates, and (ii) any other indebtedness outstanding on the date hereof, and shown on the Borrower's financial statementsdelivered to the Bank prior to the date hereof, provided that such other indebtedness will not be increased.
2.8
Restriction on Liens.
The Borrower will
not create, incur, assume or permit to exist any mortgage, pledge, encumbrance or other lien or levy upon or security interest in any of the Borrower's property now owned or hereafteracquired, except (i) taxes and assessments which are either not delinquent or which are being contested in good faith with adequate reserves provided; (ii) easements, restrictions and minor title irregularities which do not, as a practical matter, have an adverse effect upon the ownership and use of the affected property; (iii) liens
in favor of the Bank and its affiliates; and (iv) other liens disclosed in writing to the Bank prior to the date hereof.
2.9
Restrictionon Contingent Liabilities.
The Borrower will not guarantee or become a surety or otherwise contingently liable for any
obligations
of others, except pursuant to the deposit and collection of checks and similar matters in the ordinary course of business.
2.10
Insurance.
The Borrower will maintain
insurance to such extent, covering such risks and with such insurers as is usual and customary for businesses operating similar properties, and as is satisfactoryto the Bank, including insurance for fire and other risks insured against by extended coverage, public liability insurance and workers' compensation insurance; and will designate the Bank as loss payee with a "Lender's Loss Payable" endorsement on any casualty policies and take such other action as the Bank may reasonably request to ensure that the Bank
will receive (subject to no other interests) the insurance proceeds on the Bank's collateral.
2.11
Taxes and Other Liabilities.
The Borrower
will pay and discharge, when due, all of its taxes, assessments and other liabilities, except when the payment thereof is being contested in good faith by appropriate procedures which will avoid foreclosure of liens securing such items, and with adequate reserves provided therefor.
2.12
Financial Statements and Reporting.
The
financial statements and other information previously provided to the Bank or provided to the Bank in the future are or will be complete and accurate and prepared in accordance with generally accepted accounting principles. There has been no material adverse change in the Borrower's financial condition since such information was provided to the Bank. The Borrower will (i) maintain accounting records in accordance with generally recognized and accepted 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 request; and (iii) without request, provide the Bank with such specific financial statements, certifications and/or information as may be set forth in an addendum to this Agreement.
2.13
Inspection of Propertiesand Records; Fiscal Year.
The
Borrower will permit representativesof the Bank to visit and inspect any of the properties and examine any of the books and records of the Borrower at any reasonable time and as often as the Bank may reasonably desire. The Borrower will not change its fiscal year.
2.14
Financial Status.
Financial Covenants,
if any, will be as set forth in an addendum to this Agreement.
ARTICLE III. COLLATERAL AND GUARANTIES
3.1
Collateral.
This Agreement and the Note are 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, including without limitation as described in the following documents:
[ ] Real Estate Mortgage(s)/Deed(s) of Trust dated_______
[ ] covering real estate located at __________
[x] Security Agreement(s) dated
02/15/06
[ ] Possessory Collateral Pledge Agreement(s) dated________
[ ] Other __________
3.2
Guaranties.
This Agreement and the Note are guarantied by each and every guaranty now or hereafterin existence guarantying
the
indebtedness of the Borrower to the Bank (except for any guaranty expressly limited by its terms to a specific separate obligation of
Borrower to the Bank) including, without limitation, the following:______________
3.3 Credit
Balances; Setoff.
As additional security for the payment of the obligations described in 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 a 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 hereafterin 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 the 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.
The omission of any reference to an agreement in Sections 3.1 and 3.2 above will not affect the validity or enforceability thereof. The rights and remedies of the Bank outlined in this Agreement and the documents identified above are intended to be cumulative.
ARTICLEIV. DEFAULTS
4.1
Defaults. Notwithstandingany cure periods described below, the Borrowerwill 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 will constitute a default:
(a)
Nonpayment.
The Borrower shall fail to pay (i) any interest due on the 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 the Note when due.
(b)
Nonperformance.
The Borrower or any guarantor of 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 Section 4.1) 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 Agreement 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.
(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 Guarantorshall 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 faith deems itself insecure.
4.2
Termination of Loans; Additional Bank Rights.
Upon
the occurrence of any of the events identified in Section 4.1, 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 expense; all without demand or notice of any kind, all of which are hereby waived.
4.3
Acceleration of Obligations.
Upon the occurrence
of any of the events identified in Sections 4.1 (a) through 4.1 (e) and 4.1 (g), and 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 will 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 Section 4.1(f), the unpaid principal balance of any Obligations, together with all interest accrued thereon and other amounts accrued hereunder and under the other Loan Documents, will 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 Section
4.1,
Section
4.2
or this section will limit the Bank's right to Setoff as provided in Section
3.3
or
otherwise in this Agreement.
4.4
Other Remedies.
Nothing in this Article
IV is intended to restrict the Bank's rights under any of the Loan Documents or at law, and the Bank may exercise all such rights and remedies as and when they are available.
ARTICLEV.
OTHER
TERMS
5.1
Additional Terms; Addendum/Supplements.
The warranties, covenants, conditions and other terms described in this Section and/or in the Addendum and/or other attached document(s) referenced in this Section
are incorporated into this Agreement.
ARTICLEVI. MISCELLANEOUS
6.1
Delay; Cumulative Remedies.
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 of any right, power or privilege hereunder preclude other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein specified are cumulative and are not exclusive of any rights or remedies which the Bank would otherwise have.
6.2
Relationshipto Other Documents.
The warranties,covenants
and other obligations of the Borrower (and the rights and remedies of the Bank) that are outlined in this Agreement and the other Loan Documents are intended to supplement each other. In the event of any inconsistencies in any of the terms in the Loan Documents, all terms will be cumulative so as to give the Bank the most favorable rights set forth in the conflicting documents, except that if there is a direct conflict between any preprinted terms and specifically negotiated terms (whether included in an addendum
or otherwise), the specifically negotiated terms will control.
6.3
Successors.
The rights, options, powers
and remedies granted in this Agreement 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 Agreement or any other Loan Documents without
the prior written consent of the Bank.
6.4
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 Guarantoror 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.
6.5
Indemnification.
Except for harm arising
from the Bank's willful misconduct, the Borrower hereby indemnifies and agrees to defend and hold the Bank harmless from any and all losses, costs, damages, claims and expenses of any kind suffered by or asserted against the Bank relating to claims by third parties arising out of the financing provided under the Loan Documents or related to any collateral (including, without limitation, the Borrower's failure to perform its obligations relating to Environmental Matters described in Section 2.5 above). This indemnification
and hold harmless provision will survive the termination of the Loan Documents and the satisfaction of the Obligations due the Bank.
6.6
Notice of Claims Against Bank; Limitation of Certain
Damages.
In order to allow the Bank to mitigate any damages to the Borrower from the Bank's alleged breach of its duties under the Loan Documents or any other duty, if any, to the Borrower, the Borrower agrees to give the Bank immediate written notice of any claim or defense it has against the Bank, whether in tort or contract, relating to any action or inaction by the Bank under the Loan Documents, or the transactions related thereto, or of any defense to payment of the Obligations for any reason. The
requirement of providing timely notice to the Bank represents the parties' agreed-to standard of performance regarding claims against the Bank. Notwithstanding any claim that the Borrower may have against the Bank, and regardless of any notice the Borrower may have given the Bank,
the Bank will not be liable to the Borrowerfor consequential and/or special damages arising therefrom, except those damages arising from the Bank's willful misconduct.
6.7
Notices.
Notice of any record shall be
deemed delivered when the record has been (a) deposited in the United States Mail, postage pre-paid, (b) received by overnight delivery service, (c) received by telex, (d) received by telecopy, (e) received through the internet, or (f) when personally delivered.
6.8
Payments.
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.
6.9
Applicable Law and Jurisdiction; Interpretation; Joint Liability; Severability.
This Agreement and all other Loan Documents
will
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 JURISDICTIONOF THE BANK'S BRANCH WHERE THE LOAN WAS ORIGINATED.AND
WAIVESANY OBJECTION BASED ON
FORUM NON CONVENIENS
,WITH REGARDTO ANY ACTIONS.CLAIMS, DISPUTESOR PROCEEDINGSRELATINGTO THIS AGREEMENT.THE NOTE, THE COLLATERALLY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONSARISINGTHEREFROM.OR ENFORCEMENT AND/OR INTERPRETATIONOF ANY OF THE FOREGOING. Nothing herein will 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 Agreement, the other Loan Documents and any amendments hereto (regardless of when executed) will be deemed effective and accepted only at the Bank's offices, and only upon the Bank's receipt of the executed originals thereof. If there is more than one Borrower, the liability of the Borrowers will be joint and several, and the referenceto "Borrower" will be deemed to referto all Borrowers. Invalidity of any provision of this Agreement shall not affect the
validity of any other provision.
6.10
Copies; Entire Agreement; Modification.
The
Borrower hereby acknowledges the receipt of a copy of this Agreement and all other Loan Documents. This Agreement is a "transferable record" as defined in applicable law relating to electronic transactions. Therefore, the holder of this Agreement may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of this Agreement that is an authoritative copy as defined in such law. The holder of this Agreement may store the authoritative copy of such Agreement 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 AGREEMENTSHOULD 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 WRITTEN CONTRACT MAY BE LEG ALLYENFORCED. 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.
6.11
Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK
HEREBY JOINTLY AND SEVERALLYWAIVE 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 REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
6.12
Attachments. All documents attached hereto, including any appendices, schedules,
riders, and exhibits to this Agreement, are hereby expressly incorporated by reference.
IN WITNESSWHEREOF, the undersigned have executed this TERM LOAN AGREEMENT as of
MAY 5, 2010
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Park City Group, Inc.
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(Individual Borrower)
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Borrower Name (Organization)
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_________________
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a
Delaware Corporation
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Borrower Name
N/A
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By _________________
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_________________
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Name and Title ________
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Borrower Name
N/A
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By _________________
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Name and Title ________
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U.S. Bank N.A. (Bank)
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By __________________
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Name and Title
Isaac J. Allen, Relationship Manager
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Borrower Address:
3160 Pinebrook Road. Park City. UT 84098
Borrower Telephone No.:
ADDENDUM TO
TERM LOAN AGREEMENT AND NOTE
This Addendum is made part of the Term Loan Agreement and Note (the "Agreement") made and entered into by and between the undersigned borrower (the "Borrower") and the undersigned bank (the "Bank") as of the date identified below. The warranties, covenants and other terms described below are hereby added to the Agreement.
Financial Information and Reporting.
This provision replaces in its entirety the provision of the Agreement titled "Financial Information and Reporting". Financial terms used herein which are not specifically defined herein shall have the meanings ascribed to them under generally
accepted accounting principles. For any Borrower who does not have a separate fiscal year end for tax reporting purposes, the fiscal year will be deemed to be the calendar year. The financial statements and other information previously provided to Bank or provided to Bank in the future are or will be complete and accurate and prepared in accordance with generally accepted accounting principles. There has been no material adverse change in Borrower's financial condition since such information was provided to Bank.
Borrower will (i) maintain accounting records in accordance with generally recognized and accepted principles of accounting consistently applied throughout the accounting periods involved; (ii) provide Bank with such information concerning its business affairs and financial condition (including insurance coverage) as Bank may request; and (iii) without request, provide to Bank the following financial information, in form and content acceptable to Bank, pertaining to Borrower:
Annual Financial Statements:
Not later than 120 days after the end of each fiscal year, annual combined financial statements, audited by a certified public accounting firm acceptable to Bank.
Tax Returns:
Not later than 120 days after the deadline (or extended deadline if Borrower provides evidence to Bank of such extension) for filing such returns, copies of filed federal tax returns, and state returns if applicable, including all supporting schedules.
Agings of Accounts Receivable
(this requirement pertains to Borrower only, regardless of whether financial reports are otherwise required for Borrower together with others hereunder): Not later than 90 days after the end of each fiscal quarter, a detailed aging by invoice date
of accounts and contracts receivable as of the last day of such period, together with an explanation of any adjustments made at the end of such period.
Financial Covenants.
Financial terms used herein which are not specifically defined herein shall have the meanings ascribed to them under generally accepted accounting principles. For any Borrower who does not have a separate fiscal year end for tax reporting purposes, the fiscal
year will be deemed to be the calendar year. Borrower (herein referred to as the
"Subject Party")
will maintain the following:
Fixed Charge Coverage Ratio
as of the end of each fiscal half-year for the fiscal year to date of at least 1.15 to 1.
"Fixed Charge Coverage Ratio"
shall mean (a) EBITDAR minus cash taxes, cash dividends, cash distributions and Unfunded/Unfinanced Capital Expenditures divided by (b) the sum of all required principal payments (on short and long term debt and capital leases), interest and rental
or lease expense.
"EBITDAR"
shall mean net income, plus interest expense, plus income tax expense, plus depreciation expense plus amortization expense plus rent or lease expense.
"Unfunded/Unfinanced Capital Expenditures"
shall mean the sum of all Capital Expenditures, less the sum of all new financing amounts received or assumed to fund such Capital Expenditures for the period specified.
"Capital Expenditures"
shall mean the aggregate amount of all purchases or acquisitions of fixed assets, including real estate, motor vehicles, equipment, fixtures, leases and any other items that would be capitalized on the books of the Subject Party under generally accepted
accounting principles. The term "Capital Expenditures" will not include expenditures or charges for the usual and customary maintenance, repair and retooling of any fixed asset or the acquisition of new tooling in the ordinary course of business.
Dated as of
May 5, 2010
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(Individual)
________________
Borrower Name n/a
________________
Borrower Name n/a
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(Non-Individual)
Park City Group, Inc.
a/an
Delaware Corporation
By:
Name and Title
By:
Name and Title
Agreed to:
U.S. BANK N.A.
By:_______________________
Name and Title: Isaac J. Allen, Relationship Managi
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For Bank Use Only Reviewed by _______
Due September 15, 2014
Customer
#
0028586166
Loan #
_____________
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TERM NOTE
(For Term Loan Agreement)
$
445,712.33
MAY
5, 2010
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
FOUR HUNDRED FORTY-FIVE THOUSAND SEVEN HUNDRED TWELVE AND 33/100
Dollars
($
445,712.33
Interest.
The unpaid principal balance will bear interest at an annual rate of 4.900%.
Payment Schedule.
Principal and interest are payable in 52 installments of $9,359.15 each, beginning MAY 15, 2010, 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 payment equal to all unpaid principal and accrued
interest on SEPTEMBER 15, 2014, the maturity date.
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.
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.
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.
Subject to 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.
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.
This Term Note constitutes the Note issued under a Term Loan Agreement dated as of the date hereof between the Borrower and the Bank, to which Agreement reference is hereby made for a statement of the terms and conditions under which the loan evidenced hereby was made and a description of the terms and conditions upon which the maturity
of this Note may be accelerated, and for a description of the collateral securing this Note.
This Note may be prepaid in full or in part at any time without indemnity. Prepayments of less than all the outstanding principal amount of this Note shall be applied upon principal payments in the inverse order of their maturities.
This Note is a "transferablerecord" as defined in applicable law relating to electronic transactions. Therefore, the holder of this Note may, on behalf of Borrower, 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.
All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Term Note, are hereby expressly incorporated by reference.
The Borrower hereby acknowledges the receipt of a copy of this Note.
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Park City Group, Inc.
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(Individual Borrower)
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Borrower Name (Organization)
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_________________
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a
Delaware Corporation
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Borrower Name
N/A
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By _________________
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_________________
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Name and Title ________
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Borrower Name
N/A
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By _________________
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Name and Title ________
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Exhibit 10.2
AMENDMENT TO
LOAN AGREEMENT AND NOTE
THIS AMENDMENT TO LOAN AGREEMENT AND NOTE (“Amendment”), dated as of the date specified below, is by and between PARK CITY GROUP, INC., a Nevada corporation (“Borrower”), and U.S. BANK NATIONAL ASSOCIATION (“Bank”).
RECITALS
A.
Borrower and Bank have executed a Revolving Credit Agreement (the “Agreement”) dated November 24, 2008 and Borrower has executed a Promissory Note (Revolving Line of Credit), dated the same date as
the Agreement (the “Note”), any or all of which may have been amended or replaced from time to time, and Borrower (and if applicable, certain third parties) have executed the collateral documents which may or may not be identified in the Agreement and certain other related documents (as the same have been and may be amended from time to time, collectively the “Loan Documents”), setting forth the terms and conditions upon which Borrower obtained a revolving line of credit from Bank (the
“Loan”) with a maximum line amount of $3,000,000. The outstanding principal balance of the Loan as of the date of this Amendment is $2,875,701.38.
B.
Borrower has requested that Bank permit certain modifications to the Agreement and the Note as described below.
C.
Bank has agreed to such modifications, but only upon the terms and conditions outlined in this Amendment.
TERMS OF AGREEMENT
In consideration of the mutual covenants contained herein, and for other good and valuable consideration, Borrower and Bank agree as follows:
1.
Definitions
. Unless defined herein, capitalized terms used in this Amendment shall have the meanings given in the Agreement, as previously
amended.
2.
Interest Rate
. From the date hereof through November 23, 2010, the unpaid principal balance will bear interest at an annual rate of 3.25%. On
November 24, 2010 (the “Repricing Date”), the interest rate charged on the outstanding principal balance shall be adjusted to an annual rate of 2.25% plus that rate at which Lender would be able to borrow funds of comparable amounts in the Money Markets for a one-year period, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation; such rate rounded up to the nearest one-eighth percent. Such rate shall be determined solely by Lender,
one banking day prior to the Repricing Date. The term “Money Markets” refers to one or more wholesale funding markets available to and selected by Lender including negotiable certificates of deposit, commercial paper, Eurodollar deposits, bank notes, federal funds, interest rate swaps or others.
3.
Extension of Maturity Date
. Principal is payable on November 24, 2011, the maturity date. Any references in the Agreement or
the Note to the maturity date or date of final payment are hereby deleted and replaced with such date.
4.
Release and Waiver of Claims
. Borrower hereby releases and waives any and all claims, demands, actions, causes of action, damages, costs,
expenses, and other rights of any nature whatsoever, whether known or unknown, whether or not accrued, that may be presently existing against Bank arising out of or in any way relating to the Loan, its approval, documentation or administration.
5.
Effectiveness of Prior Documents
. Except as specifically amended hereby, the Agreement, the Note and the other Loan Documents shall remain
in full force and effect in accordance with their respective terms. All warranties and representations contained in the Agreement and the other Loan Documents are hereby reconfirmed as of the date hereof. All collateral previously provided to secure the Agreement and the Note continues as security, and all guaranties guaranteeing obligations under the Loan Documents remain in full force and effect. All definitions contained in the Agreement and the Note, unless expressly modified
by the terms of this Amendment, shall remain unchanged. This is an amendment, not a novation.
6.
Preconditions to Effectiveness
. This Amendment shall only become effective upon execution by Borrower and Bank, and approval by any other
third party required by Bank.
7.
No Waiver of Defaults; Warranties
. This Amendment shall not be construed as or be deemed to be a waiver by Bank of existing defaults by
Borrower, whether known or undiscovered. All agreements, representations and warranties made herein shall survive the execution of this Amendment.
8.
Counterparts
. This Amendment may be signed in any number of counterparts, each of which shall be considered an original, but when taken
together shall constitute one document.
9.
Authorization
. Borrower represents and warrants that the execution, delivery and performance of this Amendment and the documents referenced
herein are within the authority of Borrower and have been duly authorized by all necessary action.
10.
Attachments
. All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Amendment, are hereby expressly
incorporated herein by reference.
Dated effective as of May ___, 2010.
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U.S. BANK NATIONAL ASSOCIATION
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PARK CITY GROUP, INC., a Nevada corporation
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GUARANTOR’S CONSENT AND REAFFIRMATION
The following guarantor of the obligations of the borrower to Bank under the Revolving Credit Agreement dated as of November 24, 2008, as amended, and under the Note described above, as amended, hereby expressly:
(a)
consents to the modifications and changes in terms described
above; and
(b)
reaffirms his guaranty obligations described in the guaranty agreement executed by Guarantor in favor of Bank. In addition, Guarantor hereby releases and waives any and all claims, demands, actions, causes of action, damages, costs, expenses and other rights of any nature whatsoever, whether known or unknown, whether or not accrued, that may be presently existing against Bank arising out of or in any way relating to the Loan, its
approval, documentation or administration.
DATED effective as of May ___, 2010.
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_____________________________
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