Exhibit
10.4


 





 


ACCOUNT PURCHASE AGREEMENT


 


This
Agreement is dated as of October 1st, 2007 
between Wells Fargo Bank, National Association, acting through its Wells
Fargo Business Credit operating division (“WFBC”), and Gateway Companies, Inc.
(“Customer”). The Customer and WFBC agree as follows:


 


ARTICLE I


Purpose of Agreement


 


1.01        Purpose of Agreement. The
Customer desires to sell and assign to WFBC acceptable accounts receivable and
WFBC desires to purchase such accounts on the terms and conditions set forth
herein. The purchase of accounts hereunder shall be non-recourse except as
provided herein and shall be on a non-notification of assignment basis. The
purpose of this Agreement is commercial in nature and not for household, family
and/or personal use. This Agreement sets forth the terms and conditions on
which WFBC will consider purchasing accounts receivable from the Customer.


 


ARTICLE II


Definitions


 


2.01        “Account” means any
right of payment of the net amount for goods sold, or leased and delivered or
services rendered in the ordinary course of Customer’s business which is not
evidenced by an instrument or chattel paper except for the right to payment
from the account debtors listed on Exhibit A hereto.


 


2.02        “Acceptable Account”
means an Account, in any amount acceptable to WFBC, which conforms to the
representations, warranties and terms set forth herein, net of any credits or
allowances of any nature and is not an Unacceptable Account as defined below.


 


2.03        “Account Debtor”
means Customer’s customer or and other person or entity owing money to the
Customer with respect to the Account.


 


2.04        “Advance” shall mean
with respect to a given Account an amount equal to 90% of the gross face amount
of such Account less stated trade discounts offered by the Customer to the
Account Debtor. This percentage may be adjusted by WFBC at any time at WFBC’s
commercially reasonable discretion upon prior notice to Customer.


 


2.05        “Collateral” means
the intangible or tangible property given as security to WFBC by Customer for
any obligations and liabilities of Customer to WFBC under this Agreement and
includes, without limitation, the property and assets described in Section 5.01
of this Agreement.


 


2.06        “Collected Reserve”
means the internal general ledger account which credits, debits and
disbursements will be made in accordance with this Agreement. Provided there is
no Event of Default hereunder, or any event which with the passage of time or
notice would be an Event of Default, any available balance held in the Collected
Reserve shall be released to the Customer, or to any third party at Customer’s
written direction to WFBC, twice weekly. Any fee, charge or other obligation of
the Customer under this Agreement may be charged against this account in WFBC’s
sole discretion. Upon the occurrence of an Event of Default, or an event which
with the passage of time or notice would become an Event of Default, WFBC may
hold any balance in the Collected Reserve as Collateral for any obligations of
the Customer to WFBC and WFBC may charge any such obligations against the
Collected Reserve in its sole discretion.


 


2.07        “Commercial Dispute” means any material dispute or claim in any respect (including, without
limitation, any alleged dispute as to price, invoice terms, quantity, quality
or late delivery and claims of release from liability, counterclaim or any
alleged claim of deduction, offset, or counterclaim or otherwise) arising out
of or in connection with an Account or any other transaction related thereto,
which dispute relates to an Account.


 


2.08        “Customer” means
Gateway Companies, Inc..


 

















 


2.09        “Event of Default”
shall mean the existence of a default pursuant to Article VII hereunder, or a
default under any documents given to WFBC in connection with this Agreement.


 


2.10        “Facility Fee” shall mean the fee payable on November 16, 2007 , and thereafter on the 16th day of November
each year thereafter, as set forth in Section 6.06 below.


 


2.11        “Insolvency Proceeding”   shall mean any proceeding under Title 11 of the United States Code or a
proceeding in which a receiver is appointed for substantially all assets in
accordance with applicable state law; provided, however, if the proceeding is
terminated within sixty (60) days of its initiation, such proceeding shall not
be an Insolvency Proceeding for purposes of this Agreement.


 


2.12        “Lien” shall mean any security interest, mortgage,
assignment (whether absolute or by way of security), tax lien or other lien
(statutory or otherwise) or any other encumbrance of any kind or nature whatsoever.


 


2.13        “Minimum Fee” shall
be a quarterly  minimum fee calculated as
follows:  the WFBC Discount times
$30,000,000 times 30 divided by 360, for each month of the quarter, to be
payable quarterly as stated in Section 6.06 below.


 


2.14        “Net Purchase Price”
for any Account means an amount equal to the gross face amount of such Account
less (i) the WFBC’s Discount and (ii) any other charges with respect to such
Account and less any amount of any trade discounts, credits or allowances, or
any other reductions or adjustments to such Account taken by the Account
Debtor.


 


2.15        “Prime Rate” shall
mean the highest of the Prime Rate published by Wells Fargo Bank, N.A. as the base rate on corporate loans. In
the event the Prime Rate as published by Wells
Fargo Bank, N.A. ceases to exist or Wells
Fargo Bank, N.A. ceases publishing a Prime Rate, the holder hereof
will substitute a comparable index which is outside the control of the holder. In
the event of an error by Wells Fargo Bank,
N.A., the “Prime Rate” will be based upon the Prime Rate as
corrected. Any increase or decrease in the Prime Rate shall be effective as of
the next business day following such adjustment and such adjusted Prime Rate
shall be the applicable Prime Rate in determining the rate of interest payable
hereunder.


 


2.16        “Purchase Limit” shall mean the limit WFBC sets from time to time establishing the
maximum gross face amount of purchased Accounts which are approved to be
outstanding at any given time by a particular Account Debtor.


 


2.17        “Repurchase Price”
for any Account means the Advance less any amounts collected from the Account
Debtor on the Account plus the WFBC Discount and all fees, costs or expenses
associated with the repurchase or collection of such Account. In any event
where repurchase is required under this Agreement, WFBC, at its discretion, may
charge the Repurchase Price to Customer’s Collected Reserve which may create a
deficit balance under Section 3.06 below.


 


2.18     “Term”
shall mean three (3) years from November 14, 2006 to coincide with the renewal
date of the Account Purchase Agreements by and between MPC Computers, LLC, MPC
Solutions Sales, LLC and MPC-G, LLC (the “Affiliates”) and WFBC. .  This
Agreement shall automatically continue for renewal terms of three years  unless sixty (60) days prior to the end of
the current Term, the Customer notifies WFBC in writing that the Customer
wishes to terminate this Agreement.


 


2.19        “Unacceptable Account” shall mean an Account which is not acceptable in WFBC’s sole discretion
including but not limited to the following:


 


2.19(a)   Accounts
owed by any unit of government, whether foreign or domestic (provided, however,
that there shall be included in Acceptable Accounts that portion of Accounts
owed by such units of government for which the Customer has provided evidence
satisfactory to WFBC that Customer has directed such government agencies to
make payments to a lockbox established for the benefit of WFBC);


 


2.19(b) Accounts not payable in United States
dollars.


 


2.19(c)   Accounts owed
by an Account Debtor located outside the United States or Canada which are not
(i) backed by a bank letter of credit naming WFBC as beneficiary, which bank
letter of credit must be in WFBC’s possession and acceptable to WFBC in all
respects, in its sole discretion, (ii) covered by a foreign receivables
insurance policy acceptable to WFBC in its sole discretion;


 


2.19(d)   Accounts
owed by an Account Debtor that is insolvent, the subject of an Insolvency
Proceeding or has ceased doing business;


 


	
   

  	
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2.19(e)   Accounts
owed by an owner, shareholder, subsidiary, affiliate, officer or employee of
the Customer;


 


2.19(f)    Accounts
which are not subject to a duly perfected security interest in WFBC’s favor or
which are subject to any Lien in favor of any entity other than WFBC, including
without limitation any payment or performance bond; provided nothing herein
shall require MPC to seek an assignment of claims of Accounts owed by any unit
of government;


 


2.19(g)   Accounts
that have been restructured, extended, amended or modified;


 


2.19(h) Any Account whose sale, transfer or assignment (whether absolutely or by
way of security) is limited or restricted by the terms of the contract
evidencing or relating to such Account (unless such limitation or restriction
has been complied with and WFBC is satisfied in its sole discretion that the
sale, transfer or assignment of such Account hereunder is valid and effective);


 


2.19(i) That portion of Accounts that constitutes allowances, finance charges,
service charges or sales or excise taxes;


 


2.19(j) Accounts that have been invoiced, paid or partially paid in advance of
the full delivery and acceptance of goods or the performance and acceptance of
services or in advance of the submission of the Account to WFBC.


 


2.19(k)   Accounts, or
portions thereof, that fail to conform to the representation and warranties
contained herein or are otherwise deemed unacceptable by WFBC in its sole
discretion;


 


2.19(l) Accounts which would cause the Purchase Limit for such Account Debtor
to be exceeded.


 


2.20        “WFBC Discount” shall
be a fee which shall be equal to the lesser of the gross face amount of the
Account multiplied by (i) the sum of the Prime Rate, plus 0.75% per annum, or
(ii) the lawful maximum, if any, in effect from time to time for advances of
the type, in the amount, for the purposes and otherwise of the kind herein
contemplated. Such fee shall be computed on a daily basis starting on the date
each Account is purchased through and including the date of receipt of good
funds paying each Account in full. The fee shall be calculated on the basis of
a 360-day year for the actual number of days elapsed.


 


2.20(a) If
any Event of Default exists, the WFBC Discount may increase in an amount up to
the Prime Rate plus 3.75 % per annum to be determined by WFBC at its sole
discretion (but in no event shall such fee be more than the lawful maximum, if
any, in effect from time to time for advances of the type, in the amount, for
the purposes and otherwise of the kind herein contemplated).


 


2.20(b) WFBC
may, upon prior written notice to Customer, change the amount of any fee or
charge provided for herein at its sole discretion; provided, however, the
Minimum Fee, Termination Fee and the Facility Fee will not be modified under
this provision.


 


ARTICLE III


Purchase and Assignment of Accounts


 


3.01        Assignment of Accounts: Pursuant to the terms herein, Customer hereby transfers and assigns to
WFBC, its successors and assigns, as absolute owner, and WFBC hereby accepts
from the Customer all of the Customer’s right, title and interest in and to:


 


3.01(a) All of the Customer’s Accounts together with all rights of action accrued
or to accrue thereon, including, without limitation, full power to collect, sue
for, compromise, assign, in whole or in part, or in any other manner enforce
collection thereof in Customer’s name or otherwise; and


 


3.01(b) All right, title and interest of the Customer in and to the books and
records evidencing or relating to the Accounts, all deposits, or other security
for the obligation of any person under or relating to the Accounts, all goods
relating to, or which by sale have resulted in, the Accounts, including goods
returned by any Account Debtor, debtor or obligor in any way obligated on or in
connection with the Account including, without limitation, the Account Debtor,
all rights of stoppage in transit, replevin, repossession and reclamation and
all other rights of action of an unpaid vendor or lienor; and


 


	
   

  	
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3.01(c) All proceeds of the foregoing in any form.


 


3.02        Approval:  WFBC shall not purchase an Account unless
such Account is first submitted to WFBC by Customer for approval in Customer’s sole discretion. WFBC
is not obligated to buy any Account from a Customer that WFBC does not deem
acceptable in its sole discretion.


 


3.03        Required Forms:  When Customer offers an Account
to WFBC for sale, WFBC shall receive (a) an assignment of Accounts, in a form
satisfactory to WFBC and signed by an authorized representative of Customer,
(b) an original invoice or an electronic equivalent thereof, either of which
must be in a form  acceptable to WFBC in
its sole discretion, (c) a copy of the Bill of Lading if applicable, (d) proof
of delivery, (e) contract, purchase order, or purchase order number which
corresponds with such invoice, as appropriate to the business of Customer and
(f) and any other document which WFBC may require. In the event any document
required hereunder is not presented to WFBC, Customer shall have five (5) days
from the date of notice of the deficiency from WFBC to provide such required
document.


 


3.04        Purchase:  Upon approval and acceptance by WFBC of an
Account for the assignment and sale of an Account to WFBC, WFBC shall purchase
and Customer shall sell such Account to WFBC.


 


3.05        Purchase Price:  As consideration for the
assignment and sale of an Account to WFBC, WFBC shall pay to the Customer the
Net Purchase Price for such Account on the terms and conditions as stated in
Section 3.06 herein.


 


3.06        Payment of Purchase Price:  If no Default exists
hereunder, WFBC shall pay for each Account purchased hereunder the Net Purchase
Price for such Account to Customer as follows:


 


3.06(a) Upon assignment or sale of an Account to WFBC, and receipt of all
documents and forms described in Section 3.03 herein and upon fulfillment of
all terms precedent to such sale or assignment as more fully set forth herein,
WFBC shall (i) pay to the Customer by ACH transfer or wire, or (ii) pay to any
third party at Customer’s written direction to WFBC, or (iii) advance to the
Collected Reserve, the Advance with respect to such Account. In the event
required information is provided to WFBC by 9:30 a.m. MST on a business day,
and WFBC determines to purchase Accounts pursuant to the terms of this
agreement, any Advance Payment shall be made the same business day.


 


3.06(b) After collection of an Account by WFBC, WFBC shall credit the Customer’s
Collected Reserve with the amount collected on the Account less: (i) the
Advance, (ii) the WFBC Discount, and (iii) any fees, expenses or charges owed
to WFBC as more fully described herein.


 


3.06(c) In the event WFBC receives payment on an Account which has not been
purchased by WFBC, such payment will be credited to the Customer’s Collected
Reserve and released in accordance with this Agreement.


 


3.07        Sole Property:  Once WFBC has purchased an Account, any and
all payments from the Account Debtor as to that Account are the sole property
of WFBC.


 


3.08        Book Entry:  Customer shall, promptly  upon sale of Accounts to WFBC, make proper
entries on its books and records disclosing the absolute sale of said Accounts
to WFBC on said books and records and other documents as so directed by WFBC.


 


3.09        Reporting and Statement of
Account: On a weekly basis, or as otherwise determined by WFBC at its sole discretion,
WFBC shall prepare, and make available to the Customer, an accounting of the
purchases, collections, and amounts credited to and/or charged against the
Collected Reserve  during that week or
other period. Should such a statement of account indicate a deficit balance,
such balance shall be due and payable and the Customer shall promptly pay to
WFBC the amount of such deficit plus accrued interest on such deficit balance. Interest
shall accrue on any deficit balance at the annual rate of eighteen percent
(18%), calculated on a daily basis, not to exceed the applicable legal limit,
until such deficit is paid in full.


 


3.10        Notation of Assignment:  Customer shall make a notation
on each original invoice (or the electronic of an invoice) or other such
documentation accepted b WFBC for each Account purchased hereunder which
provides the following language for remittances:


 


Remit payment to:


 


	
   

  	
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MPC-Pro, LLC


#774267


4267 Solutions Center


Chicago, IL 60677-4002


 


Wire instructions


Wells Fargo Bank, N.A.


San Francisco, CA


ABA# 121000248


Beneficiary: Wells Fargo Business Credit


Acct# 6355033300


 


Upon
the request of WFBC, and in any event upon the occurrence of an Event of
Default, Customer shall make a notation on each original invoice (or the
electronic equivalent of an invoice) or other such documentation accepted by
WFBC for each Account purchased hereunder which indicates that such Account has
been sold, transferred and assigned and/or sold to WFBC with the following
language:


 


This invoice has been sold, transferred and assigned to


and is payable to:


Wells Fargo Business Credit


#774267


4267 Solutions Center


Chicago, IL 60677-4002


For information call 303/433-9300


Wire Instructions:


Wells Fargo Bank, N.A.


San Francisco, CA


ABA# 121000248


Beneficiary: Wells Fargo Business Credit


Acct# 6355033300


 


WFBC
may change the language for this notation upon Notice to Customer.


 


ARTICLE IV


Customer’s Representations, Warranties and Covenants


 


4.01                        Representations and
Warranties. Subject to the
disclosure schedule attached hereto, Customer hereby represents and warrants
and as follows:


 


4.01(a) Customer is properly licensed, qualified and authorized to operate its
business and Customer’s trade name(s), all of which are disclosed on Customers
application provided to WFBC, have been properly filed and published as
required by applicable law. Customer, and the persons executing this document,
are duly authorized to execute and deliver this Agreement and all other
documents required to be executed and delivered hereunder. Customer’s chief
executive office is at the location(s) set out under Customer’s name on the
signature pages to this Agreement. All other places of business have been
disclosed on the application provided to WFBC.


 


4.01(b) Customer is not subject to any Insolvency Proceeding.


 


	
   

  	
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4.01(c) Customer has made and shall continue to make timely payment and
remittance to applicable governmental authorities of all taxes and other
amounts required to be paid and remitted by Customer pursuant to applicable
law.


 


4.01(d) Customer is, at the time of purchase of each Account by WFBC, the
lawful owner of and has good and undisputed title to such Account. Each
Account, at the time of purchase is free from any


 


Liens,
mortgages, restrictions or encumbrances that have not been previously disclosed
to WFBC. Each Account offered for sale to WFBC is an Acceptable Account as
defined in Section 2.02 herein.


 


4.01(e) Each Account Debtor’s business is solvent to the best of Customer’s
information and knowledge at the time of this Agreement and at the time each
Account of such Account Debtor is presented to WFBC for purchase.


 


4.01(f) Each Account offered for
sale to WFBC is an accurate and undisputed statement of indebtedness owed by
Account Debtor to Customer for a certain sum which is due and payable in thirty
(30) days or less, or within such term as is agreed to by WFBC and Customer, is
for a bona fide sale, delivery and acceptance of merchandise or performance of
services which have been received and finally accepted by the Account Debtor. Customer
has all rights to transfer or sell such Accounts to WFBC and such Accounts are
payable by Account Debtor without offset, deduction or counterclaim.


 


4.01(g) Customer does not own, control or exercise dominion over, in any way
whatsoever, the Account Debtor or the business of any Account Debtor for whom
Accounts are to be sold by Customer to WFBC.


 


4.01(h) All financial records, statements, books or other documents shown to
WFBC by Customer at anytime, either before or after the signing of this
Agreement, are true and accurate in all material respects.


 


4.01(i) There is no action, suit or proceeding at law or in equity or by or
before any governmental instrumentality
or other agency now pending, or to the knowledge of Customer, threatened
against or affecting Customer, which if adversely determined, would have a
material adverse effect on the business, operations, property, assets or
condition, financial or otherwise, of Customer.


 


4.01(j) The execution and performance by Customer of the terms and provisions
of this Agreement, and the execution and delivery of any other documents
required to be executed and delivered hereunder, have been duly authorized by
all requisite company action, and neither the execution nor the performance of
this Agreement or any other documents required to be delivered hereunder, will
violate any provision of law, any order of any court or other agency of
government, the governing documents of Customer, or any agreement or other
instrument to which Customer is a party, or by which Customer is bound, or be
in conflict with, result in breach of, or constitute (with due notice or lapse
of time or both) a default under, or result in the creation or imposition of
any Lien upon any of the property or assets of Customer, pursuant to any such
agreement or instrument, except as provided hereunder. Customer agrees that it
will execute and perform all terms hereunder.


 


4.02                        Negative Covenants. Customer
agrees as follows:


 


4.02(a) Customer will not under any circumstances or in any manner whatsoever, interfere
with any of WFBC’s rights under this Agreement.


 


4.02(b) For the duration of this Agreement and for any period thereafter for as
long as any obligation to repurchase or indebtedness whatsoever remains owing
by Customer to WFBC, Customer will not sell or assign Accounts to any party
other than WFBC.


 


4.02(c) Customer shall not pledge, transfer or grant any additional consensual
Lien in any personal property or Accounts of Customer nor shall Customer
consent to the placement of any additional Lien by any other party on any
Collateral for the term of this Agreement and for as long as Customer may be
required to repurchase any Account or is indebted to WFBC hereunder without the
written consent of WFBC. WFBC hereby consents to the lien granted to Gateway,
Inc. pursuant to the Three party Agreement of a date even herewith. Customer
shall provide written notice to WFBC promptly upon obtaining any knowledge,
from any source, of the assertion, filing, recording or perfection by any
means, of any non-consensual Lien against the Collateral.


 


4.02(d) Customer will not change or modify the terms of the original invoice or
agreement with the Account Debtor or the order of payment on Accounts sold to
WFBC without prior consent in writing from WFBC.


 


	
   

  	
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4.02(e) Customer shall not be involved in a material dispute, other than a
Commercial Dispute, with an Account Debtor, regardless of validity, during the
term of this Agreement; provided, however, 
there shall be no breach of this section if Customer repurchased all
outstanding Accounts payable by the Account Debtor involved in the dispute
within ten (10) days of the occurrence of such material dispute.


 


4.02(f) Customer shall not breach any representations, warranties or covenants
in this Agreement.


 


4.02(g) Customer shall not intentionally contribute to, or aggravate any Credit
Loss of any Account Debtor.


 


4.03                        Affirmative Covenants. Customer
agrees as follows:


 


4.03(a) With respect to misdirected payments, whenever any payment on any
Account comes into Customer’s possession, Customer shall hold such payment in
trust and safekeeping, as the property of WFBC, and promptly turn over to WFBC
such payment in the same form as it was received by Customer to WFBC. Customer
shall pay a misdirected payment fee in the amount of fifteen percent (15%) of
the amount of any payment on account of an Account purchased by WFBC herein
which has been received by Customer and not delivered in kind to WFBC on the
next business day following the date of receipt by Customer. Further, Customer
shall segregate and hold in trust and safekeeping, as the property of WFBC, and
promptly turn over to WFBC, any goods or inventory returned to, reclaimed or
repossessed by the Customer which are covered by an Account purchased by WFBC.


 


4.03(b) Customer will maintain such insurance covering Customer’s business and/or
the property of the Account Debtors as is customary and adequate for businesses
similar to the business of Customer in an amount as is sufficient to compensate
for reasonably foreseeable loss, and promptly pay all premiums with respect to
the policies covering such insurance. Further, the Customer shall have WFBC
named as loss payee for such insurance.


 


4.03(c) Customer will promptly notify WFBC of any material disputes between
Account Debtor and Customer or the return of any product by Account Debtor to
Customer; provided, however, in the absence of the occurrence of an Event of
Default, a dispute involving $25,000 or less shall not be material hereunder.


 


4.03(d) Customer will notify WFBC in writing prior to any change in the location
of any of its places of business, including the location of the Customer’s
inventory or, if Customer has or intends to acquire any additional place of
business. Customer will not change its chief executive office or the office or
offices where Customer’s books and records concerning Accounts are kept without
prior notice to WFBC. Customer will not remove any Collateral from the
jurisdictions in which the Collateral is located on the date of this Agreement
without the prior written consent of WFBC.


 


4.03(e) Customer will promptly notify WFBC in writing prior to of any proposed
change of Customer’s name, identity, legal entity, corporate structure, business
dissolution, use of any additional trade name, or any proposed change in any of
the officers identified in the Certificate of Incumbency provided to WFBC and
Customer will not effect any such change without WFBC’s written consent.


 


4.03(f) Customer will promptly notify WFBC in writing of the commencement of
any material legal proceeding or service of any legal document affecting the
Customer including, but not limited to, any complaints, judgments, Liens,
attachments, garnishments or any Insolvency Proceeding against Customer. Customer
will notify WFBC in advance of the filing of any Insolvency Proceeding by
Customer.


 


4.03(g) At least once per quarter, or once per month if Customer is in default,
Customer will furnish to WFBC the consolidated financial statements of
HyperSpace Communications, Inc. and its subsidiaries, including but not limited
to a statement of profit and loss and a balance sheet, satisfactory proof of
payment and compliance with all federal, state and local tax requirements and
any other information requested by WFBC. In the event any document required
hereunder is not presented to WFBC, Customer shall have five (5) days from the
date of notice of the deficiency from WFBC to provide such required document.


 


4.03(h) Customer shall promptly notify WFBC of any material claim, loss or
offset of any kind against Customer or WFBC asserted by Account Debtor during
this Agreement.


 


4.03(i) Upon the occurrence of a Commercial Dispute with respect to an Account,
Customer shall promptly pay WFBC the Repurchase Price for such Account.


 


	
   

  	
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ARTICLE V


Security Interest


 


5.01        Security
Interest/Collateral:  As further inducement for WFBC to enter into
this Agreement, Customer grants to WFBC, as collateral for the repayment of any
and all obligations and liabilities whatsoever of Customer to WFBC, a security
interest, under the Uniform Commercial Code, in the following described
property, as defined under the Uniform Commercial Code:  All presently existing or hereafter arising,
now owned or hereafter acquired property including, but not limited to,  accounts, general intangibles, contract rights, investment
property, deposit accounts, the Collected Reserve established hereunder,
inventory, instruments, chattel paper, documents, insurance proceeds, and all
books and records pertaining to accounts and all proceeds and products of the
foregoing property together with a controlled collateral account to be
maintained by Customer and the Affiliates at Wells Fargo Bank, N.A. and
controlled by WFBC with a balance of $3,500,000 (the “Collateral Account”)
which account shall serve as additional collateral for Customer’s obligations
to WFBC hereunder. The Collateral Account shall be interest bearing and the
interest shall accrue to the benefit of Customer in the absence of the
occurrence of an Event of Default.


 


5.02        Security Documents: 
Customer shall execute all and deliver to WFBC any and all documents and
instruments as WFBC may request from time to time. Customer authorizes WFBC to
file a UCC financing statement with any appropriate authority reflecting its
security interest and further authorizes WFBC to file other filings including
amendments (other than amendments adding collateral) as WFBC deems appropriate.


 


ARTICLE VI


Operational Provisions


 


 6.01       Repurchase: Upon the occurrence of a Commercial Dispute,
Customer shall repurchase the Account subject to the Commercial Dispute
promptly. Regardless of whether there is a Commercial Dispute, in the event that
and Account payable by the United States Government is outstanding 120 days
after the due date, or any other Account is outstanding  90 days after the due date, Customer shall
promptly repurchase such Account. In either event, if the Repurchase Price is
not paid promptly, WFBCI may (but is not required to) deduct the Repurchase
Price from funds available to Customer under Article III hereof.


 


6.02  Power of
Attorney:  In order to carry out this Agreement and
avoid unnecessary notification of Account Debtors, Customer irrevocably appoints WFBC, or any
person designated by WFBC, as its special attorney in fact, or agent, with
power to:


 


6.02(a) strike through Customer’s remittance information on all invoices
delivered to Account Debtors and note WFBC’s remittance information on all
invoices.


 


6.02(b) receive, open, read,  and
thereafter forward to Customer if appropriate all mail addressed to Customer
(including any trade name of Customer) sent to WFBC’s address. Any payments
received shall be processed in accordance with this Agreement.


 


6.02(c) endorse the name of Customer or Customer’s trade name on any checks or
other evidences of payment that may come into the possession of WFBC with
respect to any Account , and on any other documents relating to any of the
Accounts or to Collateral.


 


6.02(d) Upon the occurrence of an Event of Default, in Customer’s name, or
otherwise, demand, sue for, collect, and give releases for any and all monies
due to or become due on any Account.


 


6.02(e) Upon the occurrence of an Event of Default, compromise, prosecute, or
defend any action, claim or proceeding as to any Account.


 


6.02(f) Upon the occurrence of an Event of Default, offer a trade discount to
Customer’s Account Debtor exclusive of Customer’s normal business custom with
any Account Debtor.


 


	
   

  	
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6.02(g) initiate electronic debit or credit entries through the ACH system to
Customer’s account or any other deposit account maintained by Customer wherever
located.


 


6.02(h) sign Customer’s name on any notice of assignment, financing statement,
amendment to any financing statement and on any notices to Account Debtors.


 


The
authority granted to WFBC under this provision shall remain in full force and
effect until all assigned Accounts are paid in full and any indebtedness of
Customer to WFBC is discharged.


 


6.03  Miscellaneous Payments: 
Should WFBC receive a duplicate payment on an Account or other payment
which is not identified, WFBC shall carry these sums as open items in its
accounting and shall return any duplicate payment to the Account Debtor or
apply such unidentified payment pursuant to the terms hereof upon proper
identification and documentation. In the event WFBC receives payment on an
Account which has not been purchased hereunder and can be identified as being
the property of the Customer, such payment will be credited to the Customer’s
Collected Reserve and released in accordance with this Agreement.


 


6.04  Hold Harmless: 
Customer shall hold WFBC harmless against any Account Debtor ill will
arising from WFBC’s collecting or attempting to collect on any Account,
provided that WFBC acts in a commercially reasonable manner.


 


6.05  Taxes: 
Should any excise, sale, use or other tax be imposed by any federal,
state or local authority requiring a deduction or withholding from the proceeds of sale of any Account, or
if the Account Debtor is authorized to withhold and deduct such tax or levy,
then the Customer shall promptly pay WFBC the amount of the tax or levy so
withheld, and the Customer shall indemnify and hold WFBC harmless from any loss
or expense on account of such tax.


 


6.06  Minimum Fees, Early Termination Fee and
Facility Fee:
Customer shall pay the  Minimum Fee each
month during the Term (and any renewals hereof) and Customer shall pay any
deficiency between the Minimum Fee and the fees paid under Section 2.20 hereof
on a quarterly basis the fifteenth (15th) day of the next calendar
quarter. In the event Customer terminates this agreement prior to the end of
the Term, in lieu of further Minimum Fees after the full pay off of WFBC,
Customer shall pay WFBC $1,000,000 if such termination occurs during the first
year of the Term, $750,000 if the termination occurs during the second year of
the Term and $500,000 if the termination occurs during the third year of the
term (each, the “Termination Fee”). Customer shall pay an origination fee of
$150,000 at the closing of this Agreement. Customer shall pay a Facility Fee in
the amount of $100,000 on or before November 16, 2007 and annually thereafter on the 16th day of
November  in the amount of $200,000.
WFBC agrees that if Customer obtains financing from any Wells Fargo & Co.
entity and such financing is utilized for paying off all obligations to WFBC
hereunder, including the repurchase of all Accounts, and Customer ceases
selling Accounts hereunder, Minimum Fees for the remainder of the then current
Term shall be waived from the date of the full pay off to WFBC or the date
selling of Accounts ceases, whichever is later. WFBC agrees that in calculating
the Minimum Fee, the Facility Fee and the Termination Fee hereunder, the fees
paid by the Affiliates will be credited towards such fee.


 


6.07 Reports: 
Except as provided by Section 3.10, and in the event Customer requests
information from WFBC regarding
Customer’s account hereunder, such requests shall be subject to the schedule of
fees provided by WFBC which schedule may be adjusted by WFBC from time to time
in its discretion.


 


6.08  WFBC Settlement of Accounts:  WFBC may settle any Commercial Dispute with
any Account Debtor. Such settlement does not relieve Customer of any obligation
(including any repurchase obligation) under this Agreement with respect to any
Accounts.


 


6.09  Documents: 
If documents submitted by Customer to WFBC for the purchase of any
Account are fraudulent or materially mistaken, 
incorrect or erroneous, or if the Customer fails to submit any document
required by WFBC under this Agreement for the purchase of any Account, then the
Customer shall repurchase such Account and pay the Repurchase Price as stated
herein.


 


6.10  Information:  In the event WFBC provides financial
information to Customer regarding a third party, whether by setting a Purchase
Limit, at the request of Customer or otherwise, Customer understands that WFBC
is not making any representations or warranties or expressing an opinion as to
the creditworthiness of any such third party.


 


	
   

  	
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ARTICLE VII


Default


 


7.01                        Events of Default: Any one or more of the following shall be an
Event of Default hereunder:


 


7.01(a)   Customer shall fail to pay any indebtedness to WFBC when due or
repurchase any Account when required hereunder.


 


7.01(b) Customer shall breach any material term, provision, promise, warranty,
representation or covenant under this Agreement, or under any other agreements,
contracts, between Customer and WFBC.


 


7.01(c) The appointment of any receiver or trustee of all or a substantial
portion of the assets of Customer.


 


7.01(d) Customer shall voluntarily commence any Insolvency Proceeding affecting
Customer.


 


7.01(e) any involuntary Insolvency Proceeding shall be filed against Customer
and is not dismissed within sixty (60) days.


 


7.01(f) Any levies, attachment, executions, or similar process shall be issued
against the Collateral.


 


7.01(g) Any financial statements, profit and loss statements, or schedules,
other statements or documents furnished by Customer to WFBC are false or
incorrect in any material respect.


 


7.01(h) Any documents submitted by Customer to WFBC for the purchase of an
Account are  fraudulent or  materially incorrect or erroneous, or if the
Customer fails to submit any document required by WFBC under  this Agreement for the purchase of that Account.


 


7.01(i) Any Account Debtor shall assert a claim or offset of any kind against
Customer or WFBC during any time period covered by this Agreement which may
have a material adverse impact on payment of any Account.


 


7.01(j) Any guarantor of Customer’s obligations hereunder is in default under
the guaranty or if any guarantor withdraws or revokes the guaranty as to future
sales of Accounts or otherwise.


 


ARTICLE VIII


Remedies


 


8.01                        Remedies on Default:  Upon the occurrence of an Event of Default, WFBC may do any one or more
of the following:


 


8.01(a) Accelerate and declare immediately due and payable, all indebtedness of Customer to
WFBC, whether mature, contingent or otherwise, including without limitation (i)
outstanding purchased Accounts, (ii) any unpaid Minimum Fees and (iii) all
other fees, costs and expenses as required hereunder.


 


8.01(b) Require the Customer to repurchase any and all Accounts, whether
disputed or undisputed, and pay the Repurchase Price for those Accounts as
provided herein, and, in the event the Repurchase Price is not promptly paid,
WFBC may continue to collect such Accounts and charge a reasonable fee in
connection with such collection activities in addition to any other fees or
charges provided for herein.


 


8.01 Cease purchasing any Account under this Agreement.


 


8.01(d) Notify any Account Debtor and take possession of Collateral and collect
any Account without judicial process.


 


8.01(e) Settle any disputed Account directly with the Account Debtor without
relieving Customer of its obligations with respect to such Account under this
Agreement.


 


8.01(f) Require Customer to assemble the Collateral and the records pertaining
to Accounts and make them available to WFBC at a place designated by WFBC.


 


8.01(g) Enter the premises of Customer and take possession of the Collateral
and of the records pertaining to the Accounts and any other Collateral.


 


8.01(h) Grant extensions, compromise claims and settle an Account for less than
face value, all without prior notice to Customer.


 


8.01(i) Use, in connection with any assembly or disposition of the Collateral,
any trademark, trade name, trade style, copyright, patent right or technical
process used or utilized by Customer.


 


	
   

  	
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8.01(j) Initiate electronic credit or debit entries through the ACH system to
and from Customer’s deposit account maintained by Customer wherever located.


 


8.01(k) Hold Customer liable for any deficiency for any amounts due and owing
to WFBC.


 


8.01(l) Cease making reports or accountings to the Customer as otherwise
required by this Agreement.


 


ARTICLE IX


Term and Termination


 


9.01        Term:  This Agreement shall continue in full force
and effect until the earliest of (a) the expiration of the Term; (b) any date agreed
to in writing by the parties hereto, (c) upon at least ten (10) days written
notice by Customer; or (d) any date set by WFBC upon the occurrence of an Event
of Default. On the date of termination, all obligations owing by the Customer
to WFBC, including any unpaid fees as set forth 
in Section 6.06 hereof, which fees shall become promptly due and payable
in full without further notice or demand.


 


9.02        Repurchase of Account:  Upon termination, Customer shall repurchase
any and all Accounts, whether disputed or undisputed, as may be requested by
WFBC, and shall pay the Repurchase Price for those Accounts as provided herein
as well as any other indebtedness or obligations owed to WFBC by Customer. WFBC
continues and shall continue to have a security interest in the Collateral
until all amounts owed to WFBC by Customer are paid in full or are satisfied.


 


9.03        Repayment
of Account Debtor:  In the event WFBC is required to repay any
Account Debtor for a payment received by WFBC on an Account, and non-payment of
that Account would have required repurchase by Customer under this Agreement,
the amount of the repayment by WFBC shall be an obligation of Customer to WFBC
notwithstanding the termination of this Agreement. In the event the Customer
receives a payment from WFBC to which the Customer has no rights, repayment of
the funds to WFBC is an obligation of the Customer to WFBC whether or not the
Agreement has been terminated. In either event, if the obligation is not paid
upon five (5) days notice of the obligation to pay from WFBC to Customer, WFBC
may file a financing statement in connection with the security interest granted
herein (if necessary) or otherwise perfect its interest in the Collateral and
exercise any and all rights it has under this Agreement to collect the amounts
due.


 


ARTICLE X


Miscellaneous Provisions


 


10.01                 Binding on Future Parties:  This
Agreement inures to the benefit of and is binding upon the heirs, executors, administrators, successors and assigns
of the parties hereto accept that the Customer shall not have the right to
assign its rights hereunder or any interest herein without WFBC’s prior written
consent.


 


10.02                 Cumulative Rights: No failure or delay by WFBC in exercising
any right, power or remedy under the Agreement or documents given in connection with the Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy under the Agreement. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.


 


10.03                 Waiver:  WFBC
may not waive its rights and remedies unless the waiver is in writing and
signed by WFBC. A waiver by WFBC
of a right or remedy under this Agreement on one occasion is not a waiver of
the right or remedy on any subsequent occasion.


 


10.04  Choice of Law:  This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado.


 


10.05  Invalid Provisions:  Any provision of this Agreement
which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.


 


	
   

  	
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10.06 Entire Agreement:  This
instrument contains the entire Agreement between the parties. This  Agreement, together with the documents given in connection
herewith, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof.


 


10.07 Amendment: Except as otherwise provided herein, any addendum or modification
hereto must be signed by both parties.


 


10.08   Effective:  This
Agreement becomes effective when it is accepted and executed by an authorized
officer of WFBC.


 


10.09
Data Transmission:  WFBC assumes no responsibility for privacy or
security risks as a result of the method of data transmission selected by
Customer. WFBC only assumes responsibility for data transmitted from Customer
once the data is received within the Wells Fargo Bank, National Association’s
internal network. WFBC assumes no responsibility for privacy or security data
transmitted from WFBC to Customer once the data is dispensed from Wells Fargo
Bank, National Association’s internal network.


 


10.10 Information:  Without limiting WFBC’s right
to share information regarding the Customer and its affiliates with WFBC’s agents, accountants, lawyers and other
advisors, Customer agrees that Wells Fargo & Co., and all direct and
indirect subsidiaries of Wells Fargo & Co., may, among themselves, discuss
or otherwise utilize any and all information they may have in their possession
regarding the Customer and its affiliates, and the Customer waives any right of
confidentiality it may have with respect to such exchange of such information.


 


10.11 Indemnification: Customer agrees to indemnify and hold WFBC
harmless from any and all liability, claims and damages, including attorneys’ fees, costs of suit and interest which
WFBC may incur as a result of the failure of Customer to pay withholding taxes
due and payable to any taxing authority.


 


10.12
Notices  hereunder:  All notices and communications hereunder
shall be given or made to the parties at their respective addresses set forth
below, or at such other address as the addressee may hereafter specify for the
purpose of written notice to the other party hereto. Such notices and
communications shall be effectively given by WFBC when and if given in writing
and delivered to the address set forth herein, delivered by facsimile or duly
deposited in the mails with first-class postage prepaid.


 


10.13 Costs  and Expenses:  Except as is prohibited by law, the Customer
agrees to pay on demand all costs and expenses, including (without limitation) attorneys’ fees, incurred by
WFBC in connection with this Agreement and any other related document or
agreement, and the transactions contemplated hereby, including without
limitation all such costs, expenses and fees incurred in connection with the
negotiation, due diligence, preparation, execution, amendment, administration,
performance, collection and enforcement of the obligations and all such
documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of any security interest granted
hereunder, the collection of any Account or any obligation owed by Customer to
WFBC.


 


10.14 Audit:  The Customer hereby agrees to
pay WFBC, on demand, audit fees in connection with any audits or inspections conducted by WFBC of any
Collateral or the Customer’s operations or business at the rates established
from time to time by WFBC as its audit fees, together with all actual out-of-pocket
costs and expenses incurred in conducting any such audit or inspection.


 


10.15 Jurisdiction: The parties hereby (a) consent to the personal jurisdiction of
the state and federal courts located in the State of Colorado in connection
with any controversy related to this Agreement; (b) waive any argument
that venue in any such forum is not convenient, (c) agree that any
litigation initiated by WFBC or the Customer in connection with this Agreement
shall be venued in either the State Courts of the City and County of Denver,
Colorado or the United States District Court, District of Colorado, and
(d) agree that a final judgment in any such suit, action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.


 


10.16 Waiver of Jury Trial:  THE CUSTOMER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL


 


	
   

  	
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BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON OR
PERTAINING TO THIS AGREEMENT.


 


Executed
and accepted this 1st day of October 2007 at Nampa, Idaho.


	
   

  	
   

  	
  Month/Year

  	
  City/State

  



 


 


	
  Gateway Companies, Inc.

  	
   

  	
  Wells Fargo Bank,
  National Association

  	
   

  
	
  906 East Karcher Road

  	
   

  	
  1740 Broadway, MAC
  C7300-060

  	
   

  
	
  Nampa, ID 83687

  	
   

  	
  Denver, CO 80274

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Matthew A. Howe

  	
   

  
	
   

  	
   

  	
   

  	
  Matthew A. Howe

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Curtis Akey

  	
   

  	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
  Curtis Akey Its: Vice
  President and CFO

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Witnessed by:

  	
   

  
	
  Sworn and subscribed
  before me this 1st day

  	
   

  	
   

  	
   

  
	
  of October, 2007.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  s/
  Janis Wilson

  	
   

  
	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Janis Wilson

  	
   

  	
   

  	
  Contract
  Specialist

  	
   

  
	
  NOTARY PUBLIC

  	
   

  	
  NAME AND TITLE

  	
   

  
									



 


 


	
   

  	
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