Exhibit 10.29


 


CREDIT AGREEMENT


 


THIS CREDIT AGREEMENT (this “Agreement”) is entered
into as of December 1, 2004, by and between EVANS & SUTHERLAND
COMPUTER CORPORATION, a Utah corporation (“Borrower’), and WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Bank”).


 


RECITALS


 


Borrower has requested that Bank extend or continue
credit to Borrower as described below, and Bank has agreed to provide such
credit to Borrower on the terms and conditions contained herein.


 


NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Bank and Borrower hereby agree as follows:


 


ARTICLE I

CREDIT TERMS


 


SECTION 1.1.
LETTER OF CREDIT LINE.


 


(a)                                  Letter of Credit Line. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to establish a letter of credit line (“Letter of
Credit Line) under which Bank shall issue or cause an affiliate to issue
standby letters of credit for the account of Borrower to support delivery of
simulation software packages to customers (a Performance Letter of Credit”) and
to support financial obligations of Borrower (a “Financial Letter of Credit’)
(each, a “Letter of Credit” and collectively, “Letters of Credit”) from time to
time up to and including December 1, 2006; provided however, that the aggregate
of all undrawn amounts, and all amounts drawn
and unreimbursed, under any Letters of Credit issued under the Letter of
Credit Line shall not at any time exceed the principal amount of Ten Million
Dollars ($10,000,000.00). The form and substance of each Letter of Credit shall
be subject to approval by Bank, in its sole discretion. No Letter of Credit
shall have an expiration date greater than 365 days past the maturity date of
the Letter of Credit Line. Each Letter of Credit shall be subject to the additional
terms of the Letter of Credit agreements, applications and any related
documents required by Bank in connection with the issuance thereof (each, a “Letter
of Credit Agreement”). Bank has issued thirteen (13) standby letters of credit
for the account of the Borrower in the aggregate amount of Three Million One
Hundred Forty One Thousand Nine
Hundred Forty Eight and 05/100 Dollars ($3,141,948.05), each of which is
outstanding as of the date hereof and shall be deemed Included within the
definition of Letters of Credit set forth herein.


 


(b)                                 Repayment of Drafts. Each drawing paid under any Letter of Credit
shall be repaid by Borrower in accordance with the provisions of the applicable
Letter of Credit Agreement.


 


SECTION 1.2.
FOREIGN EXCHANGE FACILITY.


 


(a)
Foreign Exchange Facility. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make available to Borrower a facility (the “Foreign
Exchange Facility”), the extension of which shall not be subject to a fee, and
under which Bank, from time to time up to and including December 1, 2005,
will enter into foreign exchange spot contracts (contracts


 


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with
a value date of not more than two calendar days after the contract is entered into)
for the account of Borrower for the purchase and/or sale by Borrower in United
States dollars of foreign currencies designated by Borrower; provided however,
that the maximum amount of all outstanding foreign exchange contracts shall not
at any time exceed an aggregate of Two Hundred Thousand United States Dollars
(US$200,000.00). No foreign exchange spot contract shall be executed for a term
which extends beyond December 1, 2005. All foreign exchange transactions
shall be subject to the additional terms of a Foreign Exchange Agreement dated
as of December 1, 2004 (“Foreign Exchange Agreement”), all terms of which
are incorporated herein by this reference.


 


(b)                                 Settlement. Each foreign exchange contract under the Foreign Exchange Facility
shall be settled on its maturity date by Bank’s debit to any deposit account
maintained by Borrower with Bank.


 


SECTION 1.3.
INTEREST/FEES.


 


(a)                                  Interest.    The
outstanding principal balance of each credit subject hereto shall bear
interest, and the amount of each drawing paid under any Letter of Credit shall
bear interest from the date such drawing is paid to the date such amount is
fully repaid by Borrower, at the rate of interest set forth in each promissory
note or other instrument or document executed in connection therewith.


 


(b)                                 Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document
required hereby.


 


(c)                                  Commitment Fee. Borrower shall pay to Bank a non-refundable commitment fee for the Letter of
Credit Line equal to $37,500.00, which fee shall be due and payable in full on December 1,
2004.


 


(d)                                 Unused Commitment Fee. Borrower shall pay to Bank a fee equal to
one quarter of one percent (.25%) per annum (computed on the basis of a 360-day
year, actual days elapsed) on the average daily unused amount of the Letter of
Credit Line, which fee shall be calculated on a
quarterly basis by Bank and shall be due and payable by Borrower in arrears within ten (10) days after each
billing is sent by Bank.


 


(e)                                  Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the
issuance of each Performance Letter of Credit, as determined by Bank, equal to
one percent (1%) per annum (computed on the basis of a 360-day year, actual
days elapsed) of the face amount thereof, and (ii) fees upon the issuance of
each Financial Letter of Credit, as determined by Bank, equal to one percent
(1.5%) per annum (computed on the basis of a 360-day year, actual days elapsed)
of the face amount thereof, and (iii) fees upon the payment or negotiation of
each drawing under any Letter of Credit and fees upon the occurrence of any
other activity with respect to any Letter of Credit (including without
limitation, the transfer, amendment or cancellation of any Letter of Credit)
determined in accordance with Bank’s standard fees and charges then in effect
for such activity.


 


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SECTION 1.4.
COLLATERAL.


 


As
security for all indebtedness of Borrower to Bank subject hereto and arising
pursuant to any deposit or treasury management services provided by Bank to
Borrower, Borrower hereby grants to Bank security interests of first priority
in all Borrower’s interest in that certain money market savings account
#3801563101, over which Borrower shall have no control (the °Cash Collateral
Account”). All of the foregoing shall be evidenced by and subject to the terms
of such security agreements, financing statements, and other documents as Bank
shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and
expenses incurred by Bank in connection with any of the foregoing security.


 


The
balance in the Cash Collateral Account shall at all times be equal to or
greater than one hundred percent (100%) of the aggregate of (i) all issued and
outstanding, unpaid and unreimbursed Letters of Credit, plus (ii) such amounts
as Bank may determine, in its sole discretion, are required to adequately
secure Borrower’s liability and performance of any foreign exchange spot
contracts under the Foreign Exchange Facility and deposit and treasury
management services provided to Borrower by Bank. In the event that the balance
of the Cash Collateral Account, for any reason and at any time, is less than
the required amount, Debtor shall, within five (5) Business Days after Bank gives Borrower verbal
or written notice of such deficiency, deposit additional monies into the Cash
Collateral Account in amounts sufficient to achieve the required amount. As
used herein, “Business Day” means any day except a Saturday, Sunday or any
other day on which commercial banks in Utah are authorized or required by law
to dose.


 


ARTICLE II

REPRESENTATIONS AND WARRANTIES


 


Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement
and shall continue in full force and effect until the full and final payment,
and satisfaction and discharge, of all obligations of Borrower to Bank subject
to this Agreement.


 


SECTION 2.1.
LEGAL STATUS. Borrower is a corporation, duly organized and existing and in
good standing under the laws of the State of Utah, and is qualified or licensed
to do business (and is in good standing as a foreign corporation, if
applicable) in all jurisdictions in which such qualification or licensing is
required or in which the failure to so qualify or to be so licensed could have a
material adverse effect on Borrower.


 


SECTION 2.2.
AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract,
instrument and other document required hereby or at any time hereafter
delivered to Bank in connection herewith (collectively, the “Loan Documents”)
have been duly authorized, and upon their execution and delivery in accordance
with the provisions hereof will constitute legal, valid and binding agreements
and obligations of Borrower or the party which executes the same, enforceable
in accordance with their respective terms.


 


SECTION 2.3.
NO VIOLATION. The execution, delivery and performance by Borrower of each of
the Loan Documents do not violate any provision of any law or regulation, or
contravene any provision of the Articles of Incorporation or By-Laws of
Borrower, or result in any breach of or default under any contract, obligation,
indenture or other instrument to which Borrower is a party or by which Borrower
may be bound.


 


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SECTION 2.4.
LITIGATION. There are no pending, or to the best of Borrower’s knowledge
threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
could have a material adverse effect on the financial condition or operation of
Borrower other than those disclosed by Borrower to Bank in writing prior to the
date hereof.


 


SECTION 2.5.
CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of Borrower dated October 1,
2004, a true copy of which has been delivered by Borrower to Bank prior to the
date hereof, (a) is complete and correct and presents fairly the financial
condition of Borrower, (b) discloses all liabilities of Borrower that are
required to be reflected or reserved against under generally accepted
accounting principles, whether liquidated or unliquidated, fixed or contingent,
and (c) has been prepared in accordance with generally accepted accounting
principles consistently applied. Since the date of such financial statement
there has been no material adverse change in the financial condition of
Borrower, nor has Borrower mortgaged, pledged, granted a security interest in
or otherwise encumbered any of Its assets or properties except in favor of Bank
or as otherwise permitted by Bank in writing.


 


SECTION 2.6.
INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or
adjustments of its income tax payable with respect to any year.


 


SECTION 2.7. NO SUBORDINATION. There
is no agreement, indenture, contract or instrument to which Borrower is a party
or by which Borrower may be bound that requires the subordination in right of
payment of any of Borrower’s obligations subject to this Agreement to any other
obligation of Borrower.


 


SECTION 2.8. PERMITS, FRANCHISES.
Borrower possesses, and will hereafter possess, all permits, consents,
approvals, franchises and licenses required and rights to all trademarks, trade
names, patents, and fictitious names, if any, necessary to enable it to conduct
the business in which it is now engaged in compliance with applicable law.


 


SECTION 2.9.
ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
or recodified from time to time (“ERISA”); Borrower has not violated any
provision of any defined employee pension benefit plan (as defined in ERISA)
maintained or contributed to by Borrower (each, a °Plan”); no Reportable Event
as defined in ERISA has occurred and is continuing with respect to any Plan
initiated by Borrower, Borrower has met its minimum funding requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as they come due in accordance with the Plan documents and
under generally accepted accounting principles.


 


SECTION 2.10.
OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed
money, any purchase money obligation or any other material lease, commitment,
contract, instrument or obligation.


 


SECTION 2.11.
ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior
to the date hereof, Borrower is in compliance in all material respects with all
applicable federal or state environmental, hazardous waste, health and safety
statutes, and any


 


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rules
or regulations adopted pursuant thereto, which govern or affect any of Borrower’s
operations and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any
of the same may be amended, modified or supplemented from time to time. None of
the operations of Borrower is the subject of any federal or state investigation
evaluating whether any remedial action involving a material expenditure is
needed to respond to a release of any toxic or hazardous waste or substance
into the environment. Borrower has no material contingent liability in
connection with any release of any toxic or hazardous waste or substance into
the environment.


 


ARTICLE III CONDITIONS


 


SECTION 3.1.
CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any
credit contemplated by this Agreement is subject to the fulfillment to Bank’s
satisfaction of all of the following conditions:


 


(a)                                  Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank’s counsel.


 


(b)                                 Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following, duly executed:


 


(i)                                     This Agreement and each promissory note or
other instrument or document required hereby.


(ii)                                  Certificate of Incumbency.


(iii)                               Corporate Resolution: Borrowing.


(iv)                              S/A; Borrower. Specific Rights to Payment


(v)                                 Foreign Exchange Agreement.


(vi)                              Such other documents as Bank may require under any other Section of
this Agreement.


 


(c)                                  Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower, nor any material decline, as determined by Bank, in the market value
of any collateral required hereunder or a substantial or material portion of
the assets of Borrower.


 


SECTION 3.2.
CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank’s satisfaction of each of the following conditions:


 


(a)                                  Compliance. The representations and warranties contained herein and in each of the
other Loan Documents shall be true on and as of the date of the signing of this
Agreement and on the date of each extension of credit by Bank pursuant hereto,
with the same effect as though such representations and warranties had been
made on and as of each such date, and on each such date, no Event of Default as
defined herein, and no condition, event or act which with the giving of notice
or the passage of time or both would constitute such an Event of Default, shall
have occurred and be continuing or shall exist.


 


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(b)                                 Documentation. Bank shall have received all additional
documents which may be required in connection with such extension of credit.


 


(c)                                  Additional Letter of Credit Documentation. Prior to the issuance of each Letter of
Credit, Bank shall have received a Letter of Credit Agreement, properly
completed and duly executed by Borrower.


 


ARTICLE IV

AFFIRMATIVE COVENANTS


 


Borrower
covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated
or unliquidated) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject
hereto, Borrower shall, unless Bank otherwise consents in writing:


 


SECTION 4.1.
PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and in
the manner specified therein.


 


SECTION 4.2.
ACCOUNTING RECORDS. Maintain adequate books and records in accordance with
generally accepted accounting principles consistently applied, and permit any
representative of Bank, at any reasonable time, to inspect, audit and examine
such books and records, to make copies of the same, and to inspect the
properties of Borrower.


 


SECTION 4.3. FINANCIAL STATEMENTS.
Provide to Bank all of the following, in form and detail satisfactory to Bank:


 


(a)                                  not later than 120 days after and as of the
end of each fiscal year, an audited financial statement of Borrower, prepared by a certified public accountant
acceptable to Bank, to include balance sheet, income statement and statement of
cash flows;


 


(b)                                 not later than 45 days after and as of the
end of each quarter, a financial statement of Borrower, prepared by Borrower,
to include balance sheet and income statement;


 


(c)                                  from time to time such other information as
Bank may reasonably request


 


SECTION 4.4. COMPLIANCE. Preserve and
maintain all licenses, permits, governmental approvals, rights, privileges and
franchises necessary for the conduct of Its business; and comply with the provisions
of all documents pursuant to which Borrower is organized and/or which govern
Borrowers continued existence and with the requirements of all laws, rules,
regulations and orders of any governmental authority applicable to Borrower and/or its business.


 


SECTION 4.5. INSURANCE. Maintain and
keep in force insurance of the types and in amounts customarily carried in
lines of business similar to that of Borrower, including but not limited to
tire, extended coverage, public liability, flood, property damage and workers’
compensation, with all such insurance carried with companies and in amounts
satisfactory to


 


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Bank,
and deliver to Bank from time
to time at Bank’s request schedules setting forth all insurance then in effect.


 


SECTION 4.6.
FACILITIES. Keep all properties useful or necessary to Borrower’s business in
good repair and condition, and from time to time make necessary repairs,
renewals and replacements thereto so that such properties shall be fully and
efficiently preserved and maintained.


 


SECTION 4.7.
TAXES AND OTHER LIABILITIES. Pay and
discharge when due any and all indebtedness, obligations, assessments and
taxes, both real or personal, including without limitation federal and state
income taxes and state and local property taxes and assessments, except such
(a) as Borrower may in good faith contest or as to which a bona fide dispute
may arise, and (b) for which Borrower has made provision, to Bank’s
satisfaction, for eventual payment thereof in the event Borrower is obligated
to make such payment.


 


SECTION 4.8.
LITIGATION. Promptly give notice in writing to Bank of any litigation pending
or threatened against Borrower.


 


SECTION 4.9.
NOTICE TO BANK. Promptly (but in no event more than five (5) days after the occurrence of each such event or matter)
give written notice to Bank in
reasonable detail of: (a) the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined In ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any
other cause affecting Borrower’s property.


 


ARTICLE V

NEGATIVE COVENANTS


 


Borrower
further covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower will not without Bank’s prior written consent:


 


SECTION 5.1.
USE OF FUNDS.. Use any of the proceeds of any credit extended hereunder except
for the purposes stated in Article I hereof.


 


SECTION 5.2.
OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness
or liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except (a) the liabilities of Borrower to Bank, and (b) any other liabilities
of Borrower existing as of, and disclosed to Bank prior to, the date hereof.


 


SECTION 5.3.
MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity; make any substantial change in the nature of Borrower’s


 


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business
as conducted as of the date hereof; acquire all or substantially all of the
assets of any other entity; nor sell, lease, transferor otherwise dispose of
all or a substantial or material portion of Borrowers assets except in the
ordinary course of its business.


 


SECTION 5.4.
LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in
any person or entity, except any of the foregoing existing as of, and disclosed
to Bank prior to, the date hereof.


 


ARTICLE VI

EVENTS OF DEFAULT


 


SECTION 6.1.
The occurrence of any of the following shall constitute an “Event of Default”
under this Agreement:


 


(a)                                  Borrower shall fail to pay when due any
principal, interest, fees or other amounts payable under any of the Loan
Documents.


 


(b)                                 Any financial statement or certificate
furnished to Bank in connection with, or any representation or warranty made by
Borrower or any other party under this Agreement or any other Loan Document
shall prove to be incorrect, false or misleading in any material respect when
furnished or made.


 


(c)                                  Any default in the performance of or
compliance with any obligation, agreement or other provision contained herein
or in any other Loan Document (other than those referred to in subsections (a)
and (b) above), and with respect to any such default which by its nature can be
cured,
such default shall continue for
a period of twenty (20) days from its occurrence.


 


(d)                                 Any default in the payment or performance of
any obligation, or any defined event of default, under the terms of any
contract or instrument (other than any of the Loan Documents) pursuant to which
Borrower, any guarantor hereunder or any general partner or joint venturer in
any Borrower which is a partnership or joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a “Third Party Obligor”) has incurred any
debt or other liability to any person or entity, including Bank.


 


(e)                                  The filing of a notice of judgment lien
against Borrower or any Third Party Obligor, or the recording of any abstract
of judgment against Borrower or any Third Party Obligor in any county in which
Borrower or such Third Party Obligor has an interest in real property; or the
service of a notice of levy and/or of a writ of
attachment or execution, or other like process, against the assets of Borrower
or any Third Party Obligor; or the entry of a judgment against Borrower or any
Third Party Obligor.


 


(f)                                    Borrower or any Third Party Obligor shall
become insolvent, or shall suffer or consent to or apply for the appointment of
a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as
they become due, or shall make a general assignment for the benefit of
creditors; Borrower or any Third Party Obligor shall file a voluntary petition
in bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act,
Title 11 of the United States Code, as amended or recodified from time to time
(“Bankruptcy Code”), or under


 


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any
state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable slate or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower or any Third Party Obligor, or Borrower or any Third Party Obligor shall file an answer admitting the jurisdiction of the court
and the material allegations of any involuntary petition; or Borrower or any
Third Party Obligor shall be adjudicated a bankrupt, or an order for relief
shall be entered against Borrower or any Third Party Obligor by any court of
competent jurisdiction under the Bankruptcy Code or any other applicable state
or federal law relating to bankruptcy, reorganization or other relief for
debtors.


 


(g)                                 There shall exist or occur any event or
condition which Bank in good faith believes impairs, or is substantially likely
to impair, the prospect of payment or performance by Borrower of its
obligations under any of the Loan Documents.


 


(h)                                 The death or incapacity of any individual Borrower or Third Party
Obligor. The dissolution or liquidation of any Borrower or Third Party Obligor
which is a corporation, partnership, joint venture or other type of entity; or
Borrower or any such Third Party Obligor, or any of its directors, stockholders
or members, shall take action seeking to effect the dissolution or liquidation
of such Borrower or Third Party Obligor.


 


(i)                                     Any change in ownership of an aggregate of
twenty-five percent (25%) or more of the common stock of Borrower.


 


SECTION 6.2. REMEDIES. Upon the
occurrence of any Event of Default: (a) all indebtedness of Borrower under each
of the Loan Documents, any term thereof to the contrary notwithstanding, shall
at Bank’s option and without notice become immediately due and payable without
presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law,
including without limitation the right to resort to any or all security for any
credit subject hereto and to exercise any or all of the rights of a beneficiary
or secured party pursuant to applicable law. All rights, powers and remedies of
Bank may be exercised at any time by Bank and from time to time after the
occurrence of an Event of Default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.


 


ARTICLE VII

MISCELLANEOUS


 


SECTION 7.1.
NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as a
waiver of such right, power or remedy; nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof
or the exercise of any other right, power or remedy, Any waiver, permit,
consent or approval of any kind by Bank of
any breach of or default under any
of the Loan Documents must be in writing and shall be effective only to
the extent set forth in such writing.


 


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SECTION 7.2.
NOTICES. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing delivered to each party at the following address:


 


	
  BORROWER:

  	
  EVANS
  & SUTHERLAND COMPUTER CORPORATION

  
	
   

  	
  600
  Komas Drive, P.O. Box 58700

  
	
   

  	
  Salt
  Lake City, Utah 84108

  
	
   

  	
   

  
	
  BANK:

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
  Utah
  RCBO

  
	
   

  	
  299
  South Main, 9th Floor

  
	
   

  	
  Salt
  Lake City, Utah 84111

  



 


or
to such other address as any party may designate by written notice to all other
parties. Each such notice, request and demand shall be deemed given or made as
follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.


 


SECTION 7.3.
COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon demand the full
amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys’ fees (to include outside counsel fees and all allocated
costs of Bank’s in-house counsel), expended or incurred by Bank in connection
with (a) the negotiation and preparation of this Agreement and the other Loan
Documents, Bank’s continued administration hereof and thereof, and the
preparation of any amendments and waivers hereto and thereto, (b) the enforcement
of Bank’s rights and/or the collection of any amounts which become due to Bank
under any of the Loan Documents, and (c) the prosecution or defense of any
action in any way related to any of
the Loan Documents, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.


 


SECTION 7.4.
SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interest hereunder without Bank’s prior written consent.
Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank’s rights and
benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.


 


SECTION 7.5.
ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents
constitute the entire agreement between Borrower and Bank with respect to each
credit subject hereto and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be amended or modified only in writing signed by each party
hereto.


 


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SECTION 7.6.
NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity shall be a
third party beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any other of the Loan Documents to
which it is not a party.


 


SECTION 7.7.
TIME. Time is of the essence of each and every provision of this Agreement and
each other of the Loan Documents.


 


SECTION 7.8.
SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be
prohibited by or Invalid under applicable law, such provision shall be
Ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of
this Agreement.


 


SECTION 7.9.
COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original,
and all of which when taken together shall constitute one and the same
Agreement.


 


SECTION 7.10.
GOVERNING LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of Utah.


 


SECTION 7.11.
ARBITRATION.


 


(a)                                  Arbitration. The parties hereto agree, upon demand by any
party, to submit to binding arbitration all claims, disputes and controversies
between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise arising
out of or relating to in any way (i) the loan and related Loan Documents which
are the subject of this Agreement and its negotiation, execution,
collateralization, administration, repayment, modification, extension,
substitution, formation, inducement, enforcement, default or termination; or
(ii) requests for additional credit.


 


(b)                                 Governing Rules. Any arbitration proceeding will (i) proceed
in a location in Utah selected by the American Arbitration Association (“AAA”):
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA’s, or such
other administrator as the parties shall mutually agree upon, in accordance
with the AAA’s commercial dispute resolution procedures, unless the claim or
counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA’s optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as
applicable, as the `Rules”). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded
to it under 12 U.S.C. §91 or any similar applicable state law.


 


(c)                                  No Waiver of Provisional Remedies, Self-Help
and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property


 


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collateral;
(ii) exercise self-help remedies relating to collateral or proceeds of
collateral such as setoff or repossession; or (iii) obtain provisional or
ancillary remedies such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency of any
arbitration proceeding. This exclusion does not constitute a waiver of the
right or obligation of any party to submit any dispute to arbitration or
reference hereunder, including those arising from the exercise of the actions
detailed in sections (i), (ii) and (iii) of this paragraph.


 


(d)                                 Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award
of greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate In all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Utah or a neutral retired judge of the state
or federal judiciary of Utah, in either case with a minimum of ten years
experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to
state a claim or motions for summary adjudication. The arbitrator shall resolve
all disputes in accordance with the substantive law of Utah and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Utah Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.


 


(e)                                  Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no
later than 20 days before the hearing date and within 180 days of the filing of the dispute
with the AM. Any requests for an extension of the discovery periods, or any
discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party’s presentation
and that no alternative means for obtaining information is available.


 


(f)                                    Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate
arbitration proceeding and such dispute shall not be consolidated with other
disputes or included in any class proceeding.


 


(g)                                 Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.


 


(h)                                 Real Property Collateral: Judicial Reference. Notwithstanding anything herein to the
contrary, no dispute shall be submitted to arbitration if the dispute concerns
indebtedness


 


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secured
directly or indirectly, in whole or in part, by any real property unless (i)
the holder of the mortgage,
lien or security interest specifically
elects in writing to proceed with the arbitration, or (ii) all parties
to the arbitration waive any rights
or benefits that might accrue to them by virtue of the single action rule statute of Utah, thereby agreeing that
all indebtedness and obligations of the parties, and all mortgages, liens and
security interests securing such indebtedness and obligations, shall remain
fully valid and enforceable. If any such dispute is not submitted to
arbitration, the dispute shall be referred to a master in accordance with Utah
Rule of Civil Procedure 53, and this general reference agreement is intended to
be specifically enforceable. A master with the qualifications required herein
for arbitrators shall be selected pursuant to the AAA’s selection procedures.
Judgment upon the decision rendered by a master shall be entered in the court
in which such proceeding was commenced In accordance with Utah Rule of Civil
Procedure 53(e).


 


(i)                                     Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results
thereof, except for disclosures
of information by a party required in the ordinary course of its business or by
applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially
applies to a dispute, the arbitration provision most directly related to the Loan Documents or the
subject matter of the dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties.


 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first
written above.


 


	
  EVANS
  & SUTHERLAND COMPUTER

  CORPORATION

  	
   

  	
  WELLS
  FARGO BANK,

  NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Kevin A. Papryzycki

  	
   

  	
   

  	
  By:

  	
  /s/
  Troy Akagi

  	
   

  
	
   

  	
  Kevin
  A. Paprzycki, CFO/Secretary

  	
   

  	
   

  	
  Relationship
  Manager

  
									



 


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