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EXHIBIT 10.9  

 
 

AMENDED REVOLVING NOTE    
  

Due:
September 1, 2002 

 
 

REVOLVING NOTE
  USANA HEALTH SCIENCES, INC.    
  

	$12,500,000.00	 	Dated: March 26, 2001

Seattle, Washington

    USANA
HEALTH SCIENCES, INC., a Utah corporation ("Borrower") unconditionally promises to pay to the order of Bank of America, N.A. ("Bank"), at its Commercial Banking office,
on or before September 1, 2002, in immediately available funds, the principal sum of Twelve Million Five Hundred Thousand and No/100 Dollars ($12,500,000.00), or such lesser sum as may be
advanced hereunder. Borrower further agrees to pay interest on the daily unpaid principal balance, in arrears on the first Business Day of each month, beginning April  , 2001, in
accordance with the terms, conditions, and definitions of Exhibit A attached, which are incorporated herein. All interest accruing under this Note shall be calculated on the basis of actual
number of days elapsed over a year of 360 days. Also incorporated herein is Exhibit 1 attached hereto, regarding prepayment fees, applicable only to prepayment of LIBOR Rate Loans prior
to conclusion of their Interest Period. 

    This
Note is governed by and shall be construed in accordance with the laws of the State of Washington. This Note is also governed by the Credit Agreement dated March 26, 2001,
between Bank and Borrower (the "Agreement"), and all terms, conditions, and definitions of the Agreement are incorporated herein. This Note amends, restates and continues that certain Revolving Note
made by Borrower in favor of Bank dated September 20, 1999 in the amount of $15,000,000 (as amended from
time to time, the "Prior Note"). The indebtedness evidenced by the Prior Note has not been repaid, satisfied or discharged and nothing herein shall constitute a repayment, satisfaction or discharge of
such indebtedness. This is the "Revolving Note" referred to in the Agreement. 

    All
advances under this Note, all conversions between the interest rate options, and all payments of principal and interest may be reflected on a schedule or a computer-generated
statement which shall become a part hereof. All unpaid principal and accrued but unpaid interest under this Note shall be paid in full on the Termination Date, or earlier pursuant to the terms of the
Agreement. 

    Bank
is authorized to automatically debit each required installment of interest from Borrower's checking account number 68504810 at Bank, or such other deposit account at Bank as
Borrower may authorize in the future. 

    If
a "default" shall occur as such term is defined in the Agreement, interest shall accrue, at the option of the holder of this Note, from the date of Default, at a floating rate per
annum three percent (3%) above the Prime Rate, as the Prime Rate may vary from time to time, and the entire unpaid principal amount of this Note, together with all accrued interest, shall become
immediately due and payable at the option of the holder hereof. 

    Advances
under this Note may be made by Bank at the oral or written request of Gilbert Fuller or Mitchell Walkington, any one acting alone, who are authorized to request Advances and
direct the disposition of any such Advances until written notice of the revocation of such authority is received by Bank at its office indicated above. Any such Advance shall be conclusively presumed
to have been made to or for the benefit of Borrower when made in accordance with such requests or directions, or when said advances are deposited to the credit of an account of Borrower with Bank,
regardless of the fact that persons other than those authorized under this paragraph may have authority to draw against such account. 

    Borrower hereby waives presentment, demand, protest, and notice of dishonor hereof. Each party signing or endorsing this Note signs as maker and principal, and not as guarantor,
surety, or accommodation party; and is estopped from asserting any defense based on any capacity other than maker or principal. 

    ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. 

	 	 	USANA HEALTH SCIENCES, INC.
	
 	
 	

By:	

/s/ GILBERT A. FULLER
 Gilbert A. Fuller, Senior Vice President & CFO

 
 

Exhibit A
  INTEREST PROVISIONS    
  

 
  Article 1: Definitions    
  

    All terms defined below shall have the meaning indicated: 

    1.1  Adjusted LIBOR Rate shall mean for any day that per annum rate equal to the sum of (a) the
Margin, (b) the Assessment Rate, and (c) the quotient of (i) the LIBOR Rate was determined for such day, divided by (ii) the Reserve Adjustment. The Adjusted LIBOR Rate
shall change with any change in the LIBOR Rate on the first day of each Interest Period and on the effective date of any change in the Assessment Rate or Reserve Adjustment. 

    1.2  Agreement shall mean the Credit Agreement dated as of March 26, 2001, between Borrower and
Bank, including all amendments thereto and restatements thereof. 

    1.3  Assessment Rate shall mean as of any day the minimum annual percentage rate established by the
Federal Deposit Insurance Corporation (or any successor) for the assessment due from members of the Bank Insurance Fund (or any successor) in effect for the assessment period during which said day
occurs based on deposits maintained at such members' offices located outside of the United States. In the event of a retroactive reduction in the Assessment Rate after a commencement of any Interest
Period, Bank shall not retroactively adjust as to such Interest Period any interest rate calculated using the Assessment Rate. 

    1.4  Bank shall mean the holder of the Note. 

    1.5  Borrower shall mean the maker of the Note. 

    1.6  Business Day shall mean any day other than a Saturday, Sunday, or other day on which commercial
banks in Seattle, Washington, are authorized or required by law to close. 

    1.7  Commencement Date shall mean the first day of any Interest Period as requested by Borrower. 

    1.8  Floating Rate shall mean the Prime Rate per annum plus the Margin. 

    1.9  Floating Rate Loans shall mean those portions of principal of the Note accruing interest at the
Floating Rate. 

    1.10  Interest Payment Date shall mean (a) the first Business Day of each month for Floating Rate
Loans, (b) the last day of the Interest Period as to LIBOR Rate Loans with Interest Periods of three months or less, (c) as to LIBOR Rate Loans with Interest Periods of more than three
months, on the day which is three months after the Commencement Date and the last day of the Interest Period, and (d) the Termination Date. 

    1.11  Interest Period shall mean the period commencing on the date of any Advance at or conversion to an
Adjusted LIBOR Rate and ending on any date thereafter as selected by Borrower, subject to the restrictions of Section 2.3. If any Interest Period would end on a day which is not a Business Day,
the Interest Period shall be extended to the next succeeding Business Day. 

    1.12  LIBOR Rate shall mean for any Interest Period the per annum rate for U.S. Dollar deposits for a
period equal to the Interest Period appearing on the display designated as "Page 3750" on the Telerate Service (or such other page on that service or such other service designated by the British
Banker's Association for the display of that Association's Interest Settlement Rates for U.S. Dollar deposits) as of 11:00 a.m., London time, on the day which is two London Banking Days prior
to the first day of the Interest Period. If there is no period equal to the Interest Period on the display, the LIBOR Rate shall be determined by straight-line interpolation to the nearest
month (or week or day if expressed in weeks or days) corresponding to the Interest Period between the two nearest neighboring periods on the display. 

    1.13  LIBOR Rate Loans shall mean those portions of principal of the Note accruing interest at the
Adjusted LIBOR Rate. 

    1.14  London Banking Day shall mean any day other than a Saturday, Sunday, or other day on which
commercial banks in London, England, are authorized or required by law to close. 

    1.15  Margin shall have the meaning given in the Agreement. 

    1.16  Note shall mean the promissory note to which this exhibit is attached. 

    1.17  Prime Rate shall mean the rate of interest publicly announced from time to time by Bank as its
"Prime Rate." The Prime Rate is set based on various factors, including Bank's costs and desired return, general economic conditions, and other factors, and is used as a reference point for pricing
some loans. Bank may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public
announcement of a change in the Prime Rate. 

    1.18  Reserve Adjustment shall mean as of any day the remainder of one minus that percentage (expressed
as a decimal) which is the highest of any such percentages established by the Board of Governors of the Federal Reserve System (or any successor) for required reserves (including any emergency,
marginal, or supplemental reserve requirement) regardless of the aggregate amount of deposits with said member bank and without benefit of any possible credit, proration, exemptions, or offsets for
time deposits established at offices of member banks located outside of the United States or for eurocurrency liabilities, if any. 

    1.19  Termination Date shall have the meaning given in the Agreement. 

 
 

Article 2: Interest Rate Options    
  

    2.1  Interest Rate and Payment Date. The Note shall bear interest from the date of Advance on the unpaid
principal balance outstanding from time to time at the Floating Rate or Adjusted LIBOR Rate as selected by Borrower and all accrued interest shall be payable in arrears on each Interest Payment Date. 

    2.2  Procedure. Borrower may, by 11:30 a.m., Pacific time, on any London Banking Day two London
Banking Days before a Commencement Date, request Bank to give an Adjusted LIBOR Rate quote for a specified loan amount and Interest Period. Bank will then quote to Borrower the available Adjusted
LIBOR Rate. Borrower shall have one hour from the time of the quote to elect an Adjusted LIBOR Rate by giving Bank irrevocable notice of such election. 

    2.3  Restrictions. Each Interest Period shall be one, two, three or six months. In no event shall an
Interest Period extend beyond the Termination Date. The minimum amount of a LIBOR Rate Loan shall be $100,000. 

    2.4  Prepayments. If Borrower prepays all or any portion of a LIBOR Rate Loan prior to the end of an
Interest Period, there shall be due at the time of any such prepayment the Prepayment Fee, determined in accordance with Exhibit 1 attached to the Note. Floating Rate Loans may be prepaid on
any Business Day, without premium or penalty. 

    2.5  Reversion to Floating. The Note shall bear interest at the Floating Rate unless an Adjusted LIBOR
Rate is specifically selected. At the termination of any Interest Period each LIBOR Rate Loan shall revert to a Floating Rate Loan unless Borrower directs otherwise pursuant to Section 2.2. 

    2.6  Inability to Participate in Market. If Bank in good faith cannot participate in the Eurodollar
market for legal or practical reasons, there shall be no Adjusted LIBOR Rate option. Bank shall notify Borrower of and when it again becomes legal or practical to participate in the Eurodollar market,
at which time the Adjusted LIBOR Rate option shall resume being an interest rate option. 

    2.7  Costs. Borrower shall reimburse Bank for all costs, taxes, and expenses, and defend and hold Bank
harmless for any liabilities, which Bank may incur as a consequence of any changes in the cost of 

participating in, or in the laws or regulations affecting, the Eurodollar market, including any additional reserve requirements, except to the extent such costs are already calculated into the
Adjusted LIBOR Rate. This covenant shall survive the payment of the Note. 

    2.8  Basis of Quotes. Borrower acknowledges that Bank may or may not in any particular case actually
match-fund a LIBOR Rate Loan. FDIC assessments, and Federal Reserve Board reserve requirements, if any are assessed, will be based on Bank's best estimates of its marginal cost for each of
these items. Whether such estimates in fact represent the actual cost to Bank for any particular dollar or Eurodollar deposit or any LIBOR Rate Loan will depend upon how Bank actually chooses to fund
the LIBOR Rate Loan. By electing an Adjusted LIBOR Rate, Borrower waives any right to object to Bank's means of calculating the Adjusted LIBOR Rate quote accepted by Borrower. 

 
 

Exhibit 1—PREPAYMENT FEES    
  

    If the principal balance of this note is prepaid in whole or in part, whether by voluntary prepayment, operation of law, acceleration or otherwise, a
prepayment fee, in addition to any interest earned, will be immediately payable to the holder of this note. 

    The
amount of the prepayment fee depends on the following: 

	(1)
	The
amount by which interest reference rates as defined below have changed between the time the loan is prepaid and either a) the time the loan was made for fixed rate loans,
or b) the time the interest rate last changed (repriced) for variable rate loans.

	(2)
	A
prepayment fee factor (see "Prepayment Fee Factor Schedule" on reverse).

	(3)
	The
amount of principal prepaid. 

If
the proceeds from a CD or time deposit pledged to secure the loan are used to prepay the loan resulting in payment of an early withdrawal penalty for the CD, a prepayment fee will not also be
charged under the loan. 

 
 

Definition of Prepayment Reference Rate for Variable Rate Loans    
  

    The "Prepayment Reference Rate" used to represent interest rate levels for variable rate loans shall be the index rate used to determine the rate on this loan
having maturities equivalent to the remaining period to interest rate change date (repricing) of this loan rounded upward to the nearest month. The "Initial Prepayment Reference Rate" shall be the
Prepayment Reference Rate at the time of last repricing and a new Initial Prepayment Reference Rate shall be assigned at each subsequent repricing. The "Final Prepayment Reference Rate" shall be the
Prepayment Reference Rate at the time of prepayment. 

 
 

Definition of Prepayment Reference Rate for Fixed Rate Loans    
  

    The "Prepayment Reference Rate" used to represent interest rate levels on fixed rate loans shall be the bond equivalent yield of the average U.S. Treasury rate
having maturities equivalent to the remaining period to maturity of this loan rounded upward to the nearest month. The "Initial Prepayment Reference Rate" shall be the Prepayment Reference Rate at the
time the loan was made. The "Final Prepayment Reference Rate" shall be the Prepayment Reference Rate at time of prepayment. 

    The
Prepayment Reference Rate shall be interpolated from the yields as displayed on Page 119 of the Dow Jones Telerate Service (or such other page or service as may replace that page
or service for the purpose of displaying rates comparable to said U.S. Treasury rates) on the day the loan was made (Initial Prepayment Reference Rate) or the day of prepayment (Final Prepayment
Reference Rate). 

    An
Initial Prepayment Reference Rate of N/A % has been assigned to this loan to represent interest rate levels at origination. 

 
 

Calculation of Prepayment Fee    
  

    If the Initial Prepayment Reference Rate is less than or equal to the Final Prepayment Reference Rate, there is no prepayment fee. 

    If
the Initial Prepayment Reference Rate is greater than the Final Prepayment Reference Rate, the prepayment fee shall be equal to the difference between the Initial and Final
Prepayment Reference Rates (expressed as a decimal), multiplied by the appropriate factor from the Prepayment Fee Factor Schedule, multiplied by the principal amount of the loan being prepaid. 

 
 

Example of Prepayment Fee Calculation    
  

    Variable Rate Loan:  A non-amortizing 6-month LIBOR based loan with
principal of $250,000 is fully prepaid with 3 months remaining until next interest rate change date (repricing). An Initial Prepayment Reference Rate of 7.0% was assigned to the loan at last
repricing. The Final Prepayment Reference Rate (as determined by the 3-month LIBOR index) is 6.5%. Rates therefore have dropped 0.5% since
last repricing and a prepayment fee applies. A prepayment fee factor of 0.31 is determined from Table 3 below and the prepayment fee is computed as follows: 

Prepayment
Fee = (0.07-0.065) × (0.31) × ($250,000) = $387.50 

    Fixed Rate Loan:  An amortizing loan with remaining principal of $250,000 is fully prepaid with
24 months remaining until maturity. An Initial Prepayment Reference Rate of 9.0% was assigned to the loan when the loan was made. The Final Prepayment Reference Rate (as determined by the
current 24-month U.S. Treasury rate on Page 119 of Telerate) is 7.5%. Rates therefore have dropped 1.5% since the loan was made and a prepayment fee applies. A prepayment fee factor of 1.3
is determined from Table 1 below and the prepayment fee is computed as follows: 

Prepayment
Fee = (0.09-0.075) × (1.3) × ($250,000) = $4,875 

 
 

PREPAYMENT FEE FACTOR SCHEDULE    
  

TABLE
I: FULLY AMORTIZING LOANS 

	 
	 	Months Remaining To Maturity/Repricing1

	Proportion of Remaining Principal

Amount Being Prepaid
 

	 	0
	 	3
	 	6
	 	9
	 	12
	 	24
	 	36
	 	48
	 	60
	 	84
	 	120
	 	240
	 	360

	90-100%	 	0	 	.21	 	.36	 	.52	 	.67	 	1.3	 	1.9	 	2.5	 	3.1	 	4.3	 	5.9	 	10.3	 	13.1
	60-89%	 	0	 	.24	 	.44	 	.63	 	.83	 	1.6	 	2.4	 	3.1	 	3.9	 	5.4	 	7.5	 	13.2	 	17.0
	30-59%	 	0	 	.28	 	.53	 	.78	 	1.02	 	2.0	 	3.0	 	4.0	 	5.0	 	7.0	 	9.9	 	18.5	 	24,4
	0-29%	 	0	 	.31	 	.63	 	.92	 	1.22	 	2.4	 	3.7	 	5.0	 	6.3	 	9.0	 	13.4	 	28.3	 	41.8

TABLE
II: PARTIALLY AMORTIZING (BALLOON) LOANS 

	 
	 	Months Remaining To Maturity/Repricing1

	Proportion of Remaining Principal

Amount Being Prepaid
 

	 	0
	 	3
	 	6
	 	9
	 	12
	 	24
	 	36
	 	48
	 	60
	 	84
	 	120
	 	240
	 	360

	90-100%	 	0	 	.26	 	.49	 	.71	 	.94	 	1.8	 	2.7	 	3.4	 	4.2	 	5.6	 	7.4	 	11.6	 	14.0
	60-89%	 	0	 	.30	 	.59	 	.86	 	1.15	 	2.2	 	3.3	 	4.3	 	5.3	 	7.1	 	9.4	 	15.0	 	18.1
	30-59%	 	0	 	.31	 	.63	 	.95	 	1.27	 	2.6	 	3.9	 	5.3	 	6.6	 	9.1	 	12.6	 	21.2	 	26.2
	0-29%	 	0	 	.31	 	.63	 	.95	 	1.27	 	2.6	 	4.0	 	5.4	 	7.0	 	10.2	 	15.7	 	33.4	 	46.0

TABLE
III: NONAMORTIZING (INTEREST ONLY) LOANS 

	 
	 	Months Remaining To Maturity/Repricing1

	Proportion of Remaining Principal

Amount Being Prepaid
 

	 	0
	 	3
	 	6
	 	9
	 	12
	 	24
	 	36
	 	48
	 	60
	 	84
	 	120
	 	240
	 	360

	0-100%	 	0	 	.31	 	.61	 	.91	 	1.21	 	2.3	 	3.4	 	4.4	 	5.3	 	6.9	 	8.9	 	13.0	 	14.8

	1
	For
the remaining period to maturity/repricing between any two maturities/repricings shown in the above schedules, interpolate between the corresponding factors to the
closest month. 

    The
holder of this note is not required to actually reinvest the prepaid principal in any U.S. Government Treasury Obligations, or otherwise prove its actual loss, as a condition to
receiving a prepayment fee as calculated above. 

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AMENDED REVOLVING NOTE

REVOLVING NOTE USANA HEALTH SCIENCES, INC.

Exhibit A INTEREST PROVISIONS

Article 1: Definitions

Article 2: Interest Rate Options

Exhibit 1—PREPAYMENT FEES

Definition of Prepayment Reference Rate for Variable Rate Loans

Definition of Prepayment Reference Rate for Fixed Rate Loans

Calculation of Prepayment Fee

Example of Prepayment Fee Calculation

PREPAYMENT FEE FACTOR SCHEDULEPrepared by MERRILL CORPORATION www.edgaradvantage.com

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EXHIBIT 10.10  

 
 

AMENDED CREDIT AGREEMENT    
  

 
 

CREDIT AGREEMENT    
  

    THIS CREDIT AGREEMENT ("Agreement") is made between USANA Health Sciences, Inc., a Utah corporation ("Borrower"), and Bank of America, N.A., a national
banking association ("Bank"). 

 
 

Recitals    
  

    A.  Borrower
and Bank are parties to that certain Credit Agreement dated September 20, 1999 (as amended or otherwise modified, the "Prior Credit Agreement")
pursuant to which Bank agreed to make revolving loans to Borrower in the maximum principal amount of $15,000,000 (the "Revolving Loan") and to make a term loan to Borrower in the maximum principal
amount of $10,000,000 (the "Term Loan"). 

    B.  Borrower
has requested that Bank extend the principal payment terms on the Term Loan and make certain modifications to the Prior Credit Agreement, which Bank has
agreed to do provided the maximum principal amount of the Revolving Loan is reduced to $12,500,000, all on the terms and conditions herein set forth. 

    NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable consideration receipt of which is hereby acknowledged, the parties agree to amend and restate the
Prior Credit Agreement in its entirety as follows: 

 
 

Article 1 Definitions    
  

    1.1  General Provisions. All terms defined below shall have the meaning indicated. All references in this
Agreement to: 

    (a) "dollars"
or "$" shall mean U.S. dollars; 

    (b) "Article,"
"Section," or "Subsection" shall mean articles, sections, and subsections of this Agreement, unless otherwise indicated; 

    (c) terms
defined in the Washington version of the Uniform Commercial Code, R.C.W. 62A.9-101, et seq., and
not otherwise defined in this Agreement, shall have the meaning given in the UCC; and 

    (d) an
accounting term not otherwise defined in this Agreement shall have the meaning assigned to it under GAAP. 

    1.2  Advances shall mean the disbursement of loan proceeds under the Revolving Loan. An Advance shall not
constitute a payment order under R.C.W. §62A.4A-103. 

    1.3  Available Amount shall mean at any time the amount of the Credit Limit minus the sum of
(i) unpaid balance of the Revolving Note plus (ii) the aggregate face amount of all outstanding unmatured Letters of Credit  plus (ii) the
aggregate amount of all payments made by Bank under Letters of Credit and not yet reimbursed by Borrower pursuant to
Section 4.3. 

    1.4  Business Day shall mean any day other than a Saturday, Sunday, or other day on which commercial
banks in Washington, are authorized or required by law to close. 

    1.5  Consolidated shall refer to consolidated financial reporting of Borrower and its subsidiaries. 

    1.6  Credit Limit shall mean $12,500,000. 

    1.7  Debt shall mean all Consolidated obligations, on a GAAP basis, included in the liability section of
a balance sheet of Borrower. 

    1.8  EBITDA shall mean earnings before interest expense, taxes, depreciation, and amortization. 

    1.9  ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended. 

    1.10  Fixed Charge Coverage Ratio shall mean: 

    (a) as
of the end of each of Borrower's fiscal quarters ending March 31, 2001 through December 29, 2001, the ratio of (i) the sum of
(A) EBITDA of Borrower less (B) the sum of (1) fifty percent (50%) of the capital expenditures made by Borrower  plus (2) the provision
for taxes based on income made by Borrower to (ii) the interest expense of Borrower, in each case, for the period
of four consecutive fiscal quarters then ended; and 

    (b) as
of the end of each of Borrower's fiscal quarters ending March 30, 2002 and thereafter, the ratio of (i) the sum of (A) EBITDA of Borrower  less (B) the sum of (1) the capital
expenditures made by Borrower plus (2) the
provision for taxes based on income made by Borrower, in each case for the period of four consecutive fiscal quarters then ended to (ii) the sum of (A) the interest expense of Borrower
for the period of four consecutive fiscal quarters then ended plus (B) the current portion of long-term Debt of Borrower as of such
date. 

    1.11  Funded Debt shall mean, as of the date of determination, the aggregate principal amount of all Debt
for (a) borrowed money (other than trade indebtedness incurred in the ordinary course of business for value received) having a final maturity of one year or more from the date of determination;
(b) installment purchases of real or personal property; (c) capital leases; and (d) guaranties of Funded Debt of others, without duplication. 

    1.12  GAAP shall mean generally accepted accounting principles as in effect from time to time in the
United States and as consistently applied by Borrower. 

    1.13  Leverage Ratio shall mean as of any date of determination, the ratio of (i) the Funded Debt
of Borrower as of such date of determination to (ii) EBITDA of Borrower for the period of four consecutive fiscal quarters then ended. 

    1.14  Loan Documents shall mean collectively this Agreement, the Notes, the L/C Agreements and all other
mortgages, deeds of trust, assignments of leases and rents, security agreements, guaranties, indemnity agreements, documents, certificates, instruments, financing statements, fixture filings and other
agreements now or later executed in connection with this Agreement. 

    1.15  Margin shall mean (a) as to Floating Rate Loans the "Floating Rate Margin" as determined by
the following chart; (b) as to LIBOR Rate Loans, the "LIBOR Rate Margin" as determined by the following chart; and (c) as to the calculation of the commitment fee under Section 2.4, the
"Fee Margin" as determined by the following chart: 

	Leverage Ratio*
 
	 	Floating Rate Margin
	 	LIBOR Rate Margin
	 	Fee Margin
	 
	< 0.5 to 1	 	-0-	 	1.75	%	0.25	%
	> 0.5 to 1 but < 1.0 to 1	 	0.25	%	2.00	%	0.375	%
	> 1.0 to 1 but < 1.5 to 1	 	0.50	%	2.25	%	0.50	%
	> 1.5 to 1 but < 2.0 to 1	 	0.75	%	2.50	%	0.625	%
	> 2.0 to 1	 	1.00	%	3.00	%	0.75	%

	*
	as determined based on the most recently delivered quarterly Consolidated financial statement of Borrower.

Upon
receipt of a quarterly financial statement showing a decrease or increase in Leverage Ratio which places Borrower in a new pricing category, the Notes and nonusage fee shall begin being
calculated at the higher or lower margin, as the case may be, for the period beginning two Business Days after receipt by Bank of such quarterly statement. 

    1.16  Notes shall mean, collectively, the Revolving Note and the Term Note. 

    1.17  Obligations shall mean Borrower's obligation to repay the loans evidenced by the Notes, with
interest, Borrower's obligation to reimburse Bank for all amounts drawn under Letters of Credit, all Swap Obligations, and all fees, costs, expenses, and indemnifications due to Bank under this
Agreement. 

    1.18  Person shall mean any individual, partnership, corporation, limited liability company, business
trust, unincorporated organization, joint venture, or any governmental entity, department, agency, or political subdivision. 

    1.19  Plan shall mean any employee benefit plan or other plan maintained for Borrower's employees and
covered by Title IV of ERISA, excluding any plan created or operated by or for any labor union. 

    1.20  Swap Contract shall mean any interest rate swap transaction, forward rate transaction, interest
rate cap, floor or collar transaction, swaption, bond or bond price swap, option or forward, treasury lock, any similar transaction, any option to enter into any of the foregoing and any combination
of the foregoing, which agreements may be oral or in writing including, without limitation, any master agreement relating to or governing any or all of the foregoing any related schedule or
confirmations. 

    1.21  Swap Obligations shall mean all indebtedness and obligations of Borrower to Bank under any Swap
Contract, as any or all of them may from time to time be modified, amended, extended, renewed and restated. 

    1.22  Tangible Net Worth shall mean the excess of Consolidated total assets over Consolidated total
liabilities, excluding, however, from the determination of total assets (a) all assets which should be classified as intangible assets (such as goodwill, patents, trademarks, copyrights,
franchises, and deferred charges, including unamortized debt discount and research and development costs), (b) cash held in a sinking or other similar fund established for the purpose of
redemption or other retirement of capital stock, (c) to the extent not already deducted from total assets, reserves for depreciation, depletion, obsolescence, or amortization of properties and
other reserves or appropriations of retained earnings
which have been or should be established in connection with the business of Borrower and its subsidiaries, and (d) any revaluation or other write-up in book value of assets
subsequent to the fiscal year of Borrower last ended at the date Tangible Net Worth is being measured. 

    1.23  Termination Date shall mean September 1, 2002, or such earlier date upon which Bank's
commitment to make Advances or issue Letters of Credit is terminated pursuant to Subsection 10.2(a). 

 
 

Article 2 Revolving Loan    
  

    2.1  Revolving Loan Facility. Subject to the terms and conditions of this Agreement, Bank shall make
Advances to Borrower from time to time, until the Termination Date ("Revolving Loan"), provided that, after giving effect to any requested Advance, the
aggregate amount of all outstanding Advances does not exceed the Available Amount. Borrower may use the Revolving Loan by borrowing, prepaying, and reborrowing the Available Amount, in whole or in
part; provided that Borrower shall fully and finally pay off the Revolving Loan on the Termination Date. 

    2.2  Revolving Note. The obligation of Borrower to repay the Revolving Loan shall be evidenced by a
promissory note (including all renewals, modifications, and extensions thereof, the "Revolving Note") made by Borrower to the order of Bank, and shall bear interest as provided in the Revolving Note.
The Revolving Note shall be secured as provided in Article 4 and shall be in a form satisfactory to Bank. 

    2.3  Procedure for Advances. Borrower may borrow under the Revolving Loan on any Business Day. Borrower
shall give Bank irrevocable notice (written or oral) specifying the amount to be borrowed and the requested borrowing date. Bank must receive such notice on or before 11:30 a.m., Seattle time,
on the day borrowing is requested, or by such earlier time as may be required under the Revolving Note. All Advances shall be discretionary to the extent notification by Borrower is given 

subsequent to that time. Borrower agrees that each Advance will be automatically deposited into Borrower's account number 68504810 at Bank, or such other of Borrower's accounts with Bank as designated
in writing by Borrower. 

    2.4  Nonusage Fee. On the last Business Day of each December, March, June, and September, and on the
Termination Date, Borrower shall pay to Bank in arrears a per annum nonusage fee equal to (a) the Fee Margin, multiplied by (b) the average daily Available Amount. The nonusage fee
payable under this Section 2.4 shall be deemed fully earned when due and non-refundable when paid. 

 
 

Article 3 Term Loan    
  

    Subject to the terms and conditions of the Prior Credit Agreement, Bank made to Borrower a term loan in the original principal amount of $10,000,000 ("Term
Loan"), which, as of the date hereof, has an outstanding principal balance of $8,000,000. The Term Loan shall have repayment terms as provided in a promissory note made by Borrower to the order of
Bank, in a form satisfactory to Bank (including all renewals, modifications, and extensions thereof, the "Term Note"). The Term Note shall be secured as provided in Article 4 and shall bear
interest as provided in the Term Note. 

 
 

Article 4 Letters of Credit    
  

    4.1  Issuance. Upon Borrower's execution of Bank's standard form application and agreement for letters of
credit ("L/C Agreement(s)"), Bank shall issue on Borrower's behalf standby or commercial letters of credit ("Letters of Credit") until the Termination Date,  provided that, after giving effect to any
requested Letter of Credit, the sum of (i) the aggregate face amount of all outstanding unmatured
Letters of Credit plus (ii) the aggregate amount of all payments made by Bank under Letters of Credit and not yet reimbursed by Borrower pursuant to Section 4.3 does not exceed the
lesser of the Available Amount or $500,000, provided, further, that the tenor of no standby letter of
credit shall extend beyond one year, the tenor of no commercial letter of credit shall extend beyond 120 days and the tenor of no Letter of Credit (standby or commercial) shall extend beyond
90 days past the Termination Date. 

    4.2  Fees. Borrower shall pay to Bank a standby letter of credit fee on the face amount of each standby
letter of credit from the date such Letter of Credit is issued until such Letter of Credit shall be terminated or drawn at a per annum rate equal to the LIBOR Rate Margin. Standby letter of credit
fees shall be payable in advance on the date of the issuance, extension or other modification of or to any standby letter of credit. Computations of standby letter of credit fees shall be made on the
basis of a year of three hundred sixty (360) days, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such fees are payable.
Borrower shall pay to Bank issuance, amendment, negotiation and other standby and commercial letter of credit fees calculated and payable in accordance with Bank's then-current standard
fee schedule, and shall reimburse Bank for all out-of-pocket costs, legal fees and expenses. 

    4.3  Reimbursement. If there is a draw under a Letter of Credit, Borrower shall on demand immediately
reimburse Bank for the amount of the draw, together with interest on the amount drawn, from the date of draw until paid, at a floating rate equal to the Prime Rate (as defined in any Note) plus 3% per
annum. Bank is authorized to automatically debit any draw under a Letter of Credit from Borrower's checking account number 68504810 at Bank, or such other deposit account at Bank as Borrower may
authorize in the future. Bank shall in addition have all rights provided in the L/C Agreement executed in respect to such Letter of Credit. Any default in the L/C Agreement shall be a Default. 

    4.4  Yield Indemnity. If any law or regulation imposes or increases any reserve, special deposit or
similar requirement against letters of credit issued by Bank or subjects Bank to any tax, charge, fee deduction, or withholding of any kind in regards to the Letters of Credit, Borrower shall promptly
on demand indemnify Bank for any such increased costs, taxes or charges. 

 
 

Article 5 Collateral Security    
  

    5.1  Collateral. As security for the prompt payment and performance of all Obligations, Borrower has
granted or will grant to Bank a first lien security interest in the following collateral (the "Collateral"): all of Borrower's accounts, inventory, equipment, general intangibles, certain real
property located in the State of Utah, and all proceeds thereof. 

    5.2  Maintenance of Security. Borrower shall execute and deliver to Bank, whenever requested, such
security instruments as Bank deems necessary, in its sole opinion, for the preservation of its security interest or to ensure the priority of each security interest, and deliver to Bank all Collateral
or proceeds of Collateral, the perfection of which requires possession by Bank. Borrower shall upon demand by Bank take whatever additional action is necessary for Bank continuously to maintain a
perfected first-lien security interest in all Collateral. Borrower hereby irrevocably appoints Bank as its attorney-in-fact, solely for the purpose of executing on
Borrower's behalf any financing statement or other security document deemed necessary by Bank to carry out the purposes of this Article, which appointment shall continue so long as this Agreement
remains in effect or any Obligations remain outstanding. 

    5.3  Negative Pledge. So long as any amount is payable by Borrower under this Agreement, Borrower shall
not allow any Collateral to be transferred or encumbered, except in the ordinary course of business or to secure the obligations under this Agreement. 

    5.4  Setoff. Bank may exercise the right of setoff, assert its banker's lien, or counterclaim against any
interest of Borrower in each deposit account which Borrower may now or later have with Bank, or any property which is now or shall later be in Bank's possession. 

 
 

Article 6 Conditions of Lending    
  

    Bank's obligation to make the Term Loan and make the initial Advance or to issue any Letter of Credit is subject to the conditions precedent listed in Sections
6.1 through 6.3, and to make subsequent Advances and to issue subsequent Letters of Credit is subject to the conditions precedent listed in Sections 6.5 and 6.6 unless waived by Bank in writing: 

    6.1  Authorization. Borrower shall have delivered to Bank a certified copy of the resolution of
Borrower's board of directors authorizing the transactions contemplated by this Agreement and the execution, delivery, and performance of all Loan Documents, together with appropriate certificates of
incumbency. 

    6.2  Documentation. Borrower shall have executed and delivered to Bank all documents to reflect the
existence of the Obligations and to perfect, as a first lien, the security interests granted to Bank. 

    6.3  Loan Fee. Borrower shall have paid to Bank a loan fee to be agreed to between Borrower and Bank. 

    6.4  Proof of Insurance. Proof of insurance as required by Section 8.11 shall have been provided
to Bank. 

    6.5  Representations and Warranties. The representations and warranties made by Borrower in the Loan
Documents and in any certificate, document, or financial statement furnished at any time shall continue to be true and correct, except to the extent that such representations and warranties expressly
relate to an earlier date. 

    6.6  Compliance. No Default or other event which, upon notice or lapse of time or both would constitute a
Default, shall have occurred and be continuing, or shall exist after giving effect to the advance of credit to be made. 

 
 

Article 7 Representations and Warranties    
  

    To induce Bank to enter into this Agreement, Borrower represents, warrants, and covenants to Bank as follows: 

    7.1  Existence. Borrower is in good standing as a corporation under the laws of the State of Utah, and
has the power, authority, and legal right to own and operate its property or lease the property it
operates and to conduct its current business; and is qualified to do business and is in good standing in all other jurisdictions where the ownership, lease, or operation of its property or the conduct
of its business requires such qualification. 

    7.2  Enforceability. The Loan Documents, when executed and delivered by Borrower, shall be enforceable
against Borrower in accordance with their respective terms. 

    7.3  No Legal Bar. The execution, delivery, and performance by Borrower of the Loan Documents, and the
use of the loan proceeds, shall not violate any existing law or regulation applicable to Borrower; any ruling applicable to Borrower of any court, arbitrator, or governmental agency or body of any
kind; Borrower's organizational documents; any security issued by Borrower; or any mortgage, indenture, lease, contract, undertaking, or other agreement to which Borrower is a party or by which
Borrower or any of its property may be bound. 

    7.4  Financial Information. By submitting each of the financial statements required by Subsections 8.5(a)
and 8.5(b), Borrower is deemed to represent and warrant that: (a) such statement is complete and correct and fairly presents the Consolidated financial condition of Borrower as of the date of
such statement; (b) such statement discloses all Consolidated liabilities of Borrower that are required to be reflected or reserved against under GAAP, whether liquidated or unliquidated, fixed
or contingent; and (c) such statement has been prepared in accordance with GAAP. As of this date, there has been no adverse change in Borrower's financial condition since preparation of the
last such financial statements delivered to Bank which would materially impair Borrower's ability to repay the Obligations. 

    7.5  Liens and Encumbrances. As of this date, Borrower has good and marketable title to its property free
and clear of all security interests, liens, encumbrances, or rights of others, except as disclosed in writing to Bank, and except for taxes which are not yet delinquent and for conditions,
restrictions, easements, and rights of way of record which do not materially affect the use of any of Borrower's property. 

    7.6  Litigation. Except as disclosed in writing to Bank, there is no threatened (to Borrower's knowledge)
or pending litigation, investigation, arbitration, or administrative action which may materially adversely affect Borrower's business, property, operations, or financial condition. 

    7.7  Payment of Taxes. Borrower has timely filed or caused to be filed all tax returns when required to
be filed; and has timely paid all taxes, assessments, fees, licenses, excise taxes, franchise taxes, governmental liens, penalties, and other charges levied or assessed against Borrower or any of its
property imposed on it by any governmental authority, agency, or instrumentality that are due and payable (other than those returns or payments of which the amount, enforceability, or validity are
contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP are provided on Borrower's books). 

    7.8  Location of Borrower. Borrower's place of business (or, if Borrower has more than one place of
business, its chief executive office) is located at the address listed in this Agreement as Borrower's address for notice purposes. 

    7.9  Employee Benefit Plan. Borrower is in compliance in all respects with the provisions of ERISA and
the regulations and published interpretations thereunder. Borrower has not engaged in any acts or omissions which would make Borrower liable to the Plan, to any of its participants, or to the Internal
Revenue Service, under ERISA. 

    7.10  Misrepresentations. No information, exhibits, data, or reports furnished by Borrower or delivered
to Bank in connection with Borrower's application for credit misstates any material fact, or omits any fact necessary to make such information, exhibits, data, or reports not misleading. 

    7.11  No Default. Borrower is not in default in any Loan Document, or in any contract, agreement, or
instrument to which it is a party. 

    7.12  No Burdensome Restrictions. No contract or other instrument to which Borrower is a party, or order,
award, or decree of any court, arbitrator, or governmental agency, materially impairs Borrower's ability to repay the Obligations. 

 
 

Article 8 Affirmative Covenants    
  

    So long as this Agreement shall remain in effect, or any liability exists under the Loan Documents, Borrower shall: 

    8.1  Use of Proceeds. Use the proceeds of the Revolving Loan for other general corporate purposes. 

    8.2  Tangible Net Worth. Maintain as of the end of each of Borrower's fiscal quarters, a Tangible Net
Worth of not less than the sum of (i) $12,000,000, plus (ii) 50% of the cumulative net income of Borrower for all fiscal quarters ended after December 31, 2000, in which
Borrower's net income was greater than zero, plus (iii) 100% of the amount, if any, by which the shareholders' equity of Borrower has increased since December 31, 2000 as a result of the
issuance of capital stock or the conversion of debt securities into capital stock. 

    8.3  Fixed Charge Coverage Ratio. Maintain as of the end of each of Borrower's fiscal quarters, a Fixed
Charge Coverage Ratio equal to or greater than 1.75 to 1 for each of Borrower's fiscal quarters ending March 31, 2001 through December 31, 2001 and 1.5 to 1 for each of Borrower's fiscal
quarters ending March 31, 2002 and thereafter. 

    8.4  Leverage Ratio. Maintain as of the end of each of Borrower's fiscal quarters, a Leverage Ratio equal
to or less than 2.4 to 1 for each of Borrower's fiscal quarters ending March 31, 2001 through December 31, 2001 and 2.0 to 1 for each of Borrower's fiscal quarters ending
March 31, 2002 and thereafter. 

    8.5  Financial Information. Maintain a standard system of accounting in accordance with GAAP, and furnish
to Bank the following: 

    (a) Quarterly Financial Statements. As soon as available and, in any event, within 45 days after the end of each
except the last fiscal quarter of each fiscal year, a copy of the Consolidated statement of income and retained earnings of Borrower for the quarter and for the current fiscal year through such
quarter, and for each such quarter a copy of the Consolidated balance sheet, Consolidated statement of shareholders' equity, and Consolidated statement of cash flows of Borrower as of the end of such
quarter, setting forth, in each case, in comparative form, figures for the corresponding period of the preceding fiscal year, all in reasonable detail and satisfactory in scope to Bank, prepared under
the supervision of the chief financial officer of Borrower, and in form and substance satisfactory to Bank; 

    (b) Annual Financial Statements. As soon as available and, in any event, within 90 days after the end of each
fiscal year, a copy of the Consolidated balance sheet, Consolidated statement of income and retained earnings, Consolidated statement of shareholders' equity, and Consolidated statement of cash flows
of Borrower for such year, setting forth in each case, in comparative form, corresponding figures from the preceding annual statements, each audited by independent certified public accountants of
recognized standing selected by Borrower and satisfactory to Bank certifying that such statement is complete and correct, fairly presents without qualification the financial condition of Borrower for
such period, is prepared in accordance with GAAP, and has been audited in conformity with generally accepted auditing standards; 

    (c) SEC Reporting. As soon as made available to the Securities and Exchange Commission or Borrower's shareholders,
copies of all 10Q and 10K filings or their equivalent; 

    (d) Compliance Certificate. With each of the statements delivered pursuant to Subsections (a) and
(b) above, a certificate in the form of Exhibit A attached; 

    (e) Annual Forecast. As soon as available and, in any event, within 60 days after the end of each fiscal year, an
annual forecast for Borrower for the next succeeding fiscal year projecting on a quarterly basis expected income statements, balance sheets, statements of cash flows and schedule of capital
expenditures on a consolidating basis for Borrower's United States and Japan operations, accompanied by a certificate of the chief financial officer of Borrower certifying that such projections
constitute Borrower's best estimates prepared in good faith; and 

    (f)  Other Information. Such other reports and information as Bank shall reasonably request from time to time. 

    8.6  Maintenance of Existence. Preserve and maintain its existence, powers, and privileges in the
jurisdiction of its formation, and qualify and remain qualified in each jurisdiction in which its presence is necessary or desirable in view of its business, operations, or ownership of its property.
Borrower shall also maintain and preserve all of its property which is necessary or useful in the proper course of its business, in good working order and condition, ordinary wear and tear excepted. 

    8.7  Books and Records. Keep accurate and complete books, accounts, and records in which complete entries
shall be made in accordance with GAAP, reflecting all financial transactions of Borrower. 

    8.8  Access to Premises and Records. At all reasonable times and as often as Bank may reasonably request,
permit any authorized representative designated by Bank to have access to the premises, property, and financial records of Borrower, including all records relating to the finances, operations, and
procedures of Borrower, and to make copies of or abstracts from such records. 

    8.9  Notice of Events. Furnish Bank prompt written notice of: 

    (a) Proceedings. Any proceeding instituted by or against Borrower in any court or before any commission or regulatory
body, or any proceeding threatened against it in writing by any governmental agency which if adversely determined would have a material adverse effect on Borrower's business, property, or financial
condition, or where the amount involved is $100,000 or more and not covered by insurance; 

    (b) Material Development. Any material development in any such proceeding referred to in Subsection 8.9(a); 

    (c) Defaults. Any accident, event, or condition which is or, with notice or lapse of time or both, would constitute a
Default, or a default under any other agreement to which Borrower is a party; and 

    (d) Adverse Effect. Any other action, event, or condition of any nature which could result in a material adverse effect
on the business, property, or financial condition of Borrower. 

    8.10  Payment of Debts and Taxes. Pay all Debt and perform all obligations promptly and in accordance
with their terms, and pay and discharge promptly all taxes, assessments, and governmental charges or levies imposed upon Borrower, its property, or revenues prior to the date on which penalties attach
thereto, as well as all lawful claims for labor, material, supplies, or otherwise which, if unpaid, might become a lien or charge upon Borrower's property. Borrower shall not, however, be required to
pay or discharge any such tax, assessment, charge, levy, or claim so long as its enforceability, amount, or validity is contested in good faith by appropriate proceedings. 

    8.11  Insurance. Maintain commercially adequate levels of coverage with financially sound and reputable
insurers, including, without limitation: 

    (a) Property Insurance. Insurance on all property of a character usually insured by organizations engaged in the same or
similar type of business as Borrower against all risks, casualties, and losses through extended coverage or otherwise and of the kind customarily insured against by such organizations, with such
policy or policies covering tangible collateral to name Bank as loss payee, as its interests may appear; 

    (b) Liability Insurance. Public liability insurance against tort claims which may be asserted against Borrower; and 

    (c) Additional Insurance. Such other insurance as may be required by law. 

 
 

Article 9 Negative Covenants    
  

    So long as this Agreement shall remain in effect, or any liability shall exist under the Loan Documents, Borrower shall not, without prior written consent of
Bank, which consent shall not be unreasonably withheld: 

    9.1  Debt. Create, incur, assume, permit to exist, or otherwise become committed for any Debt except any: 

    (a) Unsecured Trade Credit. Unsecured, short-term Debt arising from current operations by purchasing on
credit goods, services, supplies, or merchandise and not constituting borrowings; 

    (b) Existing
Obligations. Debt owing to Bank, or in existence as of this date and disclosed to Bank, and all renewals, modifications, and extensions thereof; 

    (c) Lease Agreements. Debt incurred in connection with capital leases calling for payments in the aggregate not
exceeding $100,000 in any one fiscal year; and 

    (d) Ordinary Course. Debt incurred in the ordinary course of business and appearing on the liability section of the
balance sheet of Borrower, prepared in accordance with GAAP, including, without limitation, accrued liabilities and taxes payable. 

    9.2  Liens and Encumbrances. Create, incur, or assume, or agree to create, incur, or assume any lien,
whether consensual or nonconsensual, on any of its property, or to enter into any lease with respect to any of its property except: 

    (a) Existing Liens. Liens in effect as of this date; 

    (b) Liens of Bank. Liens in favor of Bank; 

    (c) Tax Liens. Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings; and 

    (d) Incidental Liens. Other liens incidental to the conduct of its business or the ownership of its property which are
not incurred in connection with the borrowing of money or the obtaining of credit, and which do not in the aggregate materially impair the value or use of property. 

    9.3  Guaranties. Assume, guaranty, endorse, become a surety for, indemnify, or otherwise in any fashion
become responsible for, directly or indirectly, any obligation of any Person, except: 

    (a) Negotiable Instruments. Endorsements on negotiable instruments for deposit or collection in the ordinary course of
business. 

    (b) Performance Bonds. Performance bonds as required in the ordinary course of Borrower's business; and 

    (c) Subsidiary Guaranties. Guaranties in favor of Bank or an affiliate of Bank in respect of obligations owed by
Borrower or a subsidiary of Borrower to Bank or an affiliate of Bank. 

    9.4  Disposition of Assets. Sell, transfer, lease, or otherwise assign or dispose of a substantial
portion of its property to any Person, outside the ordinary course of business. 

    9.5  Mergers. Become a party to any merger, consolidation, or like structural change, or make any
substantial transfer or contribution to, or material investment in, stock, shares, or licenses of any Person. 

    9.6  Capital Structure. Purchase, retire, or redeem any of its capital stock or otherwise effect any
change in Borrower's capital structure. 

    9.7  Dividends. Declare or pay any dividend on any class of Borrower's capital stock, except dividends
payable in the form of its capital stock. 

    9.8  Wage and Hour Laws. Engage in any material violation of the federal Fair Labor Standards Act or any
comparable state wage and hour law. 

    9.9  ERISA. Engage in any act or omission which would make Borrower materially liable under ERISA to the
Plan, to any of its participants, or to the Internal Revenue Service. 

    9.10  Dissolution. Adopt any agreement or resolution for dissolving, terminating, or substantially
altering Borrower's present business activities. 

    9.11  Business Activities. Engage or enter into any activity which is unusual to Borrower's existing
business. 

    9.12  Capital Expenditures. Make or commit to make expenditures for fixed assets or other capital
expenditures which in the aggregate are in excess of (i) $7,000,000 for Borrower's fiscal year ending December 31, 2001 or (ii) $5,000,000 for Borrower's fiscal years ending
December 31, 2002 and thereafter. 

    9.13  Permissible Loans and Investments. Make any loan or advance to any Person other than in the
ordinary course of business, or make any investment outside the ordinary course of Borrower's business, except: 

    (a) Certificates of Deposit. Investments in certificates of deposit maturing within one year from the date of
acquisition from any one or more of the top 25 commercial banks in the United States; 

    (b) Money Market. Money market mutual funds, bankers' acceptances, eurodollar investments, repurchase agreements, and
other short-term money market investments acceptable to Bank; 

    (c) Commercial Paper. Prime commercial paper with maturities of less than one year; and 

    (d) U. S. Government Paper. Obligations issued or guaranteed by the United States Government or its agencies. 

 
 

Article 10 Events and Consequences of Default    
  

    10.1  Events of Default. Any of the following events shall, at the option of Bank and at any time without
regard to any previous knowledge on the part of Bank, constitute a default by Borrower under the terms of this Agreement, the Notes, and all other Loan Documents ("Default"): 

    (a) Nonpayment. Any payment or reimbursement due or demanded under this Agreement or any Loan Document is not made
within three days of the date when due; 

    (b) Breach of Warranty. Any representation or warranty made or deemed made by Borrower under this Agreement or any other
Loan Document, or any certificate, notice, or report furnished pursuant hereto or thereto, proves to be false or misleading in any material respect when made; 

    (c) Failure to Perform. Any other term, covenant, or agreement contained in any Loan Document is not performed or
satisfied, and, if remediable, such failure continues unremedied for 30 days after written notice thereof has been given to Borrower by Bank; 

    (d) Collateral. Bank fails to have a valid, enforceable, and perfected first lien security interest in the Collateral,
and such failure continues for 30 days after Borrower receives written notice thereof from Bank; 

    (e) Defaults on Other Obligations. There exists a default in the performance of any other agreement or obligation for
the payment of borrowed money, for the deferred purchase price of property or services, or for the payment of rent under any lease, whether by acceleration or otherwise, which would permit such
obligation to be declared due and payable prior to its stated maturity; and such default continues for 30 days after Borrower receives written notice thereof from the creditor so affected; 

    (f)  Loss, Destruction, or Condemnation of Property. A portion of Borrower's property is affected by any uninsured loss,
damage, destruction, theft, sale, or encumbrance other than created herein or is condemned, seized, or appropriated, the effect of which materially impairs Borrower's financial condition or its
ability to pay its debts as they come due; 

    (g) Attachment Proceedings and Insolvency. Borrower or any of Borrower's property is affected by any: 

     (i) Judgment
lien, execution, attachment, garnishment, general assignment for the benefit of creditors, sequestration, or forfeiture, to the extent Borrower's financial
condition or its ability to pay its debts as they come due is thereby materially impaired; or 

    (ii) Proceeding
under the laws of any jurisdiction relating to receivership, insolvency, or bankruptcy, whether brought voluntarily or involuntarily by or against
Borrower, including, without limitation, any reorganization of assets, deferment or arrangement of debts, or any similar proceeding, and, if such proceeding is involuntarily brought against Borrower,
it is not dismissed within 60 days; 

    (h) Judgments.
Final judgment on claims not covered by insurance which, together with other outstanding final judgments against Borrower, exceeds $500,000, is rendered
against Borrower and is not discharged, vacated, or reversed, or its execution stayed pending appeal, within 60 days after entry, or is not discharged within 60 days after the expiration
of such stay; or 

    (i)  Government
Approvals. Any governmental approval, registration, or filing with any governmental authority, now or later required in connection with the performance
by Borrower of its obligations under the Loan Documents, is revoked, withdrawn, or withheld, or fails to remain in full force and effect, except Borrower shall have 60 days after notice of any
such event to take whatever action is necessary to obtain all necessary approvals, registrations, and filings. 

    10.2  Remedies Upon Default. If any Default occurs under Subsection 10.1(g), Bank's commitment to
make Advances and issue Letters of Credit shall immediately and automatically terminate, and all Obligations, including all accrued interest, shall immediately and automatically become due and
payable, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower, and Bank may immediately exercise any or all of the following remedies for
Default; and if any other Default occurs and is continuing, Bank may, upon notice to Borrower: 

    (a) Terminate Commitments. Terminate Bank's commitment to make Advances and issue Letters of Credit; 

    (b) Suspend Commitments. Refuse to make Advances and issue Letters of Credit until any Default has been cured; 

    (c) Accelerate. Declare all or any of the Notes, together with all accrued interest, to be immediately due and payable
without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower; 

    (d) Collateral. Proceed to realize on any or all Collateral by any available means; 

    (e) Setoff. Exercise its right of setoff against deposit accounts of Borrower with Bank, or place an administrative
freeze on any such accounts; and/or 

    (f)  All Remedies. Pursue any other available legal and equitable remedies. 

    All
of Bank's rights and remedies in all Loan Documents shall be cumulative and can be exercised separately or concurrently. Amounts paid or received hereunder in respect of issued
and outstanding Letters of Credit which exceed amounts paid by Bank under such Letters of Credit shall be held (and applied) as cash collateral to secure the performance of all obligations of Borrower
owing to Bank hereunder and under the other Loan Documents. 

 
 

Article 11 Miscellaneous    
  

    11.1  Manner of Payments. 

    (a) Payments on Nonbusiness Days. Whenever any event is to occur or any payment is to be made under any Loan Document on
any day other than a Business Day, such event may occur or such payment may be made on the next succeeding Business Day and such extension of time shall be included in computation of interest in
connection with any such payment. 

    (b) Payments. All payments and prepayments to be made by Borrower shall be made to Bank when due, at Bank's office as
may be designated by Bank, without offsets or counterclaims for any amounts claimed by Borrower to be due from Bank, in U.S. dollars and in immediately available funds. Borrower agrees that all
principal and interest payments may be deducted automatically on the due date from Borrower's account number 68504810 at Bank, or such other of Borrower's accounts with Bank as designated in writing
by Borrower. Bank will debit the account on the dates the payments become due. If a due date does not fall on a Business Day, Bank will debit the account on the first Business Day following the due
date. 

    (c) Application of Payments. All payments made by Borrower shall be applied first against fees, expenses, and
indemnities due; second, against interest due; and third, against principal, with Bank having the right, after a Default which is continuing, to apply any payments or collections received against any
one or more of the Obligations in any manner which Bank may choose. 

    (d) Recording of Payments. Bank is authorized to record on a schedule or computer-generated statement the date and
amount of each Advance, all changes in interest rates, and all payments of principal and interest. All such schedules or statements shall constitute prima facie evidence of the accuracy of the
information so recorded. 

    11.2  Notices. Bank may make Advances, and make conversions between interest rates, based on telephonic,
e-mail, and oral requests made by any one or more of Gilbert Fuller, Doug Hekking, or Mitchell Walkington. All other notices, demands, and other communications to be given pursuant to any
of the Loan Documents shall be in writing and shall be deemed received the earlier of when actually received, or two days after being mailed, postage prepaid and addressed as follows, or as later
designated in writing: 

	Bank:	 	Borrower:
	

BANK OF AMERICA, N.A.

Commercial Banking

WA1-501-35-01

800 Fifth Avenue, Floor 35

Seattle, WA 98104

Attention: Mark N. Crawford	
 	

USANA HEALTH SCIENCES, INC.

3838 West Parkway Boulevard

Salt Lake City, Utah 84120

Attention: Gilbert A. Fuller

    11.3  Documentation and Administration Expenses. Borrower shall pay, reimburse, and indemnify Bank for
all of Bank's reasonable costs and expenses, including, without limitation, all accounting, appraisal, and report preparation fees or expenses, all attorneys' fees (including the allocated cost of 

in-house counsel), legal expenses, and recording or filing fees, incurred in connection with the negotiation, preparation, execution, and administration of this Agreement and all other
Loan Documents, and all amendments, supplements, or modifications thereto, and the perfection of all security interests, liens, or encumbrances that may be granted to Bank. Borrower acknowledges that
any legal counsel retained or employed by Bank acts solely on Bank's behalf and not on Borrower's behalf, despite Borrower's obligation to reimburse Bank for the cost of such legal counsel, and that
Borrower has had sufficient opportunity to seek the advice of its own legal counsel with regard to this Agreement. 

    11.4  Collection Expenses. The nonprevailing party shall, upon demand by the prevailing party, reimburse
the prevailing party for all of its costs, expenses, and reasonable attorneys' fees (including the allocated cost of in-house counsel) incurred in connection with any controversy or claim
between said parties relating to this Agreement or any of the other Loan Documents, or to an alleged tort arising out of the transactions evidenced by this Agreement, including those incurred in any
action, bankruptcy proceeding, arbitration or other alternative dispute resolution proceeding, or appeal, or in the course of exercising any judicial or nonjudicial remedies. 

    11.5  Waiver. No failure to exercise and no delay in exercising, on the part of Bank, any right, power,
or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power, or privilege. Further, no waiver or indulgence by Bank of any Default shall constitute a waiver of Bank's right to declare a subsequent similar failure or event to
be a Default. 

    11.6  Assignment. This Agreement is made expressly for the sole benefit of Borrower and for the
protection of Bank and its successors and assigns. The rights of Borrower hereunder shall not be assignable by operation of law or otherwise, without the prior written consent of Bank. 

    11.7  Merger. The rights and obligations set forth in this Agreement shall not merge into or be
extinguished by any of the Loan Documents, but shall continue and remain valid and enforceable. This Agreement and the other Loan Documents constitute Bank's entire agreement with Borrower with regard
to the Revolving Loan and the Term Loan, and supersede all prior writings and oral negotiations. Upon execution of this Agreement, any prior loan agreement between Borrower and Bank shall be deemed
superseded by this Agreement, and amounts outstanding under such prior agreement and its related loan documents shall be deemed Advances under the Revolving Loan. No oral or written representation,
covenant, commitment, waiver, or promise of either Bank or Borrower shall have any effect, whether made before or after the date of this Agreement, unless contained in this Agreement or another Loan
Document, or in an amendment complying with Section 11.8. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF
A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.  

     11.8  Amendments. Any amendment or waiver of, or consent to any departure by Borrower from any provision of, this Agreement shall
be in writing signed by each party to be bound thereby, and shall be effective only in the specific instance and for the specific purpose for which given. 

    11.9  Jurisdiction and Venue. Borrower irrevocably consents to the personal jurisdiction of the state and
federal courts located in the State of Washington in any action brought under this Agreement or any other Loan Document, and any action based upon the transactions encompassed by this Agreement,
whether or not based in contract. Venue of any such action shall be laid in King County, Washington, unless some other venue is required for Bank to fully realize upon the assets of Borrower, or any
collateral or guaranties. 

    11.10  Mandatory Arbitration. 

    (a) At
the request of either Bank or Borrower, any controversy or claim between Bank and Borrower, arising from or relating to this Agreement or any of the other Loan
Documents, or arising from an alleged tort, shall be settled by arbitration in Seattle, Washington. The United 

States Arbitration Act shall apply even though this Agreement is otherwise governed by Washington law. The proceedings shall be administered by the American Arbitration Association under its
commercial rules of arbitration. Any controversy over whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the arbitration award may be entered in any court having
jurisdiction over the parties. The institution and maintenance of an action for judicial relief or pursuit of an ancillary or provisional remedy shall not constitute a waiver of the right of either
party, including the plaintiff, to submit the controversy or claim to arbitration if such action for judicial relief is contested. For purposes of the application of the statute of limitations, the
filing of an arbitration pursuant to this subsection is the equivalent of the filing of a lawsuit, and any claim or controversy which may be arbitrated under this subsection is subject to any
applicable statute of limitations. The arbitrator(s) will have the authority to decide whether any such claim or controversy is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. The parties consent to the joinder of any guarantor, hypothecator, or other party having an interest relating to the claim or controversy being arbitrated in any proceedings
under this Section. 

    (b) Notwithstanding
the provisions of subsection (a), no controversy or claim shall be submitted to arbitration without the consent of all parties if at the time of the
proposed submission, such controversy or claim arises from or relates to an obligation secured by real property. 

    (c) No
provision of this subsection shall limit the right of Borrower or Bank to exercise self-help remedies such as set-off, foreclosure,
retention or sale of any collateral, or obtaining any ancillary, provisional, or interim remedies from a court of competent jurisdiction before, after, or during the pendency of any arbitration
proceeding. The exercise of any such remedy does not waive the right of either party to request arbitration. 

    11.11  Construction. Each term of this Agreement and each Loan Document shall be binding to the extent
permitted by law and shall be governed by the laws of the State of Washington, excluding its conflict of laws rules. If one or more of the provisions of this Agreement should be invalid, illegal, or
unenforceable in any respect, the remaining provisions of this Agreement shall remain effective and enforceable. If there is a conflict among the provisions of any Loan Documents, the provisions of
this Agreement shall be controlling. The captions and organization of this Agreement are for convenience only, and shall not be construed to affect any provision of this Agreement. 

    11.12  Counterparts. This Agreement and each Loan Document may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures to such counterparts were upon the same instrument. 

    DATED
as of the 26th day of March, 2001. 

	 Borrower:	 	Bank:
	
 USANA HEALTH SCIENCES, INC.	
 	

BANK OF AMERICA, N.A.
	

By:	

/s/ GILBERT A. FULLER
	
 	

By	

/s/ MARK N. CRAWFORD

	 	Gilbert A. Fuller, SVP & CFO	 	 	Mark N. Crawford, Senior Vice President

 
 

EXHIBIT A TO CREDIT AGREEMENT
  [Form of Certificate to be sent with financial reports]    
  

[Date] 

Bank
of America, N.A.

Commercial Banking

WA1-501-35-01

800 Fifth Avenue, Floor 35

Seattle, WA 98104 

Attention:
Mark N. Crawford 

Re:
Certificate of Chief Financial Officer 

Ladies
and Gentlemen: 

    With
respect to that certain Credit Agreement between USANA Health Sciences, Inc. ("Borrower"), and Bank of America, N.A. ("Bank") dated as of March 26, 2001 (the
"Agreement"), we hereby represent to you the following (capitalized terms used in this certificate shall have the same meaning as in the Agreement): 

	1.
	Enclosed
are financial statements required by Section 8.5 of the Agreement.

	2.
	As
of the date of such financial statements, Borrower's Tangible Net Worth is $            .

	4.
	As
of the date of such financial statements, Borrower's ratio of Fixed Charge Coverage Ratio, as defined in Section 8.3, is      to 1.

	5.
	As
of the date of such financial statements, Borrower's Leverage Ratio, as defined in Section 8.4, is      to 1.

	6.
	As
of the date of such financial statements, Borrower's year-to-date cumulative capital expenditures are $            .

	7.
	Such
financial statements are complete and correct, fairly present, without qualification, the Consolidated financial condition of Borrower for such period, and are prepared in
accordance with GAAP;

	8.
	No
Default exists, nor any event which, with lapse of time or upon the giving of notice would constitute a Default under the Agreement. 

Sincerely,

	/s/ GILBERT A. FULLER

	Gilbert A. Fuller

Chief Financial Officer

USANA Health Sciences, Inc.

QuickLinks

AMENDED CREDIT AGREEMENT

CREDIT AGREEMENT

Recitals

Article 1 Definitions

Article 2 Revolving Loan

Article 3 Term Loan

Article 4 Letters of Credit

Article 5 Collateral Security

Article 6 Conditions of Lending

Article 7 Representations and Warranties

Article 8 Affirmative Covenants

Article 9 Negative Covenants

Article 10 Events and Consequences of Default

Article 11 Miscellaneous

EXHIBIT A TO CREDIT AGREEMENT [Form of Certificate to be sent with financial reports]

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