Document:

Prepared by MERRILL CORPORATION

Exhibit 10.1

 

 

LOAN

AGREEMENT

 

 

This

loan agreement dated January 12, 2000 is by and between Sento Corporation,

(Borrower), and Wyoming Industrial Development Corporation, (WIDC).

 

Section

1.0

BORROWER,

AGREEMENT TO LEND AND BASIC TERMS

Type of Borrower

 

	

  1.1

  	

  Borrower is a

  corporation, incorporated under the laws of the State of Utah.

  

 

Type

of Loan

 

	

  1.2

  	

  Subject to the terms and conditions of this Loan

  Agreement, WIDC agrees to lend to Borrower and Borrower agrees to borrow from

  WIDC as follows (the “Loan”): The Loan shall be evidenced by a promissory

  note in the form attached hereto as Exhibit “A” (the “Note”). All the

  provisions of the Loan Agreement, and any documents and instruments delivered

  in connection herewith, shall apply with equal force and effect to the

  promissory note, hereafter executed by Borrower which, in whole or in part,

  represent a renewal, extension for any period, increase in amount,

  substitution or rearrangement of any part of the Loan originally evidenced by

  the Note.

  

 

Loan Advances Plus Principal Plus Interest

 

	

  1.3

  	

  The loan shall be

  repaid in principal and interest payments under the note The Loan will be a

  maximum of Nine Hundred Ninety-Nine Thousand, Nine Hundred Dollars ($999,900)

  (the “Loan Amount”). The Loan proceeds shall be used to purchase certain

  equipment and goods for use in the Borrower’s business. The Lender will make

  Loan advances directly to the vendors upon presentation to the Lender of a

  valid invoice. The total amount of advances will not exceed $999,900 and no

  further Loan advances will be made after June 23, 2000. The Loan Amount,

  together with interest, shall be payable in fifty-seven (57) equal monthly

  installments. Once the final disbursement of the Loan Amount is made by the

  Lender, the Lender will send the Borrower a letter stating the following: (i)

  the total sum of the Loan Amount advanced, (ii) the amount of the monthly

  payment due (principal and interest), (iii) the date that the first monthly

  installment payment is due, to be set approximately ninety (90) days from

  final disbursement, and (iv) the day of the month that each monthly payment

  thereafter will be due. On the date of the first installment payment, the

  Borrower will pay all accrued interest current to that date, and thereafter

  will make the monthly payments on the Note as set forth in the Lender’s

  letter.

  

 

Principal

Repayment

 

	

  1.4

  	

  As long as the Borrower

  is not in default under this loan agreement, Borrower shall have the right to

  make prepayments on the loan without premium or penalty of any kind. All

  prepayments shall be applied first to accrued interest and then to principal.

  

Interest

 

	

  1.5

  	

  The interest rate shall

  be at a blended rate of approximately 8.5% on the unpaid principal balance.

  The guaranteed portion shall be calculated on the official fixed rate of the

  Wyoming Retirement System for FSA. The non guaranteed portion shall be

  calculated at a fixed rate of 9.50% Interest shall be based upon a year of

  365 days and computed on actual number of days elapsed.

  

 

Loan

 

	

  1.6

  	

  WIDC is requiring an origination

  fee of $9,990.00. Additional fees will consist of a 2% USDA Rural Development

  fee on the guaranteed portion of the Loan in the amount of $15,998.40, and

  lender’s attorney fees for loan documentation.

  

 

Guaranties

 

	

  1.7

  	

  As a condition to

  Lender making the Loan on the terms and conditions set forth herein, and for

  good and valuable consideration which consideration includes benefits

  accruing to the guarantors as a result of this agreement between Lender and

  Borrower, Sento Technical Services Corporation, Sento Consulting Corp, and

  Sento Training Corp must unconditionally, jointly, and severally guarantee to

  Lender that Borrower will fully and promptly and faithfully perform, pay and

  discharge all its present and future obligations and covenants under this

  agreement including, without limitation, the Note and Security Agreement.

  

 

Quick

Ratio

 

	

  1.8

  	

  Borrower shall maintain

  a quick ratio of Quick Assets to Current Liabilities minus Deferred Revenue

  of at least .75 to 1.0.

  

 

Debt/Net

Worth Ratio

 

	

  1.9

  	

  A ratio of Total

  Liabilities less Subordinated Debt less Deferred Revenue to Tangible Net

  Worth of not more that 3.00 to 1.00.

  

 

Section

2.0                            THE

COLLATERAL

 

As

collateral, WIDC shall receive a First Lien position on Borrower’s property

described in Schedule “A” to the Security Agreement given in connection

herewith (which Security Agreement is, by this reference incorporated herein),

and a second lien position on the Borrower’s property described in Schedule “B”

to the Security Agreement.

Section

3.0                            BORROWER REPRESENTATIONS

AND WARRANTIES

 

Corporate Existence

 

	

  3.1

  	

  Borrower warrants that

  it is a corporation, duly organized, validly existing and in good standing

  under the laws of the jurisdiction of their incorporation, and is duly

  licensed or qualified within the State of Wyoming.

  

 

Authority to Borrow

 

	

  3.2

  	

  Borrower is duly

  authorized to execute and deliver this Loan Agreement and all documents and

  instruments in connection herewith. Borrower is and will continue to be duly

  authorized to borrow hereunder and to perform all of the other terms and

  provisions of this Loan Agreement.

  

 

Litigation

and Proceedings

 

	

  3.3

  	

  There is no material

  litigation or governmental proceeding pending or threatened against Borrower

  or a Guarantor, which, if adversely determined, could have a material adverse

  effect on the financial condition of Borrower or any Guarantor.

  

 

Pension

or Retirement Plans

 

	

  3.4

  	

  Borrower is in

  compliance with all provisions of the Employee Retirement Income Act of 1974,

  as amended, (ERISA), including but not limited to the provisions related to

  minimum funding requirements for an employee pension or other benefit plan

  maintained by Borrower which is covered by ERISA.

  

 

Title and Lien

 

	

  3.5

  	

  Borrower has good and

  marketable title to each of the properties and assets reflected on its

  financial statements except as to those that have been since sold or

  otherwise disclosed to WIDC in writing. No assets or revenues of Borrower are

  subject to any lien except as required or permitted by this Loan Agreement,

  disclosed in the financial statements or otherwise previously disclosed to

  WIDC in writing.

  

 

No Adverse Change

 

	

  3.6

  	

  The Borrower covenants

  that there has been neither any material adverse change in Borrower’s

  financial condition nor any material adverse change in Borrower, for any

  reason, since December 23, 1999.

  

 

Section 4.0                 AFFIRMATIVE COVENANTS

 

Until the Loans and all obligations have been

performed by Borrower, Borrower agrees to do all of the following unless WIDC

shall otherwise Consent in writing. If Borrower is a corporation and has

subsidiaries, Borrower also shall cause each of its subsidiaries to comply with

the following: Lender will not unduly withhold concurrence.

 

Inspection Rights

 

	

  4.1

  	

  Borrower will permit

  WIDC, at any reasonable time, to examine and make copies of the records and

  books of account of Borrower, to visit the properties of Borrower and to

  discuss the affairs, finances and accounts of Borrower, any of its officers

  or directors.

  

 

Taxes

 

	

  4.2

  	

  Borrower will timely

  pay all taxes, assessments, and governmental charges assessed against it or

  any of its properties or income prior to the date on which penalties will

  attach.

  

 

Insurance

 

	

  4.3

  	

  Borrower will keep in

  force with responsible companies, policies of all such risk that is usually

  carried by similar businesses, including without limitation, liabilities on

  account of damage to persons or property and applicable workers compensation

  insurance, in amounts, form and content and through an insurer satisfactory

  to WIDC.

  

 

Financial Information

 

	

  4.4

  	

  Receipt of annual CPA

  audited balance sheet and profit and loss financial statements on Borrower no

  later than 120 days from the Borrower’s year-end. In addition, Borrower shall

  also deliver compiled quarterly in-house prepared balance sheet and profit

  and loss statements on the Borrower no later than 45 days after each quarter

  ending.

  

 

Other Promises

 

	

  4.5

  	

  Borrower shall comply

  with all terms, conditions, and promises of the Note and the Security

  Agreement, which agreements are, by this reference incorporated herein.

  

 

Corporate Existence & Standing

 

	

  4.6

  	

  Borrower shall remain a

  corporation duly incorporated, validly existing, and in good standing under

  the law of the State of Utah, with all requisite authority to conduct its

  business in Wyoming.

  

 

5.0                                NEGATIVE

COVENANTS

 

Until

the Loans and all obligations have been performed by Borrower, Borrower agrees

to do all of the following unless WIDC shall otherwise consent in writing. If

Borrower is a corporation and has subsidiaries, Borrower also shall cause each of

its subsidiaries to comply with the following:

 

Dividends; Purchase

 

	

  5.1

  	

  Borrower will not

  declare or pay any dividend on any shares of any class of its capital stock

  unless a profit was made during the fiscal year and all debts owed to WIDC or

  USDA Rural Development are paid to a current status.

  

 

Liquidation; Merger; Sale of Assets

 

	

  5.2

  	

  Borrower will not

  acquire, liquidate, dissolve, or enter into any merger; consolidation; joint

  venture; partnership or other combination; or sell (except for sales of goods

  in the ordinary course of business); lease or dispose of any collateral or a

  substantial portion of its business or assets. In addition, the Borrower is

  to provide the lender a fully executed SEC Form 4, when applicable.

  

Loans

 

	

  5.3

  	

  Borrower will not make

  any loans or advance to its officers, directors, shareholders, or outside

  parties in any year.

  

 

Guaranties:  Indebtedness; Fixed Asset Purchases

 

	

  5.4

  	

  Borrower will not

  create, incur, assume, or permit to exist any indebtedness, except the

  obligations created hereby. Borrower will not assume, guaranty, endorse, or

  become directly or contingently liable for, or obligated to purchase, pay, or

  provide funds for payment of any obligations or indebtedness over a total

  aggregate amount of $1,000,000 annually, except the obligations created

  within the terms of this Loan Agreement without prior written consent of

  Lender. All existing debt agreements acceptable. Existing line of credit at

  Silicon Valley Bank is considered allowable debt. Advances on this line of

  credit do not require prior written approval. Capital Leases do not require

  prior written approval. The Borrower will also execute such additional

  security agreements and financing statements as the Lender requires in order

  to create and prefect a lien against additional capital items. Convertible

  Debentures are not considered debt under this loan agreement.

  

 

Officer Wages

 

	

  5.5

  	

  Borrower will not

  provide, make, or create additional wages to officers, shareholders, or

  outside parties, other than their normal annual wages,unless Borrower is

  profitable and all indebtedness is in current standing.

  

 

Key Personnel

 

	

  5.6

  	

  Borrower shall notify

  WIDC of any changes in executive personnel or key management immediately.

  

 

Officers Compensation

 

	

  5.6

  	

  There will be no increase

  in officers’ compensation or payment of dividends without prior written

  approval unless all payments are current And all loan agreement covenants are

  met.

  

 

In witness whereof, the

parties hereto have executed this Loan Agreement as of the day first written

above.

 

 

 

 

	

   

  	

   

  	

  Wyoming Industrial

  Development Corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  
	

   

  	

   

  	

  /s/ Diane Johnston

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Borrower:  Sento Corporation

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/ Stanley J. Cutler

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Attest:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  /s/ Brian W.

  BraithwaitePrepared by MERRILL CORPORATION

Exhibit 10.2

 

 

USDA Loan Identification

No. 59-021-0870284979

 

MODIFICATION

OF A PROMISSORY NOTE WITH A BLENDED

RATE

 

                WHEREAS,

heretofore and under the date of January 12, 2000, Sento Corporation, a Utah

corporation, of American Forks, Utah (hereinafter called

“Borrower”), made, executed and delivered to Wyoming Industrial

Development Corporation of Casper, Wyoming, one Promissory Note in

the original principal amount of $999,900.00 payable in 57 monthly

payments of $26,088.04 each, first to interest then to principal,

commencing March 12, 2001, due the 12th of each month thereafter,

with the balance of principal and interest due at maturity, with interest at

the rate therein provided, final maturity date of said Note being November

12, 2004, and

 

                WHEREAS, it is

mutually desirable, beneficial and agreeable to the parties hereto that the

repayment terms of said Note be modified as hereinafter set out.

 

                NOW, THEREFORE, in

consideration of the mutual benefits inuring to each other, it is understood

and agreed, by and between the parties hereto, that the terms and conditions of

Borrower’s Note, as above described, are hereby modified as follows:

 

                The loan rate

shall be a blended rate of 6.05 percent as a result of the twenty

percent of the loan balance retained by the Lender, Wyoming Industrial Development

Corporation accruing interest at the rate of 8.50

percent and the eighty percent guaranteed portion of

the loan balance sold to the Wyoming State Treasurer accruing interest at the

rate of 5.43 percent for a period of (60) months from the date of

assignment to the Wyoming State Treasurer and as more fully set

forth below.

 

                Installments,

including principal and interest, each in the amount of $20,103.33 payable

monthly commencing on the twelfth of the first full month subsequent to the

date of said assignment. The balance of principal and interest at the end of

the sixty (60) month period referred to above, or at such time as said Note is

no longer assigned to the Treasurer, shall be amortized with monthly principal

and interest payments sufficient to fully amortize the remaining loan balance

over the remaining term of the loan. Interest shall be a rate of 2.75%

over New York prime as quoted in the Wall Street Journal. If this loan is

assigned to the Small Business Administration, the interest rate of 2 75%

over New York prime shall become effective not later than the day before the

date of the assignment of the Note to the Small Business Administration.

 

                Commencing with

the sixty first (61) month following assignment to the Wyoming State Treasurer,

the interest rate shall become fixed for the remaining term of the loan at a

rate equal to 2.75% over New York prime as quoted in the Wall Street

Journal computed as of the first business day of the sixty first (61) month

subsequent to assignment to the Wyoming State Treasurer. Monthly installments

of principal and interest shall be sufficient to fully amortize the remaining

term of the loan.

 

                Borrower agrees to

pay a late charge equal to 5% of the payment amount due if such payment

is not received within 15 days of the due date.

 

                Borrower shall

have the exclusive right to prepay any installment of principal and interest or

multiples thereof prior to maturity date without penalty but if said payment is

more than twenty (20) percent of the outstanding balance borrower will be

required to provide Lender within fifteen (15) days prior notice thereof.

                If the collateral

for this loan should be sold or otherwise transferred, or any interest of the

Borrower is transferred at voluntary or judicial sale or otherwise, or if any

part thereof should be so transferred without the agreement of the Wyoming

State Treasurer, then the Wyoming State Treasurer shall have the right after

reasonable consideration, and upon thirty (30) days written notice, to

terminate the subsidized rate. The interest rate of the Note shall then go to a

rate equal to 2.75% over New York prime, as quoted in the Wall Street

Journal, computed on the last business day of the month preceding the State’s

written notice of refusal and shall continue on the entire outstanding loan

balance for the remaining term of the loan.

 

                It is further

understood and agreed that all other terms, conditions and covenants of the

aforesaid Note, not otherwise modified hereby, shall be and remain the same,

and that this Agreement, when executed by the parties hereto, shall be attached

and become a part of the original Note, and shall have the same force and

effect as if the terms and conditions hereof were originally incorporated in the

Note, prior to its execution thereof.

 

                IN WITNESS WHEREOF

this Agreement is executed by the undersigned parties as of the 9th

day of April, 2001.

 

	

  Sento

  Corporation

  	

   

  
	

   

  	

   

  
	

  BY:

  	

   

  	

   

  	

  Date: April 9, 2001

  
	

  Stanley J.

  Cutler, Corporate Controller & Secretary

  	

   

  
	

   

  	

   

  
	

  ACCEPTED BY:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  	

  Date: April 9, 2001

  
	

  Diane Johnston, President

  	

   

  
	

  Wyoming Industrial Development Corporation

  	

   

  
					

 

THE GUARANTEED PORTION OF THIS NOTE HAS BEEN SOLD TO A

REGISTERED HOLDER FOR VALUE.

 

 

	

  Date:  April

  9, 2001

  	

  BY:

  	

   

  
	

   

  	

   

  	

  Diane Johnston, President

  
	

   

  	

   

  	

  Wyoming Industrial Development Corp.

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