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EXHIBIT 10.9
[▇▇▇▇▇ Fargo Bank letterhead]
BUSINESS LENDING DIVISION
CONFIRMATION LETTER
MARCH 30, 1998
CRL NETWORK SERVICES, INC.
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RE: $692,000.00 Equipment Line
▇▇▇▇▇ FARGO BANK. N.A. ("Bank"), agrees to make available to CRL NETWORK
SERVICES. INC. ("Borrower") a Equipment Line ("Credit"). The Credit shall bear
interest and be repayable in accordance with the terms and conditions of the
Agreement. The Agreement consists of (1) this Confirmation Letter (this
"Letter"), (2) the Business Lending Disclosure dated August 01, 1997 (the
"Disclosure") and (3) any Related Documents. All terms and conditions of the
Disclosure and Related Documents are incorporated herein by reference for all
purposes. All capitalized terms not defined in this Letter are defined in the
Disclosure.
PROMISE TO PAY. Borrower promises to pay to Bank, or order, the principal amount
of $692,000.00, or so much as may be advanced and outstanding from time to time,
together with interest on the unpaid outstanding principal balance of each
Advance. Interest shall be calculated from the date of each Advance until
repayment of each Advance. Borrower will pay Bank at Bank's address shown in
this letter or at such other place as Bank may designate in writing.
EQUIPMENTLINE; TERM. Your EquipmentLine is a credit facility under which you may
request loans and/or equipment leases to facilitate your acquisition of
equipment. During the term of this EquipmentLine, you may request and the Bank
may approve loans or leases in its discretion whenever you desire financing for
qualifying pieces of equipment. The total amount of such loans and leases may
not exceed your preapproved credit limit referenced above. This EquipmentLine
credit facility is available to you for a term of 12 months, commencing with the
date your EquipmentLine is opened by the Bank.
REPAYMENT OPTIONS. At the time of each Advance under an EquipmentLine. Borrower
shall choose between the following two interest rate/loan repayment options, or
in lieu of an Advance, may choose an Equipment Lease. In each instance, the
amount available under this Credit shall be reduced by the amount of the Advance
or Equipment Lease. If this credit is granted under a Capital Access Program,
then the lease option does not apply.
OPTION 1. FIXED OPTION.
If Borrower elects to have a fixed rate of interest apply to an Advance:
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FIXED INTEREST RATE: The interest rate applicable to the Advance shall
be the rate 4.610% above the Treasury Rate in effect as of the close of
business on the Thursday of the week preceding disbursement of the
Advance; provided. however. that such interest rate shall be rounded to
the nearest 0.05%.
PAYMENTS: Borrower shall pay principal of and interest on each Advance
on the fifth day of each month in equal successive monthly installments
sufficient to amortize the principal and accruing interest of such
Advance over a payment schedule of not less than 36 months or more than
96 months, as agreed by Borrower and Bank at the time of such Advance,
depending on the type of equipment financed and the interest rate
applicable at the time of such Advance. If the Advance occurs on or
before the eighteenth day of a month, the first payment due date shall
be the 5th day of the next month; if the Advance occurs after the
eighteenth day of a month, the first payment due date shall be the 5th
day of the second month following the Advance. All unpaid principal and
accrued and unpaid interest and any other amounts owed in connection
with this Credit shall be due and payable in full at maturity on the
final payment date.
PREPAYMENT TERMS. Borrower may prepay principal of the Credit as
follows:
If the original Credit amount is $10,000 or more, and there are (12)
months or more remaining until maturity, Borrower shall pay to Bank a
prepayment fee equal to (i) 5% of the amount prepaid if the remaining
term is five or more years, (ii) 4% of the amount prepaid if the
remaining term is four to five years, (iii) 3% of the amount prepaid if
the remaining term is three to four years, (iv) 2% of the amount prepaid
if the remaining term is two to three years, and (v) 1% of the amount
prepaid if the remaining term is one to two years. All prepayments of
principal shall be applied on the most remote principal installment or
installments then unpaid.
Borrower(s) Initials /s/ JGC
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OPTION 2. VARIABLE OPTION.
If Borrower elects to have a variable rate of interest apply to an
Advance:
VARIABLE INTEREST RATE: The interest rate applicable to the Advance
shall be subject to change from time to time based on changes in the
Prime Rate. The Prime Rate currently is 8.500% per annum. The variable
interest rate to be applied to the unpaid principal balance of the
Advance will be 1.500% percentage points above the Prime Rate, resulting
in a currently applicable initial rate of 10.000% per annum.
PAYMENTS: Borrower shall pay principal on each Advance on the fifth day
of each month in equal successive monthly installments sufficient to
amortize the principal amount of such Advance over a payment schedule of
not less than 36 months or more than 96 months, as agreed by Borrower
and Bank at the time of such Advance, depending oh the type of equipment
financed and the interest rate applicable at the time of such Advance.
In addition, Borrower shall pay all accrued unpaid interest on each
payment date. If the
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Advance occurs on or before the eighteenth day of a month, the first
payment due date shall be the 5th day of the next month; if the Advance
date occurs after the eighteenth day of a month, the first payment due
date shall be the 5th day of the second month following the Advance. All
unpaid principal and accrued and unpaid interest and any other amounts
owed in connection with this Credit shall be due and payable in full at
maturity on the final payment date.
PREPAYMENT TERMS. Borrower may prepay principal of the Credit at any
time, in any amount, without penalty.
ADVANCES: Advances shall be subject to the following terms and conditions:
* This Credit shall be a non-revolving line of credit. Once the total
amount available under the Credit has been advanced. Borrower shall not
be entitled to further Advances.
* Borrower shall deliver to Bank an acceptable purchase agreement or an
invoice from vendor - not more than 90 days old - for equipment to be
purchased in whole or in part with the Advance.
* Bank may fund Advances to Borrower or directly to vendor at Bank's sole
discretion.
* If an Advance or Advances to acquire an item of used equipment
aggregate(s) $100,000.00 or more, Borrower shall obtain, at Borrower's
sole cost and expense, an appraisal to determine the liquidation value
of such equipment. The appraisal must be performed by an independent
appraiser satisfactory to Bank, at Bank's sole discretion.
* The minimum Advance shall be $5,000.00.
INTEREST ACCRUAL BASIS. Interest shall be computed on a 365/360 simple interest
basis; that is, by multiplying the ratio of the annual interest rate over a year
of 360 days, times the outstanding principal balance, times the actual number of
days the principal is outstanding.
AUTOMATIC DEBIT OF PAYMENTS. At the time of an Advance, Borrower may elect to
have Bank automatically debit payments and other amounts owed in connection with
this Credit from Borrower's Account, or Borrower can request Bank to invoice
Borrower for payments.
DISBURSEMENT INFORMATION. Bank is not obligated to make an Advance under the
Agreement until Borrower delivers to Bank an acceptable purchase agreement or
invoice from vendor not more than 90 days old - for equipment to be purchased
with the Advance. Bank shall disburse to Borrower or directly to the vendor at
Bank's sole discretion.
COLLATERAL. Subject to the terms and conditions of the Disclosure, as security
for the obligations set forth in Section 2.1 of the Disclosure. CRL NETWORK
SERVICES, INC. as Grantor, pledges and grants to Bank a first priority security
interest in the following personal property, whether existing or hereafter
arising, now owned or hereafter acquired, and wherever located. and all Proceeds
of the foregoing (including insurance):
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All accounts, inventory, equipment, instruments, general intangibles and
contract rights. All equipment purchased or acquired in whole or in part with an
Advance.
COMMITMENT FEES. Borrower shall pay a commitment fee of $1,326.00 for the
availability of the Credit through the maturity date.
THIRD PARTY FEES. Borrower shall pay estimated fee(s) as follows:
$50.00 UCC Filing Fee
PAYMENT OF FEES. Estimated fees will be paid as follows:
Commitment Fee From Account 0524033941
UCC Filing Fee From Account 0524033941
EXTENSIONS, RENEWALS AND INCREASES. The Credit may be extended, renewed or
increased at Bank's sole discretion Bank will notify Borrower in writing of any
modification and the terms of any such modification will be deemed to have been
accepted if Borrower does not deliver to Bank a written rejection within 10 days
from the date of notification, or draws additional funds at any time following
the date of notification.
INSURANCE. Borrower shall provide and maintain insurance coverage as required by
the Disclosure and any Related Documents.
COUNTERPART. This document may be signed in any number of separate copies, each
of which shall be effective as an original. but all of which taken together
shall constitute a single document.
FACSIMILE. An electronic transmission or other facsimile of this Letter or any
signed document shall be deemed an original and shall be admissible as evidence
of the document and the signer's execution.
PURPOSE. The proceeds of the Credit shall be used primarily for business or
commercial purposes.
OTHER TERMS AND CONDITIONS. Guarantee amount of $750,000.00 is a continuing
guarantee for all of the Borrower's indebtedness to Well Fargo Bank, N.A., now
or hereafter in effect.
The Borrower and the Bank agree that borrowings under this Equipment line will
be limited to 80% of new equipment invoice amounts.
At the time the Agreement is signed and delivered to Bank, the persons signing
below, including without limitation the Borrower(s), any Grantors(s) and any
Guarantor(s), acknowledge receipt of the Agreement, including the Disclosure and
Related Documents, and accept all terms and conditions contained in them. Unless
a fully signed copy of this Letter and all Related Documents is received by Bank
within 30 days, this offer to extend credit will expire. This offer
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is not transferable or assignable, and may be withdrawn or modified at any time
prior to Bank's receipt of the above fully signed documents.
ALL STATES (EXCEPT OREGON). THIS LETTER, THE DISCLOSURE, AND ANY RELATED
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES RELATING TO THIS CREDIT.
OREGON ONLY. STATUTORY DISCLOSURE TO OREGON RESIDENTS: UNDER OREGON LAW, MOST
AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A LENDER AFTER OCTOBER 3, 1989,
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.
If you have any questions, please contact me at (▇▇▇) ▇▇▇-▇▇▇▇. For future
reference, please send all correspondence to the Bank to the following address:
Business Lending Division, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ #▇▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
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▇▇▇▇▇ FARGO BANK, N.A. ("Bank")
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice-President
Dated: March 30, 1998
GUARANTOR ACKNOWLEDGMENT:
By signing below, Guarantor acknowledges receipt of a copy of the Disclosure,
guarantees the Credit, and agrees to the terms and provisions of this Letter and
Chapter 3 of the Disclosure. The Guarantor's address is: ▇▇▇ ▇▇▇ ▇▇▇ #▇▇▇, ▇ ▇
▇▇▇ ▇▇▇▇, INCLINE VILLAGE, NV 89452. * SEE "OTHER TERMS AND CONDITIONS."
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By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By:
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: PRESIDENT
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▇▇▇▇▇▇▇▇ AND GRANTOR ACKNOWLEDGMENT AND ACCEPTANCE:
By signing below, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ acknowledge receipt of the Agreement,
including the Disclosure and Related Documents, and agree to the terms and
provisions contained in them.
CRL NETWORK SERVICES, INC., a Corporation
By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By:
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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