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EXHIBIT 10.3
LOAN AGREEMENT
This LOAN AGREEMENT ("Agreement") is entered into as of this 20th day
of September, 1996 by and among VIEWSTAR CORPORATION, a California corporation
(the "Borrower"), and DIGITAL SYSTEMS INTERNATIONAL, INC., a Washington
corporation (the "Lender").
WHEREAS, the Lender and the Borrower are entering into good faith
negotiations with respect to a potential merger of the two companies (any such
consummated transaction, a "Merger").
WHEREAS, the Lender and the Borrower wish to enter into this Agreement
to establish the terms and conditions upon which the Lender shall make a term
loan to the Borrower for the purpose of funding Borrower's working capital
requirements prior to consummation of a Merger.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
Unless otherwise provided, all accounting terms used herein shall be
construed in accordance with Generally Accepted Accounting Principles. The
following terms shall have the meanings assigned to them below in this Section 1
or in the provisions of this Agreement referred to below:
"Business Day" - any day on which commercial banks in Seattle,
Washington are open for the conduct of normal banking business.
"Default(s)" - the occurrence of any event or condition which, after
the giving of notice and/or the lapse of time (provided for in Section 6), would
become an Event of Default under Section 6.
"Event(s) of Default" - see Section 6.
"Generally Accepted Accounting Principles" or "GAAP" - generally
accepted accounting principles which are (i) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year of the Borrower ending December 31,
1996, and (ii) such that certified public accountants would, insofar as the use
of accounting principles is pertinent, be in a position to deliver an
unqualified opinion as to financial statements in which such principles have
been properly applied.
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"Indebtedness" - all debt, capital leases and other similar monetary
obligations, whether direct or indirect, and all guaranties, endorsements (other
than endorsement of notes, bills and checks presented to banks for collection or
deposit in the ordinary course of business) and other contingent obligations in
respect of indebtedness of others, including any obligations to supply funds to
or in any other manner to invest, directly or indirectly, in the debtor, to
purchase indebtedness, or to purchase goods, supplies or services for the
purpose of enabling the debtor to make payment of the indebtedness or to assure
the owner of the indebtedness against loss, or otherwise.
"IPO" - an intial public offering of shares of capital stock of the
Borrower.
"Lending" - the disbursement by the Lender to the Borrower of the Loan
to be made hereunder.
"Loan" - see Section 2.1.
"Loan Documents" - collectively, this Agreement, the Promissory Note,
the Subordination Agreement and any other instruments or agreements executed and
delivered by the Borrower to the Lender in connection with the transactions
contemplated by this Agreement.
"Maturity Date" - see Section 2.3.
"Note" - see Section 2.3.
"Obligations" - all indebtedness, obligations and liabilities of the
Borrower to the Lender arising after the date of this Agreement, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, whether arising or incurred under this Agreement or in
respect of the Loan and the Promissory Note or under the other Loan Documents or
any other agreements or instruments at any time evidencing or securing any
obligations of the Borrower to the Lender.
"Person" - any individual, corporation, partnership, trust,
unincorporated association, joint stock company or other legal entity or
organization and any government or agency or political subdivision thereof.
"Prime Rate" - the rate of interest designated by Seafirst Bank (or any
successor thereto) ("Seafirst) as its "Prime" rate; provided, however, that if
Seafirst Bank shall discontinue such designation, the Prime Rate shall
thereafter refer to the rate of interest charged to Lender for commercial loans
obtained by Lender in the ordinary course of its business.
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"Promissory Note" - see Section 2.3.
"Registration Statement" - the registration statement on Form S-1 filed
by the Borrower with the Securities and Exchange Commission in August 5, 1996.
"Subordination Agreements" - the subordination agreements between the
Borrower and certain holders of its preferred stock referred to in Section 2.8.
"Voting Stock" - stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, partnership, association or
other business entity involved, whether or not the right so to vote exists by
reason of the happening of a contingency.
2. THE LOAN
2.1 COMMITMENT TO LEND
Subject to all of the terms and conditions set forth herein, including,
without limitation, full compliance with all of the conditions precedent set
forth in Section 4 below, the Lender agrees to loan to the Borrower an aggregate
principal amount of $4,000,000 (the "Loan").
2.2 USE OF PROCEEDS
The proceeds of the Loan shall be used by Borrower solely in the
ordinary course of the Borrower's business, including retirement of outstanding
capital lease obligations.
2.3 PROMISSORY NOTE
The Loan shall be evidenced by the Borrower's promissory note
substantially in the form of Exhibit A hereto, with appropriate insertions (the
"Promissory Note"), payable in the manner provided therein to the order of the
Lender in the original principal amount of $4,000,000. The Promissory Note shall
be dated the date of the disbursement of the Loan evidenced thereby and shall be
stated to mature on the fourth anniversary at the disbursement of the Loan (the
"Maturity Date"). The outstanding principal balance of the Promissory Note shall
bear interest from the date of disbursement of the Loan evidenced thereby
through the Maturity Date at a rate per annum equal to the Prime Rate from time
to time in effect plus one-half of one percent (0.50%) (subject to adjustment as
provided in the Promissory Note), provided that any amounts overdue shall bear
interest as provided in Section 2.7.
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2.4 OPTIONAL PREPAYMENT OF PROMISSORY NOTE
Any provision of this Agreement notwithstanding, the Borrower shall
have the right at any time to prepay, at its election, the Loan as a whole, and
from time to time to prepay the Loan in part, without premium or penalty, upon
not less than five Business Days' written or telephonic notice to the Lender,
provided that (a) each partial prepayment shall be in the principal amount of
$5,000 or an integral multiple thereof, and (b) on the date of each prepayment,
the Borrower shall pay accrued interest on the principal so prepaid to the date
of such prepayment. Any amounts so prepaid shall not be available for
reborrowing by the Borrower.
2.5 COMPUTATIONS, ETC.
All computations of interest on the Promissory Note shall be computed
on the basis of a 360-day year and paid for the actual number of days elapsed.
The outstanding amount of the Obligations as reflected on the Lender's records
from time to time shall, absent demonstrable error, be conclusive and binding on
the Borrower. Each change in the rate of interest applicable to the Loan
resulting from a change in the Prime Rate shall be effective on the date of each
change in the Prime Rate. Lender shall provide notice to Borrower of any change
in the rate of interest applicable to the Loan as soon as practicable following
the corresponding change in the Prime Rate. Whenever a payment hereunder or
under the Promissory Note becomes due on a day which is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day
and interest and any applicable fees shall accrue during each such extension.
2.6 FUNDS FOR PAYMENTS
The Loan shall be made in immediately available funds by check or wire
transfer to a bank account designated in writing by Borrower. Borrower's
payments and prepayments under the Loan (whether of principal, interest or other
amount) shall be made in immediately available funds at the Lender's principal
office in Redmond, Washington.
2.7 INTEREST ON OVERDUE AMOUNTS
Each overdue amount payable to the Lender under this Agreement or the
Promissory Note (whether principal, interest or other amount) shall bear
interest from the due date thereof to the date such amount is paid in full
(whether before or after judgment) at a rate per annum at all times equal to two
percentage points (2.0%) above the Prime Rate from time to time in effect,
compounded daily and payable on demand.
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2.8 SUBORDINATION
The Obligations shall be subordinate to the Borrower's outstanding bank
line of credit and existing capital lease obligations, and Lender agrees to
execute and deliver from time to time any commercially reasonable subordination
agreements which such lenders or any other institutional lenders (including,
without limitation, banks, insurance companies and leasing companies) shall
require in connection with the Borrower's Indebtedness to such parties. Except
for the Indebtedness described in the first sentence of this Section 2.8, the
Obligations shall have priority over any other Indebtedness of the Borrower,
including, without limitation, any outstanding Indebtedness to the Borrower's
shareholders. Prior to incurring any Indebtedness as to which the Obligations
shall have priority, the Borrower hereby agrees to obtain executed Subordination
Agreements in substantially the form of Exhibit B hereto from each prospective
obligee of any such Indebtedness.
3. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
3.1 CORPORATE EXISTENCE AND GOOD STANDING, ETC.
The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the state of California and has all requisite
corporate power and authority to own and operate its properties, to carry on its
business as now conducted and proposed by the Borrower to be conducted, to enter
into this Agreement and the other Loan Documents and to consummate the
transactions contemplated hereby and thereby. The Borrower is duly qualified and
in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary and where the failure to be so qualified has, or would
be reasonably expected (so far as can be foreseen at the time) to have, a
material adverse effect on the business, properties, operations, condition
(financial or other) or prospects of the Borrower. The Borrower has obtained
from the appropriate governmental authorities all approvals and licenses
necessary for the conduct of its business and operations as currently conducted,
which approvals and licenses are valid and remain in full force and effect,
except where the failure to have obtained such approvals or licenses or the
failure of such licenses and approvals to be valid and in full force and effect
does not have, and would not be reasonably expected (so far as can be foreseen
at the time) to have, a material adverse effect on the business, properties,
operations, condition (financial or other) or prospects of the Borrower.
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3.2 CORPORATE POWER; CONSENTS; ABSENCE OF CONFLICT WITH OTHER
AGREEMENTS, ETC.
The execution, delivery and performance of this Agreement and the other
Loan Documents by the Borrower and the borrowings and transactions contemplated
hereby and thereby:
(a) are within the Borrower's corporate powers, and have been duly
authorized by all necessary corporate action or the part of the Borrower;
(b) except for any required consents or any conflicts, breaches or
contraventions (i) which shall be obtained or waived within 10 business days of
the date hereof or (ii) under any indenture, agreement, lease, instrument or
undertaking under which no Indebtedness is outstanding (and the Borrower agrees
that it will incur no Indebtedness under any such indenture, agreement, lease,
instrument or undertaking without obtaining any required consent or waiver)
(i) do not require any approval or consent of, or filing with,
any governmental agency or authority bearing on the validity of such
instruments and borrowings which is required by law or the regulation
of any such agency or authority, and are not in contravention of law or
the terms of the Borrower's Articles of Incorporation or Bylaws, or any
amendment thereof;
(ii) will not conflict with or result in any breach or
contravention of or the creation of any lien under any indenture,
agreement, lease, instrument or undertaking to which the Borrower is a
party or by which it or any of its properties are bound, ; and
(c) are and will be valid and legally binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting generally the enforcement of creditors'
rights, and except to the extent that the availability of equitable remedies
with respect to such obligations may be subject to the discretion of the court
before which any proceedings for such remedies may be brought.
3.3 NO DEFAULT
No Default or Event of Default under this Agreement exists at the
delivery of this Agreement.
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3.4 FINANCIAL STATEMENTS
There has been furnished to the Lender the (a) audited consolidated
financial statements of the Borrower as of and for the fiscal years ended
December 31, 1993, 1994 and 1995, including the reports and opinions of the
Borrower's independent auditors relating thereto, and (b) unaudited consolidated
financial statements of the Borrower as of and for the fiscal quarters ended
March 31, 1996 and June 30, 1996, each consisting of a balance sheet and
statements of income and changes in financial position (collectively, the
"Financials"). The Financials have been, and all financial statements to be
furnished in accordance with Section 5.1 hereof will be, prepared in accordance
with the books and records of the Borrower and fairly present or will fairly
present the financial condition of the Borrower at the dates thereof and the
results of operations for the periods indicated (subject, in the case of
unaudited financial statements, to normal year-end adjustments, none of which
are or will be material). The Financials have been, and all financial statements
to be furnished in accordance with Section 5.1 hereof will be, prepared in
accordance with GAAP. Since the date of the most recent Financials, there has
been no material adverse change in the financial condition, results of
operations or business of the Borrower.
3.5 DISCLOSURE
This Agreement, the other Loan Documents, the Registration Statement
and all certificates and statements furnished by or on behalf of the Borrower to
the Lender in connection herewith and therewith do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein and therein not misleading. There is no
fact known to the Borrower or to any executive officer of the Borrower which
materially adversely affects, or in the future may (so far as they can now
foresee) materially adversely affect, the business, assets, or financial
condition of the Borrower which has not previously been disclosed to the Lender.
3.6 LEGAL PROCEEDINGS
There is no action, suit, or proceeding pending or threatened, at law
or in equity, or before or by any governmental authority, domestic or foreign,
which might result in any materially adverse change in Borrower's financial
condition or operations, or which would involve the probability of any judgment
or liability resulting in an uninsured payment by the Borrower of at least
$50,000 other than an action by a former salesperson of the Borrower for
commissions allegedly due, for which the Borrower has established an accounting
reserve.
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4. CONDITIONS OF LENDING
The obligation of the Lender to make the Loan hereunder shall be
subject to the following conditions precedent:
4.1 EXECUTION AND DELIVERY OF LOAN DOCUMENTS
All of the Loan Documents shall have been executed and delivered by the
Borrower (and any other party thereto) to the Lender.
4.2 REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in Section 3 hereof and in
each of the other Loan Documents shall have been true and correct as of the date
on which made and shall also be true and correct at and as of the date of the
Lending with the same effect as if made at and as of such date.
4.3 PERFORMANCE; NO DEFAULT
The Borrower shall have performed and complied with all terms and
conditions of the Loan Documents, and each of them, required to be performed or
complied with by it prior to or at the time of the Lending, and at the time of
the Lending, there shall exist no Default or Event of Default or condition
which, with either the giving of notice or the lapse of time or both, would
result in a Default or Event of Default under this Agreement, or under any of
the Loan Documents upon consummation of the Lending.
4.4 CORPORATE ACTION
All corporate action required by law of the Borrower necessary for the
valid execution, delivery and performance by the Borrower of the Loan Documents
shall have been duly and effectively taken.
4.5 PROCEEDINGS AND DOCUMENTS
All proceedings in connection with the transactions contemplated by
this Agreement, the Loan Documents and all documents incident hereto and
thereto, shall be reasonably satisfactory in substance and in form to the Lender
and its counsel, and the Lender and its counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Lender or its counsel may reasonably request.
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5. COVENANTS
The Borrower covenants and agrees that, so long as the Promissory Note
is outstanding:
5.1 FINANCIAL STATEMENTS
The Borrower shall deliver to the Lender such financial statements of
the Borrower (including, without limitation, quarterly and audited annual
financial statements), all in reasonable detail and prepared in accordance with
GAAP andall documents filed with the Securities and Exchange Commission under
the Securities Act of 1933 or the Securities Exchange Act of 1934, promptly
after the preparation of such financial statements or the filing of such
documents, and such other data as the Lender may reasonably request.
5.2 FURTHER ASSURANCES
The Borrower shall cooperate with the Lender and execute such further
instruments and documents as the Lender shall reasonably request to carry out to
its satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
5.3 NOTICES
Borrower shall promptly give written notice to Lender of (a) all
litigation affecting Borrower where the uninsured amount is at least $100,000;
(b) any substantial dispute which may exist between Borrower and any
governmental regulatory body or law enforcement authority (c) any Default or
Event of Default or any default under any other agreement between Borrower and
Lender or any other creditor, or any event which, upon notice or lapse of time,
or both, would become an Event of Default (d) any other matter which has
resulted or is expected by the Borrower to result in a material adverse change
in Borrower's financial condition or operations. Lender shall maintain the
confidentiality of any nonpublic information received pursuant to this Section
5.3 which Borrower designates as confidential information.
5.4 INSURANCE
Borrower shall maintain in effect insurance with responsible insurance
companies in such amounts and against such risks as is customarily maintained by
persons engaged in businesses similar to that of Borrower, including, without
limitation, a policy covering products liability and errors and omissions with
policy limits of not less than $1,000,000. Borrower agrees to deliver to Lender
such
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evidence of insurance as Lender may reasonably require and, within 30 days after
notice from Lender, to obtain such additional insurance as Lender may reasonably
request.
5.5 COMPLIANCE WITH LAWS
Borrower shall comply with all applicable federal, state and municipal
laws, ordinances, rules and regulations relating to its properties, charters,
businesses and operations, including compliance with all minimum funding and
other requirements related to any of Borrower's employee benefit plans.
5.6 DIVIDENDS; INSIDER LOANS
Borrower shall not without the written consent of Lender (a) pay any
dividends or otherwise distribute earnings or (b) make any loans or advances to
any of its officers, directors or shareholders (other than (i) loans made to
officers, directors or employees for the sole purpose of allowing such persons
to exercise options to purchase capital stock of the Borrower or (ii) loans or
advances to officers or employees in the ordinary course of business and not
exceeding $50,000), or assume, guarantee, endorse or otherwise become directly
or contingently liable in connection with any obligation of any of its officers,
directors or shareholders or any third party.
5.7 CERTAIN TRANSACTIONS
Borrower shall not without the written consent of Lender, liquidate,
dissolve, enter into any merger or consolidation, create or acquire any
subsidiaries or, except in the ordinary course of business, sell, lease,
transfer or distribute any of its assets. The Lender shall not withhold its
consent to any such transaction unless the Lender reasonably believes that such
transaction will materially adversely affect Borrower's ability to repay the
Obligations, except that the Lender may withhold its consent for any reason if
the transaction consists of the acquisition of the Borrower by another person or
entity with total assets in excess of $500,000,000 for a purchase price of
$50,000,000 or more..
6. EVENTS OF DEFAULT; ACCELERATION
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) if the Borrower shall default in the payment of any principal or
interest or other amounts under the Promissory Note, whether at maturity or at
any date fixed for payment or prepayment or by declaration or otherwise; or
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(b) if the Borrower shall default in the performance of or compliance
with any other term contained herein or in any of the other Loan Documents and
such default shall not have been remedied within seven days after occurrence
thereof; or
(c) if any representation, warranty or certification made in writing by
or on behalf of the Borrower herein, in any of the Loan Documents or in
connection with any of the transactions contemplated hereby shall prove to have
been false or incorrect in any material respect on the date as of which made; or
(d) if the Borrower shall default (as principal or guarantor or other
surety) in the payment of any principal of, premium, if any, or interest on any
Indebtedness (other than the Borrower's obligations to the Lender hereunder), or
shall default in the performance of or compliance with any other obligation
contained in any agreement or instrument evidencing or securing such
Indebtedness, and such default gives to the holder of such Indebtedness the
right to accelerate such Indebtedness (whether or not the holder has, in fact,
accelerated such Indebtedness), or the right to take action with respect to any
collateral securing such Indebtedness, and such default shall continue for
longer than the period of grace, if any, specified therein; or
(e) if either the Borrower makes an assignment for the benefit of
creditors, or petitions or applies for the appointment of a liquidator or
receiver or custodian (or similar official) of the Borrower or of any
substantial part of its assets, or commences any proceeding or case relating to
the Borrower under any bankruptcy, reorganization, arrangements, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect; or
(f) if any such petition or application is filed or any such proceeding
or case is commenced against the Borrower and the Borrower indicates its
approval thereof, consent thereto or acquiescence therein, or an order is
entered appointing any such liquidator or receiver or custodian (or similar
official), or adjudicating the Borrower bankrupt or insolvent, or approving a
petition in any such proceeding or a decree or order for relief is entered in
respect of the Borrower in an involuntary case under any bankruptcy,
reorganization, arrangements, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, and
such order remains in effect for more than 30 days, whether or not consecutive;
or
(g) if any order is entered in any proceeding by or against the
Borrower decreeing or permitting its dissolution or split-up or the winding up
of its affairs; or
(h) if the Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debt generally;
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then and in each and every such event the Lender may, by written notice to the
Borrower, declare all amounts owing with respect to the Promissory Note to be
due and payable (unless there shall occur any event specified in any of
paragraphs (f), (g) or(h) of this Section 6, in which case all amounts owing
with respect to this Agreement and the Promissory Note shall automatically
become due and payable), and thereupon in either instance the same shall
forthwith mature and become immediately due and payable together with interest
thereon and all other amounts then owing under this Agreement and the Promissory
Note, without presentment, demand, protest or notice, all of which are hereby
waived.
7. REMEDIES ON DEFAULT
7.1 RIGHTS OF LENDER
In case any one or more of the Events of Default specified in Section 6
shall have occurred and be continuing, and whether or not all amounts owing with
respect to this Agreement and the Promissory Note have been declared due and
payable as provided in Section 6, the Lender may proceed to protect and enforce
its rights by suit in equity, action at law and/or other appropriate proceeding,
whether such rights arise under this Agreement or otherwise whether for the
specific performance of any covenant or agreement contained in this Agreement,
the Promissory Note or any other Loan Document, and shall have and may exercise
all available rights and remedies, including, without limitation, the obtaining
of an ex parte appointment of a receiver.
7.2 SET-OFF
During the continuance of any Event of Default, any deposits or other
sums credited by or due from any of the Lender to the Borrower may be set off
against any and all liabilities, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, of the Borrower to the
Lender.
8. EXPENSES
Each party shall bear its own expenses incurred in connection with this
Agreement, the other Loan Documents and the transactions contemplated hereby and
thereby; provided, however that Borrower agrees to reimburse Holder on demand
for all legal fees and other costs and expenses incurred in collecting and
enforcing the Promissory Note.
9. SURVIVAL OF COVENANTS
All covenants, agreements, representations and warranties made herein
and in any certificates or other papers delivered by or on behalf of the
Borrower pursuant
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hereto are material and shall be deemed to have been relied upon by the Lender,
any investigation heretofore or hereafter made by it notwithstanding, and shall
survive the making of the Loan, as herein contemplated, and shall continue in
full force and effect so long as the Loan or other amounts due under this
Agreement or the Promissory Note remain outstanding and unpaid. All statements
contained in any certificate or other paper delivered to the Lender at any time
by or on behalf of the Borrower pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower hereunder.
10. PARTIES IN INTEREST
All of the terms of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns, provided that the Borrower shall not assign or transfer
its rights hereunder without the prior written consent of the Lender.
11. NOTICES
Except as otherwise provided herein, any notice to the Borrower or to
the Lender shall be in writing, and such notice shall be given by delivery in
hand; by telecopy with original posted first class mail, postage prepaid, within
three days thereafter; by certified mail, postage prepaid, return receipt
requested; or by private courier requesting evidence of receipt as a part of its
service, addressed as follows:
(a) if to the Borrower, as follows:
ViewStar Corporation
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
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(b) if to the Lender, as follows:
Digital Systems International, Inc.
0000 000xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
with a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
or to such other address as may be designated in writing by either party from
time to time in accordance herewith. Notices shall be deemed delivered upon the
earliest to occur of delivery by hand, when so telecopied, when so placed in the
mails or when delivered to such delivery service as aforesaid.
12. GOVERNING LAW
This Agreement shall be construed, enforced and otherwise governed by
the laws of the state of Washington.
13. ENTIRE AGREEMENT
This Agreement and any other documents executed in connection herewith
express the entire understanding of the parties with respect to the transactions
contemplated hereby. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally or in writing, except as provided in
Section 14.
14. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly set forth in any particular provision of
this Agreement, any consent or approval required or permitted by this Agreement
to be given by the Lender may be given, and any term of this Agreement or of any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Lender. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of
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dealing or delay or omission on the part of the Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.
15. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION
The borrower hereby waives any right it may have to trial by jury in
any action or proceeding of any kind or nature, in any court in which an action
may be commenced, arising out of or in connection with this Agreement, any other
Loan Document or any other matters related thereto. The Borrower hereby consents
to the exclusive jurisdiction of the United States District Court for the
Western District of Washington or, at the option of the Lender, any court in
which the Lender decides to initiate legal or equitable proceedings concerning
this Agreement, any other Loan Documents or any other matters related thereto in
which the court has subject matter jurisdiction over the matter and controversy;
and to the extent permitted by law, the Borrower hereby waives personal service
of the summons and complaint or other process of the papers issued therein and
agrees that service may be made by registered or certified mail addressed to the
Borrower at its address set forth herein.
16. MISCELLANEOUS
The rights and remedies herein expressed are cumulative and not
exclusive of any other rights which the Lender would otherwise have. Any
instruments required by any of the provisions hereof to be in the form annexed
hereto as an exhibit shall be substantially in such form with such changes
therefrom, if any, as may be approved by the Lender. The captions in this
Agreement are for convenience of reference only and shall not define or limit
the provisions hereof. This Agreement or any amendment may be executed in
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In making
proof of this Agreement, it shall not be necessary to produce or account for
more than one counterpart executed by the party against which enforcement
thereof is sought.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal by their duly authorized undersigned officers as of the date
first written above.
PAGE 15
16
VIEWSTAR CORPORATION
By:_____________________________
Name:
Title:
DIGITAL SYSTEMS
INTERNATIONAL, INC.
By:______________________________
Name:
Title:
PAGE 16
17
EXHIBIT A
[PROMISSORY NOTE]
PAGE 1
18
EXHIBIT B
[SUBORDINATION AGREEMENT]
PAGE 1
