LOAN AGREEMENT Between ZIONS FIRST NATIONAL BANK Lender and INCONTACT, INC. Borrower SIEMENSENTERPRISE COMMUNICATIONS, INC. Guarantor Effective Date: October 7, 2011 TABLE OF CONTENTS

EX-10.27 2 d280894dex1027.htm LOAN AGREEMENT WITH ZIONS Loan Agreement with Zions

Exhibit 10.27

LOAN AGREEMENT

Between

ZIONS FIRST NATIONAL BANK

Lender

and

INCONTACT, INC.

Borrower

SIEMENS ENTERPRISE COMMUNICATIONS, INC.

Guarantor

Effective Date: October 7, 2011

TABLE OF CONTENTS


			Page

1.	Definitions			1

	1.1	Definitions		1

2.	Loan Description			5

	2.1	Amount of Loan		5

	2.2	Nature and Duration of Loan		5

	2.3	Promissory Note		5

	2.4	Loan Fee		6

3.	Security for Loan			6

	3.1	Collateral		6

	3.2	Release of Lender as Condition to Lien Termination		6

4.	Guarantee			6

	4.1	Guarantee		6

	4.2	Guarantor Organization and Qualification		6

	4.3	Guarantor Authorization		7

	4.4	Guarantor Financial Statements and Reports		7

	4.5	Accuracy of Guarantor Financial Statements		7

5.	Conditions to Loan Disbursements			8

	5.1	Conditions to Loan Disbursements		8

	5.2	No Default, Adverse Change, False or Misleading Statement		8

6.	Representations and Warranties			8

	6.1	Organization and Qualification		8

	6.2	Authorization		9

	6.3	No Governmental Approval Necessary		9

	6.4	Accuracy of Financial Statements		9

	6.5	No Pending or Threatened Litigation		9

	6.6	Full and Accurate Disclosure		10

	6.7	Compliance with ERISA		10

	6.8	Compliance with USA Patriot Act		11

	6.9	Compliance with All Other Applicable Law		11

	6.10	Environmental Representations and Warranties		11

	6.11	Operation of Business		11

TABLE OF CONTENTS


			Page

	6.12	Payment of Taxes		11

7.	Borrower’s Covenants			12

	7.1	Use of Proceeds		12

	7.2	Continued Compliance with ERISA		12

	7.3	Compliance with USA Patriot Act		12

	7.4	Continued Compliance with Applicable Law		12

	7.5	Prior Consent for Amendment or Change		13

	7.6	Payment of Taxes and Obligations		13

	7.7	Financial Statements and Reports		13

	7.8	Insurance		14

	7.9	Inspection		14

	7.10	Operation of Business		14

	7.11	Maintenance of Records and Properties		14

	7.12	Notice of Claims		14

	7.13	Environmental Covenants		14

	7.14	Financial Covenants		15

	7.15	Negative Pledge		16

	7.16	Restriction on Debt		16

	7.17	Mergers, Consolidations, and Purchase and Sale of Assets		16

	7.18	Dividends and Loans		17

8.	Default			17

	8.1	Events of Default		17

	8.2	Cure Periods		18

	8.3	No Waiver of Event of Default		18

9.	Remedies			18

	9.1	Remedies upon Event of Default		18

	9.2	Rights and Remedies Cumulative		19

	9.3	No Waiver of Rights		19

10.	General Provisions			19

	10.1	Governing Agreement		19

	10.2	Borrower’s Obligations Cumulative		19

TABLE OF CONTENTS


			Page

	10.3	Payment of Expenses and Attorney’s Fees		19

	10.4	Right to Perform for Borrower		20

	10.5	Assignability		20

	10.6	Third Party Beneficiaries		20

	10.7	Governing Law		20

	10.8	Severability of Invalid Provisions		20

	10.9	Interpretation of Loan Agreement		21

	10.10	Survival and Binding Effect of Representations, Warranties, and Covenants		21

	10.11	Indemnification		21

	10.12	Environmental Indemnification		21

	10.13	Interest on Expenses and Indemnification, Collateral, Order of Application		22

	10.14	Limitation of Consequential Damages		22

	10.15	Waiver of Defenses and Release of Claims		22

	10.16	Revival Clause		23

	10.17	Jury Trial Waiver, Arbitration, and Class Action Waiver		23

	10.18	Consent to Utah Jurisdiction and Exclusive Jurisdiction of Utah Courts		25

	10.19	Joint and Several Liability		25

	10.20	Notices		25

	10.21	Duplicate Originals; Counterpart Execution		26

	10.22	Disclosure of Financial and Other Information		26

	10.23	Integrated Agreement and Subsequent Amendment		26

SCHEDULES

6.5	Litigation
7.16	Existing Debt

iii

LOAN AGREEMENT

This Loan Agreement is made and entered into as of October 7, 2011 (the “Effective Date”) by and between Zions First National Bank and inContact, Inc.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.	Definitions

1.1 Definitions

Terms defined in the singular shall have the same meaning when used in the plural and vice versa. As used herein, the term:

“Accounting Standards” means (i) in the case of financial statements and reports, conformity with generally accepted accounting principles and fully and fairly representing the financial condition as of the date thereof and the results of operations for the period or periods covered thereby, consistent with other financial statements of that company previously delivered to Lender, and (ii) in the case of calculations, definitions, and covenants, generally accepted accounting principles consistent with those used in the preparation of financial statements of Borrower, Guarantor or Guarantor’s Parent, as applicable, previously delivered to Lender.

“Administrator” shall have the meaning set forth in Section 10.17 Jury, Trial, Arbitration and Class Action Waiver.

“Arbitration Order” shall have the meaning set forth in Section 10.17 Jury, Trial, Arbitration and Class Action Waiver.

“Banking Business Day” means any day not a Saturday, Sunday, legal holiday in the State of Utah, or day on which national banks in the State of Utah are authorized to close and, when used in reference to an Interest Period (as defined in the Promissory Notes), a day on which dealings in dollar deposits are also carried on in the London Interbank market and banks are open for business in London.

“Borrower” means inContact, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors, and, if permitted, assigns.

“Collateral” shall have the meaning set forth in Section 3.1 Collateral.

“Debt” means (i) indebtedness or liability for borrowed money; (ii) obligations evidenced by bonds, debentures, notes, or other similar instruments; (iii) obligations for the deferred purchase price of property or services (including trade obligations); (iv) obligations as lessee under capital leases; (v) current liabilities in respect of unfunded vested benefits under Plans covered by ERISA; (vi) obligations under letters of credit; (vii) obligations under acceptance facilities; (viii) all guarantees, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any person or entity, or otherwise to assure a creditor against loss; and (ix) obligations secured by any mortgage, deed of trust, lien, pledge, or security interest or other charge or encumbrance on property, whether or not the obligations have been assumed.

“Default Notice” shall have the meaning set forth in Section 8.2 Cure Periods.

“Dispute” shall have the meaning set forth in Section 10.17 Jury, Trial, Arbitration and Class Action Waiver.

“EBITDA” means earnings (excluding extraordinary gains and losses realized other than in the ordinary course of business and excluding the sale or writedown of intangible or capital assets) before Interest Expense, Income Tax Expense, depreciation, amortization, and other non-cash charges, determined in accordance with Accounting Standards.

“Effective Date” shall mean the date the parties intend this Loan Agreement to become binding and enforceable, which is the date stated at the introduction of this Loan Agreement.

“Environmental Condition” shall mean any condition involving or relating to Hazardous Materials and/or the environment affecting the Real Property, whether or not yet discovered, which could or does result in any damage, loss, cost, expense, claim, demand, order, or liability to or against Borrower or Lender by any third party (including, without limitation, any government entity), including, without limitation, any condition resulting from the operation of Borrower’s business and/or operations in the vicinity of the Real Property and/or any activity or operation formerly conducted by any person or entity on or off the Real Property.

“Environmental Health and Safety Law” shall mean any legal requirement that requires or relates to:

a. advising appropriate authorities, employees, or the public of intended or actual releases of Hazardous Materials, violations of discharge limits or other prohibitions, and of the commencement of activities, such as resource extraction or construction, that do or could have significant impact on the environment;

b. preventing or reducing to acceptable levels the release of Hazardous Materials;

c. reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated;

d. assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the environment when used or disposed of;

e. protecting resources, species, or ecological amenities;

f. use, storage, transportation, sale, or transfer of Hazardous Materials or other potentially harmful substances;

g. cleaning up Hazardous Materials that have been released, preventing the threat of release, and/or paying the costs of such clean up or prevention; or

h. making responsible parties pay for damages done to the health of others or the environment or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

“Equipment Line” means one or more equipment finance or lease facilities between Borrower and Zions Credit Corporation outstanding from time to time.

“ERISA” shall have the meaning set forth in Section 6.7 Compliance with ERISA.

“ERISA Affiliate” shall have the meaning set forth in Section 6.7 Compliance with ERISA.

“Event of Default” shall have the meaning set forth in Section 8.1 Events of Default.

“Guarantee” means each guarantee described in Section 4.1 Guarantee, and any and all amendments, modifications, addendums, and replacements.

“Guarantor” means Siemens Enterprise Communications, Inc., a Delaware corporation, its successors and assigns.

“Guarantor’s Parent” means Enterprise Networks Holdings B.V., its successors and assigns.

“Hazardous Materials” means (i) “hazardous waste” as defined by the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et. seq.), including any future amendments thereto, and regulations promulgated thereunder, and as the term may be defined by any contemporary state counterpart to such act; (ii) “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et. seq.), including any future amendments thereto, and regulations promulgated thereunder, and as the term may be defined by any contemporary state counterpart of such act; (iii) asbestos; (iv) polychlorinated biphenyls; (v) underground or above ground storage tanks, whether empty or filled or partially filled with any substance; (vi) any substance the presence of which is or becomes prohibited by any federal, state, or local law, ordinance, rule, or regulation; and (vii) any substance which under any federal, state, or local law, ordinance, rule or regulation requires special handling or notification in its collection, storage, treatment, transportation, use or disposal.

“Income Tax Expense” means expenditures for federal and state income taxes determined in accordance with Accounting Standards.

“Indebtedness” means all liabilities, obligations, and indebtedness of Borrower arising under the Loan Documents, including the Promissory Note and including all costs and expenses, including reasonable attorneys fees and legal expenses, for which Borrower is liable under the Loan Documents.

“Interest Expense” means expenditures for interest determined in accordance with Accounting Standards.

“Lender” means Zions First National Bank, its successors, and assigns.

“Loan” means the loan to be made pursuant to Section 2 Loan Description.

“Loan Agreement” means this agreement, together with any exhibits, amendments, addendums, and modifications.

“Loan Documents” means the Loan Agreement, Promissory Note, Guarantee, Security Documents, all other agreements and documents contemplated by any of the aforesaid documents, and all amendments, modifications, addendums, and replacements, whether presently existing or created in the future.

“Material Adverse Effect” means a material adverse effect on Borrower’s or any Guarantor’s financial condition, conduct of its business, or ability to perform its obligations under the Loan Documents.

“Minimum Liquidity Position” shall have the meaning set forth in Section 7.14a Minimum Liquidity Position and Minimum Quarterly EBITDA.

“Organizational Documents” means, in the case of a corporation, its Articles or Certificate of Incorporation and By-Laws; in the case of a general partnership, its Articles or Certificate of Partnership; in the case of a limited partnership, its Articles or Certificate of Limited Partnership; in the case of a limited liability company, its Articles of Organization or Certificate of Formation and Operating Agreement, Limited Liability Company Agreement, Member Control Agreement or Bylaws, if any; in the case of a limited liability partnership, its Articles of Limited Liability Partnership; and all similar formation or governing documents and all amendments, modifications, and changes to any of the foregoing which are currently in effect.

“PBGC” shall have the meaning set forth in Section 6.7 Compliance with ERISA.

“Person” means any natural person, any unincorporated association, any corporation, any partnership, any joint venture, any limited liability company, any trust, any other legal entity, or any governmental authority.

“Promissory Note” means the promissory note to be executed by Borrower pursuant to Section 2.3 Promissory Note and any and all renewals, extensions, modifications, and replacements thereof.

“Real Property” means any and all real property or improvements thereon owned or leased by Borrower or in which Borrower has any other interest of any nature whatsoever.

“Reseller Agreement” means that certain Master Reseller Agreement between Guarantor and Borrower dated June 14, 2011.

“RLOC Loan Agreement” means that certain Loan Agreement dated July 16, 2009, between Borrower and Lender, and any and all amendments, modifications, and replacements thereof.

“RLOC Loan Documents” means the RLOC Loan Agreement, RLOC Note, Security Agreement, any other Security Documents related to the RLOC Loan Agreement, all other agreements and documents contemplated by any of the aforesaid documents, and all amendments, modifications, addendums, and replacements, whether presently existing or created in the future, including, without limitation, any which extend the maturity date or increase the principal under the RLOC Note.

“RLOC Note” means that certain Promissory Note (Revolving Line of Credit) dated July 16, 2009, as amended by that certain Note Modification Agreement and Allonge dated August 3, 2010, and that certain Second Note Modification Agreement and Allonge dated March 1, 2011, each executed by Borrower in favor of Lender, including any and all renewals, extensions, modifications and replacements thereof, including, without limitation, any which extend the maturity or increase the principal amount thereof.

“Security Agreement” means that certain Security Agreement (All Assets) dated July 16, 2009 between Borrower and Lender, and any and all amendments, modifications, and replacements thereof.

“Security Documents” means all security agreements, assignments, pledges, financing statements, deeds of trust, mortgages, and other documents which create or evidence any security interest, assignment, lien or other encumbrance in favor of Lender to secure any or all of the obligations created or contemplated by any of the Loan Documents, and all amendments, modifications, addendums, and replacements, whether presently existing or created in the future.

“Security Transfer Agreement” means that certain Security Transfer Agreement between inContact, Ltd., a limited liability company organized under the laws of England and Wales, which is a wholly owned subsidiary of Borrower, and Guarantor, dated as of October 7, 2011.

“Working Capital” means all total current assets less total current liabilities. Current liabilities include, without limitation, (i) all obligations payable on demand or within one year after the date on which the determination is made, and (ii) final maturities and sinking fund payments required to be made within one year after the date on which the determination is made, but excluding all such liabilities or obligations which are renewable or extendable at the option of Borrower to a date more than one year from the date of determination.

2.	Loan Description

2.1 Amount of Loan

Upon fulfillment of all conditions precedent set forth in this Loan Agreement, and so long as no Event of Default exists, which has not been waived or timely cured, and no other breach has occurred under the Loan Documents, which has not been waived or timely cured, Lender agrees to loan Borrower up to the maximum principal amount of $2,500,000.00.

2.2 Nature and Duration of Loan

The Loan shall be a term loan payable in full upon the date and upon the terms and conditions provided in the Promissory Note.

2.3 Promissory Note

The Loan shall be evidenced by the Promissory Note. The Promissory Note shall be executed and delivered to Lender upon execution and delivery of this Loan Agreement. Proceeds of the Promissory Note may be disbursed by Lender by wire transfer.

2.4 Loan Fee

Upon execution and delivery of this Loan Agreement, Borrower shall pay to Lender a loan fee of $25,000. No portion of such fee shall be refunded in the event of early termination of this Loan Agreement or any termination or reduction of the right of Borrower to request advances under this Loan Agreement.

3.	Security for Loan

3.1 Collateral

The Loan, Promissory Note, and all obligations of Borrower under the Loan Documents shall be secured by such collateral as is provided in the Security Documents (the “Collateral”), which shall include, without limitation, a security interest in all assets of Borrower, as more particularly described in the Security Documents, including, without limitation, the Security Agreement, except that equipment purchased by Borrower to fulfill its obligations under the Reseller Agreement (limited to the equipment listed on Schedule 2 of the Security Transfer Agreement) is expressly excluded from Lender’s Collateral.

3.2 Release of Lender as Condition to Lien Termination

In recognition of Lender’s right to have all its attorneys fees and expenses incurred in connection with this Loan Agreement secured by the Collateral, notwithstanding payment in full of the Loan and all other obligations secured by the Collateral, Lender shall not be required to release, reconvey, or terminate any Security Document unless and until Borrower and all Guarantors have executed and delivered to Lender general releases in form and substance satisfactory to Lender.

Guarantee

4.1 Guarantee

Upon execution and delivery of this Loan Agreement, Guarantor shall execute and deliver to Lender a Guarantee in a form acceptable to Lender.

4.2 Guarantor Organization and Qualification

Guarantor represents and warrants to Lender as follows:

a. Guarantor is a corporation duly organized and existing in good standing under the laws of the State of Delaware. Guarantor is duly qualified to do business in each jurisdiction where the conduct of its business requires qualification.

b. Guarantor has the full power and authority to own its properties and to conduct the business in which it engages and to enter into and perform its obligations under the Loan Documents. Guarantor has delivered to Lender or Lender’s counsel accurate and complete copies of Guarantor’s Organizational Documents which are operative and in effect as of the Effective Date.

4.3 Guarantor Authorization

Guarantor represents and warrants to Lender that the execution, delivery, and performance by Guarantor of the Loan Documents have been duly authorized by all necessary action on the part of Guarantor and are not inconsistent with Guarantor’s Organizational Documents or any resolution of the Board of Directors of Guarantor, do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract, or other instrument to which Guarantor is a party or by which it is bound, and that upon execution and delivery hereof and thereof, the Loan Documents will constitute legal, valid, and binding agreements and obligations of Guarantor, enforceable in accordance with their respective terms.

4.4 Guarantor Financial Statements and Reports

Until requested otherwise by Lender, Guarantor shall provide the following financial statements and reports to Lender:

a. Semi-annual and annual financial statements for each such fiscal period of Guarantor which are consistent with other financial statements previously delivered to Lender subject to providing a proforma statement of Guarantor’s standard internal reporting information with reasonable adjustments made in good faith by Guarantor for financial statements dated as of March 31, to be delivered to Lender within 120 days of March 31 and September 30 of each year.

b. Semi-annual and annual financial statements for each such fiscal period of Guarantor’s Parent, to be delivered to Lender within 120 days of March 31 and September 30 of each year. The financial statements delivered for the fiscal year end shall include a certification by the chief executive officer and chief financial officer of Guarantor’s Parent certifying that the financial statements fully and fairly represent Guarantor’s Parent’s financial condition as of the date thereof and the results of operations for the period covered thereby and are consistent with other financial statements previously delivered to Lender.

4.5 Accuracy of Guarantor Financial Statements

All of Guarantor’s and Guarantor’s Parent’s audited financial statements heretofore delivered to Lender, if any, have been prepared in accordance with Accounting Standards and fully and fairly represent Guarantor’s and Guarantor’s Parent’s financial condition as of the date thereof and the results of Guarantor’s and Guarantor’s Parent’s operations for the period or periods covered thereby.

All of Guarantor’s and Guarantor’s Parent’s unaudited financial statements heretofore delivered to Lender fully and fairly represent Guarantor’s and Guarantor’s Parent’s financial condition as of the date thereof and the results of Guarantor’s and Guarantor’s Parent’s operations for the period or periods covered thereby and are consistent with other financial statements previously delivered to Lender.

Since the date of such financial statements, there has been no change in Guarantor’s and Guarantor’s Parent’s financial condition which could have a Material Adverse Effect.

5.	Conditions to Loan Disbursements

5.1 Conditions to Loan Disbursements

Lender’s obligation to disburse any of the Loan is expressly subject to, and shall not arise until all of the conditions set forth below have been satisfied. All of the documents referred to below must be in a form and substance acceptable to Lender.

a. All of the Loan Documents and all other documents contemplated to be delivered to Lender prior to funding have been fully executed and delivered to Lender.

b. All of the documents contemplated by the Loan Documents which require filing or recording have been properly filed and recorded so that all of the liens and security interests granted to Lender in connection with the Loan will be properly created and perfected, and Lender shall have a first priority security interest on all assets of Borrower except as set forth in Section 3.1 Collateral hereto.

c. All other conditions precedent provided in or contemplated by the Loan Documents or any other agreement or document have been performed.

d. As of the date of disbursement of all or any portion of the Loan, the following shall be true and correct: (i) all representations and warranties made by Borrower and Guarantor in the Loan Documents are true and correct in all material respects as of the date of such disbursement; and (ii) no Event of Default has occurred which has not been waived or timely cured, and no conditions exist and no event has occurred, which, with the passage of time or the giving of notice, or both, would constitute an Event of Default.

All conditions precedent set forth in this Loan Agreement and any of the Loan Documents are for the sole benefit of Lender and may be waived unilaterally by Lender.

5.2 No Default, Adverse Change, False or Misleading Statement

Lender’s obligation to advance any funds at any time pursuant to this Loan Agreement and the Promissory Note shall, at Lender’s sole discretion, terminate upon the occurrence of any Event of Default, any event which could have a Material Adverse Effect, or upon the determination by Lender that any of Borrower’s or Guarantor’s representations made in any of the Loan Documents were false or materially misleading when made. Upon the exercise of such discretion, Lender shall be relieved of all further obligations under the Loan Documents.

6.	Representations and Warranties

Borrower represents and warrants to Lender as follows:

6.1 Organization and Qualification

Borrower is a corporation duly organized and existing in good standing under the laws of the State of Delaware, and Borrower is qualified and in good standing as a foreign corporation in the State of Utah. Borrower is duly qualified to do business in each jurisdiction where the conduct of its business requires qualification.

Borrower has the full power and authority to own its property and to conduct the business in which it engages and to enter into and perform its obligations under the Loan Documents. Borrower has delivered to Lender or Lender’s counsel accurate and complete copies of Borrower’s Organizational Documents which are operative and in effect as of the Effective Date.

6.2 Authorization

The execution, delivery, and performance by Borrower of the Loan Documents has been duly authorized by all necessary action on the part of Borrower and are not inconsistent with Borrower’s Organizational Documents or any resolution of the Board of Directors of Borrower, do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract, or other instrument to which Borrower is a party or by which it is bound, and that upon execution and delivery thereof, the Loan Documents will constitute legal, valid, and binding agreements and obligations of Borrower, enforceable in accordance with their respective terms.

6.3 No Governmental Approval Necessary

No consent by, approval of, giving of notice to, registration with, or taking of any other action with respect to or by any federal, state, or local governmental authority or organization is required for Borrower’s execution, delivery, or performance of the Loan Documents.

6.4 Accuracy of Financial Statements

All of Borrower’s audited financial statements heretofore delivered to Lender have been prepared in accordance with Accounting Standards.

All of Borrowers unaudited financial statements heretofore delivered to Lender fully and fairly represent Borrower’s financial condition as of the date thereof and the results of Borrower’s operations for the period or periods covered thereby and are consistent with other financial statements previously delivered to Lender.

Since the dates of the most recent audited and unaudited financial statements delivered to Lender, there has been no event which would have a Material Adverse Effect on its financial condition.

All of Borrower’s pro forma financial statements heretofore delivered to Lender have been prepared consistently with Borrower’s actual financial statements and fully and fairly represent Borrower’s anticipated financial condition and the anticipated results of Borrower’s operation for the period or periods covered thereby.

6.5 No Pending or Threatened Litigation

Except as set forth on Schedule 6.5 attached hereto, there are no actions, suits, or proceedings pending or, to Borrower’s knowledge, threatened against or affecting Borrower in any court or before any governmental commission, board, or authority which, if adversely determined, would have a Material Adverse Effect.

6.6 Full and Accurate Disclosure

This Loan Agreement, the financial statements referred to herein, any loan application submitted to Lender, and all other statements furnished by Borrower to Lender in connection herewith contain no untrue statement of a material fact and omit no material fact necessary to make the statements contained therein or herein not misleading. Borrower represents and warrants that it has not failed to disclose in writing to Lender any fact that would have a Material Adverse Effect.

6.7 Compliance with ERISA

Borrower is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, and the regulations and published interpretations thereunder. Neither a Reportable Event as set forth in Section 4043 of ERISA or the regulations thereunder (“Reportable Event”) nor a prohibited transaction as set forth in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended, has occurred and is continuing with respect to any employee benefit plan established, maintained, or to which contributions have been made by Borrower or any trade or business (whether or not incorporated) which together with Borrower would be treated as a single employer under Section 4001 of ERISA (“ERISA Affiliate”) for its employees which is covered by Title I or Title IV of ERISA (“Plan”); no notice of intent to terminate a Plan has been filed nor has any Plan been terminated which is subject to Title IV of ERISA; no circumstances exist that constitute grounds under Section 4042 of ERISA entitling the Pension Benefit Guaranty Corporation (“PBGC”) to institute proceedings to terminate, or appoint a trustee to administer a Plan, nor has the PBGC instituted any such proceedings; neither Borrower nor any ERISA Affiliate has completely or partially withdrawn under Section 4201 or 4204 of ERISA from any Plan described in Section 4001(a)(3) of ERISA which covers employees of Borrower or any ERISA Affiliate (“Multi-employer Plan”); Borrower and each ERISA Affiliate has met its minimum funding requirements under ERISA with respect to all of its Plans and the present fair market value of all Plan assets equals or exceeds the present value of all vested benefits under or all claims reasonably anticipated against each Plan, as determined on the most recent valuation date of the Plan and in accordance with the provisions of ERISA and the regulations thereunder and the applicable statements of the Financial Accounting Standards Board (“FASB”) for calculating the potential liability of Borrower or any ERISA Affiliate under any Plan; neither Borrower nor any ERISA Affiliate has incurred any liability to the PBGC (except payment of premiums, which is current) under ERISA.

Borrower, each ERISA Affiliate and each group health plan (as defined in ERISA Section 733) sponsored by Borrower and each ERISA Affiliate, or in which Borrower or any ERISA Affiliate is a participating employer, are in compliance with, have satisfied and continue to satisfy (to the extent applicable) all requirements for continuation of group health coverage under Section 4980B of the Internal Revenue Code and Sections 601 et seq. of ERISA, and are in compliance with, have satisfied and continue to satisfy Part 7 of ERISA and all corresponding and similar state laws relating to portability, access and renewability of group health benefits and other requirements included in Part 7.

6.8 Compliance with USA Patriot Act

Borrower is not subject to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Lender from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower.

6.9 Compliance with All Other Applicable Law

Borrower has complied in all material respects with all applicable statutes, rules, regulations, orders, and restrictions of any domestic or foreign government, or any instrumentality or agency thereof having jurisdiction over the conduct of Borrower’s business or the ownership of its properties, which may have a Material Adverse Effect.

6.10 Environmental Representations and Warranties

Except as Lender has been otherwise previously advised by Borrower to Borrower’s knowledge after due inquiry and investigation, no Hazardous Materials are now located on, in, or under the Real Property, nor to Borrower’s knowledge after due inquiry and investigation is there any Environmental Condition on, in, or under the Real Property and neither Borrower nor, to Borrower’s knowledge, after due inquiry and investigation, any other person has ever caused or permitted any Hazardous Materials to be placed, held, used, stored, released, generated, located or disposed of on, in or under the Real Property, or any part thereof, nor caused or allowed an Environmental Condition to exist on, in or under the Real Property, except in the ordinary course of Borrower’s business under conditions that are generally recognized to be appropriate and safe and that are in compliance with all applicable Environmental Health and Safety Laws. Borrower further represents and warrants that to Borrower’s knowledge after due inquiry and investigation no investigation, administrative order, consent order and agreement, litigation or settlement with respect to Hazardous Materials and/or an Environmental Condition is proposed, threatened, anticipated or in existence with respect to the Real Property.

6.11 Operation of Business

Borrower possesses all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, to conduct its business substantially as now conducted and as presently proposed to be conducted, and Borrower is not in violation of any valid rights of others with respect to any of the foregoing.

6.12 Payment of Taxes

Borrower has filed all tax returns (federal, state, and local) required to be filed, or has filed timely return extensions and has paid all taxes, assessments, and governmental charges and levies, including interest and penalties, on Borrower’s assets, business and income, except such as are being contested in good faith by proper proceedings and as to which adequate reserves are maintained.

7.	Borrower’s Covenants

Borrower makes the following agreements and covenants, which shall continue so long as this Loan Agreement is in effect and so long as Borrower is indebted to Lender for obligations arising out of, identified in, or contemplated by this Loan Agreement.

7.1 Use of Proceeds

Borrower shall use the proceeds of the Loan solely for the purposes identified to Lender in applying for the Loan.

Borrower shall not, directly or indirectly, use any of the proceeds of the Loan for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or to extend credit to any person or entity for the purpose of purchasing or carrying any such margin stock or for any purpose which violates, or is inconsistent with, Regulation X of said Board of Governors, or for any other purpose not permitted by Section 7 of the Securities Exchange Act of 1934, as amended, or by any of the rules and regulations respecting the extension of credit promulgated thereunder.

7.2 Continued Compliance with ERISA

Borrower covenants that, with respect to all Plans (as defined in Section 6.7 Compliance with ERISA) which Borrower or any ERISA Affiliate currently maintains or to which Borrower or any ERISA Affiliate is a sponsoring or participating employer, fiduciary, party in interest or disqualified person or which Borrower or any ERISA Affiliate may hereafter adopt, Borrower and each ERISA Affiliate shall continue to comply with all applicable provisions of the Internal Revenue Code and ERISA and with all representations made in Section 6.7 Compliance with ERISA, including, without limitation, conformance with all notice and reporting requirements, funding standards, prohibited transaction rules, multi-employer plan rules, necessary reserve requirements, and health care continuation, coverage and portability requirements.

7.3 Compliance with USA Patriot Act

Borrower shall (a) not be or become subject at any time to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Lender from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower, and (b) provide documentary and other evidence of Borrower’s identity as may be requested by Lender at any time to enable Lender to verify Borrower’s identity or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

7.4 Continued Compliance with Applicable Law

Borrower shall conduct its business in a lawful manner and in material compliance with all applicable federal, state, and local laws, ordinances, rules, regulations, and orders; shall maintain in good standing all licenses and organizational or other qualifications reasonably necessary to its business and existence; and shall not engage in any business not authorized by and not in accordance with its Organizational Documents and other governing documents.

7.5 Prior Consent for Amendment or Change

Borrower shall not modify, amend, waive, or otherwise alter, or fail to enforce, its Organizational Documents or other governing documents without Lender’s prior written consent.

7.6 Payment of Taxes and Obligations

Borrower shall pay when due all taxes, assessments, and governmental charges and levies on Borrower’s assets, business, and income, and all material obligations of Borrower of whatever nature, except such as are being contested in good faith by proper proceedings and as to which adequate reserves are maintained.

7.7 Financial Statements and Reports

Borrower shall provide Lender with such financial statements and reports as Lender may reasonably request. Audited financial statements and reports shall be prepared in accordance with Accounting Standards. Unaudited financial statements and reports shall fully and fairly represent Borrower’s financial condition as of the date thereof and the results of Borrower’s operations for the period or periods covered thereby and shall be consistent with other financial statements previously delivered to Lender.

Until requested otherwise by Lender, Borrower shall provide the following financial statements and reports to Lender:

a. Annual consolidated audited financial statements for each fiscal year of Borrower in a form acceptable to Lender, to be delivered to Lender within 120 days of the end of the fiscal year. The annual financial statements shall include a certification by the chief financial officer and chief executive officer of Borrower that the annual financial statements fully and fairly represent Borrower’s financial condition as of the date thereof and the results of operations for the period covered thereby and are consistent with other financial statements previously delivered to Lender.

b. Borrower’s annual forecast in a form acceptable to Lender to be delivered to Lender within 60 days of the end of the fiscal year.

c. Quarterly financial statements for each fiscal quarter of Borrower in a form acceptable to Lender, to be delivered to Lender within 45 days of the end of the fiscal quarter. The quarterly financial statements shall include a certification by the chief financial officer or chief executive officer of Borrower that the quarterly financial statements fully and fairly represent Borrower’s financial condition as of the date thereof and the results of operations for the period covered thereby and are consistent with other financial statements previously delivered to Lender.

d. Together with the delivery of each financial statement delivered in respect of a period ending as of the end of a fiscal quarter, a consolidated compliance certificate certifying that Borrower is in compliance with all terms and conditions of this Loan Agreement, including compliance with the financial covenants provided in Section 7.14 Financial Covenants. The compliance certificate shall include the data and calculations supporting all financial covenants, whether in compliance or not, and shall be signed by the chief executive officer or chief financial officer of Borrower

7.8 Insurance

Borrower shall maintain insurance with financially sound and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business and similarly situated, which insurance may provide for reasonable deductibility from coverage thereof.

7.9 Inspection

Borrower shall at any reasonable time and from time to time permit Lender or any representative of Lender to examine and make copies of and abstracts from the records and books of account of, and visit and inspect the properties and assets of, Borrower, and to discuss the affairs, finances, and accounts of Borrower with any of Borrower’s officers and directors and with Borrower’s independent accountants.

7.10 Operation of Business

Borrower shall maintain all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or rights thereto, necessary or advisable to conduct its business and Borrower shall not violate any valid rights of others with respect to any of the foregoing. Borrower shall continue to engage in a business of the same general type as now conducted.

7.11 Maintenance of Records and Properties

Borrower shall keep adequate records and books of account in which complete entries will be made in accordance with Accounting Standards. Borrower shall maintain, keep and preserve all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted.

7.12 Notice of Claims

Borrower shall promptly notify Lender in writing of all actions, suits or proceedings filed or threatened against or affecting Borrower in any court or before any governmental commission, board, or authority which, if adversely determined, would have a Material Adverse Effect.

7.13 Environmental Covenants

Borrower covenants that it will:

a. Not permit the presence, use, disposal, storage or release of any Hazardous Materials on, in, or under the Real Property, except in the ordinary course of Borrower’s business under conditions that are generally recognized to be appropriate and safe and that are in compliance with all applicable Environmental Health and Safety Laws.

b. Not permit any substance, activity or Environmental Condition on, in, under or affecting the Real Property which is in violation of any Environmental Health and Safety Laws.

c. Comply in all material respects with the provisions of all Environmental Health and Safety Laws.

d. Notify Lender promptly of any discharge of Hazardous Materials, Environmental Condition, or environmental complaint or notice received from any governmental agency or any other party.

e. Upon any discharge of Hazardous Materials or upon the occurrence of any Environmental Condition, immediately contain and remediate the same in compliance with all Environmental Health and Safety Laws, promptly pay any fine or penalty assessed in connection therewith, and immediately notify Lender of such events.

f. Permit Lender with reasonable time and notice to inspect the Real Property for Hazardous Materials and Environmental Conditions, to conduct tests thereon, and to inspect all books, correspondence, and records pertaining thereto.

g. From time to time upon Lender’s request, and at Borrower’s expense, provide a report (including all validated and unvalidated data generated for such reports) of a qualified independent environmental engineer acceptable to Lender, satisfactory to Lender in scope, form, and content, and provide to Lender such other and further assurances reasonably satisfactory to Lender, that Borrower is in compliance with these covenants concerning Hazardous Materials and Environmental Conditions, and that any past violation thereof has been corrected in compliance with all applicable Environmental Health and Safety Laws.

h. Immediately advise Lender of any additional, supplemental, new, or other information concerning any Hazardous Materials or Environmental Conditions relating to the Real Property.

7.14 Financial Covenants

Except as otherwise provided herein, each of the accounting terms used in this Section 7.14 shall have the meanings used in accordance with Accounting Standards.

a. Minimum Liquidity Position and Minimum Quarterly EBITDA. Borrower shall at all times maintain cash, cash equivalents, and marketable securities having an aggregate value, as determined in accordance with Accounting Standards and as reasonably acceptable to Lender, of not less than the outstanding balance on the revolving line of credit loan described in the RLOC Loan Documents plus $2,500,000 (“Minimum Liquidity Position”). If the aggregate value of Borrower’s cash, cash equivalents, and marketable securities is at any time less than the Minimum Liquidity Position, Borrower shall maintain a minimum quarterly EBITDA of not less than $1,100,000, measured as of the last day of each quarter.

b. Minimum Working Capital. Borrower shall at all times maintain minimum Working Capital of not less than $1,000,000.00, measured as of the last day of each quarter.

7.15 Negative Pledge

Borrower will not create, incur, assume, or suffer to exist any mortgage, deed of trust, pledge, lien, security interest, hypothecation, assignment, deposit arrangement, or other preferential arrangement, charge, or encumbrance (including, without limitation, any conditional sale, other title retention agreement, or finance lease) of any nature, upon or with respect to any of its properties or assets, now owned or hereafter acquired, or sign or file, under the Uniform Commercial Code of any jurisdiction, a financing statement under which Borrower appears as debtor, or sign any security agreement authorizing any secured party thereunder to file such financing statement, except (a) those contemplated by this Loan Agreement and the RLOC Loan Agreement; (b) liens arising in the ordinary course of business (such as liens of carriers, warehousemen, mechanics, and materialmen) and other similar liens imposed by law for sums not yet due and payable or, if due and payable, those being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained in accordance with Accounting Standards; (c) easements, rights of way, restrictions, minor defects or irregularities in title or other similar liens which alone or in the aggregate do not interfere in any material way with the ordinary conduct of the business of Borrower; (d) liens for taxes and assessments not yet due and payable or, if due and payable, those being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained in accordance with Accounting Standards; (e) anti-assignment provisions included in any Qualified Account, Chattel Paper, General Intangible or promissory note in which Borrower has any right, title or interest; (f) the Equipment Line; and (g) liens arising under the Security Transfer Agreement.

7.16 Restriction on Debt

Borrower shall not create, incur, assume, or suffer to exist any debt except as permitted by this Section 7.16.

Permitted exceptions to this covenant are: (i) Debt contemplated by this Loan Agreement and the RLOC Loan Agreement; (ii) accounts payable to trade creditors for goods or services which are not aged more than ninety (90) days from the billing date and current operating liabilities (other than for borrowed money) which are not more than ninety (90) days past due, in each case incurred in the ordinary course of business, as presently conducted, and paid within the specified time, unless contested in good faith and by appropriate proceedings; (iii) Debt incurred under the Equipment Line; (iv) Debt due not to exceed an outstanding principal amount of two hundred thousand dollars ($200,000.00) per debt and not to exceed an aggregate, outstanding principal amount of five hundred thousand dollars ($500,000.00); (v) Debt existing on the Effective Date and set forth on Schedule 7.16 hereto; (vi) Debt secured by liens described in clause (f) of the definition of Permitted Encumbrances in the Security Agreement; (vii) extensions, refinancings, modifications, amendments and restatements of any items of the foregoing clauses, provided that the principal amount thereof is not increased and the terms thereof are not modified or impose more burdensome terms upon Borrower; (viii) subordinated Debt, which is approved in advance in writing by Lender; and (ix) recourse of Guarantor against Borrower pursuant to the Security Transfer Agreement.

7.17 Mergers, Consolidations, and Purchase and Sale of Assets

Borrower shall not wind up, liquidate, or dissolve itself, reorganize, merge, or consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise dispose of (whether in one

transaction or a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any person or entity, or acquire all or substantially all of the assets or the business of any person or entity.

7.18 Dividends and Loans

Borrower shall not (i) declare or pay any dividends, (ii) purchase, redeem, retire or otherwise acquire for value any of its capital stock or equity interests now or hereafter outstanding, (iii) make any distribution of assets to its stockholders, investors, or equity holders, whether in cash, assets, or in obligations of Borrower, (iv) allocate or otherwise set apart any sum for the payment of any dividend or distribution on, or for the purchase, redemption, or retirement of any shares of its capital stock or equity interests, or (v) make any other distribution by reduction of capital or otherwise in respect of any shares of its capital stock or equity interests.

Borrower shall not make any loans or pay any advances of any nature whatsoever to any person or entity, except advances in the ordinary course of business to vendors, suppliers, and contractors.

Default

8.1 Events of Default

Time is of the essence of this Loan Agreement. The occurrence of any of the following events shall constitute a default under this Loan Agreement and under the Loan Documents and shall be termed an “Event of Default”:

a. Borrower fails in the payment or performance of any obligation, covenant, agreement, or liability created by any of the Loan Documents.

b. Any representation, warranty, or financial statement made by or on behalf of Borrower in any of the Loan Documents, or any document contemplated by the Loan Documents, is materially false or materially misleading.

c. Default occurs or Borrower fails to comply with any term in any of the Loan Documents.

d. Any indebtedness of Borrower under any note, indenture, contract, agreement, or undertaking is accelerated.

e. Default or an event which, with the passage of time or the giving of notice or both, would constitute a default, by Borrower, occurs on any note, indenture, contract, agreement, or undertaking.

f. Borrower is dissolved or substantially ceases business operations.

g. A receiver, trustee, or custodian is appointed for any part of Borrower’s property, or any part of Borrower’s property is assigned for the benefit of creditors.

h. Any proceeding is commenced or petition filed under any bankruptcy or insolvency law by or against Borrower.

i. Any judgment or regulatory fine is entered against Borrower which may materially affect Borrower.

j. Borrower becomes insolvent or fails to pay its debts as they mature.

k. Any change occurs in Borrower’s condition or any event occurs which may have a Material Adverse Effect.

l. Any default under the Equipment Line.

m. Any default occurs under the Reseller Agreement or the Security Transfer Agreement.

n. Any default occurs under the RLOC Loan Documents.

8.2 Cure Periods

For any Event of Default other than an Event of Default arising from the failure of Borrower to make a payment to Lender when due, Borrower may cure such default within 10 Banking Business Days of the receipt of written notice from Lender of such default (a “Default Notice”), or if it is commercially unreasonable to cure such default within 10 Banking Business Days and with Lender’s consent, within such longer period of time as is reasonably necessary to accomplish the cure, provided (i) Borrower promptly commences such cure upon receipt of the Default Notice, (ii) such cure period does not exceed 90 days under any circumstances, and (iii) Borrower shall pay to Lender all of Lender’s reasonable costs to confirm that the Event of Default has been cured. If an Event of Default is cured, provided Borrower immediately pays all of Lenders reasonable enforcement costs, including attorneys’ fees, through the date Lender received notice of the cure, Lender shall cease its enforcement actions and remedies, including any acceleration remedy provided herein or elsewhere in the Loan Documents, and the parties shall proceed under the Loan Documents as if no default has occurred. Notwithstanding Lender’s obligation to terminate its remedies upon a cure as set forth above, Lender shall have no obligation to suspend or delay its enforcement of its rights and remedies under the Loan Documents and at law during any applicable cure period. In no event shall Borrower have the right to cure Events of Default more than three (3) times during the term of this Agreement.

8.3 No Waiver of Event of Default

No course of dealing or delay or failure to assert any Event of Default shall constitute a waiver of that Event of Default or of any prior or subsequent Event of Default.

Remedies

9.1 Remedies upon Event of Default

Upon the occurrence of an Event of Default, and at any time thereafter, all or any portion of the obligations due or to become due from Borrower to Lender, whether arising under this

Loan Agreement, the Promissory Note, the Security Documents or otherwise, at the option of Lender and without notice to Borrower of the exercise of such option, shall accelerate and become at once due and payable in full, and Lender shall have all rights and remedies created by or arising from the Loan Documents, and all other rights and remedies existing at law, in equity, or by statute.

Additionally, Lender shall have the right, immediately and without prior notice or demand, to set off against Borrower’s obligations to Lender, whether or not due, all money and other amounts owed by Lender in any capacity to Borrower, including, without limitation, checking accounts, savings accounts, and other depository accounts, and Lender shall be deemed to have exercised such right of setoff and to have made a charge against any such money or amounts immediately upon occurrence of an Event of Default, even though such charge is entered on Lender’s books subsequently thereto.

9.2 Rights and Remedies Cumulative

The rights and remedies herein conferred are cumulative and not exclusive of any other rights or remedies and shall be in addition to every other right, power, and remedy that Lender may have, whether specifically granted herein or hereafter existing at law, in equity, or by statute. Any and all such rights and remedies may be exercised from time to time and as often and in such order as Lender may deem expedient.

9.3 No Waiver of Rights

No delay or omission in the exercise or pursuance by Lender of any right, power, or remedy shall impair any such right, power, or remedy or shall be construed to be a waiver thereof.

10.	General Provisions

10.1 Governing Agreement

In the event of conflict or inconsistency between this Loan Agreement and the other Loan Documents, excluding the Promissory Note, the terms, provisions and intent of this Loan Agreement shall govern.

10.2 Borrower’s Obligations Cumulative

Every obligation, covenant, condition, provision, warranty, agreement, liability, and undertaking of Borrower contained in the Loan Documents shall be deemed cumulative and not in derogation or substitution of any of the other obligations, covenants, conditions, provisions, warranties, agreements, liabilities, or undertakings of Borrower contained herein or therein.

10.3 Payment of Expenses and Attorney’s Fees

Borrower shall pay all reasonable expenses of Lender relating to the negotiation, drafting of documents, documentation of the Loan, and administration and supervision of the Loan, including, without limitation, appraisal fees, environmental inspection fees, field examination expenses, title insurance, recording fees, filing fees, and reasonable attorneys fees and legal expenses, whether incurred in making the Loan, in future amendments or modifications to the Loan Documents, or in ongoing administration and supervision of the Loan.

Upon occurrence of an Event of Default, Borrower agrees to pay all costs, and expenses, including reasonable attorney fees and legal expenses, incurred by Lender in enforcing, or exercising any remedies under, the Loan Documents, and any other rights and remedies.

Borrower agrees to pay all expenses, including reasonable attorney fees and legal expenses, incurred by Lender in any bankruptcy proceedings of any type involving Borrower, Guarantor, the Loan Documents, or the Collateral, including, without limitation, expenses incurred in modifying or lifting the automatic stay, determining adequate protection, use of cash collateral or relating to any plan of reorganization.

10.4 Right to Perform for Borrower

Lender may, in its sole discretion and without any duty to do so, elect to discharge taxes, tax liens, security interests, or any other encumbrance upon the Collateral or any other property or asset of Borrower, to pay any filing, recording, or other charges payable by Borrower, or to perform any other obligation of Borrower under this Loan Agreement or under the Security Documents.

10.5 Assignability

Borrower may not assign or transfer any of the Loan Documents and any such purported assignment or transfer is void.

Lender may assign or transfer any of the Loan Documents. Funding of this Loan may be provided by an affiliate of Lender.

10.6 Third Party Beneficiaries

The Loan Documents are made for the sole and exclusive benefit of Borrower, Guarantor and Lender and are not intended to benefit any other third party. No third party may claim any right or benefit or seek to enforce any term or provision of the Loan Documents.

10.7 Governing Law

The Loan Documents shall be governed by and construed in accordance with the laws of the State of Utah, except to the extent that any such document expressly provides otherwise.

10.8 Severability of Invalid Provisions

Any provision of this Loan Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10.9 Interpretation of Loan Agreement

The article and section headings in this Loan Agreement are inserted for convenience only and shall not be considered part of the Loan Agreement nor be used in its interpretation.

All references in this Loan Agreement to the singular shall be deemed to include the plural when the context so requires, and vice versa. References in the collective or conjunctive shall also include the disjunctive unless the context otherwise clearly requires a different interpretation.

10.10 Survival and Binding Effect of Representations, Warranties, and Covenants

All agreements, representations, warranties, and covenants made herein by Borrower shall survive the execution and delivery of this Loan Agreement and shall continue in effect so long as any obligation to Lender contemplated by this Loan Agreement is outstanding and unpaid, notwithstanding any termination of this Loan Agreement. All agreements, representations, warranties, and covenants made herein by Borrower shall survive any bankruptcy proceedings involving Borrower. All agreements, representations, warranties, and covenants in this Loan Agreement shall bind the party making the same, its successors and, in Lender’s case, assigns, and all rights and remedies in this Loan Agreement shall inure to the benefit of and be enforceable by each party for whom made, their respective successors and, in Lender’s case, assigns.

10.11 Indemnification

Borrower hereby agrees to indemnify Lender for all liabilities and damages (including contract, tort and equitable claims) which may be awarded against Lender, and for all reasonable attorneys fees, legal expenses and other expenses incurred in defending such claims, arising from or relating in any manner to the negotiation, execution or performance by Lender of the Loan Documents (including all reasonable attorneys fees, legal expenses and other expenses incurred in defending any such claims brought by Borrower if Borrower does not prevail in such actions), excluding only breach of contract by Lender under such circumstances that such breach amounts to gross negligence or willful misconduct. Lender shall have sole and complete control of the defense of any such claims and is hereby given authority to settle or otherwise compromise any such claims as Lender in good faith determines shall be in its best interests.

10.12 Environmental Indemnification

Borrower shall indemnify Lender for any and all claims and liabilities, and for damages which may be awarded or incurred by Lender, and for all reasonable attorney fees, legal expenses, and other out-of-pocket expenses arising from or related in any manner, directly or indirectly, to (i) Hazardous Materials located on, in, or under the Real Property; (ii) any Environmental Condition on, in, or under the Real Property; (iii) violation of or non compliance with any Environmental Health and Safety Law; (iv) any breach or violation of Section 6.10 Environmental Representations and Warranties and/or Section 7.13 Environmental Covenants; and/or (v) any activity or omission, whether occurring on or off the Real Property, whether prior to or during the term of the loans secured hereby, and whether by Borrower or any other person or entity, relating to Hazardous Materials or an Environmental Condition. The indemnification obligations of Borrower under this Section shall survive any reconveyance, release, or foreclosure of the Real Property, any transfer in lieu of foreclosure, and satisfaction of the obligations secured hereby.

Lender shall have the sole and complete control of the defense of any such claims. Lender is hereby authorized to settle or otherwise compromise any such claims as Lender in good faith determines shall be in its best interests.

10.13 Interest on Expenses and Indemnification, Collateral, Order of Application

All expenses, out-of-pocket costs, attorneys fees and legal expenses, amounts advanced in performance of obligations of Borrower, and indemnification amounts owing by Borrower to Lender under or pursuant to this Loan Agreement, the Promissory Note, and/or any Security Documents shall be due and payable upon demand. If not paid upon demand, all such obligations shall bear interest at the default rate provided in the Promissory Note from the date of disbursement until paid to Lender, both before and after judgment. Lender is authorized to disburse funds under the Promissory Note for payment of all such obligations.

Payment of all such obligations shall be secured by the Collateral and by the Security Documents.

All payments and recoveries shall be applied to payment of the foregoing obligations, the Promissory Note, and all other amounts owing to Lender by Borrower in such order and priority as determined by Lender. Unless provided otherwise in the Promissory Note, payments on the Promissory Note shall be applied first to accrued interest and the remainder, if any, to principal.

10.14 Limitation of Consequential Damages

Lender and its officers, directors, employees, representatives, agents, and attorneys, shall not be liable to Borrower or any Guarantor for consequential damages arising from or relating to any breach of contract, tort, or other wrong in connection with the negotiation, documentation, administration or collection of the Loan.

10.15 Waiver of Defenses and Release of Claims

Borrower hereby (i) represents that neither the Borrower nor any affiliate or principal of Borrower has any defenses to or setoffs against any obligations owing by Borrower, or by Borrower’s affiliates or principals, to Lender or Lender’s affiliates, nor any claims against Lender or Lender’s affiliates for any matter whatsoever, related or unrelated to any obligations, and (ii) releases Lender and Lender’s affiliates, officers, directors, employees, representatives and agents from all claims, causes of action, and costs, in law or equity, known or unknown, whether or not matured or contingent, existing as of the date hereof that Borrower has or may have by reason of any matter of any conceivable kind or character whatsoever, related or unrelated to the Loan, including the subject matter of the Loan Documents. The foregoing release does not apply, however, to claims for future performance of express contractual obligations that mature after the date hereof that are owing to Borrower by Lender or Lender’s affiliates. Borrower acknowledges that Lender has been induced to enter into or continue the obligations by, among other things, the waivers and releases in this paragraph.

10.16 Revival Clause

If the incurring of any debt by Borrower or the payment of any money or transfer of property to Lender by or on behalf of Borrower or Guarantor should for any reason subsequently be determined to be “voidable” or “avoidable” in whole or in part within the meaning of any state or federal law (collectively “voidable transfers”), including, without limitation, fraudulent conveyances or preferential transfers under the United States Bankruptcy Code or any other federal or state law, and Lender is required to repay or restore any voidable transfers or the amount or any portion thereof, or upon the advice of Lender’s counsel is advised to do so, then, as to any such amount or property repaid or restored, including all reasonable costs, expenses, and attorneys fees of Lender related thereto, the liability of Borrower and Guarantor, and each of them, shall automatically be revived, reinstated and restored and shall exist as though the voidable transfers had never been made.

10.17 Jury Trial Waiver, Arbitration, and Class Action Waiver

This Section contains a jury waiver, arbitration clause, and a class action waiver. READ IT CAREFULLY.

a. Jury Trial Waiver. As permitted by applicable law, Borrower, Guarantor and Lender each waive their respective rights to a trial before a jury in connection with any Dispute (as “Dispute” is hereinafter defined), and Disputes shall be resolved by a judge sitting without a jury. If a court determines that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing such litigation pending arbitration (“Arbitration Order”).

b. Arbitration. If a claim, dispute, or controversy arises between Borrower, Guarantor and Lender with respect to this Agreement, related agreements, or any other agreement or business relationship between Borrower, Guarantor, and Lender whether or not related to the subject matter of this Agreement (all of the foregoing, a “Dispute”), and only if a jury trial waiver is not permitted by applicable law or ruling by a court, any of the parties may require that the Dispute be resolved by binding arbitration before a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute, Borrower and Guarantor give up any right they may have to a jury trial, as well as other rights it would have in court that are not available or are more limited in arbitration, such as the rights to discovery and to appeal.

Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum (“Administrator”) as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is selected by the parties and who agrees to conduct the arbitration without an Administrator. Disputes include matters relating to a deposit account, application for or denial of credit, enforcement of any of the obligations the parties have to each other, compliance with applicable laws and/or regulations, performance or services provided under any agreement by any party, including but not limited to the validity, enforceability, meaning, or scope of this

arbitration provision, and including a dispute based on or arising from an alleged tort or matters involving either of Borrower’s, Guarantor’s or Lender’s employees, agents, affiliates, or assigns of a party. However, Disputes do not include the validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, Borrower, Guarantor and Lender each will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party. Venue for the arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if there is no agreement, in Salt Lake City, Utah.

After entry of an Arbitration Order, the non-moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence arbitration. The arbitrator will (i) hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a claim, or for full or partial summary judgment, (ii) will render a decision and any award applying applicable law, (iii) give effect to any limitations period in determining any Dispute or defense, (iv) enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable, (v) with regard to motions and the arbitration hearing, apply rules of evidence governing civil cases, and (vi) apply the law of the state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and/or the appointment of a receiver, (ii) pursuing non-judicial foreclosure, or (iii) availing itself of any self-help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.

Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator, arbitrator, and attorney’s fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if Administrator has no such rules, then the JAMS arbitration appellate rules shall apply.

Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The provisions of this arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from the Administrator’s rules, this arbitration provision shall control.

c. Class Action Waiver. BORROWER, GUARANTOR AND LENDER EACH WAIVE THE RIGHT TO LITIGATE IN COURT OR ARBITRATE ANY CLAIM OR DISPUTE AS A CLASS ACTION, EITHER AS A MEMBER OF A CLASS OR AS A REPRESENTATIVE, OR TO ACT AS A PRIVATE ATTORNEY GENERAL.

d. Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual waivers, agreements, and certifications in this section.

10.18 Consent to Utah Jurisdiction and Exclusive Jurisdiction of Utah Courts

Borrower and Guarantor acknowledge that by execution and delivery of the Loan Documents Borrower and Guarantor have transacted business in the State of Utah and Borrower and Guarantor voluntarily submit to, consent to, and waive any defense to the jurisdiction of courts located in the State of Utah as to all matters relating to or arising from the Loan Documents and/or the transactions contemplated thereby. EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER AND EXCEPT AS PROVIDED IN THE ARBITRATION PROVISIONS ABOVE, THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF UTAH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND CONTROVERSIES, ARISING UNDER OR RELATING TO THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER.

10.19 Joint and Several Liability

Borrower and Guarantor shall each be jointly and severally liable for all obligations and liabilities relating to payment of Indebtedness.

10.20 Notices

All notices or demands by any party to this Loan Agreement shall, except as otherwise provided herein, be in writing and may be sent by certified mail, return receipt requested. Notices so mailed shall be deemed received when deposited in a United States post office box, postage prepaid, properly addressed to Borrower or Lender at the mailing addresses stated herein or to such other addresses as Borrower or Lender may from time to time specify in writing. Any notice so addressed and otherwise delivered shall be deemed to be given when actually received by the addressee.

Mailing addresses:

Lender:

Zions First National Bank

Corporate Banking Group

One South Main Street, Suite 200

Salt Lake City, Utah 84111

Attention: Thomas C. Etzel, Sr. Vice President

With a copy to:

Scott R. Irwin

Holland & Hart LLP

222 South Main Street, Suite 2200

Salt Lake City, Utah 84101

Borrower:

inContact, Inc.

7730 South Union Park Avenue, Suite 500

Salt Lake City, Utah 84047

Attention: Greg Ayers

Guarantor:

Siemens Enterprise Communications, Inc.

1881 Campus Commons Drive, Suite 501

Reston, VA 20191

Attention: General Counsel

10.21 Duplicate Originals; Counterpart Execution

Two or more duplicate originals of the Loan Documents may be signed by the parties, each duplicate of which shall be an original but all of which together shall constitute one and the same instrument. Any Loan Documents may be executed in several counterparts, without the requirement that all parties sign each counterpart. Each of such counterparts shall be an original, but all counterparts together shall constitute one and the same instrument.

10.22 Disclosure of Financial and Other Information

Borrower and Guarantor hereby consent to Lender disclosing to any other lender who may participate in the Loan any and all information, knowledge, reports, and records, including, without limitation, financial statements, relating in any manner whatsoever to the Loan, Borrower and Guarantor, provided such other lender shall enter into a confidentiality and non-disclosure agreement limiting its use and all such information and data relating to Guarantor only for purposes of such participation in the Loan.

10.23 Integrated Agreement and Subsequent Amendment

The Loan Documents constitute the entire agreement between Lender, Borrower, and Guarantor, and may not be altered or amended except by written agreement signed by Lender, Borrower, and, if applicable, Guarantor. PURSUANT TO UTAH CODE SECTION 25-5-4, BORROWER AND GUARANTOR ARE NOTIFIED THAT THESE AGREEMENTS ARE A

FINAL EXPRESSION OF THE AGREEMENT BETWEEN LENDER, BORROWER AND GUARANTOR, AND THESE AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT.

All prior and contemporaneous agreements, arrangements and understandings between the parties hereto as to the subject matter hereof are, except as otherwise expressly provided herein, rescinded.

[Signature Page(s) Follow]

IN WITNESS WHEREOF, this Loan Agreement has been executed and becomes effective as of the Effective Date.


Lender:

Zions First National Bank

By:
		Thomas C. Etzel
		Senior Vice President

Borrower:

inContact, Inc.

By:
Name:
Title:

Each undersigned Guarantor hereby acknowledges and consents to the foregoing Loan Agreement, makes the representations, warranties and covenants set forth in Section 4 Guarantee, and agrees to the provisions of Section 10.14 Limitation of Consequential Damages, Section 10.17 Jury Trial Waiver, Arbitration, and Class Action Waiver, Section 10.18 Consent to Utah Jurisdiction and Exclusive Jurisdiction of Utah Courts, Section 10.19 Joint and Several Liability, and Section 10.22 Disclosure of Financial and Other Information.


Guarantor:

Siemens Enterprise Communications, Inc.

By:
		Stephen Juge
		Sr. Vice President and General Counsel

SCHEDULE 6.5

LITIGATION DISCLOSURE

California College, Inc., et al v. UCN, Inc., et al, Third Judicial District Court in and for Salt Lake County, State of Utah, Case No. 090907053.

SCHEDULE 7.16

EXISTING DEBT