Loan No. ____________
RENEWAL AND SUBSTITUTE PROMISSORY NOTE
Salt Lake City, Utah
June 30, 2000
$15,000,000.00
1. Promise to Pay. For value received, Evans & Sutherland Computer
Corporation, a Utah corporation ( "Borrower"), and Evans & Sutherland, GMBH, a
German limited company; Evans & Sutherland, Ltd., a U.K. public limited company;
and Evans & Sutherland Graphics Corporation, a Utah corporation (collectively
"Additional Obligors"), jointly and severally, promise to pay to the order of
Zions First National Bank, a national banking association ("Lender"), at its
office at P.O. Box 25822 One South Main Street, in Salt Lake City, Utah 84125,
or at such other place as Lender may from time to time designate, in lawful
money of the United States of America, the principal sum of Fifteen Million
Dollars ($15,000,000.00), or so much of that sum as may be advanced under this
Renewal and Substitute Promissory Note (the "Promissory Note") by any holder,
together with all other advances made pursuant to this Promissory Note
(collectively the "Principal Indebtedness"), plus interest as computed below.
This Promissory Note is referred to in and arises out of a Loan Agreement dated
the Closing Date (the "Loan Agreement") between Borrower and Lender and is
secured by the Collateral.
2. Interest. The outstanding balance of the Principal Indebtedness
shall bear interest from the Closing Date at a variable interest rate of four
percent (4%) per annum above Lender's Prime Rate (as defined below). Interest
shall accrue daily on the outstanding balance of the Principal Indebtedness both
before and after judgment, and shall be calculated on the basis of a 360-day
year. Interest is computed on a 360-day year simple interest basis by applying
the ratio for the annual interest rate over a year of 360 days (365/360),
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. The applicable annual total
interest rate, as computed in accordance with the foregoing, shall be adjusted
with each change of the Prime Rate, effective on the date of the change in the
Prime Rate.
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As used in this Promissory Note, the term "Prime Rate" shall be deemed
to mean an index which is determined daily by the published commercial loan
variable rate index held by any two of the following banks: Chase Manhattan
Bank, Wells Fargo Bank N.A., and Bank of America N.A. In the event no two of the
above banks have the same published rate, the bank having the median rate will
establish Lender's Prime Rate. If, for any reason beyond the control of Lender,
any of the aforementioned banks becomes unacceptable as a reference for the
purpose of determining the Prime Rate used herein, Lender may, five days after
posting notice in Lender's bank offices, substitute another comparable bank for
the one determined unacceptable. As used in this paragraph, "comparable bank"
shall mean one of the ten largest commercial banks headquartered in the United
States of America. This definition of Prime Rate is to be strictly interpreted
and is not intended to serve any purpose other than providing an index to
determine the variable interest rate used herein. It is not the lowest rate at
which Lender may make loans to any of its customers, either now or in the
future.
3. Payments. Accrued interest computed in accordance with the foregoing
shall be due and payable on May 1, 2000 and thereafter on the first day of each
and every month thereafter to and including March 30, 2001, when the total
unpaid Principal Indebtedness and all accrued and unpaid interest thereon shall
be due and payable in full. Checks will constitute payment only when collected.
4. Lender's Expenditures. Borrower and Additional Obligors agree to pay
on demand any reasonable expenditures made by Lender in accordance with the Loan
Documents, including, but not limited to, the payment of taxes, insurance
premiums, costs of maintenance and preservation of the Property, common expense
and other assessments relating to the Property, and attorney fees and costs
incurred in connection with any matter pertaining hereto or to the security
pledged to secure the Principal Indebtedness or any portion thereof
(collectively the "Lender Expenditures"). At the election of Lender, all Lender
Expenditures may be added to the unpaid balance of this Promissory Note and
become a part of and on a parity with the Principal Indebtedness secured by the
Trust Deed and shall accrue interest at such rate as may be computed from time
to time in the manner prescribed in this Promissory Note.
5. Prepayment. Borrower and Additional Obligors shall have the right,
from time to time and at any time, to prepay all, or any part, of the Loan at
any time or times prior to the maturity of the Loan without payment of any
premium or penalty. Borrower and Additional Obligors agree that any prepayment
shall be made to Lender in the form of cash or equivalent prior to 3:00 p.m.
Mountain Time to facilitate investment of such prepayment funds for account of
Lender. In the event this deadline is not met, interest will continue to accrue
on the unpaid loan balance at the rate specified herein through and including
Lender's next regular banking day.
6. Late Charge. If any payment is fifteen (15) days or more late,
Borrower and Additional Obligors will be charged five percent (5%) of the
regularly scheduled payment or $50.00, whichever is greater. The imposition of a
late charge does not in any way extend any payment date or the maturity date of
the Note.
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7. Default Interest Rate. If default occurs in the payment of any
principal or interest past any applicable grace or cure period, or if any Event
of Default occurs under the Loan Documents, time being the essence hereof, then
(a) the entire unpaid balance, shall, at the election of the holder of this
Promissory Note and without notice of such election, become immediately due and
payable in full, and (b) without notice and whether or not the principal balance
has been accelerated, all outstanding principal shall bear interest at a default
rate from the date when due until paid, both before and after judgment, which
default rate shall be six percent (6%) per annum above Lender's Prime Rate. If
this Promissory Note becomes in default or payment is accelerated, Borrower and
Additional Obligors agree to pay to the holder of this Promissory Note all
collection costs, including reasonable attorney fees and legal expenses, in
addition to all other sums due under this Promissory Note.
8. Application of Payments. Any and all payments by Borrower and/or
Additional Obligors under this Promissory Note shall be applied as follows:
first, to the repayment of any Lender Expenditures advanced by Lender under this
Promissory Note or pursuant to the Loan Documents; second, to the payment of any
late charges; third, to the payment of accrued interest on the Principal
Indebtedness; and fourth, to the payment of the Principal Indebtedness.
9. Extension. The time for any payment required under this Promissory Note
may be extended from time to time at the election of Lender. Acceptance by
Lender of additional security or guarantees for the performance of the terms and
provisions contained in this Promissory Note shall not in any way affect the
liability of Borrower or Additional Obligors.
10. Governing Law. This Promissory Note shall be governed by and construed
in accordance with the laws of the State of Utah.
11. Interest Limitation. All agreements between the parties to this
Promissory Note and the holder of this Promissory Note are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
deferment or advancement of the proceeds of the Loan evidenced by this
Promissory Note, acceleration of maturity of the Loan, or otherwise shall the
amount paid or agreed to be paid to holder for the use, forbearance or detention
of the money to be loaned under this Promissory Note exceed the maximum interest
rate permissible under applicable law. If, from any circumstance whatsoever,
fulfillment of any provision of this Promissory Note or of any other agreement
between the parties to this Promissory Note and the holder, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity. In the event that any payment is
received by the holder of this Promissory Note which would otherwise be deemed
to be a payment of interest in excess of the maximum allowed by law, such
payment shall be deemed to have been paid on account of principal at the time of
receipt. This provision shall never be superseded or waived and shall control
every other provision of this Promissory Note and all agreements between the
parties and the holder of this Promissory Note.
12. Defined Terms. Unless otherwise defined in this Promissory Note,
capitalized terms hereinafter used have the meanings given them in the Loan
Agreement.
13. Renewal Note. This Renewal and Substitute Promissory Note replaces
and renews the Promissory Note dated March 31, 2000 executed by Borrower in the
amount of $15,000,000.00 and is being executed in connection with the Second
Loan Modification Agreement dated June 30, 2000 and entered into between
Borrower, Additional Obligors and Lender.
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DATED: June 30, 2000.
BORROWER
EVANS & SUTHERLAND COMPUTER CORPORATION,
a Utah corporation
By: /s/ Richard J. Gaynor
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Richard J. Gaynor
Vice President and Chief Financial Officer
ADDITIONAL OBLIGORS
EVANS & SUTHERLAND, GMBH,
a German limited company
By: /s/ David Janke
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David Janke
Its: Managing Director
EVANS & SUTHERLAND, LTD.,
a U.K. public limited company
By: /s/ Stuart Anderson
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Stuart Anderson
Its: Managing Director
EVANS & SUTHERLAND GRAPHICS CORPORATION,
a Utah corporation
By: /s/ Mark McBride
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Mark McBride
Its: Secretary