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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 29, 1999, is between IRI
INTERNATIONAL CORPORATION, a Delaware corporation ("Borrower"), and BANK ONE,
TEXAS, N.A., a national banking association ("Lender").
R E C I T A L S:
Borrower has requested Lender to extend credit to Borrower in the form
of commercial and standby letters of credit and bank guarantees not to exceed
an aggregate principal amount of Ten Million and No/100 Dollars
($10,000,000.00) at any time outstanding. Lender is willing to make such
extensions of credit to Borrower upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, the
following terms have the following meanings:
"Advance" means a funding of a Bank Guarantee or a Letter of
Credit, as applicable, pursuant to Article III.
"Affiliate" means, as to any Person, any other Person (i) that
directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, such Person;
(ii) that directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of such Person; or
(iii) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Person in
question. The term "control" means the possession, directly or
indirectly, of the power to direct or cause direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise; provided, however, in no
event shall Lender be deemed an Affiliate of Borrower or any of its
Subsidiaries.
"Bank Guarantee Application" means an application for a bank
guarantee and reimbursement agreement, in a form acceptable to Lender,
properly completed and signed by Borrower.
"Bank Guarantee Liabilities" means, at any time, the aggregate
face amount of all outstanding Bank Guarantees.
"Bank Guarantee" means a Guaranty provided by the Lender or a
Lending Installation for the benefit of Borrower pursuant to Article
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"Business Day" means any day on which commercial banks are not
authorized or required to close in Houston, Texas.
"Capitalization" means, at any particular time, all amounts
which, in conformity with GAAP, would be included as debt and equity
on a consolidated balance sheet of Borrower and its Subsidiaries.
"Chinese Petroleum Corp. Letter of Credit" means that certain
letter of credit issued by Lender to Chinese Petroleum Corp. in the
amount of $48,781.00, expiring September, 2001.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated and rulings issued thereunder.
"Commercial Letter of Credit" means a commercial letter of
credit issued by Lender for the account of Borrower pursuant to
Article II.
"Commitment" means the obligation of Lender to issue Letters
of Credit and provide Bank Guarantees hereunder in an aggregate
principal amount at any time outstanding up to but not exceeding Ten
Million and No/100 Dollars ($10,000,000.00).
"Consolidated Tangible Net Worth" means, at any particular
time, all amounts which, in conformity with GAAP, would be included as
stockholders' equity on a consolidated balance sheet of Borrower and
the Subsidiaries; provided, however, there shall be subtracted
therefrom: (i) any amount at which shares of capital stock of Borrower
appear as an asset on Borrower's balance sheet, (ii) goodwill,
including any amounts, however designated, that represent the excess
of the purchase price paid for assets or stock over the value assigned
thereto, (iii) patents, trademarks, trade names, and copyrights, (iv)
deferred expenses, (v) loans and advances to any stockholder,
director, officer, or employee of Borrower or any Subsidiary or any
Affiliate, and (vi) all other assets which are properly classified as
intangible assets.
"Debt" means as to any Person at any time (without
duplication): (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, notes,
debentures, or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the
ordinary course of business which are not past due by more than ninety
(90) days unless such trade accounts payable are being contested in
good faith by appropriate proceedings, (iv) all obligations of such
Person under any lease which, in conformity with GAAP, is required to
be capitalized for balance sheet purposes, (v) all obligations of such
Person under guaranties, endorsements (other than for collection or
deposit in the ordinary course of business), assumptions or other
contingent obligations, in respect of, or to purchase or otherwise
acquire, any Debt,
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(vi) all obligations secured by a Lien existing on property owned by
such Person, whether or not the obligations secured thereby have been
assumed by such Person or are non-recourse to the credit of such
Person, (vii) all reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments, and (viii)
the Commitment.
"Default Rate" means the lesser of (a) the Maximum Rate or,
(b) the sum of the Prime Rate in effect from day to day plus one and
one-half percent (1-1/2 %).
"Dollars" and "$" mean lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, and
local laws, regulations, and requirements pertaining to health,
safety, or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq., the Clean Air
Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33 U.S.C.
Section 1251 et seq., the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., and all similar laws, regulations, and
requirements of any governmental authority or agency having
jurisdiction over Borrower or any Subsidiary or any of their
respective properties or assets, as such laws, regulations, and
requirements may be amended or supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as Borrower or is under
common control (within the meaning of Section 414(c) of the Code) with
Borrower.
"Event of Default" has the meaning specified in Section 12.1.
"GAAP" means generally accepted accounting principles, applied
on a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards
Board and/or their respective successors and which are applicable in
the circumstances as of the date in question. Accounting principles
are applied on a "consistent basis" when the accounting principles
observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period (other
than any change in accounting principles required or suggested in
Opinions of the Accounting Principles Board of the American Institute
of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board and/or
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their respective successors and which are applicable in the
circumstances as of the date in question.)
"Hazardous Substance" means any substance, product, waste,
pollutant, material, chemical, contaminant, constituent, or other
material which is or becomes listed, regulated, or addressed under any
Environmental Law, including, without limitation, asbestos, petroleum,
and polychlorinated biphenyls.
"Lending Installation" means the office, branch, subsidiary or
affiliate of Lender selected by Lender pursuant to Section 2.6.
"Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Liabilities" means, at any time, the
aggregate face amount of all outstanding Letters of Credit.
"Letter of Credit Master Agreement" means the Standby Letter
of Credit Master Agreement and the Commercial Letter of Credit Master
Agreement from time to time entered into by the Borrower and the
Lender, each substantially in the form attached hereto as Exhibit "C"
and Exhibit "D," except as modified by Section 11.4 hereof.
"Letter of Credit Request Form" means a certificate, in
substantially the form of Exhibit B hereto, properly completed and
signed by Borrower requesting issuance of a Letter of Credit, together
with such applications and agreements as Lender shall customarily use
in connection with issuance of letters of credit.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or
title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement and all promissory
notes, security agreements, deeds of trust, assignments, bank
guarantees, letters of credit, guaranties, and other instruments,
documents, and agreements executed and delivered pursuant to or in
connection with this Agreement, as such instruments, documents, and
agreements may be amended, modified, renewed, extended, or
supplemented from time to time.
"Material Adverse Effect" means a material adverse effect (i)
on the consolidated business operations, financial condition or
properties of the Borrower and its Subsidiaries, taken as a whole, and
(ii) on the ability of Borrower to pay and perform its obligations
under the Loan Documents to which it is a party.
"Maximum Rate" means the maximum rate of nonusurious interest
permitted from day to day by applicable law, including as to Chapter
346 of the Texas Finance
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Code (and as the same may be incorporated by reference in other Texas
statutes), but otherwise without limitation, that rate based upon the
"indicated rate ceiling" and calculated after taking into account any
and all relevant fees, payments, and other charges in respect of the
Loan Documents which are deemed to be interest under applicable law.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made
by Borrower or any ERISA Affiliate and which is covered by Title IV of
ERISA.
"Note" means the promissory note of Borrower payable to the
order of Lender, in substantially the form of Exhibit A hereto, and
all extensions, renewals and modifications thereof.
"Obligated Party" means or any Person who is or becomes a
party to any agreement that guarantees or secures payment and
performance of the Obligations or any part thereof.
"Obligations" means all obligations, indebtedness, and
liabilities of Borrower to Lender, now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several,
arising under this Agreement and the other Loan Documents (including,
without limitation, Borrower's contingent reimbursement obligations in
respect of Bank Guarantees and Letters of Credit), and all interest
accruing thereon and all attorneys' fees and other expenses incurred
in the enforcement or collection thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, governmental
authority, or other entity.
"Plan" means any employee benefit or other plan established or
maintained by Borrower or any ERISA Affiliate and which is covered by
Title IV of ERISA.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Lender or its parent (which is
not necessarily the lowest rate charged to any customer), changing
when and as said prime rate changes.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
"Regulatory Change" means, with respect to Lender, any change
after the date of this Agreement in United States federal, state, or
foreign laws or regulations (including
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Regulation D) or the adoption or making after such date of any
interpretations, directives, or requests applying to a class of banks
including Lender of or under any United States federal or state, or
any foreign, laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented
from time to time.
"RICO" means the Racketeer Influenced and Corrupt Organization
Act of 1970, as amended from time to time.
"Standby Letter of Credit" means standby letters of credit
issued by Lender for the account of Borrower pursuant to Article II.
"Subsidiary" means any corporation or entity of which more
than fifty percent (50%) of (i) the issued and outstanding securities
having ordinary voting power for the election of a majority of
directors, or (ii) in the case of an entity that is not a corporation,
of the equity interests is owned or controlled, directly or
indirectly, by Borrower, by Borrower and one or more other
Subsidiaries, or by one or more other Subsidiaries.
"Termination Date" means 11:00 A.M. Houston, Texas time on
December 29, 2000, or such earlier date on which the Commitment
terminates as provided in this Agreement.
Section 1.2 Other Definitional Provisions. All definitions
contained in this Agreement are equally applicable to the singular and plural
forms of the terms defined. The words "hereof," "herein," and "hereunder" and
words of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the Uniform
Commercial Code as adopted by the State of Texas, unless otherwise defined
herein, shall have the meanings specified in the Uniform Commercial Code as
adopted by the State of Texas.
ARTICLE II
Bank Guarantees and Letters of Credit
Section 2.1 Bank Guarantees and Letters of Credits.
(a) Subject to the terms and conditions of this Agreement,
Lender agrees to issue one or more Letters of Credit and agrees to
cause a Lending Installation to issue one or more Bank Guarantees for
the account of Borrower from time to time from the
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date hereof to and including the Termination Date; provided, however,
that the aggregate amount of the outstanding Bank Guarantee
Liabilities and the Letter of Credit Liabilities shall not at any time
exceed an amount equal to the Commitment.
(b) Each Commercial Letter of Credit shall have an expiration
date not to exceed one year and each Standby Letter of Credit shall
have an expiration date not to exceed one and a half years, no Letter
of Credit shall have an expiration date beyond six months after the
Termination Date (except for the Chinese Petroleum Corp. Letter of
Credit), must support a transaction that is entered into in the
ordinary course of Borrower's business, must otherwise be satisfactory
in form and substance to Lender, and shall be issued pursuant to such
documents and instruments (including, without limitation, Lender's
standard application for issuance of letters of credit as then in
effect) as Lender may require. Notwithstanding the foregoing, Letters
of Credit in the aggregate of up to $500,000 may be issued with
expiration dates later than six months beyond the Termination Date,
with customary evergreen provisions, provided however that such
Letters of Credit shall be cash collateralized as of the Termination
Date.
(c) Each Bank Guarantee shall have an expiration date not to
exceed one year, shall not have an expiration date beyond six months
after the Termination Date must support a transaction that is entered
into in the ordinary course of Borrower's business, must otherwise be
satisfactory in form and substance to the applicable Lending
Installation, and shall be issued pursuant to such documents and
instruments (including, without limitation, the applicable Lending
Installation's standard application for issuance of bank guarantees as
then in effect) as the applicable Lending Installation may require.
Section 2.2 Procedure for Issuing Bank Guarantees and Letters of
Credit. Each Bank Guarantee and Letter of Credit shall be issued on at least
three Business Days' prior notice from Borrower to Lender by means of a Bank
Guarantee Application or Letter of Credit Request Form, as applicable,
describing the transaction proposed to be supported thereby and specifying (a)
the date on which such Bank Guarantee or Letter of Credit, as applicable, is to
be issued (which shall be a Business Day) and the face amount thereof, (b) the
name and address of the beneficiary, (c) the expiration date of such Bank
Guarantee or Letter of Credit and (d) and if a Letter of Credit, (i) whether
such Letter of Credit shall permit a single drawing or multiple drawings, (ii)
the conditions permitting the drawing or drawings thereunder, (iii) whether the
draft thereunder shall be a sight or time draft and, if the latter, the date
when the draft shall be payable, and (iv) the form of the draft and any other
documents required to be presented at the time of any drawing (such notice to
set forth the exact wording of such documents or to attach copies thereof).
Lender at its option may accept telephonic requests for Bank Guarantees or
Letters of Credit, provided that such acceptance shall not constitute a waiver
of Lender's right to require delivery of a Bank Guarantee Application or Letter
of Credit Request Form, as applicable, in connection with subsequent Bank
Guarantees or Letters of Credit provided hereunder. Any telephonic request for
a Bank Guarantee or Letter of Credit by Borrower shall be promptly confirmed by
submission of a properly completed Bank Guarantee Application or Letter of
Credit Request Form, as applicable, to Lender. Upon fulfillment of the
applicable
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conditions precedent in Article VI, Lender shall make, or shall cause a Lending
Installation to make, if applicable, the applicable Bank Guarantee or Letter of
Credit available to Borrower or, if so requested by Borrower, to the
beneficiary of such Bank Guarantee or Letter of Credit.
Section 2.3 Fees.
(a) Bank Guarantee and Commercial Letter of Credit Fees.
Borrower shall pay to Lender a Bank Guarantee fee or Commercial Letter
of Credit fee equal to the greater of (i) $250; or (ii) an amount
equal to seventy-five hundredths of one percent (.75%) per annum of
the stated amount of such Bank Guarantee or Commercial Letter of
Credit, for the period during which such Bank Guarantee or Commercial
Letter of Credit will remain outstanding, based on a 365 day year and
the actual number of days elapsed, plus all expenses incurred by the
Lender arising from the issuance thereunder. Said fees shall be
payable quarterly in arrears on the 29th day of each March, June,
September and December during the term hereof.
(b) Standby Letter of Credit Fee. Borrower shall pay to
Lender a Standby Letter of Credit fee equal to the greater of (i) $300;
or (ii) an amount equal to seventy-five hundredths of one percent
(.75%) per annum of the stated amount of such Standby Letter of Credit,
for the period during which such Standby Letter of Credit will remain
outstanding, based on a 365 day year and the actual number of days
elapsed, plus all expenses incurred by the Lender arising from the
issuance thereunder. Said fees shall be payable quarterly in arrears
on the 29th day of each March, June, September and December during the
term hereof.
(c) Customary Fees and Expenses. Borrower shall pay to
Lender all customary fees and expenses incurred by the Lender or a
Lending Installation, as applicable, related to the issuance and/or
Advance of all Bank Guarantees and Letters of Credit, which fees and
expenses shall be billed by Lender to Borrower quarterly, and due
within 30 days of receipt thereof.
Section 2.4 Obligations Absolute. The obligations of Borrower
under this Agreement and the other Loan Documents (including without limitation
the obligation of Borrower to reimburse Lender for draws under any Bank
Guarantee or Letter of Credit) shall be absolute, unconditional, and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and the other Loan Documents under all circumstances whatsoever,
including without limitation the following circumstances:
(a) Any lack of validity or enforceability of any Bank
Guarantee or Letter of Credit or any other Loan Document;
(b) Any amendment or waiver of or any consent to
departure from any Loan Document;
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(c) The existence of any claim, set-off, counterclaim,
defense or other rights which Borrower, any Obligated Party, or any
other Person may have at any time against any beneficiary of any Bank
Guarantee or Letter of Credit, Lender, or any other Person, whether in
connection with this Agreement or any other Loan Document or any
unrelated transaction;
(d) Any statement, draft, or other document presented
under any Bank Guarantee or Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(e) Payment by Lender under any Bank Guarantee or Letter
of Credit against presentation of a draft or other document which does
not comply with the terms of such Bank Guarantee or Letter of Credit;
or
(f) Any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
Section 2.5 Limitation of Liability. Borrower assumes all risks of
the acts or omissions of any beneficiary of any Bank Guarantee or Letter of
Credit with respect to its use of such Bank Guarantee or Letter of Credit.
Neither Lender nor a Lending Installation nor any of their officers or
directors shall have any responsibility or liability to Borrower or any other
Person for: (a) the failure of any draft to bear any reference or adequate
reference to any Bank Guarantee or Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person
to surrender or to take up any Bank Guarantee or Letter of Credit or to send
documents apart from drafts as required by the terms of any Bank Guarantee or
Letter of Credit, or the failure of any Person to note the amount of any
instrument on any Bank Guarantee or Letter of Credit, each of which
requirements, if contained in any Bank Guarantee or Letter of Credit itself, it
is agreed may be waived by Lender or a Lending Installation, as applicable, (b)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, (c) the validity, sufficiency, or genuineness of any draft or other
document, or any endorsement(s) thereon, even if any such draft, document or
endorsement should in fact prove to be in any and all respects invalid,
insufficient, fraudulent, or forged or any statement therein is untrue or
inaccurate in any respect, (d) the payment by the Lender or a Lending
Installation, as applicable, to the beneficiary of any Bank Guarantee or Letter
of Credit against presentation of any draft or other document that does not
comply with the terms of the Bank Guarantee or Letter of Credit, or (e) any
other circumstance whatsoever in making or failing to make any payment under a
Bank Guarantee or Letter of Credit. Borrower shall have a claim against Lender
or a Lending Installation, as applicable, and Lender or a Lending Installation,
as applicable, shall be liable to Borrower, to the extent of any direct, but
not consequential, damages suffered by Borrower which Borrower proves in a
final nonappealable judgment were caused by (i) Lender's or a Lending
Installation's, as applicable, willful misconduct or gross negligence in
determining whether documents presented under any Bank Guarantee or Letter of
Credit complied with the terms thereof or (ii) Lender's or a Lending
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Installation's, as applicable, willful failure to pay under any Bank Guarantee
or Letter of Credit or after presentation to it of documents strictly complying
with the terms and conditions of such Bank Guarantee or Letter of Credit.
Lender or a Lending Installation, as applicable, may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Section 2.6 Lending Installations. Lender may book any Bank
Guarantees and Letters of Credit at any Lending Installation selected by Lender
and change its Lending Installations from time to time. All terms of this
Agreement shall apply to any such Lending Installation and the Bank Guarantees,
Letters of Credit, and the Note shall be held by the Lender for the benefit of
the Lending Installation, as applicable. Lender may designate replacement or
additional Lending Installations through which Bank Guarantees or Letters of
Credit may be issued and for whose accounts payments on Advances with respect to
such Bank Guarantees or Letters of Credit are to be made.
Section 2.7 Account with Lender. During the term of this Agreement,
Borrower shall maintain its primary deposit accounts and cash management
services with Lender.
ARTICLE III
Advances
Section 3.1 Advances. (a) Each payment by Lender pursuant to a
drawing under a Bank Guarantee or Letter of Credit shall constitute and be
deemed an Advance by Lender to Borrower under the Note and this Agreement as of
the day and time such payment is made by Lender and in the amount of such
payment.
(b) Borrower will be deemed to have made an Advance if at the
Termination Date there are any Letters of Credit or Bank Guarantees outstanding
that have an expiration beyond the Termination Date and that have not been cash
collateralized.
(c) Subject to the terms and provisions of this Agreement,
Borrower may borrow (by way of Advances pursuant to subsections (a) and (b)
above), repay, and reborrow (by way of Advances pursuant to subsections (a) and
(b) above) hereunder.
Section 3.2 Repayment of Advances. Borrower shall repay the unpaid
principal amount of all Advances on demand, and if not demanded by the Lender,
at the Termination Date
Section 3.3 Interest. The unpaid principal amount of the Advances
shall bear interest prior to maturity at a varying rate per annum equal from
day to day to the lesser of (a) the Maximum Rate, or (b) the Prime Rate, each
such change in the rate of interest charged on the Advances to become
effective, without notice to Borrower, on the effective date of each change in
the Prime Rate or the Maximum Rate, as the case may be; provided, however, if
at any time the rate of interest specified in clause (b) preceding shall exceed
the Maximum Rate, thereby
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causing the interest on the Advances to be limited to the Maximum Rate, then
any subsequent reduction in the Prime Rate shall not reduce the rate of
interest on the Advances below the Maximum Rate until the aggregate amount of
interest accrued on the Advances equals the aggregate amount of interest which
would have accrued on the Advances if the interest rate specified in clause (b)
preceding had at all times been in effect. If repayment of any Advance is not
made within 10 days of the demand therefor pursuant to Section 3.3 hereof, the
unpaid principal amount of such Advance shall bear interest at the Default
Rate.
ARTICLE IV
Payments
Section 4.1 Method of Payment. All payments of principal,
interest, and other amounts to be made by Borrower under this Agreement, the
Note, and the other Loan Documents shall be made to Lender at its office at
Bank One Center, 000 Xxxxxx, Xxxxxxx, Xxxxx 00000, without setoff, deduction,
or counterclaim, in Dollars and in immediately available funds. Borrower shall,
at the time of making each such payment, specify to Lender the sums payable by
Borrower under this Agreement, the Note, or other Loan Document to which such
payment is to be applied (and in the event Borrower fails to so specify, or if
an Event of Default has occurred and is continuing, Lender may apply such
payment to the Obligations in such order and manner as it may elect in its sole
discretion). Whenever any payment under this Agreement, the Note, or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of interest and commitment fee, as the case may be.
Section 4.2 Computation of Interest. Interest on the indebtedness
evidenced by the Note shall be computed on the basis of a year of 365 days and
the actual number of days elapsed (including the first day but excluding the
last day) unless such calculation would result in a usurious rate, in which
case interest shall be calculated on the basis of a year of 365 or 366 days, as
the case may be.
Section 4.3 Capital Adequacy. If, after the date hereof, Lender
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Lender (or its parent) with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on Lender's (or its
parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which Lender (or its
parent) could have achieved but for such adoption, change or compliance (taking
into consideration Lender's policies with respect to capital adequacy) by an
amount deemed by Lender to be material, then from time to time, within ten (10)
Business Days after demand by Lender, Borrower shall pay to Lender such
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additional amount or amounts as will compensate Lender (or its parent) for such
reduction. A certificate of Lender claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive, provided that the determination thereof is made on a reasonable
basis. In determining such amount or amounts, Lender may use any reasonable
averaging and attribution methods.
Section 4.4 Additional Costs in Respect of Letters of Credit. If
as a result of any Regulatory Change there shall be imposed, modified, or
deemed applicable any tax, reserve, special deposit, or similar requirement
against or with respect to or measured by reference to Letters of Credit issued
or to be issued hereunder or Lender's Commitment to issue Letters of Credit
hereunder, and the result shall be to increase the cost to Lender of issuing or
maintaining any Letter of Credit or its Commitment to issue Letters of Credit
hereunder or reduce any amount receivable by Lender hereunder in respect of any
Letter of Credit (which increase in cost, or reduction in amount receivable,
shall be the result of Lender's reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then, upon demand by
Lender, Borrower agrees to pay Lender, from time to time as specified by
Lender, such additional amounts as shall be sufficient to compensate Lender for
such increased costs or reductions in amount. A statement as to such increased
costs or reductions in amount incurred by Lender, submitted by Lender to
Borrower, shall be conclusive as to the amount thereof, provided that the
determination thereof is made on a reasonable basis.
ARTICLE V
Conditions Precedent
Section 5.1 Initial Bank Guarantee or Letter of Credit. The
obligation of Lender to provide an initial Bank Guarantee or Letter of Credit
is subject to the condition precedent that Lender shall have received on or
before the day of such Bank Guarantee or Letter of Credit, all of the
following, each dated (unless otherwise indicated) the date hereof, in form and
substance satisfactory to Lender:
(a) Resolutions. Resolutions of the Board of Directors of
Borrower certified by its Secretary or an Assistant Secretary which
authorize the execution, delivery, and performance by Borrower of this
Agreement and the other Loan Documents to which Borrower is or is to
be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of Borrower
certifying the names of the officers of Borrower authorized to sign
this Agreement and each of the other Loan Documents to which Borrower
is or is to be a party (including the certificates contemplated
herein) together with specimen signatures of such officers;
(c) Articles of Incorporation. The articles of
incorporation of Borrower certified by the Secretary of State of state
of incorporation of Borrower and dated within
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ten (10) days prior to the date of such initial Bank Guarantee or
Letter of Credit.
(d) Bylaws. The bylaws of Borrower certified by the
Secretary or an Assistant Secretary of Borrower;
(e) Governmental Certificates. Certificates of the
appropriate government officials of the state of incorporation of
Borrower as to the existence and good standing of Borrower, each dated
within 10 days prior to the date of the initial Advance;
(f) Note. The Note executed by Borrower;
(g) UCC Search. The results of a Uniform Commercial Code
search showing all financing statements and other documents or
instruments on file against Borrower in the office of the Secretary of
State of Delaware and the Secretary of State of Texas, such search to
be as of a date no more than ten (10) days prior to the date of the
initial Bank Guarantee or Letter of Credit; and
(h) Attorneys' Fees and Expenses. Evidence that the costs
and expenses (including attorneys' fees) referred to in Section 11.1,
to the extent incurred, shall have been paid in full by Borrower.
Section 5.2 All Bank Guarantees or Letters of Credit. The
obligation of Lender to provide any Bank Guarantee or issue any Letter of
Credit, (including the initial Bank Guarantee and the initial Letter of Credit)
is subject to the following additional conditions precedent:
(a) Request for Bank Guarantee or Letter of Credit.
Lender shall have received in accordance with Section 2.2, a Bank
Guarantee Application or Letter of Credit Request Form, dated the date
of such Bank Guarantee or Letter of Credit, and executed by an
authorized officer of Borrower, all of the statements in which shall
be true and correct on and as of such date; and
(b) Additional Documentation. Lender shall have received
such additional approvals, opinions, or documents as Lender or its
legal counsel, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may request.
ARTICLE VI
Representations and Warranties
To induce Lender to enter into this Agreement, Borrower represents and
warrants to Lender that:
Section 6.1 Corporate Existence. Borrower and each Subsidiary (a)
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its
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incorporation; (b) has all requisite corporate power and authority to own its
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
its business makes such qualification necessary and where failure to so qualify
would reasonably be expected to have a Material Adverse Effect. Borrower has
the corporate power and authority to execute, deliver, and perform its
obligations under this Agreement and the other Loan Documents to which it is or
may become a party.
Section 6.2 Financial Statements. Borrower has delivered to
Lender audited consolidated financial statements of Borrower and its
Subsidiaries as at and for the fiscal year ended December 31, 1998, and
unaudited consolidated financial statements of Borrower and its Subsidiaries
for the nine-month period ended September 30, 1999. Such financial statements
are true and correct, have been prepared in accordance with GAAP (except as
disclosed therein), and fairly and accurately present, on a consolidated basis,
the financial condition of Borrower and its Subsidiaries as of the respective
dates indicated therein and the results of operations for the respective
periods indicated therein. Neither Borrower nor any of its Subsidiaries has any
material contingent liabilities, liabilities for taxes, material forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable
commitments not reflected in such financial statements. There has been no
material adverse change in the business, condition (financial or otherwise),
operations, prospects, or properties of Borrower or any of its Subsidiaries
since the effective date of the most recent financial statements referred to in
this Section.
Section 6.3 Corporate Action; No Breach. The execution, delivery,
and performance by Borrower of this Agreement and the other Loan Documents to
which Borrower is or may become a party have been duly authorized by all
requisite action on the part of Borrower and do not and will not violate or
conflict with the articles of incorporation or bylaws of Borrower or any law,
rule, or regulation or any order, writ, injunction, or decree of any court,
governmental authority, or arbitrator, and do not and will not conflict with,
result in a breach of, or constitute a default under, or result in the creation
or imposition of any Lien upon any of the revenues or assets of Borrower or any
Subsidiary pursuant to the provisions of any indenture, mortgage, deed of
trust, security agreement, franchise, permit, license, or other instrument or
agreement by which Borrower or any Subsidiary or any of their respective
properties is bound, except for violations, conflicts, breaches or defaults
which would not reasonably be expected to have a Material Adverse Effect.
Section 6.4 Operation of Business. Borrower and each of its
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted except where failure to have such licenses, permits, franchises,
patents, copyrights, trademarks and tradenames and rights thereto would not
reasonably be expected to have a Material Adverse Effect, and Borrower and each
of its Subsidiaries are not in violation of any valid rights of others with
respect to any of the foregoing, except where such violation would not
reasonably be expected to have a Material Adverse Effect.
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Section 6.5 Litigation and Judgments. Except as disclosed on
Schedule 1 hereto, there is no action, suit, investigation, or proceeding
before or by any court, governmental authority, or arbitrator pending or, to
the knowledge of Borrower, threatened against or affecting Borrower or any
Subsidiary, that would, if adversely determined (taking into account the
probable nature and scope of the remedy therein), be reasonably expected to
have a Material Adverse Effect. There are no outstanding judgments against
Borrower or any Subsidiary.
Section 6.6 Rights in Properties; Liens. Borrower and each
Subsidiary have good and indefeasible title to or valid leasehold interests in
their respective properties and assets, real and personal, including the
properties, assets, and leasehold interests reflected in the financial
statements described in Section 6.2, except for encumbrances including
covenants, restrictions, rights, easements and minor irregularities in title
which would not reasonably be expected to have a Material Adverse Effect, and
none of the properties, assets, or leasehold interests of Borrower or any
Subsidiary is subject to any Lien that is prohibited by Section 8.1.
Section 6.7 Enforceability. This Agreement constitutes, and the
other Loan Documents to which Borrower is party, when delivered, shall
constitute the legal, valid, and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms, except as limited
by bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
Section 6.8 Approvals. No authorization, approval, or consent of,
and no filing or registration with, any court, governmental authority, or third
party is or will be necessary for the execution, delivery, or performance by
Borrower of this Agreement and the other Loan Documents to which Borrower is or
may become a party or the validity or enforceability thereof.
Section 6.9 Debt. Borrower and its Subsidiaries have no Debt,
except as disclosed on Schedule 2 hereto.
Section 6.10 Taxes. (a) Borrower and each Subsidiary have filed
all tax returns (federal, state, and local) required to be filed, including all
income, franchise, employment, property, and sales taxes, and have paid all of
their respective liabilities for taxes, assessments, governmental charges, and
other levies that are due and payable, and (b) Borrower knows of no pending
investigation of Borrower or any Subsidiary by any taxing authority or of any
pending but unassessed tax liability of Borrower or any Subsidiary except where
failure to file such returns, pay such liabilities or where such pending
investigation (taking into account the probable nature and scope of the
remedy), would result in a pending unassessed tax liability, the amount of
which would not reasonably be expected to have a Material Adverse Effect. The
federal income tax liability of Borrower and its Subsidiaries has been audited
by the Internal Revenue Service and has been finally determined and satisfied
for all taxable years up to and including the taxable year ending December 31,
1998.
Section 6.11 Use of Proceeds; Margin Securities. Neither Borrower
nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for
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the purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any extension of credit under this
Agreement will be used to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock.
Section 6.12 ERISA. Borrower and each Subsidiary have complied
with all applicable minimum funding requirements and all other applicable and
material requirements of ERISA and there are no existing conditions that would
reasonably be expected to have a Material Adverse Effect. No Reportable Event
has occurred in connection with any Plan that might constitute grounds for the
termination thereof by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan.
Section 6.13 Disclosure. No statement, information, report,
representation, or warranty made by Borrower in this Agreement or in any other
Loan Document or furnished to Lender in writing in connection with this
Agreement or any transaction contemplated hereby contains any untrue statement
of a material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading.
Section 6.14 Subsidiaries. Borrower has no Subsidiaries other than
those listed on Schedule 3 hereto, and Schedule 3 sets forth the jurisdiction
of incorporation of each Subsidiary and the percentage of Borrower's ownership
of the outstanding voting stock of each Subsidiary. All of the outstanding
capital stock of each Subsidiary has been validly issued, is fully paid, and is
nonassessable.
Section 6.15 Agreements. Neither Borrower nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a Material Adverse Effect. Neither Borrower nor any Subsidiary
is in default in any respect in the performance, observance, or fulfillment of
any of the obligations, covenants, or conditions contained in any agreement or
instrument material to its business to which it is a party where such default
would reasonably be expected to have a Material Adverse Effect.
Section 6.16 Compliance with Laws. Neither Borrower nor any
Subsidiary is in violation in any material respect of any law, rule,
regulation, order, or decree of any court, governmental authority, or
arbitrator where such violation would reasonably be expected to have a Material
Adverse Effect.
Section 6.17 Investment Company Act. Neither Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 6.18 Public Utility Holding Company Act. Neither Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility
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Holding Company Act of 1935, as amended.
Section 6.19 Environmental Matters.
(a) To the best of the Borrower's knowledge, Borrower,
each Subsidiary, and all of their respective properties, assets, and
operations are in full compliance with all Environmental Laws except
where such compliance would not reasonably be expected to have a
Material Adverse Effect. Borrower is not aware of, nor has Borrower
received notice of, any past, present, or future conditions, events,
activities, practices, or incidents which may interfere with or
prevent the compliance or continued compliance of Borrower and the
Subsidiaries with all Environmental Laws.
(b) Borrower and each Subsidiary have obtained all
permits, licenses, and authorizations which are required under
Environmental Laws and the failure to obtain which would reasonably be
expected to have a Material Adverse Effect.
(c) No Hazardous Substances exist on, about, or within or
have been used, generated, stored, transported, disposed of on, or
released from any of the properties or assets of Borrower or any
Subsidiary in violation of any Environmental Law if such violation
would reasonably be expected to have a Material Adverse Effect. The
use which Borrower and the Subsidiaries make and intend to make of
their respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or
release of any Hazardous Substance on, in, or from any such properties
or assets in violation of any Environmental Law if such violation
would reasonably be expected to have a Material Adverse Effect.
(d) There is no action, suit, proceeding, investigation,
or inquiry before any court, administrative agency, or other
governmental authority pending or, to the knowledge of Borrower,
threatened against Borrower or any Subsidiary relating in any way to
any Environmental Law. Neither Borrower nor any Subsidiary has (i) any
liability for remedial action under any Environmental Law, (ii)
received any request for information by any governmental authority
with respect to the condition, use, or operation of any of its
properties or assets, or (iii) received any notice from any
governmental authority or other Person with respect to any violation
of or liability under any Environmental Law.
(e) No Lien arising under any Environmental Law has
attached to any of the properties or assets of Borrower or any of its
Subsidiaries.
Section 6.20 Year 2000 Provisions. Borrower represents and
warrants as follows to Lender that: (i) as of the date of any request for a
Letter of Credit or a Bank Guarantee hereunder; (ii) as of the date of any
renewal, extension or modification of this Agreement; and (iii) at all times
this Agreement or Lender's commitment to make Advances under this Agreement is
outstanding:
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(a) All devices, systems, machinery, information
technology, computer software and hardware, and other date sensitive
technology (jointly and severally the "Systems") necessary for
Borrower to carry on its business as presently conducted and as
contemplated to be conducted in the future are Year 2000 Compliant or
will be Year 2000 Compliant within a period of time reasonably
expected to result in no material disruption of any of Borrower's
business operations. For purposes of these provisions, "Year 2000
Compliant" means that such Systems are designed to be used prior to,
during and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date
data, specifically including any error relating to, or the product of,
date data which represents or references different centuries or more
than one century.
(b) Borrower has: (1) undertaken a detailed inventory,
review, and assessment of all areas within its business and operations
that could be materially adversely affected by the failure of Borrower
to be Year 2000 Compliant on a timely basis; (2) developed a detailed
plan and time line for becoming Year 2000 Compliant on a timely basis,
and (3) to date, implemented that plan in accordance with that
timetable in all material respects.
(c) Borrower has made written inquiry of each of its key
suppliers, vendors, and customers, as to whether such persons have
initiated programs to become Year 2000 Compliant and on the basis of
such inquiries, Borrower reasonably believes that all such persons
will be or become so compliant. For purposes hereof, "key suppliers,
vendors, and customers" refers to those suppliers, vendors, and
customers of Borrower whose business failure would reasonably be
expected to have a Material Adverse Effect. For purposes of this
paragraph, Lender, as a lender of funds under the terms of this
Agreement, confirms to Borrower that Lender has initiated its own
corporate-wide Year 2000 program with respect to its lending
activities.
ARTICLE VII
Positive Covenants
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any Commitment hereunder, Borrower
will perform and observe the following positive covenants, unless Lender shall
otherwise consent in writing:
Section 7.1 Reporting Requirements. Borrower will furnish to
Lender:
(a) Annual Financial Statements. (i) As soon as available,
and in any event within 90 days after the end of each fiscal year of
Borrower, beginning with the fiscal year ending December 31, 1999, a
copy of the Form 10-K Annual Report of Borrower and the Subsidiaries
for such fiscal year; (ii) as soon as available, and in any event
within 45 days after the end of each of the quarters of each fiscal
year of Borrower, a copy of the
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Form 10-Q of Borrower and the Subsidiaries as of the end of such fiscal
quarter and for the portion of the fiscal year then ended; and (iii) as
soon as available, one copy of any other financial statement, report,
notice or proxy statement sent by Borrower or any Subsidiary to its
stockholders generally and one copy of any other regular, periodic or
special report, registration statement, or prospectus filed by Borrower
or any Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency.
(b) Annual Projections. By December 31 of each year,
annual projections of Borrower for the subsequent fiscal year.
(c) Management Letters. Promptly upon receipt thereof, a
copy of any management letter or written report submitted to Borrower
or any Subsidiary by independent certified public accountants with
respect to the business, condition (financial or otherwise),
operations, or properties of Borrower or any Subsidiary;
(d) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any
court or governmental department, commission, board, bureau, agency,
or instrumentality, domestic or foreign, affecting Borrower or any
Subsidiary which, if determined adversely to Borrower or such
Subsidiary, would reasonably be expected to have a Material Adverse
Effect;
(e) Notice of Default. As soon as possible and in any
event within five days after the occurrence of each Event of Default
and each event which, with the giving of notice or lapse of time or
both, would constitute an Event of Default, a written notice setting
forth the details of such Event of Default or event and the action
which Borrower has taken and proposes to take with respect thereto;
(f) ERISA Reports. Promptly after the filing or receipt
thereof, copies of all reports, including annual reports, and notices
which Borrower or any Subsidiary files with or receives from the PBGC
or the U.S. Department of Labor under ERISA; and as soon as possible
and in any event within five days after Borrower or any Subsidiary
knows or has reason to know that any Reportable Event or Prohibited
Transaction has occurred with respect to any Plan or that the PBGC or
Borrower or any Subsidiary has instituted or will institute
proceedings under Title IV of ERISA to terminate any Plan, a
certificate of the chief financial officer of Borrower setting forth
the details as to such Reportable Event or Prohibited Transaction or
Plan termination and the action that Borrower proposes to take with
respect thereto;
(g) Reports to Other Creditors. Promptly after the
furnishing thereof, copies of any statement or report furnished to any
other party pursuant to the terms of any indenture, loan, or credit or
similar agreement and not otherwise required to be furnished to Lender
pursuant to any other clause of this Section;
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(h) Notice of Environmental Law Violation. As soon as
possible and in any event within five days after the occurrence
thereof, written notice of any violation of any Environmental Law that
Borrower or any Subsidiary reports or is required to report to any
governmental authority;
(i) Notice of Material Adverse Effect. As soon as
possible and in any event within five days after the occurrence
thereof, written notice of any matter that would reasonably be
expected to have a Material Adverse Effect;
(j) General Information. Promptly, such other information
concerning Borrower or any Subsidiary as Lender may from time to time
reasonably request.
Section 7.2 Maintenance of Existence; Conduct of Business. Except
for mergers, consolidations, liquidations or amalgamations not otherwise
prohibited by this Agreement, Borrower will preserve and maintain, and, will
cause each Subsidiary to preserve and maintain, its corporate existence and all
of its leases, privileges, licenses, permits, franchises, qualifications and
rights that are necessary or desirable in the ordinary conduct of its business,
and conduct, and cause each Subsidiary to conduct, its business as presently
conducted in an orderly and efficient manner in accordance with good business
practices.
Section 7.3 Maintenance of Properties. Borrower will maintain,
keep, and preserve, and cause each Subsidiary to 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, except
where the failure to so maintain, keep or preserve would not reasonably be
expected to have a Material Adverse Effect.
Section 7.4 Taxes and Claims. Borrower will pay or discharge, and
will cause each Subsidiary to pay or discharge, at or before maturity or before
becoming delinquent (i) all material taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (ii) all lawful claims for labor, material, and supplies, which,
if unpaid, might become a Lien prohibited by Section 8.1 upon any of its
property; provided, however, that neither Borrower nor any Subsidiary shall be
required to pay or discharge any tax, levy, assessment, or governmental charge
which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves have been established.
Section 7.5 Insurance. Borrower will maintain, and will cause
each Subsidiary to maintain, with financially sound and reputable insurance
companies workmen's compensation insurance, liability insurance, and insurance
on its property, assets, and business at least in such amounts and against such
risks as are usually insured against by Persons engaged in similar businesses.
Section 7.6 Inspection Rights. At any reasonable time and from
time to time, Borrower will permit, and will cause each Subsidiary to permit,
representatives of Lender to examine and make copies of the books and records
of, and visit and inspect the properties of
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Borrower and any Subsidiary, and to discuss the business, operations, and
financial condition of Borrower and the Subsidiaries with their respective
officers and employees and with their independent certified public accountants.
Section 7.7 Keeping Books and Records. Borrower will maintain,
and will cause each Subsidiary to maintain, proper books of record and account
in which full, true, and correct entries in conformity with GAAP shall be made
of all dealings and transactions in relation to its business and activities.
Section 7.8 Compliance with Laws. Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, and orders of any court, governmental authority, or
arbitrator, including, without limitation, any directives or regulations issued
by the U.S. Department of Treasury, Office of Foreign Assets Control, except
where the failure to comply would not reasonably be expected to have a Material
Adverse Effect.
The Borrower shall not serve under or enter into any contract with, a
Person included within the definition of (i) "national" of a "designated
foreign country," or "specially designated national" of a "designated foreign
county," in the Foreign Assets Control Regulations or the Cuban Assets Control
Regulations of the United States Treasury Department, 31 C.F.R. Parts 500 and
515, in each case as amended, (ii) "Government of Libya," "entity of the
Government of Libya" or "Libyan entity" in the Libyan Sanctions Regulations of
the United States Treasury Department, 31 C.F.R Part 550, as amended, or
(iii)"Government of Iraq," "entity of the Government of Iraq" or "Iraqi
Government entity" in the Iraqi Sanctions Regulations, 31 C.F.R Part 575, as
amended, all within the meaning of said Regulations or of any regulations,
interpretations or rulings issued thereunder, or engage in any transaction that
violates any provision of said Regulations or that violates any provision of
the Iranian Transactions Regulations, 31 C.F.R. Part 560, as amended, the
Transaction Control Regulations, 31 C.F.R. Part 505, as amended, the Foreign
Assets Control Regulations, 31 C.F.R. Part 500, as amended, or Executive Orders
12810 and 12831; provided however that to the extent any of the foregoing
regulations are repealed and not replaced by similar regulations, restrictions
or sanctions, the prohibitions herein shall not apply as they pertain to such
regulations.
Section 7.9 Compliance with Agreements. Borrower will comply, and
will cause each Subsidiary to comply, in all material respects with all
contracts, agreements, and instruments binding on it or affecting its
properties or business, except where the failure to comply would not reasonably
be expected to have a Material Adverse Effect.
Section 7.10 Further Assurances. Borrower will execute and
deliver, and will cause each Subsidiary to execute and deliver, such further
instruments as may be requested by Lender to carry out the provisions and
purposes of this Agreement and the other Loan Documents.
Section 7.11 ERISA. Borrower will comply, and will cause each
Subsidiary to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, except
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where the failure to comply would not reasonably be expected to have a Material
Adverse Effect.
Section 7.12 Year 2000 Compliance. Borrower covenants and agrees
with Lender that, while any Letter of Credit or Bank Guarantee is in effect,
Borrower will:
(a) At all times prior to January 1, 2000, furnish such
additional information, statements and other reports with respect to
Borrower's activities, course of action and progress towards becoming
Year 2000 Compliant as Lender may request from time to time.
(b) In the event of any change in circumstances that
causes or will likely cause any of Borrower's representations and
warranties with respect to its being or becoming Year 2000 Compliant
to no longer be true (hereinafter, referred to as a "Change in
Circumstances") then Borrower shall promptly, and in any event within
ten days of receipt of information regarding a Change in
Circumstances, provide Lender with written notice (the "Notice") that
describes in reasonable detail the Change in Circumstances and how
such Change in Circumstances caused or will likely cause Borrower's
representations and warranties with respect to being or becoming Year
2000 Compliant to no longer be true. Borrower shall, within 10 days of
a request, also provide Lender with any additional information Lender
requests of Borrower in connection with the Notice and/or a Change in
Circumstances.
(c) Give any representative of Lender access during all
business hours, upon reasonable prior notice to Borrower, to, and
permit such representative to examine, copy or make excerpts from, any
and all books, records and documents in the possession of Borrower and
relating to its affairs, and to inspect any of the properties and
Systems of Borrower, all at the sole cost and expense of Lender.
Section 7.13 Accounts with Lender. Borrower shall transfer all of
its primary operating accounts and treasury management to Lender by March 31,
2000.
ARTICLE VIII
Negative Covenants
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any Commitment hereunder, Borrower
will perform and observe the following negative covenants, unless Lender shall
otherwise consent in writing:
Section 8.1 Limitation on Liens. Borrower will not incur,
create, assume, or permit to exist, and will not permit any Subsidiary to
incur, create, assume, or permit to exist, any Lien upon any of its accounts,
accounts receivable, inventory or related general intangibles, whether now
owned or hereafter acquired, unless Lender has entered into an intercreditor
agreement with the prospective holder of the Lien, in form and substance
acceptable to Lender.
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Nothing in the foregoing section shall prohibit:
(a) Liens on equipment or inventory of Borrower created by a
purchase money security interest;
(b) undetermined or inchoate liens arising or potentially arising
under statutory provisions that have not at the time been
filed or registered in accordance with applicable law or of
that written notice has not been duly given in accordance
with applicable law or that, although filed or registered,
relate to obligations not due or delinquent;
(c) Liens (i) of landlords and carriers, warehousemen, mechanics,
suppliers, sellers, materialmen or repairmen, or other
similar Liens arising by operation of law, and (ii) Liens
that have not been registered in accordance with applicable
law, in each case arising in the ordinary course of business
and with respect to amounts not yet delinquent or that are
being contested in good faith by appropriate proceedings
diligently pursued and diligently conducted and for which
adequate reserves have been established;
(d) Liens on a property of a Person which Liens are existing at
the time such Person is merged into or consolidated with the
Borrower and Liens on property existing at the time of
acquisition thereof by the Borrower; provided that such Liens
were not placed on such property in contemplation of the
consummation of such merger, consolidation or acquisition and
do not extend to any assets other than those of the Person
merged into or consolidated with the Borrower, or the
property so acquired, and proceeds and products of any of the
foregoing;
(e) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in
connection with the importation of goods;
(f) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods
entered into by the Borrower in the ordinary course of
business of the Borrower;
(g) Liens extending, renewing or replacing any of the foregoing
Liens, provided that the principal amount of the indebtedness
or other obligation secured by such Lien is not increased or
the maturity thereof shortened and such Lien is not extended
to cover any additional indebtedness, obligations or
property, other than like obligations and the substitution of
like property (or categories of property to the extent the
terms of the Lien being extended, renewed or replaced,
extended to or covered such categories of property) or the
proceeds or products of the property subject thereto; and
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(h) Liens on any proceeds (including, without limitation,
insurance, condemnation and eminent domain proceeds) or
products of any collateral a Lien over which is permitted by
clauses (a) to and including (g) above.
ARTICLE IX
Financial Covenants
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any Commitment hereunder, Borrower
will observe and perform the following financial covenants, unless Lender shall
otherwise consent in writing:
Section 9.1 Debt to Capitalization Ratio. Borrower will at all
times maintain a ratio Debt to Capitalization of at least 1.0 to 4.0.
Section 9.2 Consolidated Tangible Net Worth. Borrower will at all
times maintain Consolidated Tangible Net Worth in an amount not less than One
Hundred Eighty-One Million and No/100 Dollars ($181,000,000.00).
ARTICLE X
Default
Section 10.1 Events of Default. Without in any manner impairing
the demand nature of the Note, each of the following shall be deemed an "Event
of Default":
(a) Borrower shall fail to pay when due the principal on
any Advances or any part thereof, or the Borrower shall fail to pay
within 5 Business Days when due any other monetary obligation
hereunder other than principal on Advances.
(b) Any representation or warranty made or deemed made by
Borrower or any Obligated Party (or any of their respective officers)
in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with this
Agreement shall be false, misleading, or erroneous in any material
respect when made or deemed to have been made.
(c) Borrower or any Obligated Party shall fail to
perform, observe, or comply with any covenant, agreement, or term
contained in this Agreement or any other Loan Document.
(d) Borrower, any Subsidiary, or any Obligated Party
shall commence a voluntary proceeding seeking liquidation,
reorganization, or other relief with respect to itself or its debts
under any bankruptcy, insolvency, or other similar law now or
hereafter
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in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a
substantial part of its property or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it or shall
make a general assignment for the benefit of creditors or shall
generally fail to pay its debts as they become due or shall take any
corporate action to authorize any of the foregoing.
(e) An involuntary proceeding shall be commenced against
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or a substantial part of
its property, and such involuntary proceeding shall remain undismissed
and unstayed for a period of 30 days.
(f) Borrower, any Subsidiary, or any Obligated Party
shall fail to discharge within a period of 30 days after the
commencement thereof any attachment, sequestration, or similar
proceeding or proceedings involving an aggregate amount in excess
$1,000,000 against any of its assets or properties.
(g) Borrower, any Subsidiary, or any Obligated Party
shall fail to satisfy and discharge promptly any judgment or judgments
against it for the payment of money in an aggregate amount in excess
of $1,000,000.
(h) Borrower, any Subsidiary, or any Obligated Party
shall fail to pay when due any principal of or interest on any Debt
(other than the Obligations) in an aggregate amount in excess of
$1,000,000, or the maturity of any such Debt shall have been
accelerated, or any such Debt shall have been required to be prepaid
prior to the stated maturity thereof, or any event shall have occurred
that permits (or, with the giving of notice or lapse of time or both,
would permit) any holder or holders of such Debt or any Person acting
on behalf of such holder or holders to accelerate the maturity thereof
or require any such prepayment.
(i) This Agreement or any other Loan Document shall cease
to be in full force and effect or shall be declared null and void or
the validity or enforceability thereof shall be contested or
challenged by Borrower, any Subsidiary, any Obligated Party or any of
their respective shareholders, or Borrower or any Obligated Party
shall deny that it has any further liability or obligation under any
of the Loan Documents.
(j) Any of the following events shall occur or exist with
respect to Borrower or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with respect
to any Plan; (iii) the filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any Plan; (iv)
any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee
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to administer, any Plan, or the institution by the PBGC of any such
proceedings; (v) complete or partial withdrawal under Section 4201 or
4204 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of any Multiemployer Plan; and in each case
above, such event or condition, together with all other events or
conditions, if any, have subjected or could in the reasonable opinion
of Lender subject Borrower to any tax, penalty, or other liability to
a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceed or could reasonably
be expected to exceed $500,000.
(k) Borrower, any of its Subsidiaries, or any Obligated
Party, or any of their respective properties, revenues, or assets,
shall become subject to an order of forfeiture, seizure, or
divestiture (whether under RICO or otherwise) and the same shall not
have been discharged within 30 days from the date of entry thereof.
Section 10.2 Remedies Upon Default. If any Event of Default shall
occur, Lender may without notice terminate its Commitment to make Advances,
issue Letters of Credit, and create Acceptances hereunder and declare the
Obligations or any part thereof to be immediately due and payable, and the same
shall thereupon become immediately due and payable, without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by Borrower; provided, however,
that upon the occurrence of an Event of Default under Section 10.1(d) or
Section 10.1(e), the Commitment of Lender to make Advances, issue Letters of
Credit, and create Acceptances shall automatically terminate, and the
Obligations shall become immediately due and payable without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by Borrower. If any Event of
Default shall occur, Lender may exercise all rights and remedies available to
it in law or in equity, under the Loan Documents, or otherwise.
Section 10.3 Bank Guarantees and Letters of Credit. If the
Termination Date or any Event of Default shall occur, Borrower shall, if
requested by Lender or otherwise required by the terms of this Agreement,
immediately deposit with and pledge to Lender cash or cash equivalent
investments in an amount equal to the outstanding Bank Guarantees and Letter of
Credit Liabilities as security for the Obligations.
Section 10.4 Performance by Lender. If Borrower shall fail to
perform any covenant, duty, or agreement contained in any of the Loan
Documents, Lender may perform or attempt to perform such covenant, duty, or
agreement on behalf of Borrower. In such event, Borrower shall, at the request
of Lender, promptly pay any amount expended by Lender in such performance or
attempted performance to Lender, together with interest thereon at the Default
Rate from the date of such expenditure until paid. Notwithstanding the
foregoing, it is expressly agreed that Lender shall not have any liability or
responsibility for the performance of any obligation of Borrower under this
Agreement or any other Loan Document.
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ARTICLE XI
Miscellaneous
Section 11.1 Expenses of Lender. Borrower hereby agrees to pay
Lender on demand: (i) all costs and expenses incurred by Lender in connection
with the preparation, negotiation, and execution of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the fees and expenses of Lender's legal counsel, (ii) all costs and expenses
incurred by Lender in connection with the enforcement of this Agreement or any
other Loan Document, including, without limitation, the fees and expenses of
Lender's legal counsel, and (iii) all other costs and expenses incurred by
Lender in connection with this Agreement or any other Loan Document, including,
without limitation, all costs, expenses, taxes, assessments, filing fees, and
other charges levied by a governmental authority or otherwise payable in
respect of this Agreement or any other Loan Document.
Section 11.2 INDEMNIFICATION. BORROWER HEREBY INDEMNIFIES LENDER
AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS AND AGENTS (EACH AN "INDEMNIFIED PERSON") FROM, AND HOLDS EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS'
FEES) ("LOSSES") TO WHICH ANY OF THEM MAY BECOME SUBJECT IN CONNECTION WITH ANY
CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING (OR THE PREPARATION OF ANY
DEFENSE IN CONNECTION THEREWITH) (COLLECTIVELY "PROCEEDINGS") (WHETHER OR NOT
SUCH INDEMNIFIED PERSON IS A PARTY THERETO) INSOFAR AS SUCH LOSSES DIRECTLY
ARISE OUT OF OR RELATE TO OR RESULT FROM, WHICH DIRECTLY OR INDIRECTLY ARISE
FROM OR RELATE TO (I) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (II) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (III) ANY BREACH BY BORROWER
OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY
OF THE LOAN DOCUMENTS, (IV) THE PRESENCE, RELEASE, THREATENED RELEASE,
DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE LOCATED ON, ABOUT,
WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF BORROWER OR ANY
SUBSIDIARY, (V) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, ISSUED
PURSUANT HERETO (VI) ANY AND ALL TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED
ON LENDER OR ANY OF LENDER'S CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT
ISSUED PURSUANT HERETO, OR (VII) ANY INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING RELATING TO ANY OF THE FOREGOING AND ANY LEGAL PROCEEDING RELATING
TO ANY COURT ORDER, INJUNCTION, OR OTHER PROCESS OR DECREE RESTRAINING OR
SEEKING TO RESTRAIN LENDER OR ANY OF LENDER'S CORRESPONDENTS FROM PAYING ANY
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AMOUNT UNDER ANY LETTER OF CREDIT ISSUED PURSUANT HERETO. WITHOUT LIMITING ANY
PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF THE PERSON TO BE INDEMNIFIED BUT NOT FROM THE
GROSS NEGLIGENCE OR WILFULL MISCONDUCT OF SUCH PERSON.
Promptly after receipt by any Indemnified Person of notice of its
involvement in any pending or threatened Proceeding as to which, or related to
or arising out of any matter for which indemnification may be sought hereunder
(an "Indemnified Proceeding"), such Indemnified Person shall, if a claim in
respect thereof is to be made against Borrower under the Loan Documents, notify
Borrower in writing of such involvement; provided, however, that the failure by
such Indemnified Person to so notify Borrower shall not relieve Borrower from
the obligation to indemnify or any other liability hereunder or otherwise
except to the extent that such failure to provide notice prejudices Borrower in
any material respect. In case any Indemnified Person's involvement in such
Indemnified Proceeding shall be in any capacity other than as a witness,
Borrower and its counsel shall be entitled to participate therein with such
Indemnified Person and its counsel. To the extent Borrower wishes, Borrower
also shall be entitled to assume the defense of any Indemnified Proceeding with
counsel of Borrower's choice that is reasonably acceptable to the relevant
Indemnified Person and after notice from Borrower to such Indemnified Person of
Borrower's election so to assume the defense thereof, Borrower will not be
liable to such Indemnified Person for the cost of defense thereof.
Notwithstanding the foregoing, Borrower shall not be entitled to assume the
defense of any Indemnified Proceeding, and the limitations in the preceding
sentence on Borrower's liability to any Indemnified Person shall not apply, if
counsel to any Indemnified Person reasonably determines, and Borrower
reasonable concurs, that there are actual or potential conflicts of interest
between such Indemnified Person and Borrower or that defenses available to such
Indemnified Person may not be asserted by Borrower on the behalf of such
Indemnified Person. In any event, notwithstanding the foregoing, Borrower shall
not be required to indemnify any Indemnified Person for the settlement of any
Indemnified Proceeding entered into without Borrower's prior written consent.
If Borrower assumes the defense of any Indemnified Proceeding as provided
above, Borrower shall not settle or compromise any such Indemnified Proceeding
without the relevant Indemnified Person's prior written consent if the
settlement or compromise involves performance by, or adverse admission of, such
Indemnified Person.
Only one counsel shall be retained by all Indemnified Persons with
respect to any Indemnified Proceeding, unless counsel to any Indemnified Person
reasonably determines, and the Borrower reasonably concurs, that there are
actual or potential conflicts of interest between such Indemnified Person and
other Indemnified Persons, in which case such Indemnified Person may retain
separate counsel together with all other Indemnified Person subject to the same
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conflict of interest.
Section 11.3 Limitation of Liability. Neither Lender nor any
Affiliate, officer, director, employee, attorney, or agent of Lender shall have
any liability with respect to, and Borrower hereby waives, releases, and agrees
not to xxx any of them upon, any claim for any special, indirect, incidental,
or consequential damages suffered or incurred by Borrower in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or
any of the other Loan Documents. Borrower hereby waives, releases, and agrees
not to xxx Lender or any of Lender's Affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions contemplated by
this Agreement or any of the other Loan Documents.
Section 11.4 Modification to Letter of Credit Master Agreements.
The following modifications are hereby made to the Letter of Credit Master
Agreements provided by Lender to the Borrower (and to the extent there are any
discrepancies between such Letter of Credit Master Agreements and this
Agreement, the provisions of this Agreement shall prevail):
(a) Section 2 thereto is deleted in its entirety and replaced by
the following:
"Applicant agrees to pay such fees and interest as set forth
in the Loan Agreement between Issuer and Applicant dated as of
December 29, 1999 (hereinafter referred to as the "Loan
Agreement")";
(b) Section 4(i) thereto is deleted in its entirety and replaced
by the following:
"Applicant is a corporation organized under the laws of the
State of Delware";
(c) Section 4(iii) thereto is amended by adding the following
clause at the beginning of said subsection:
"To the best of Applicant's knowledge";
(d) Section 4(v) thereto is deleted in its entirety;
(e) Section 5 thereto is deleted in its entirety;
(f) Section 10 thereto is amended by adding the following clause
at the beginning of said section:
"During the continuance of an Event of Default,";
(g) Section 11(c) thereto is amended by deleting "three percentage
points" and
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replacing it with "one and one-half percentage points" and by
deleting "Base Rate" and replacing it with "Prime Rate, as defined
in the Loan Agreement";
(h) Section 13 thereto is deleted in its entirety;
(i) Section 14 thereto is amended by deleting the first clause of
the first sentence to remove the reference to the deleted Section 13; and
(j) Section 16 thereto is deleted in its entirety.
Section 11.5 No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by Lender shall have the
right to act exclusively in the interest of Lender and shall have no duty of
disclosure, duty of loyalty, duty of care, or other duty or obligation of any
type or nature whatsoever to Borrower or any of Borrower's shareholders or any
other Person.
Section 11.6 Lender Not Fiduciary. The relationship between
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Loan Documents shall be construed so as to deem the relationship
between Borrower and Lender to be other than that of debtor and creditor.
Section 11.7 Equitable Relief. Borrower recognizes that in the
event Borrower fails to pay, perform, observe, or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to Lender.
Borrower therefore agrees that Lender, if Lender so requests, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
Section 11.8 No Waiver; Cumulative Remedies. No failure on the
part of Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement and the other Loan Documents
are cumulative and not exclusive of any rights and remedies provided by law.
Section 11.9 Successors and Assigns. This Agreement is binding
upon and shall inure to the benefit of Lender and Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior written
consent of Lender.
Section 11.10 Survival. All representations and warranties made in
this Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by Lender or any closing shall affect the representations and
warranties or the right of Lender to rely upon them. Without prejudice to the
survival of any
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other obligation of Borrower hereunder, the obligations of Borrower under
Sections11.1, and 11.2 shall survive repayment of the Note and termination of
the Commitment and the Letters of Credit.
Section 11.1 ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, THE
NOTE, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO. The provisions of this Agreement and the other Loan Documents
to which Borrower is a party may be amended or waived only by an instrument in
writing signed by the parties hereto.
Section 11.12 Maximum Interest Rate. No provision of this
Agreement or of any other Loan Document shall require the payment or the
collection of interest in excess of the maximum permitted by applicable law. If
any excess of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in connection
with this loan transaction, the provisions of this Section shall govern and
prevail and neither Borrower nor the sureties, guarantors, successors, or
assigns of Borrower shall be obligated to pay the excess amount of such
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by the Note; and, if
the principal of the Note has been paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable exceeds the Maximum Rate, Borrower and Lender shall, to the extent
permitted by applicable law, (i) characterize any non-principal payment as an
expense, fee, or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
entire contemplated term of the indebtedness evidenced by the Note so that
interest for the entire term does not exceed the Maximum Rate.
Section 11.13 Notices. All notices and other communications
provided for in this Agreement and the other Loan Documents to which Borrower
is a party shall be given or made by telex, telegraph, telecopy, cable, or in
writing and telexed, telecopied, telegraphed, cabled, mailed by certified mail
return receipt requested, or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other address as shall be designated by such party
in a notice to the other party given in accordance with this Section. Except as
otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telex or telecopy, subject to
telephone confirmation of receipt, or delivered to the telegraph or cable
office, subject
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to telephone confirmation of receipt, or when personally delivered or, in the
case of a mailed notice, when duly deposited in the mails, in each case given
or addressed as aforesaid; provided, however, notices to Lender pursuant to
Articles II, III, and IV shall not be effective until received by Lender.
Section 11.14 Applicable Law; Venue; Service of Process. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas and the applicable laws of the United States of America. This
Agreement has been entered into in Xxxxxx County, Texas, and it shall be
performable for all purposes in Xxxxxx County, Texas. Any action or proceeding
against Borrower under or in connection with any of the Loan Documents may be
brought in any state or federal court in Xxxxxx County, Texas. Borrower hereby
irrevocably (i) submits to the nonexclusive jurisdiction of such courts, and
(ii) waives any objection it may now or hereafter have as to the venue of any
such action or proceeding brought in any such court or that any such court is
an inconvenient forum. Borrower agrees that service of process upon it may be
made by certified or registered mail, return receipt requested, at its address
specified or determined in accordance with the provisions of Section 11.13.
Nothing herein or in any of the other Loan Documents shall affect the right of
Lender to serve process in any other manner permitted by law or shall limit the
right of Lender to bring any action or proceeding against Borrower or with
respect to any of its property in courts in other jurisdictions. Any action or
proceeding by Borrower against Lender shall be brought only in a court located
in Xxxxxx County, Texas.
Section 11.15 Demand Nature. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, Borrower's obligation
to repay outstanding Advances and to pay accrued interest thereon shall at all
times be a demand obligation, and Lender need not rely on or prove the
existence of an Event of Default before making demand for the payment of any or
all outstanding Advances and accrued and unpaid interest thereon.
Section 11.16 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 11.17 Severability. Any provision of this Agreement held
by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 11.18 Headings. The headings, captions, and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 11.19 Non-Application of Chapter 303 of Texas Credit Code.
The provisions of Chapter 303 of the Texas Finance Code are specifically
declared by the parties hereto not to be applicable to this Agreement or any of
the other Loan Documents or to the transactions contemplated hereby.
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Section 11.20 Participations. Lender shall have the right at any
time and from time to time to grant participations in the Note and any other
Loan Documents. Each actual or proposed participant shall be entitled to
receive all information received by Lender regarding the creditworthiness of
Borrower, including, without limitation, information required to be disclosed
to a participant pursuant to Banking Circular 181 (Rev., August 2, 1984),
issued by the Comptroller of the Currency (whether the actual or proposed
participant is subject to the circular or not).
Section 11.21 Construction. Borrower and Lender acknowledge that
each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by Borrower and Lender.
Section 11.22 Arbitration. Any controversy or claim between or
among the parties hereto including but not limited to those arising out of or
relating to this Agreement or any related agreements or instruments, including
any claim based on or arising from an alleged tort, shall be determined by
binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), and the "Special Rules" set forth
below. In the event of any inconsistency, the Special Rules shall control.
Judgment upon any arbitration award may be entered in any court having
jurisdiction. Any part to this Agreement may bring an action, including a
summary or expedited proceeding, to compel arbitration of any controversy or
claim to which this agreement applies in any court having jurisdiction over the
action.
(a) Special Rules. The arbitration shall be conducted in
Houston, Texas and presided over by an arbitrator provided at the
nearest location of Judicial Arbitration & Mediation Services ("JAMS")
office, or if JAMS is not able or is legally precluded from providing
an arbitrator, then the AAA. All arbitration will be commenced within
120 days of the demand for arbitration and the decision/award rendered
within 30 days thereafter; further, the arbitrator shall only, upon
showing of cause, be permitted to extend the commencement period of an
additional 60 days.
(b) Reservation of Rights. Nothing in this Agreement shall
be deemed to (i) limit the applicability of any otherwise applicable
statutes of limitation or repose and any waivers contained in this
Agreement; or (ii) be a waiver by the Lender of the protection
afforded to it by 12 U.S.C. Sec. 91 or any substantially equivalent
state law; or (iii) limit the right of any party hereto (A) to
exercise self help remedies such as (but not limited to) setoff, or
(B) to foreclose against any real or personal property collateral, or
(C) to obtain from a court provisional or ancillary remedies such as
(but not limited to) injunctive relief or the appointment of a
receiver. Any party may exercise such self help rights, foreclose upon
such property, or obtain such provisional or ancillary remedies
before, during or after the pendency of any arbitration proceeding
brought pursuant to this Agreement. Neither exercise of self help
remedies nor the institution or maintenance of an action for
provisional or ancillary remedies shall constitute a waiver of the
right of
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any party, including the claimant in any such action, to arbitrate the
merits of the controversy or claim occasioning resort to such
remedies.
Section 11.23 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
IRI INTERNATIONAL CORPORATION,
a Delaware corporation
By:
Xxxxxx Xxxxxxxx
Vice Chairman and Chief Financial Officer
Address for Notices:
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxxxx
LENDER:
BANK ONE, TEXAS, N.A.,
a national banking association
By:
Xxxxx Xxxxxx
First Vice President
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Address for Notices:
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxx
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INDEX TO EXHIBITS
Exhibit Description of Exhibit Section
------- ---------------------- -------
"A" Note 2.2
"B" Letter of Credit Request Form 3.2
"C" Standy Letter of Credit Master Agreement 1.1
"D" Commercial Letter of Credit Master Agreement 1.1
INDEX TO SCHEDULES
Schedule Description of Schedule Section
-------- ----------------------- -------
1 Existing Litigation 7.5
2 Existing Debt 7.9
3 List of Subsidiaries 7.14
37
SCHEDULE 1
Existing Litigation
None.
38
SCHEDULE 2
Existing Debt
Master Lease Agreement No. 127 by and between Borrower and Data
General Corporation dated December 26, 1995, with Lease Schedule attached dated
February 1, 1996.
39
SCHEDULE 3
List of Subsidiaries
=====================================================================================================================
PERCENTAGE OF
NAME OF JURISDICTION OF VOTING STOCK OWNED
SUBSIDIARY INCORPORATION BY BORROWER
---------------------------------------------------------------------------------------------------------------------
Xxxxx Mexicana, S.A. de Mexico 100%
C.V.
---------------------------------------------------------------------------------------------------------------------
Xxxxx Tools, Ltd. Canada 100%
---------------------------------------------------------------------------------------------------------------------
Xxxxxxxx International, Ltd. Kansas 100%
---------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Manufacturing Canada 100%
Company, Ltd.
---------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Exports, Ltd. U.S. Virgin Islands 100%
---------------------------------------------------------------------------------------------------------------------
IRI Energy Services Barbados 100%
(Barbados) Limited
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
=====================================================================================================================
40
******************************************************************************
IRI INTERNATIONAL CORPORATION
CREDIT AGREEMENT
Dated as of December 29, 1999
$10,000,000
BANK ONE, TEXAS, N.A.
******************************************************************************
41
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions......................................................................................... 1
----------- -
Section 1.1 Definitions................................................................. 1
----------- -
Section 1.2 Other Definitional Provisions............................................... 6
----------------------------- -
ARTICLE II
Bank Guarantees and Letters of Credit............................................................... 6
------------------------------------- -
Section 2.1 Bank Guarantees and Letters of Credits...................................... 6
-------------------------------------- -
Section 2.2 Procedure for Issuing Bank Guarantees and Letters of Credit................. 7
----------------------------------------------------------- -
Section 2.3 Fees........................................................................ 8
---- -
Section 2.4 Obligations Absolute........................................................ 8
-------------------- -
Section 2.5 Limitation of Liability..................................................... 9
----------------------- -
Section 2.6 Lending Installations....................................................... 10
--------------------- --
Section 2.7 Account with Lender......................................................... 10
------------------- --
ARTICLE III
Advances............................................................................................ 10
-------- --
Section 3.2 Repayment of Advances....................................................... 10
--------------------- --
Section 3.3 Interest.................................................................... 10
-------- --
ARTICLE IV
Payments............................................................................................ 11
-------- --
Section 4.1 Method of Payment........................................................... 11
----------------- --
Section 4.2 Computation of Interest..................................................... 11
----------------------- --
Section 4.3 Capital Adequacy............................................................ 11
---------------- --
Section 4.4 Additional Costs in Respect of Letters of Credit............................ 12
------------------------------------------------ --
ARTICLE V
Conditions Precedent................................................................................ 12
-------------------- --
Section 5.1 Initial Bank Guarantee or Letter of Credi.................................. 12
------------------------------------------ --
Section 5.2 All Bank Guarantees or Letters of Credit.................................... 13
---------------------------------------- --
ARTICLE VI
Representations and Warranties...................................................................... 14
------------------------------ --
Section 6.1 Corporate Existence......................................................... 14
------------------- --
Section 6.2 Financial Statements........................................................ 14
-------------------- --
Section 6.3 Corporate Action; No Breach................................................. 14
--------------------------- --
Section 6.4 Operation of Business....................................................... 15
--------------------- --
Section 6.5 Litigation and Judgments.................................................... 15
------------------------ --
Section 6.6 Rights in Properties; Liens................................................. 15
--------------------------- --
Section 6.7 Enforceability.............................................................. 15
-------------- --
Section 6.8 Approvals................................................................... 15
--------- --
Section 6.9 Debt........................................................................ 15
---- --
Section 6.10 Taxes....................................................................... 15
----- --
Section 6.11 Use of Proceeds; Margin Securities.......................................... 16
---------------------------------- --
Section 6.12 ERISA....................................................................... 16
----- --
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`
TABLE OF CONTENTS
(CONTINUED)
Page
----
Section 6.13 Disclosure.................................................................. 16
---------- --
Section 6.14 Subsidiaries................................................................ 16
------------ --
Section 6.15 Agreements.................................................................. 16
---------- --
Section 6.16 Compliance with Laws........................................................ 17
-------------------- --
Section 6.17 Investment Company Act...................................................... 17
---------------------- --
Section 6.18 Public Utility Holding Company Act.......................................... 17
---------------------------------- --
Section 6.19 Environmental Matters....................................................... 17
--------------------- --
Section 6.20 Year 2000 Provisions........................................................ 18
-------------------- --
ARTICLE VII
Positive Covenants.................................................................................. 19
------------------ --
Section 7.1 Reporting Requirements...................................................... 19
---------------------- --
Section 7.2 Maintenance of Existence; Conduct of Business............................... 20
--------------------------------------------- --
Section 7.3 Maintenance of Properties................................................... 20
------------------------- --
Section 7.4 Taxes and Claims............................................................ 21
---------------- --
Section 7.5 Insurance................................................................... 21
--------- --
Section 7.6 Inspection Rights........................................................... 21
----------------- --
Section 7.7 Keeping Books and Records................................................... 21
------------------------- --
Section 7.8 Compliance with Laws........................................................ 21
-------------------- --
Section 7.9 Compliance with Agreements.................................................. 22
-------------------------- --
Section 7.10 Further Assurances.......................................................... 22
------------------ --
Section 7.11 ERISA....................................................................... 22
----- --
Section 7.12 Year 2000 Compliance........................................................ 22
-------------------- --
Section 7.13 Accounts with Lender........................................................ 23
-------------------- --
ARTICLE VIII
Negative Covenants.................................................................................. 23
------------------ --
Section 8.1 Limitation on Liens......................................................... 23
------------------- --
ARTICLE IX
Financial Covenants................................................................................. 24
------------------- --
Section 9.1 Debt to Capitalization Ratio................................................ 24
---------------------------- --
Section 9.2 Consolidated Tangible Net Worth............................................. 24
------------------------------- --
ARTICLE X
Default............................................................................................. 25
------- --
Section 10.1 Events of Default........................................................... 25
----------------- --
Section 10.2 Remedies Upon Default....................................................... 26
--------------------- --
Section 10.3 Bank Guarantees and Letters of Credit....................................... 27
------------------------------------- --
Section 10.4 Performance by Lender....................................................... 27
--------------------- --
ARTICLE XI
Miscellaneous....................................................................................... 27
------------- --
Section 11.1 Expenses of Lender.......................................................... 27
------------------ --
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TABLE OF CONTENTS
(CONTINUED)
Page
----
Section 11.2 Indemnification.............................................................. 27
--------------- --
Section 11.3 Limitation of Liability...................................................... 29
----------------------- --
Section 11.4 Modification to Letter of Credit Master Agreements........................... 29
-------------------------------------------------- --
Section 11.5 No Duty...................................................................... 30
------- --
Section 11.6 Lender Not Fiduciary......................................................... 30
-------------------- --
Section 11.7 Equitable Relief............................................................. 31
---------------- --
Section 11.8 No Waiver; Cumulative Remedies............................................... 31
------------------------------ --
Section 11.9 Successors and Assigns....................................................... 31
---------------------- --
Section 11.10 Survival..................................................................... 31
-------- --
Section 11.11 Entire Agreement; Amendment.................................................. 31
--------------------------- --
Section 11.12 Maximum Interest Rate........................................................ 31
--------------------- --
Section 11.13 Notices...................................................................... 32
------- --
Section 11.14 Applicable Law; Venue; Service of Process.................................... 32
----------------------------------------- --
Section 11.15 Demand Nature................................................................ 33
------------- --
Section 11.16 Counterparts................................................................. 33
------------ --
Section 11.17 Severability................................................................. 33
------------ --
Section 11.18 Headings..................................................................... 33
-------- --
Section 11.19 Non-Application of Chapter 303 of Texas Credit Code.......................... 33
--------------------------------------------------- --
Section 11.20 Participations............................................................... 33
-------------- --
Section 11.21 Construction................................................................. 33
------------ --
Section 11.23 WAIVER OF JURY TRIAL......................................................... 34
-------------------- --
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