EXHIBIT 10.19
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[LOGO OF GREYROCK BUSINESS CREDIT APPEARS HERE]
LETTER OF CREDIT AGREEMENT
BORROWER(S): INTERPLAY PRODUCTIONS
INTERPLAY OEM, INC.
ADDRESS: 00000 XXX XXXXXX XXX.
XXXXXX, XX 00000
DATE: SEPTEMBER 24, 1997
THIS LETTER OF CREDIT AGREEMENT ("Agreement"), dated the above date, is entered
into between GREYROCK BUSINESS CREDIT, a Division of NationsCredit Commercial
Corporation ("GBC") and the borrower named above ("Borrower"), in connection
with the Loan and Security Agreement ("Loan Agreement") between GBC and Borrower
dated JUNE 16, 1997. This Agreement is an integral part of the Loan Agreement,
and all of the terms and provisions of the Loan Agreement are incorporated
herein by this reference. (Capitalized terms used in this Agreement, which are
not defined in this Agreement, shall have the meanings set forth in the Loan
Agreement. This Agreement, the Loan Agreement and all other present and future
documents instruments and agreements between GBC and the Borrower are referred
to herein collectively as the "Loan Documents.") *THIS AGREEMENT DOES NOT
SUPERSEDE THE LETTER OF CREDIT AGREEMENT BETWEEN BORROWER AND GBC DATED
SEPTEMBER 10, 1997 (THE "SEPTEMBER 10 AGREEMENT"). THE SEPTEMBER 10 AGREEMENT
SHALL CONTINUE IN FULL FORCE AND EFFECT AND CONTINUE TO APPLY TO THE LETTER OF
CREDIT REFERRED TO THEREIN.
1. LETTERS OF CREDIT. From time to time, in order to assist Borrower in
establishing or opening Letters of Credit (the "LCs") with a bank, trust company
or other issuer ("Bank") to cover the purchase of goods or for other purposes,
Borrower may request that GBC join in the applications for the LCs, and/or
provide guarantees of, and/or indemnities with respect to, payment or
performance of the LCs and/or any drafts or acceptances thereunder and/or
Borrower's obligations in connection therewith (collectively, "Guarantees").
The decision to do so shall be a matter of GBC's sole discretion. In the event
GBC joins in such applications and/or provides Guarantees, the transactions
shall be subject to the terms and conditions of this Agreement. The amount,
extent, terms and conditions of the LCs and any drafts or acceptance relating
thereto, shall in all respects be determined solely by GBC and shall be subject
to change, modification and revision by GBC at any time and from time to time,
in its discretion.
2. INDEMNITY. Borrower unconditionally agrees to indemnify, defend and
hold GBC harmless from any and all indebtedness, liabilities, obligations,
losses and claims, of every sort whatsoever, however arising, whether present or
future, fixed or contingent, due or to become due, paid or incurred, arising,
incurred in connection with, or relating to, any LCs, applications for LCs,
Guarantees, drafts or acceptances thereunder or LC Collateral (as defined
below), including without limitation (i) any and all losses and claims due to
any action or omission by any Bank, any errors or omissions of GBC or any Bank,
or otherwise, (ii) all amounts due or which may become due under LCs, or any
drafts or acceptances thereunder, (iii) all liabilities and obligations under
any steamship or airway guarantees or releases or any Guarantees, (iv) all
amounts charged or chargeable to Borrower or to GBC by any Bank, any other
financial institution or any correspondent bank which opens, issues or is
involved with the LCs, (v) all other bank charges, and (vi) all fees,
commissions, duties, taxes, costs of insurance, and all such other charges and
expenses which may pertain either directly or indirectly to any LC, draft,
acceptance, or Guarantee or to the goods or documents relating thereto.
Borrower's obligation to indemnify GBC under this Agreement and Borrower's other
obligations under this Agreement are referred to herein as the "LC Obligations"
(which shall include, without limitation, the aggregate face amounts of all LCs
and Guarantees). Borrower's LC Obligations shall not be modified or diminished
for any reason or in any manner whatsoever, shall be included in the
"Obligations" (as defined in the Loan Agreement), and shall survive
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termination of the Loan Agreement and any other Loan Document. Without limiting
the generality of the foregoing, Borrower agrees that any charges made to GBC by
any Bank for Borrower's account or relating to any LC shall be conclusive on
Borrower and may be charged to any of Borrower's Loan accounts with GBC. GBC
shall have the right, at any time and without notice to Borrower, to charge any
of Borrower's Loan accounts with GBC with the amount of any and all sums due
from Borrower to GBC under this Agreement, and the same shall constitute Loans
for all purposes of the Loan Documents and shall bear interest at the rate
provided in the Loan Agreement. All sums payable by Borrower to GBC under this
Agreement shall be paid solely in United States dollars.
3. LC LIMITS. The total amount of all LC Obligations and all outstanding
"Loans" and other "Obligations" (as defined in the Loan Agreement) shall not at
any time exceed the maximum amount of all Loans and other Obligations specified
in Section 1.1 of the Loan Agreement, and if for any reason they do, Borrower
shall immediately pay the excess to GBC to be applied to the Obligations in such
order and manner as GBC shall determine in its sole discretion.
4. LOAN AVAILABILITY RESERVE. Without limiting the fact that Loans under
the Loan Documents are discretionary on the part of GBC, the amount of Loans
which would otherwise be available to Borrower from time to time under the
lending formulas set forth in the Loan Agreement and the other Loan Documents
shall be reduced by 100% of the total amount of all LC Obligations from time to
time outstanding.
5. CHARGES. In addition to any charges, fees or expenses of any Bank or
other person in connection with any LC (all of which shall be charged to
Borrower's Loan account), GBC shall be entitled to charge Borrower's Loan
account with a fee as follows:
A FLAT FEE IN AN AMOUNT EQUAL TO ONE AND ONE QUARTER PERCENT
(1.25%) OF THE AMOUNT OF ALL LCS ISSUED PURSUANT HERETO, PAYABLE
UPON ISSUANCE THEREOF (REGARDLESS OF THE TERM OF SAID LCS).
6. SECURITY. Without limiting the security interests granted in the Loan
Documents, Borrower hereby grants GBC a security interest in the following (the
"LC Collateral"), whether now owned or hereafter acquired by Borrower, wherever
located, whether in transit or not, to secure all of the Obligations: all bills
of lading, shipping documents, documents of title, chattel paper, invoices,
cash, checks, drafts, notes, documents, warehouse, shipping and dock receipts,
and other title, payment, or other instruments, and instruments, whether
negotiable or not, relating to any LC, and all goods and inventory relating
thereto in all stages of manufacture, process or production, and all cash and
non-cash proceeds and insurance proceeds thereof of whatever sort and however
arising. All references in the Loan Agreement to "Collateral" shall, for all
purposes, include without limitation the LC Collateral, and all terms and
provisions of the Loan Agreement applicable to Collateral shall also apply to
the LC Collateral.
7. NON-RESPONSIBILITY. GBC shall not be responsible for: the existence,
character, quality, quantity, condition, packing, value or delivery of the goods
purporting to be represented by any documents; any difference or variation in
the character, quality, quantity, condition, packing, value or delivery of the
goods from that expressed in the documents; the validity, sufficiency or
genuineness of any documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; the time, place, manner or order in which
shipment is made; partial or incomplete shipment, or failure or omission to ship
any or all of the goods referred to in the LCs or documents; any deviation from
instructions, delay, default, or fraud by the shipper and/or anyone else in
connection with the LC Collateral or the shipping thereof; or any breach of
contract between the shipper or vendors and Borrower. Furthermore, without being
limited by the foregoing, GBC shall not be responsible for any act or omission
with respect to or in connection with any LC Collateral.
8. GBC's AUTHORITY. Borrower agrees that any action taken by GBC, if
taken in good faith, or any action taken by any Bank, under or in connection
with the LCs, the Guarantees, the drafts or acceptances, or the LC Collateral,
shall be binding on Borrower and shall not result in any liability of GBC to
Borrower. In furtherance thereof, GBC shall have the full right and authority to
clear and resolve any questions of non-compliance of documents; to give any
instructions as to acceptance or rejection of any documents or goods; to execute
any and all applications for steamship or airway guarantees, indemnities or
delivery orders; to grant any extensions of the maturity of, time or payment
for, or time of presentation of, any drafts, acceptances, or documents; and to
agree to any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the applications, LCs,
drafts or acceptances; all in GBC's sole name, and the Bank shall be entitled to
comply with and honor any and all such documents or instruments executed by or
received solely from GBC, all without any notice to or any consent from
Borrower.
9. GBC's RIGHTS. Any rights, remedies, duties or obligations granted or
undertaken by Borrower to any Bank in any application for LCs, or any standing
agreement relating to LCs or otherwise, shall be deemed to have been granted to
GBC and apply in all respects to GBC and
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shall be in addition to any rights, remedies, duties or obligations contained
herein. Borrower hereby agrees that prior to the payment of all Obligations to
GBC, GBC may be deemed to be the absolute owner of, with unqualified rights to
possession and disposition of, all LC Collateral, all of which may be held by
GBC as security as herein provided. Should possession of any LC Collateral be
transferred to Borrower, said LC Collateral shall continue to serve as security
as herein provided, and any goods or inventory covered hereby may be sold,
transferred or disposed of only as permitted by the Loan Documents.
10. NEGATIVE COVENANTS. Without GBC's prior written approval, Borrower
agrees not to clear or resolve any questions of non-compliance of documents; not
to give any instructions as to acceptance or rejection of any documents or
goods; not to execute any applications for steamship or airway guarantees,
indemnities or delivery orders; not to grant any extensions of the maturity of,
time of payment for, or time of presentation of, any drafts, acceptances or
documents; and not to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the applications, LCs, drafts or acceptances.
11. AFFIRMATIVE COVENANTS. Borrower shall cause: all necessary import,
export or other licenses or certificates for the import or handling of the LC
Collateral to be promptly procured; all foreign and domestic governmental laws
and regulations in regard to the shipment and importation of the LC Collateral,
or the financing thereof to be promptly and fully complied with; and any
certificates in that regard that GBC may at any time request to be promptly
furnished. In this connection, Borrower warrants and represents to GBC that all
shipments made under the LCs are and shall be in accordance with the
governmental laws and regulations of the countries in which the shipments
originate and terminate, and shall not be prohibited by any such laws or
regulations. Borrower assumes all risk, liability and responsibility for, and
agrees to pay and discharge, all present and future local, state, federal or
foreign taxes, duties, and levies. Any embargo, restriction, laws, customs or
regulations of any country, state, city, or other political subdivision, where
the Collateral is or may be located, or wherein payments are to be made, or
wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely
Borrower's risk, liability and responsibility.
12. TERMINATION. Without limiting any of the terms of the Loan Agreement,
on the effective date of termination of the Loan Agreement, in addition to
paying and performing in full all other Obligations, Borrower shall provide cash
collateral to GBC in an amount equal to 110% of the amount of all LC
Obligations, to secure all of the Obligations, and Borrower shall execute and
deliver to GBC a pledge agreement with respect thereto on GBC's standard form.
(If the Loan Agreement provides for a lesser amount of cash collateral, this
Agreement shall control..)
13. DEFAULT. On any failure to pay or perform any Obligation when due, or
the occurrence of any other "Event of Default" (as defined in the Loan
Agreement), GBC shall have all of the rights and remedies set forth in the Loan
Documents and which it otherwise has under applicable law, and without limiting
the generality of the foregoing, GBC shall have the right to require Borrower to
deposit cash collateral with GBC in an amount equal to 110% of the amount of all
LC Obligations, to secure all of the Obligations, and Borrower shall execute and
deliver to GBC a pledge agreement with respect thereto on GBC's standard form.
14. POWER OF ATTORNEY. Without limiting the terms of any of the Loan
Documents, Borrower hereby appoints each employee, attorney or agent of GBC as
Borrower's attorney-in-fact, with full power and authority in each of them, at
GBC's option, but without obligation, with or without notice to Borrower, in
connection with any LC and any purchase agreement or other document or agreement
entered into, or goods delivered, in connection therewith, at Borrower's
expense, to do any or all of the following in Borrower's name or otherwise: (i)
to sign or endorse all warehouse, shipping, dock or other receipts, letters of
credit, notes, acceptances, checks, drafts, money orders and all other evidence
of indebtedness, and all financing statements, invoices, trust receipts, bills
of lading and other title documents; (ii) to complete any transaction in
connection with, arising out of, or which is the subject of any LC or Guarantee,
to obtain, execute and deliver all necessary or proper documents in connection
therewith and to collect the proceeds thereof; (iii) upon any Event of Default
under the Loan Agreement, or this Agreement, to cancel, rescind, terminate,
modify, amend, or adjust, in any other way, in whole or in part, any transaction
in connection with, arising out of, or which is the subject of any LC or
Guarantee; and (iv) to do any and all other acts and things which may be
necessary or appropriate in connection with this Agreement or any LC, or any
transaction relating thereto, or to enable GBC to obtain payment of any
Obligations. The power of attorney granted hereunder is coupled with an interest
and shall be irrevocable until all Obligations have been paid in full.
15. GENERAL. Without limiting any of the other provisions of this
Agreement, all of the General Provisions of Section 9 of the Loan Agreement, as
well as all other provisions of the Loan Agreement, are hereby incorporated
herein by this reference.
16. MUTUAL WAIVER OF JURY TRIAL. BORROWER AND GBC EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GBC AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GBC OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY
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OTHER PERSONS AFFILIATED WITH GBC OR BORROWER, IN ALL OF THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
BORROWER:
INTERPLAY PRODUCTIONS
BY /s/ Xxxxxx Camps
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PRESIDENT OR VICE PRESIDENT
BORROWER:
INTERPLAY OEM, INC.
BY /s/ Xxxx X. Goldworn
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PRESIDENT OR VICE PRESIDENT
GBC:
GREYROCK BUSINESS CREDIT,
A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
BY /s/ Xxxx Xxxxxx
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TITLE VP
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