EXHIBIT 10.1
RENEWAL, EXTENSION, AND SECOND AMENDMENT TO LOAN AGREEMENT
THIS RENEWAL, EXTENSION, AND SECOND AMENDMENT TO LOAN AGREEMENT
(this "AMENDMENT") is entered into to be effective as of June 15, 2000,
between INET TECHNOLOGIES, INC., a Delaware Corporation ("BORROWER"),
successor by merger to INET, Inc., a Texas corporation, and BANK OF AMERICA,
N.A., f/k/a NationsBank, N.A., a national banking association, successor in
interest by merger to NationsBank of Texas, N.A. ("LENDER").
R E C I T A L S
1. Borrower and Lender are parties to that certain Loan Agreement
(as renewed, extended, and amended, the "LOAN AGREEMENT") dated as of June
26, 1997 providing for a revolving credit and letter of credit facility in
the amount of $10,000,000.00.
2. Borrower and Lender are parties to that certain Renewal,
Extension, and First Amendment to Loan Agreement dated as of June 15, 1998.
3. Borrower and Lender are parties to that certain Assumption and
Modification Agreement dated as of September 18, 1998.
4. Borrower executed that certain Substitute Promissory Note (the
"NOTE") dated as of July 16, 1998, payable to the order of Lender in the
original principal amount of $10,000,000.00, which Note was in substitution
and replacement of that certain Renewal Promissory Note dated as of June 15,
1998, executed by Borrower and payable to the order of Lender in the original
principal amount of $10,000,000.00, which Note was in renewal, extension, and
replacement, but not extinguishment, of that certain Promissory Note dated
June 26, 1997, executed by Borrower and payable to the order of Lender in the
original principal amount of $10,000,000.00.
5. The parties hereto desire to amend the Loan Agreement subject to
the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender agree as
follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this Amendment
(a) terms defined in the Loan Agreement have the same meanings when used in
this Amendment, and (b) references to "SECTIONS" are to the Loan Agreement's
sections.
2. AMENDMENTS TO THE LOAN AGREEMENT.
(a) SECTION 1 of the Loan Agreement is hereby amended to delete the
definition of "TERMINATION DATE" in its entirety and to replace such
definition with the following:
"TERMINATION DATE" means the earlier of (a) June 15, 2001, or
(b) the date Lender's commitment to fund advances hereunder is
terminated pursuant to SECTION 7.
3. RENEWAL NOTE. Borrower shall execute a Renewal Promissory Note
dated effective as of the date hereof, and payable to the order of Lender in
the original principal amount of $10,000,000.00 (the "RENEWAL Note"), which
Renewal Note is in renewal, extension, modification, and amendment, and not
extinguishment, of the Note.
4. AMENDMENTS TO OTHER LOAN DOCUMENTS.
(a) All references in the Loan Documents to the Loan Agreement shall
henceforth include references to the Loan Agreement, as modified and amended
hereby, and as may, from time to time, be further amended, modified,
extended, renewed, and/or increased. All references in the Loan Documents to
the Note shall henceforth include references to the Renewal Note as such
Renewal Note may, from time to time, be further amended, modified, extended,
renewed, and/or increased.
(b) Any and all of the terms and provisions of the Loan Documents
are hereby amended and modified wherever necessary, even though not
specifically addressed herein, so as to conform to the amendments and
modifications set forth herein.
5. RATIFICATIONS. Borrower (a) ratifies and confirms all provisions
of the Loan Documents as amended by this Amendment and the Renewal Note, (b)
ratifies and confirms that all guaranties, assurances, and liens granted,
conveyed, or assigned to Lender under the Loan Documents are not released,
reduced, or otherwise adversely affected by this Amendment and the Renewal
Note and continue to guarantee, assure, and secure full payment and
performance of the present and future Loans, and (c) agrees to perform such
acts and duly authorize, execute, acknowledge, deliver, file, and record such
additional documents, and certificates as Lender may request in order to
create, perfect, preserve, and protect those guaranties, assurances, and
liens.
6. REPRESENTATIONS. Borrower represents and warrants to Lender that
as of the date of this Amendment: (a) this Amendment, the Renewal Note, and
the other Loan Documents to be delivered under this Amendment have been duly
authorized, executed, and delivered by Borrower and each Guarantor; (b) no
action of, or filing with, any governmental authority is required to
authorize, or is otherwise required in connection with, the execution,
delivery, and performance by Borrower or the Guarantors of this Amendment and
the Renewal Note; (c) the Loan Documents, as amended by this Amendment and
the Renewal Note, are valid and binding upon Borrower and each Guarantor and
are enforceable against Borrower and each Guarantor in accordance with their
respective terms; (d) the execution, delivery, and performance by Borrower
and each Guarantor of this Amendment and the Renewal Note do not require the
consent of any other person and do not and will not constitute a violation of
any laws, agreements, or understandings to which Borrower or any Guarantor is
a party or by which Borrower or any Guarantor is bound; (e) all
representations and warranties in the Loan Documents are true and correct in
all material respects except to the extent that (i) any of them speak to a
different specific date, or (ii) the facts on which any of them were based
have been changed by transactions contemplated or permitted by the Loan
Agreement; and (f) after giving effect to this Amendment and the Renewal
Note, no Potential Default or Event of Default exists.
7. CONTINUED EFFECT. Except to the extent amended hereby, all terms,
provisions and conditions of the Loan Agreement and the other Loan Documents,
and all documents executed in connection therewith, shall continue in full
force and effect and shall remain enforceable and binding in accordance with
their respective terms.
8. CONDITIONS PRECEDENT. This Amendment and the Renewal Note shall
not be effective unless and until: (a) Lender receives counterparts of this
Amendment and the Renewal Note executed by each party listed below; and (b)
the representations and warranties in this Amendment are true and correct in
all material respects on and as of the date of this Amendment.
9. MISCELLANEOUS. Unless stated otherwise (a) the singular number
includes the plural and VICE VERSA and words of any gender include each other
gender, in each case, as appropriate, (b) headings
and captions may not be construed in interpreting provisions, (c) this
Amendment must be construed -- and its performance enforced -- under Texas
law, (d) if any part of this Amendment is for any reason found to be
unenforceable, all other portions of it nevertheless remain enforceable, and
(e) this Amendment may be executed in any number of counterparts with the
same effect as if all signatories had signed the same document, and all of
those counterparts must be construed together to constitute the same document.
10. ENTIRETIES. THE LOAN AGREEMENT AS AMENDED BY THIS AMENDMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER
OF THE LOAN AGREEMENT AS AMENDED BY THIS AMENDMENT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
11. PARTIES. This Amendment binds and inures to Borrower and Lender,
and their respective successors and permitted assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES TO FOLLOW]
EXECUTED as of the date first stated above.
BORROWER:
INET TECHNOLOGIES, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------
Title: CFO
-------------------------
LENDER:
BANK OF AMERICA, N.A., f/k/a NationsBank,
N.A., a national banking association,
successor in interest by merger to
NationsBank of Texas, N.A.
By: /s/ Xxxxxx X. XxxXxxxxx
--------------------------------
Name: Xxxxxx X. XxxXxxxxx
--------------------------
Title: Vice President
-------------------------
To induce Lender to enter into this Amendment and the Renewal Note,
each of the undersigned jointly and severally (a) consent and agree to this
Amendment's and the Renewal Note's execution and delivery, (b) ratify and
confirm that all guaranties, assurances, and liens granted, conveyed, or
assigned to Lender under the Loan Documents are not released, diminished,
impaired, reduced, or otherwise adversely affected by this Amendment or the
Renewal Note and continue to guarantee, assure, and secure the full payment
and performance of all present and future Loans, (c) agree to perform such
acts and duly authorize, execute, acknowledge, deliver, file, and record such
additional guaranties, assignments, security agreements, deeds of trust,
mortgages, and other agreements, documents, instruments, and certificates as
Lender may reasonably deem necessary or appropriate in order to create,
perfect, preserve, and protect those guaranties, assurances, and liens, and
(d) waive notice of acceptance of this consent and agreement, which consent
and agreement binds the undersigned and their successors and permitted
assigns and inures to Lender and their respective successors and permitted
assigns.
INET FOREIGN SALES CORPORATION, a
corporation organized under the laws of
Barbados
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------
Title: Director
-------------------------
INET GLOBAL, LTD., a corporation
organized under the laws of the United
Kingdom
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
--------------------------
Title: Director
-------------------------
RENEWAL PROMISSORY NOTE
$10,000,000.00 Dallas, Texas As of June 15, 2000
FOR VALUE RECEIVED, the undersigned, INET TECHNOLOGIES, INC., a
Delaware corporation, successor by merger to INET, Inc., a Texas corporation
("MAKER"), hereby unconditionally promises to pay to the order of BANK OF
AMERICA, N.A., f/k/a NationsBank, N.A., a national banking association,
successor in interest by merger to NationsBank of Texas, N.A. ("PAYEE"), at
000 Xxxx Xxxxxx, X.X. Xxx 000000, Xxxxxx, Xxxxx 00000-0000 or at such other
address given to Maker by Payee, the principal sum of TEN MILLION AND 00/100
DOLLARS ($10,000,000.00), or so much thereof as shall be advanced prior to
maturity, in lawful money of the United States of America, together with
interest (calculated on the basis of a 360-day year) on the unpaid principal
balance from day to day outstanding, computed from the date of advance until
maturity at the rates per annum provided below.
1. CERTAIN DEFINITIONS. Capitalized terms not defined herein shall
have the meanings assigned to such terms in the Loan Agreement (defined
below). In addition, as used herein, the following terms shall have the
respective meanings assigned to such term:
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the quotient obtained by
dividing (a) the Eurodollar Rate for such Eurodollar Borrowing for such
Interest Period by (b) one (1) MINUS the Reserve Requirement for such
Eurodollar Borrowing for such Interest Period.
"APPLICABLE LENDING OFFICE" means, for Payee and for each Eurodollar
Borrowing, the "LENDING OFFICE" of Payee (or of an affiliate of Payee)
designated for such Eurodollar Borrowing as Payee may from time to time
specify to Maker by written notice in accordance with the terms hereof as the
office by which its Eurodollar Borrowings are to be made and maintained.
"APPLICABLE MARGIN" means the interest margin over the Base Rate or
the Adjusted Eurodollar Rate, as the case may be, based upon the ratio of (a)
Total Funded Indebtedness to (b) EBITDA as of and for the most recent four
(4) quarter period ending on or before the date of determination, set forth
opposite such ratio below:
================================================================================
RATIO OF APPLICABLE APPLICABLE
TOTAL FUNDED INDEBTEDNESS TO EBITDA MARGIN MARGIN
BASE RATE EURODOLLAR
BORROWINGS BORROWINGS
--------------------------------------------------------------------------------
Less than 1.0 to 1.0 - 0.50% 1.25%
--------------------------------------------------------------------------------
Less than 1.5 to 1.0 but greater than or - 0.25% 1.50%
equal to 1.0 to 1.0
================================================================================
The ratio of Total Funded Indebtedness to EBITDA shall be determined from the
then-most current of the financial statements and Compliance Certificates
delivered to Payee pursuant to SECTION 4.a.iii. of the Loan Agreement. The
adjustment, if any, to the Applicable Margin shall be effective commencing on
the fifth (5th) Business Day after delivery of such financial statements and
Compliance Certificates. If Maker fails at any time to furnish to Bank the
financial statements and Compliance Certificates as required to be delivered
pursuant to SECTION 4.a.iii. of the Loan Agreement, then the maximum
Applicable Margin shall apply until such time as such financial statements
and Compliance Certificates are so delivered.
"BASE RATE" means, for any day, the rate per annum equal to the
Prime Rate for such day. Any change in the Base Rate due to a change in the
Prime Rate shall be effective on the effective date of such change in the
Prime Rate.
"BASE RATE BORROWING" means any principal amount under this Note
with respect to which the interest rate is calculated by reference to the
Base Rate PLUS the Applicable Margin.
"BORROWING" means either a Base Rate Borrowing or a Eurodollar
Borrowing.
"BUSINESS DAY" means (a) for all purposes, any day OTHER THAN a
Saturday, Sunday, or day on which national banks are authorized to be closed
under the laws of the State of Texas, and (b) for purposes of any Eurodollar
Borrowing, a day that satisfies the requirements of CLAUSE (a) and is a day
when commercial banks are open for domestic or international business in
London.
"CONTINUE," "CONTINUATION," and "CONTINUED" refer to the
continuation pursuant to SECTION 3(B) of a Eurodollar Borrowing from one
Interest Period to the next Interest Period.
"CONVERSION DATE" has the meaning set forth in SECTION 3(b)(iv).
"CONVERT," "CONVERSION," and "CONVERTED" refer to a conversion
pursuant to SECTION 3(b) of one Type of Borrowing into another Type of
Borrowing.
"EURODOLLAR BORROWING" means any principal amount under this Note
with respect to which the interest rate is calculated by reference to the
Adjusted Eurodollar Rate PLUS the Applicable Margin.
"EURODOLLAR RATE" means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Dow Xxxxx Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first (1st) day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, then the term
"EURODOLLAR RATE" means, for any Eurodollar Borrowing for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two (2) Business Days prior to the first (1st) day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER, if
more than one rate is specified on Reuters Screen LIBO Page, then the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%).
"INTEREST PERIOD" means, with respect to a Eurodollar Borrowing, a
period commencing:
(a) on the advance date thereof; or
(b) on the Conversion Date pertaining to such Eurodollar Borrowing,
if such Eurodollar Borrowing is made pursuant to a Conversion as described in
SECTION 3(B)(IV); or
(c) on the last day of the preceding Interest Period in the case of
a rollover to a successive Interest Period;
and ending 1, 3, or 6 months thereafter, as Maker shall elect in accordance with
SECTION 3(B); PROVIDED THAT:
(i) any Interest Period that would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day,
UNLESS such Business Day falls in another calendar month in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month or at the end of such Interest Period) shall,
subject to CLAUSE (i) above, end on the last Business Day of a calendar
month; and
(iii) if the Interest Period for any Eurodollar Borrowing would
otherwise end after the final maturity date of this Note, then such Interest
Period shall end on the final maturity date of this Note.
"LOAN AGREEMENT" means that certain Loan Agreement dated as of June
15, 1998, executed by Maker and Payee, as modified, amended, renewed,
extended, or restated from time to time.
"MAXIMUM RATE" means the highest non-usurious rate of interest (if
any) permitted from day to day by applicable law. Payee hereby notifies and
discloses to Maker that, for purposes of Tex. Rev. Civ. Stat. Xxx. art.
5069-1D.001 (codified in the TEXAS FINANCE CODE ss. 303.001), as it may from
time to time be amended, the "APPLICABLE CEILING" shall be the "WEEKLY
CEILING" from time to time in effect as limited by article 5069-1D.009
(codified in the TEXAS FINANCE CODE Section 303.305); PROVIDED, HOWEVer, that
to the extent permitted by applicable law, Payee reserves the right to change
the "APPLICABLE CEILING" from time to time by further notice and disclosure
to Maker.
"PRIME RATE" means the per annum rate of interest established from
time to time by Payee as its prime rate, which rate may not be the lowest
rate of interest charged by Payee to its customers.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental,
or emergency reserves) are required to be maintained under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or
any successor) by member banks of the Federal Reserve System against
"EUROCURRENCY LIABILITIES" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect
any other reserves required to be maintained by such member banks with
respect to (a) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or (b)
any category of extensions of credit or other assets which include Eurodollar
Borrowings. The Adjusted Eurodollar Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Requirement.
"TYPE" means any type of Borrowing (I.E., a Base Rate Borrowing or
Eurodollar Borrowing).
2. PAYMENT OF PRINCIPAL. The unpaid principal balance of this Note
shall be due and payable in one (1) installment, on June 15, 2001, in the
amount of the unpaid principal balance of this Note as of such date.
3. INTEREST.
(a) RATE OF INTEREST. Subject to SECTION 3(d) below, the unpaid
principal of each Base Rate Borrowing shall bear interest from the date of
advance until paid at a rate per annum which shall from day to day be equal
to the lesser of (a) the sum of (i) the Base Rate in effect from day to day,
and (ii) the Applicable Margin, or (b) the Maximum Rate. Subject to SECTION
3(d) below, the unpaid principal of each Eurodollar Borrowing shall bear
interest from the date of advance until paid at a rate per annum which shall
be equal to the lesser of (a) the sum of (i) the Adjusted Eurodollar Rate for
the applicable Interest Period, and (ii) the Applicable Margin, or (b) the
Maximum Rate.
(b) SELECTION OF INTEREST OPTION.
(i) Subject to the provisions of this Note, Maker shall have
the option to designate that all or any portion of the unpaid principal
balance of this Note shall bear interest at (A) the Base Rate PLUS the
Applicable Margin, or (B) the Adjusted Eurodollar Rate PLUS the
Applicable Margin;
(ii) Upon making a Notice of Borrowing under the Loan
Agreement, Maker shall advise Payee as to whether an advance under the
Loan Agreement shall be (A) a Eurodollar Borrowing, in which case Maker
shall specify the applicable Interest Period therefor, or (B) a Base
Rate Borrowing. Maker shall give Payee a Notice of Borrowing on or
before 10:00 a.m. (Dallas, Texas time) on the day of each Base Rate
Borrowing and on or before 10:00 a.m. (Dallas, Texas time) at least two
(2) Business Days prior to each Eurodollar Borrowing.
(iii) Prior to 10:00 a.m. (Dallas, Texas time) at least two
(2) Business Days prior to the termination of each Interest Period with
respect to a Eurodollar Borrowing, Maker shall give Payee a Notice of
Borrowing specifying the interest option which shall be applicable to
such Borrowing upon the expiration of such Interest Period. Such Notice
of Borrowing shall either be in writing, by telecopy (immediately
followed by written notice), or by telephone (immediately followed by
written notice). If Maker shall specify that such Borrowing shall be a
Eurodollar Borrowing, then such Notice of Borrowing shall also specify
the length of the succeeding Interest Period selected by Maker with
respect to such Borrowing. If the required Notice of Borrowing shall
not have been timely received by Payee prior to the expiration of the
then-relevant Interest Period, then Maker shall be deemed to have
elected to have such Borrowing be a Base Rate Borrowing.
(iv) With respect to any Base Rate Borrowing, Maker shall have
the right, on any Business Day, as the case may be ("CONVERSION DATE"),
to convert such Base Rate Borrowing to a Eurodollar Borrowing, by
giving Payee a Notice of Borrowing of such selection at least two (2)
Business Days prior to such Conversion Date.
(v) Notwithstanding anything to the contrary contained herein,
(A) no more than three (3) Interest Periods shall be in effect at any
one time with respect to Eurodollar Borrowings, (B) Maker shall have no
right to request a Eurodollar Borrowing if the Interest Rate applicable
thereto would exceed the Maximum Rate in effect on the first day of the
Interest Period applicable to such Borrowing, and (C) each Eurodollar
Borrowing shall be in an amount of $500,000.00 or a greater integral
multiple of $100,000.00.
(vi) Each Notice of Borrowing shall be irrevocable and binding
on Maker and, in respect of any Eurodollar Borrowing specified in such
Notice of Borrowing, Maker shall indemnify Payee against any loss, cost
or expense incurred or suffered by Payee as a result of (A) any failure
to fulfill, on or before the date specified for such Borrowing, any
condition to such Borrowing set forth in the Loan Agreement, or (B)
Maker's requesting that an Borrowing not be made on the date specified
for such Borrowing in the Notice of Borrowing. A certificate of Payee
establishing the amount due from Maker according to the preceding
sentence, together with a description in reasonable detail of the
manner in which such amount has been calculated, shall be conclusive in
the absence of manifest error.
(c) INTEREST PAYMENT DATES. Interest on the unpaid principal amount
of a Base Rate Borrowing, computed as aforesaid, shall be due and payable
quarterly as it accrues, commencing on June 30, 2000, and thereafter on last
day of each December, March, June, and September thereafter, and at maturity;
PROVIDED, however, that interest with respect to any Base Rate Borrowing
shall also be due and payable on the Conversion Date of any such Borrowing to
a Eurodollar Borrowing. Interest on the unpaid principal amount of a
Eurodollar Borrowing, computed as aforesaid, shall be due and payable on the
last day of the related Interest Period; PROVIDED, HOWEVER, if any Interest
Period is greater than three (3) months, then accrued interest shall also be
due and payable on the date ending each three (3) month period after the
commencement of such Interest Period.
(d) INTEREST ON PAST-DUE AMOUNTS. All past-due principal of, and, to
the extent permitted by applicable law, interest on, this Note shall bear
interest until paid at the lesser of (i) the Maximum Rate or (ii) the Base
Rate PLUS four percent (4%).
4. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or
regulation, 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 Payee (or its
Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject Payee (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar
Borrowing, this Note, or its obligation to make Eurodollar Borrowings,
or change the basis of taxation of any amounts payable to Payee (or its
Applicable Lending Office) under the Loan Agreement or this Note in
respect of any Eurodollar Borrowings (other than taxes imposed on
Payee's income and franchise taxes imposed on Payee by the jurisdiction
under the laws of which Payee (or its Applicable Lending Office) is
organized or any political subdivision thereof);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, Payee
(or its Applicable Lending Office), including the commitment of Payee
under the Loan Agreement and this Note; or
(iii) shall impose on Payee (or its Applicable Lending Office)
or the London interbank market any other condition affecting the Loan
Agreement or this Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to Payee (or
its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Borrowings or
to reduce any sum received or receivable by Payee (or its Applicable Lending
Office) under the Loan Agreement or this Note with respect to any Eurodollar
Loans, then Maker shall pay to Payee, within fifteen (15) days following
demand, such amount or amounts as will compensate Payee for such increased
cost or reduction. If Payee requests compensation by Maker under this SECTION
4, Maker may, by notice to Payee, suspend the obligation of Payee to make or
Continue Eurodollar Borrowings or to Convert all Eurodollar Borrowings to
Base Rate Borrowings until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of SECTION 7 shall be
applicable); PROVIDED THAT such suspension shall not affect the right of
Payee to receive the compensation so requested.
(b) If, after the date hereof, Payee shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency, has
or would have the effect of reducing the rate of return on the capital of
Payee or any corporation controlling Payee as a consequence of Payee's
obligations hereunder to a level below that which Payee or such corporation
could have achieved but for such adoption, change, request, or directive
(taking into consideration its policies with respect to capital adequacy),
then from time to time upon demand Maker shall pay to Payee such additional
amount or amounts as will compensate Payee for such reduction.
(c) Payee shall promptly notify Maker of any event of which it has
knowledge, occurring after the date hereof, which will entitle Payee to
compensation pursuant to this SECTION 4 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of
Payee, be otherwise disadvantageous to it. Payee shall furnish to Maker a
statement setting forth in reasonable detail an accounting of the additional
amount or amounts to be paid to it hereunder and the calculations used to
determine in good faith such amount or amounts, which statement shall be
conclusive in the absence of manifest error. In determining such amount,
Payee may use any reasonable averaging and attribution methods.
(d) Without prejudice to the survival of any other agreement of
Maker hereunder, the agreements and obligations of Maker contained in this
SECTION 4 shall survive the termination of the commitments under the Loan
Agreement and the payment in full of this Note for a period of time equal to
two (2) years following the later to occur of such termination or payment.
5. LIMITATION ON TYPES OF BORROWINGS. If, on or prior to the first
day of any Interest Period for any Eurodollar Borrowing, Payee determines
(which determination shall be conclusive) that for the Loans made to Borrower
hereunder and for other similar loans made by Lender to similar borrowers:
(a) by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period; or
(b) the Adjusted Eurodollar Rate will not adequately and fairly
reflect the cost to Payee of funding Eurodollar Borrowings for such Interest
Period;
then Payee shall give Maker prompt notice thereof specifying the relevant
amounts or periods, and so long as such condition remains in effect, Payee
shall be under no obligation to make additional Eurodollar Borrowings,
Continue any Eurodollar Borrowings, or to Convert Base Rate Borrowings into
Eurodollar Borrowings and Maker shall, on the last day(s) of the then-current
Interest Period(s) for all outstanding Eurodollar Borrowings, either prepay
such Eurodollar Borrowings or Convert such Eurodollar Borrowings into Base
Rate Borrowings in accordance with the terms of this Note.
6. ILLEGALITY. Notwithstanding any other provision of the Loan
Agreement or this Note, in the event that it becomes unlawful for Payee or
its Applicable Lending Office to make, maintain, or fund Eurodollar
Borrowings hereunder, then Payee shall promptly notify Maker and Payee's
obligation to make or Continue Eurodollar Borrowings and to Convert Base Rate
Borrowings into Eurodollar Borrowings shall be suspended until such time as
Payee may again make, maintain, and fund Eurodollar Borrowings (in which case
the provisions of SECTION 7 shall be applicable).
7. TREATMENT OF AFFECTED BORROWINGS. If the obligation of Payee to
make Eurodollar Borrowings, Continue Eurodollar Borrowings, or Convert Base
Rate Borrowings to Eurodollar Borrowings shall be suspended pursuant to
SECTIONS 4, 5, or 6 hereof, then all Eurodollar Borrowings shall be
automatically Converted into Base Rate Borrowings on the last day(s) of the
then-current Interest Period(s) for Eurodollar Borrowings (or, in the case of
a Conversion required by SECTION 6 hereof, on such earlier date as Payee may
specify to Maker) and, unless and until Payee gives notice as provided below
that the circumstances specified in SECTION 4, 5, or 6 hereof that gave rise
to such Conversion no longer exist:
(a) to the extent that Eurodollar Borrowings have been so Converted,
all payments and prepayments of principal that would otherwise be applied to
Eurodollar Borrowings shall be applied instead to Base Rate Borrowings; and
(b) all Borrowings that would otherwise be made or Continued by
Payee as Eurodollar Borrowings shall be made or Continued instead as Base
Rate Borrowings, and all Borrowings that would otherwise be Converted into
Eurodollar Borrowings shall be Converted instead into (or shall remain as)
Base Rate Borrowings.
Payee shall give prompt notice to Maker that the circumstances specified in
SECTION 4, 5, or 6 hereof that gave rise to the Conversion of Eurodollar
Borrowings pursuant to this SECTION 7 no longer exist.
8. COMPENSATION. Upon the request of Payee, Maker shall pay to Payee
such amount or amounts as shall be sufficient (in the reasonable opinion of
Payee) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Borrowing
for any reason (including, without limitation, the acceleration of the
Borrowings pursuant to SECTION 7 of the Loan Agreement) on a date other than
the last day of the Interest Period for such Borrowing; or
(b) any failure by Maker for any reason (including, without
limitation, the failure of any condition precedent specified in SECTION 2.g.
of the Loan Agreement to be satisfied) to borrow, Convert, Continue, or
prepay a Eurodollar Borrowing on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant Notice of Borrowing,
prepayment, Continuation, or Conversion under the Loan Agreement and this
Note.
Without prejudice to the survival of any other agreement of Maker hereunder,
the agreements and obligations of Maker contained in this SECTION 8 shall
survive the termination of the commitments under the Loan Agreement and the
payment in full of this Note for a period of time equal to two (2) years
following the later to occur of such termination or payment.
9. TAXES.
(a) Any and all payments by Maker to or for the account of Payee
hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, charges, or withholdings, and all liabilities
with respect thereto, EXCLUDING taxes imposed on Payee's income and franchise
taxes imposed on Payee by the jurisdiction under the laws of which Payee (or
its Applicable Lending Office) is organized or any political subdivision
thereof (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"TAXES"). If Maker shall be required by law to deduct any Taxes from or in
respect of any sum payable under this Agreement or any other Loan Document to
Payee, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this SECTION 9) Payee receives an amount equal to the sum
it would have received had no such deductions been made, (ii) Maker shall
make such deductions, (iii) Maker shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) Maker shall furnish to Payee, at its address referred to in
SECTION 8 of the Loan Agreement, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, Maker agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges
or similar levies which arise from any payment made under this Note or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Note or any other Loan Document (hereinafter referred to as
"OTHER TAXES").
(c) Maker agrees to indemnify Payee for the full amount of Taxes and
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this SECTION 9) paid
by Payee and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) If Maker is required to pay additional amounts to or for the
account of Payee pursuant to this SECTION 9, then Payee will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of Payee, is not otherwise
disadvantageous to Payee.
(e) Within thirty (30) days after the date of any payment of Taxes,
Maker shall furnish to Payee the original or a certified copy of a receipt
evidencing such payment.
(f) Without prejudice to the survival of any other agreement of
Maker hereunder, the agreements and obligations of Maker contained in this
SECTION 9 shall survive the termination of the commitments and the payment in
full of this Note for a period of time equal to two (2) years following the
later to occur of such termination or payment.
10. PAYMENT DATES; MANNER OF PAYMENT; APPLICATION OF PAYMENTS.
Should the principal of, or any installment of the principal of or interest
on, this Note become due and payable on any day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day,
and interest shall be payable with respect to such extension. All payments of
principal of, and interest on, this Note shall be made by Maker to Payee at
its principal banking office in Dallas, Texas in federal or other immediately
available funds. Payments made to Payee by Maker hereunder shall be applied
first to accrued interest and then to principal. Payments received by Payee
after 2:00 p.m. on any Business Day shall be deemed to have been received on
the following Business Day.
11. PREPAYMENT. Subject to the provisions set forth in SECTION 8
above, Maker may prepay this Note, in whole or in part, at any time and from
time to time without premium or penalty. Any prepayment made hereunder shall
be made together with interest accrued (through the date of such prepayment)
on the principal amount prepaid.
12. RIGHTS UNDER LOAN AGREEMENT. This Note has been executed and
delivered pursuant to, and is subject to certain terms and conditions set
forth in, the Loan Agreement between Maker and Payee, executed as of the date
hereof, and is the "NOTE" referred to therein. The holder of this Note shall
be entitled to the benefits provided in the Loan Agreement. Reference is made
to the Loan Agreement for a statement of (a) the obligation of Payee to
advance funds hereunder, (b) the events upon which the maturity of this Note
may be accelerated, and (c) Maker's right to cure certain events of default,
if any, as more fully set forth therein.
13. WAIVERS. Except as expressly provided in the Loan Agreement,
Maker and each surety, endorser, guarantor, and other party ever liable for
payment of any sums of money
payable on this Note, jointly and severally waive presentment, protest,
notice of protest and non-payment, or other notice of default, notice of
acceleration and intention to accelerate, and agree that their liability
under this Note shall not be affected by any renewal or extension in the time
of payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note, and hereby consent to any and all
renewals, extensions, indulgences, releases, or changes, regardless of the
number of such renewals, extensions, indulgences, releases, or changes.
14. NO WAIVER. No waiver by Maker or Payee of any of its respective
rights or remedies hereunder or under any other document evidencing or
securing this Note or otherwise shall be considered a waiver of any other
subsequent right or remedy of Maker or Payee, as appropriate; no delay or
omission in the exercise or enforcement by Maker or Payee of any rights or
remedies shall ever be construed as a waiver of any right or remedy of Maker
or Payee; and no exercise or enforcement of any such rights or remedies shall
ever be held to exhaust any right or remedy of Maker or Payee.
15. LIMITATION OF INTEREST. Regardless of any provision contained in
this Note, the Loan Agreement, or any other Loan Document, Payee shall never
be deemed to have contracted for or be entitled to receive, collect, or apply
as interest on this Note (whether termed interest herein or deemed to be
interest by judicial determination or operation of law), any amount in excess
of the Maximum Rate, and, in the event that Payee ever receives, collects or
applies as interest any such excess, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
this Note, and, if the principal balance of this Note is paid in full, any
remaining excess shall forthwith be paid to Maker. In determining whether or
not the interest paid or payable under any specific contingency exceeds the
highest Maximum Rate, Maker, and Payee shall, to the maximum extent permitted
under applicable law, (a) characterize any non-principal payment (other than
payments which are expressly designated as interest payments hereunder) as an
expense or fee rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) spread the total amount of interest throughout
the entire contemplated term of this Note so that the interest rate is
uniform throughout such term; PROVIDED, THAT if this Note is paid and
performed in full prior to the end of the full contemplated term hereof, and
if the interest received for the actual period of existence thereof exceeds
the Maximum Rate, if any, then Payee or any holder hereof shall refund to
Maker the amount of such excess, or credit the amount of such excess against
the aggregate unpaid principal balance of all advances made by the Payee or
any holder hereof under this Note at the time in question.
16. GOVERNING LAW. This Note is being executed and delivered, and is
intended to be performed in the State of Texas. Except to the extent that the
laws of the United States may apply to the terms hereof, the substantive laws
of the State of Texas shall govern the validity, construction, enforcement
and interpretation of this Note.
17. RENEWAL. This Note is in renewal, extension, and replacement,
but not extinguishment of that certain Substitute Promissory Note dated as of
July 16, 1998, executed by Maker and payable to the order of Payee in the
original principal amount of $10,000,000.00, which Note was in substitution
and replacement of that certain Renewal Promissory Note dated
as of June 15, 1998, executed by INET, Inc., a Texas corporation, and payable
to the order of Payee in the original principal amount of $10,000,000.00,
which note was in renewal, extension, and replacement, but not
extinguishment, of that certain Promissory Note dated June 26, 1997, executed
by INET, Inc., a Texas corporation, and payable to the order of Payee in the
original principal amount of $10,000,000.00.
18. 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 RULES OF PRACTICE AND PROCEDURE
FOR THE ARBITRATION OF J.A.M.S./ENDISPUTE, INC. OR ANY SUCCESSOR THEREOF
("J.A.M.S."), 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 PARTY 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 SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY
OF PAYEE'S DOMICILE AT THE TIME OF THE ARBITRATION AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON
A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING
FOR UP TO 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 PAYEE OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SS. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF PAYEE (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SET-OFF, 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. PAYEE 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. AT PAYEE'S OPTION, FORECLOSURE
UNDER A DEED OF TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE
FOLLOWING: THE EXERCISE OF A POWER OF SALE UNDER THE DEED OF TRUST OR
MORTGAGE, OR BY JUDICIAL SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY
JUDICIAL FORECLOSURE. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
19. FINAL AGREEMENT. THE PROVISIONS OF THIS NOTE AND THE LOAN
DOCUMENTS MAY BE AMENDED OR REVISED ONLY BY AN INSTRUMENT IN WRITING SIGNED
BY THE MAKER AND PAYEE. THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE
FINAL, ENTIRE AGREEMENT OF MAKER AND PAYEE AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF MAKER AND PAYEE. THERE ARE NO ORAL
AGREEMENTS BETWEEN MAKER AND PAYEE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW]
EXECUTED AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.
MAKER:
INET TECHNOLOGIES, INC., a Delaware
corporation, successor by merger to INET, Inc., a
Texas corporation
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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CFO
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