EXHIBIT 10.18
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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 10, 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.")
1. LETTERS OF CREDIT.
1.1 LCS. In order to assist Borrower in establishing or opening a
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documentary Letter of Credit (the "LC" or "LCs") with a bank, trust company or
other issuer ("Bank") in the amount of $5,858,568, to cover the purchase of
goods by Borrower, Borrower has requested that GBC join in the application for
the LC, and/or provide guarantees of, and/or indemnities with respect to,
payment or performance of the LC and/or any drafts or acceptances thereunder
and/or Borrower's obligations in connection therewith (collectively,
"Guarantees"). The amount, extent, terms and conditions of the LC and any
drafts or acceptance relating thereto and all matters and transactions relating
thereto, shall in all respects be subject to approval by GBC in its sole
discretion and shall be subject to change, modification and revision by GBC at
any time and from time to time, in its sole discretion.
1.2 CONDITIONS. Without limiting any of the terms of the Loan
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Agreement or other Loan Documents, and without limiting the fact that the
issuance of Guarantees by GBC is a matter of its sole discretion, the issuance
of Guarantees by GBC shall be subject to the following conditions:
(a) No Event of Default and no event which, with notice or passage of
time or both, would constitute an Event of Default shall have occurred and be
continuing.
(b) No Guarantees shall be issued after September 11, 1997.
(c) The LC shall have an expiration date of no later than November 15,
1997.
1.3 COLLATERAL LCS. Borrower represents and warrants that the goods
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being purchased with the LC are being simultaneously sold, and Borrower has
received from its customers duly issued letters of credit in the aggregate
amount of not less than $_____________ as to which Borrower is the beneficiary
(the "Collateral LCs"), representing the proceeds of sale of such goods. All
Collateral LCs shall, in all respects by in form and substance satisfactory to
GBC in its sole discretion
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GREYROCK BUSINESS CREDIT LETTER OF CREDIT AGREEMENT
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and shall be issued by banks satisfactory to GBC in its sole discretion.
Borrower acknowledges and agrees that GBC has a perfected security interest in
all of the Collateral LCs under the Loan Agreement.
1.3 PAYMENT ON COLLATERAL LCS. All proceeds of the Collateral LCs
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(the "Proceeds") shall be held in trust by Borrower for GBC and shall be
delivered by Borrower to GBC immediately on receipt and in the form received, to
be held as additional collateral for all of the Obligations, including without
limitation the obligations of the Borrower under this Agreement. GBC may
comingle the Proceeds with GBC's other funds, and GBC shall not be required to
pay interest on the Proceeds.
2. 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 "Dollar Limit" specified in Section 1 of the Schedule to 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.
3. GENERAL. Without limiting any of the other provisions of this
Agreement, this Agreement is subject to all of the General LC Provisions
attached hereto and incorporated herein by this reference, and to the General
Provisions of Section 9 of the Loan Agreement, as well as all other provisions
of the Loan Agreement, all of which are hereby incorporated herein by this
reference.
4. 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 OTHER PERSONS AFFILIATED WITH GBC OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
Borrower: GBC:
INTERPLAY PRODUCTIONS GREYROCK BUSINESS CREDIT,
a Division of NationsCredit
Commercial Corporation
By /s/ Xxxxxx Camps
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President or Vice President
By /s/ Xxxx Xxxxxx
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Title VP
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Borrower:
INTERPLAY OEM, INC.
By /s/ Xxxxxx Camps
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Secretary/CFO
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GENERAL LC PROVISIONS
Attached to and forming a part of the Letter of Credit Agreement between
GREYROCK BUSINESS CREDIT, a Division of NationsCredit Commercial Corporation
("GBC") and Interplay Productions and Interplay OEM, Inc. (jointly and
severally, "Borrower").
1. 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 limitaion, 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 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. 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.
4. 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
GREYROCK BUSINESS CREDIT LETTER OF CREDIT AGREEMENT
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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.
5. 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.
6. 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 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.
7. 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 appli cations,
LCs, drafts or acceptances.
8. 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.
9. 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..)
10. 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
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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.
11. 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.
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