CREDIT AGREEMENT
Exhibit 10.1
THIS AGREEMENT is entered into as of September 27, 2002, by and between
TANOX, INC. a Delaware corporation (“Borrower”), and XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION (“Bank”).
Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the terms and conditions contained herein.
ARTICLE I
(a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time to time up to and including September 27 , 2006, not to
exceed at any time the aggregate principal amount of Sixteen Million Dollars ($16,000,000.00) (“Line of Credit”), the proceeds of which shall be used to finance Borrower’s working capital requirements including the purchase of
property, plant and equipment. Borrower’s obligation to repay advances under the Line of Credit shall be evidenced by a promissory note substantially in the form of Exhibit “A” attached hereto (“Line of Credit Note”), all
terms of which are incorporated herein by this reference.
(b) Borrowing and Repayment. Borrower may from
time to time during the term of the Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above.
(a) Standby Letter of Credit. Bank has issued or cause an affiliate to issue a standby letter of credit for the account of Borrower and for the benefit of Travelers
Casualty and Surety Company of America, Travelers Casualty and Surety Company, Farmington Casualty Company, Travelers Casualty and Surety Company of Illinois, Travelers Casualty and Surety Company of Canada to finance the support of surety bond (the
“Standby Letter of Credit”) in the principal amount of Four Million One Hundred Seventeen Thousand Dollars ($4,117,000.00). The Standby Letter of Credit has an expiration date of July 8, 2003, and is subject to the additional terms of the
Letter of Credit Agreement, application and any related documents required by Bank in connection with the issuance thereof (the “Letter of Credit Agreement”). Subject to the terms and conditions of this Agreement, Bank hereby confirms that
the Standby Letter of Credit remains in full force and effect.
(b) Repayment of Drafts. Each draft paid
under the Standby Letter of Credit shall be repaid by Borrower in accordance with the provisions of the Letter of Credit Agreement.
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(a) Interest. The outstanding principal
balance of each credit subject hereto shall bear interest, and the amount of each draft paid under the Standby Letter of Credit shall bear interest from the date such draft is paid to the date such amount is fully repaid by Borrower, at the rate of
interest set forth in each promissory note or other instrument executed in connection therewith.
(b)
Computation and Payment. Interest shall be computed on the basis of a 360-day year, actual days elapsed, unless such calculation would result in a usurious rate, in which case interest shall be computed on the basis of a 365/366-day year, as the
case may be, actual days elapsed. Interest shall be payable at the times and place set forth in each promissory note or other instrument required hereby.
(c) Letter of Credit Fees. Borrower shall pay to Bank fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each draft under any Letter of Credit and upon the
occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Bank’s standard fees and charges then in effect
for such activity.
As security for all indebtedness of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests of first priority in all Borrower’s Xxxxx Capital Management account number xxxxxxxx.
All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds of trust and other
documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for all costs and expenses incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits and title insurance.
ARTICLE II
Borrower makes the following representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to this Agreement.
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claims are being asserted for Taxes except to the extent that such liens or claims, in the aggregate, are not reasonably expected to have a
material adverse effect on Borrower.
ARTICLE III
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(a) Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank’s counsel.
(b) Documentation. Bank shall
have received, in form and substance satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and each promissory note or other instrument required hereby.
(ii) Corporate Resolution: Borrowing.
(iv) Such other
documents as Bank may require under any other Section of this Agreement.
(c) Financial Condition. There
shall have been no material adverse change since June 30, 2002, as reasonably determined by Bank, in the financial condition or business of Borrower, nor any material decline, as determined by Bank, in the market value of any collateral required
hereunder or a substantial or material portion of the assets of Borrower.
(d) Insurance. Borrower shall
have delivered to Bank evidence of insurance coverage on all Borrower’s property, in form, substance, amounts, covering risks and issued by companies satisfactory to Bank.
(a) Compliance. The
representations and warranties contained herein and in each of the other Loan Documents shall be true on and as of the date of the signing of this Agreement and shall be true and correct in all material respects (except where the representation is
already qualified by materiality, in which case the representation shall be true and correct) and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and warranties had been made on
and as of each such date, and on each such date: (i) no Event of Default as defined herein, and no condition, event or act which with the giving of notice or the passage of time or both would constitute an Event of Default, shall have occurred and
be continuing or shall exist; and (ii) the condition in Section 3.1 (c) must be satisfied.
(b)
Documentation. Bank shall have received all additional documents which may be required in connection with such extension of credit.
ARTICLE IV
Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Bank
under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing:
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(a) not later than 120 days after the end of each fiscal year, Borrower’s Annual Report on Form 10-Q, including financial
statements of Borrower, audited by a certified independent public accountant acceptable to Bank, which financial statement will include a balance sheet, income statement, and statement of cash flow in accordance with generally accepted accounting
principles consistently applied;
(b) not later than 60 days after and as of the end of each fiscal quarter,
Borrower’s Quarterly Report on Form 10-Q, to include balance sheet, income statements, and statement of cash flow prepared in accordance with generally accepted accounting principles consistently applied subject to normal year end adjustments
and omission of certain footnotes as permitted by the SEC; and
(c) from time to time such other information as
Bank may reasonably request.
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ARTICLE V
Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower
to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written consent:
ARTICLE VI
SECTION 6.1. The occurrence of any of the following shall constitute an “Event of Default” under this Agreement:
(a) Borrower shall fail to pay when due any principal, interest, fees or other amounts payable under any of the
Loan Documents.
(b) Any financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made.
(c) Any default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other
Loan Document (other than those referred to in subsections (a) and (b) above), and with respect to any such default which by its nature can be cured, such default shall continue for a period of twenty (20) days from its occurrence.
(d) Any default in the payment or performance of any obligation, or any defined event of default, under the terms of any
contract or instrument (other than any of the Loan Documents) pursuant to which Borrower has incurred any debt or other liability to any person or entity, including Bank.
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(e) The filing of a notice of judgment lien against Borrower; or the recording of
any abstract of judgment against Borrower in any county in which Borrower has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower; or the
entry of a judgment against Borrower.
(f) Borrower shall become insolvent, or shall suffer or consent to or apply
for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to
time (“Bankruptcy Code”), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower, or Borrower shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or
Borrower shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization
or other relief for debtors.
(g) There shall exist or occur any event or condition which Bank in good faith
believes impairs, or is substantially likely to impair, the prospect of payment or performance by Borrower of its obligations under any of the Loan Documents.
(h) The dissolution or liquidation of Borrower; or Borrower, or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of Borrower.
ARTICLE VII
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of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver, permission, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.
BORROWER: TANOX, INC.
0000
Xxxx Xxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: President
With copy to: General Counsel
Fax number: (000) 000-0000
BANK: XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION
MAC# T5056-012
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax number: (000)
000-0000
or to such other address as any party may designate by written notice to the other party. Each such notice, request and demand
shall be deemed given or made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon confirmation of facsimile transmission.
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all documents and information which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, or
any collateral required hereunder provided that recipient executes a confidentiality agreement in form and substance reasonably acceptable to Borrower.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.
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Loan Documents does not include the right to accelerate, collect or charge unearned interest, but only such interest that has otherwise accrued
as of the date of acceleration. Without limiting the foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or received in connection with any of the Loan Documents which are made for the purpose of determining
whether such rate exceeds the Maximum Rate shall be made to the extent permitted by applicable laws by amortizing, prorating, allocating and spreading during the period of the full term of such Loan Documents, including all prior and subsequent
renewals and extensions hereof or thereof, all interest at any time contracted for, charged, taken, reserved or received by Bank. The terms of this paragraph shall be deemed to be incorporated into each of the other Loan Documents.
To the extent that either Chapter 303 or 306, or both, of the Texas Finance Code apply in determining the Maximum Rate, Bank
hereby elects to determine the applicable rate ceiling by using the weekly ceiling from time to time in effect, subject to Bank’s right subsequently to change such method in accordance with applicable law, as the same may be amended or modified
from time to time.
(a) Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise arising out of or relating to in any way (i) the loan and related Loan Documents which are the subject of this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit.
(b) Governing Rules. Any arbitration proceeding will (i) be held in Houston, Texas in a location selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting
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choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the
parties shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be
referred to, as applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following a
demand by the other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it
under 12 U.S.C. §91 or any similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help
and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after the pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. Each arbitrator will be a neutral attorney licensed in the State of Texas with a minimum of ten years experience in the
substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrators will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration
proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The
arbitrators shall resolve all disputes in accordance with the substantive law of Texas and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make
effective any award. The arbitrators shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrators deems necessary to the same extent a judge could pursuant to the Federal
Rules of Civil Procedure, the Texas Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. Notwithstanding this agreement to arbitrate, either party may
request a court of competent jurisdiction to grant provisional remedies, including a temporary restraining order or preliminary injunction (1) to preserve the status quo pending resolution of the parties’ dispute, (2) to prevent conduct in
contravention of the terms of the parties’ Agreement, (3) to prevent the destruction of documents and other information or things related to the dispute, and/or (4) to prevent the transfer, dissipation, or hiding of assets. A request for such
provisional remedies to a judicial authority shall not be incompatible with this arbitration agreement or a waiver of a party’s right to arbitrate.
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(e) Discovery. In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date and within 180 days of the filing of the dispute
with the AAA. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation
and that no alternative means for obtaining information is available.
(f) Class Proceedinqs and
Consolidations. The resolution of any dispute arising pursuant to the terms of this Agreement shall be determined by a separate arbitration proceeding and such dispute shall not be consolidated with other disputes or included in any class
proceeding.
(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and expenses
of the arbitration proceeding.
(h) Miscellaneous. To the extent practicable, the AAA, the arbitrators and
the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results
thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the
arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision, as it may be amended from time to time, shall survive termination, amendment or expiration of any of
the Loan Documents or any relationship between the parties.
NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THE
INDEBTEDNESS CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES 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 RELATING TO THE INDEBTEDNESS.
TANOX, INC. |
XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION | |
By: /s/ Xxxxxxx Organ Xxxxxxx Organ Chief Operating Officer |
By: /s/ Xxx Xxx Xxxxxxx Xxx Xxx Xxxxxxx Assistant Vice President |
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