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EXHIBIT 10.6
RENEWAL, EXTENSION, AND FIRST AMENDMENT TO LOAN AGREEMENT
THIS RENEWAL, EXTENSION, AND FIRST AMENDMENT TO LOAN AGREEMENT (this
"AMENDMENT") is entered into to be effective as of June 15, 1998, between INET,
INC., a Texas corporation ("BORROWER"), and 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. 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
definitions of "MAXIMUM RATE" and "TERMINATION DATE" in their entirety and to
replace such definitions with the following:
"MAXIMUM RATE" means the highest non-usurious rate of interest (if
any) permitted from day to day by applicable law. Lender hereby
notifies and discloses to Borrower that, for purposes of Tex. Rev. Civ.
Stat. Xxx. art. 5069-1D.001 (codified in the Texas Finance Code Section
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, Lender reserves the right to change the "applicable
ceiling" from time to time by further notice and disclosure to
Borrower.
"TERMINATION DATE" means the earlier of (a) June 15, 2000, or (b)
the date Lender's commitment to fund advances hereunder is terminated
pursuant to SECTION 7.
(b) SECTION 2 of the Loan Agreement is hereby delete SUBSECTION C, in
its entirety and replace such SUBSECTION with the following:
C. USAGE FEE. Borrower shall pay hereafter on September 30, 1997
and on the last day of each December, March, June, and September for
the period from and including the date the Line was established to and
including the maturity date of the Line, a usage fee at a rate per
annum of one-eighth of one percent (1/8%) of the average daily unused
portion of the Line during
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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such period. Borrower may at any time upon written notice to Bank
permanently reduce the amount of the Line at which time the obligation
of Borrower to pay a usage fee shall thereupon correspondingly be
reduced.
(c) SECTION 2.D. of the Loan Agreement is hereby amended to delete
SUBSECTION iii. in its entirety and replace such subsection with the following:
iii. Borrower shall pay to Bank a fee for each Letter of Credit,
payable in installments in advance, so long as such Letter of Credit
remains outstanding. Such installments shall be paid commencing on the
date of issuance of the applicable Letter of Credit, for the period
from and including such date to but excluding the next quarterly
payment date (as hereinafter specified), and thereafter on each March
31, June 30, September 30, and December 31, for the period from and
including such quarterly payment date to but excluding the next
quarterly payment date or (if earlier) the expiry date of such Letter
of Credit. Each such installment shall be paid in an amount equal to
the product of (A) the face amount of such Letter of Credit, multiplied
by (B) one percent (1%) per annum and prorated for the period for
which such installment is due.
(d) SECTION 4.A. of the Loan Agreement is hereby amended to delete
SUBSECTIONS iv. and v. in their entirety and replace such SUBSECTIONS with the
following:
iv. Furnish to Bank promptly such additional information, reports
and statements respecting the business operations and financial
condition of any Company from time-to-time, as Bank may reasonably
request.
(e) SECTION 5 of the Loan Agreement is hereby amended to delete
SUBSECTIONS J. and K. in their entirety and replace such SUBSECTIONS with the
following:
J. CERTAIN TRANSACTIONS. Enter into any transaction with,
transfer any assets to, or pay any management fees to any Affiliate;
provided, however, that each Obligor may enter into transactions with
Affiliates upon terms not less favorable to such Obligor than would be
obtainable at the time in comparable, arms-length transactions with
Persons other than Affiliates.
3. RENEWAL NOTE. Borrower shall execute a Renewal Promissory Note
dated effective as of June 15, 1998, 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.
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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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; (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; and (c) Lender
receives an officer's certificate executed by an authorized officer of Borrower,
certifying to (i) the resolutions adopted by its board of directors authorizing
the transactions contemplated by this Amendment, (ii) incumbency of officers of
Borrower, and (iii) changes in Borrower's articles of incorporation and bylaws,
if any, since June 26, 1997.
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.
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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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]
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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EXECUTED as of the date first stated above.
BORROWER:
INET, INC., a Texas corporation
By: /s/ XXXXXXX XXXX
--------------------------------
Name: Xxxxxxx Xxxx
-------------------------
Title: Senior Vice President
------------------------
LENDER:
NATIONSBANK, N.A., a national banking
association, successor in interest
by merger to NationsBank of Texas, N.A.
By: /s/ XXXXXXX X. XXXXXXXXXX
----------------------------------
Xxxxxxx X. Xxxxxxxxxx
Senior Vice President
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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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 law of
Barbados
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
------------------------------
Title: Director
-----------------------------
INET GLOBAL, LTD., a corporation
organized under the law of Barbados
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
------------------------------
Title: Director
-----------------------------
RENEWAL, EXTENSION, AND
FIRST AMENDMENT TO LOAN AGREEMENT
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RENEWAL PROMISSORY NOTE
$ 10,000,000.00 Dallas, Texas As of June 15, 1998
FOR VALUE RECEIVED, the undersigned, INET, INC., a Texas corporation
("MAKER") hereby unconditionally promises to pay to the order of 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 MARGIN MARGIN
EBITDA BASE RATE EURODOLLAR
BORROWINGS BORROWINGS
---------------------------------------------------------------------------------------
Less than 1.0 to 1.0 -0.50% 1.25%
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Less than 1.5 to 1.0 but greater
than or equal to 1.0 to 1.0 -0.25% 1.50%
=======================================================================================
RENEWAL PROMISSORY NOTE
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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,
RENEWAL PROMISSORY NOTE 2
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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 of even date
herewith, 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 Section 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
RENEWAL PROMISSORY NOTE 3
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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, 2000, 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
RENEWAL PROMISSORY NOTE 4
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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
RENEWAL PROMISSORY NOTE 5
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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, 1998, 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
RENEWAL PROMISSORY NOTE
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(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.
RENEWAL PROMISSORY NOTE 7
14
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.
RENEWAL PROMISSORY NOTE 8
15
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.
RENEWAL PROMISSORY NOTE 9
16
(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.
RENEWAL PROMISSORY NOTE 10
17
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.
RENEWAL PROMISSORY NOTE
11
18
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 Promissory Note dated June 26, 1997,
executed by Maker 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. SECTION 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)
RENEWAL PROMISSORY NOTE 12
19
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]
RENEWAL PROMISSORY NOTE 13
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EXECUTED AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.
MAKER:
INET, INC., a Texas corporation
By: /s/ XXXXXXX XXXX
-----------------------------------
Name: Xxxxxxx Xxxx
----------------------------
Title: Senior Vice President
----------------------------
RENEWAL PROMISSORY NOTE 14
