1
EXHIBIT 10.4
U.S. $3,000,000.00
INTERNATIONAL REVOLVING LOAN AGREEMENT
DATED AS OF
JUNE 30, 1997
BY AND BETWEEN
NATIONAL TANK COMPANY
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
2
TABLE OF CONTENTS
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1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. THE LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2. International Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4. Letter of Credit Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5. Agreement to Repay Letter of Credit Drawings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6. Conflict between Applications and Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7. Increased Costs; Unavailable LIBOR; Increased Capital . . . . . . . . . . . . . . . . . . . . . . . 6
2.8. Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9. Voluntary Conversion/Continuation of Loans; Past Due Rate . . . . . . . . . . . . . . . . . . . . . 7
2.10. Illegality, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. PREPAYMENTS AND OTHER PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2. Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3. Place of Payment or Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4. Prepayment Premium or Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Reduction or Termination of the Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1. Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3. Fees Not Interest; Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2. Financial Statements; Positive Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.4. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.5. Title to Assets; Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.6. Authorization, Validity, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.7. Line of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.9. Conflicting or Adverse Agreements or Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 12
6.10. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.11. No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.12. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.13. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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7. CONDITIONS . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1. Representations True and No Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2. Terms of Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.3. Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.4. Borrowing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.5. Letter of Credit Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.6. Required Initial Documents and Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.7. Eximbank Acknowledgment, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.8. Post-Closing Lien Search. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.9. Approval of Authorized Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1. Financial Statements and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.2. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.4. Inspection of Property and Records; Audits of Collateral . . . . . . . . . . . . . . . . . . . . 17
8.5. Notice of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.6. Security and Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.7. Export Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.8. Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.9. Existence, Laws and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.10. Assignment of International Letter of Credit Proceeds . . . . . . . . . . . . . . . . . . . . . . 19
8.11. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.12. Controlling Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.1. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2. Merger, Consolidation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.3. Nature of Business; Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4. Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.5. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.6. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.7. Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.8. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.9. Change in Accounting Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.10. Export Orders and Indirect Export Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.11. Copyrights, Patents and Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.12. Eximbank Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10. EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1. Failure to Pay Principal or Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.2. Failure to Pay Other Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.3. Misrepresentation or Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.4. Violation of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.5. Bankruptcy and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.6. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.7. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.8. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.9. International Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.10. Cross-Default to Export Orders, Indirect Export Orders and
Direct Export Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.11. Cross-Default to Domestic Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.12. Cross-Default to Non-Eximbank Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.13. Cross-Acceleration to Other Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.14. Undischarged Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.15. Cross-Default to Borrower Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.16. Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.17. Controlling Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.18. Impairment of Eximbank Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.19. Impairment of International Loan Documents, Export Orders,
Indirect Export Orders and Direct Export Contracts. . . . . . . . . . . . . . . . . . . . . . . . 25
10.20. Negative Pledge on Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.21. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.22. Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.23. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.24. Distributions in Violation of the Eximbank Guaranty . . . . . . . . . . . . . . . . . . . . . . . 26
10.25. Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.1. Representation by the Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.2. Waivers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.3. Reimbursement of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.6. Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . 28
11.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.8. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.9. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.10. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.11. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.12. Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.13. Sale or Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.14. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.15. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.16. Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.17. Loan Agreement Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.18. FINAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.19. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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Exhibit A - Definitions
Exhibit B - Form of International Revolving Note
Exhibit C - Form of Request for Borrowing
Exhibit D - Form of International Borrowing Base Certificate,
together with Annex I and II
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Letter of Credit Request
Exhibit G - Notice of Rate Change/Continuation
Schedule 6.1 - Subsidiaries
Schedule 6.3 - Litigation
Schedule 6.5 - Ownership
Schedule 6.13 - Existing Indebtedness
Schedule 8.3 - Insurance
Schedule 9.1 - Existing Liens
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INTERNATIONAL REVOLVING
LOAN AGREEMENT
NATIONAL TANK COMPANY, a Delaware corporation (hereinafter
called the "Borrower"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association (together with its successors and assigns,
hereinafter called the "Bank"), hereby agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings given to them in
Exhibit A to this Agreement.
2. THE LOANS AND LETTERS OF CREDIT.
2.1. THE LOANS.
(a) Upon the terms and conditions and relying upon the
representations and warranties herein set forth, the Bank agrees to
make Loans to the Borrower on any one or more Business Days prior to
the Maturity Date, up to an aggregate principal amount of Loans not
exceeding at any one time outstanding the lesser of (i) $3,000,000.00
(such amount, as it may be reduced from time to time pursuant to
Section 3.6, being the Bank's "Commitment") or (ii) the International
Borrowing Base. Subject to the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow hereunder.
(b) The Borrower shall execute and deliver to the Bank to
evidence the Loans made by the Bank under the Bank's Commitment, a
Note which shall be (i) dated of even date herewith; (ii) in the
principal amount of the Commitment; and (iii) in substantially the
form attached hereto as Exhibit B, with the blanks appropriately
filled. The outstanding principal balance of the Note shall be
payable on or before the Maturity Date. The Note shall bear interest
on the unpaid principal amount thereof from time to time outstanding,
payable on the last Business Day of each month, commencing on July 31,
1997, and at maturity, at a rate per annum (calculated based on a year
of 360 days) which (A) in the case of a Base Rate Loan shall be equal
to the lesser of (i) the Base Rate, such interest rate to change
automatically from time to time effective as of the date of each
change in the Base Rate, or (ii) the Highest Lawful Rate, and (B) in
the case of a LIBOR Rate Loan shall be equal to the lesser of (i) the
LIBOR Rate plus 2.25%, such interest rate to change automatically from
time to time effective as of the date of each change in the LIBOR
Rate, or (ii) the Highest Lawful Rate. Any amount of principal which
is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest at the Past Due Rate.
(c) Each Loan (other than a Loan made pursuant to Section
2.5(a) to repay a reimbursement obligation) made hereunder shall be in
$100,000 increments and in a principal amount of not less
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than $500,000 or the balance of the Commitment, if such balance is
less than $500,000, and shall be made on prior written notice from the
Borrower to the Bank in the form of Exhibit C attached hereto (the
"Request for Borrowing") delivered to the Bank not later than 12:00
noon (Houston time) (i) in the case of a LIBOR Rate Loan on the third
Business Day prior to the date of the proposed Loan (the "Borrowing
Date"), and (ii) in the case of a Base Rate Loan at least one Business
Day prior to the proposed Borrowing Date. Each Request for Borrowing
shall specify (i) the amount of the proposed borrowing and of each
Loan comprising a part thereof; (ii) the Borrowing Date; (iii) the
Type of Loan requested; (iv) with respect to any LIBOR Rate Loan, the
Interest Period with respect to each such Loan and the Expiration Date
of each such Interest Period (provided, that there shall not be more
than three (3) Interest Periods in effect at any one time under this
Agreement). The Borrower may give the Bank telephonic notice,
including by telephonic facsimile, by the required time of any
proposed borrowing under this Section 2.1(c); provided, however, that
such telephonic notice shall be confirmed in original writing by
delivery to the Bank promptly (but in no event later than the
Borrowing Date relating to any such borrowing) of a Request for
Borrowing. The Bank shall not incur any liability to the Borrower in
acting upon any telephonic notice referred to above which the Bank
believes to have been given by the Borrower, or for otherwise acting
in good faith under this Section 2.1(c). Upon fulfillment of the
applicable conditions set forth in Section 7, on the Borrowing Date,
the Bank shall make the borrowing available to the Borrower. The Bank
shall pay or deliver the proceeds of each borrowing to or upon the
order of the Borrower; provided that in the case of the first Loan,
such payment or delivery shall be made only against delivery to the
Bank of the Note payable to the order of the Bank. The Bank's records
as to the date and principal amount of each Loan and each payment of
principal thereon shall be controlling. Any deposit to or for the
Borrower's account by the Bank pursuant to a request (whether written
or oral) believed by the Bank to be an authorized request by the
Borrower for a Loan hereunder shall be deemed to be a Loan hereunder
for all purposes with the same effect as if the Borrower had in fact
requested the Bank to make such Loan.
(d) Each Request for Borrowing shall be irrevocable and
binding on the Borrower. In the case of any request for a LIBOR Rate
Loan, the Borrower shall indemnify the Bank against any loss, cost or
expense incurred by the Bank as a result of any failure to fulfill on
or before the Borrowing Date specified in such Request for Borrowing
for such Loan the applicable conditions set forth in Section 7,
including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Bank to fund
the Loan when the Loan, as a result of such failure, is not made on
such date.
2.2. INTERNATIONAL BORROWING BASE.
(a) From the date hereof to the date of the first
determination of the International Borrowing Base as hereinafter provided, the
amount of the International Borrowing Base shall be $0.
(b) As soon as available, and in any event within twenty
(20) Business Days after the end of each calendar month, the Borrower shall
furnish the Bank an international borrowing base detailed scheduled report (the
"International Borrowing Base Certificate") in the form of Exhibit D, which is
dated as of the end of each calendar month and which includes a list of the
Eligible Accounts
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Receivable and Eligible Inventory of the Borrower as at the end of the
preceding month, such list to be in such form and containing such information
and detail as the Bank may reasonably request, and as is satisfactory to the
Bank, to comply with the requirements of the Eximbank Guaranty, including,
without limiting the generality of the foregoing, as to Eligible Accounts
Receivable, aging thereof in the customary manner. The inclusion of any
receivable or inventory in the International Borrowing Base Certificate shall
constitute a representation and warranty by the Borrower that such receivable
is an Eligible Accounts Receivable or Eligible Inventory, as the case may be.
The Bank may, on demand, inspect the documentation supporting any International
Borrowing Base Certificate.
(c) Two (2) Business Days after the receipt of any such
International Borrowing Base Certificate (unless the Bank prior to such date
has notified the Borrower of its determination of a different International
Borrowing Base) the International Borrowing Base amount stated in any such
International Borrowing Base Certificate shall automatically be deemed the
International Borrowing Base amount until the earlier of (i) the date of the
next determination or (ii) the date the Bank notifies the Borrower of its
determination of a different International Borrowing Base. The date of any
such notification (if any) by the Bank is herein called a "Determination Date"
and any increase or reduction in the International Borrowing Base by the Bank
shall be effective as of such date. Each determination of the International
Borrowing Base shall be made by the Bank in its reasonable business judgment,
based on the most recent International Borrowing Base Certificate furnished by
the Borrower and other information available to the Bank.
2.3. LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions herein
set forth, including, without limitation, the applicable terms and conditions
set forth in Section 7 hereof, the Bank agrees that it will, following its
receipt of a Letter of Credit Request, issue for the account of the Borrower
and in support of the obligations of the Borrower, one or more irrevocable
letters of credit which either (i) can be drawn down by a Buyer only if the
Borrower fails to perform all of its obligations under an Export Order or
Indirect Export Order, or (ii) can be drawn down by a United States supplier if
the Borrower fails to pay for goods or services purchased from said supplier by
the Borrower in support of export sales to be made pursuant to an Export Order
or Indirect Export Order (all such letters of credit collectively, the "Letters
of Credit"); provided that the Bank shall be under no obligation to issue any
Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or
restrain the Bank from issuing such Letter of Credit or any
requirement of law applicable to the Bank or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Bank shall prohibit, or request
that the Bank refrain from, the issuance of letters of credit
generally; or
(ii) the Stated Amount of such Letter of Credit plus the
Letter of Credit Outstandings at such time (subject to any adjustment
pursuant to Section 2.3(c), if any) and the aggregate principal amount
of all Loans then outstanding (after giving effect to the principal
amount of all Loans repaid and all Unpaid Drawings reimbursed prior to
or concurrently with the issuance of such Letter of Credit) exceeds
the lesser of (A) the Commitment (after giving effect to any
reductions to the Commitment on such date) and (B) the International
Borrowing Base then in effect; or
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(iii) unless the Bank shall give its prior written consent
in its sole discretion, the expiry date, or, in the case of any Letter
of Credit containing an expiry date that is extendible at the option
of the Bank, the initial expiry date of such Letter of Credit, is a
date that is later than the scheduled Maturity Date; or
(iv) the expiry date is not later than twelve (12) months
from the date of issuance of such letter of credit.
(b) Notwithstanding the foregoing, the Bank may not issue
during the final sixty (60) days of the term of this Agreement any Letters of
Credit which expire after the Maturity Date unless the Bank either has decided
to renew this Agreement or has obtained the prior written approval of Eximbank.
(c) The Bank may from time to time, in its sole and
absolute discretion, allow the issuance of Letters of Credit that are less than
100% collateralized.
2.4. LETTER OF CREDIT REQUESTS.
(a) Whenever the Borrower desires that a Letter of Credit
be issued for its account or that an existing expiry date shall be extended, it
shall deliver to the Bank its prior written request therefore not later than
12:00 noon (Houston time) on at least the second (2nd) Business Day prior to
the requested issuance or extension date, as the case may be. Each such
request shall be executed by the Borrower and shall be in the form of Exhibit F
attached hereto (each a "Letter of Credit Request") and, in the case of the
issuance of any Letter of Credit, shall be accompanied by an Application
therefor, completed to the satisfaction of the Bank, and such other
certificates, documents and other papers and information as the Bank may
reasonably request. Each Letter of Credit shall be denominated in Dollars,
shall expire no later than the date specified in Section 2.3, shall not be in
an amount greater than is permitted under Section 2.3(a) and shall be in such
form as may be approved from time to time by the Bank and the Borrower.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of Section 2.3(a) and Section 7 of this Agreement. Upon its issuance of any
Letter of Credit or the extension of the existing expiry date of any Letter of
Credit, as the case may be, the Bank shall promptly notify the Borrower of such
issuance or extension, which notice shall be accompanied by a copy of the
Letter of Credit actually issued or a copy of any amendment extending the
existing expiry date of any Letter of Credit, as the case may be.
2.5. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) Upon the receipt by the Bank of any Drawing from a
beneficiary under a Letter of Credit, the Bank promptly will provide the
Borrower with telecopy notice thereof. The Borrower hereby agrees to reimburse
the Bank by making payment to the Bank in immediately available funds
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at the office, for any payment made by the Bank under any Letter of Credit
issued by it (each such amount so paid until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date of, such payment, with interest
on the amount so paid by the Bank, to the extent not reimbursed prior to 2:00
p.m. (Houston time) on the date of such payment, from and including the date
paid but excluding the date reimbursement is made as provided above, at a rate
per annum equal to the Highest Lawful Rate, such interest to be payable on
demand. Unless otherwise paid by the Borrower, such Unpaid Drawing may (and,
if the Bank so desires, shall automatically, provided that the Bank give notice
thereof to Borrower promptly thereafter), subject to satisfaction of the
conditions precedent set forth in Sections 2.3 and 7, be paid with the proceeds
of Loans which shall bear interest at an annual rate equal to the Base Rate.
(b) The Borrower's obligations under this Section 2.5 to
reimburse the Bank with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances (except as provided below with respect to the gross negligence or
willful misconduct of the Bank) and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Bank,
including any defense based upon the failure of any drawing under a Letter of
Credit (each a "Drawing") to conform to the terms of the Letter of Credit
(other than a defense based upon the gross negligence or willful misconduct of
the Bank in determining whether such Drawing conforms to the terms of the
Letter of Credit) or any non-application or misapplication by the beneficiary
of the proceeds of such Drawing, including any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other International Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Bank,
or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between
the Borrower or any other Person and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
International Loan Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower;
provided that none of the foregoing is attributable to the gross
negligence or willful misconduct of the Bank.
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(c) The Borrower also agrees with the Bank that, in the
absence of gross negligence or willful misconduct of the Bank, the Bank shall
not be responsible for, and the Borrower's reimbursement obligations under
Section 2.6(a) shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged or any
dispute between or among the Borrower or any other Person and the beneficiary
of any Letter of Credit or any other party to which such Letter of Credit may
be transferred or any claims whatsoever of the Borrower or any other Person
against any beneficiary of such Letter of Credit or any such transferee.
(d) The Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except
for errors or omissions caused by the Bank's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Bank
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and
Practice for Documentary Credits (1994 Revision), International Chamber of
Commerce, Publication No. 500 (and any subsequent revisions thereof approved by
a Congress of the International Chamber of Commerce and adhered to by such
Bank) and, to the extent not inconsistent therewith, the Uniform Commercial
Code of the State of Texas, shall not result in any liability of the Bank to
the Borrower or any other Person. IT IS THE INTENT OF THE PARTIES HERETO THAT
THE BANK SHALL NOT HAVE ANY LIABILITY UNDER THIS SECTION 2.5 FOR THE ORDINARY
SOLE OR CONTRIBUTORY NEGLIGENCE OF THE BANK.
2.6. CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. To the
extent that any provision of any Application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
2.7. INCREASED COSTS; UNAVAILABLE LIBOR; INCREASED CAPITAL.
(a) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining LIBOR Rate Loans, then the Borrower shall from time to time, upon
demand by the Bank, pay to the Bank additional amounts sufficient to compensate
the Bank for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower by the Bank, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If the Borrower shall have chosen the LIBOR Rate in a
Request for Borrowing or a Notice of Rate Change/Continuation and not later
than 11:00 a.m. (Houston, Texas time) one Business Day prior to the Borrowing
Date or Conversion/Continuation Date, as the case may be, the Bank notifies the
Borrower that (i) deposits in Dollars in the principal amount of such LIBOR
Rate Loan are not being offered to the Bank in the interbank market selected by
the Bank for the Interest
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Period applicable thereto or (ii) adequate and reasonable means do not exist
for ascertaining the chosen LIBOR Rate in respect of such LIBOR Rate Loan or
(iii) the LIBOR Rate for any Interest Period for such LIBOR Rate Loan will not
adequately reflect the cost to the Bank of making such LIBOR Rate Loan for such
Interest Period, then such LIBOR Rate shall not become effective as to such
LIBOR Rate Loan on such Borrowing Date or the Conversion/Continuation Date, as
the case may be, or at any time thereafter until such time thereafter as the
Borrower receives notice from the Bank that the circumstances giving rise to
such determination no longer apply and such Loan shall bear interest at the
lesser of (i) the Base Rate or (ii) the Highest Lawful Rate.
(c) If the Bank determines that compliance with any law
or regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank and that the amount of such
capital is increased by or based upon the existence of the Bank's Commitment
hereunder and other commitments of this type, then, within fifteen (15)
Business Days after demand by the Bank, the Borrower shall pay to the Bank,
from time to time as specified by the Bank, additional amounts sufficient to
compensate the Bank or such corporation in the light of such circumstances. A
certificate as to such amounts submitted to the Borrower by the Bank shall be
conclusive and binding for all purposes, absent manifest error.
(d) Anything in this Section notwithstanding: (i) the
Borrower shall not be required to pay to the Bank reimbursement or
indemnification with regard to any costs or expenses described in this Section,
unless the Bank notifies the Borrower of such costs or expenses within 90 days
after the date paid or incurred; and (ii) the Bank shall not be permitted to
pass through to the Borrower charges and costs under this Section on a
discriminatory basis (i.e., which are not also passed through by the Bank to
other customers of the Bank similarly situated where such customer is subject
to documents providing for such pass through).
2.8. INTEREST RATE PROTECTION. If the Borrower shall fail
to select the duration of any Interest Period for any LIBOR Rate Loan in
accordance with the provisions hereof, such Loan will automatically, on the
last day of the then existing Interest Period therefor, convert into a Base
Rate Loan.
2.9. VOLUNTARY CONVERSION/CONTINUATION OF LOANS; PAST DUE
RATE.
(a) So long as no Default or Event of Default has
occurred and is continuing, the Borrower may (i) change the interest rates to
apply to any Loan or (ii) elect to continue all or any part of the outstanding
principal balance of any LIBOR Rate Loan as an Loan of such Type by giving the
Bank an irrevocable written notice (the "Notice of Rate Change/Continuation")
in the form of Exhibit G hereto, specifying (A) the date on which such Loan was
made; (B) the interest rate then applicable to such Loan; (C) with respect to
any LIBOR Rate Loan, the Interest Period then applicable to each such Loan; (D)
the principal amount of such Loan to remain outstanding; (E) the Type of Loan
and, with respect to any LIBOR Rate Loan, the Interest Period to become
applicable to such Loan on the effective date of the rate change or
continuation; and (F) the requested effective date of the rate change or
continuation (the "Conversion/Continuation Date"). In the case of the
conversion of all or any part of any Base Rate Loan into a LIBOR Rate Loan or
the continuation of
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any LIBOR Rate Loan as an Loan of such Type, such notice must be received by
the Bank not later than 11:00 A.M. (Houston time) at least three (3) full
Business Days prior to the Conversion/Continuation Date, and otherwise at least
one (1) full Business Day prior thereto. Each rate so specified shall become
effective on the Conversion/Continuation Date and remain in effect until the
expiration of the applicable Interest Period specified in such Notice of Rate
Change/ Continuation.
(b) Nothing contained herein shall authorize the Borrower
(i) to convert any Loan into or continue any Loan as a LIBOR Rate Loan unless
the Expiration Date of the Interest Period for such Loan occurs on or before
the Maturity Date or (ii) to continue or change the interest rates applicable
to any LIBOR Rate Loan prior to the Expiration Date of the Interest Period with
respect thereto.
(c) Notwithstanding anything set forth herein to the
contrary, any Loan which is not paid when due shall bear interest at a rate per
annum which shall be equal to the lesser of (i) 3% above the interest rate
otherwise applicable thereto or (ii) the Highest Lawful Rate, which interest
shall be due and payable on demand.
2.10. ILLEGALITY, ETC. Notwithstanding any other provision
of this Agreement, if the Bank shall notify the Borrower that the introduction
of or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other Governmental Authority asserts that it
is unlawful, for the Bank to perform its obligations hereunder to make LIBOR
Rate Loans or to fund or maintain LIBOR Rate Loans hereunder, (i) the
obligation of the Bank to make, or to convert Loans into, LIBOR Rate Loans
shall be suspended until the Bank shall notify the Borrower that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all LIBOR Rate Loans of the Bank then
outstanding, together with interest accrued thereon, unless the Borrower,
within five (5) Business Days of notice from the Bank, converts all LIBOR Rate
Loans of the Bank then outstanding into a Base Rate Loan.
3. PREPAYMENTS AND OTHER PAYMENTS.
3.1. REQUIRED PREPAYMENTS.
(a) The Borrower agrees that if at any time it or the
Bank determines that the aggregate principal amount of Loans outstanding plus
the Letter of Credit Outstandings (subject to any adjustment pursuant to
Section 2.3(c), if any) exceeds the International Borrowing Base, the Borrower
will, within five (5) Business Days, either (i) make a prepayment of principal
in an amount at least equal to such excess, or (ii) furnish additional security
to the Bank, in form and amount satisfactory to the Bank and the Eximbank.
(b) The Borrower agrees that if at any time the aggregate
principal amount of Loans outstanding plus the Letter of Credit Outstandings
exceeds the amount of the Commitment, the Borrower shall immediately make a
prepayment of principal in an amount at least equal to such excess.
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3.2. OPTIONAL PREPAYMENTS. The Borrower shall have the
right at any time and from time to time to prepay the Note, in whole or in
part, provided that each partial prepayment shall be in an aggregate principal
amount of at least $50,000 or such lesser amount as may be due and owing. In
the event of such prepayment of a LIBOR Rate Loan, the Borrower shall be
obligated to reimburse the Bank in respect thereof pursuant to Section 3.4.
3.3. PLACE OF PAYMENT OR PREPAYMENT. All payments and
prepayments of the International Obligations made in accordance with the
provisions of this Agreement or of the Note, including, without limitation,
fees, principal or interest, shall be made to the Bank no later than 2:00 p.m.
(Houston time) on the date when due, in immediately available funds.
3.4. PREPAYMENT PREMIUM OR PENALTY. Each prepayment
pursuant to Section 3.1 or 3.2 shall be without premium or penalty, provided,
if any payment of principal of any LIBOR Rate Loan is made other than on the
last day of the Interest Period for such Loan, as a result of a payment
pursuant to Sections 3.1 or 3.2 or acceleration of the maturity of the Loans
and the Notes pursuant to Section 10 or for any other reason, the Borrower
shall, within 15 Business Days after receipt of Bank's demand, pay to the Bank
any amounts required to compensate the Bank for additional losses, costs or
expenses which it may reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Bank to fund or maintain such Loan.
3.5. TAXES. All payments (whether of principal, interest,
reimbursements or otherwise) under this Agreement or on the Note shall be made
by the Borrower without set-off or counterclaim and shall be made free and
clear of and without deduction for any present or future tax, levy, impost or
any other charge, if any, of any nature whatsoever now or hereafter imposed by
any taxing authority, but excluding taxes imposed on or measured by the Bank's
net income and franchise taxes imposed on the Bank. If the making of such
payments is prohibited by law unless such a tax, levy, impost or other charge
is deducted or withheld therefrom, the Borrower shall pay to the Bank, on the
date of each such payment, such additional amounts as may be necessary in order
that the net amounts received by the Bank after such deduction or withholding
shall equal the amounts which would have been received if such deduction or
withholding were not required.
3.6. REDUCTION OR TERMINATION OF THE COMMITMENT. The
Borrower may at any time or from time to time reduce or terminate the
Commitment by giving written notice thereof no later than 2:00 p.m. (Houston
time) not less than two (2) Business Days' prior to such reduction or
termination. Any reduction in the Commitment shall be effective on the date
specified in the Borrower's notice with respect to such reduction. The
Commitment shall automatically terminate on the Maturity Date or in the event
of acceleration of the Maturity Date of the Note. Each reduction of the
Commitment hereunder shall be irrevocable.
4. FEES.
4.1. FACILITY FEE. The Borrower hereby irrevocably agrees
to pay $30,000 to the Bank on the Closing Date. In no event shall such amount
be refunded to the Borrower, whether or not the transactions contemplated
hereby are consummated. The required facility fee hereunder is 1.0% of the
Commitment.
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4.2. LETTER OF CREDIT FEES. The Borrower agrees to pay
the Bank a fee in respect of each Letter of Credit issued for the account of
the Borrower (the "Letter of Credit Fee"), computed at the rate of 1% per annum
on the initial Stated Amount of such Letter of Credit. Letter of Credit Fees
shall be due and payable quarterly, in advance. Fees due under this Section
4.2 shall be computed on the basis of a year of 360 days.
4.3. FEES NOT INTEREST; NONPAYMENT. The fees described in
this Agreement represent compensation for services rendered and to be rendered
separate and apart from the lending of money or the provision of credit and do
not constitute compensation for the use, detention or forbearance of money, and
the obligation of the Borrower to pay each fee described herein shall be in
addition to, and not in lieu of, the obligation of the Borrower to pay
interest, other fees described in this Agreement, and expenses otherwise
described in this Agreement. Fees shall be payable when due in Dollars and in
immediately available funds. All fees shall be non-refundable, and shall, to
the fullest extent permitted by law, bear interest, if not paid when due, at a
rate per annum equal to the Past Due Rate.
5. APPLICATION OF PROCEEDS. The Borrower agrees that (a) the
proceeds of the Loans shall be used exclusively for purposes permitted pursuant
to the Eximbank Guaranty and the Borrower Agreement and (b) the Letters of
Credit shall be issued solely to support the Borrower's obligations (i) under
an Export Order or Indirect Export Order, or (ii) to pay for goods or services
purchased from a United States supplier in support of export sales to be made,
pursuant to an Export Order or Indirect Export Order.
6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants that:
6.1. ORGANIZATION AND QUALIFICATION. The Borrower and
each Subsidiary (a) is duly organized, validly existing, and in good standing
under the laws of its state of formation; (b) has the power to own its
Properties and to carry on its business as now conducted; and (c) is duly
qualified to do business and is in good standing in every jurisdiction where
such qualification is necessary. The Borrower has no Subsidiaries other than
those listed on Schedule 6.1.
6.2. FINANCIAL STATEMENTS; POSITIVE TANGIBLE NET WORTH.
The Borrower and each Guarantor has furnished the Bank with the following
financial statements: (a) its year-end Annual Audited Financial Statements for
the fiscal periods ended 1994, 1995 and 1996; and (b) its balance sheet and
statement of operations and retained earnings as at and for the 12 month period
ended March 31, 1997. These statements have been prepared in conformity with
GAAP. Such statements present, in all material respects, the financial
condition of the Borrower or Guarantor and its Subsidiaries and the results of
its operations as at the dates and for the periods indicated. There has been
no material adverse change in the condition, financial or otherwise, of the
Borrower since March 31, 1997. During the period from March 31, 1997 to the
Closing Date, the Borrower has had a positive tangible net worth, as determined
in accordance with GAAP. For the purpose of this determination, net worth (as
determined in accordance with GAAP) must be (i) increased by any Indebtedness
of the Borrower and its Subsidiaries subordinated to the Loans and (ii)
decreased by all intangible assets (including, without limitation, all patents,
licenses, goodwill, subscription lists, capitalized software, organization
expenses, covenants not to compete, and investments in and monies due from
Affiliates, officers and directors of the Borrower and its Subsidiaries).
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6.3. LITIGATION. Other than as set forth on Schedule 6.3,
there is no material action or proceeding pending or, to the knowledge of the
Borrower, threatened against or involving the Borrower or any Subsidiary
thereof before any court, administrative agency or arbitrator which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect. There is no outstanding judgment, order or decree binding upon the
Borrower or any Subsidiary before or by any administrative or governmental
authority.
6.4. DEFAULT. Neither the Borrower nor any Subsidiary is
in default under or in violation of the provisions of (i) any instrument
evidencing any Indebtedness or (ii) any agreement relating thereto or (iii) any
Governmental Requirement (except where such default or violation could not
reasonably be likely to have a Material Adverse Effect) or (iv) any Export
Order or Indirect Export Order (which is a material violation of such Export
Order or Indirect Export Order), which has not been waived by the applicable
lender or other party thereto.
6.5. TITLE TO ASSETS; OWNERSHIP. (a) The Borrower and
each Subsidiary has good and marketable title to its material Properties,
subject to no Liens except as permitted by Section 9.1 hereof.
(b) The Persons identified on Schedule 6.5 directly own,
free and clear of all Liens or restrictions on transferability or voting, one
hundred percent (100%) of the outstanding shares of the Borrower and all such
shares are validly issued, fully paid and non-assessable. There are no
outstanding warrants, options, contracts or commitments of any kind entitling
any Person to purchase or otherwise acquire (i) any shares of the capital stock
(or other equivalent interests) of the Borrower or (ii) any securities
convertible into or exchangeable for any shares (or other equivalent interests)
of such capital stock (or other equivalent interests). No securities are
outstanding which are convertible into or exchangeable for any shares of
capital stock (or other equivalent interests) of the Borrower. The Persons
identified on Schedule 6.5 as Controlling Affiliates are the only Controlling
Affiliates of the Borrower.
6.6. AUTHORIZATION, VALIDITY, ETC. The Borrower has the
power and authority to make, execute, deliver and carry out the International
Loan Documents to which it is a party and the transactions contemplated therein
and to perform its obligations thereunder and all such action has been duly
authorized by all necessary proceedings on its part. The International Loan
Documents have been duly and validly executed and delivered by the Borrower and
the Guarantors and constitute valid and legally binding agreements of the
Borrower and the Guarantors enforceable in accordance with their respective
terms, except as limited by Debtor Laws. The Liens created by the
International Security Documents will constitute valid and perfected Liens on
the International Collateral described therein subject in priority to no other
Liens whatsoever. The liens created by the International Security Documents
will constitute valid and perfected Liens on the Domestic Collateral, subject
in priority to no other Liens whatsoever, other than Permitted Liens and Liens
securing the Domestic Obligations.
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6.7. LINE OF BUSINESS. The Borrower's line of business is
to design, distribute, install and service production processing equipment and
systems for the petroleum industry worldwide. The Borrower provides a wide
spectrum of equipment and systems for separating one substance from another in
a hydrocarbon fluid stream and removing contaminants from gases and liquids.
6.8. TAXES. (a) The Borrower and each Subsidiary has
filed, or has caused to be filed, all tax returns required to be filed and has
paid, or has caused to be paid, all taxes shown on said returns and all
assessments which are not yet delinquent. The Borrower is not aware of any
pending investigation by any taxing authority or of any claims by any
Governmental Authority for any unpaid taxes, except liabilities contested in
good faith.
(b) The Borrower and each Guarantor has furnished the
Bank a copy of its signed federal tax returns, including federal income tax
returns, for the years 1994, 1995 and 1996.
6.9. CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS.
Neither the execution, delivery and performance of the International Loan
Documents to which the Borrower or any Subsidiary is a party, any Export Order,
or any Indirect Export Order, nor the consummation of the transactions
contemplated thereby nor fulfillment of and compliance with the respective
terms, conditions and provisions thereof, will conflict with or result in a
breach of any of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation or
imposition of any Lien on any of the Property of the Borrower or any Subsidiary
or Guarantor pursuant to, (a) the charter or bylaws of such Person; (b) any
Governmental Requirement; or (c) the terms, conditions or provisions of any
material contract to which such Person is a party or by which it is bound or to
which it is subject.
6.10. INFORMATION. Neither this Agreement nor any other
document, certificate or statement furnished to the Bank by or on behalf of the
Borrower or any Subsidiary or Guarantor in connection with this Agreement
(including, without limitation, any Export Order or any International Borrowing
Base Certificate) contains any statement of fact which is untrue or incorrect
in any material respect or omits to state a fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
peculiar to the Borrower which currently or (so far as the Borrower can now
reasonably foresee) in the future may result in the existence of a Material
Adverse Effect.
6.11. NO CONSENT. Except to the extent obtained, no
authorization or approval or other action by, and no notice to or filing with,
any Person or any Governmental Authority is required for the due execution,
delivery, and performance (a) by the Borrower or any Subsidiary or Guarantor of
any International Loan Document to which it is a party or the borrowings
hereunder, in each case as contemplated herein, or the effectuation of the
transactions contemplated under any International Loan Document to which it is
a party, or (b) of any Export Order or any Indirect Export Order by the parties
thereto or the effectuation of the transactions contemplated thereunder.
6.12. ENVIRONMENTAL MATTERS. The Borrower and each
Subsidiary (a) owns, possesses or otherwise holds, and is in compliance with
the terms and conditions of, all Governmental Approvals under Environmental
Laws necessary for the ownership or lease and operation of its
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Property and the carrying on of its business as now conducted or proposed to be
conducted and except where the failure would not reasonably be expected to have
a Material Adverse Effect, and (b) is in compliance with all Governmental
Requirements relating to the environment except where the failure would not
reasonably be expected to have a Material Adverse Effect. There are no civil,
criminal or administrative actions, investigations or proceedings or claims
pending or, to the best knowledge of the Borrower, threatened against the
Borrower or any Subsidiary, for noncompliance with Environmental Laws or
arising out of the presence or release of hazardous materials at, on or under
any Property now owned, leased or operated by the Borrower or any Subsidiary
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect.
6.13. DEBT. Attached hereto as Schedule 6.13 is a complete
list, as of the Closing Date, of all agreements or instruments evidencing
Indebtedness of the Borrower, each Subsidiary and the Guarantors not reflected
in the Annual Audited Financial Statements previously furnished to the Bank
pursuant to Section 6.2 (other than the International Loan Documents, the
Domestic Loan Documents and agreements or instruments evidencing Indebtedness
arising from or with respect to current accounts payable and unsecured current
liabilities, not the result of borrowing, to vendors, suppliers and Persons
providing services, for expenditures and/or goods and services normally
required by it in the ordinary course of business and on ordinary trade terms).
6.14. NO UNTRUE OR MISLEADING STATEMENTS. No document,
instrument or other writing furnished to the Bank by or on behalf of the
Borrower, any Subsidiary or Guarantor in connection with the transactions
contemplated by the International Loan Documents contains any untrue material
statement of fact or omits to state any such fact necessary to make the
representations, warranties and other statements contained herein or in such
other document, instrument or writing not misleading in any material respect.
7. CONDITIONS. The obligation of the Bank to make each Loan, to
issue each Letter of Credit, is subject to the following conditions:
7.1. REPRESENTATIONS TRUE AND NO DEFAULTS. (a) The
representations and warranties of the Borrower contained in the International
Loan Documents shall be true and correct on and as of the particular Borrowing
Date or the date of the issuance of any Letter of Credit, as the case may be,
as though made on and as of such date unless otherwise limited to an earlier
date; (b) no event which could reasonably be expected to have a Material
Adverse Effect shall have occurred and be continuing; and (c) no Event of
Default or Default shall have occurred.
7.2. TERMS OF SALE. Loans and Letters of Credit shall be
made or issued, as the case may be, only against Export Orders and Indirect
Export Orders, copies of which have been delivered to the Bank and which are
maintained on file with the Borrower. With respect to Loans and Letters of
Credit to be made or issued, as the case may be, against Indirect Export
Orders, if requested by the Bank, a copy of each Direct Export Contract
pursuant to which the Items will be exported shall have been delivered to the
Bank. Unless waived by the Bank and the Eximbank, the Borrower must execute an
assignment of any contract and the proceeds thereof in favor of the Bank, for
the benefit of any Loan or Letter of Credit related thereto, such assignment to
be in form and substance satisfactory to the Bank. Each Loan and Letter of
Credit hereunder is subject to the condition precedent that the Bank shall have
reviewed and approved in its sole discretion the terms
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and conditions, including without limitation that there exists satisfactory
evidence that the Items will in fact be exported, of the applicable Export
Order or Indirect Export Order and, if required by the Bank, any Direct Export
Contracts.
7.3. GOVERNMENTAL APPROVALS. The Borrower, each
Subsidiary, the Guarantors, and the Bank shall have obtained all Governmental
Approvals required for the making and carrying out of this Agreement, the
making of the Loans and the issuance of Letters of Credit pursuant hereto and
the issuance of the Note to evidence such Loans and the execution, delivery and
performance of the applicable Export Order or Indirect Export Order. Without
limitation of the foregoing, no Loan shall be made or Letter of Credit issued
hereunder (a) in violation of the Eximbank Guaranty or contrary to the
instructions of the Eximbank; (b) following the occurrence of an event of
default or of any event which but for the giving of notice or the lapse of time
or both would constitute and event of default pursuant to Section 4.5 of the
Eximbank Guaranty; or (c) without the prior written approval of the Bank and
the Eximbank subsequent to the event of an occurrence under any insurance
policy referred to in Section 8.7 hereof.
7.4. BORROWING DOCUMENTS; INTERNATIONAL BORROWING BASE
CERTIFICATE. The Bank shall have timely received from the Borrower a duly
executed and completed Request for Borrowing in respect of Loans to be made on
such Borrowing Date, an International Borrowing Base Certificate dated within
the past five (5) Business Days, and such other documents and certificates
relating to the transactions herein contemplated as the Bank may reasonably
request.
7.5. LETTER OF CREDIT DOCUMENTS. On the date of the
issuance of any Letter of Credit, the Bank shall have received from the
Borrower a Letter of Credit Request in respect of Letters of Credit to be
issued on such issuance date together with such other documents and
certificates relating to the transactions herein contemplated as the Bank may
reasonably request. Without limitation of the foregoing, each Letter of Credit
shall be issued only upon receipt of an International Borrowing Base
Certificate current within the past five (5) Business Days.
7.6. REQUIRED INITIAL DOCUMENTS AND CERTIFICATES. On or
before the first Loan is made, or Letter of Credit issued, hereunder (the
"Initial Date"), the Bank shall have received from the Borrower the following,
in each case in form, scope and substance satisfactory to the Bank:
(i) the SBA/Eximbank Joint Application, duly executed by
the parties thereto, together with the $100 application fee related
thereto;
(ii) the Borrower Agreement duly executed by the parties
thereto;
(iii) this Agreement, together with all schedules and
exhibits thereto;
(iv) the Note duly executed by the Borrower;
(v) the International Security Agreement duly executed by
the parties thereto;
(vi) the International Guaranties duly executed by the
Guarantors;
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(vii) an Officer's Certificate of the Borrower dated as of
the Closing Date to which are attached true and correct copies of the
articles of incorporation and bylaws of the Borrower and corporate
resolutions duly adopted by the Board of Directors of the Borrower
authorizing the transactions contemplated by the International Loan
Documents;
(viii) satisfactory results of on-line search as to the
continued existence and good standing of the Borrower;
(ix) satisfactory results of on-line search as to each
state in which the Borrower is authorized and qualified to do business
as to its due qualification and good standing;
(x) an International Borrowing Base Certificate dated
within five (5) Business Days preceding the Initial Date, as required
by Section 7.4;
(xi) copies of duly executed UCC-1 Financing Statements
and all other requisite filing documents necessary to perfect the
Liens granted pursuant to the International Security Documents and
duly executed releases or assignments of Liens and UCC-3 financing
statements in recordable form, and in form and substance satisfactory
to the Bank, and filed with the appropriate filing offices, covering
all of the Collateral subject thereto, as may be necessary to reflect
that the Liens granted to the Bank are of the priority required by
Section 9.1 hereof;
(xii) a copy of the fully effective Eximbank insurance
policy complying with the terms of Section 8.7 hereof, together with
an assignment thereof in favor of the Bank;
(xiii) the facility fee required under Section 4.1;
(xiv) the Borrower's monthly inventory listing and accounts
receivable aging schedule showing all of the Borrower's inventory and
accounts receivable as of the last day of the calendar month
immediately preceding the Initial Date;
(xv) satisfactory completion of field analysis and due
diligence of the Borrower to be performed by the Bank; and
(xvi) the Borrower's and each Guarantor's financial
statements and signed federal tax returns as contemplated in Sections
6.2 and 6.8(b).
In addition, as of the Initial Date, all legal matters
incident to the transactions herein contemplated shall be reasonably
satisfactory to the Bank.
7.7. EXIMBANK ACKNOWLEDGMENT, ETC. On or before the
Initial Date, the Eximbank shall have received from the Bank copies of all
documents required pursuant to the Eximbank Guaranty. The Bank shall have
received from the Eximbank (a) an acknowledged Loan Authorization Notice
executed by an Authorized Officer evidencing the Eximbank's commitment to issue
a guarantee pursuant to the Bank's exercise of its delegated authority with
respect to this Agreement, together with all other acknowledged items referred
to in Section 3 of the Delegated Authority Letter Agreement and (b) an
acknowledgment of the Eximbank's receipt of its portion of the facility fee
referred to in Section 4.1 hereof.
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7.8. POST-CLOSING LIEN SEARCH. On or before the Initial
Date, Bank shall have received the results of all post-closing lien searches
confirming that the Bank has obtained a perfected security interest in the
Collateral of the priority required by Section 9.1.
7.9. APPROVAL OF AUTHORIZED OFFICER. Eximbank requires
that an Authorized Officer approve in writing any Loan made, or Letter of
Credit issued hereunder. Such approval shall not be withheld provided all
requirements set forth herein and in the Borrower Agreement are fully complied
with.
8. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees
that, so long as the Borrower may borrow hereunder and until payment in full of
the Note, the Borrower will:
8.1. FINANCIAL STATEMENTS AND INFORMATION. Deliver to the
Bank in duplicate:
(a) as soon as available, and in any event within one
hundred twenty (120) days after the end of each fiscal year of the
Borrower, the Annual Audited Financial Statements of (i) the Borrower
and its Subsidiaries prepared on a consolidated basis, and (ii) each
Guarantor;
(b) as soon as available, and in any event within one
hundred eighty (180) days after the end of each year, a copy of
Borrower's and each Guarantor's signed federal tax returns, including
federal income tax returns, and all supporting documentation;
(c) as soon as available, and in any event within thirty
(30) days after the end of each calendar month (including a month
ending a fiscal year), Monthly Unaudited Financial Statements of the
Borrower and its Subsidiaries prepared on a consolidated basis;
(d) as soon as available, and in any event within twenty
(20) Business Days after the end of each month, an International
Borrowing Base Certificate dated within the past five (5) Business
Days of the Bank's receipt thereof;
(e) promptly after such request is submitted to the
appropriate Governmental Authority, any request for waiver of funding
standards or extension of amortization periods with respect to any
employee benefit plan;
(f) contemporaneously therewith or within 10 days
thereafter copies of all statements and reports sent to the
stockholders of the Borrower or any Subsidiary, or filed with the
Securities and Exchange Commission;
(g) such additional financial or other information as the
Bank may reasonably request;
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(h) as soon as available, and in any event within 30 days
after the end of each calendar month, the Borrower's monthly inventory
listing and accounts receivable aging schedule showing all of the
Borrower's inventory and accounts receivable; and
(i) as soon as available, and in any event within
forty-five (45) days after the end of each quarter, quarterly
financial statements of the Borrower.
Together with each delivery of the Annual Audited Financial Statements, the
Borrower will deliver to the Bank an Compliance Certificate in the form of
Exhibit E hereto, stating that there exists no Event of Default or Default, or,
if any such Event of Default or Default exists, stating the nature thereof, the
period of existence thereof and what action the Borrower has taken or proposes
to take with respect thereto. The Bank is authorized to deliver a copy of any
information and financial statement delivered to it to the Eximbank and any
Governmental Authority having jurisdiction over the Bank.
8.2. BOOKS AND RECORDS. Maintain, and cause its
Subsidiaries to maintain, proper books of record and account in accordance with
GAAP in which true, full and correct entries will be made of all its dealings
and business affairs.
8.3. INSURANCE. Maintain, and cause its Subsidiaries to
maintain, insurance with financially sound, responsible and reputable companies
in such types (including, without limitation, fire and casualty) and amounts
and against such casualties, risks and contingencies as is customarily carried
by owners of similar businesses and Properties, and furnish to the Bank,
together with each delivery of financial statements under Section 8.1(a), an
Officer's Certificate containing full information as to the insurance carried.
Without limiting the generality of the foregoing, the Borrower will comply with
the insurance requirements set forth in each International Security Document to
which the Borrower is a party. For purposes hereof, the Borrower's types and
amounts of insurance set forth in Schedule 8.3 shall be acceptable to the Bank.
8.4. INSPECTION OF PROPERTY AND RECORDS; AUDITS OF
COLLATERAL.
(a) Permit, and cause its Subsidiaries to permit, any
Person designated by the Bank in writing to visit and inspect any of the
Properties, books and financial records of the Borrower and its Subsidiaries
and discuss its affairs and finances with its officers, all at such times as
the Bank may reasonably request at a mutually agreeable time, and cause its
officers and employees to give full cooperation and assistance in connection
therewith. Without limiting the generality of the foregoing, the Borrower will
permit, and cause its Subsidiaries to permit, any officer or employee of, or
agent designated by, the Bank to have access to, examine and inspect the
Collateral and to audit and make extracts from the Borrower's records, files
and books of account in order to verify such Collateral.
(b) The Borrower will, from time to time, on at least a
semiannually basis, permit the Bank, an independent certified public accountant
or another appropriate entity acceptable to the Bank to audit the Borrower's
books, records and procedures with respect to the Inventory, Accounts
Receivable and other Collateral. This inspection shall include a physical
inspection of the Collateral in accordance with normal commercial lending
practices, except that a book audit shall be made of
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the Borrower's Accounts Receivable and any intangible Collateral. Promptly
after the conclusion of each such audit, the Borrower shall pay to the Bank its
reasonable and customary out-of-pocket expenses associated with such audit.
8.5. NOTICE OF CERTAIN MATTERS. Notify the Bank
immediately upon acquiring knowledge of the occurrence of any of the following
events: (a) the occurrence of any event having a Material Adverse Effect; (b)
the occurrence of any Event of Default or any Default; (c) the existence of any
condition requiring a mandatory prepayment pursuant to Section 3.1 hereof; (d)
any failure to pay when due any amount payable to the Bank by the Borrower, any
Subsidiary or any Guarantor under any non-Eximbank guaranteed loan(s) extended
by the Bank to the Borrower, any Subsidiary or any Guarantor; (e) the filing of
an action for debtor's relief by, against, or on behalf of the Borrower, any
Subsidiary or any Guarantor; (f) any actual or threatened breach of any Export
Order, Indirect Export Order or Direct Export Contract by any party to any such
contract or (g) any threatened or pending material litigation against the
Borrower, any Subsidiary or any Guarantor or any material dispute involving the
Borrower, any Subsidiary or any Guarantor. The Borrower shall promptly notify
the Bank in writing of the occurrence of any of the following: (a) the
Borrower, any Subsidiary or any Guarantor begins or consents in any manner to
any proceeding or arrangement for its liquidation in whole or in part or to any
other proceeding or arrangement whereby any of its liabilities or whereby any
receiver, trustee, liquidator or the like is appointed for it or any
substantial part of its assets (including, without limitation, the filing by
the Borrower, any Subsidiary or any Guarantor of a petition for appointment as
a debtor-in-possession under Title 11 of the U.S. Code); (b) the Borrower, any
Subsidiary or any Guarantor fails to obtain the dismissal or stay on appeal
within thirty (30) calendar days of the commencement of any proceeding
arrangement referred to in (a) above; (c) the Borrower, any Subsidiary or any
Guarantor begins any other procedure for the relief of financially distressed
or insolvent debtors, or such procedure has been commenced against it, whether
voluntarily or involuntarily, and such procedure has not been effectively
terminated, dismissed or stayed within thirty (30) calendar days after the
commencement thereof, or (d) the Borrower, any Subsidiary or any Guarantor
begins any procedure for its dissolution, or a procedure therefore has been
commenced against it.
8.6. SECURITY AND FURTHER ASSURANCES. The Borrower shall,
whenever and as often as the Bank may reasonably request, at the Borrower's own
expense, promptly execute and deliver all such further instruments (including,
without limiting the generality of the foregoing, additional security
agreements, deeds of trust and financing statements) and do such other acts
(including, without limitation, field warehousing) as the Bank may reasonably
request for the purpose of protecting or perfecting any Lien created or granted
or intended to be created or granted in the International Security Documents or
in order to ensure that any such Lien is of the priority purported to be
granted thereby and as required by Section 9.1 hereof, or in order to police or
protect any Collateral or otherwise to carry out more effectually the purposes
and intent of the International Loan Documents.
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8.7. EXPORT INSURANCE.
(a) Any Eligible Account Receivable to be covered by the
Eximbank insurance must be insured by the Eximbank pursuant to a policy in form
and substance, and in such amounts, satisfactory to the Bank;
(b) any Eligible Account Receivable to be covered by
private sector insurance must be pursuant to a policy in form and substance,
and in such amounts, satisfactory to the Bank;
(c) the Borrower shall keep each such policy in full
force and effect and timely pay all premiums thereon and deliver copies thereof
to the Bank, together with all endorsements, declarations, amendments and
renewals;
(d) the Borrower shall immediately notify the Bank of any
loss related to the accounts receivable and of any submission of a claim under
any such policy and upon the event of an occurrence thereunder;
(e) the Borrower hereby assigns and grants to the Bank
its rights to claim payment(s) under any such policy, such assignments to be
notified to the policy issuers in the manner required by the Bank and a duly
executed original of each such notification to be delivered to the Bank; and
(f) the proceeds of any such assignment paid to the Bank
shall be applied first towards reducing any amount then outstanding hereunder.
Any excess thereafter shall be promptly paid to the Borrower.
8.8. MAINTENANCE OF PROPERTY. Cause its and each
Subsidiary's material Properties to be maintained, preserved, protected and
kept in reasonably good repair, working order and condition so that the
business carried on in connection therewith may be conducted properly and
efficiently.
8.9. EXISTENCE, LAWS AND OBLIGATIONS. Maintain, and cause
each Subsidiary to maintain, its existence, and pay, or cause to be paid, all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
other obligations which if unpaid might become a Lien against the Property of
the Borrower or any Subsidiary; except liabilities which are being contested in
good faith and which are not owed to a Government Authority. The Borrower will
comply, and cause each Subsidiary to comply, with all Governmental Requirements
except where failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
8.10. ASSIGNMENT OF INTERNATIONAL LETTER OF CREDIT
PROCEEDS. Each letter of credit issued in favor of the Borrower with respect
to the sale of Items to be financed under this Agreement, if any, (a) shall be
in form and substance reasonably satisfactory to the Bank, and (b) shall be
issued and/or confirmed in the manner required by the Bank by financial
institutions acceptable to the Bank, and shall list the Bank as the advising
and paying bank. If required by the Bank, any such letter of credit shall
provide for an assignment of proceeds thereof, in form and substance
satisfactory to the Bank.
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8.11. ENVIRONMENTAL MATTERS. At all times:
(a) comply, and cause each Subsidiary to comply, with all
applicable Governmental Requirements under and Governmental Approvals
under Environmental Laws except where failure to so comply could not
reasonably be expected to have a Material Adverse Effect;
(b) promptly notify the Bank and provide copies upon
receipt of all material written claims, complaints, notices or
inquiries relating to the environmental condition of the facilities
and Properties of the Borrower or any Subsidiary or its compliance
with Environmental Laws; and
(c) provide such information and certifications which the
Bank may reasonably request from time to time to evidence compliance
with this Section 8.11.
8.12. CONTROLLING AFFILIATES. If any Person shall become a
Controlling Affiliate, then the Borrower will, and will cause such Controlling
Affiliate to, amend the International Loan Documents and execute additional
documents as may be required by the Bank or Eximbank.
9. NEGATIVE COVENANTS. So long as the Borrower may borrow
hereunder and until payment in full of the Note, unless the Bank shall
otherwise give its prior written consent in its sole and absolute discretion:
9.1. LIENS. The Borrower will not, and will not permit
any Subsidiary to create, incur, assume or permit to exist any Lien (including
any charge upon assets purchased under a conditional sales agreement, purchase
money mortgage, security agreement or other title retention agreement) upon any
of its Properties, or the proceeds thereof, whether now owned or hereafter
acquired, except (a) Permitted Liens and Liens set forth on Schedule 9.1,
provided that any such Lien (i) is not extended to any other Property, (ii)
secures only Indebtedness permitted by Section 9.6 and (iii) no such Lien shall
encumber the Collateral subject to the International Security Documents, (b)
Liens in favor of the Bank and Domestic Lenders created by the International
Security Documents and pursuant to the Domestic Security Documents, and (c)
Liens permitted pursuant to Section 8.2 of the Domestic Credit Agreement.
NOTHING WITHIN THIS SECTION SHALL PERMIT THE BORROWER TO TAKE ANY ACTION WHICH
WOULD CAUSE THE LIEN ON THE INTERNATIONAL COLLATERAL CREATED IN FAVOR OF THE
BANK PURSUANT TO THE INTERNATIONAL SECURITY DOCUMENTS TO FAIL TO BE A VALID
FIRST PRIORITY LIEN, AND THE LIEN ON THE DOMESTIC COLLATERAL CREATED IN FAVOR
OF THE BANK PURSUANT TO THE INTERNATIONAL SECURITY DOCUMENTS TO BE A VALID LIEN
WHICH IS JUNIOR IN PRIORITY ONLY TO LIENS CREATED PURSUANT TO THE DOMESTIC
SECURITY DOCUMENTS, AND THE BORROWER WILL NOT TAKE ANY SUCH ACTION.
9.2. MERGER, CONSOLIDATION, ETC. Without the prior
written consent of the Bank and the Eximbank, the Borrower will not merge or
consolidate with any other Person or sell, lease, transfer or otherwise dispose
of (whether in one transaction or a series of transactions) all or a
substantial part of its assets or any part of its assets which are essential to
the conduct of its business or operations or acquire (whether in one
transaction or a series of transactions) all or a substantial part of the
assets of any Person or make any material change in its corporate structure or
identity, or
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enter into any agreement to do any of the foregoing. Without the prior written
consent of the Bank and the Eximbank, the Borrower shall not form, acquire or
create any Subsidiary. Without the prior written consent of the Bank and the
Eximbank, the Borrower shall not, and will not permit any of its Subsidiaries
to, transfer, purchase or redeem, or permit any Subsidiary to transfer,
purchase or redeem, any shares of the Borrower's or any Subsidiary's capital
stock unless such transfer, purchase or redemption is effected solely from the
proceeds of and within a reasonable time after the issuance to third parties by
the Borrower or its Subsidiary of capital stock which is in addition to the
capital stock of the Borrower or its Subsidiary, as the case may be,
outstanding on the date hereof.
9.3. NATURE OF BUSINESS; MANAGEMENT. Neither the Borrower
nor any Subsidiary will change its line of business from that described in
Section 6.7 or enter into any business which is substantially different from
such business.
9.4. LOANS AND INVESTMENTS. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, make or have
outstanding any loans, advances or other extensions of credit; or make or
permit to remain outstanding any capital contributions to, or purchase or own
any stocks, bonds, notes, debentures or other securities of, any Person other
than as permitted by Section 8.8 of the Domestic Credit Agreement. This
Section 9.4 shall not be construed to prohibit advances made to employees,
officers and directors in the usual, customary and ordinary course of business.
9.5. FINANCIAL COVENANTS. Throughout the term of this
Agreement, the Borrower shall comply with each of the financial tests in
Section 7.3 of the Domestic Credit Agreement. The Borrower shall deliver
schedules reflecting the calculation of such amounts and ratios concurrently
with each set of financial statements delivered under Section 8.1(a) of this
Agreement.
9.6. DEBT. The Borrower will not, and will not permit any
Subsidiary to create, incur, suffer or permit to exist, or assume or guarantee,
directly or indirectly, or become or remain liable with respect to any
Indebtedness, contingent or otherwise, except:
(a) Indebtedness to the Bank;
(b) Indebtedness previously approved by the Bank in
writing on any date following the Closing Date;
(c) current accounts payable and unsecured current
liabilities, not the result of borrowing, to vendors, suppliers and
persons providing services, for expenditures and/or goods and services
normally required by it in the ordinary course of business and on
ordinary trade terms, and liabilities related to deferred premiums for
liability insurance;
(d) Indebtedness set forth on Schedule 6.13 hereof or
reflected in the Borrower's Annual Audited Financial Statements
delivered to the Bank prior to the date hereof pursuant to Section
6.2, including any renewals or modifications, but not increases,
thereof; and
(e) Indebtedness permitted by Section 8.1(d) - (i) of the
Domestic Credit Agreement.
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9.7. AFFILIATE TRANSACTIONS. The Borrower will not, and
will not permit any Subsidiary to enter into any transaction or agreement with
any officer, director or holder of any outstanding capital stock of the
Borrower or any Subsidiary (or any member of the family of such Person, or any
Person controlling, controlled by or under common control with such Person)
unless the same is upon terms substantially similar to those obtainable from
wholly unrelated sources. Without limitation of the foregoing, and except as
expressly permitted herein, in no event shall the Borrower or any Subsidiary
make any advances to any stockholder or affiliated or related entity (including
but not limited to, partnerships, joint ventures, joint stock companies, sister
companies, parent companies or subsidiaries). In the event that any such
advances are made, the Bank shall not make any further disbursements to the
Borrower hereunder without the prior written approval of Eximbank.
9.8. RESTRICTED PAYMENTS. The Borrower will not (a)
purchase, redeem, retire or otherwise acquire, directly or indirectly, any
shares of its capital stock or other equity interests; (b) declare or pay any
dividend (except stock dividends); (c) make any other disposition of any
Property or cash to owners of an equity interest in their capacity as such; (d)
Tax Dividends with respect to its estimated taxable income; or (e) as allowed
under Section 8.5 of the Domestic Credit Agreement.
9.9. CHANGE IN ACCOUNTING METHOD. The Borrower will not
make any change in the method of computing depreciation for either tax or book
purposes or any other material change in accounting method without prior
written notice to the Bank, except for any changes required by GAAP or
applicable law. The Borrower will not change its fiscal year.
9.10. EXPORT ORDERS AND INDIRECT EXPORT ORDERS. The
Borrower will not consent to any material and adverse modification, supplement
or waiver of any of the provisions of any Export Order or any Indirect Export
Order without the prior consent of the Bank and excluding change orders in the
ordinary course of business; provided, no such modifications or change orders
may be made if the effect thereof would cause the Loans outstanding plus the
Letter of Credit Outstandings to exceed the International Borrowing Base if
calculated after taking into effect such modification or change. The Borrower
will not assign or terminate any of its obligations, nor will it consent to any
assignment or termination of any other Person's obligations, under any Export
Order or any Indirect Export Order without the prior written consent of the
Bank.
9.11. COPYRIGHTS, PATENTS AND SOFTWARE. Except for (a)
Permitted Liens and (b) Liens to secure the Domestic Obligations, neither the
Borrower or any Subsidiary will create or suffer to exist any Lien upon any of
its copyrights, patents, software or other similar Property now owned or
hereafter acquired, or acquire any copyrights, patents, software or other
similar Property upon any conditional sale or other title retention device or
arrangement or any purchase money security agreement; or in any manner directly
or indirectly sell, assign, pledge or otherwise transfer any of its copyrights,
patents, software or other similar Property; provided, however, that Borrower
shall be entitled to sell software in the ordinary course of business and
Borrower shall be entitled to assign rights to market its software for sale in
the ordinary course of its business.
9.12. EXIMBANK VIOLATIONS. Notwithstanding anything herein
to the contrary, neither the Borrower nor any Subsidiary or Guarantor will take
any action which if taken would violate any rule, regulation or other
requirement of Eximbank applicable to such Borrower, Subsidiary or Guarantor,
or violate any agreement which such Borrower, Subsidiary or Guarantor has with
Eximbank.
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10. EVENTS OF DEFAULT; REMEDIES. If any of the following events
shall occur, then the Bank may (a) by notice to the Borrower, declare the
Commitment of the Bank and the obligation of the Bank to make Loans and issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (b) declare the Note and all interest accrued and unpaid
thereon, and all other amounts payable under the Note and this Agreement, to be
forthwith due and payable, whereupon the Note, all such interest and all such
other amounts, shall become and be forthwith due and payable without
presentment, demand, protest, or further notice of any kind (including, without
limitation, notice of default, notice of intent to accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower;
provided, however, that with respect to any Event of Default described in
Section 10.5 hereof, (i) the Commitment of the Bank and the obligation of the
Bank to make Loans and issue Letters of Credit hereunder shall automatically be
terminated and (ii) the entire unpaid principal amount of the Note, all
interest accrued and unpaid thereon, and all such other amounts payable under
the Note and this Agreement, shall automatically become immediately due and
payable, without presentment, demand, protest, or any notice of any kind
(including, without limitation, notice of default, notice of intent to
accelerate and notice of acceleration), all of which are hereby expressly
waived by the Borrower.
10.1. FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower
does not pay, repay or prepay any principal of the Note when due; or
10.2. FAILURE TO PAY OTHER AMOUNTS. The Borrower does not
pay any interest on the Note, other obligation or amount payable under this
Agreement or the Note or any other International Loan Document to which it is a
party when due and such failure continues for a period of five days; or
10.3. MISREPRESENTATION OR BREACH OF WARRANTY. Any
representation or warranty made by the Borrower, any Subsidiary or any
Guarantor herein or in any other International Loan Document or otherwise
furnished to the Bank in connection with this Agreement shall be incorrect,
false or misleading in any material respect when made; or
10.4. VIOLATION OF COVENANTS. The Borrower, any Subsidiary
or any Guarantor violates any covenant, agreement or condition contained herein
or in any other International Loan Document to which it is a party; or
10.5. BANKRUPTCY AND OTHER MATTERS. (i) The Borrower, any
Subsidiary or any Guarantor begins or consents in any manner to any proceeding
or arrangement for its liquidation in whole or in part or to any other
proceeding or arrangement whereby any of its assets are subject generally to
the payment of its liabilities or whereby any receiver, trustee, liquidator or
the like is appointed for it or any substantial part of its assets (including
without limitation the filing by the Borrower, any Subsidiary or any Guarantor
of a petition for appointment as a debtor-in-possession under Title 11 of the
U.S. Code); (ii) the Borrower, any Subsidiary or any Guarantor fails to obtain
the dismissal or stay on appeal within thirty (30) calendar days of the
commencement of any proceeding arrangement referred to in (i) above; (iii) the
Borrower, any Subsidiary or any Guarantor
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begins any other procedure for the relief of financially distressed or
insolvent debtors, or such procedure has been commenced against it, whether
voluntarily or involuntarily, and such procedure has not been effectively
terminated, dismissed or stayed within thirty (30) calendar days after the
commencement thereof; (iv) the Borrower, any Subsidiary or any Guarantor begins
any procedure for its dissolution, or a procedure therefor has been commenced
against it; or (v) the Borrower, any Subsidiary or any Guarantor shall fail
generally to pay its debts as they become due; or
10.6. DISSOLUTION. Any order is entered in any proceeding
against the Borrower or any Subsidiary decreeing the dissolution, liquidation,
winding-up or split-up of the Borrower or any Subsidiary; or
10.7. LIENS. The Borrower, any Subsidiary or any Guarantor
claims, or any court finds or rules, that the Bank does not have a valid Lien
or a Lien of the purported priority as provided in any International Security
Document; or
10.8. COLLATERAL. The Borrower or any Subsidiary sells,
encumbers or abandons (except as otherwise expressly permitted by the
International Loan Documents) any of the Property now or hereafter subject to
any of the International Security Documents (other than the sale of inventory
in the normal course of business); or any levy, seizure, or attachment is made
thereof or thereon; or such Property is lost, stolen, substantially damaged or
destroyed; or
10.9. INTERNATIONAL SECURITY DOCUMENTS. The Borrower
violates any covenant, agreement or condition contained in any International
Security Documents or any default or event of default otherwise occurs
thereunder; or
10.10. CROSS-DEFAULT TO EXPORT ORDERS, INDIRECT EXPORT
ORDERS AND DIRECT EXPORT CONTRACTS. The Borrower is in breach of any material
provision of any Export Order, any Indirect Export Order or any Direct Export
Contract; or
10.11. CROSS-DEFAULT TO DOMESTIC LOAN DOCUMENTS. An event
of default shall occur under any of the Domestic Loan Documents, unless the
same shall have been waived in accordance with the terms thereof; or
10.12. CROSS-DEFAULT TO NON-EXIMBANK DEBT. The Borrower,
any Subsidiary or any Guarantor does not pay when due any amount payable to the
Bank under any loan or other extension of credit from the Bank to the Borrower,
any Subsidiary or any Guarantor which is not guaranteed by the Eximbank, unless
the same shall have been waived by the Bank in accordance with the terms
thereof; or
10.13. CROSS-ACCELERATION TO OTHER DEBT. Any event occurs
which results in acceleration of any Indebtedness in excess of $3,000,000 of
the Borrower, any Subsidiary or any Guarantor or if default shall be made in
the payment of any such Indebtedness at the stated maturity thereof, after any
applicable period of grace; or
10.14. UNDISCHARGED JUDGMENT. Final judgment shall be
rendered against the Borrower, any Subsidiary or any Guarantor and the same
shall remain undischarged for a period of thirty (30) days during which
execution shall not be effectively stayed, released, bonded or vacated; or
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10.15. CROSS-DEFAULT TO BORROWER AGREEMENT. The Borrower
violates any covenant, agreement or condition contained in the Borrower
Agreement or any default or event of default otherwise occurs thereunder; or
10.16. CHANGE OF CONTROL. A Change of Control shall occur;
or
10.17. CONTROLLING AFFILIATES. A Person, other than those
in compliance with Section 8.12, shall become a Controlling Affiliate of the
Borrower; or
10.18. IMPAIRMENT OF EXIMBANK GUARANTY. The Eximbank
Guaranty shall cease to be in full force and effect or shall be declared null
and void or the validity or enforceability thereof shall be contested,
challenged or denied by the Eximbank, the Borrower, any Governmental Authority,
any Affiliate of the Borrower, any Subsidiary or any Guarantor; or
10.19. IMPAIRMENT OF INTERNATIONAL LOAN DOCUMENTS, EXPORT
ORDERS, INDIRECT EXPORT ORDERS AND DIRECT EXPORT CONTRACTS. This Agreement,
the Note, any Export Order, any Indirect Export Order, any Direct Export
Contract, or any other International Loan Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability hereof or thereof shall be contested, challenged or denied by
the Borrower, any Governmental Authority, any Affiliate of the Borrower, any
Subsidiary or any Guarantor, or any Lien created by the International Security
Documents shall cease to be in effect or shall cease to be a valid first
priority Lien; or
10.20. NEGATIVE PLEDGE ON SHARES. Any Lien shall exist on
any of the outstanding shares of the Borrower or any Subsidiary, except in
favor of the Domestic Lenders pursuant to the Domestic Loan Documents; or
10.21. OTHER REMEDIES. In addition to and cumulative of any
rights or remedies expressly provided for in this Section 10, if any one or
more Events of Default shall have occurred, the Bank may proceed to protect and
enforce its rights hereunder by any appropriate proceedings and the Liens
evidenced by the International Security Documents shall be subject to
foreclosure in any manner provided for therein or provided for by law as the
Bank may elect. The Bank may also proceed either by the specific performance
of any covenant or agreement contained in this Agreement or the other
International Loan Documents or by enforcing the payment of the Note or by
enforcing any other legal or equitable right provided under this Agreement or
the other International Loan Documents or otherwise existing under any law in
favor of the holder of the Note. The Bank shall not, however, be under any
obligation to xxxxxxxx any assets in favor of the Borrower or against or in
payment of any or all obligations under any International Loan Document. Upon
the occurrence of an Event of Default, it is hereby acknowledged and agreed
that the Eximbank shall have the right to (a) direct the Bank to make demand
hereunder and under the other International Loan Documents and (b) request that
the Bank accelerate the maturities of any of the Borrower's non-Eximbank loans,
and the Bank shall have no liability to the Borrower for complying with such
directions or requirements; or
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10.22. COLLATERAL ACCOUNT. The Borrower hereby agrees that
in the event of (a) the termination of the Commitment, or (b) the occurrence of
an Event of Default, it shall, if requested by the Bank, pay to the Bank an
amount in immediately available funds equal to 100% of the then aggregate
amount of Letter of Credit Outstandings, which funds shall be held by the Bank
in a collateral account to be maintained by the Bank. The Borrower hereby
agrees to execute and deliver to the Bank such security agreements, pledges or
other documents as the Bank may, from time to time, require to perfect the
pledge, lien and security interest in and to any such funds provided for in
this Section 10.23. Upon the payment or expiry of all Letter of Credit
Outstandings, all such Collateral shall be promptly released to the Borrower in
due form at Borrower's cost.
10.23. REMEDIES CUMULATIVE. No remedy, right or power
conferred upon the Bank is intended to be exclusive of any other remedy, right
or power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
10.24. DISTRIBUTIONS IN VIOLATION OF THE EXIMBANK GUARANTY.
The Borrower shall request and the Bank shall make a Disbursement in violation
of the Eximbank Guaranty.
10.25. MATERIAL LITIGATION. Any material litigation is
filed against the Borrower and is not withdrawn within thirty (30) calendar
days of filing.
11. MISCELLANEOUS.
11.1. REPRESENTATION BY THE BANK. The Bank represents
that it is its present intention, as of the date of its acquisition of the
Note, to acquire the Note for its account or for the account of its Affiliates,
and not with a view to the distribution or sale thereof, and, subject to any
applicable laws, the disposition of the Bank's Property shall at all times be
within its control. The Note has not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), and may not be transferred, sold or
otherwise disposed of except (a) in a registered offering under the Securities
Act; (b) pursuant to an exemption from the registration provisions of the
Securities Act; or (c) if the Securities Act shall not apply to the Note or the
transactions contemplated by the International Loan Documents. Nothing in this
Section 11.1 shall affect the characterization of the Loans and the
transactions contemplated hereunder as commercial lending transactions.
11.2. WAIVERS, ETC. No failure or delay on the part of the
Bank in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No course of dealing between the Borrower, any Subsidiary, the
Guarantors and the Bank shall operate as a waiver of any right of the Bank. No
modification or waiver of any provision of this Agreement, the Note or any
other International Loan Document nor consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Except as otherwise provided by
any International Loan Document or applicable law, no notice to or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
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11.3. REIMBURSEMENT OF EXPENSES. WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL BE CONSUMMATED, THE BORROWER
AGREES TO REIMBURSE THE BANK FOR ITS REASONABLE OUT-OF-POCKET EXPENSES,
INCLUDING THE REASONABLE FEES AND EXPENSES OF COUNSEL TO THE BANK, IN
CONNECTION WITH SUCH TRANSACTIONS, OR ANY OF THEM, OR OTHERWISE IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER INTERNATIONAL LOAN DOCUMENT, INCLUDING (A) THE
NEGOTIATION, PREPARATION, EXECUTION, ADMINISTRATION, MODIFICATION AND
ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER INTERNATIONAL LOAN DOCUMENT AND ALL
FEES AND EXPENSES OF ATTORNEYS TO THE BANK, AND (B) COSTS AND EXPENSES OF THE
BANK IN CONNECTION WITH DUE DILIGENCE, TRANSPORTATION AND DUPLICATION. THE
BORROWER AGREES TO PAY ANY AND ALL STAMP AND OTHER TAXES WHICH MAY BE PAYABLE
OR DETERMINED TO BE PAYABLE IN CONNECTION WITH THE EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE NOTE OR ANY OTHER INTERNATIONAL LOAN DOCUMENT, AND TO SAVE
ANY HOLDER OF THE NOTE HARMLESS FROM ANY AND ALL LIABILITIES WITH RESPECT TO OR
RESULTING FROM ANY DELAY OR OMISSION TO PAY ANY SUCH TAXES. THE OBLIGATIONS OF
THE BORROWER UNDER THIS SECTION 11.3 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT AND/OR THE PAYMENT OF THE NOTE.
11.4. NOTICES. All notices and other communications
provided for herein shall be in writing (including facsimile or cable
communication) and shall be mailed, telecopied, cabled or delivered, addressed
as follows:
(a) If to the Borrower, to it at:
National Tank Company
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx III
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
(b) If to the Bank, to it at:
Texas Commerce Bank National Association
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxx. Xxxx X. Xxxx
Vice President
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. XxXxxxxx
International Banking Officer
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
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or to such other address as shall be designated by such party in a written
notice to the other party. All such notices and communications shall, when
mailed, telecopied, transmitted, or cabled, become effective when deposited in
the mail, transmitted to the telecopier, or delivered to the cable company,
except that notices and communications to the Bank shall not be effective until
actually received by the Bank.
11.5. GOVERNING LAW. UNLESS OTHERWISE SPECIFIED THEREIN,
EACH INTERNATIONAL LOAN DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF
AMERICA; provided, however, that Chapter 15 of Subtitle 3, Title 79, Revised
Civil Statutes of Texas, 1925, as amended (Articles 5069-15.01 through
5069-15.11, Vernon's Texas Civil Statutes, as amended) shall not apply to this
Agreement and the Note issued hereunder.
11.6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations, warranties and covenants contained herein or
made in writing by the Borrower in connection herewith shall survive the
execution and delivery of this Agreement and the Note, and will bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not. No investigation at any time made by or on behalf
of the Bank shall diminish the Bank's right to rely thereon.
11.7. COUNTERPARTS. This Agreement may be executed in
several counterparts, and by the parties hereto on separate counterparts, and
each counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
11.8. SEPARABILITY. Should any clause, sentence, paragraph
or Section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision shall not have the effect of invalidating
or voiding the remainder of this Agreement, and the parties hereto agree that
the part or parts of this Agreement so held to be invalid, unenforceable or
void will be deemed to have been stricken herefrom and the remainder will have
the same force and effectiveness as if such part or parts had never been
included herein.
11.9. DESCRIPTIVE HEADINGS. The section headings in this
Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
provisions of this Agreement.
11.10. ACCOUNTING TERMS. All accounting terms used herein
which are not expressly defined in this Agreement, or the respective meanings
of which are not otherwise qualified, shall have the respective meanings given
to them in accordance with GAAP.
11.11. LIMITATION OF LIABILITY. No claim may be made by the
Borrower or the Affiliates, directors, officers, employees, attorneys, or
agents of the Borrower against the Bank or the Affiliates, directors, officers,
employees, attorneys, or agents of the Bank for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract arising out of or related to the transactions contemplated by this
Agreement, or any act, omission, or event occurring in connection herewith; and
the Borrower hereby waives, releases, and agrees not to xxx upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
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11.12. SET-OFF. If an Event of Default has occurred and is
continuing, the Borrower hereby gives and confirms to the Bank a right of
set-off of all moneys, securities and other property of the Borrower (whether
special, general or limited) and the proceeds thereof, now or hereafter
delivered to remain with or in transit in any manner to the Bank, its
correspondents or its agents from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise or coming into
possession of the Bank in any way, and also, any balance of any deposit
accounts and credits of the Borrower with, and any and all claims of security
for the payment of the Note and of all other liabilities and obligations now or
hereafter owed by the Borrower to the Bank, contracted with or acquired by the
Bank, whether such liabilities and obligations be joint, several, absolute,
contingent, secured, unsecured, matured or unmatured, and the Borrower hereby
authorizes the Bank at any time or times, without prior notice, to apply such
money, securities, other property, proceeds, balances, credits of claims, or
any part of the foregoing, to such liabilities in such amounts as it may
select, whether such liabilities be contingent, unmatured or otherwise, and
whether any collateral security therefor is deemed adequate or not. The rights
described herein shall be in addition to any collateral security described in
any separate agreement executed by the Borrower.
11.13. SALE OR ASSIGNMENT. The Bank may assign its rights
hereunder and under each other International Loan Document and the Liens
granted pursuant to the International Security Documents only to the Eximbank
in accordance with the terms and conditions of the Eximbank Guaranty.
Notwithstanding the foregoing, the Bank may assign, transfer, negotiate, sell
or participate all or part of its interests and rights in the Loans and Letters
of Credit to an Affiliate or Subsidiary of the Bank, provided that the Bank
retains all obligations under the Eximbank Guaranty with respect to the
Eximbank.
11.14. INTEREST. All agreements between the Borrower, the
Guarantors and the Bank, whether now existing or hereafter arising and whether
written or oral, are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of demand being made on the Note or
otherwise, shall the amount paid, or agreed to be paid, to the Bank for the
use, forbearance, or detention of the money to be loaned under this Agreement
or otherwise or for the payment or performance of any covenant or obligation
contained herein or in any other International Loan Document exceed the Highest
Lawful Rate. If, as a result of any circumstances whatsoever, fulfillment of
any provision hereof or of any of such documents, at the time performance of
such provision shall be due, shall involve transcending the limit of validity
prescribed by applicable usury law, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if, from any such
circumstance, the Bank shall ever receive interest or anything which might be
deemed interest under applicable law which would exceed the Highest Lawful
Rate, such amount which would be excessive interest shall be applied to the
reduction of the principal amount owing on account of the Note or the amounts
owing on other obligations of the Borrower or the Guarantors to the Bank under
any International Loan Document and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of the Note and the
amounts owing on other obligations of the Borrower and the Guarantors to the
Bank under any International Loan Document, as the case may be, such excess
shall be refunded to the Borrower or the Guarantor, as applicable. All sums
paid or agreed to be paid to the Bank for the use, forbearance, or detention of
the
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indebtedness of the Borrower and the Guarantors to the Bank shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full term of such indebtedness until payment in full of
the principal thereof (including the period of any renewal or extension
thereof) so that the interest on account of such indebtedness shall not exceed
the Highest Lawful Rate. Notwithstanding anything to the contrary contained in
this Agreement or the Note, it is understood and agreed that if at any time the
rate of interest which accrues on the outstanding principal balance of the Note
shall exceed the Highest Lawful Rate, the rate of interest which accrues on the
outstanding principal balance of the Note shall be limited to the Highest
Lawful Rate, but any subsequent reductions in the rate of interest which
accrues on the outstanding principal balance of the Note shall not reduce the
rate of interest which accrues on the outstanding principal balance of the Note
below the Highest Lawful Rate until the total amount of interest accrued on the
outstanding principal balance of the Note equals the amount of interest which
would have accrued if such interest rate had at all times been in effect. The
terms and provisions of this Section 11.14 shall control and supersede every
other provision of all agreements between the Borrower, the Guarantors and the
Bank.
11.15. INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY,
DEFEND, AND SAVE HARMLESS THE BANK AND ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, AND ATTORNEYS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"), FROM AND
AGAINST ALL CLAIMS, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS, DAMAGES, COSTS,
INTEREST, CHARGES, TAXES (OTHER THAN THE BANK'S FRANCHISE TAXES OR TAXES ON
INCOME), COUNSEL FEES, AND OTHER EXPENSES AND PENALTIES WHICH ANY OF THE
INDEMNIFIED PARTIES MAY SUSTAIN OR INCUR BY REASON OF OR ARISING OUT OF (I) THE
MAKING OF ANY LOAN HEREUNDER, THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
NOTE AND THE OTHER INTERNATIONAL LOAN DOCUMENTS AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY AND THE EXERCISE OF ANY OF THE BANK'S RIGHTS
UNDER THIS AGREEMENT, THE NOTE AND THE OTHER INTERNATIONAL LOAN DOCUMENTS OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, DAMAGES, COSTS, AND EXPENSES INCURRED
BY ANY OF THE INDEMNIFIED PARTIES IN INVESTIGATING, PREPARING FOR, DEFENDING
AGAINST, OR PROVIDING EVIDENCE, PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION
IN RESPECT OF ANY COMMENCED OR THREATENED LITIGATION UNDER ANY FEDERAL
SECURITIES LAW OR ANY SIMILAR LAW OF ANY JURISDICTION OR AT COMMON LAW OR (II)
ANY VIOLATIONS OF ANY LAW OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN WHICH COULD
RESULT IN A VIOLATION OF ANY ENVIRONMENTAL LAW, OR IMPOSE ANY LIABILITY ON THE
INDEMNIFIED PARTIES FOR DAMAGE TO HEALTH OR THE ENVIRONMENT; AND PROVIDED
FURTHER THAT NO INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS
SECTION 11.15 TO THE EXTENT ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
CONTRIBUTED TO ITS LOSS; AND PROVIDED FURTHER THAT IT IS THE INTENTION OF THE
BORROWER TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE CONSEQUENCES OF THEIR
OWN NEGLIGENCE. THIS AGREEMENT IS INTENDED TO PROTECT AND INDEMNIFY THE
INDEMNIFIED PARTIES AGAINST ALL RISKS HEREBY ASSUMED BY THE BORROWER. THE
OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 11.15 SHALL SURVIVE ANY EXERCISE
OF THE POWER OF SALE GRANTED IN ANY INTERNATIONAL SECURITY DOCUMENT TO WHICH THE
BORROWER IS A PARTY, ANY FORECLOSURE OF THE LIENS CREATED BY ANY INTERNATIONAL
SECURITY DOCUMENT TO WHICH THE BORROWER IS A PARTY, OR CONVEYANCE IN LIEU OF
FORECLOSURE, THE REPAYMENT OF THE NOTE, THE DISCHARGE AND RELEASE OF ANY PERSON
UNDER ANY INTERNATIONAL LOAN DOCUMENT AND ANY TERMINATION OF THIS AGREEMENT.
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11.16. PAYMENTS SET ASIDE. To the extent that the Borrower
makes a payment or payments to the Bank or the Bank enforces any security
interest or exercises its right of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other Person under any
Debtor Law or equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and shall continue in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
11.17. LOAN AGREEMENT CONTROLS. If there are any conflicts
or inconsistencies between this Agreement and any of the other International
Loan Documents, the provisions of this Agreement shall prevail and control.
11.18. FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE
INTERNATIONAL LOAN DOCUMENTS REPRESENT 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.
11.19. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAWS, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR INTERNATIONAL LOAN DOCUMENTS, OR ARISING FROM
ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
INTERNATIONAL LOAN DOCUMENT AND AGREE THAT ANY ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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IN WITNESS WHEREOF, the parties hereto, by their respective
officers thereunto duly authorized, have executed this Agreement effective as
of June 30, 1997.
NATIONAL TANK COMPANY
By: /s/ XXXXXXX X. XXXXXX III
------------------------------
Name: Xxxxxxx X. Xxxxxx III
Title: Senior Vice President
Commitment: TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
$3,000,000.00
By: /s/ XXXX X. XXXX
------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: International Banking Officer
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EXHIBIT "A"
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the
respective meanings indicated opposite each of them:
"Accounts Receivable" shall have the meaning set forth in the
Borrower Agreement.
"Adjusted Indebtedness" shall mean, as to the Borrower, as at
any date, Indebtedness minus Subordinated Debt.
"Adjusted Tangible Net Worth" shall mean, as to the Borrower,
as at any date, stockholder's equity in the Borrower minus goodwill, other
intangible assets, loans and advances to equity holders and loans to
Affiliates, plus Subordinated Debt.
"Affiliate" shall have the meaning set forth in Section 5 of
the Delegated Authority Letter Agreement.
"Agreement" shall mean this International Revolving Loan
Agreement, as the same may be amended, modified or supplemented from time to
time.
"Annual Audited Financial Statements" shall mean, as to any
Person, the year-end financial statements of such Person (balance sheet, income
statement, cash flow statement), all prepared in conformity with GAAP and
audited by independent certified public accountants reasonably satisfactory to
the Bank.
"Application" shall mean an application, in such form as the
Bank may specify from time to time, requesting the Bank to open a Letter of
Credit.
"Authorized Officer" shall have the meaning set forth in
Section 4 of the Delegated Authority Letter Agreement.
"Base Rate" shall mean, for any day, a rate per annum (rounded
upward to the nearest 1/16 of 1%) equal to the greater of (a) the Prime Rate
(computed on the basis of the actual number of days elapsed over a year of 360
days) in effect on such day and (b) the Federal Funds Rate in effect for such
day. For purposes of this Agreement, any change in the Base Rate due to a
change in the Federal Funds Rate shall be effective on the effective date of
such change in the Federal Funds Rate. If for any reason the Bank shall have
determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds Rate for any
reason, including, without limitation, the inability or failure of the Bank to
obtain sufficient binds or publications in accordance with the terms thereof,
the Base Rate shall be the Prime Rate until the circumstances giving rise to
such inability no longer exist.
"Base Rate Loan" shall mean any Loan which bears interest at
the Base Rate.
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39
"Borrower Agreement" shall mean the Borrower Agreement dated
as of the Closing Date, executed and delivered by the Borrower, and
acknowledged by the Bank.
"Borrowing Date" shall have the meaning set forth in Section
2.1(c).
"Business Day" shall mean a day when the Bank is open for
business, provided that, if the applicable Business Day relates to any LIBOR
Rate Loan, it shall mean a day when the Bank is open for business and on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London.
"Buyer" shall mean an entity which has entered into one or
more Export Orders or Indirect Export Orders with the Borrower.
"Change of Control" shall mean any change in the percentage
ownership of the outstanding voting shares of the Borrower identified in
Schedule 6.5.
"Closing Date" shall mean June 30, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, as now or hereafter in effect, together with all regulations, rulings
and interpretations thereof or thereunder issued by the Internal Revenue
Service.
"Collateral" shall mean collectively the Domestic Collateral
and the International Collateral.
"Collateral Value" shall have the meaning set forth in the
Borrower Agreement.
"Commitment" shall have the meaning set forth in Section
2.1(a).
"Controlling Affiliate" shall have the meaning set forth in
Section 5 of the Delegated Authority Letter Agreement.
"Conversion/Continuation Date" shall have the meaning set forth
in Section 2.9(a).
"Country Limitation Schedule" shall have the meaning set forth
in the Borrower Agreement.
"Debtor Laws" shall mean all applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization, or similar laws, or general equitable principles from time to
time in effect affecting the rights of creditors generally.
"Default" shall mean any of the events specified in Section
10, whether or not there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act.
"Determination Date" shall have the meaning set forth in
Section 2.2(c).
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40
"Delegated Authority Letter Agreement" shall mean the
Delegated Authority Letter Agreement issued by Eximbank to the Bank.
"Direct Export Contract" shall mean each contract pursuant to
which a Buyer under an Indirect Export Order exports goods incorporating the
Items.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"Domestic Collateral" shall have the meaning set forth in the
International Security Agreement.
"Domestic Credit Agreement" shall mean the Loan Agreement
dated June 30, 1997 between the Borrower and the Domestic Lenders, as the same
may be amended from time to time.
"Domestic Lenders" shall mean the Bank, as agent and lender,
and the other lenders who are a party to the Domestic Credit Agreement.
"Domestic Loan Documents" shall mean the Domestic Credit
Agreement, the Domestic Notes, and the Domestic Security Documents and, the
agreements, documents, instruments and other writings related to or executed in
connection with the foregoing documents, all other assignments, deeds,
guaranties, pledges, instruments, certificates and agreements now or hereafter
executed or delivered to the Domestic Lenders pursuant to any of the foregoing,
and all amendments, modifications, renewals, extensions, increases and
rearrangements of, and substitutions for, any of the foregoing.
"Domestic Notes" shall mean all notes of the Borrower made in
connection with the Domestic Credit Agreement, including the Revolving Notes
and the Term Notes made to each of the Domestic Lenders, together with any and
all renewals, extensions, modifications, rearrangements, increases and
replacements thereof and substitutions therefor.
"Domestic Obligations" shall mean the Borrower's obligations
arising under the Domestic Loan Documents to repay the loans thereunder and all
other indebtedness of the Borrower to the Bank under the Domestic Loan
Documents of any nature and in any amount whatsoever, whether now or hereafter
arising.
"Domestic Security Documents" shall mean, collectively, as the
same may be amended or modified from time to time, those certain security
agreements executed by the Borrower in favor of the Domestic Lenders from time
to time, and any and all other agreements, deeds of trust, mortgages, chattel
mortgages, security agreements, pledges, guaranties, assignments of production
or proceeds of production, assignments of income, assignments of contract
rights, assignments of partnership interests, assignments of royalty interests,
assignments of performance, completion or surety bonds, standby agreements,
subordination agreements, undertakings and other instruments and financing
statements now or hereafter executed and delivered by any Person in connection
with, or as security for the payment or performance of indebtedness of the
Borrower to the Domestic Lenders under or in connection with the Domestic Loan
Documents.
"Drawings" still have the meaning set forth in Section 2.5(b).
-3-
41
"Eligible Accounts Receivable" shall mean Accounts Receivable
of the Borrower meeting all of the following criteria as of the date of any
determination of Eligible Accounts Receivable: (a) the account debtor is not,
in the opinion of the Bank, unsatisfactory as to creditworthiness; (b) the
account debtor's obligation to pay the account receivable is not conditional
upon such account debtor's approval or the account receivable is not subject to
any repurchase obligation or return right other than warranty obligations in
the ordinary course of business; (c) the account receivable shall arise from
the performance by the Borrower of services which have been fully and
satisfactorily performed, or from the absolute sale by the Borrower of goods
(i) in which the Borrower or any of its Subsidiaries had sole and complete
ownership and (ii) which have been shipped and delivered to the account debtor,
which shall evidence which such obligee has possession of shipping and delivery
receipts; (d) the account receivable shall arise in the ordinary course of
business of the Borrower thereon, and no notice of bankruptcy or insolvency of
the account debtor (unless such account debtor's obligations are secured by a
letter of credit or bond), nor any notice of such account debtor's inability to
pay its debts as they become due, has been received by the Borrower of such
account receivable; and (e) for which the account debtor is contractually
obligated to pay. In addition, pursuant to the requirements of the Eximbank,
the following criteria must be met as of such date: (a) the account receivable
is payable in Dollars and is due and collected in the United States (unless
Eximbank shall otherwise give its prior written consent); (b) the account
receivable is not subject to set-off (other than commissions to salesmen in the
normal course of business), counterclaim, defense, allowance or adjustment
other than non-material claims for warranty, discounts for prompt payment shown
on the invoice, or to dispute, objection or complaint by the account debtor
concerning its liability on the account receivable, and the goods, the sale of
which gave rise to the account receivable, have not been returned, rejected,
lost or damaged; (c) the account receivable does not have a term in excess of
one hundred eighty (180) days; (d) the Bank has a valid and perfected first
priority Lien with respect thereto; (e) the account receivable is not more than
sixty (60) calendar days past the original invoice due date, unless it is
insured through Eximbank export credit insurance for comprehensive commercial
and political risk, or through Eximbank approved private insurers for
comparable coverage, in each case in form and substance satisfactory to the
Bank in its sole discretion, in which case ninety (90) calendar days shall
apply, (f) the account debtor is not a director, officer, employee or Affiliate
of the Borrower; (g) if the account receivable arises under an Export Order,
such account receivable is, at the option of the Bank: (i) fully supported by a
letter of credit complying with the terms of Section 8.10 hereof; or (ii)
insured by the Eximbank or private sector sources on terms and conditions
acceptable to the Bank, including, without limitation, terms complying with
Section 8.7 hereof or (iii) a result of a cash against documents, documentary
collection or cash prior to shipment transaction which is acceptable to the
Bank or (iv) on any other terms as approved by the Bank in its sole and
absolute discretion; (h) the account receivable is supported by an Export Order
or an Indirect Export Order complying with Section 7.2 hereof; (i) the account
receivable is not in the name of a Buyer (or, if the account receivable arises
under an Indirect Export Order, the name of a Person buying the Items from the
Buyer pursuant to a Direct Export Contract) located or incorporated in one of
those countries in which the Eximbank is prohibited from doing business (as
those countries are identified in the Country Limitation Schedule); (j) the
account receivable is not in the name of a Buyer (or, if the account receivable
arises under an Indirect Export Order, the name of a Person buying the Items
from the Buyer pursuant to a Direct Export Contract) located or incorporated in
one of those countries in which the Eximbank coverage is not available for
commercial reasons (as those countries are identified in the Country Limitation
Schedule), unless and only to the extent that the Items were sold to such Buyer
or such Person on terms of a Letter of Credit in form and substance
satisfactory to the Bank and issued or confirmed by a bank acceptable to the
Bank and the Eximbank; (k) the account receivable is not due pursuant to the
sale of Items
-4-
42
which were purchased by a military Buyer or a Person for military purposes; (l)
if the account receivable arises under an Indirect Export Order, such account
receivable must result from the sale of Items by a Borrower to the Buyer for
export by the Buyer and (i) must be supported by documentation stating the name
and address (including country) of the ultimate foreign buyer and the
U.S.-based intermediary or (ii) on any other terms as approved by the Bank in
its sole and absolute discretion; (m) the account receivable is not, in the
reasonable opinion of the Bank or the Eximbank, uncollectible for any reason;
(n) at least fifty percent (50%) of the Item which was sold to create the
account receivable must be of U.S. Content; and (o) the account receivable
shall not be generated by the sale of defense articles or defense services. In
addition, "Eligible Accounts Receivable" shall also mean any account receivable
of the Borrower which is approved in writing by the Bank and the Eximbank. As
used in this definition, "Letter of Credit" shall mean an irrevocable letter of
credit subject to the XXX 000, xxxxxxx xx xxx Xxxxxx Xxxxxx or at the issuing
bank and issued for the benefit of the Borrower on behalf of a Buyer in
connection with the purchase of Items.
"Eligible Inventory" shall mean Inventory of the Borrower
meeting all of the following criteria as of the date of determination of
Eligible Inventory: (a) the Inventory has not been returned, repossessed or
damaged; (b) the Inventory is not the subject of a canceled purchase order or
otherwise not used for the purpose for which it was originally manufactured or
purchased; and (c) the Inventory is not, in the opinion of the Bank exercising
reasonable discretion, unacceptable due to age, type, category, and/or
quantity. In addition, pursuant to the requirements of the Eximbank, the
following criteria must be met as of such date: (a) the Bank has a valid and
perfected first priority Lien with respect to such Inventory and such Inventory
is in the possession of such Borrower or its bailee and is not evidenced by any
negotiable or non-negotiable document of title; (b) the Inventory is not
subject to a buyer's rights which would be superior to the Lien of the Bank
evidenced by the International Security Documents; (c) the Inventory is located
inside the United States of America; (d) the Inventory is not to be used in
manufacturing or selling an Item to be purchased by a Buyer (or, if the Item is
to be sold pursuant to an Indirect Export Order, a Person purchasing the Item
pursuant to a Direct Export Contract) for a military purpose; (e) the Inventory
is not to be incorporated into Items which are destined for shipment to
countries in which the Eximbank is prohibited from doing business (as these
countries are identified in the Country Limitation Schedule); (f) the Inventory
is not destined for shipment to countries in which the Eximbank coverage is not
available for commercial reasons (as those countries are identified in the
Country Limitation Schedule), unless and only to the extent that the Items are
to be sold to such countries on terms of a Letter of Credit in form and
substance satisfactory to the Bank and issued or confirmed by a bank acceptable
to the Bank and the Eximbank; (g) with respect to Inventory incorporated into
Items sold under an Indirect Export Order and which, in turn, are to be
incorporated into goods to be sold under a Direct Export Contract, said goods
shall, in fact, be destined for export by the Buyer thereof; (h) at least fifty
percent (50%) of such Inventory must be of U.S. Content; (i) the Inventory is
not demonstration Inventory or Inventory sold on consignment; (j) the Inventory
is not proprietary software; (k) the Inventory is not damaged, obsolete,
returned, defective, recalled or unfit for further processing; (l) the
Inventory has not been previously exported from the United States; (m) the
Inventory does not constitute defense articles or defense services; or (n) the
Inventory is not to be incorporated into Items whose sale would result in an
account receivable which would not constitute an Eligible Account Receivable.
For purposes of determining the value of Eligible Inventory to be included in
the International Borrowing Base, the value thereof shall be the lower of
actual cost or market value as determined in accordance with GAAP. As used in
this definition, "Letter of Credit" shall mean an irrevocable letter of credit
subject to the XXX 000, xxxxxxx xx xxx Xxxxxx Xxxxxx or at the issuing bank and
issued for the benefit of the Borrower on behalf of a Buyer in connection with
the purchase of Items.
-5-
43
"Environmental Laws" shall mean any Governmental Requirement
pertaining to health or the environment, including, but not limited to, CERCLA,
the Toxic Substances Control Act, the Clean Water Act, the Safe Drinking Water
Act or the Clean Air Act, the Resource Conservation and Recovery Act of 1976,
the Texas Water Code, the Texas Solid Waste Disposal Act and the Texas Clean
Air Act, each as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder.
"Event of Default" shall mean any of the events specified in
Section 10, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act.
"Eximbank" shall mean the Export-Import Bank of the United
States.
"Eximbank Guaranty" shall mean that certain Master Guaranty
Agreement No. TX-MGA-96-004 dated as of June 24, 1996 between the Eximbank and
the Bank, as the same may be amended, modified or supplemented from time to
time.
"Expiration Date" shall mean the last day of an Interest
Period.
"Export Order" shall have the meaning set forth in the
Borrower Agreement.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal fund transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, of the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Bank from three Federal funds brokers of
recognized standing selected by it.
"GAAP" shall mean Generally Accepted Accounting Principles as
defined in the Borrower Agreement.
"Governmental Approval" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any Governmental Authority.
"Governmental Authority" shall mean any foreign governmental
authority, the United States of America, any State of the United States of
America and any political subdivision of any of the foregoing, and any agency,
department, commission, board, bureau, court or other tribunal having
jurisdiction over the Bank, any Guarantor or the Borrower, or any of their
respective assets or Property.
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44
"Governmental Requirement" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
franchise, permit, certificate, license, award, authorization or other
direction, guideline, or requirement of any Governmental Authority, including,
without limitation, any requirement under common law.
"Guarantors" shall mean, collectively, NATCO Holdings, Inc.,
and Xxxxxxxx Point Industries, Inc.
"Highest Lawful Rate" shall mean, with respect to the Bank,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged, or received with respect
to the Note or on other amounts, if any, due to the Bank pursuant to this
Agreement or any other International Loan Document, under laws applicable to
the Bank which are presently in effect, or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
"Indebtedness" shall mean, without duplication, (a) all items
which, in accordance with GAAP, would be included on the liability side of a
balance sheet on the date as of which Indebtedness is to be determined
(excluding capital stock, surplus, surplus reserves and deferred credits); (b)
all guaranties, endorsements and other contingent obligations in respect of, or
any obligations to purchase or otherwise acquire, Indebtedness of others; and
(c) all Indebtedness secured by any Lien existing on any interest of the Person
with respect to which indebtedness is being determined in Property owned
subject to such Lien whether or not the Indebtedness secured thereby shall have
been assumed.
"Indemnified Parties" shall have the meaning set forth in
Section 11.15.
"Indirect Export Order" shall have the meaning set forth in
the Borrower Agreement for the term "Export Order," shall relate to purchase
orders and other contracts pursuant to which Items will be sold to a Buyer who
will export the Items pursuant to a Direct Export Contract, and shall include
the purchase order.
"Initial Date" shall have the meaning set forth in Section 7.6.
"Interest Period" shall mean the period of time for which the
LIBOR Rate shall be in effect as to any LIBOR Rate Loan which shall be a 1, 2,
3 or 6 month period of time, commencing with the Borrowing Date or the
Expiration Date of the immediately preceding Interest Period, as the case may
be, applicable to and ending on the effective date of any rate change or rate
continuation made as provided in Section 2.9 as the Borrower may specify in the
Request for Borrowing or the Notice of Rate Change/Continuation; provided,
however, that: (i) any Interest Period which 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) the duration
of any Interest Period which commences before any principal repayment
installment date and otherwise ends after such date shall end on such date,
(iii) Interest Periods commencing for Loans comprising part of the same
borrowing shall be of the same duration and (iv) no Interest Period shall
extend beyond the Maturity Date.
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45
"International Borrowing Base" shall mean (i) an amount equal
to the sum of 90% of the Eligible Accounts Receivable of the Borrower which is
supported by a firm Export Order or Indirect Export Order to which no party is
in breach of any material provision thereof, and (ii) 75% of the Eligible
Inventory of the Borrower supported by firm Export Orders or firm Indirect
Export Orders. Notwithstanding anything herein to the contrary, the
International Borrowing Base shall not include the amount of any receivable
supported by a letter of credit prior to the date of shipment of the Items
covered by the subject letter of credit. That is, an account receivable shall
not be included in the International Borrowing Base until shipment of the
Items, regardless of when the letter of credit is in effect.
"International Borrowing Base Certificate" shall have the
meaning set forth in Section 2.2(b).
"International Collateral" shall have the meaning set forth in
the International Security Agreement.
"International Guaranties" shall mean the continuing
guaranties dated as of the Closing Date executed by the Guarantors in favor of
the Bank, as may be amended, modified or supplemented from time to time.
"International Loan Documents" shall mean this Agreement, the
Note, all International Security Documents, and all instruments, certificates
and agreements now or hereafter executed or delivered to the Bank pursuant to
any of the foregoing and the transactions connected therewith, and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing; provided that "International
Loan Documents" shall not include the Domestic Credit Agreement, the Domestic
Notes, the Domestic Security Documents, the Eximbank Guaranty and the Borrower
Agreement.
"International Obligations" shall mean the Borrower's
obligations arising under this Agreement, the Note and the other International
Loan Documents to repay the Loans and all other indebtedness of the Borrower to
the Bank under the International Loan Documents of any nature and in any amount
whatsoever, whether now or hereafter arising.
"International Security Agreement" shall mean that certain
International Security Agreement dated as of even date herewith, executed by
the Borrower for the benefit of the Bank, and any and all amendments,
modifications, renewals and extensions thereof.
"International Security Documents" shall mean this Agreement
and the International Security Agreement, as each may be amended or modified
from time to time.
"Inventory" shall have the meaning set forth in the Borrower
Agreement.
"Items" shall have the meaning set forth in the Borrower
Agreement.
"Letter of Credit" shall have the meaning provided in Section
2.3(a).
"Letter of Credit Fee" shall have the meaning specified in
Section 4.2.
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46
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (a) the aggregate Stated Amount of all outstanding
Letters of Credit and (b) the amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning specified in
Section 2.4(a).
"LIBOR Rate" shall mean, for any Interest Period or portion
thereof, a rate per annum (rounded upwards, if necessary, to the nearest 1/16th
of 1%) equal to the LIBOR Rate (Unadjusted) divided by the difference between 1
and the LIBOR Reserve Percentage on the first day of such Interest Period.
"LIBOR Rate Loan" shall mean any Loan which bears interest at
the LIBOR Rate.
"LIBOR Rate (Unadjusted)" shall mean, for each Interest
Period, the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/16th of 1%) quoted by the Bank at or before 10:00 a.m., (Houston,
Texas time) (or as soon thereafter as practicable), on the date two (2)
Business Days prior to the first day of such Interest Period, for the offering
to the Bank by prime banks in the London LIBOR interbank market, at the time of
determination and in accordance with the then usual practice in such market, of
deposits in Dollars for delivery on the first day of such Interest Period and
having a maturity equal to the length of such Interest Period and in an amount
equal (or as nearly equal as possible) to the LIBOR Rate Loan to which such
Interest Period relates. Each determination by the Bank of the LIBOR Rate
shall be conclusive and binding, absent manifest error, and may be computed
using any reasonable averaging and attribution method.
"LIBOR Reserve Percentage" shall mean, with respect to any
Interest Period or portion thereof, a percentage (expressed as a decimal) equal
to the percentage in effect on the first day of such Interest Period as
prescribed by the Board for determining the maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or any other
applicable regulation of the Federal Reserve Board (or any successor thereto)
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as currently defined in Regulation D.
"Lien" shall mean any claim, mortgage, deed of trust, pledge,
security interest, encumbrance, lien, or charge of any kind (including, without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).
"Loan" or "Loans" shall mean a loan or loans, respectively,
from the Bank to the Borrower made under Section 2.
"Material Adverse Effect" shall mean any material adverse
effect on (a) the consolidated financial condition, business, properties,
assets, prospects or operations of the Borrower or any Guarantor, or (b) the
ability of the Borrower or any Guarantor to perform its obligations under this
Agreement or any other International Loan Document to which it is a party on a
timely basis.
"Maturity Date" shall mean June 30, 1998.
"Monthly Unaudited Financial Statements" shall mean the
monthly financial statements of a Person, which statements shall include a
balance sheet as of the end of such month and a statement of operations and
retained earnings for such month, and for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures for the corresponding month and year to date of the
preceding year, prepared in accordance with GAAP and certified as true and
correct by the president or chief financial officer of such Person.
-9-
47
"Note" shall mean the promissory note of the Borrower,
executed and delivered under this Agreement, as amended from time to time.
"Notice of Rate Change/Continuation shall have the meaning
provided in Section 2.9(a).
"Officer's Certificate" shall mean a certificate signed in the
name of the Borrower by either its President, its Chief Financial Officer, any
Vice President or its Secretary.
"Past Due Rate" shall mean the lower of (a) the Highest Lawful
Rate, or (b) a rate per annum equal to the Prime Rate plus two percent (2%).
"Permitted Liens" shall mean each of the following: (a)
artisans' or mechanics' Liens arising in the ordinary course of business, and
Liens for taxes, but only to the extent that payment thereof shall not at the
time be due or if due, the payment thereof is being diligently contested in
good faith and adequate reserves computed in accordance with GAAP have been set
aside therefor; (b) Liens in effect on the date of this Agreement and disclosed
to the Bank in Annual Audited Financial Statements delivered on or prior to the
date of this Agreement or in a schedule hereto; (c) normal reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions and encumbrances which do not secure Indebtedness and which do not
materially impair the value or utility of the applicable Property; (d) Liens
incurred or deposits made in the ordinary course of business (1) in connection
with workmen's compensation, unemployment insurance, social security and other
like laws, or (2) to secure insurance in the ordinary course of business, the
performance of bids, tenders, contracts, leases, licenses, statutory
obligations, surety, appeal and performance bonds and other similar obligations
incurred in the ordinary course of business, not, in any of the cases specified
in this clause (2), incurred in connection with the borrowing of money, the
obtaining of advances or the payment of the deferred purchase price of
Property; (e) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution and enforcement
of such Liens are effectively stayed and the claims secured thereby are being
actively contested in good faith with adequate reserves made therefor in
accordance with GAAP; (f) Liens imposed by law, such as landlords', carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
yet due or which are being contested in good faith by appropriate proceedings
if adequate reserves with respect thereto are maintained in accordance with
GAAP; (g) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, and restrictions on the use of Property, and
which do not in any case singly or in the aggregate materially impair the
present value or utility of the applicable Property; (h) Liens securing
purchase money Indebtedness permitted under Section 9.6 hereof and covering the
Property so purchased; (i) capital leases and sale/leaseback transactions
permitted under the other provisions of this Agreement, and (j) extensions,
renewals and replacements of Liens referred to in clauses (a) through (i) of
this definition; provided that any such extension, renewal or replacement Lien
shall be limited to the Property or assets covered by the Lien extended,
renewed or replaced and that the Indebtedness secured by any such extension,
renewal or replacement Lien shall be in an amount not greater than the amount
of the Indebtedness secured by the Lien extended, renewed or replaced.
"Person" shall mean an individual, partnership, joint venture,
corporation, joint stock company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
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48
"Plan" shall mean any plan subject to Title IV of ERISA or
Section 412 of the Code and maintained at any time since January 1, 1986 for
employees of the Borrower or any Subsidiary thereof or of any member of a
"controlled group of corporations" or "trade or business," as such terms are
defined in Section 414(b) or (c) of the Code, of which the Borrower or any
Subsidiary thereof is a member, or any plan subject to Title IV of ERISA or
Section 412 of the Code to which the Borrower or any Subsidiary thereof is
required to contribute, or has been required to contribute at any time since
January 1, 1986, on behalf of its employees.
"Prime Rate" shall mean the prime rate announced from time to
time by the Bank, and thereafter entered in the minutes of the Bank's Loan and
Discount Committee. Without notice to the Borrower or any other Person, the
Prime Rate shall change automatically from time to time as and in the amount by
which said Prime Rate shall fluctuate, with each such change to be effective as
of the date of each change in such Prime Rate. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. The Bank may make commercial or other loans at rates
of interest at, above or below the Prime Rate.
"Property" or "Properties" means any interest in any kind of
property or assets, whether real, personal or mixed, and whether tangible or
intangible.
"Request for Borrowing" shall have the meaning set forth in
Section 2.1(c).
"Securities Act" shall have the meaning set forth in Section
11.1.
"Stated Amount" shall mean, as to each Letter of Credit, at
any time, the maximum amount then available to be drawn thereunder (without
regard to whether any conditions to drawing could then be met).
"Subordinated Debt" shall mean any Indebtedness subordinated
to Indebtedness due the Bank on terms reasonably satisfactory to the Bank.
"Subsidiary" means any corporation, joint venture or limited
liability company of which the Borrower or any Subsidiary of the Borrower,
either directly or indirectly, owns at the time more than 50% of the indicia of
equity rights (whether outstanding capital stock or otherwise) of such Person,
and shall include any such Person which shall become a Subsidiary of the
Borrower after the date hereof, and shall further include any partnership of
which the Borrower or any Subsidiary is a general partner thereof and any other
entity of which the Borrower or any Subsidiary shall by virtue of its
investment therein incur liability for the liabilities and obligations thereof.
"Tax Dividends" shall mean, for each Subchapter "S"
corporation or other entity which is, without regard to its income, statutorily
exempt from the payment of income tax, dividends with respect to its estimated
taxable income.
"Type" shall mean, with respect to any Loan, any LIBOR Rate
Loan or any Base Rate Loan.
"Unpaid Drawing" shall have the meaning specified in Section
2.5(a).
"U.S. Content" shall have the meaning set forth in the
Borrower Agreement. The parties hereto hereby agree that in the event any
dispute arises as to the U.S. Content of any good or service, the decision of
the Eximbank shall be final and conclusive.
-11-
49
EXHIBIT "B"
INTERNATIONAL REVOLVING NOTE
$3,000,000.00 June 30, 1997
FOR VALUE RECEIVED, the undersigned, NATIONAL TANK COMPANY, a
corporation organized under the laws of the State of Texas (the "Borrower"),
HEREBY PROMISES TO PAY to the order of TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
a national banking association (the "Bank"), on or before June 30, 1998 (the
"Maturity Date"), the principal sum of Three Million and 00/100 Dollars
($3,000,000.00), or, if less, the aggregate principal amount of Loans
outstanding on the Maturity Date, in accordance with the terms and provisions of
that certain International Revolving Loan Agreement dated as of June 30, 1997 by
and between the Borrower and the Bank (the "International Loan Agreement";
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the International Loan Agreement).
The outstanding principal balance of this Note shall be due
and payable as provided in the International Loan Agreement. The Borrower
promises to pay interest on the unpaid principal balance of this Note from the
date of any Loan evidenced by this Note until the principal balance thereof is
paid in full. Interest shall accrue on the outstanding principal balance of this
Note from and including the date of any Loan evidenced by this Note to but not
including the Maturity Date at the rate or rates, and shall be due and payable
on the dates, set forth in the International Loan Agreement. Any amount not paid
when due with respect to principal (whether at stated maturity, by acceleration
or otherwise), costs or expenses, or, to the extent permitted by applicable law,
interest, shall bear interest from the date when due to and excluding the date
the same is paid in full, payable on demand, at the Past Due Rate.
Payments of principal and interest, and all amounts due with
respect to costs and expenses, shall be made in lawful money of the United
States of America in immediately available funds, without deduction, set-off or
counterclaim to the Bank, or such other location as may be notified to the
Borrower by the Bank, not later than 12:00 noon (Houston time) on the dates on
which such payments shall become due pursuant to the terms and provisions set
forth in the International Loan Agreement.
If any payment of principal or interest on this Note shall
become due on a Saturday, Sunday, or public holiday on which the Bank is not
open for business, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in computing
interest in connection with such payment.
50
All loans and advances and all payments and prepayments made
hereon shall be recorded in the holder's records and such records shall be
controlling, absent manifest error.
In addition to all principal and accrued interest on this
Note, the Borrower agrees to pay (a) all reasonable costs and expenses incurred
by all owners and holders of this Note in collecting this Note through any
probate, reorganization, bankruptcy or any other proceeding and (b) reasonable
attorneys' fees when and if this Note is placed in the hands of an attorney for
collection after default.
All agreements among the Borrower and the Bank, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand being made on this Note or otherwise, shall the amount paid, or agreed to
be paid, to the Bank for the use, forbearance, or detention of the money to be
loaned under the International Loan Agreement and evidenced by this Note or
otherwise or for the payment or performance of any covenant or obligation
contained in the International Loan Agreement, this Note or in any other
International Loan Document exceed the Highest Lawful Rate. If, as a result of
any circumstances whatsoever, fulfillment of any provision hereof or of any of
such documents, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable usury law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if, from any such circumstance, the Bank shall ever
receive interest or anything which might be deemed interest under applicable law
which would exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be applied to the reduction of the principal amount owing on
account of this Note or the amounts owing on other obligations of the Borrower
to the Bank under any International Loan Document and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal balance of
this Note and the amounts owing on other obligations of the Borrower to the Bank
under any International Loan Documents, as the case may be, such excess shall be
refunded to the Borrower. All sums paid or agreed to be paid to the Bank for the
use, forbearance, or detention of the indebtedness of the Borrower to the Bank
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full term of such indebtedness until
payment in full of the principal thereof (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary
contained in the International Loan Agreement or this Note, it is understood and
agreed that if at any time the rate of interest which accrues on the outstanding
principal balance of this Note shall exceed the Highest Lawful Rate, the rate of
interest which accrues on the outstanding principal balance of this Note shall
be limited to the Highest Lawful Rate, but any subsequent reductions in the rate
of interest which accrues on the outstanding principal balance of this Note
shall not reduce the rate of interest which accrues on the outstanding principal
balance of this Note below the Highest Lawful Rate until the total amount of
interest accrued on the outstanding principal balance of this Note equals the
amount of interest which would have accrued if such interest rate had at all
times been in effect. The terms and provisions of this paragraph shall control
and supersede every other provision of all agreements between the Borrower and
the Bank.
51
This Note is entitled to the benefits of the International
Loan Agreement, which International Loan Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions and with the effect therein
specified, and provisions to the effect that no provision of the International
Loan Agreement or this Note shall require the payment or permit the collection
of interest in excess of the Highest Lawful Rate. The obligations of the
Borrower hereunder are secured by the International Security Documents. It is
contemplated that by reason of prepayments or repayments hereon prior to the
Maturity Date, there may be times when no indebtedness is owing hereunder prior
to such date, but notwithstanding such occurrences, this Note shall remain valid
and shall be in full force and effect as to Loans made pursuant to the
International Loan Agreement subsequent to each such occurrence.
Except as otherwise specifically provided for in the
International Loan Agreement, the Borrower and any and all endorsers, guarantors
and sureties severally waive grace, demand, presentment for payment, notice of
dishonor or default, protest, notice of protest, notice of intent to accelerate,
notice of acceleration and diligence in collecting and bringing of suit against
any party hereto, and agree to all renewals, extensions or partial payments
hereon, with or without notice, before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
THIS NOTE AND THE OTHER INTERNATIONAL LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND
THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES; AND THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
NATIONAL TANK COMPANY
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------
Xxxxxxx X. Xxxxxx III
Senior Vice President
52
EXHIBIT "C"
REQUEST FOR BORROWING
(International)
The undersigned hereby certifies that he is the
__________________ of NATIONAL TANK COMPANY, a Texas corporation (the
"Borrower"), and that as such he is authorized to execute this Request for
Borrowing on behalf of the Borrower. With reference to that certain
International Revolving Loan Agreement dated as of June 30, 1997 (as same may
be amended, modified, increased, supplemented and/or restated from time to
time, the "International Loan Agreement") entered into by and between the
Borrower and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking
association (the "Bank"), the undersigned further certifies, represents and
warrants on behalf of the Borrower that all of the following statements are
true and correct (each capitalized term used herein having the same meaning
given to it in the International Loan Agreement unless otherwise specified):
(a) All of the statements and calculations set forth in
the most recent International Borrowing Base Certificate provided to
the Bank and dated as of ________, 199_, were true and correct as of
the date thereof, and such International Borrowing Base Certificate is
dated within the past five (5) Business Days. In accordance with the
terms of the International Loan Agreement as evidenced by such
International Borrowing Base Certificate, the borrowing availability
for which the Borrower was eligible as of the date of such
International Borrowing Base Certificate was $____________. The
Borrower represents and warrants that as of the date hereof and after
the making of the requested Loan, the aggregate amount of Loans
outstanding under the International Loan Agreement will not be in
excess of that permitted by Section 2.1 of the International Loan
Agreement.
(b) The Borrower requests that the Bank advance to the
Borrower the aggregate sum of $___________ by no later than
__________, 199_. Immediately following the making of such Loan, the
aggregate outstanding balance of the Loans under the International
Loan Agreement shall equal $________.
(c) As of the date hereof, and as a result of the making
of the requested Loan, there does not and will not exist any Default
or Event of Default.
-1-
53
(d) The representations and warranties contained in
Section 6 of the International Loan Agreement and in each other
International Loan Document are true and correct in all respects as of
the date hereof and shall be true and correct upon the making of the
requested Loan, with the same force and effect as though made on and
as of the date hereof and thereof.
(e) No change that would cause a material adverse effect
on the business, properties, operations or condition (financial or
otherwise) of the Borrower has occurred since the date of the most
recent financial statements provided to the Bank dated as of ________,
199_.
(f) The Items to be financed with the proceeds of the
Loan requested hereby shall be sold solely pursuant to an export
transaction eligible for financing pursuant to and in accordance with
the International Loan Agreement.
(g) All conditions set forth in Section 7 of the
International Loan Agreement to the making of the Loans requested
hereunder have been fully satisfied as of the date hereof.
EXECUTED AND DELIVERED this ___ day of __________, 199_.
NATIONAL TANK COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
-2-
54
EXHIBIT "D"
INTERNATIONAL BORROWING BASE CERTIFICATE
Monthly accounting period ended _____________, 199_
Reference is made to that certain International Revolving Loan
Agreement dated as of June 30, 1997 (as amended, modified and supplemented and
in effect from time to time, the "International Loan Agreement") by and between
NATIONAL TANK COMPANY, a Texas corporation (the "Borrower") and TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, a national banking association (the "Bank"). Terms
defined in the International Loan Agreement are used herein as defined therein.
Pursuant to Sections 7.4 and 8.1(d) of the International Loan
Agreement, the undersigned, the _______________________ of the Borrower, hereby
certifies that, to the best of his knowledge and belief after reasonable and
due investigation and review, (i) attached hereto as Annex 1 is a true and
accurate calculation of the International Borrowing Base determined in
accordance with the requirements set forth in the International Loan Agreement;
(ii) attached hereto as Annex 2 is a true and accurate schedule which
specifically identifies the Eligible Accounts Receivable and Eligible Inventory
in accordance with the requirements of the Eximbank; and (iii) all statements
and calculations set forth in Annexes 1 and 2 hereof are current as of the date
hereof.
IN WITNESS WHEREOF, the undersigned has caused this
International Borrowing Base Certificate to be duly executed as of the ___ day
of _______________, 199_.
NATIONAL TANK COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
55
ANNEX 1
International Borrowing Base Calculation
1 A Total Eligible Accounts Receivable of Borrower $
B Advance Rate: 90% $
C Total Eligible Inventory of Borrower $
D Advanced Rate: 75% $
2 Line 1B plus 1D equals: International Borrowing Base $
3 Lesser of line 3 or the Commitment $
4 Less the International Exposure (under this facility): $
Loan(s) Outstanding $
Letter(s) of Credit(1) $
5 Equals: Borrowing Availability $
If line 6 above is a negative number, the amount of paydown and/or $
additional collateral required:
If line 6 above is a positive number, the amount of borrowing $
availability:
6 Requested Action:
Paydown $
Drawdown $
Issuance of Letter of Credit $
____________________
(1) Subject to review of the transaction, the Bank may allow
the inclusion of L/Cs that are less than 100% collateralized.
The face value of L/Cs issued under this facility plus Loans
Outstanding under this facility can not exceed the amount of
the Commitment.
56
ANNEX 2
International Borrowing Base Detailed Schedule Report
1. Eligible Accounts Receivable
The Borrower represents and warrants that all of the accounts
receivable outlined below meet the requirements set forth in the
definition of "Eligible Accounts Receivables." All such accounts
receivable are supported by an Export Order delivered to the Bank.
A. Receivables covered by letters of credit issued and/or
confirmed in accordance with Section 8.10 of the International
Loan Agreement. Copies of such letters of credit and
assignments of proceeds of such letters of credit are attached
hereto or have already been provided to the Bank.
Invoice
Customer Country Amount Date L/C Bank
-------- ------- ------ ---- --------
1.
2.
3.
B. Receivables insured by export insurance in accordance with
Section 8.7 of the International Loan Agreement. True and
correct copies of such insurance policies together with all
endorsements, declarations, amendments and renewals thereto
have been delivered to the Bank. True and correct copies of
the notification of assignment of insurance claims under such
policies have been delivered to the Bank.
Customer Country Amount SBCL or DCL
-------- ------- ------ -----------
1.
2.
3.
- 1 -
57
C. Receivables arising from documentary collections,
cash against documents transactions and other
receivables otherwise approved in writing by the Bank
and Eximbank.
Invoice
Customer Country Amount Date Payment Terms
-------- ------- ------ ------- -------------
1.
2.
3.
2. Eligible Inventory
The Borrower represents and warrants that all of the inventory
outlined below meets the requirements set forth in the definition of
"Eligible Inventory." Without limitation of the foregoing, the
Borrower represents and warrants that all such inventory contains at
least 50% U.S. content and, except as notified to the Bank, that all
of such inventory is supported by an Export Order delivered to the
Bank.
Inventory Supported by
Purchase Order: Finished Goods
-------------- -------------------------
Work-in-Process
-------------------------
Raw Materials
-------------------------
Inventory Not Supported
by Purchase Order: Finished Goods
----------------- -------------------------
Work-in-Process
-------------------------
Raw Materials
-------------------------
Total
--------------------------
Note: Describe any large or special inventory items.
ADDITIONAL COLLATERAL
1. Export-related receivables no longer Eligible which have previously
been included in an International Borrowing Base Certificate and which
remain as Collateral for the International Obligations.
[List]
- 2 -
58
ATTACHMENTS
-----------
1. Export Orders
Attached hereto are executed Export Orders for each new Eligible
Receivable, as outlined below:
Customer Country Amount Payment Terms
-------- ------- ------ -------------
1.
2.
3.
2. Export Insurance
In accordance with Section 8.7 of the International Loan Agreement
attached hereto are duly executed copies of the export insurance
policies, together with endorsements, declarations, amendments and
renewals which have not been previously provided to the Bank:
3. Other Information or Special Requests
- 3 -
59
EXHIBIT "E"
COMPLIANCE CERTIFICATE
(International)
I, ___________________, do hereby certify to Texas Commerce
Bank National Association (the "Bank") that I am the duly elected, qualified
and acting _______________ of NATIONAL TANK COMPANY, a Texas corporation (the
"Borrower"), and do hereby further certify to the Bank as follows:
1. Each of the representations and warranties contained
in Section 6 of the International Revolving Loan
Agreement dated as of June 30, 1997 (as amended or
otherwise modified from time to time, the
"International Loan Agreement"), by and between the
Borrower and the Bank and in each other International
Loan Document is true and correct in all respects on
and as of the date hereof as though made on and as of
the date hereof;
2. No Default or Event of Default has occurred as of the
date hereof or would result from the making of any
Loans on the date hereof; and
3. No change that would cause a material adverse effect
on the business, properties, operations or condition
(financial or otherwise) of the Borrower has occurred
since the date of the most recent financial
statements provided to the Bank dated as of ________,
199_.
All terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the International Loan Agreement.
IN WITNESS WHEREOF, I have signed by name this ____ day of ________, 199_.
--------------------------------------
(Signature)
Name:
---------------------------------
Title:
--------------------------------
60
EXHIBIT "F"
LETTER OF CREDIT REQUEST
(International)
_______________, 199_
Texas Commerce Bank National Association
_________________
_________________
Attention: _______________
Gentlemen:
Reference is made to that certain International Revolving
Credit Agreement dated as of June 30, 1997 (the "International Loan Agreement")
executed by and between Texas Commerce Bank National Association (the "Bank"),
and National Tank Company (the "Borrower"). Capitalized terms which are used
but not defined herein shall have the respective meanings assigned to such
terms in the International Loan Agreement.
The Borrower hereby requests the issuance of a Letter of
Credit under the International Loan Agreement, and in that connection sets
forth below the information relating to such Letter of Credit ("Proposed Letter
of Credit") as required by Section 2.3 of the International Loan Agreement. As
more fully set forth in the Application for Irrevocable Stand-by Letter of
Credit attached hereto as Exhibit I, the Proposed Letter of Credit must be
issued:
(a) on or before _______________, 19__(1);
(b) for the benefit of __________________;
(c) in the amount of $_____________(2);
(d) having an expiry date of __________, 19__(3); and which is
__________________________________
(1) Which must be not less than three (3) Business Days after notice is given
to the Bank.
(2) Which must not be less than $2,000.
(3) Which shall not be later than the stated Maturity Date, without the prior
written consent of the Bank.
61
(e) subject to the conditions set forth in the Application
attached hereto.
OR
The Borrower hereby refers to Letter of Credit Number _____
(the "Expiring Letter of Credit") which has an existing expiry date of
__________. The Borrower hereby requests that [the expiry date of the Expiring
Letter of Credit be extended to __________(3)]. [The Bank permits the expiry
date of the Expiring Letter of Credit to be extended to _____________(3)].
The Borrower hereby certifies that after giving effect to the
[issuance of the Proposed Letter of Credit] or [the extension of the Expiring
Letter of Credit] (a) the aggregate Letter of Credit Outstandings will not
exceed the Letter of Credit Limit and (b) the sum of the aggregate outstanding
Loans plus the aggregate Letter of Credit Outstandings will not exceed the
Commitment.
The Borrower hereby further certifies that:
(a) on the date hereof all applicable conditions to the
[issuance of the Proposed Letter of Credit] [extension of the Expiring Letter
of Credit] set forth in Sections 2.3 and 7 of the International Loan Agreement
have been satisfied and that the [Proposed Letter of Credit] [the Expiring
Letter of Credit as extended] complies with the terms of the International Loan
Agreement;
(b) as of the date hereof and as a result of the
[issuance of the Proposed Letter of Credit] [the extension of the Expiring
Letter of Credit], there does not and will not exist any Default or Event of
Default;
(c) the representations and warranties contained in
Section 6 of the International Loan Agreement and in each other International
Loan Document are true and correct as of the date hereof and shall be true and
correct upon the [issuance of the Proposed Letter of Credit] [the extension of
the Expiring Letter of Credit], with the same force and effect as though made
on and as of the date hereof and thereof; and
(d) no material adverse change in the business,
properties, operations or condition (financial or otherwise) of the Borrower
has occurred since the date of the most recent financial statements provided to
the Bank dated as of __________, 199_.
Upon the [issuance of the Proposed Letter of Credit]
[extension of the Expiring Letter of Credit], the Borrower will be deemed to
have recertified the foregoing on such issuance date or extension date, as the
case may be.
- 2 -
62
EXECUTED AND DELIVERED this _____ day of __________, 199__.
NATIONAL TANK COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
- 3 -
63
Exhibit "G"
NOTICE OF RATE CHANGE/CONTINUATION
TO: TEXAS COMMERCE BANK NATIONAL ASSOCIATION (the "Bank") pursuant to that
certain International Revolving Loan Agreement dated as of June 30,
1997 (as same may be amended, modified, increased, supplemented and/or
restated from time to time, the "Credit Agreement"), entered into by
and between National Tank Company (the "Borrower") and the Bank.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Notice.
Pursuant to Section 2.9 of the Credit Agreement, this Notice of Rate
Change/Continuation (the "Notice") represents the Borrower's election to
[insert one or more of the following]:
[1. Use if converting LIBOR Rate Loans to Base Rate Loans.]
Convert $_____________ in aggregate principal amount of LIBOR
Rate Loans with a current Interest Period ending on________,
19__, to Base Rate Loans on____________, 19__. [and]
[1. Use if converting Base Rate Loans to LIBOR Rate Loans.]
Convert $_____________ in aggregate principal amount of Base
Rate Loans to LIBOR Rate Loans on _________________, 19__.
The initial Interest Period for such LIBOR Rate Loans is
requested to be a [one] [two] [three] [six] (_____) month
period.
[1. Use if continuing LIBOR Rate Loans.]
Continue $__________ in aggregate principal amount of LIBOR
Rate Loans with a current Interest Period ending on
_____________, 19___. The initial Interest Period for such
LIBOR Rate Loans is requested to be a [one] [two] [three]
[six] (__) month period.
2. Borrower hereby certifies that no Default or Event of Default
has occurred and is continuing under the Credit Agreement.
3. As of the date hereof, and as a result of the making of the
requested Loans, there does not and will not exist any Default
or Event of Default.
4. The representations and warranties contained in the Loan
Documents (other than those by their terms limited to a
specific date) are true and correct in all material respects
as of the date hereof and shall be true and correct upon the
making of the requested Loans, with the same force and effect
as though made on and as of the date hereof and thereof.
-1-
64
5. No event has occurred since the date of the most
recent financial statements provided to the Bank
dated as of ________, 19__ that has caused a Material
Adverse Effect.
Dated: __________, 19___.
NATIONAL TANK COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-2-
65
INTERNATIONAL REVOLVING NOTE
$3,000,000.00 June 30, 1997
FOR VALUE RECEIVED, the undersigned, NATIONAL TANK COMPANY, a
corporation organized under the laws of the State of Texas (the "Borrower"),
HEREBY PROMISES TO PAY to the order of TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
a national banking association (the "Bank"), on or before June 30, 1998 (the
"Maturity Date"), the principal sum of Three Million and 00/100 Dollars
($3,000,000.00), or, if less, the aggregate principal amount of Loans
outstanding on the Maturity Date, in accordance with the terms and provisions of
that certain International Revolving Loan Agreement dated as of June 30, 1997 by
and between the Borrower and the Bank (the "International Loan Agreement";
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the International Loan Agreement).
The outstanding principal balance of this Note shall be due
and payable as provided in the International Loan Agreement. The Borrower
promises to pay interest on the unpaid principal balance of this Note from the
date of any Loan evidenced by this Note until the principal balance thereof is
paid in full. Interest shall accrue on the outstanding principal balance of this
Note from and including the date of any Loan evidenced by this Note to but not
including the Maturity Date at the rate or rates, and shall be due and payable
on the dates, set forth in the International Loan Agreement. Any amount not paid
when due with respect to principal (whether at stated maturity, by acceleration
or otherwise), costs or expenses, or, to the extent permitted by applicable law,
interest, shall bear interest from the date when due to and excluding the date
the same is paid in full, payable on demand, at the Past Due Rate.
Payments of principal and interest, and all amounts due with
respect to costs and expenses, shall be made in lawful money of the United
States of America in immediately available funds, without deduction, set-off or
counterclaim to the Bank, or such other location as may be notified to the
Borrower by the Bank, not later than 12:00 noon (Houston time) on the dates on
which such payments shall become due pursuant to the terms and provisions set
forth in the International Loan Agreement.
If any payment of principal or interest on this Note shall
become due on a Saturday, Sunday, or public holiday on which the Bank is not
open for business, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in computing
interest in connection with such payment.
66
All loans and advances and all payments and prepayments made
hereon shall be recorded in the holder's records and such records shall be
controlling, absent manifest error.
In addition to all principal and accrued interest on this
Note, the Borrower agrees to pay (a) all reasonable costs and expenses incurred
by all owners and holders of this Note in collecting this Note through any
probate, reorganization, bankruptcy or any other proceeding and (b) reasonable
attorneys' fees when and if this Note is placed in the hands of an attorney for
collection after default.
All agreements among the Borrower and the Bank, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand being made on this Note or otherwise, shall the amount paid, or agreed to
be paid, to the Bank for the use, forbearance, or detention of the money to be
loaned under the International Loan Agreement and evidenced by this Note or
otherwise or for the payment or performance of any covenant or obligation
contained in the International Loan Agreement, this Note or in any other
International Loan Document exceed the Highest Lawful Rate. If, as a result of
any circumstances whatsoever, fulfillment of any provision hereof or of any of
such documents, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable usury law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if, from any such circumstance, the Bank shall ever
receive interest or anything which might be deemed interest under applicable law
which would exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be applied to the reduction of the principal amount owing on
account of this Note or the amounts owing on other obligations of the Borrower
to the Bank under any International Loan Document and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal balance of
this Note and the amounts owing on other obligations of the Borrower to the Bank
under any International Loan Documents, as the case may be, such excess shall be
refunded to the Borrower. All sums paid or agreed to be paid to the Bank for the
use, forbearance, or detention of the indebtedness of the Borrower to the Bank
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full term of such indebtedness until
payment in full of the principal thereof (including the period of any renewal or
extension thereof) so that the interest on account of such indebtedness shall
not exceed the Highest Lawful Rate. Notwithstanding anything to the contrary
contained in the International Loan Agreement or this Note, it is understood and
agreed that if at any time the rate of interest which accrues on the outstanding
principal balance of this Note shall exceed the Highest Lawful Rate, the rate of
interest which accrues on the outstanding principal balance of this Note shall
be limited to the Highest Lawful Rate, but any subsequent reductions in the rate
of interest which accrues on the outstanding principal balance of this Note
shall not reduce the rate of interest which accrues on the outstanding principal
balance of this Note below the Highest Lawful Rate until the total amount of
interest accrued on the outstanding principal balance of this Note equals the
amount of interest which would have accrued if such interest rate had at all
times been in effect. The terms and provisions of this paragraph shall control
and supersede every other provision of all agreements between the Borrower and
the Bank.
67
This Note is entitled to the benefits of the International
Loan Agreement, which International Loan Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions and with the effect therein
specified, and provisions to the effect that no provision of the International
Loan Agreement or this Note shall require the payment or permit the collection
of interest in excess of the Highest Lawful Rate. The obligations of the
Borrower hereunder are secured by the International Security Documents. It is
contemplated that by reason of prepayments or repayments hereon prior to the
Maturity Date, there may be times when no indebtedness is owing hereunder prior
to such date, but notwithstanding such occurrences, this Note shall remain valid
and shall be in full force and effect as to Loans made pursuant to the
International Loan Agreement subsequent to each such occurrence.
Except as otherwise specifically provided for in the
International Loan Agreement, the Borrower and any and all endorsers, guarantors
and sureties severally waive grace, demand, presentment for payment, notice of
dishonor or default, protest, notice of protest, notice of intent to accelerate,
notice of acceleration and diligence in collecting and bringing of suit against
any party hereto, and agree to all renewals, extensions or partial payments
hereon, with or without notice, before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
THIS NOTE AND THE OTHER INTERNATIONAL LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND
THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES; AND THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
NATIONAL TANK COMPANY
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------
Xxxxxxx X. Xxxxxx III
Senior Vice President
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INTERNATIONAL GUARANTY
This INTERNATIONAL GUARANTY (the "Guaranty") is made as of the
30th day of June, 1997 by NATCO Holdings, Inc., a Delaware corporation (the
"Guarantor"), to Texas Commerce Bank National Association, a national banking
association (the "Bank").
PRELIMINARY STATEMENT. The Bank and National Tank Company, a
Delaware corporation (the "Borrower") have entered into that certain
International Revolving Loan Agreement dated of even date herewith (as amended
or otherwise modified from time to time, the "Credit Agreement"). The
Guarantor expects to derive substantial benefit from the Loans (as defined in
the Credit Agreement) made by the Bank to the Borrower pursuant to the terms
and conditions set forth in the Credit Agreement. It is a condition precedent
to the effectiveness of the Credit Agreement that the Guarantor shall have
executed and delivered this Guaranty.
All terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bank to make the Loans under the Credit Agreement, the Guarantor
hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
and irrevocably (a) guarantees the punctual payment when due, whether at stated
maturity, by acceleration, by prepayment or otherwise, of all obligations of
the Borrower now or hereafter existing under the Credit Agreement, the Note,
all other International Loan Documents to which the Borrower is a party and any
other agreement or instrument executed in connection therewith, whether for
principal, interest, prepayment, fees, expenses, taxes, costs, losses,
compensation, reimbursements or any other amount payable to the Bank under the
terms of any such agreements, and (b) agrees to pay all reasonable expenses
(including, without limitation, reasonable counsel fees and expenses) incurred
by the Bank in enforcing any rights under this Guaranty (all of the above being
hereinafter called the "Guaranteed Obligations").
SECTION 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms
of the Credit Agreement, the Note, all other International Loan Documents and
any other agreement or instrument executed in connection therewith, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Bank with respect thereto.
The liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of or defect
or deficiency in the Credit Agreement, the Note, any of the other
International Loan Documents or any other agreement or instrument
executed in connection with or pursuant to any International Loan
Document;
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69
(b) any change in the time, manner, terms or place of
payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to
departure from the Credit Agreement, the Note, any of the other
International Loan Documents, or any other agreement or instrument
relating thereto or executed in connection with or pursuant to any
International Loan Document;
(c) any sale, exchange, release or non-perfection of any
Collateral or any setoff against any of the Guaranteed Obligations, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(d) an Event of Bankruptcy (as defined below), which
shall occur where the Borrower makes a general assignment for the
benefit of creditors or petitions or applies to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or
any substantial part of its business, estate or assets or commences
any proceeding under any bankruptcy, insolvency, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect; or any such petition or application is filed or any such
proceeding is commenced against the Borrower, and the Borrower, by an
act or omission, indicates approval thereof, consents thereto or
acquiesces therein, or an order is entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of
the assets of the Borrower or granting relief to the Borrower or
approving the petition in any such proceeding (each an "Event of
Bankruptcy");
(e) the exercise by the Bank of any of its rights and
remedies under this Guaranty or any of the International Loan
Documents;
(f) any delay or failure by the Bank in the exercise of
its rights and remedies under this Guaranty or any of the
International Loan Documents;
(g) any breach or default by the Borrower in the
performance or observance of any of its obligations under any of the
International Loan Documents; or
(h) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower or
any other Person that is a party to any International Loan Document
(including any guarantor) in respect of the Guaranteed Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Bank upon the insolvency,
bankruptcy or reorganization of the Borrower, or any other guarantor or
otherwise, all as though such payment had not been made. The obligations of
the Guarantor under this Guaranty shall not be affected by the amount of credit
extended to the Borrower, any repayment by the Borrower to the Bank (other than
the full and final payment of all of the Guaranteed Obligations), allocation by
the Bank of any repayment, any compromise or discharge of the Guaranteed
Obligations, any application, release or substitution of collateral or other
security
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70
therefor, release of any guarantor, surety or other person obligated in
connection with the International Loan Documents, or any further advances to
the Borrower, or for any other reason.
SECTION 3. Continuing Guaranty. This is a continuing
Guaranty, and all extensions of credit and financial accommodations heretofore,
concurrently herewith or hereafter made by the Bank to the Borrower and all
indebtedness of the Borrower now owned or hereafter acquired by the Bank in
connection with the transactions contemplated under the Credit Agreement shall
be conclusively presumed to have been made or acquired in acceptance hereof.
SECTION 4. Waiver. This is an absolute Guaranty of payment
and not of collection; and the Guarantor hereby waives (a) promptness,
diligence, notice of acceptance, presentment, demand, protest, notice of
protest and dishonor, notice of intent to accelerate, notice of acceleration
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty; (b) any requirement that the Bank protect, secure, perfect or insure
any Lien on any Property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any Collateral or that the
Borrower or any other Person be joined in any action hereunder. Should the
Bank seek to enforce the obligations of the Guarantor hereunder by action in
any court, the Guarantor waives any necessity, substantive or procedural, that
a judgment previously be rendered against the Borrower or any other Person, or
that any action be brought against the Borrower or any other Person, or that
the Borrower or any other Person should be joined in such cause. Such waiver
shall be without prejudice to the Bank at its option to proceed against the
Borrower or any other Person, whether by separate action or by joinder.
The Guarantor waives, and agrees, to the fullest extent
permitted by applicable law, that the Guarantor shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, marshalling of assets or
redemption laws, or exemption, whether now or at any time hereafter in force,
which may delay, prevent or otherwise affect the performance by the Guarantor
of the Guarantor's obligations under, or the enforcement by the Bank of, this
Guaranty.
SECTION 5. Several Obligations. The obligations of the
Guarantor hereunder are several from the Borrower or any other Person, and are
primary obligations concerning which the Guarantor is the principal obligor.
The Guarantor agrees that this Guaranty shall not be discharged except by
complete performance of the obligations of the Borrower under the Note, the
Credit Agreement and any other International Loan Document to which the
Borrower is a party and the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder shall not be affected in any way by any
receivership, insolvency, bankruptcy or other proceedings affecting the
Borrower or any of the Borrower's assets, or the release or discharge of the
Borrower from the performance of any obligation contained in any promissory
note or other instrument issued in connection with, evidencing or securing any
Guaranteed Obligations, whether occurring by reason of law or any other cause,
whether similar or dissimilar to the foregoing.
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71
SECTION 6. Subrogation. The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Guaranteed Obligations shall
have been paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Bank and shall forthwith be paid to the Bank to be
applied to the Guaranteed Obligations in such order as the Bank shall select.
If (a) the Guarantor shall make payment to the Bank of all or any part of the
Guaranteed Obligations and (b) all the Guaranteed Obligations shall be paid in
full, the Bank will, at the Guarantor's request, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
any interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
SECTION 7. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor has received, or will receive, direct
or indirect benefit from the making of this Guaranty.
(b) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is required
for the due execution, delivery and performance by the Guarantor of
this Guaranty and the other documents and instruments executed in
connection therewith, all of which have been duly obtained or made and
are in full force and effect.
(c) This Guaranty is, and all other documents and
instruments executed in connection therewith, when delivered, will be,
legal, valid and binding obligations of the Guarantor, enforceable
against the Guarantor in accordance with their respective terms,
except as such enforceability may be (i) limited by the effect of any
applicable Debtor Laws and (ii) subject to the effect of general
principles of equity.
(d) The Guarantor's execution, delivery and performance
of this Guaranty do not require the consent or approval of any other
Person except the Bank, which consent and approval shall be deemed
granted by the Bank's acceptance of the delivery of this Guaranty.
SECTION 8. Delivery of Financial Information. The Guarantor
covenants and agrees that, so long as any of the Guaranteed Obligations shall
remain outstanding, the Guarantor will deliver to the Bank as soon as
available, and in any event within one hundred eighty (180) days after the end
of each year, a copy of its signed federal tax returns, including federal
income tax returns, and all supporting documentation.
SECTION 9. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall in any event be effective
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72
unless the same shall be in writing and signed by the Bank, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 10. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile or cable communication) and mailed, telegraphed,
transmitted, cabled or delivered, if to the Guarantor, at the Guarantor's
address at Brookhollow Central III, 0000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxxx X. Xxxxxx III, Senior Vice President, Telecopy
No. (000) 000-0000, if to the Bank, at its address at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, attention Xxxxxxx X. XxXxxxxx, International Banking
Officer, Telecopy No. (000) 000-0000, or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
party. All such notices and communications shall, when mailed, telegraphed,
transmitted or cabled be effective when deposited in the mail, delivered to the
telegraph company, transmitted by telecopier or delivered to the cable company,
respectively.
SECTION 11. No Waiver; Remedies. No failure on the part of
the Bank or the Guarantor to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 12. Right of Setoff. Upon the occurrence and during
the continuance of any Event of Default, the Bank is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Bank to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor now or hereafter
existing under this Guaranty, irrespective of whether or not the Bank shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. The Bank agrees promptly to notify the Guarantor
after any such setoff and application made by the Bank, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Bank under this Section 11 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Bank may have.
SECTION 13. Costs, Expenses and Taxes. The Guarantor agrees
to pay, and cause to be paid, on demand all costs and expenses actually
incurred by the Bank in connection with the preparation, execution, delivery,
filing, recording and administration of this Guaranty and any of the documents
or instruments evidencing the Guaranteed Obligations and any other agreements
or documents delivered in connection with any of the Guaranteed Obligations,
including, without limitation, the reasonable fees and out-of-pocket expenses
of outside counsel for the Bank with respect thereto and with respect to
advising the Bank as to its rights and responsibilities under this Guaranty,
and all costs and expenses, if any (including reasonable counsel fees and
expenses), in connection with the enforcement of this Guaranty. The Guarantor
agrees to pay interest on any
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73
expenses or other sums due to the Bank hereunder that are not paid when due at
a rate per annum equal to the Past Due Rate. In addition, the Guarantor shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Guaranty and any of the
documents or instruments evidencing the Guaranteed Obligations, and agrees to
save the Bank harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes. The
agreements of the Guarantor contained in this Section 12 shall survive the
payment of all other amounts owing hereunder or under any of the other
obligations.
SECTION 14. INDEMNITY. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE GUARANTOR AGREES TO INDEMNIFY, PROTECT AND SAVE HARMLESS
THE BANK FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES GROWING
OUT OF OR RESULTING FROM THIS GUARANTY (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS GUARANTY), EXCEPT CLAIMS, LOSSES OR LIABILITIES RESULTING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BANK, PROVIDED THAT IT
IS THE INTENTION OF THE GUARANTOR TO INDEMNIFY THE BANK AGAINST THE
CONSEQUENCES OF ITS OWN NEGLIGENCE.
SECTION 15. Separability. Should any clause, sentence,
paragraph, subsection or Section of this Guaranty be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Guaranty, and the parties hereto
agree that the part or parts of this Guaranty so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the
remainder will have the same force and effectiveness as if such part or parts
had never been included herein.
SECTION 16. Captions. The captions in this Guaranty have
been inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Guaranty.
SECTION 17. Continuing Guaranty; Transfer of Note. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty; (b) be binding upon the Guarantor and the
Guarantor's successors and assigns; and (c) inure to the benefit of and be
enforceable by the Bank and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Bank may assign or
otherwise transfer the Note to any Person permitted under the Credit Agreement,
and such other Person shall thereupon become vested with all the rights and
benefits in respect thereof granted to the Bank herein or otherwise.
SECTION 18. Limitation by Law. All rights, remedies and
powers provided in this Guaranty may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Guaranty are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Guaranty invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
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SECTION 19. GOVERNING LAW; JURISDICTION. (A) THIS GUARANTY
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
(B) THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE GUARANTOR MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS BROUGHT IN
ANY TEXAS STATE COURT OR FEDERAL COURT LOCATED IN HOUSTON, TEXAS (COLLECTIVELY,
THE "COURTS"), OR ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
AN INCONVENIENT FORUM. THE GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY
JUDICIAL PROCEEDING AGAINST THE GUARANTOR ARISING OUT OF OR IN CONNECTION WITH
THIS GUARANTY OR THE GUARANTEED OBLIGATIONS MAY BE BROUGHT IN THE COURTS.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, THE
PARTIES HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS GUARANTY OR ANY OF THE
OTHER INTERNATIONAL LOAN DOCUMENTS, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY OR ANY OTHER INTERNATIONAL LOAN
DOCUMENTS AND AGREES THAT ANY ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
THIS GUARANTY TOGETHER WITH ALL OTHER INTERNATIONAL LOAN
DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
as of the date first above written.
NATCO HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx III
----------------------------------
Name: Xxxxxxx X. Xxxxxx III
--------------------------------
Title: [ILLEGIBLE]
-------------------------------
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INTERNATIONAL GUARANTY
This INTERNATIONAL GUARANTY (the "Guaranty") is made as of the
30th day of June, 1997 by Xxxxxxxx Point Industries, Inc., a Delaware
corporation (the "Guarantor"), to Texas Commerce Bank National Association, a
national banking association (the "Bank").
PRELIMINARY STATEMENT. The Bank and National Tank Company, a
Delaware corporation (the "Borrower") have entered into that certain
International Revolving Loan Agreement dated of even date herewith (as amended
or otherwise modified from time to time, the "Credit Agreement"). The
Guarantor expects to derive substantial benefit from the Loans (as defined in
the Credit Agreement) made by the Bank to the Borrower pursuant to the terms
and conditions set forth in the Credit Agreement. It is a condition precedent
to the effectiveness of the Credit Agreement that the Guarantor shall have
executed and delivered this Guaranty.
All terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Bank to make the Loans under the Credit Agreement, the Guarantor
hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
and irrevocably (a) guarantees the punctual payment when due, whether at stated
maturity, by acceleration, by prepayment or otherwise, of all obligations of
the Borrower now or hereafter existing under the Credit Agreement, the Note,
all other International Loan Documents to which the Borrower is a party and any
other agreement or instrument executed in connection therewith, whether for
principal, interest, prepayment, fees, expenses, taxes, costs, losses,
compensation, reimbursements or any other amount payable to the Bank under the
terms of any such agreements, and (b) agrees to pay all reasonable expenses
(including, without limitation, reasonable counsel fees and expenses) incurred
by the Bank in enforcing any rights under this Guaranty (all of the above being
hereinafter called the "Guaranteed Obligations").
SECTION 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms
of the Credit Agreement, the Note, all other International Loan Documents and
any other agreement or instrument executed in connection therewith, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Bank with respect thereto.
The liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of or defect
or deficiency in the Credit Agreement, the Note, any of the other
International Loan Documents or any other agreement or instrument
executed in connection with or pursuant to any International Loan
Document;
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76
(b) any change in the time, manner, terms or place of
payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to
departure from the Credit Agreement, the Note, any of the other
International Loan Documents, or any other agreement or instrument
relating thereto or executed in connection with or pursuant to any
International Loan Document;
(c) any sale, exchange, release or non-perfection of any
Collateral or any setoff against any of the Guaranteed Obligations, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(d) an Event of Bankruptcy (as defined below), which
shall occur where the Borrower makes a general assignment for the
benefit of creditors or petitions or applies to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or
any substantial part of its business, estate or assets or commences
any proceeding under any bankruptcy, insolvency, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect; or any such petition or application is filed or any such
proceeding is commenced against the Borrower, and the Borrower, by an
act or omission, indicates approval thereof, consents thereto or
acquiesces therein, or an order is entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of
the assets of the Borrower or granting relief to the Borrower or
approving the petition in any such proceeding (each an "Event of
Bankruptcy");
(e) the exercise by the Bank of any of its rights and
remedies under this Guaranty or any of the International Loan
Documents;
(f) any delay or failure by the Bank in the exercise of
its rights and remedies under this Guaranty or any of the
International Loan Documents;
(g) any breach or default by the Borrower in the
performance or observance of any of its obligations under any of the
International Loan Documents; or
(h) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower or
any other Person that is a party to any International Loan Document
(including any guarantor) in respect of the Guaranteed Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Bank upon the insolvency,
bankruptcy or reorganization of the Borrower, or any other guarantor or
otherwise, all as though such payment had not been made. The obligations of
the Guarantor under this Guaranty shall not be affected by the amount of credit
extended to the Borrower, any repayment by the Borrower to the Bank (other than
the full and final payment of all of the Guaranteed Obligations), allocation by
the Bank of any repayment, any compromise or discharge of the Guaranteed
Obligations, any application, release or substitution of collateral or other
security
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therefor, release of any guarantor, surety or other person obligated in
connection with the International Loan Documents, or any further advances to
the Borrower, or for any other reason.
SECTION 3. Continuing Guaranty. This is a continuing
Guaranty, and all extensions of credit and financial accommodations heretofore,
concurrently herewith or hereafter made by the Bank to the Borrower and all
indebtedness of the Borrower now owned or hereafter acquired by the Bank in
connection with the transactions contemplated under the Credit Agreement shall
be conclusively presumed to have been made or acquired in acceptance hereof.
SECTION 4. Waiver. This is an absolute Guaranty of payment
and not of collection; and the Guarantor hereby waives (a) promptness,
diligence, notice of acceptance, presentment, demand, protest, notice of
protest and dishonor, notice of intent to accelerate, notice of acceleration
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty; (b) any requirement that the Bank protect, secure, perfect or insure
any Lien on any Property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any Collateral or that the
Borrower or any other Person be joined in any action hereunder. Should the
Bank seek to enforce the obligations of the Guarantor hereunder by action in
any court, the Guarantor waives any necessity, substantive or procedural, that
a judgment previously be rendered against the Borrower or any other Person, or
that any action be brought against the Borrower or any other Person, or that
the Borrower or any other Person should be joined in such cause. Such waiver
shall be without prejudice to the Bank at its option to proceed against the
Borrower or any other Person, whether by separate action or by joinder.
The Guarantor waives, and agrees, to the fullest extent
permitted by applicable law, that the Guarantor shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, marshalling of assets or
redemption laws, or exemption, whether now or at any time hereafter in force,
which may delay, prevent or otherwise affect the performance by the Guarantor
of the Guarantor's obligations under, or the enforcement by the Bank of, this
Guaranty.
SECTION 5. Several Obligations. The obligations of the
Guarantor hereunder are several from the Borrower or any other Person, and are
primary obligations concerning which the Guarantor is the principal obligor.
The Guarantor agrees that this Guaranty shall not be discharged except by
complete performance of the obligations of the Borrower under the Note, the
Credit Agreement and any other International Loan Document to which the
Borrower is a party and the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder shall not be affected in any way by any
receivership, insolvency, bankruptcy or other proceedings affecting the
Borrower or any of the Borrower's assets, or the release or discharge of the
Borrower from the performance of any obligation contained in any promissory
note or other instrument issued in connection with, evidencing or securing any
Guaranteed Obligations, whether occurring by reason of law or any other cause,
whether similar or dissimilar to the foregoing.
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SECTION 6. Subrogation. The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Guaranteed Obligations shall
have been paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all the Guaranteed
Obligations shall not have been paid in full, such amount shall be held in
trust for the benefit of the Bank and shall forthwith be paid to the Bank to be
applied to the Guaranteed Obligations in such order as the Bank shall select.
If (a) the Guarantor shall make payment to the Bank of all or any part of the
Guaranteed Obligations and (b) all the Guaranteed Obligations shall be paid in
full, the Bank will, at the Guarantor's request, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
any interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
SECTION 7. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor has received, or will receive, direct
or indirect benefit from the making of this Guaranty.
(b) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority is required
for the due execution, delivery and performance by the Guarantor of
this Guaranty and the other documents and instruments executed in
connection therewith, all of which have been duly obtained or made and
are in full force and effect.
(c) This Guaranty is, and all other documents and
instruments executed in connection therewith, when delivered, will be,
legal, valid and binding obligations of the Guarantor, enforceable
against the Guarantor in accordance with their respective terms,
except as such enforceability may be (i) limited by the effect of any
applicable Debtor Laws and (ii) subject to the effect of general
principles of equity.
(d) The Guarantor's execution, delivery and performance
of this Guaranty do not require the consent or approval of any other
Person except the Bank, which consent and approval shall be deemed
granted by the Bank's acceptance of the delivery of this Guaranty.
SECTION 8. Delivery of Financial Information. The Guarantor
covenants and agrees that, so long as any of the Guaranteed Obligations shall
remain outstanding, the Guarantor will deliver to the Bank as soon as
available, and in any event within one hundred eighty (180) days after the end
of each year, a copy of its signed federal tax returns, including federal
income tax returns, and all supporting documentation.
SECTION 9. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall in any event be effective
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unless the same shall be in writing and signed by the Bank, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 10. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, facsimile or cable communication) and mailed, telegraphed,
transmitted, cabled or delivered, if to the Guarantor, at the Guarantor's
address at Brookhollow Central III, 0000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, Attention: Xxxxxxx X. Xxxxxx III, Senior Vice President, Telecopy
No. (000) 000-0000, if to the Bank, at its address at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000, attention Xxxxxxx X. XxXxxxxx, International Banking
Officer, Telecopy No. (000) 000-0000, or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
party. All such notices and communications shall, when mailed, telegraphed,
transmitted or cabled be effective when deposited in the mail, delivered to the
telegraph company, transmitted by telecopier or delivered to the cable company,
respectively.
SECTION 11. No Waiver; Remedies. No failure on the part of
the Bank or the Guarantor to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 12. Right of Setoff. Upon the occurrence and during
the continuance of any Event of Default, the Bank is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Bank to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor now or hereafter
existing under this Guaranty, irrespective of whether or not the Bank shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. The Bank agrees promptly to notify the Guarantor
after any such setoff and application made by the Bank, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of the Bank under this Section 11 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which the Bank may have.
SECTION 13. Costs, Expenses and Taxes. The Guarantor agrees
to pay, and cause to be paid, on demand all costs and expenses actually
incurred by the Bank in connection with the preparation, execution, delivery,
filing, recording and administration of this Guaranty and any of the documents
or instruments evidencing the Guaranteed Obligations and any other agreements
or documents delivered in connection with any of the Guaranteed Obligations,
including, without limitation, the reasonable fees and out-of-pocket expenses
of outside counsel for the Bank with respect thereto and with respect to
advising the Bank as to its rights and responsibilities under this Guaranty,
and all costs and expenses, if any (including reasonable counsel fees and
expenses), in connection with the enforcement of this Guaranty. The Guarantor
agrees to pay interest on any
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expenses or other sums due to the Bank hereunder that are not paid when due at
a rate per annum equal to the Past Due Rate. In addition, the Guarantor shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Guaranty and any of the
documents or instruments evidencing the Guaranteed Obligations, and agrees to
save the Bank harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes. The
agreements of the Guarantor contained in this Section 12 shall survive the
payment of all other amounts owing hereunder or under any of the other
obligations.
SECTION 14. INDEMNITY. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE GUARANTOR AGREES TO INDEMNIFY, PROTECT AND SAVE HARMLESS
THE BANK FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES AND LIABILITIES GROWING
OUT OF OR RESULTING FROM THIS GUARANTY (INCLUDING, WITHOUT LIMITATION,
ENFORCEMENT OF THIS GUARANTY), EXCEPT CLAIMS, LOSSES OR LIABILITIES RESULTING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BANK, PROVIDED THAT IT
IS THE INTENTION OF THE GUARANTOR TO INDEMNIFY THE BANK AGAINST THE
CONSEQUENCES OF ITS OWN NEGLIGENCE.
SECTION 15. Separability. Should any clause, sentence,
paragraph, subsection or Section of this Guaranty be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Guaranty, and the parties hereto
agree that the part or parts of this Guaranty so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the
remainder will have the same force and effectiveness as if such part or parts
had never been included herein.
SECTION 16. Captions. The captions in this Guaranty have
been inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Guaranty.
SECTION 17. Continuing Guaranty; Transfer of Note. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty; (b) be binding upon the Guarantor and the
Guarantor's successors and assigns; and (c) inure to the benefit of and be
enforceable by the Bank and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Bank may assign or
otherwise transfer the Note to any Person permitted under the Credit Agreement,
and such other Person shall thereupon become vested with all the rights and
benefits in respect thereof granted to the Bank herein or otherwise.
SECTION 18. Limitation by Law. All rights, remedies and
powers provided in this Guaranty may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Guaranty are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Guaranty invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
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SECTION 19. GOVERNING LAW; JURISDICTION. (A) THIS GUARANTY
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
(B) THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE GUARANTOR MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS BROUGHT IN
ANY TEXAS STATE COURT OR FEDERAL COURT LOCATED IN HOUSTON, TEXAS (COLLECTIVELY,
THE "COURTS"), OR ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
AN INCONVENIENT FORUM. THE GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY
JUDICIAL PROCEEDING AGAINST THE GUARANTOR ARISING OUT OF OR IN CONNECTION WITH
THIS GUARANTY OR THE GUARANTEED OBLIGATIONS MAY BE BROUGHT IN THE COURTS.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, THE
PARTIES HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS GUARANTY OR ANY OF THE
OTHER INTERNATIONAL LOAN DOCUMENTS, OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY OR ANY OTHER INTERNATIONAL LOAN
DOCUMENTS AND AGREES THAT ANY ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
THIS GUARANTY TOGETHER WITH ALL OTHER INTERNATIONAL LOAN
DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
as of the date first above written.
XXXXXXXX POINT INDUSTRIES, INC.
By: /s/ XXXXXXX X. XXXXXX XX
----------------------------------
Name: Xxxxxxx X. Xxxxxx XX
--------------------------------
Title: Senior Vice President
-------------------------------
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EXHIBIT 10.4
Pursuant to Regulation S-K 601(b)(2), the Disclosure Schedule to
Exhibit 10.4 of the Registration Statement has been omitted. Such Disclosure
Schedule contains the following sections:
Section 6.1: Subsidiaries
Section 6.3: Litigation
Section 6.5: Ownership
Section 6.13: Existing Indebtedness
Section 8.3: Insurance
Section 9.1: Existing Liens
The Registrant hereby agrees to furnish supplementally copies of any
omitted Sections of the Disclosure Schedule to the Commission upon request.
