Exhibit (a)(1)
Draft 2/22/99
FORM OF
LOAN AGREEMENT
dated March , 1999
between
BANK HAPOALIM B.M. (the "Bank")
and
PEC ACQUISITION CORPORATION (the "Borrower")
TABLE OF CONTENTS
CLAUSE TITLE
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1. DEFINITIONS
2. INTERPRETATION
3. AVAILABILITY AND DISBURSEMENT OF THE LOAN
4. INTEREST
5. REPAYMENT OF THE LOAN
6. PREPAYMENT
7. DEFAULT INTEREST
8. TIME, PLACE AND MANNER OF PAYMENT
9. CONDITIONS PRECEDENT
10. REPRESENTATIONS AND WARRANTIES
11. UNDERTAKINGS
12. EVENTS OF DEFAULT
13. CHANGES IN CIRCUMSTANCES
14. SET-OFF AND APPLICATION OF PAYMENTS
15. THE BORROWER'S DUTY TO NOTIFY
16. COMPENSATION FOR BROKEN FUNDING
17. REMEDIES AND WAIVERS
18. DISCLOSURE OF INFORMATION
19. ASSIGNMENT
20. ADDITIONAL PROVISIONS
21. AUTHORIZED SIGNATORIES
22. NOTICES
23. GOVERNING LAW AND JURISDICTION
24. CURRENCY INDEMNITY
25. SEVERABILITY
26. AMENDMENTS AND WAIVERS
(i)
EXHIBITS
EXHIBIT 1 FORM OF GUARANTEE
EXHIBIT 2 FORM OF NOTE
EXHIBIT 3 OPINION OF COUNSEL
EXHIBIT 4 PENDING LITIGATION
EXHIBIT 5 MERGER AGREEMENT BETWEEN THE BORROWER AND PEC
ISRAEL ECONOMIC CORPORATION DATED AS OF DECEMBER 15, 1998
EXHIBIT 6 FORM OF AUDITOR'S CERTIFICATE
(ii)
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated the day of March, 1999
and made by and between:
BANK HAPOALIM B.M., a banking corporation organized and existing under the laws
of the State of Israel, acting through its New York branch at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000 (hereinafter the "BANK").
and
PEC ACQUISITION CORPORATION, a corporation organized and existing under the laws
of the State of Maine, U.S.A. and having its principal office at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000 (hereinafter the "BORROWER").
WHEREAS:
(1) The Borrower has requested the Bank to grant it a loan in the sum of U.S.
$103,000,000 (One Hundred Three Million United States Dollars).
(2) The Borrower has entered into a merger agreement dated as of December 15,
1998 whereunder the Borrower will be merged into PEC Israel Economic
Corporation ("P.E.C.").
(3) The purpose for which the Loan has been requested is to provide funds to
enable the Borrower to acquire common stock of P.E.C. from the public
through the merger pursuant to the merger agreement.
(4) The Bank has agreed to make a loan available to the Borrower upon the terms
and subject to the conditions hereinafter appearing;
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
In this Agreement, the following words and expressions shall bear the
following meanings unless the context otherwise requires:
"ALTERNATIVE RATE" shall mean an annual rate of interest equal to the Prime
Rate plus the Margin.
"BANK" shall mean Bank Hapoalim B.M. and any of its branches or offices
existing on the date hereof and/or to be subsequently opened, as well as
its successors, assignee, or attorneys in fact.
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"Bank's Books" shall be construed so as to include any book, record,
statement of account and copy of any statement of account, loan
agreement, deed of undertaking, customers' xxxx, card index, page,
film, means of storage and retrieval of data via computer, and any
other means of storage and retrieval of data.
"BANKING DAY" shall mean any day on which both (a) banks are regularly
open for business in New York City and (b) the Branch is open for
ordinary business, provided that, (1) in the Bank's discretion, the
Branch may be closed on any Saturday, Sunday, legal holiday or other
day on which it is lawfully permitted to close; and (2) with respect to
any day upon which a payment or transfer of funds is to be made under
this Agreement, the term "Banking Day" shall mean a day on which
commercial banks and foreign exchange markets are open for business in
London and New York.
"BRANCH" shall mean the New York Branch of the Bank.
"CLOSING DATE" shall have the meaning set forth in Clause 3 hereof.
"CONTROL" shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract
or otherwise.
"EVENT OF DEFAULT" shall mean any of the events or circumstances
described in Clause 13 hereof.
"GAAP" means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of
Certified Public Accountants and the Financial Accounting Standards
Board and in such statements, opinions and pronouncements of such other
entities with respect to financial accounting of for-profit entities as
shall be accepted by a substantial segment of the accounting profession
in the United States.
"GUARANTEE" shall mean the guarantee of Discount Investment
Corporation Ltd. (the "Guarantor") in the form set out in Exhibit 1
hereto.
"INTEREST PAYMENT DATE" shall mean a date upon which interest is
payable under the terms hereof.
"INTEREST PERIOD" shall mean a period of one, two or three months
selected by the Borrower, or such other term as may be acceptable to
the Bank in its discretion. The initial interest period shall commence
on the Closing Date and each subsequent interest period shall commence
at the end of the preceding Interest Period; provided that,
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(1) if any Interest Period would otherwise end on a day
that is not a Banking Day, such Interest Period shall
be extended to the next succeeding Banking Day; and
(2) any Interest Period that would otherwise extend
beyond the Maturity Date shall end on the Maturity
Date.
"LIBOR" in relation to any Interest Period shall mean:
the rate or rates established by the Branch two Working Days prior to
the first day of that Interest Period, by applying the following: (i)
the British Bankers Association ("BBA") Interest Settlement Rates for
U.S. Dollars, as defined in the BBA official definitions and reflected
on the Telerate BBA pages, for an amount equal to the principal amount
of the Loan outstanding from time to time and for the relevant Interest
Period, which rates reflect the offered rates at which deposits are
being quoted to prime banks in the London Interbank Market at 11:00
a.m. London Time calculated as set forth in said BBA official
definition; or (ii) such other recognized source of London Eurodollar
deposit rates as the Bank may determine from time to time. In the event
the applicable BBA page or pages shall be replaced by another Telerate
page or other Telerate pages for quoting London Eurocurrency rates,
then rates quoted on said replacement page or pages shall be applied.
If the Bank determines that London Eurocurrency rates are no longer
being quoted (temporarily or permanently) on any Telerate pages or that
Telerate is no longer functioning (temporarily or permanently) in
substantially the same manner as on the date hereof, then the Bank
shall notify the Borrower of a comparable substitute, publicly
available reference for the determination of LIBOR.
"LOAN" shall mean the amount of U.S. $103,000,000 to be disbursed to
the Borrower under the provisions of this Agreement.
"MARGIN" shall mean zero point thirty percent (0.30%) per annum.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated as
of December 15, 1998 among IDB Development Corporation Ltd., the
Borrower and P.E.C.
"NOTE" shall mean the promissory note of the Borrower evidencing the
Loan in the form set out in EXHIBIT 2 hereto.
"PRIME RATE" shall mean the Bank's New York Branches stated Prime Rate
as reflected in its books and records as such Prime Rate may change
from time to time. The Bank's determination of its Prime Rate shall be
conclusive and final. The Prime Rate is a reference rate and not
necessarily the lowest interest rate charged by the Bank.
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"US $" or "UNITED STATES DOLLARS" or "U.S. DOLLARS" or "DOLLARS" shall
mean the lawful currency of the United States of America, and in
respect of all payments to be made under this Agreement, shall mean
funds which are for same day settlement in the New York Federal Reserve
Payment System (or such other Dollar funds as may, from time to time,
be customary for the settlement of international banking transactions
denominated in United States Dollars).
"WORKING DAY" shall mean a Banking Day on which banks are regularly
open for business in New York.
2. INTERPRETATION
2.1 In this Agreement, unless the context otherwise requires:
(a) references to Clauses and Exhibits are to clauses of, and
exhibits to this Agreement;
(b) references to this Agreement include its Exhibits, and shall
be construed as references to this Agreement as the same may
be amended, novated or supplemented from time to time;
(c) the words "hereof", "hereunder" and similar words shall be
construed as references to this Agreement as a whole and not
limited to the particular Clause or provision in which the
relevant reference appears;
(d) the word "person" shall be construed so as to include any
person, firm, company, corporation, unincorporated body of
persons or any state or government or any agency thereof;
(e) a "subsidiary" of a person is a reference to an entity of
which that person has Control or owns more than fifty per
cent (50%) of the share capital or similar right of
ownership;
(f) "Taxes" shall be construed so as to include all present and
future income and other taxes, levies, imposts, duties,
charges, fees, deductions and withholdings whatsoever
together with interest thereon and penalties with respect
thereto, if any, and any payment of principal, interest
charges, fees
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or other amounts made on or in respect thereof, and "Tax"
and "Taxation" and similar words shall be construed
accordingly;
(g) references to any statute or statutory provision shall be
construed as a reference thereto as the same may have been,
or may from time to time be, amended or re-enacted;
(h) references to times of the day are to New York time unless
otherwise specifically indicated to the contrary; and
(i) references to the singular shall include the plural and vice
versa.
2.2 The headings in this Agreement and the Table of Contents are
inserted for convenience only and shall be ignored in the
interpretation or construction of this Agreement.
2.3 The preamble to this Agreement shall form an integral part
thereof.
2.4 This Agreement forms an integral part of the Borrower's
application to open an account at the Branch and of the general
conditions for operating such accounts which have been signed by
the Borrower (hereinafter the "Application").
3. AVAILABILITY AND DISBURSEMENT OF THE LOAN; FEE
3.1 Subject to the terms of this Agreement, and in particular to the
provisions contained in Clause 9, the Bank shall make the Loan
available to the Borrower in one lump sum in immediately
available funds through the Branch on at least three Business
Days' written, telecopy or telephone (immediately confirmed in
writing) notice of borrowing (the "Closing Date"). The notice of
borrowing shall be irrevocable and binding on the Borrower.
3.2 Upon execution of this Agreement, the Borrower shall pay the sum
of $64,375 to the Bank.
4. INTEREST
4.1 the Borrower shall pay interest on the outstanding balance of the
principal amount of the Loan at a rate determined by the Bank to
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be the aggregate of LIBOR and the Margin for each Interest Period,
with the initial Interest Period commencing on the Closing Date.
4.2 Interest (other than Default Interest) shall be paid by the Borrower
to the Bank on the last day of each Interest Period and at maturity
(whether by acceleration or otherwise).
4.3 All interest payable under this Agreement shall accrue from day to day
and shall be calculated on the basis of the actual number of days
elapsed, and a year of 360 days.
4.4 Notwithstanding anything to the contrary contained herein, in no event
shall the Borrower be obligated to pay interest or Default Interest in
excess of the maximum amount which is chargeable under applicable law.
5. REPAYMENT OF THE LOAN
The Borrower shall repay the unpaid principal amount of the Loan to the
Bank in one lump sum three hundred and sixty (360) days after the closing,
provided that if that day shall not be a Business Day, then payment shall
be made on the next succeeding Business Day.
6. PREPAYMENT
6.1 Provided that no Event of Default and/or any event which with the
lapse of time or giving of notice or both would constitute an Event of
Default, has occurred and is continuing, the Borrower may, on any
Interest Payment Date, upon giving in each case at least 5 (five)
Banking Days prior written notice to the Bank (which shall be
irrevocable and shall constitute the Borrower's undertaking to prepay
accordingly), prepay the principal amount of the Loan outstanding from
time to time in whole or in part, being in each instance not less than
the least of (i) U.S. $5,000,000, (Five Million Dollars) or (ii) the
outstanding principal amount of the Loan at such time, together with
accrued interest to such date on the principal amount of the Loan
prepaid.
6.2 If the Borrower notifies the Bank of its intention to prepay any
amount under the provisions of this Agreement but does not so prepay
in accordance with such notification, the Borrower shall indemnify the
Bank and hold the Bank harmless against any loss or expense which the
Bank shall certify as actually sustained or incurred by it as a
consequence of not having been prepaid in accordance with such
notification, and shall pay to the Bank the full amount so certified
on demand.
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6.3 The Borrower may not prepay the Loan or any part thereof save as
expressly provided in this Agreement.
7. DEFAULT INTEREST
7.1. In the event that the Borrower shall not pay any amount payable by the
Borrower hereunder on its due date, the Bank in its sole discretion
may determine that such overdue amount shall bear default interest
from the date due until the date of actual payment at the rate
determined by the Bank to be 2% (two percent) per annum above the
Prime Rate ("Default Interest").
7.2 The Borrower shall pay Default Interest on sums payable by the
Borrower under this Agreement, such Default Interest being payable
from the date of the Event of Default or from the date of a demand for
payment (in respect of sums payable on demand) until the date of
actual payment.
7.3 Default Interest shall be due and payable on demand, and shall be
compounded monthly and calculated on the basis of the actual number of
days elapsed and a year of 360 days.
8. TIME, PLACE AND MANNER OF PAYMENT
8.1 All payments to be paid by the Borrower hereunder shall be made to the
Bank with the same day value free of any Taxes and without set-off or
counterclaim, in lawful and freely transferable U.S. Dollars and in
funds available to the Bank at the Branch or at any other place
nominated by the Bank in the United States of America.
8.2 (a) Any and all payments by the Borrower to the Bank under this
Agreement and the Note shall be made free and clear of, and
without deduction for, any Taxes, provided that, if the Borrower
shall be required by law to deduct any Taxes from any such
payments, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Clause) the Bank
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Borrower shall
furnish to the Bank the original or a certified copy of a receipt
evidencing payment thereof.
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(b) The Borrower agrees to indemnify the Bank for the full amount of
Taxes not currently applicable (including, without limitation,
any Taxes imposed or asserted by any jurisdiction on amounts
payable under this Clause) paid by the Bank with respect to the
Loan and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This
indemnification shall be paid within 30 days after the Bank makes
written demand therefor (which demand shall identify the nature
and the amount of Taxes for which indemnification is being
sought).
(c) If the Borrower becomes liable to pay any amounts to the Bank
pursuant to this Clause 8.2, it shall have the right to prepay
the Loan pursuant to Clause 6, but at any time upon notice as
provided therein.
8.3 All payments to be paid by the Borrower to the Bank hereunder shall be
made on a Banking Day. If any payment is due on a day which is not a
Banking Day, such payment shall be made on the next succeeding Banking
Day, in which case the Borrower shall pay interest to the Bank on such
deferred payment from the date due until the date of actual payment at
the rate specified in Clause 4 for the then current Interest Period.
8.4 All amounts to be paid hereunder shall be paid no later than 2:00 p.m.
on the relevant Banking Day. If any sum is paid after 2:00 p.m. it
shall be deemed to have been paid at 9:30 a.m. on the next succeeding
Banking Day.
8.5 If any sum to be paid hereunder shall be paid by the Borrower on a day
other than a Banking Day it shall be deemed to have been paid on the
next succeeding Banking Day.
8.6 As used in this Clause 8, the term "Taxes" shall exclude Taxes imposed
on the Bank's income, franchise branch profits and similar Taxes
imposed on the Bank.
9. CONDITIONS PRECEDENT
The obligation of the Bank to make the Loan available to the Borrower shall
be subject to the conditions that (a) no Event of Default and/or any event
which with
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the giving of notice or the lapse of time or both would constitute an Event
of Default has occurred and is continuing and (b) that on or before the
Closing Date, the Borrower shall have fulfilled all the conditions and
carried out all the acts hereinafter set out to the full satisfaction of
the Bank and (c) the Borrower shall have delivered to the bank the
documents hereinafter set out in form and substance satisfactory to the
Bank:
(a) Certified true copies of the resolutions of the Board of
Directors of the Borrower authorizing the borrowing under this
Agreement, authorizing the opening of the Borrower's New York
Account and providing for the persons authorized to sign this
Agreement and any document or instrument hereunder and thereunder
in the name and on behalf of the Borrower;
(b) Opinion of the legal counsel of the Borrower acceptable to the
Bank, dated as of the date of this Agreement substantially in the
form of EXHIBIT 3 hereto and forming an integral part hereof;
(c) the Note duly executed by the Borrower;
(d) State Certificates as to the Borrower:
(1) A copy of the Articles of Incorporation of the Borrower and
each amendment, if any, thereto, certified by the Secretary
of State of the State of Maine (as of a date reasonably near
the Closing Date) as being true and correct copies of such
documents on file in his office.
(2) The signed Certificate of the Secretary of State of the
State of Maine (dated reasonably near the Closing Date),
listing the Articles of Incorporation of the Borrower and
each amendment, if any, thereto, on file in his office and
stating that such documents are the only constitutive
documents of the Borrower on file in his office and that the
Borrower is
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duly organized and in good standing in the State of Maine.
(e) Signed Certificate of Secretary of the Borrower dated the
Closing Date certifying the incumbency and specimen
signatures of the persons authorized to execute the
Agreement and the Note;
(f) The Guarantee, duly executed by the Guarantor;
(g) Opinion of Israeli legal counsel to the Guarantor, addressed
to the Bank, in form reasonably acceptable to the Bank,
dated as of the date of this Agreement;
(h) Such additional agreements, opinions, certifications,
instruments, documents, orders, consents, financing
statements, reports and other information regarding the
Borrower and the Guarantor in form and substance reasonably
satisfactory to the Bank as the Bank may reasonably request.
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10. REPRESENTATIONS AND WARRANTIES
10.1 The Borrower represents and warrants to the Bank that:
(a) the Borrower is a corporation, duly organized and validly
existing and in good standing under the laws of the State of
Maine and has the full corporate power, authority and legal right
to own its assets and conduct its business as is now being
conducted;
(b) the Borrower has the full corporate power, authority and legal
right to enter into, exercise its rights and perform its
obligations under this Agreement;
(c) all necessary consents and authorities for the Borrower to enter
into and perform its obligations under this Agreement and the
Note have been obtained and no further consents or authorities
are necessary;
(d) the obligations of the Borrower under this Agreement will, when
executed by the Borrower, be legal, valid, binding and
enforceable against the Borrower in accordance with their terms,
subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of
equity;
(e) the execution, delivery and performance by the Borrower of its
obligations under this Agreement and the Note will not (i)
contravene any existing law, regulation or authorization to which
the Borrower is subject, (ii) result in any breach of or default
under any agreement or other instrument to which the Borrower is
a party or is subject or (iii) contravene any provision of the
Borrower's constitutional documents;
(f) the Borrower is not in breach of or in default under any other
document or agreement to which it is a party, or by which it is
bound, or any permit granted
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to it which may materially impair its ability to fulfill its
obligations hereunder;
(g) no action, litigation, arbitration or administrative proceeding
is current, pending or threatened against the Borrower except as
set forth in Exhibit 4;
(h) there is not in existence nor to the Borrower's knowledge is
there likely to occur any dispute with any governmental or other
authority or any other dispute of any kind which in any such
case, may materially adversely affect it or its business or
assets;
(i) no event has occurred, and is continuing that constitutes, or
that with the giving of notice or the lapse of time or both,
would constitute, an Event of Default;
(j) all written information which has been given by or on behalf of
the Borrower to the Bank, or to its representatives in connection
with, or in the course of the negotiations leading to this
Agreement was when given and is now (except to the extent revised
by subsequent written notice to the Bank prior to the Closing
Date) true, accurate and complete in all material respects and
there are no facts relating thereto, the omission of which would
render misleading in any material respect any such information
supplied to the Bank;
(k) the audited financial statements to be delivered to the Bank from
time to time will have been prepared in accordance with generally
accepted accounting principles and practices in the United States
of America, will be prepared on a consistent basis, and the
audited and unaudited financial statements will fairly present
the financial position of the Borrower for the period in respect
of which they were prepared, subject, with respect to the
unaudited financial statements, to normal year-end adjustments
and subject to the provisions of Clauses 11.1(g) and 11.1(h);
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(l) the choice by the Borrower of New York law to govern this
Agreement and the submission by the Borrower in this Agreement to
the jurisdiction of the competent state and federal courts
sitting in the State of New York are valid and binding;
(m) neither the Borrower nor any of its assets is entitled to
immunity on the grounds of sovereignty or otherwise from any
legal action or proceeding (which shall include, without
limitation, suit, attachment before or after judgment, execution
or other enforcement);
(n) the Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, by reason of the
provisions of Section 3(b)(2) of such Act or another provision of
such Act. The Borrower is not subject to regulation under any
federal or state statute or regulations that limits its ability
to incur indebtedness;
(o) The Merger Agreement, a copy of which is appended hereto as
Exhibit 5 provides for the full assumption by P.E.C. of all
indebtedness of the Borrower upon the effective date of the
merger transaction provided for therein, including the
indebtedness and undertakings of the Borrower provided for in
this Agreement;
(p) the making of the Loan pursuant to this Agreement does not
contravene Regulation U of the Board of Governors of the Federal
Reserve System as in effect on the date hereof;
(q) the Borrower is not engaged principally in the business of
extending credit for the purpose of purchasing or carrying any
"Margin Stock" as defined in Regulation U of the Federal Reserve
Board;
(r) the Borrower's principal office is located at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000 and, after the merger contemplated
by the Merger Agreement, may be located at such location or at
000 Xxxxx
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Xxxxxx, Xxx Xxxx, XX 00000 or at 00 Xxxx Xxxxxxxx Xxxx, Xxx Xxxx,
Xxxxxx, as shall be advised to the Bank as provided in Clause
22.2.
10.2 The representations and warranties of the Borrower contained in Clause
10.1 in this Agreement shall be deemed to be repeated by the Borrower
on each day from the date of this Agreement until all monies due or
owing under this Agreement and the Note have been repaid and paid in
full as if made with reference to the facts and circumstances existing
on each such day.
11. UNDERTAKINGS
11.1 The Borrower undertakes with the Bank that so long as any monies are
owing under this Agreement or the Note it will:
(a) obtain or cause to be obtained and maintain in full force and
effect and comply or cause to be complied in all material
respects with the conditions and restrictions (if any) imposed
in, or in connection with, every consent, authorization, license
or approval of governmental or public bodies or authorities or
courts and do, or cause to be done, all other acts and things,
which may from time to time be necessary or desirable under
applicable law for the continued due performance of all its
obligations under this Agreement and the Note;
(b) upon becoming aware that the same may be threatened in an amount
exceeding Ten Million Dollars or pending in any amount and in any
case immediately after the commencement thereof give to the Bank
notice in writing of all litigation or administrative or
arbitration proceedings before or of any court, tribunal,
arbitrator or other relevant authority affecting it or its assets
of the type described in Clause 10.1(g) and of all disputes of
the type described in Clause 10.1(h);
(c) upon any Vice President or more senior officer of the Borrower
becoming aware of the same promptly, and in any event not later
than ten (10) days thereafter, give written notice to the Bank of
the occurrence of any Event of Default or any event which with
the giving of notice or the lapse of time
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or both may constitute an Event of Default and at the same time
inform the Bank of any action taken or proposed to be taken in
connection therewith;
(d) pay when due all Taxes for which it is liable other than any
Taxes which are contested by the Borrower in good faith for which
adequate reserves have been set aside on the books of the
Borrower;
(e) prepare a consolidated balance sheet of Borrower and its
subsidiaries and the related statements of income, cash flows and
changes in stockholders equity for the period in accordance with
generally accepted accounting principles and practices in the
United States, except that investments in securities shall be
carried at their market value if they are publicly traded and at
their fair value as reasonably determined in good faith by
management of the Borrower if they are not publicly traded,
rather than based upon Borrower's equity in the ownership of
investee companies, consistently applied annually in respect of
each fiscal year and cause such annual statements to be certified
according to the form of report set forth as Exhibit 6 by
independent certified public accountants of nationally recognized
standing (it being acknowledged by the Bank that the firm of Haft
& Xxxxxxxx LLP is a firm of independent certified accountants of
nationally recognized standing) and deliver a copy of same to the
Bank, as soon as practicable, but in each case not later than 90
(Ninety) days after the end of the period to which they relate;
(f) prepare an unaudited consolidated balance sheet of the Borrower
and its subsidiaries and the related consolidated statements of
income for each quarterly period (other than the last quarterly
period in any fiscal year) following the same methodology as set
forth in Clause 11(e) and certified by the Chief Financial
Officer of Borrower as being fairly stated in all material
respects (subject to normal year-end adjustments) and deliver
same to the Bank as soon as practicable, but in each case not
later than sixty (60) days after the end of the period to which
they relate;
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(g) prepare a certificate setting forth a valuation of investments of
the Borrower, utilizing market value with respect to marketable
securities that are publicly traded and fair value as reasonably
determined in good faith by the management of Borrower with
respect to investments that are not publicly traded, with respect
to each fiscal year (as to which the accountants described in
Clause 11(e) shall certify that, in their opinion the valuations
are fairly stated) and with respect to each fiscal quarter except
the last quarterly fiscal period in each year (as to which the
Chief Financial Officer of Borrower shall certify that the
valuations are fairly stated) and deliver copies of same to the
Bank at the times set forth in Clauses 11(e) and 11(f), as
applicable;
(h) provide the Bank with financial statements of the Guarantor in
the same form, at the same times and audited and certified in the
same manner as provided with respect to the Borrower in Clauses
11(e), 11(f) and 11(g), except that said financial statements of
the Guarantor may be prepared in accordance with generally
accepted accounting principles and practices in Israel and
certified by accountants of nationally recognized standing in
Israel.
(i) provide the Bank with such financial and other information
concerning the Borrower and the Guarantor and their affairs, as
the Bank may from time to time reasonably require.
(j) simultaneously with the delivery of each set of financial
statements pursuant to Clauses 11(e), 11(f) and 11(h) above,
provide to the Bank a certificate of Borrower's or the
Guarantor's (as the case may be) Chief Financial Officer to the
effect that nothing has come to his attention to cause him to
believe that an Event of Default existed on the date of each of
such statements.
-17-
12. EVENTS OF DEFAULT
12.1 There shall be an Event of Default if:
(a) the Borrower or the Guarantor fails to pay any sum due to be paid
by it under this Agreement or the Guarantee and such payment is
not made within a period of 5 Banking Days after notice thereof
shall have been given by the Bank to the Borrower or the
Guarantor, as the case may be; or
(b) the Borrower or the Guarantor commits any breach of or fails to
observe any of the obligations, undertakings or other provisions
contained in this Agreement or the Guarantee and, where such
breach or failure is capable of being remedied, it is not
remedied to the Bank's satisfaction within a period of 20 days
after notice thereof shall have been given by the Bank to the
Borrower, provided however that where such breach or failure is
not capable of being remedied, the Bank shall reasonably
determine that such breach or failure may have a material adverse
effect on the financial condition of the Borrower or the
Guarantor and/or the ability of the Borrower or the Guarantor to
fulfill its obligations hereunder or under the Guarantee or on
the rights of the Bank pursuant hereto or under the Guarantee; or
(c) any representation or warranty made or deemed to be made or
repeated by or in respect of the Borrower or the Guarantor
pursuant to this Agreement or the Guarantee, or any other
document submitted to the Bank is, or proves to have been
incorrect or untrue when made or repeated and is not remedied,
when capable of being remedied, to the Bank's satisfaction within
a period of _____ days after notice thereof shall have been given
by the Bank to the Borrower; provided, however that where such
position is not capable of being remedied, the Bank shall
reasonably determine that such breach or failure may have a
material adverse effect on the financial condition of the
Borrower or the Guarantor and/or the ability of the Borrower or
the Guarantor to fulfill its obligations hereunder and/or on the
rights of the Bank pursuant to this Agreement or the Guarantee;
(d) any consent, authorization, license or approval of, or
registration with or declaration to governmental or public bodies
or authorities or courts required by the
-18-
Borrower or the Guarantor to authorize, or required by the
Borrower or the Guarantor in connection with the execution,
delivery, validity, enforceability or admissibility in evidence
(upon payment of stamp duty, if required) of this Agreement or
the Guarantee or the performance by the Borrower of its
obligations under this Agreement or the Guarantee is modified or
is not granted or is revoked or terminated or expires and is not
renewed, or otherwise ceases to be in full force and effect and
the position is not remedied, when capable of being remedied, to
the Bank's reasonable satisfaction within a period of 30 days
after notice thereof shall have been given by the Bank to the
Borrower, provided, however that where such position is not
capable of being remedied, the Bank shall reasonably determine
that such breach or failure may have a material adverse effect on
the financial condition of the Borrower or the Guarantor and/or
the ability of the Borrower or the Guarantor to fulfill its
obligations under this Agreement or the Guarantee; or
(e) a creditor attaches or takes possession of, or a distress,
execution, sequestration or other process is levied, or enforced
upon or against a material part of the property, undertakings,
assets, rights or revenues of the Borrower or the Guarantor and
such attachment or other similar order shall remain undischarged
or unstayed for a period in excess of 30 days; or
(f) the Borrower or the Guarantor takes any action, or any decision,
order or writ is made or given by any court or competent
authority for (1) the Borrower to be adjudicated or found
bankrupt or insolvent; (2) the winding-up or dissolution of the
Borrower (other than the merger of the Borrower pursuant to the
Merger Agreement) or the Guarantor; (3) the appointment of a
liquidator, whether provisional or otherwise, administrator,
trustee, receiver or similar offices in respect of the Borrower
or the Guarantor and/or in respect of the whole or any part of
its undertakings, assets, rights or revenues; or (4) the Borrower
or the Guarantor enter into any general arrangement or
composition for the benefit of its creditors or any class of
them; or
-19-
(g) any legal proceedings are started or other steps are taken by any
third party before any court of law for: (i) the Borrower or the
Guarantor to be adjudicated or found bankrupt or insolvent; (ii)
the winding-up or dissolution of the Borrower (other than the
merger of the Borrower pursuant to the Merger Agreement) or the
Guarantor in the event that the Borrower or the Guarantor, as the
case may be, have not been released from all obligations under
this Agreement and the Guarantee by the Bank; (iii) the
appointment of a liquidator, whether provisional or otherwise,
administrator, trustee, receiver or similar officer in respect of
the whole or any part of the Borrower's or the Guarantor's
undertakings, assets, rights or revenues; or (iv) the Borrower or
the Guarantor to enter into any general arrangement or
composition for the benefit of its creditors or any class of
them; provided however that the same shall not constitute an
Event of Default, if the Borrower or the Guarantor shall contest
any such proceedings or other steps in good faith within 10 days,
and further provided that legal counsel to the Borrower or the
Guarantor (who shall be acceptable to the Bank) shall render
within such 10 days his opinion in writing, that there is a
reasonable chance that such proceeding or other steps will be
rejected or dismissed by the court before which they were
instituted; or
(h) any event occurs or proceeding is taken with respect to the
Borrower or the Guarantor in any jurisdiction to which it is
subject which is analogous to, or has an effect equivalent or
similar to any of the events mentioned in Clauses 12.1(f) or (g)
and subject to grace periods set forth in those Clauses, as
applicable; or
(i) all or a material part of the undertakings, assets, rights or
revenues of the Borrower or the Guarantor are seized,
nationalized, expropriated or compulsorily acquired by, or under
the authority of, any government or local or other authority and
any such action is not resolved within 30 days; or
(j) it becomes unlawful at any time for the Borrower or the Guarantor
to perform all or any of its obligations under this Agreement and
the Bank shall reasonably
-20-
determine that such event may have a material adverse effect on
the financial condition of the Borrower or the Guarantor and/or
on the rights of the Bank pursuant hereto; or
(k) the Borrower repudiates this Agreement or does or causes or
permits to be done any act or thing evidencing an intention to
repudiate this Agreement; or
(l) the Guarantor repudiates the Guarantee or does or causes or
permits to be done any act or thing evidencing an intention to
repudiate the Guarantee;
(m) the Borrower or the Guarantor has and/or shall have committed a
breach of any of its undertakings and/or obligations under any
other documents or agreements to which it is a party or by which
it is bound and the Bank shall reasonably determine that such
breach may have a material adverse effect on the financial
condition of the Borrower or the Guarantor and/or the ability of
the Borrower or the Guarantor to fulfill its obligations
hereunder or under the Guarantee and/or on the rights of the Bank
pursuant hereto or the Guarantee; or
(n) an event deemed to be an event of default and/or an event which
gives the Bank the right to demand early repayment of any amount
owed to the Bank by the Borrower or the Guarantor exists or
occurs or is threatened under any other agreement or document for
the extension of credit or any other banking facilities by the
Bank to the Borrower or the Guarantor; or
(o) so long as any amount remains outstanding and payable to the Bank
by PEC under and pursuant to a Loan Agreement dated May 5, 1998
(the "PEC Loan Agreement"), if an event of default provided for
in Clause 13.1(b) of the PEC Loan Agreement shall occur; or
(p) if no amount remains outstanding and payable to the Bank by PEC
under and pursuant to the PEC Loan Agreement, if the Bank shall
reasonably deem itself insecure.
12.2 The Bank may, without prejudice to any of its other rights, by notice
in writing to the Borrower at any time upon or after the occurrence of
an Event of Default, so long as the same is continuing:
-21-
(a) declare the Loan and all interest accrued and all other sums
payable under this Agreement to have become due and payable,
whereupon the same shall, immediately or at any time thereafter
in accordance with such notice, become due and payable;
(b) declare that the Loan and all other sums payable under this
Agreement shall bear interest at the rate of Default Interest
from the date of the Event of Default, as if such sums had not
been paid on their due date, whereupon such interest shall,
immediately or at any time thereafter in accordance with the
terms of such notice, become due and payable.
12.3 The Borrower shall pay to the Bank all losses, costs and expenses,
including, without limitation, reasonable attorney fees and expenses,
suffered or incurred by the Bank as a result of any Event of Default
and in connection with the enforcement of any of the Bank's rights
hereunder.
-22-
13. CHANGES IN CIRCUMSTANCES
13.1. Increased Costs
If by reason and as a result of a) any change in or the introduction
of any law, regulation, treaty or official directive or any change in
the interpretation or application thereof including without limitation
by the central banking authorities of the U.S.A. or Israel or b)
compliance by the Bank or the Branch with any future directive,
demand, order, request or requirement (whether or not having the force
of law) of the central banking authorities of the U.S.A. or Israel or
any other central bank or any governmental, fiscal, monetary or other
authority (including without limitation a directive, demand, order,
request or requirement which affects the manner in which the Bank or
the Branch allocates capital in support of its assets or liabilities
or contingent liabilities or deposits with it or for its account or
advances or commitments made by it):
(i) the Bank incurs a cost or costs as a result of performing its
obligations under this Agreement or the Note or maintaining its
commitment to disburse the Loan or maintaining the outstanding
balance of the Loan; or
(ii) the cost to the Bank of making, funding or maintaining the Loan
or any of the outstanding balance thereof is directly or
indirectly increased; or
(iii) the Bank becomes liable to make any payment not currently
applicable on account of tax or otherwise (not being a tax
imposed on the net income of its lending office in the
jurisdiction in which it is incorporated or in which its lending
office is situated or contemplated pursuant to Clause 8.2 of this
Agreement) on or calculated by reference to the outstanding
balance of the Loan or by reference to any sum received or
receivable by it hereunder, or if any such sum received or
receivable by the Bank hereunder or the effective return to the
Bank hereunder is reduced;
then and in each such case:
a) the Bank shall notify the Borrower in writing of the
occurrence of such event upon the Bank becoming aware of the
same;
-23-
b) the Borrower shall from time to time pay to the Bank on
demand such amount or amounts as the Bank may specify to be
necessary to compensate the Bank for such cost, increased
costs, payment, reduction in payment, loss of return or
other liability;
c) the Bank shall as soon as reasonably practicable deliver to
the Borrower a certificate as to any of the matters referred
to in this Clause, specifying the amount of such
compensation, and setting out in reasonable detail its
calculation of the relevant amount. The said certificate
shall be conclusive save for manifest error;
d) subject to the provisions of Clause 6 hereof, the Borrower
may, after receipt of the Bank's notification as aforesaid,
so long as the circumstances giving rise to such
compensation continue and subject to its giving the Bank no
less than five (5) Banking Days written notice thereof
(which shall be irrevocable) notify the Bank at any time
that it will prepay to the Bank on the next Interest Payment
Date the whole (but not part only) of the outstanding
balance of the Loan together with accrued interest thereon
and all other amounts owing to the Bank provided that such
notice on the part of the Borrower is given within 30
(thirty) days of the Bank's notification as aforesaid.
13.2. Unlawfulness
This Agreement has been made in accordance with legal, regulatory,
fiscal and monetary measures currently in force and in accordance with
current market conditions. If the making or the continuation of the
Loan by the Bank becomes impossible or unlawful, or the Bank is
required to reduce the volume of its loans due to any change, after
the date of this Agreement, in any applicable law or governmental
regulation or order or in any requirement of any monetary authority,
or in the interpretation of the same, then and in any such event the
Bank may give written notice to the Borrower and the Borrower agrees
to prepay the full amount of the Loan then outstanding as well as
interest accrued thereon, or such lesser amount as the Bank shall
determine is required to be prepaid so that no
-24-
impediment continues to subsist, within 60 (sixty) days or any shorter
period of time required by any such change.
13.3. Substitute Basis
If the Bank determines (i) that at anytime (a) by reason of
circumstances affecting the London Interbank Market generally,
adequate and fair means do not exist for ascertaining an applicable
LIBOR rate or it is impractical for the Bank to fund or continue to
fund the then outstanding balance of the principal amount of the Loan
at the LIBOR rate during the applicable Interest Period, or (b) quotes
for funds in United States Dollars in sufficient amounts comparable to
the said outstanding balance and for the duration of the applicable
Interest Period would not be available to the Bank in the London
Interbank Market, or (c) quotes for funds in United States Dollars in
the London Interbank Market would not accurately reflect the cost to
the Bank of funding the said outstanding balance on the London
Interbank Market during the applicable Interest Period, or (ii) that
at any time the making or funding of loans, or charging of interest at
rates, based on LIBOR shall be unlawful or unenforceable for any
reason, then as long as such circumstances(s) shall continue, interest
on the outstanding balance of the principal amount of the Loan shall
accrue at the Alternative Rate; provided that the Bank shall notify
the Borrower of such determination and the Borrower, upon giving the
Bank no less than five (5) Banking Days written notice thereof (which
shall be irrevocable) notify the Bank at anytime that it will prepay
to the Bank on the next Interest Payment Date the whole (but not part
only) of the outstanding balance of the Loan together with accrued
interest thereon.
14. SET-OFF AND APPLICATION OF PAYMENTS
14.1. All monies held or received by the Bank for or on account of the
Borrower, regardless whether such monies may have been intended by the
Borrower or any third party to be appropriated for or on account of
any other amount, may be applied by the Bank in or towards
satisfaction of any amount then due and owing by the Borrower under
this Agreement or the Note, and if so applied, shall be applied in the
following order of priority:
(i) first, all costs, charges or expenses, including, inter alia,
those incurred by the Bank in enforcing its rights hereunder
(ii) secondly, accrued and unpaid interest and/or Default Interest
owing in respect of the Loan; and
-25-
(iii) thirdly, on account of the unpaid principal of the Loan.
15. THE BORROWER'S DUTY TO NOTIFY
15.1 The Borrower hereby undertakes to notify the Bank immediately of any
of the events enumerated in Clause 12.1.
16. COMPENSATION FOR BROKEN FUNDING
16.1. If the Loan or any part thereof or any interest thereon is for any
reason whatsoever repaid, paid or recovered by the Bank (whether from
the Borrower or any third Party) under any security or otherwise, on
any day other than the last day of any Interest Period or the Maturity
Date, as the case may be, the Borrower shall upon demand pay to the
Bank such amount or amounts as may be necessary to compensate the Bank
for any actual loss incurred by it (after redeployment of funds) on
account of funds borrowed in order to make, fund or maintain the Loan
with respect to which repayment, payment or recovery is made and/or
for interest differential caused thereby, provided that the Borrower
shall not be required to make any payment under this Clause 16.1 or
otherwise to pay any penalty or breakage fee in the event of a
repayment of all or any part of the Loan on the last day of any
Interest Period pursuant to Clause 6.1 above and liability for
compensation pursuant to a prepayment under Clause 8.2(c) shall be
shared equally between the Bank and the Borrower.
17. REMEDIES AND WAIVERS
17.1 No delay or omission on the part of the Bank in exercising any right,
power, privilege or remedy pursuant to this Agreement shall impair
such right, power, privilege or remedy or be construed as a waiver
thereof, nor shall any single or partial exercise of any such right,
power, privilege or remedy preclude any other or further exercise
thereof, or the exercise of any other power, right or remedy.
17.2. The rights and remedies of the Bank provided in this Agreement are
cumulative, and are not exclusive of any rights or remedies provided
by law.
18. DISCLOSURE OF INFORMATION
Any branch of the Bank administering the Loan may disclose to the Head
Office of the Bank, to any financial institution within the Bank Hapoalim
group which is
-26-
an assignee or potential assignee of all or part of the Loan or to the Bank
of Israel, the Examiner of the Banks, the Controller of Foreign Exchange or
any person acting under their authority or to any other regulatory
authority having jurisdiction over the Bank or over the Head Office of the
Bank, or to the Head Office of the Bank for delivery by the latter to any
such regulatory authorities, such information about the Borrower, or the
Loan as may be required by such regulatory authorities or as the branch or
the Head Office of the Bank may deem appropriate.
19. ASSIGNMENT
19.1 The Bank may at any time at its own discretion and without the
Borrower's consent being required, assign or transfer its rights in
relation to the Loan and/or arising from this Agreement, in whole or
in part, to any bank within the Bank Hapoalim group, and any such
assignee may also reassign or transfer the said rights to any such
bank without any consent being required from the Borrower (or to any
other financial institution, with the prior consent of the Borrower,
which consent shall not be unreasonably withheld), provided in each
case that such assignment does not result in any increased cost or
liability to the Borrower (including, without limitation, any tax).
Such assignment may be effected in any manner in which the Bank or any
subsequent assignor may deem fit.
19.2 Except as otherwise permitted by this Agreement, the Borrower shall
not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Bank (which consent
shall not be unreasonably withheld).
20. ADDITIONAL PROVISIONS
20.1 The Bank agrees that no judgment or recourse shall be sought or
enforced for the payment of any of the Borrower's obligations
hereunder or under the Note or under any document delivered by the
Borrower in connection herewith against any officer, director,
shareholder, manager, member or other affiliate of the Borrower or any
of their respective assets or property.
20.2. The Borrower hereby confirms that the Bank's books, accounts and
entries shall be binding on the Borrower, shall be deemed to be
correct, absent manifest error and shall be prima facie evidence
against the Borrower in all their particulars.
21. AUTHORIZED SIGNATORIES
21.1 The Borrower hereby agrees that until the Bank receives a certified
copy of any subsequent resolution of the Board of Directors of the
Borrower providing
-27-
otherwise, any two of the Chairman of the Board, President, the
Executive Vice President, the Vice President, the Secretary, or the
Treasurer, signing jointly shall be deemed authorized to act on behalf
of the Borrower in connection with all matters relating to the
execution, delivery and performance of this Agreement to which the
Borrower is a party and the terms and conditions thereof.
22. NOTICES
22.1 All notices, requests, demands or other communications to be made
under this Agreement shall be made in writing, and unless otherwise
stated, may also be made by facsimile transmission. All notices,
requests, demands or other communications sent by mail shall be by
certified mail.
22.2 All such notices, etc. to be made or delivered by one party to this
Agreement to the other party to this Agreement (unless that other
party has by fifteen (15) days' written notice specified another
address) be made or delivered to such other party, addressed as
follows:
[i] if to the Borrower at:
PEC Acquisition Corporation
c/x Xxxxxxx & Xxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx, Clerk
with a copy to:
Discount Investment Corporation Ltd.
00 Xxxx Xxxxxxxx Xxxx
Xxx Xxxx, Xxxxxx
Fax No. 000-000-0-000-0000
Attn: Managing Director
[ii] if to the Bank at:
Bank Hapoalim B.M.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx
Fax No: (000) 000-0000
22.3 All such notices etc., shall be deemed to have been made or delivered
the next Banking Day after dispatch (in the case of any communication
made by any form of facsimile transmission) or in the case of any
-28-
communication made by letter the next Banking Day after being
physically left at the address as referred to above.
23. GOVERNING LAW AND JURISDICTION
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the choice of law
provisions thereof
(b) The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and
of any New York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this Agreement,
the Note or transactions contemplated hereby. The Bank hereby submits
to the exclusive jurisdiction of the United Stated District Court for
the Southern District of New York and any New York State court sitting
in New York City, for purposes of all legal proceedings arising out of
or relating to this Agreement, the Note or the transaction
contemplated hereby.
(c) The submission by the parties hereto to the jurisdiction to such
courts as are referred to in Clause 24(b) hereof shall not (and shall
not be construed so as to) limit the right of the Bank to take
proceedings against the Borrower in any other court of competent
jurisdiction, whether in Israel or in any other country, including
without prejudice to the generality of the foregoing, any country
where the Borrower has offices, interests or assets, nor shall the
taking of proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction, whether concurrently
or not.
(d) Each of the parties hereto irrevocably waives any objections which it
may have now or hereafter to such courts as are referred to in this
Clause, and irrevocably waives any claim that any such court is not a
convenient or appropriate forum.
(e) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
24. CURRENCY INDEMNITY
The Borrower agrees to indemnify the Bank against any loss incurred by it
as a result of any judgment or order being given or made for the payment of
any amount due under this Agreement in a currency other than the currency
in which such amount is payable hereunder and as a result of any variation
having occurred in the rates of exchange between the date on which any such
amount becomes due under this Agreement and the date of actual payment
thereof. The foregoing
-29-
indemnity shall constitute a separate and independent obligation of the
Borrower and shall apply irrespective of any indulgence granted to the
Borrower from time to time and shall continue in full force and effect
notwithstanding any such judgment or order.
-30-
25. SEVERABILITY
If at any time any provision of this Agreement or the Note is or becomes
invalid, illegal or unenforceable in any respect under the laws of the
State of New York neither the legality, validity or the enforceability of
the remaining provisions hereof shall in any way be affected or impaired
thereby.
26. AMENDMENTS AND WAIVERS
Any provision of this Agreement or the Note may be amended or waived if,
but only if, such amendment or waiver is in writing and is duly signed by
the Borrower and the Bank.
In Witness whereof the Borrower and the Bank have caused this Agreement to be
duly executed and delivered in New York, New York on the date first above
written.
BANK HAPOALIM B.M.
By:
------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President and Branch Manager
By:
------------------------------------
Name: Xxx Xxxxxxxxx
Title: First Vice President
PEC ACQUISITION CORPORATION
By:
------------------------------------
Name: Xxx Xxxxxx
Title: Chairman of the Board
By:
------------------------------------
Name: Yoram Turbowicz
Title: President
EXHIBIT 1
LIMITED GUARANTY
FOREIGN GUARANTOR
In consideration of financial accommodations given or to be given or
continued to PEC Acquisition Corporation, herein called "Borrower", by BANK
HAPOALIM B.M., having branch offices outside the United States, herein called
"Bank", the undersigned irrevocably and unconditionally guarantees to the Bank,
payment when due, whether by acceleration or otherwise, of any and all
liabilities of the Borrower to the Bank, together with all interest thereon and
all attorney's fees, costs and expenses of collection incurred by the Bank in
enforcing any of such liabilities and/or the terms hereof, to any principal
amount, not exceeding One Hundred and Three Million ($103,000,000.00) in the
aggregate at any one time outstanding. With respect to each obligation, if any,
hereby guaranteed which is payable in United States currency, the undersigned
shall be obligated to pay to the Bank the unpaid amount of such guaranteed
obligation in United States currency at the same place at which such guaranteed
obligation is payable by its terms.
The term "liabilities of the Borrower" shall mean a loan in the
amount of U.S.$103,000,000, advanced by the Bank to the Borrower pursuant to a
Loan Agreement dated March ____, 1999 between the Borrower and the Bank (the
"Loan Agreement") and all interest and other sums payable thereunder.
The undersigned waives notice of acceptance of this guaranty and notice
of any liability to which it may apply, and waives presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such liabilities, suit
or taking other action by the Bank against, and any other notice to, any party
liable thereon (including the undersigned).
The Bank may at any time from time to time (whether or not after
revocation or termination of this guaranty) without the consent of, or notice
(except as shall be required by applicable statute and cannot be waived) to, the
undersigned, without incurring responsibility to the undersigned, without
impairing or releasing the obligations of the undersigned hereunder, upon or
without any terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, and/or change or extend
the time of payment of, renew or alter, any liability of the Borrower, any
security therefor, or any liability incurred directly or indirectly in respect
thereof, and the guaranty herein made shall apply to the liabilities of the
Borrower as so changed, extended, renewed or altered;
(2) sell, exchange, release, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the liabilities hereby guaranteed to
or any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(3) exercise or refrain from exercising any rights against the Borrower or
others (including the undersigned) or otherwise act or refrain from acting;
(4) settle or compromise any liability hereby guaranteed, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to creditors of the Borrower other than the Bank and the
undersigned; and
(5) apply any sums by whomsoever paid or howsoever realized from a person
or persons other than the undersigned to any liability or liabilities of the
Borrower to the Bank regardless of what liability or liabilities of the Borrower
remain unpaid.
No invalidity, irregularity or unenforceability of all or any part of
the liabilities hereby guaranteed or of any security therefor shall affect,
impair or be a defense to this guaranty, and this guaranty is a primary
obligation of the undersigned.
This guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance thereon. This guaranty shall continue until
written notice of revocation signed by the undersigned shall have been actually
received by the Bank, notwithstanding a complete or partial release for any
cause of the Borrower or of anyone liable in any manner for the liabilities
hereby guaranteed or for the liabilities (including those hereunder) incurred
directly or indirectly in respect thereof or hereof. No revocation or
termination hereof shall affect in any manner rights arising under this guaranty
with respect to (a) liabilities which shall have been created, contracted,
assumed or incurred prior to receipt by the Bank of written notice of such
revocation or termination or (b) liabilities which shall have been created,
contracted, assumed or incurred after receipt of such written notice pursuant to
any contract entered into by the Bank prior to receipt of such notice; and the
sole effect of revocation or termination hereof shall be to exclude from this
guaranty liabilities thereafter arising which are unconnected with liabilities
theretofore arising or transactions theretofore entered into.
All notices provided to be given to the Bank herein shall be sent by
registered or certified mail, return receipt requested.
Any and all rights and claims of the undersigned against the Borrower
or any of its property, arising by reason of any payment by the undersigned to
the Bank pursuant to the provisions of this guaranty, shall be subordinate and
subject in right of payment to the prior payment in full of all liabilities of
the Borrower.
All property of the undersigned shall be held by the Bank subject to a
lien and a security interest in favor of the Bank, as security for any and all
liabilities of the undersigned to the Bank. The term "property of the
undersigned" shall include all property of every description, now or hereafter
in the possession or custody of or in transit to the Bank for any purpose,
including safekeeping, collection or pledge, for account of the undersigned, or
as to which the undersigned may have any right or power. The balance of every
account of the undersigned with, and each claim of the undersigned against, the
Bank existing from time to time, shall be subject to a lien and subject to be
sent off against any and all liabilities of the undersigned to the Bank, and the
Bank may at any time or from time to time at its option and without notice
appropriate and apply toward the payment of any of such liabilities the balance
of each such account of the undersigned with, and each such claim of the
undersigned against, the Bank. The Bank may at any time and from time to time,
without notice, transfer into its own name or that of its nominee any of the
property of the undersigned.
Upon the happening of an Event of Default provided for in the Loan
Agreement and as long as any Event of Default is continuing, the Bank may,
upon notice to the Borrower, if any, as provided therein, make the
liabilities of the Borrower to the Bank, whether or not then due, immediately
due and payable hereunder as to the undersigned and the Bank shall be
entitled to enforce the obligations of the undersigned hereunder.
Upon nonpayment when due of any of the liabilities of the Borrower or
the undersigned to the Bank, the Bank shall have the right from time to time,
without advertisement or demand upon or notice to the Borrower or the
undersigned or right of redemption except as shall be required by applicable
statute and cannot be waived, to sell, re-sell, assign, transfer and deliver all
or part of said property of the undersigned, at any brokers' board or exchange
or at public or private sale, for cash or on credit or for future delivery, and
in connection therewith may grant options and may impose reasonable conditions
such as requiring any purchaser of any stock so sold to represent that such
stock is purchased for investment purposes only. Upon each such sale the Bank,
unless prohibited by provision of any applicable statute which cannot be waived,
may purchase all or any part of said property being sold, free from and
discharged of all trusts, claims, right of redemption and equities of the
undersigned.
2
In the case of each such sale, or of any proceedings to collect any
liabilities of the undersigned to the Bank, the undersigned shall pay all costs
and expenses of every kind for collection, sale or delivery, including
reasonable attorneys' fees, and after deducting such costs and expenses from the
proceeds of sale or collection, the Bank may apply any residue to pay any of
such liabilities of the undersigned, which shall continue liable for any
deficiency, with interest.
If claim is ever made upon the Bank for repayment or recovery of any
amount or amounts received by the Bank in payment or on account of any of the
liabilities of the Borrower guaranteed hereunder and the Bank repays all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Bank or any of its property, or
(b) any settlement or compromise of any such claim effected by the Bank with any
such claimant (including the Borrower), then and in such event the undersigned
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon the undersigned, notwithstanding any revocation hereof or the
cancellation of any note or other instrument evidencing any liability of the
Borrower, and the undersigned shall be and remain liable to the Bank hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by the Bank.
Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by the Borrower or others (including the
undersigned), with respect to any of the liabilities of the Borrower shall, if
the statute of limitations in favor of the undersigned against the Bank shall
have commenced to run, toll the running of such statute of limitations and, if
the period of such statute of limitations shall have expired, prevent the
operation of such statute of limitations.
The Bank shall have no responsibility for ascertaining, nor for
informing the undersigned with respect to, not be required to take any action
concerning, any maturities, calls, conversions, exchanges, offers, tenders or
similar matters relating to any of the property of the undersigned (whether or
not the Bank has, or is deemed to have, knowledge of any of the aforesaid),
provided that the Bank shall endeavor to take such action as may be requested or
authorized by the undersigned if the Bank determines, in its sole discretion,
that such action will not adversely affect the value as collateral of the
property of the undersigned in question and the relative request or
authorization is made in writing and is received by the Bank in due time.
The Bank shall not be bound to take any steps necessary to preserve any
rights in any of the property of the undersigned against prior parties who may
be liable in connection therewith, and the undersigned hereby agrees to take
such steps. The Bank may nevertheless at any time (a) take any action it may
deem appropriate for the care or preservation of such property or of any rights
of the undersigned or the Bank therein, (b) demand, xxx for, collect or receive
any money or property at any time due, payable or receivable on account of or in
exchange for any property of the undersigned, (c) compromise and settle with any
person liable on such property, or (d) extend the time of payment or otherwise
change the terms thereof as to any party liable thereon, all without notice to,
without incurring responsibility to, and without affecting any of the
liabilities hereunder of, the undersigned. The undersigned shall pay to the Bank
all costs and expenses, including filing fees and attorneys' fees, incurred by
the Bank in connection with the custody, care, preservation or collection of any
of the property of the undersigned or in seeking to enforce any of the
liabilities or obligations of the undersigned hereunder.
The Bank shall have the right, at any time and from time to time,
without notice, to (i) transfer into its own name or that of its nominee any of
the property of the undersigned; (ii) notify any obligor on any of such property
to make payment to the Bank of any amounts due thereon; and/or (iii) take
control of any proceeds of any such property.
No delay on the part of the Bank in exercising any of its options,
powers or rights, or partial or single exercise thereof, shall constitute a
waiver thereof. No waiver of any of its rights hereunder, and no modification or
amendment of this guaranty, shall be deemed to be made by the Bank unless the
same shall be in writing, duly signed on behalf of the Bank, and each such
waiver, if any, shall apply only with respect to the specific instance involved,
and shall in no way impair the rights of the Bank or the obligations of the
undersigned to the Bank in any other respect at any other time.
3
The undersigned waives the right of trial by jury in the event of any
litigation between the parties hereto in respect of any matter arising under
this guaranty and agree that, should the Bank bring any judicial proceedings in
relation to any such matter, the undersigned will not interpose any counterclaim
or setoff of any nature.
This guaranty and the rights and obligations of the Bank and of the
undersigned hereunder shall be governed and construed in accordance with the law
of the State of New York; and this guaranty is binding upon the undersigned its
successors or assigns, and shall inure to the benefit of the Bank, its
successors or assigns. In the event that the Bank brings any action or suit in
any court of record of New York State or the Federal Government to enforce any
or all liabilities of the undersigned hereunder, service of process may be made
upon the undersigned by mailing a copy of the summons to the undersigned at the
address below set forth.
The undersigned, if more than one, shall be jointly and severally
liable hereunder and the term "undersigned" wherever used herein shall mean the
undersigned or any one more of them. Anyone signing this guaranty shall be bound
hereby, whether or not anyone else signs this guaranty at any time. The term
"Bank" includes any agent of the Bank acting for it.
Dated: March ___, 1999
DISCOUNT INVESTMENT CORPORATION LTD.
By:
---------------------------------
Address: 00 Xxxx Xxxxxxxx Xxxx
Xxx Xxxx, Xxxxxx
Attn: Managing Director
4
EXHIBIT 2
FORM OF NOTE
$103,000,000 New York, New York
________________, 1999
FOR VALUE RECEIVED, the undersigned, PEC Acquisition Corporation, a corporation
organized and existing under the laws of the State of Maine (the "Borrower),
hereby promises to pay the principal sum of Xxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Dollars (US$103,000,000) to the order of Bank Hapoalim B.M. (the "Bank"),
at its New York office, at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
00000 on __________________, 2000 in lawful money of the United States of
America in immediately available funds, and to pay interest from the date hereof
on such principal amount hereof from time to time outstanding, in like funds, at
said office, at a rate or rates per annum and payable on the dates determined
pursuant to the Loan Agreement dated March , 1999 between the Borrower and
the Bank (the "Agreement".)
The Borrower promises to pay interest, payable on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their due
dates at a rate or rates determined as set forth in the Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever except as provided in the Agreement. The non-exercise by the
holder of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
The Loan evidenced by this Note and all payments and prepayments of the
principal hereof and interest hereon on the respective dates thereof shall be
inscribed or otherwise entered on the books and records of the Bank, provided,
however, that the failure of the Bank to make such inscriptions of entries or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loan in accordance with the terms hereof.
This Note is the Note referred to in, and is subject to the provisions of, the
Agreement which, among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional
prepayment of the principal hereof prior to the maturity thereof and for the
amendment and waiver of certain provisions of the Agreement, all upon the terms
and conditions therein specified. This Note shall be construed in accordance
with and governed by the laws of the State of New York and any applicable laws
of the United States of America.
PEC ACQUISITION CORPORATION
By:
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Name:
Title:
By:
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Name:
Title:
