MASTER LETTER OF CREDIT AGREEMENT
Date: April 16, 1996
To induce ABN AMRO Bank N.V. Houston Agency (the "Bank") to issue letters of
credit (as the same may be amended, the "Credits") substantially in accordance
with the Applications submitted to Bank in accordance with Paragraph 1 of this
Agreement, the undersigned, jointly and severally if there is more than one of
the undersigned (the "Applicant") agrees as follows:
1. APPLICATIONS
Each Application to Bank for the issuance of a Credit shall be made by
Applicant on Bank's standard form application or other mutually acceptable
format (the "Application"), either sent by telecopy transmission, by United
States mail or by a Bank-supplied applicant initiation systems (i.e. Planet).
In the event a Bank-supplied applicant initiation system is used, Applicant
represents and warrants that it is authorized to use such system. In
connection with such Applications, Bank and Applicant agree that (i) Bank is
hereby authorized to act on any Application which Bank in good faith believes
emanates from an authorized representative of Applicant and shall not be
liable for any action taken in good faith with respect to Applications from
unauthorized persons; (ii) Bank shall not be under any duty to verify the
identity of any person submitting any Application and all such Applications
shall be binding upon Applicant whether made with or without Applicant's
authority, knowledge or consent; and (iii) APPLICANT WILL INDEMNIFY BANK FROM
ALL ACTIONS, PROCEEDINGS, CLAIMS, LOSS, DAMAGE, COSTS AND EXPENSES BROUGHT
AGAINST, INCURRED OR SUFFERED BY BANK (INCLUDING THOSE RESULTING FROM BANK'S
OWN NEGLIGENCE) WHICH HAVE ARISEN DIRECTLY OR INDIRECTLY FROM THE ACCEPTANCE
BY BANK OF ANY APPLICATION. IT IS THE INTENTION OF THE PARTIES THAT BANK BE
INDEMNIFIED FOR ITS OWN NEGLIGENCE (EXCEPT GROSS NEGLIGENCE).
2. BANK'S GENERAL OBLIGATIONS
Bank may, in Bank's sole and absolute discretion, issue Credits hereunder
upon the request of Applicant. Upon Bank's issuance of a Credit, Bank's
obligations to Applicant with respect to the Credit include good faith and
observance of general banking usage, but shall NOT include liability or
responsibility of any kind arising out of or in connection with: (a)
performance of the underlying contract for sale or other transactions between
Applicant and the beneficiary or any other person; (b) acts, errors,
defaults, or omissions of any person other than Bank's including any use of
the Credit by any such person; (c) loss or destruction of any telegram,
cable, letter, instrument, or document while in transit or in the possession
of others; (d) knowledge or lack of knowledge of any custom or usage of any
particular trade; (e) delivery, transmission, translation, or interpretation
of any message, including any interruption, delay, error or omission therein;
(f) insufficiency, lack of authorization, invalidity of, lack of genuineness,
truthfulness, or error or fraud in any documents presented under the Credit
or in any instructions purporting to be from Applicant or Bank's
correspondents; (g) validity or correctness of any transfer or proper
identity of any transferee (if the Credit is issued in transferable form);
(h) waiver of any requirement which exists for Bank's protection and not for
the protection of Applicant, or which waiver does not in fact materially
prejudice Applicant; or (i) any other act or omission for which banks are
relieved of responsibility under the "Uniform Customs & Practice for
Documentary Credits" of the International Chamber of Commerce (hereafter, the
"UCP") or the Uniform Commercial Code, in each case as in effect on the date
hereof.
3. BANK'S OBLIGATIONS CONCERNING DOCUMENTS
(a) Bank's obligations to Applicant relative to any Credit include Bank's
examination of documents with reasonable care so as to ascertain that on
their face they appear to comply with the terms of the Credit, but do NOT
include liability or responsibility of any kind arising out of or in
connection with: (i) validity, sufficiency, truthfulness, genuineness or
effect of documents which appear on Bank's examination to be regular on their
face; (ii) honor of drafts or demands for payment which appear on Bank's
examination to be regular on their face; or (iii) the ultimate correctness of
Bank's decision regarding documentary compliance, where Bank's decision is
based on Bank's examination of the documents, or Bank's exercise of judgment,
in a manner not manifestly unreasonable. Bank may in its discretion (but
shall not be obligated to) accept documents which substantially or reasonably
comply with the terms of the Credit.
(b) Unless otherwise specified in the Application, Bank may, in Bank's
discretion, but shall not be obligated to, accept or honor (in the case of
negotiable Credits) as complying with a Credit: (i) drafts or documents
signed by or issued by the purported executor, agent, administrator,
liquidation, receiver, trustee in bankruptcy, or other legal representative
of any party designated in the Credit; (ii) drafts or documents which fail to
bear any or adequate reference to the Credit, or notation to be made on the
Credit, or the Credit to be surrendered, or documents to be forwarded apart
from the draft, whether or not required by the Credit; (iii) drafts or
documents which comply under the laws, rules, regulations, and general
banking or trade customs and usages of the place of drawing, negotiation or
presentation; or (iv) drafts or documents which comply with the UCP.
4. PAYMENT; COMMISSIONS
(a) With respect to each Credit, Applicant shall pay Bank in United States
currency and in immediately available funds, by wire transfer or otherwise,
at Bank's office identified in the Application, the amount paid or to be paid
by Bank, Bank's agent or any other party on Bank's behalf, on each draft or
other order, instrument or demand drawn or presented or purporting to be
drawn or presented under a Credit (the "Item") together with all other
amounts owing to Bank in connection therewith, such payment to be made at the
time of honor of each Item or if so demanded by Bank, on demand in advance of
any drawing. In the case of Items drawn in foreign currency, such payments
shall be at Bank's current rate of exchange for transfers to the place of
payment in the currency in which such Item is drawn (or, if for any reason
Bank is unable to establish such a rate of exchange,
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in an amount equal to Bank's actual cost of settlement). Applicant shall
reimburse the Bank in the same currency in which the Item is payable,
provided that at Bank's option, Applicant shall reimburse Bank in United
States dollars for Items payable in a foreign currency at the rate at
which Bank could sell such foreign currency in exchange for United States
dollars for transfer to the place of payment of the Item, or, if there is
no such rate, the United States dollar equivalent of Bank's actual cost of
settlement. Applicant agrees to pay Bank on demand in United States
dollars such amounts as Bank may be required to expend to comply with any
and all governmental exchange regulations now or hereafter applicable to
the purchase of foreign currency.
(b) With respect to each Credit, Applicant shall pay Bank on demand, in
United States currency at Bank's office identified on the Application: (i) a
non-refundable commission at such rate as Bank may establish; (ii) interest
on all amounts due and owing to Bank, from and including the date such amount
is paid or incurred by Bank or otherwise due and owing hereunder until such
amount is paid in full, at a fluctuating rate equal to the lesser of (x)
Bank's Prime Rate plus two percent (2%) per annum, and (y) the maximum
nonusurious rate of interest permitted by applicable law from time to time in
effect. "Prime Rate" shall mean the rate in effect from time to time as set
by Bank and called its Prime Rate for United States dollar loans, which rate
is not necessarily the lowest or best interest rate offered by Bank and
interest shall be calculated on the basis of a 360-day year for actual days
elapsed (unless such calculation would cause a usury violation, in which
event interest shall be calculated on the basis of a year of 365 or 366 days,
as the case may be); and (iii) all charges and expenses, including attorney's
fees, legal expenses, court costs, and any similar costs or liabilities from
time to time paid or incurred by Bank issuance or maintenance of the Credit,
Bank's performance under the Credit and this Agreement, and all transactions
(including, without limitation, the involvement of Bank in any court
proceeding regarding the Credit) related to or contemplated by this Agreement
(including without limitation, Bank's creation, perfection, maintenance,
protection, exercise, enforcement or other realization of or upon Bank's
interests, rights, and remedies) and (iv) all charges and fees payable under
any fee schedule of Bank in effect from time to time or as otherwise agreed.
(c) All amounts payable by Applicant hereunder shall be paid at the office
of Bank identified on Application, in immediately available and freely
transferable funds at such place of payment. Bank is authorized to set off or
charge to any account or other funds of Applicant in Bank's possession all
obligations of Applicant owing hereunder, irrespective of the currency in
which such account or funds are denominated.
(d) If, as a result of any law, regulation, treaty or directive, or any
change therein, or in the interpretation or application thereof or Bank's
compliance with any request or directive (whether or not having the force of
law) from any court or governmental authority, agency or instrumentality, any
reserve, capital requirement, premium, special deposit, special assessment or
similar requirements against Bank's assets, deposits or credit extended by
Bank are imposed, modified or deemed applicable and Bank shall determine
that, by reason thereof, the cost to Bank of issuing or maintaining the
Credit is increased, Applicant agrees to pay Bank upon demand such additional
amount or amounts as will compensate Bank for such additional costs (but only
to the extent such compensation does not cause the aggregate compensation to
Bank to exceed the maximum nonusurious rate of interest permitted by
applicable law from time to time in effect). Determinations by Bank of the
additional amounts required to compensate Bank in respect of the foregoing
shall be conclusive, absent manifest error. Applicant further agrees to pay
any applicable levies or other taxes imposed in connection with the Credit
other than net income taxes payable by Bank, and to otherwise comply with all
domestic and foreign laws and regulations applicable to all transactions
under or in connection with the Credit.
(e) Bank may (but shall not be obligated to) make a loan to Applicant in an
amount equal to the reimbursement obligation of Applicant under Section 4(a)
hereof and Bank shall be hereby authorized to apply the proceeds of such loan
to the repayment of such reimbursement obligation. Each loan shall, except
to the extent otherwise agreed to in writing between Applicant and Bank, be
due on demand and shall bear interest payable on demand at the per annum rate
set forth in Section 4(b)(ii) hereof.
5. ASSUMPTION OF RISK BY APPLICANT; INDEMNIFICATION OF BANK BY APPLICANT;
SUBROGATION.
(a) Applicant's obligations to Bank hereunder are, and shall remain, absolute
and unconditional notwithstanding any lack of enforceability of any of the
Credits or the existence of any claim, counterclaim, defense or right of set
off Applicant may have against Bank.
(b) The beneficiary or any other user of a Credit and any other drawer of
any draft or the presenter of any demand for payment thereunder shall be
deemed Applicant's agents, and Applicant assumes all risk, loss, liability,
charges and expenses with respect to their acts or omissions and also with
respect to any error, delay, misdelivery or loss in or arising out of the
transmission of telegrams, cables, letters or other communications or
documents or items forwarded in connection with the drafts or the Credit,
including, without limitation, any Application. Applicant shall not be
relieved from any obligation or liability, nor shall the terms of this
Agreement be affected by the occurrence of any of the foregoing. Any action
or inaction by Bank or its correspondents in connection with a Credit or with
instructions, drafts, documents, or merchandise relative to a Credit, shall,
if in good faith, conclusively be deemed to have been authorized by
Applicant, and Bank shall have no liability thereunder.
(c) APPLICANT SHALL INDEMNIFY BANK AND ITS CORRESPONDENTS AND SHALL DEFEND
AND HOLD BANK AND ITS CORRESPONDENTS HARMLESS FROM AND AGAINST ANY AND ALL
CLAIMS, DAMAGES, LOSS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
LIABILITIES OF ANY NATURE WHATEVER, SUSTAINED, INCURRED OR ASSERTED IN
CONNECTION WITH ANY CREDITS (INCLUDING CONSEQUENCES OF ANY INDEMNITER'S OWN
NEGLIGENCE), THE PAYMENT OR ACCEPTANCE OR REFUSAL TO PAY OR ACCEPT ANY DRAFT
OR OTHER DEMAND FOR PAYMENT, AND ANY OTHER ACTION OR INACTION IN RELIANCE
UPON THE PROVISIONS OF THIS AGREEMENT (including but not limited to any and
all claims, damages, loss, costs, expenses and liabilities arising out of or
resulting from the negligence (sole, ordinary, contributory or other) of the
person to be indemnified except, only if, and to the extent that any such
claims, damages, loss, expenses or liabilities shall have been determined
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by a court of competent jurisdiction to have been directly caused by the
willful misconduct or gross negligence of Bank in performing its obligations
under the Credit or by Bank's failure to make payment of any drawing or other
demand for payment made in strict conformity with the Credit). It is
understood that in making payment under the Credit Bank's exclusive reliance
on the documents presented to Bank in accordance with the terms of the Credit
as to any and all matters set forth therein, whether or not any statement or
any document presented pursuant to the Credit proves to be forged,
fraudulent, invalid or insufficient in any respect whatsoever shall not be
deemed willful misconduct or gross negligence of Bank.
(d) Bank shall be subrogated (for purposes of defending against Applicant's
claims and proceeding against others to the extent of Bank's liability to
Applicant) to Applicant's rights against any person who may be liable to
Applicant on any underlying transaction; to the rights of any holder in due
course or person with similar status against Applicant; and to the rights of
any beneficiary or its assignee or person with similar status against
Applicant.
(e) Applicant certifies that transactions in any commodities covered by this
Agreement are not prohibited under the foreign assets control regulations of
the United States Treasury Department and that any importation covered by
this Agreement conforms in every respect with all existing United States
government regulations.
6. DEFAULT; REMEDIES.
(a) Applicant shall be in default under this Agreement if any of the
following events are not cured within five days of occurrence, and Applicant
shall immediately notify the Bank at such point: (i) any failure by Applicant
to perform its obligations or covenants under this Agreement or any other
agreement with Bank or instrument delivered to Bank; including without
limitation Applicant's obligation to pay promptly all sums due to Bank; (ii)
any failure to furnish upon demand any financial information Bank may request
of Applicant or to permit at a reasonable time Bank's inspection of
Applicant's books, records and accounts; (iii) any act or event evidencing or
reasonably appearing to evidence the bankruptcy, reorganization,
rehabilitation, arrangement, liquidation, insolvency or financial instability
of any party signing hereto as an Applicant, or of any guarantor thereof;
(iv) any material misrepresentation made by Applicant in connection with this
Agreement or a Credit; (v) any default in excess of $200,000 by Applicant
under any agreement involving the borrowing of money or the obtaining of
credit; or (vi) any other act, event or occurrence which in Bank's sole
judgment increases its risk.
(b) Upon default, all of Applicant's obligations and liabilities to Bank, of
whatever nature, whether contingent or absolute, shall become immediately due
and payable WITHOUT PRESENTMENT, PROTEST, NOTICE OR DEMAND AND WITHOUT NOTICE
OF INTENTION TO ACCELERATE OR NOTICE OF ACCELERATION, ALL OF WHICH ARE HEREBY
WAIVED and, without limiting the foregoing and any other rights of Bank
hereunder, Applicant shall pay to Bank within five days an amount equal to
the available undrawn amount of all outstanding Credits. Bank shall have all
the rights and remedies of a secured party under the Uniform Commercial Code,
and in addition to such rights and remedies, Applicant further agrees that
any default under this Agreement shall also be a default under all other
agreements with Bank.
(c) All amounts due and payable shall accrue interest, from and including
the date such amount is paid or incurred by Bank until payment in full, at
the per annum rate set forth in Section 4(b)(ii) hereof.
7. NEGATIVE PLEDGE
Applicant shall not create, assume, incur, suffer or permit to exist any
mortgage, pledge, encumbrance, security interest, assignment, lien or charge
of any kind or character upon any asset of Applicant whether owned at the
date hereof or hereafter acquired except: (i) liens for taxes, assessments or
other governmental charges not yet due or which are being contested in good
faith by appropriate proceedings in such a manner as not to make the property
forfeitable; (ii) other liens, charges, and encumbrances incidental to the
conduct of its business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money or the obtaining
of an advance or credit, and which do not in the aggregate materially detract
from the value of its property or assets or materially impair the use thereof
in the operation of its business; (iii) liens arising out of judgments or
awards against Applicant with respect to which it shall concurrently
therewith be prosecuting an appeal or proceeding for review and with respect
to which it shall have secured a stay of execution pending such appeal or
proceedings for review; (iv) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation; (v) good faith deposits
in connection with lending contracts or leases to which Applicant is a party;
(vi) deposits to secure public or statutory obligations of Applicant; (vii)
liens existing on the date hereof and disclosed in writing to Bank; (viii)
assignments under Applicant's ongoing note purchase programs not to exceed
$50,000,000 in aggregate; (ix) mortgages against Applicant's property in
Stafford, Texas incurred with the expansion of Applicant's manufacturing
facilities not to exceed $15,000,000 in aggregate; and (x) liens and
encumbrances assumed under purchase money security agreements for equipment
purchases not to exceed $25,000,000 in aggregate.
8. WAIVER BY BANK; ACTS NOT AFFECTING AGREEMENT.
Bank shall have no duty to exercise any of its rights hereunder, and shall
not be liable for any failure to do so or delay in doing so. No such failure
or delay on the part of Bank or its correspondents shall operate as a waiver,
and no notice to or demand by the Bank or its correspondents shall be deemed
a waiver of Bank's right to take any other or further action without notice
or demand. Bank's rights-including all security interests in Collateral, and
Applicant's obligations and liabilities under this Agreement shall continue
unimpaired and this Agreement shall remain binding upon each party hereto
signing as an Applicant, notwithstanding: (a) release or substitution of any
Collateral or any right or interest therein (b) extension of the maturity or
time for presentation of drafts, acceptances, or documents; (c) any other
modification of the terms of any Credit at the request of any party hereto
signing as an Applicant, with or without notification to any other party; or
(d) any increase in the amount
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of any Credit at the request of any party hereto. No delay, extension of
time, renewal, compromise or other indulgence which Bank may permit in
connection with any of Bank's rights hereunder shall impair those rights,
and Bank shall not be deemed to have waived any rights unless such waiver
is in writing and signed by Bank or its authorized agent; nor shall any
such waiver constitute a waiver of any other right or of the same right at
any future time. Bank 's acceptance or honor of drafts or issuance of a
Credit varying from the terms of this Agreement will not affect the terms
and conditions applicable to any other drafts or Credits, whether such
other drafts or Credits are then existing or subsequently arising.
9. SOLE OBLIGATION OF BANK.
Without limiting any other provision herein, Bank is hereby expressly
authorized and directed to honor any request for payment which is made under
and in compliance with the terms of any Credit without regard to, and without
any duty on the part of Bank to inquire into, the existence of any disputes
or controversies between Applicant, the beneficiary of a Credit or any other
person, firm or corporation, or the respective rights, duties or liabilities
of any of them or whether any facts or occurrences represented in any of the
documents presented under a Credit are true or correct. Furthermore,
Applicant fully understands and agrees that Bank's sole obligation to
Applicant shall be limited to honoring requests for payment made under and in
compliance with the terms of any Credit and this Agreement and Bank's
obligation remains so limited even if Bank may have assisted Applicant in the
preparation of the wording of any Credit or any documents required to be
presented thereunder or that Bank may otherwise be aware of the underlying
transaction giving rise to any Credit and this Agreement.
10. DURATION OF AGREEMENT, AGREEMENT BINDING UPON SUCCESSORS, INDEMNITY.
This Agreement shall remain in full force and effect until Bank has actually
received written notice to the contrary from the Applicant, and after receipt
of such notice shall continue in full force and effect as to all transactions
between Bank and Applicant commenced prior to the date of such receipt. All
indemnities, covenants, agreements, representations and warranties made in
this Agreement shall survive the issuance by Bank of the Credits and shall
continue in full force and effect so long as any Credit, or any portion
thereof, shall be unexpired or any sums drawn thereunder or other amounts
owing hereunder shall remain unpaid, provided, however, that the provisions
of Section 4(b)(iii), 4(d), 6(c), 11, 13, 14(b), 14(c) and 14(k) shall
survive the termination of this Agreement. This Agreement shall not be
revoked or impaired by the death of any party hereto, by the revocation or
release of any obligations hereunder of any one or more parties hereto (or if
any party hereto shall be a partnership, by any changes in the parties
composing the partnership). If this Agreement is terminated or revoked as to
any party for any reason, Applicant shall indemnify and hold Bank harmless
from any loss incurred in acting hereunder prior to the actual receipt of
written notice of such termination or revocation. The invalidity or lack of
enforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof. If this Agreement is signed by
two or more Applicants, it shall constitute the joint and several agreement
of such parties, provided that the Designated Party, as set forth below,
shall have the exclusive right to issue all instructions relating to the
Credits including, without limitation, instructions as to the disposition of
documents and any unutilized funds, waiver of discrepancies and to agree with
Bank upon any amendments, modifications, extensions, renewals or increases in
the Credits or further financing or refinancing of any transaction effected
hereunder, irrespective of whether the same may now or hereafter affect the
rights of any party hereto or of their legal representatives, heirs or
assigns. The Designated Party shall have specimen signatures on file with
Bank and Bank may give notices to the Designated Party without notice to any
other party. The term "Applicant" as used herein shall mean and include each
party signing this Agreement as applicant.
12. LAW GOVERNING
The Credit and this Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts made
and to be wholly performed within such State. Unless inconsistent with such
state law or except so far as otherwise expressly stated in the Credit, the
Credit and this Agreement are subject to the terms of the UCP in effect on
the date of the Application; provided, however, without limiting the
foregoing, Articles 41 and 43 of the UCP 500 (or their counterparts under any
successor UCP) shall have no application to the Credits or this Agreement.
In the absence of proof expressly to the contrary, the UCP shall serve as
evidence of general banking usage.
13. GROSS-UP PROVISION
Any and all payments made to Bank hereunder shall be made free and clear of,
and without deduction or withholding for, any present or future taxes,
levies, imposts, deductions, charges or withholdings of any nature, and all
liabilities with respect thereto, excluding taxes imposed on net income of
Bank and all income and franchise taxes of the United States and any
political subdivision thereof imposed on Bank (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities are
referred to herein as "Taxes"). If Applicant shall be required by law to
deduct any Taxes from or in respect to any sum payable hereunder (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 12(i), Bank shall receive an amount equal to the
sum Bank would have received had no deductions been made; (ii) Applicant
shall make all such deductions; and (iii) Applicant shall pay the full amount
deducted to the relevant taxation authority or other authority in compliance
with applicable law. APPLICANT SHALL INDEMNIFY BANK for the full amount of
Taxes (including, without limitation, any Taxes imposed by any jurisdiction
on amounts payable hereunder) paid by Bank and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. Payment upon
this indemnification shall be made within thirty (30) days from the date Bank
makes written demand therefore.
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Within thirty (30) days after date of the payment of Taxes, Applicant will
furnish to Bank the original or certified copy of a receipt evidencing
payment thereof.
14. OTHER PROVISIONS.
(a) If any of the Credits shall contain any provision for automatic renewal,
Applicant acknowledges and agrees that Bank is under no obligation to allow
such renewal to occur and any such renewal shall remain within the sole and
absolute discretion of Bank. Applicant hereby irrevocably consents to the
automatic renewal of each such Credit in accordance with its terms should
Bank decide to allow such renewal to occur; provided, however, that Applicant
shall have the right to request Bank to disallow such renewal on the
condition that Applicant shall give Bank prior written notice of such request
not less than thirty (30) days prior to the deadline imposed upon Bank for
notification to the beneficiary of non-renewal of the Credit.
(b) APPLICANT SHALL INDEMNIFY BANK against any loss incurred by Bank as a
result of any judgment or order being given or made for the payment of any
amount due hereunder in a particular currency (the "Currency of Account") and
such judgment or order being expressed in a currency (the "Judgment
Currency") other than the Currency of Account and as a result of any
variation having occurred in the rates of exchange between the date which
such amount is converted into the Judgment Currency and the date of actual
payment pursuant thereto. The foregoing indemnity shall constitute a
separate and independent obligation of Applicant.
(c) Each party signing as Applicant and any guarantor thereof agrees that if
any amount paid to Bank hereunder is rescinded or must be otherwise restored
or returned by Bank due to the insolvency, bankruptcy, liquidation or
reorganization of any party hereto, each party's obligations hereunder with
respect to each such amount shall be reinstated to the same extent as if such
payment had not been made.
(d) Applicant authorizes Bank to set forth the terms of each Application in
the Credit corresponding to such Application in such language as Bank deems
appropriate, with such variations from such terms as Bank may in its
discretion determine to be necessary (which determination shall be
conclusive) and not materially inconsistent with such Application. If
Applicant, or in the case of more than one Applicant, the Designated Party,
does not notify Bank of any inconsistencies in such Credit within ten (10)
calendar days of its issuance, Applicant agrees that such Credit is
conclusively presumed to be in proper form. Upon its receipt of timely
notice of any discrepancy in any Credit, Bank will endeavor to obtain the
consent of the confirming bank (if any) and the beneficiary for an
appropriate modification to the Credit; provided, however that Bank shall
assume no liability or responsibility for its failure to obtain such consent.
(e) No party to this Agreement may assign its rights or obligations under
this Agreement without the prior written consent of Bank, except that the
obligations of Bank under this Agreement may be provided or fulfilled by any
affiliate of Bank so long as Bank assumes full responsibility for such
obligations.
(f) This Agreement and any exhibits hereto constitute the entire agreement
and contract between the parties and supersede any and all prior agreements,
proposals, negotiations and representations pertaining to the obligations and
duties to be performed under this Agreement. No amendments or modifications
of this Agreement shall be valid unless evidenced in writing and signed by or
on behalf of Applicant and Bank.
(g) Except as otherwise provided in this Agreement, all notices required to
be given pursuant to this Agreement shall be effective when received, and
shall be sufficient if given in writing, hand delivered, sent by First Class
United States Mail, postage prepaid, by telecopier or air courier and
addressed to the appropriate party at its address as shown on the signature
page hereof or at such other address as the sending party shall have been
advised in writing.
(h) Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or lack of enforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction; wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law.
(i) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
(j) Regardless of the expiration date of any Credit, Applicant shall remain
liable hereunder until Bank is released from liability by every person, firm,
corporation or other entity which is entitled to draw or demand payment under
the Credit.
(k) Applicant agrees to indemnify and hold Bank harmless from each and every
claim, demand, liability, loss, cost or expense, including, but not limited
to, attorney's fees and court costs any and all claims, damages, loss, costs,
expenses and liabilities arising out of or resulting from the negligence
(sole, ordinary, contributory or other) of the person to be indemnified which
may arise or be created by Bank's acceptance of telecommunication
instructions in connection with the Credit, including, but not limited to,
telephone or facsimile instructions in connection with any waiver of
discrepancies.
(l) Applicant, or in the case of more than one person signing as Applicant,
the Designated Party, agrees to examine promptly all instruments and
documents delivered to Applicant or the Designated Party, as the case may be,
from time to time and in the event Applicant or the Designated Party shall
have any claim of non-compliance with their instructions or of discrepancies
or other irregularity, Applicant or the Designated Party, as the case may be,
shall immediately notify Bank thereof in writing. Applicant and the
Designated Party shall
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conclusively be deemed to have waived any such claim against Bank unless
such immediate notice is given as stated above.
(m) For multiple parties signing as Applicant, such parties may request that
the Credit be issued with the name of one of Applicants, and agree that such
Applicant shall be the Designated Party for the purposes of this Agreement.
(n) The parties hereto each hereby submits to the jurisdiction of the courts
of the State of Texas, the venue of which shall be in the County of Harris
and the United States District Court for the Southern District of Texas, as
well as to the jurisdiction of all courts to which an appeal may be taken or
other review sought from the aforesaid courts, for the purpose of any suit,
action or other proceeding arising out of Applicant's obligations under or
with respect to this Agreement and the Credits and expressly waives any and
all objections it may have as to venue in any such courts. BANK AND APPLICANT
EACH WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THEM AGAINST THE OTHER ON ANY MATTER WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE CREDITS, ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THEREIN). No party to this Agreement, including but not limited to
any assignee or successor of a party, shall seek a jury trial in any lawsuit,
proceeding, counterclaim, or any other litigation procedure based upon, or
arising out of this Agreement, the Credits, any related instruments, any
Collateral or the dealings or the relationship between the parties. No party
will seek to consolidate any such action in which a jury trial has been
waived, with any other action in which a jury trial cannot be or has not been
waived. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
PARTIES HERETO WITH LEGAL COUNSEL, AND THESE PROVISIONS SHALL BE SUBJECT TO
NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
IN WITNESS WHEREOF, Applicant and Bank have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
APPLICANT BANK
INPUT/OUTPUT, INC. ABN AMRO Bank N.V. Houston Agency
By: ABN AMRO North America, Inc., as agent
By: /s/ Robert P. Brindley By: /s/ Rebecca S. McCulloch
--------------------------------- -------------------------------
Robert P. Brindley Rebecca S. McCulloch
Senior Vice President and Chief Vice President and Director
Financial Officer
By: /s/ Jonathan C. Homeyer
-------------------------------
Jonathan C. Homeyer
Officer
Address: Address:
Input/Output, Inc. ABN AMRO Bank
12300 Parc Crest Drive Three Riverway, Suite 1700
Stafford, Texas 77477 Houston, Texas 77056