Exhibit 10(i)
The First International Bank of Israel Ltd. May 11, 1999
Tel-Aviv Main Branch
Dear Sirs,
Whereas on February 17, 1999 we signed a Request for a loan in foreign currency
(hereinafter: "loan application") which is attached hereto and forms an integral
part hereof;
And whereas in the loan application we requested you to grant us a loan in the
amount of U.S. $24,000 000 (Twenty four million) due date May 17, 1999 ("loan")
and you granted the loan to us;
And whereas the due date of the loan will expire on May 18, 1999;
We accordingly request you to extend the validity of the loan for a period of 3
months up to the new expiry date on August 18, 1999.
All other terms and conditions of the loan as stipulated in the loan
application, remain unchanged.
Yours faithfully,
PEC Israel Finance Corporation Ltd.
[Borrower's signature]
-----------------------------------
By: s/JON BOOCK s/MICHEL DAHAN
-----------------------------------
Title:
-----------------------------------
We, the undersigned, as signatories on a Special Guarantee as stipulated in the
loan application, hereby confirm that the expiry date of the a/m loan has been
extended with our knowledge and consent and that our guarantee of the
obligations of PEC Israel Finance Corporation Ltd. towards you under the loan
remains in full force and effect.
PEC Israel Economic Corporation
Guarantor's signature: By: Frank J. Klein, President
-----------------------------------
Date: May 11, 1999
-----------------------------------
Page 15 of 23 pages
THE FIRST INTERNATIONAL BANK OF ISRAEL LTD. A SAFRA BANK
APPLICATION FOR FOREIGN CURRENCY LOAN [FLOATING INTEREST]
The First International Bank Customer's name: PEC Israel Finance
of Israel Ltd. Tel Aviv Main Corporation Ltd.
Branch Account No: 467057
Date: May 11, 1999
Date of disbursement of loan: May 18, 1999
Dear Sirs:
Within the scope of the General Debit Agreement signed between us
(hereinafter the "debit agreement") and subject to our obligations towards you
therein and under any other document signed an/or to be signed by us, we request
you to grant to us a foreign currency loan (hereinafter - "the loan") on the
terms set forth below:
1. LOAN CURRENCY AND AMOUNT
The loan will be in U.S. Dollars (hereinafter - "the loan currency") in
the amount of $24,000,000.
2. REPAYMENT OF PRINCIPAL
The principal amount of the loan will be repaid in the loan currency:
|_| by _____ monthly/quarterly/semi-annual consecutive and equal
installments_of ________ each on the ____ day of the month commencing on
_____________.
|_| by _____ consecutive and equal installments of _________ each on the last
day of March, June, September and December in each year commencing on
_______.
|X| in one bullet payment on August 18, 1999.
|_| by installments in amounts and on dates as follows:
the sum of _____________ on _______________.
the sum of _____________ on _______________.
the sum of _____________ on _______________.
the sum of _____________ on _______________.
the sum of _____________ on _______________.
3. LOAN INTEREST
a. Interest payment dates
Interest on the loan will be paid in the loan currency on the
following dates:
|X| on the principal payment dates specified in clause 2 above.
|_| on the last day of each calendar month commencing on ________ and a
final payment on the date of payment of the final installment of
loan principal.
|_| on the last day of March, June, September and December in each year
commencing on _____, and a final payment on the date of payment of
the final installment of loan principal.
|_| monthly/quarterly/semi-annually on the _____ of each month
commencing on the _____ and a final payment on the date of payment
of the final installment of loan principal.
Page 16 of 23 pages
b. Interest periods
Interest on the outstanding principal amount of the loan will be
computed by you in relation to interest periods.
The first period will run from the date of disbursement of the loan
up to the first interest payment date stipulated in sub-para. a)
above or the deferred date pursuant to para. 4 below (exclusive of
such date). Subsequent interest periods will run from an interest
payment date (inclusive of such date) to the next following interest
payment date stipulated in sub-para. a) above or the deferred date
pursuant to para. 4 below (exclusive of such date).
c. Rate of interest and manner of determination
The principal amount of the loan outstanding from time to time shall
carry daily interest from the date of disbursement of the loan up to
the principal payment date(s), calculated according to the actual
number of days elapsed based on a year of 360 days, at the Foreign
Currency Base Rate (as defined below) determined from time to time
by the Bank for the first day of each interest period, plus 0.75%
p.a. "Foreign Currency Base Rate" herein shall mean the interest
rate determined by the bank from time to time, based on interest
rates prevailing in international currency markets, for loans in the
loan currency and for a period of 1, 2, 3, 6 or 12 months (each such
period being hereinafter referred to as a "fixed period") according
to the interest period stipulated in sub-para. b) above PROVIDED
HOWEVER that:
1. in a loan where interest is payable in a lump sum concurrently
with the principal amount and the period of the loan does not
coincide with any fixed period, the Foreign Currency Base Rate
for the loan will be the Foreign Currency Base Rate determined
by the bank for the first fixed period which is immediately
longer than the period of the loan;
2. in a loan where interest is payable by installments and the
first and/or the last interest period(s) is/are shorter than
the intervening interest period(s), the Foreign Currency Base
Rate for the first and/or the last interest periods (as the
case may be) will be the Foreign Currency Base Rate determined
by the bank for a fixed period coinciding with the intervening
interest period(s).
The Foreign Currency Base Rate for the first interest period is 5.0% p.a.
and the full interest rate for the first period is 5.75% p.a. At the end
of each interest period, the bank will determine the Foreign Currency Base
Rate for the following interest period and notice of the full interest
rate for such period will be sent to us.
4. DEFERRED PAYMENT
In this paragraph "business day" means a day on which transactions
in the loan currency are carried out in your bank.
Page 17 of 23 pages
If any date for payment of principal and/or interest and/or
commission shall fall on a day which is not a business day in the bank,
the date for effecting such payment shall be deferred to the next
following business day and interest up to such date will be calculated
accordingly.
5. INTENTIONALLY DELETED
6. EFFECTIVE COST
The effective cost of the loan is ____%.
7. TAXES DUTIES AND OTHER CHARGES
a. Without derogating from our aforementioned obligations, we undertake
to pay to you any amount demanded by you to pay any tax, duty or
fees that you have been and/or may be obliged to pay and/or which we
have been obliged and/or may be obliged to pay in connection with
the loan as well as in the event that the bank may demand immediate
repayment of the loan for any reason before the scheduled maturity
date(s).
b. All amounts due from us under the loan will be paid to you by us in
full without deduction, set-off or withholding whatsoever in respect
of taxes, levies, duties, fees or any other impositions, present or
future (hereinafter "tax") levied on any such amount (hereinafter:
"payment"). Should we be required to deduct or withhold tax at
source from any payment in accordance with the requirements of
applicable law (except Israel Law) and/or any competent authority,
we shall effect such payment increased at the required rate to
ensure that after deduction or withholding as aforesaid, you will
receive on the due date such amount as you would have received had
no such deduction or withholding been made as aforesaid.
8. INCREASED COST
If the result of any law or regulation or change in the
interpretation or application thereof after the date hereof or compliance
by you with the requirements or directives of the Bank of Israel or other
competent authority (including, but without limiting, those relating to
liquidity or reserve requirements) is that the cost to your bank of
making, funding or maintaining the loan or any part thereof is increased
compared to the cost on the date of disbursement; then and in each such
case:
a. you shall notify us in writing of such event and of the rate
of increase (hereinafter "notice of increase").
b. we shall pay such additional amount as you shall determine
will compensate you for such increased cost and/or dilution of
yield.
c. we shall be entitled to prepay the outstanding amount of the
loan together with all interest accrued thereon subject as
stated below:
Page 18 of 23 pages
1. prepayment shall take place on a principal payment date as
stated in para. 2 above provided that such day is a business
day as defined in para. 4 above. Should such day not be a
business day we may effect payment on the next following
business day.
2. we shall give you not less than thirty days' prior written
notice of the prepayment. Such notice shall be irrevocable and
may not be changed.
3. we shall pay you, in respect of any amount of principal
prepaid as aforesaid, a prepayment commission (if any) payable
on the date of prepayment.
4. we shall pay you, in respect of the period between the date of
giving a notice of increase and actual repayment, the
additional amount referred to in sub-para.(b) above.
9. LOAN CONVENTION
a. You may at any time at your discretion convert the unpaid balance of
the loan or any part thereof into a shekel loan linked to the loan
currency and you may reconvert the same or any part thereof and
repeat such conversions, each conversion as aforesaid being referred
to hereinafter as a "conversion".
b. A conversion will be effected by making a new loan available, in
shekels or the loan currency as the case may be, in the amount that
the bank wishes to convert out of the existing loan and the proceeds
of the new loan will be used to redeem all or part of the existing
loan.
c. For so long as a loan is maintained in shekels, the principal amount
thereof and interest thereon shall be linked to the middle rate (as
defined in para. 5 above) of the loan currency as published by you
from time to time.
d. For the avoidance of doubt, we note that no change shall take effect
by reason of any conversion, in the amount of principle, interest or
commission payable by us to you in the loan currency had such
conversion not taken place.
e. Save as aforesaid, the terms and conditions of the loan as specified
herein shall remain unchanged.
10. PREPAYMENT
We shall be entitled to prepay all or any part of the outstanding
principal amount of the loan or interest thereon or any part thereof
before the payment date(s) stipulated above provided we obtain your prior
written consent thereto. You may attach such conditions to your giving
consent as you shall deem fit.
11. EURO
a. We acknowledge that the occurrence or non-occurrence of an event
connected to the Economic and Monetary Union of the European
Community (hereinafter: the "Union") shall not of
Page 19 of 23 pages
itself cause the cancellation of (by way of frustration or
otherwise) or give a right to cancel the loan or to change any of
its terms save as stated in para.b) below.
b. If the loan currency is a national currency which, according to
decisions taken or to be taken within the scope of the Union will be
cancelled and replaced by a common European currency (hereinafter:
"Euro" even if such currency will be given another name), the
following provisions shall apply:
1. In the transition period between 1st January 1999 and 31st
December 2001 or such other expiry date as shall be
determined, we may instruct you on any interest payment date
stipulated in para. 3a) above to convert the outstanding
account of the loan to Euro provided we give you at least 15
days prior written notice of such intention.
2. If we do not instruct you as aforesaid, you shall convert the
outstanding balance of the loan into Euro on the date of
expiry of the transition period or, if such date does not fall
on an interest payment date hereunder, on the immediately
preceding interest payment date stipulated in para. 3a) above.
3. Conversion of the loan into Euro as aforesaid shall be
effected in accordance with the standard procedure in force in
the bank and without charge.
4. Save for the change of the loan currency to Euro, no change in
the terms of the loan shall occur as a result of the
conversion referred to in sub-paras. 1) and 2) above and the
provisions of this application shall continue to apply as
prescribed herein.
12. GOVERNING LAW AND JURISDICTION
We hereby irrevocably agree and undertake as follows:
a. This application and all matters relating thereto shall be governed
by and construed in accordance with the laws of the State of Israel.
b.
1. The competent courts in Israel as stated in sub-para. 2) below
shall have sole jurisdiction to hear any dispute deriving from
this application.
2 The sole place of jurisdiction for the purposes hereof shall
rest with the competent court in Jerusalem, Tel Aviv-Jaffa,
Haifa, Beersheva or Nazereth, whichever is closer to the
location of the Bank's branch at which the account mentioned
above is maintained.
c. We hereby waive the raising of any plea of objection in respect of
the jurisdiction as provided in sub-clause (b) above in any claim
proceeding or dispute deriving herefrom or in connection with this
application, and we shall not plead that the court as aforesaid is
not the convenient or appropriate forum.
d. Our consent to jurisdiction as provided in sub-clause (b) above
shall not impair your right to take legal proceedings against us
Page 20 of 23 pages
in any other competent court in Israel or abroad, and the taking of
legal proceedings in a particular court shall not prevent you from
taking legal proceedings in another court, whether simultaneously or
otherwise.
e. We hereby give our general consent that in any claim or legal
proceeding filed in the court or before another judicial authority
in connection with this application, any relief or remedy may be
given and any proceeding shall be taken in connection with a claim
as aforesaid, including, and without derogating from the generality
of the foregoing, proceedings for the execution, enforcement and
realisation of any assets or property (unconnected to the actual use
or intended use of the said property or assets), and we also agree
to any order or judgment given in any claim and proceeding as
aforesaid.
f. Without derogating from any other legal provision regarding the
service of process, we hereby consent that any process or claim
filed as above shall be served on us at the address furnished to you
by us from time to time as the address for the dispatch of mail.
13. INTENTIONALLY DELETED
14. IRREVOCABLE INSTRUCTIONS
We hereby give you irrevocable instructions to debit our account indicated
below with the amounts in the loan currency for payments of principal,
interest and commission (hereinafter: "amounts due") or such amount in NIS
as shall be required to purchase the loan currency amount equivalent to
the amounts due, as the case may be, on the payment dates stipulated above
on the conversion dates, on the deferred dates or on payment dates
determined by you if we shall be obliged to make immediate repayment of
the loan under the Debit Agreement as the case may be (hereinafter - the
"agreed repayment dates"), and we undertake to pay any amount debited to
our account as aforesaid on the due date.
|_| Account of the type _____ in the loan currency and in the absence of
sufficient balance to cover the amounts due-a debitory account for
an indeterminate period in the loan currency or, in your discretion,
our NIS current account.
|_| Our NIS current account.
We acknowledge and warrant that all sums debited to our account as
aforesaid and not paid when due shall, in the absence of a credit balance
or agreed overdraft, carry default interest at an agreed rate or, in the
absence of agreement, at the highest rate prevailing in your bank on
overdue debit balances in foreign currency or local currency as the case
may be.
15. EXCHANGE RATE
For the purpose of carrying out this agreement, every sale of loan
currency shall be calculated at the lowest rate for transfers and drafts
published by you on the date of sale and every purchase shall be
Page 21 of 23 pages
calculated at the highest rate for transfers and drafts published by you
on the data of purchase unless a different rate is agreed between us
further to a request to buy or sell currency, as the case may be, served
by us on you not later than 11:00 a.m. on the date of purchase or sale as
aforesaid.
16. APPLICABILITY OF DOCUMENTS
The provisions of the debit agreement and account-opening documents
(hereinafter "documents") shall also apply to our obligations hereunder
provided that in case of conflict between the provisions of this
instrument and the documents, the provisions of this instrument shall
prevail.
17. INTERPRETATION
In this instrument the plural shall include the singular and vice-versa.
PEC ISRAEL FINANCE CORPORATION LTD.
s/JON BOOCK s/MICHEL DAHAN
--------------------------------------
Signature of applicants(s)
Page 22 of 23 pages