EXHIBIT 10.11
CONTINUING LETTER OF CREDIT AGREEMENT
Date: June 30, 2004
TO:
HSBC Bank USA
452 Fifth Avenue
New York, New York
10018
Gentlemen:
Unless otherwise agreed in writing, the following Terms and
Conditions
shall apply to our application for and your issuance of each letter
of credit on
our behalf, including amendments or modifications thereto. Each
such letter of
credit shall hereinafter be referred to as the "Credit".
1.
PREPAYMENT/REIMBURSEMENT. We agree in the case of each Draft,
whether or not the Credit calls for Deferred Payments, to reimburse
you at your principal banking office at the above address or at
such other banking office of yours as you and we may agree upon in
writing, at once, in United States currency in immediately
available funds, the amount paid on such Draft, or, if so demanded
by you, to pay to you at your office in advance, at least in time
for cover to reach the place of payment at maturity, in United
States currency in immediately available funds, the amount required
to pay such Draft.
2.
(a) COMMISSIONS. We agree to pay you, on demand, (i) your
commission in connection with the Credit, at your customary rates
in effect at the time of the Application (or at any special rate on
which you shall agree with us, in writing), as well as (ii) the
commission(s) of any correspondent, confirming, paying, accepting
or negotiating banks at their customary rates in effect at the time
of their taking any action in connection with the Credit. (b)
INTEREST. Except as expressly provided for elsewhere in this
Agreement or otherwise in writing signed or accepted by you, any
and all amounts due you from us under this Agreement and/or the
Application, including without limitation our obligations under
paragraph 1 of this Agreement, shall bear interest, payable on
demand, from the date due until paid in full at the lesser of the
maximum rate allowed by law or a rate per year equal to two percent
(2%) per year above your stated Reference Rate, as reflected on
your books and records (the "Reference Rate"), which rate shall
fluctuate from time to time when and as your Reference Rate shall
change. Your determination of your Reference Rate shall be
conclusive and final. We recognize and acknowledge that you may
extend credit to others at rates below your stated Reference Rate.
(c) FEES, COSTS AND EXPENSES. We agree to pay or reimburse you and
your correspondents on demand for, and to indemnify and hold
harmless you and your correspondents from and against, all costs,
charges, and expenses, including reasonable attorneys' fees and
expenses incurred by you and your correspondents arising in any
manner, from, out of, or in connection with (i) the Application,
(ii) this Agreement, (iii) the Credit, (iv) compliance with
governmental exchange regulations applicable to the purchase of
foreign currency, (v) collection of our Liabilities, (vi)
protection of any of your or your correspondents' rights or
interests in connection with any of the foregoing, and (vii) any
litigation in connection with any of the foregoing. The foregoing
obligation to pay, reimburse and indemnify shall not apply to the
extent that any such costs, charges or expenses result from your or
your correspondents' own gross negligence or bad faith. (d)
PAYMENTS FREE OF TAXES. Any and all payments made to you under this
Agreement shall be made free and clear of and without deduction for
any present or future taxes, levies, imposts, deductions, charges,
or withholdings, and all liabilities with respect thereto, in any
jurisdiction worldwide, excluding taxes imposed on your net income
and all income and franchise taxes imposed on you. All such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities which are imposed with respect to this
Agreement or any amount payable under it are hereinafter called
"Taxes". If we shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement, (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 subparagraph), you shall receive
an amount equal to the sum you would have received had no such
deductions been made, (ii) we shall make such deductions, and (iii)
we shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. We
will indemnify you for the full amount of Taxes
(including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this subparagraph) paid by
you 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 pursuant to this
indemnification shall be made upon written demand therefor. Within
30 days after the date of any payment of Taxes we will furnish you
with evidence thereof. (e) RESERVES, ASSESSMENT CHARGES, CAPITAL
REQUIREMENTS AND OTHER REGULATORY COSTS. In the event that you are
required by, or as a result of any action or policy position taken
by, any regulatory authority, to pay, institute, increase, maintain
at any particular level or otherwise to incur any reserves,
assessment charges or capital requirements or other regulatory
costs in connection with or as a result of this Agreement or the
Credit, in order for you to be in compliance with any present or
future applicable law or governmental, regulation, guideline,
order, interpretation (including but not limited to an
interpretation by a court or any regulatory authority that any law
or regulation requires or permits the imposition of such specified
costs in connection with or as a result of this Agreement or the
Credit) or request (whether or not having the force of law), we
agree to pay you on demand and to indemnify and hold you harmless
from and against all costs and expenses of, or of establishing or
maintaining, such specified costs, as such costs and expenses shall
be reasonably determined by you.
3.
DEFINITIONS. As used in this Agreement: (a) "Bank Affiliate" shall
include any person, firm or entity acting as nominee or agent for
you, and any corporation which is directly or indirectly owned or
controlled by, or under common control with you; (b) "Deferred
Payment" shall mean an arrangement provided for in the Credit
pursuant to which the Beneficiary shall have the right or
obligation to present Documents for examination by you in advance
of presenting a Drafts or Draft drawn under the Credit; (c)
"Documents" shall mean any and all certificates, documents and
statements accompanying or relating to the Credit and/or to Drafts
drawn under the Credit, but shall not mean Drafts; (d) "Draft"
shall mean a written request, order or demand for the payment of
money, whether or not negotiable; (e) "Liabilities" shall include
any and all of the obligations and liabilities under or with
reference to the Credit, the Application, this Agreement, any other
letter of credit issued by you and any and all other of our debts
to, or held or to be held by, you in any jurisdiction worldwide,
for your own account or as agent for another or others, whether
created directly or acquired by assignment or otherwise; (f)
"Party" shall include (i) us, (ii) any guarantor, surety or
accommodation party with respect to, or any party that provides any
collateral as security for, or any party that provides a comfort
letter, letter of awareness, letter of intent or similar document
with respect to any of the Liabilities, and (iii) if any Party is a
partnership, any general partner of such Party; (g) "Property"
shall mean any and all goods, merchandise, securities, funds,
chosen in action, and any and all other forms of property whether
real, personal or mixed, tangible or intangible, and any right or
interest therein; (h) "UCC" shall mean the New York Uniform
Commercial Code, as in effect from time to time; and (i) "UCP"
shall mean the Uniform Customs and Practice for Documentary Credits
adopted by the Congress of the International Chamber of Commerce
("ICC"), 1993 revision, ICC Publication No. 500 as amended or
substituted for and as in effect from time to time.
4.
ACCEPTABLE DOCUMENTS UNDER THE CREDIT; ADMINISTRATIVE AGREEMENTS.
(a) SUBSTANTIAL COMPLIANCE. Except as expressly provided otherwise
on the Application, we authorize you to accept as complying with
the Credit any Drafts and/or Documents which are in substantial but
not strict compliance with the Credit without affecting or
relieving us of any of our Liabilities under this Agreement.
Nevertheless, you may in your discretion, refuse to accept any or
all such Drafts and/or Documents unless they are in strict
compliance with the Credit. (b) APPLICANT'S INSTRUCTIONS. In
administering the Credit, you and your correspondents may act in
reliance upon any oral, telephonic, telegraphic, facsimile,
electronic or written request, agreement, notice, consent, waiver
or other communication believed in good faith to have been
authorized by us, whether or not actually given or signed by an
authorized person. (c) APPLICABLE STANDARDS. Except as otherwise
expressly provided, you and/or your correspondents may, to the
extent that you or they deem appropriate: (i) consider applicable
to the Credit and any or all transactions thereunder any laws,
regulations, customs, or usages, foreign or domestic, deemed
appropriate and not inconsistent with the UCP; (ii) accept as
"bills of lading" documents acknowledging receipt of property, for
transportation by or on behalf of carriers, and, as "steamer bills
of lading," such documents of carriers whether or not the entire
transportation is by water; (iii) accept bills of lading not marked
"notify the account party named in the Credit" or not indicating
the letter of credit number notwithstanding anything herein
specified to the contrary. (d) INSURANCE. We will cause the
property covered by the Credit to be adequately insured in amounts,
against risks and by companies satisfactory to you, assign the
policies or certificates thereof to you or make loss payable to
you, at your option, and furnish you upon request evidence of
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compliance with the foregoing. If you at any time deem such
insurance inadequate for any reason, you may procure such insurance
as you deem necessary, at our expense. (e) COMPLIANCE WITH
REGULATIONS. We shall procure promptly necessary import, export or
shipping licenses for the property covered by the Credit, comply
with all governmental regulations, foreign or domestic (including
exchange regulations) with regard thereto or the financing thereof,
and furnish to you, at your request, certificates evidencing the
foregoing, and on demand, pay to you, any amount(s) you may be
required to expend in respect thereto. (f) RELEASE OF PROPERTY OR
DOCUMENTS - TRUST RECEIPTS. if you deliver to us or upon our order
any of the property, documents or instruments relative to the
Credit, or held by you as security hereunder, prior to payment in
full of all of our obligations secured thereby, we will deliver to
you trust receipts therefor, or other security agreements and
statements of trust receipt financing, or other financing
statements, complying with applicable law and in such form as you
may request, and pay all necessary filing fees, it being understood
that any such delivery is made in reliance upon this Agreement and
that your rights specified herein shall be in addition to your
rights under any such applicable law, trust receipt or security
agreement. (g) STEAMSHIP GUARANTY, ETC. (i) In case we ask you,
orally or by written request, at any time prior to your receipt of
documents relative to the Credit, to issue your Steamship Guaranty,
Delivery Order or Air Release to the carrier company or its agent
to enable us to receive the property covered by the Credit, we
hereby indemnify and hold you harmless from all consequences of the
delivery of said Guaranty, Delivery Order or Air Release and agree
to pay you on demand any and all claims, losses and/or expenses
that may arise under or in respect of said Guaranty, Delivery Order
or Air Release. You also may at any time pay, compromise or adjust
any such claim and we agree to pay you on demand any amount
required or expended by you for such purpose. We will immediately
upon receipt of the original bill(s) of lading arrange for the
prompt release or return to you of any guaranty or release issued
by you in connection with the Credit.
5.
MODIFICATIONS, EXTENSIONS AND INCREASES. Any agreement to modify
the Credit shall require the Beneficiary's consent. In your
discretion, the Beneficiary's consent need not be in writing and
may be indicated by the Beneficiary's acquiescence in modifications
communicated to and received by the Beneficiary.
6.
DIVISION OF RESPONSIBILITIES. (a) APPLICANT'S RESPONSIBILITIES. In
the event you are compelled by any binding judgment, decree, order
or award to make any payment under the Credit or to honor any
Drafts or Documents as complying with the Credit, our obligations
arising under this Agreement to reimburse you shall continue to
apply or, if previously expired, shall be immediately restored,
upon the rendering of any such judgment, decree, order or award,
regardless of whether or not such judgment, decree, order or award
shall be rendered, or any payment pursuant thereto shall be made,
after the expiration of the Credit. (b) NON-RESPONSIBILITY OF
BANKS. Subject to paragraph 7 of this Agreement, neither you nor
your correspondents shall be liable for any of the following: (i)
LACK OF CONTROL. Any matter or event beyond your or your
correspondents' reasonable control; (ii) DOCUMENTS. The
truthfulness or accuracy of any statement contained in any
Document, or the validity, sufficiency, or genuineness of Documents
or Drafts, even if such Documents or Drafts should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) PARTIES ISSUING DOCUMENTS. The solvency or
responsibility of any party issuing any Document; (iv) ARRIVAL OF
DOCUMENTS. Any delay in arrival or failure to arrive of any
Documents relating to the Credit; (v) NOTICES. Any delay in giving
or failure to give any notice; (vi) LOCAL LAWS. Any laws, acts,
decrees, customs or regulations, legal or illegal, of any
government or governmental agency or of any authority actually in
control, of or which may be effective in, places of negotiation
and/or payment of the Credit or otherwise relating to the Credit,
Documents, or Drafts under the Credit; (vii) WAR. Any declared or
undeclared war or any military, guerrilla or terrorist operation;
(viii) COMPLIANCE WITH CREDIT TERMS. Failure of any Draft or
Document to bear any reference or adequate reference to the Credit;
failure of Documents to accompany any Draft at negotiation; or
failure of any person to note the amount of any Draft on the
reverse of the Credit or to surrender or take up the Credit or to
send or forward Documents apart from Drafts as required by the
terms of the Credit; it is agreed that each of the provisions
referred to in this subparagraph 6(b)(viii), if appearing as a
requirement in the Credit itself, may be waived by you; (ix)
COMMUNICATIONS. Errors, omissions, mutilations, losses, failures,
defaults, interruptions or delays in transmission, delivery,
receipt, or recording of any messages, by mail, telex, cable,
telegraph, wireless, facsimile, SWIFT, or otherwise, whether or not
arising out of the use of codes; (x) CORRESPONDENTS. Any act,
error, neglect, default, insolvency or failure in business of any
of your correspondents, or of correspondents of your correspondents
except that any such correspondent shall be liable, if at all,
solely for its own bad faith or gross negligence, or if and solely
to the extent required by law and not disclaimable, for its own
negligence; (xi) INVALID INSTRUCTIONS. Any consequence resulting
from the
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fact that any instructions, oral or written, given to you
purporting to be by us or on our behalf and believed by you in good
faith and in the exercise of ordinary care to be valid, which
pertain to the opening of the Credit, payments against Documents
despite discrepancies, any modification of the Credit or any other
action to be taken or omitted in connection with the Credit were,
wholly or in part, unauthorized, fraudulent or otherwise invalid;
(xii) UNIFORM CUSTOMS AND PRACTICE. Any matter as to which banks
assume no liability or responsibility pursuant to the UCP; (xiii)
TRANSLATIONS. Any consequence resulting from errors in or
inadequacy of any translation of or in connection with: (A) the
Application, if not entirely written in English, (B) the Credit, if
the Credit is requested to be written in any language other than
English, or (C) any Document or Draft not entirely written in
English; or (xiv) GOOD FAITH. Without limiting the foregoing, any
act or omission of you or your correspondents in good faith except,
respectively, solely for your or your correspondent's own gross
negligence or bad faith or, if and solely to the extent required by
law and not disclaimable, for your or its own negligence. In any
event, neither you nor any correspondent shall have any liability
for any special, consequential or punitive damages. (c) PAYMENTS BY
CORRESPONDENTS; FAILURE TO RECEIVE TRANSMITTED DOCUMENTS. If the
Credit provides that payment is to be made by your correspondent,
neither you nor such correspondent shall be responsible for your
failure to receive any of the Documents specified in the Credit or
for any delay in connection with them. Our obligation to make
reimbursement shall not be affected by any such failure or delay.
(d) DELIVERY OF DOCUMENTS. (i) if the Credit calls for sight Drafts
without providing for Deferred Payments, Documents presented under
the Credit shall be released by you to us or at our instruction
promptly after you pay the respective Draft, once we shall have
complied with paragraph 1; (ii) if the Credit calls for Deferred
Payments, Documents presented under the Credit in advance of Drafts
shall be released by you to us or at our instruction promptly after
you examine the Documents, provided they conform to the terms and
conditions of the Credit, but such release shall not affect or
reduce our obligations under paragraph 1.
7.
INDEMNITY. In addition to our obligations under other provisions of
this Agreement, we hereby agree to indemnify and hold you harmless
from and against any and all costs, expenses (including reasonable
attorneys' fees and expenses), losses, claims, obligations and
liabilities arising in any manner from, out of, or in connection
with, the Application, this Agreement or the Credit, and your
issuing the Credit or acting thereunder or hereunder, or in
connection with any action, suit or proceeding seeking to enjoin or
restrain you from acting pursuant to the Credit, the Application or
this Agreement, including but not limited to all obligations and
responsibilities imposed by foreign law and usages and any and all
claims resulting from the endorsement and/or Transfer to us or at
our request of any Documents and/or your acting in accordance with
our instructions, unless caused by your gross negligence or bad
faith or, if and solely to the extent required by law and not
disclaimable, for your negligence. We hereby similarly indemnify
and hold harmless each and every correspondent acting in connection
with the Credit, except with respect to any such correspondent's
gross negligence or bad faith or, if and solely to the extent
required by law and not disclaimable, negligence.
8.
GOVERNMENTAL COMPLIANCE. (a) COMPLIANCE. We agree: (i) to comply
with all applicable foreign and Unit
