Exhibit 10.1
STANDBY LETTER OF CREDIT
AGREEMENT
To : WELLS FARGO BANK, NATIONAL
ASSOCIATION
Applicant hereby agrees for good and
valuable consideration that the Existing Agreement, regardless of
whether it was addressed to you or some other person or entity, be
replaced in its entirety by this Agreement so that the Existing
Credits which were originally issued under and in connection with
the Existing Agreement will now be deemed for all purposes Credits
issued under and in connection with this Agreement and not the
Existing Agreement. Applicant also hereby requests that you, Wells
Fargo Bank, National Association (“Wells Fargo”), issue
in your name and at your sole option, unless provided otherwise in
any Loan Document, one or more standby letters of credit pursuant
to Applications for the issuance of such Credits and the terms and
conditions of this Agreement. The Existing Credits were issued at
Applicant’s request for Applicant’s account, and Each
other Credit will be issued at Applicant’s request and for
its account, and, unless otherwise specifically provided in any
Loan Document, at your option. Applicant agrees that the terms and
conditions in this Agreement shall apply to each Application and
the Credit issued pursuant to each Application, and to transactions
under each Application, each Credit and this Agreement.
SECTION
1. DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth after each term: “
Agreement ” means this Standby Letter of Credit
Agreement as it may be revised or amended from time to time.
“ Applicant ” means collectively each
person and/or entity signing this Agreement as Applicant.
“ Application ” means the Existing
Application and your printed form titled “Application For
Standby Letter of Credit” or any other form acceptable to you
on which Applicant applies for the issuance by you of a Credit
and/or an application for amendment of a Credit or any combination
of such applications, as the context may require. “
Beneficiary ” means the person or entity named on
an Application as the beneficiary or any transferee of such
beneficiary. “ Collateral ” means the
Property, together with the proceeds of such Property, securing any
or all of Applicant’s obligations and liabilities at any time
existing under or in connection with any L/C Document and/or any
Loan Document. “ Commission Fee ” means
the fee, computed at the commission fee rate specified by you or
specified in any Loan Document, charged by you at the time or times
specified by you on the amount of each Credit and on the amount of
each increase in a Credit for the time period each Credit is
outstanding. “ Credit ” means the
Existing Credits and any instrument or document titled
“Irrevocable Standby Letter of Credit” or
“Standby Letter of Credit”, or any instrument or
document whatever it is titled or whether or not it is titled
functioning as a standby letter of credit, issued under or pursuant
to an Application, and all renewals, extensions and amendments of
such instrument or document.. “ Demand ”
means any sight draft, electronic or telegraphic transmission or
other written demand drawn or made, or purported to be drawn or
made, under or in connection with any Credit. “
Document ” means any instrument, statement,
certificate or other document referred to in or related to any
Credit or required by any Credit to be presented with any Demand.
“ Dollars ” means the lawful currency at
any time for the payment of public or private debts in the United
States of America. “ Event of Default ”
means any of the events set forth in Section 13 of this
Agreement.. “ Expiration Date ” means the
date any Credit expires. “ Existing Agreement
” means that certain Standby Letter of Credit Agreement
dated December 8, 2000 signed by Applicant in favor of Wells
Fargo Bank, National Association, as such Existing Agreement may
have been amended or replaced from time to time. “
Existing Applications ” means that certain
(1) Application For Standby Letter of Credit dated
December 18, 1998 signed by Applicant in favor of Wells Fargo
Bank, National Association requesting the issuance of Existing
Credit number NZS314605, (2) Application For Standby Letter of
Credit dated June 20, 2001 signed by Applicant in favor of
Wells Fargo Bank, National Association requesting the issuance of
the Existing Credit numbed NZS401574, (3) Application For
Standby Letter of Credit dated December 5, 2003 signed by
Applicant in favor of Wells Fargo Bank, National Association
requesting the issuance of the Existing Credit number NZS504587,
and (4) Application For Standby Letter of Credit dated
April 7, 2006 signed by Applicant in favor of Wells Fargo
Bank, National Association requesting the issuance of the Existing
Credit number NZS568994, as such Existing Applications may have
been amended or replaced from time to time. “ Existing
Credits ” means that certain (1) standby letter
of credit number NZS314605 issued on December 18, 1998 by you
for the account of Applicant, (2) standby letter of credit
number NZS401574 issued on June 20, 2001 by you for the
account of Applicant, (3) standby letter of credit number
NZS504587 issued on December 8, 2003 by you for the account of
Applicant, and (4) standby letter of credit number NZS568994
issued on April 11, 2006 by you for the account of Applicant,
as such Existing Credits may have been amended or replaced from
time to time. “ Guarantor ” means any
person or entity guaranteeing the payment and/or performance of any
or all of Applicant’s obligations under or in connection with
any L/C Document and/or any Loan Document. “ Holding
Company ” means any company or other entity directly
or indirectly controlling you. “ L/C Document
” means this Agreement, each Application, each Credit,
and each Demand. “ Loan Document ” means
each and any promissory note, loan agreement, security agreement,
pledge agreement, guarantee or other agreement or document executed
in connection with, or relating to, any extension of credit under
which any Credit is issued. “ Maximum Rate
” means the maximum amount of interest (as defined by
applicable laws), if any, permitted to be paid, taken, reserved,
received, collected or charged under applicable laws, as the same
may be amended or modified from time to time. “
Negotiation Fee ” means the fee, computed at the
negotiation fee rate specified by you or specified in any Loan
Document, charged by you on the amount of each Demand paid by you
or any other bank specified by you when each Demand is paid.
“ Payment Office ” means the office
specified by you or specified in any Loan Document as the office
where reimbursements and other payments under or in connection with
any L/C Document are to be made by Applicant. “ Prime
Rate ” means the rate of interest most recently
announced within Wells Fargo at its principal office as its Prime
Rate, with the understanding that the Prime Rate is one of Wells
Fargo’s base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as
Wells Fargo may designate. “ Property ”
means all forms of property, whether tangible or intangible, real,
personal or mixed. “ Rate of Exchange ”
means Wells Fargo’s then current selling rate of exchange in
San Francisco, California for sales of the currency of payment of
any Demand, or of any fees or expenses or other amounts payable
under this Agreement, for cable transfer to the country of which
such currency is the legal tender. “ UCP
” means the Uniform Customs and Practice for Documentary
Credits, an International Chamber of Commerce publication, or any
substitution therefor or replacement thereof. “ Unpaid
and Undrawn Balance ” means at any time the entire
amount which has not been paid by you under all the Credits issued
for Applicant’s account, including, without limitation, the
amount of each Demand on which you have not yet effected payment as
well as the amount undrawn under all such Credits. “
Wells Fargo & Company ” means Wells
Fargo & Company, a Delaware corporation.
SECTION 2. HONORING DEMANDS AND
DOCUMENTS. You may receive, accept and honor, as complying with
the terms of any Credit, any Demand and any Documents accompanying
such Demand; provided, however, that such Demand and accompanying
Documents appear on their face to comply substantially with the
provisions of such Credit and are, or appear on their face to be,
signed or issued by (a) a person or entity authorized under
such Credit to draw, sign or issue such Demand and accompanying
Documents, or (b) an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, liquidator, receiver or other legal representative or
successor in interest by operation of law of any such person or
entity.
SECTION 3. REIMBURSEMENT FOR
PAYMENT OF DEMANDS. Applicant shall reimburse you for all
amounts paid by you on each Demand, including, without limitation,
all such amounts paid by you to any paying, negotiating or other
bank. If in connection with the issuance of any Credit, you agree
to pay any other bank the amount of any payment or negotiation made
by such other bank under such Credit upon your receipt of a cable,
telex or other written telecommunication advising you of such
payment or negotiation, or authorize any other bank to debit your
account for the amount of such payment or negotiation, Applicant
agrees to reimburse you for all such amounts paid by you, or
debited to your account with such other bank, even if any Demand or
Document specified in such Credit fails to arrive in whole or in
part or if, upon the arrival of any such Demand or Document, the
terms of such Credit have not been complied with or such Demand or
Document does not conform to the requirements of such Credit or is
not otherwise in order.
SECTION 4. FEES AND EXPENSES.
Applicant agrees to pay to you (a) all Commission Fees,
Negotiation Fees, cable fees, amendment fees, non-usance fees, and
cancellation fees of, and all out-of-pocket expenses incurred by,
you under or in connection with any L/C Document, and (b) all
fees and charges of banks or other entities other than you under or
in connection with any L/C Document if any Application
(i) does not indicate who will pay such fees and charges,
(ii) indicates that such fees and charges are to be paid by
Applicant, or (iii) indicates that such fees and charges are
to be paid by the Beneficiary and the Beneficiary does not, for any
reason whatsoever, pay such fees or charges. There shall be no
refund of any portion of any Commission Fee in the event any Credit
is used, reduced, amended, modified or terminated before its
Expiration Date.
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SECTION 5. DEFAULT INTEREST.
Unless otherwise specified in any Loan Document , or on an
Application and agreed to by you, all amounts to be reimbursed by
Applicant to you, and all fees and expenses to be paid by Applicant
to you, and all other amounts due from Applicant to you under or in
connection with any L/C Documents, will bear interest (to the
extent permitted by law), payable on demand, from the date you paid
the amounts to be reimbursed or the date such fees, expenses and
other amounts were due until such amounts are paid in full, at a
rate per annum (computed on the basis of a 360-day year, actual
days elapsed) which is the lesser of (a) four percent
(4%) above the Prime Rate in effect from time to time, or
(b) the Maximum Rate.
SECTION 6. TIME AND METHOD OF
REIMBURSEMENT AND PAYMENT. Unless otherwise specified in this
Section, in any Loan Document, or on an Application and agreed to
by you, all amounts to be reimbursed by Applicant to you, all fees
and expenses to be paid by Applicant to you, and all interest and
other amounts due to you from Applicant under or in connection with
any L/C Documents will be reimbursed or paid at the Payment Office
in Dollars in immediately available funds without setoff or
counterclaim (i) on demand or, (ii) at your option by
your debiting any of Applicant’s accounts with you, with each
such debit being made without presentment, protest, demand for
reimbursement or payment, notice of dishonor or any other notice
whatsoever, all of which are hereby expressly waived by Applicant.
Each such debit will be made at the time each Demand is paid by you
or, if earlier, at the time each amount is paid by you to any
paying, negotiating or other bank, or at the time each fee and
expense is to be paid or any interest or other amount is due under
or in connection with any L/C Documents. If any Demand or any fee,
expense, interest or other amount payable under or in connection
with any L/C Documents is payable in a currency other than Dollars,
Applicant agrees to reimburse you for all amounts paid by you on
such Demand, and/or to pay you all such fees, expenses, interest
and other amounts, in one of the three following ways, as
determined by you in your sole discretion in each case: (a) at
such place as you shall direct, in such other currency; or
(b) at the Payment Office in the Dollar equivalent of the
amount of such other currency calculated at the Rate of Exchange on
the date determined by you in your sole discretion; or (c) at
the Payment Office in the Dollar equivalent, as determined by you
(which determination shall be deemed correct absent manifest
error), of such fees, expenses, interest or other amounts or of the
actual cost to you of paying such Demand. Applicant assumes all
political, economic and other risks of disruptions or interruptions
in any currency exchange.
SECTION
7. AGREEMENTS OF APPLICANT. Applicant agrees that
(a) unless otherwise specifically provided in any Loan
Document, you shall not be obligated at any time to issue any
Credit for Applicant’s account; (b) unless otherwise
specifically provided in any Loan Document, if any Credit is issued
by you for Applicant’s account, you shall not be obligated to
issue any further Credit for Applicant’s account or to make
other extensions of credit to Applicant or in any other manner to
extend any financial consideration to Applicant; (c) you have
not given Applicant any legal or other advice with regard to any
L/C Document or Loan Document; (d) if you at any time discuss
with Applicant the wording for any Credit, any such discussion will
not constitute legal or other advice by you or any representation
or warranty by you that any wording or Credit will satisfy
Applicant’s needs; (e) Applicant is responsible for the
wording of each Credit, including, without limitation, any drawing
conditions, and will not rely on you in any way in connection with
the wording of any Credit or the structuring of any transaction
related to any Credit; (f) Applicant, and not you, is
responsible for entering into the contracts relating to the Credits
between Applicant and the Beneficiaries and for causing Credits to
be issued; (g) you may, as you deem appropriate, modify or
alter and use in any Credit the terminology contained on the
Application for such Credit; (h) unless the Application for a
Credit specifies whether the Documents to be presented with a
Demand under such Credit must be sent to you in one parcel or in
two parcels or may be sent to you in any number of parcels, you
may, if you so desire, make such determination and specify in the
Credit whether such Documents must be sent in one parcel or two
parcels or may be sent in any number of parcels; (i) you shall
not be deemed Applicant’s agent or the agent of any
Beneficiary or any other user of any Credit, and neither Applicant,
nor any Beneficiary nor any other user of any Credit shall be
deemed your agent; (j) Applicant will promptly examine all
Documents and each Credit if and when they are delivered to
Applicant and, in the event of any claim of noncompliance of any
Documents or any Credit with Applicant’s instructions or any
Application, or in the event of any other irregularity, Applicant
will promptly notify you in writing of such noncompliance or
irregularity, Applicant being conclusively deemed to have waived
any such claim of noncompliance or irregularity unless such notice
is promptly given; (k) all directions and correspondence
relating to any L/C Document are to be sent at Applicant’s
risk; (l) if any Credit has a provision concerning the
automatic extension of its Expiration Date, you may, at your sole
option, give notice of nonrenewal of such Credit and if Applicant
does not at any time want such Credit to be renewed Applicant will
so notify you at least fifteen (15) calendar days before you
are to notify the Beneficiary of such Credit or any advising bank
of such nonrenewal pursuant to the terms of such Credit;
(m) Applicant will not seek to obtain, apply for, or acquiesce
in any temporary or permanent restraining order, preliminary or
permanent injunction, permanent injunction or any other pretrial or
permanent injunctive or similar relief, restraining, prohibiting or
enjoining you, any of your correspondents or any advising,
confirming, negotiating, paying or other bank from paying or
negotiating any Demand or honoring any other obligation under or in
connection with any Credit; and (n) Applicant will have a net
loss of no more than $8,000,000 for the fiscal year ending
December 31, 2009 and maintain a net income after taxes of not
less than $1.00 on an annual basis thereafter, determined as of the
end of each of Applicant’s fiscal years; (o) Applicant
will maintain liquid assets (defined as unencumbered cash, cash
equivalents, and publicly traded and quoted marketable securities
acceptable to you) having an aggregate fair market value not at any
time less than $10,000,000.00, determined as of the end of each of
Applicant’s fiscal quarters; (p) Applicant will deliver
to you, not later than 95 calendar days after the end of each of
Applicant’s fiscal years, copies of all Applicant’s
filings with the Securities and Exchange Commission for the fiscal
year just ended, including, without limitation, Applicant’s
10K filing for the fiscal year just ended; (q) Applicant will
deliver to you, not later than 50 calendar days after the end of
each of Applicant’s fiscal quarters, copies of all
Applicant’s filings with the Securities and Exchange
Commission for the fiscal quarter just ended, including, without
limitation, Applicant’s 10Q filing for the fiscal quarter
just ended; (r) Applicant will not mortgage, pledge, grant or
permit to exist a security interest in, or a lien upon, all or any
portion of Borrower’s assets now owned or hereafter acquired,
except for any of the foregoing in your favor and except for
security interests covering purchase money indebtedness which does
not at any time exceed $500,000.00; (s) Applicant will not
create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether
secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except the liabilities of Applicant
to you and except for purchase money indebtedness which Applicant
incurs in an amount not exceeding $500,000.00 during each of
Applicant’s fiscal years; and (t) except for
Applicant’s obligations specifically affected by those
actions or failures to act referred to in subsections (ii) and
(vii) of this Section 7(t) which you have performed or
approved or accepted, Applicant’s obligations under or in
connection with each L/C Document and Loan Document shall be
absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of each such L/C Document and
Loan Document under all circumstances whatsoever, including,
without limitation, the following circumstances, the circumstances
listed in Section 12(b) through (u) of this Agreement,
and any other event or circumstance similar to such circumstances:
(i) any lack of validity or enforceability of any L/C
Document, any Loan Document, any Document or any agreement relating
to any of the foregoing; (ii) any amendment of or waiver
relating to, or any consent to or departure from, any L/C Document,
any Loan Document or any Document; (iii) any release or
substitution at any time of any Property held as Collateral;
(iv) your failure to deliver to Applicant any Document you
have received with a drawing under a Credit because doing so would,
or is likely to, violate any law, rule or regulation of any
government authority; (v) the existence of any claim, set-off,
defense or other right which Applicant may have at any time against
you or any Beneficiary (or any person or entity for whom any
Beneficiary may be acting) or any other person or entity, whether
under or in connection with any L/C Document, any Loan Document,
any Document or any Property referred to in or related to any of
the foregoing or under or in connection with any unrelated
transaction; (vi) any breach of contract or other dispute
between or among any two or more of you, Applicant, any
Beneficiary, any transferee of any Beneficiary, any person or
entity for whom any Beneficiary or any transferee of any
Beneficiary may be acting, or any other person or entity; or
(vii) any delay, extension of time, renewal, compromise or
other indulgence granted or agreed to by you with or without notice
to Applicant, or Applicant’s approval, in respect of any of
Applicant’s indebtedness or other obligations to you under or
in connection with any L/C Document or any Loan
Document.
SECTION 8. COMPLIANCE WITH LAWS
AND REGULATIONS. Applicant represents and warrants to you that
no Application, Credit or transaction under any Application and/or
Credit will contravene any law or regulation of the government of
the United States or any state thereof. Applicant agrees
(a) to comply with all federal, state and foreign exchange
regulations and other government laws and regulations now or
herea
