1
Exhibit 10.18
================================================================================
SEAGATE TECHNOLOGY, INC.
---------------------------------
$300,000,000
CREDIT AGREEMENT
Dated as of November 4, 1999
---------------------------------
BANK OF AMERICA, N.A.
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.01 Certain Defined Terms.......................................................................1
SECTION 1.02 Accounting Principles......................................................................11
(a) Accounting Terms....................................................................11
(b) GAAP Changes........................................................................11
(c) "Fiscal Year" and "Fiscal Quarter"..................................................11
SECTION 1.03 Interpretation.............................................................................11
ARTICLE II THE LOANS.............................................................................................12
SECTION 2.01 The Loans..................................................................................12
SECTION 2.02 Borrowing Procedure........................................................................13
SECTION 2.03 Lending Offices............................................................................13
SECTION 2.04 Evidence of Indebtedness...................................................................13
SECTION 2.05 Minimum Amounts............................................................................13
SECTION 2.06 Required Notice............................................................................13
ARTICLE III INTEREST AND FEES; CONVERSION OR CONTINUATION........................................................14
SECTION 3.01 Interest...................................................................................14
(a) Interest Rate.......................................................................14
(b) Interest Periods....................................................................14
(c) Interest Payment Dates..............................................................15
(d) Notice to the Borrower..............................................................15
SECTION 3.02 Default Rate of Interest...................................................................15
SECTION 3.03 Fees.......................................................................................15
SECTION 3.04 Computations...............................................................................15
SECTION 3.05 Conversion or Continuation.................................................................16
(a) Election............................................................................16
(b) Automatic Conversion................................................................16
i
3
(c) Notice to the Bank..................................................................16
SECTION 3.06 Highest Lawful Rate........................................................................16
ARTICLE IV REDUCTION OF COMMITMENTS; REPAYMENT; PREPAYMENT.......................................................17
SECTION 4.01 Reduction or Termination of the Commitment.................................................17
(a) Reduction or Termination............................................................17
(b) Adjustment of Commitment Fee; No Reinstatement......................................17
SECTION 4.02 Repayment of the Loans.....................................................................17
SECTION 4.03 Prepayments................................................................................17
(a) Optional Prepayments................................................................17
(b) Notice; Application.................................................................17
ARTICLE V YIELD PROTECTION AND ILLEGALITY........................................................................17
SECTION 5.01 Inability to Determine Rates...............................................................17
SECTION 5.02 Funding Losses.............................................................................18
SECTION 5.03 Regulatory Changes.........................................................................18
(a) Increased Costs.....................................................................18
(b) Capital Requirements................................................................19
(c) Requests............................................................................19
SECTION 5.04 Illegality.................................................................................19
SECTION 5.05 Funding Assumptions........................................................................19
SECTION 5.06 Obligation to Mitigate.....................................................................19
ARTICLE VI PAYMENTS..............................................................................................20
SECTION 6.01 Payments...................................................................................20
(a) Payments............................................................................20
(b) Authorization to Bank...............................................................20
(c) Extension...........................................................................20
(d) Application.........................................................................20
SECTION 6.02 Taxes......................................................................................20
(a) No Reduction of Payments............................................................20
(b) Deduction or Withholding; Tax Receipts..............................................21
(c) Indemnity...........................................................................21
(d) Mitigation..........................................................................21
ARTICLE VII CONDITIONS PRECEDENT.................................................................................21
ii
4
SECTION 7.01 Conditions Precedent to the Initial Loan...................................................21
(a) Fees and Expenses...................................................................22
(b) Closing Certificate.................................................................22
(c) Corporate Documents.................................................................22
(d) Legal Opinions......................................................................22
SECTION 7.02 Conditions Precedent to All Loans..........................................................22
(a) Notice..............................................................................22
(b) Material Adverse Effect.............................................................22
(c) Representations and Warranties; No Default..........................................22
(d) Additional Documents................................................................23
ARTICLE VIII REPRESENTATIONS AND WARRANTIES......................................................................23
SECTION 8.01 Representations and Warranties.............................................................23
(a) Organization and Powers.............................................................23
(b) Authorization; No Conflict..........................................................23
(c) Binding Obligation..................................................................23
(d) Consents............................................................................23
(e) No Defaults.........................................................................24
(f) Title to Properties; Liens..........................................................24
(g) Litigation..........................................................................24
(h) Compliance with Environmental Laws..................................................24
(i) Governmental Regulation.............................................................24
(j) Taxes...............................................................................24
(k) Patents and Other Rights............................................................25
(l) Insurance...........................................................................25
(m) Financial Statements................................................................25
(n) Liabilities.........................................................................25
(o) Solvency............................................................................25
(p) Year 2000...........................................................................25
(q) Disclosure..........................................................................26
ARTICLE IX COVENANTS.............................................................................................26
SECTION 9.01 Reporting Covenants........................................................................26
(a) Financial Statements and Other Reports..............................................26
(b) Additional Information..............................................................27
SECTION 9.02 Financial Covenants........................................................................27
(a) Quick Ratio.........................................................................27
(b) Total Funded Debt...................................................................27
(c) Consolidated Net Income.............................................................27
SECTION 9.03 Additional Affirmative Covenants...........................................................27
(a) Preservation of Existence, Etc......................................................27
(b) Payment of Obligations..............................................................28
iii
5
(c) Maintenance of Insurance............................................................28
(d) Keeping of Records and Books of Account.............................................28
(e) Inspection Rights...................................................................28
(f) Compliance with Laws, Etc. .........................................................28
(g) Maintenance of Properties, Etc. ....................................................28
(h) Licenses............................................................................29
(i) [intentionally omitted].............................................................29
(j) Use of Proceeds.....................................................................29
(k) Further Assurances and Additional Acts..............................................29
SECTION 9.04 Negative Covenants.........................................................................29
(a) Liens; Negative Pledges.............................................................29
(b) Change in Nature of Business........................................................30
(c) Restrictions on Fundamental Changes.................................................30
(d) [intentionally omitted].............................................................30
(e) Transactions with Related Parties...................................................30
(f) Hazardous Substances................................................................30
(g) Accounting Changes..................................................................30
ARTICLE X EVENTS OF DEFAULT......................................................................................31
SECTION 10.01 Events of Default..........................................................................31
(a) Payments............................................................................31
(b) Representations and Warranties......................................................31
(c) Failure by Borrower to Perform Certain Covenants....................................31
(d) Failure by Borrower to Perform Other Covenants......................................31
(e) Insolvency; Voluntary Proceedings...................................................31
(f) Involuntary Proceedings.............................................................31
(g) Acceleration Indebtedness...........................................................32
(h) Judgments...........................................................................32
(i) ERISA...............................................................................32
SECTION 10.02 Effect of Event of Default.................................................................32
ARTICLE XI MISCELLANEOUS.........................................................................................33
SECTION 11.01 Amendments and Waivers.....................................................................33
SECTION 11.02 Notices....................................................................................33
(a) Notices.............................................................................33
(b) Facsimile and Telephonic Notice.....................................................33
SECTION 11.03 No Waiver; Cumulative Remedies.............................................................34
SECTION 11.04 Costs and Expenses; Indemnification........................................................34
(a) Costs and Expenses..................................................................34
(b) Indemnification.....................................................................34
(c) Other Charges.......................................................................35
iv
6
SECTION 11.05 Right of Set-Off...........................................................................35
SECTION 11.06 Survival...................................................................................35
SECTION 11.07 Benefits of Agreement......................................................................35
SECTION 11.08 Binding Effect; Assignment.................................................................35
(a) Binding Effect......................................................................35
(b) Assignment..........................................................................36
SECTION 11.09 Governing Law..............................................................................36
SECTION 11.10 Submission to Jurisdiction.................................................................36
(a) Submission to Jurisdiction..........................................................36
(b) No Limitation.......................................................................36
SECTION 11.11 Waiver of Jury Trial.......................................................................36
SECTION 11.12 Limitation on Liability....................................................................37
SECTION 11.13 Entire Agreement...........................................................................37
SECTION 11.14 Severability...............................................................................37
SECTION 11.15 Counterparts...............................................................................37
SCHEDULES
Schedule 1 Bank Payment Office; Addresses for Notices
Schedule 2 Existing Liens
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Compliance Certificate
v
7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of November 4, 1999,
is made between SEAGATE TECHNOLOGY, INC., a Delaware corporation (the
"Borrower"), and BANK OF AMERICA, N.A. (the "Bank").
The Borrower has requested the Bank to make loans to the Borrower in an
aggregate principal amount of up to $300,000,000. The Bank is willing to make
such loans to the Borrower upon the terms and subject to the conditions set
forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" means any Person which, directly or indirectly, controls, is
controlled by or is under common control with another Person. For purposes of
the foregoing, "control," "controlled by" and "under common control with" with
respect to any Person shall mean the possession, directly or indirectly, of the
power (i) to vote 10% or more of the securities having ordinary voting power of
the election of directors of such Person, or (ii) to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise. Provided that
(except for the purposes of Section 11.12 of this Agreement) Affiliates of
Borrower shall not include Veritas Software Corporation.
"Applicable Margin" means 0.80% per annum.
"Bank" has the meaning set forth in the recital of parties to this
Agreement.
"Bank's Payment Office" means the office of the Bank designated on
Schedule 1 or otherwise notified by Bank to Borrower from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy."
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum above
the latest Federal Funds Rate; and (b) the rate of interest in effect for such
day as publicly announced from time to time by Bank in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by Bank
based upon various factors including Bank's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change.
1
8
"Base Rate Loan" means a Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" has the meaning set forth in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower set forth on
Schedule 1, or such other account as the Borrower from time to time shall
designate in a written notice to the Bank.
"Business Day" means a day (i) other than Saturday or Sunday, and (ii)
on which commercial banks are open for business in New York, New York, and San
Francisco, California.
"Capital Lease" means, for any Person, any lease of property (whether
real, personal or mixed) which, in accordance with GAAP, would, at the time a
determination is made, be required to be recorded as a capital lease in respect
of which such Person is liable as lessee.
"Closing Date" means the date on which all conditions precedent set
forth in Section 7.01 are satisfied or waived by the Bank.
"Commitment" means, $300,000,000, as from time to time reduced pursuant
to Section 4.01, or, where the context so requires, the obligation of the Bank
to make Loans up to such amount on the terms and conditions set forth in this
Agreement.
"Compliance Certificate" means a certificate of a Responsible Officer of
the Borrower, in substantially the form of Exhibit B, with such changes thereto
as the Bank may from time to time reasonably request.
"Consolidated Current Liabilities" means, as of any date of
determination, the current liabilities of the Borrower and its Subsidiaries on a
consolidated basis as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Borrower and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period, as determined in accordance with GAAP.
"Consolidated Net Loss" means, for any period, a negative Consolidated
Net Income; provided, that, there shall be excluded from Consolidated Net Loss
losses due to (i) charges related to the amortization of goodwill in connection
with the investment by Borrower in Veritas Software Corporation, (ii) non-cash
charges associated with the recapitalization of Seagate Software, Inc., not to
exceed $285,000,000, and (iii) charges in respect of restructuring or
acquisition-related reserves, not to exceed $200,000,000 in the aggregate and of
which no more than 50% shall be cash-related charges.
"Consolidated Net Operating Loss" means, for any period, the net
operating losses of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP; provided, that, to the extent used
in the calculation of operating losses, there shall be excluded from
Consolidated Net Operating Loss (i) charges related to the amortization of
2
9
goodwill in connection with the investment by Borrower in Veritas Software
Corporation, (ii) non-cash charges related to the recapitalization of Seagate
Software, Inc., not to exceed $285,000,000 and (iii) charges in respect of
restructuring or acquisition-related reserves, not to exceed $200,000,000 in the
aggregate and of which no more than 50% shall be cash-related charges.
"Consolidated Quick Assets" means, as of any date of determination, the
cash, cash equivalents and accounts receivable due within one year of the
Borrower and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP; provided that there shall be excluded any such assets
subject to security interests in favor of anyone other than the Bank except for
Liens permitted pursuant to clause (viii) of the definition of Permitted Liens
incurred in the ordinary course of business.
"Consolidated Tangible Net Worth" means the total assets of the Borrower
and its Subsidiaries minus the total liabilities of the Borrower and its
Subsidiaries minus the carrying value of (a) goodwill, organizational expenses,
patents, patent applications, trademarks, trademark applications, trade names,
service marks, service mark applications, copyrights, designs and other
intellectual property and licenses therefor and rights therein and other similar
intangible property, (b) all amortizing debt issuance expenses accrued as an
asset, (c) cash held in a sinking fund or other analogous fund for the purpose
of redemption, retirement or prepayment of any capital stock or indebtedness or
Guaranty Obligation, if no offsetting liability exists with respect to such
indebtedness or Guaranty Obligation on the consolidated balance sheet of the
Borrower and its Subsidiaries, in all cases determined on a consolidated basis
in accordance with GAAP.
"Consolidated Total Assets" means the total assets (real, personal,
tangible or intangible) of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Default" means an Event of Default or an event or condition which with
notice or lapse of time or both would constitute an Event of Default.
"Dollars" and the sign "$" each means lawful money of the United States.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directives, requests, licenses, authorizations and
permits of, and agreements with (including consent decrees), any Governmental
Authorities, in each case relating to or imposing liability or standards of
conduct concerning public health, safety and environmental protection matters,
including the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law, the California
Solid Waste Management, Resource Recovery and Recycling Act, the California
Water Code and the California Health and Safety Code.
3
10
"ERISA" means the Employee Retirement Income Security Act of 1974,
including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control with the Borrower within the meaning
of Section 4001(a)(14) of ERISA and Sections 414(b), (c) and (m) of the Internal
Revenue Code.
"Eurodollar Business Day" means a Business Day on which dealings in
Dollar deposits are carried on in the London interbank market.
"Eurodollar Rate" means for each Interest Period for each Eurodollar
Rate Loan the rate per annum (rounded upward, if necessary, to the nearest 1/100
of 1%) determined by the Bank pursuant to the following formula:
Eurodollar Rate = Interbank Rate
------------------------------------
100% - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" means a Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Reserve Percentage" means the maximum reserve requirement
percentage (including any ordinary, supplemental, marginal and emergency
reserves), if any, as determined by the Bank, then applicable under Regulation D
in respect of Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities") of a member bank in the Federal Reserve System with deposits
exceeding $1,000,000,000.
"Event of Default" has the meaning set forth in Section 10.01.
"Exchangeable Indebtedness" means Indebtedness with a maturity date
after the Final Maturity Date which is on terms and conditions satisfactory to
the Bank.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%), as determined by the Bank,
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for any day of determination (or if such day of
determination is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by it.
"Final Maturity Date" means November 2, 2000.
4
11
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles in the U.S. as in
effect from time to time.
"Governmental Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority, domestic or foreign, exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (ii) to advance or provide funds (A) for the payment or discharge
of any such primary obligation, or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (iv) in connection with any synthetic lease or other similar off
balance sheet lease transaction, or (v) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof.
"Hazardous Substances" means any toxic or hazardous substances,
materials, wastes, contaminants or pollutants, including asbestos, PCBs,
petroleum products and byproducts, and any substances defined or listed as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances" (or similarly identified), regulated under or forming the basis for
liability under any applicable Environmental Law.
"Indebtedness" means, for any Person: (i) all indebtedness or other
obligations of such Person for borrowed money or for the deferred purchase price
of property or services (except for trade payables in the ordinary course of
business); (ii) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (iii) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property); (iv) all obligations under Capital
Leases; (v) all reimbursement or other obligations of such Person under or in
respect of letters of credit and bankers acceptances, and all net obligations in
respect of Rate Contracts; (vi) all reimbursement or other obligations of such
Person in respect of any bank guaranties, shipside bonds, surety bonds and
similar instruments issued for the account of such Person or as to which such
Person is otherwise liable for reimbursement of drawings or payments; (vii) all
Guaranty Obligations in respect of Indebtedness covered in Subsections (i)
through (vi) hereof; and (viii) all indebtedness of another Person secured by
any Lien upon or in property owned by the Person for whom Indebtedness is being
determined, whether or not such
5
12
Person has assumed or become liable for the payment of such indebtedness of such
other Person. For all purposes of this Agreement, the Indebtedness of any Person
shall include all Indebtedness of any partnership or joint venture or limited
liability company in which such Person is a general partner or a joint venturer
or a member, to the extent there is recourse against such Person for the
liabilities of such partnership, joint venture or limited liability company.
"Insolvency Proceeding" means (i) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (ii) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, in each case undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interbank Rate" means for each Eurodollar Rate Loan the rate per annum
determined by the Bank to be the average (rounded upward, if necessary, to the
nearest 1/16 of 1%) of the rates at which deposits in Dollars are offered to the
Bank by prime banks in the London interbank market, at approximately 11:00 A.M.
(London time), two Eurodollar Business Days before the first day of such
Interest Period, in an amount substantially equal to the proposed Eurodollar
Rate Loan and for a period of time comparable to such Interest Period.
"Interest Payment Date" means a date specified for the payment of
interest pursuant to Section 3.01(c).
"Interest Period" means, with respect to any Eurodollar Rate Loan, the
period determined in accordance with Section 3.01(b) applicable thereto.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Lending Office" has the meaning set forth in Section 2.03.
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien (statutory or
other), or other preferential arrangement (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing or any agreement to give any
security interest).
"Loan Documents" means this Agreement and all other certificates,
documents, agreements and instruments delivered to the Bank under or in
connection with this Agreement.
"Loans" has the meaning set forth in Section 2.01(b).
"Material Adverse Effect" means any event, matter, condition or
circumstance which: (i) has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of the Borrower and its
6
13
Subsidiaries taken as a whole; or (ii) affects the legality, validity, binding
effect or enforceability of any of the Loan Documents.
"Material Subsidiary" means, at any time, any Subsidiary accounting for
(i) 5% or more of Consolidated Net Income during the immediately preceding
fiscal quarter, or (ii) 5% or more of Consolidated Total Assets as of the last
day of the immediately preceding fiscal quarter.
"Minimum Amount" has the meaning set forth in Section 2.05.
"Multiemployer Plan" means a "multiemployer plan" as defined in Sections
3(37) and 4001(a)(3) of ERISA.
"Notice" means a Notice of Borrowing, a Notice of Conversion or
Continuation or a Notice of Prepayment.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Conversion or Continuation" has the meaning set forth in
Section 3.05(c).
"Notice of Prepayment" has the meaning set forth in Section 4.03(b).
"Obligations" means the indebtedness, liabilities and other obligations
of the Borrower to the Bank under or in connection with the Loan Documents,
including all Loans, all interest accrued thereon, all fees due under this
Agreement and the other Loan Documents and all other amounts payable by the
Borrower to the Bank thereunder or in connection therewith, whether now or
hereafter existing or arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined.
"PBGC" mean the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Pension Plan" means any employee pension benefit plan covered by Title
IV of ERISA (other than a Multiemployer Plan) that is maintained for employees
of the Borrower or any ERISA Affiliate or with regard to which the Borrower or
an ERISA Affiliate is a contributing sponsor within the meaning of Sections
4001(a)(13) or 4069 of ERISA.
"Permitted Liens" means:
(i) Liens in favor of the Bank;
(ii) the existing Liens listed in Schedule 2 or incurred in connection
with the extension, renewal or refinancing of the Indebtedness secured by such
existing Liens, provided that any extension, renewal or replacement Lien shall
be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not
increase;
7
14
(iii) Liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate
proceedings and which are adequately reserved for in accordance with GAAP;
(iv) Liens of materialmen, mechanics, warehousemen, carriers or
employees or other like Liens arising in the ordinary course of business and
securing obligations either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved for in accordance with
GAAP and which do not in the aggregate materially impair the use or value of the
property or risk the loss or forfeiture of title thereto;
(v) Liens consisting of deposits or pledges to secure the payment of
worker's compensation, unemployment insurance or other social security benefits
or obligations, or to secure the performance of bids, trade contracts, leases
(other than Capital Leases), public or statutory obligations, surety or appeal
bonds or other obligations of a like nature incurred in the ordinary course of
business (other than for Indebtedness or any Liens arising under ERISA);
(vi) easements, rights of way, servitudes or zoning or building
restrictions and other minor encumbrances on real property and irregularities in
the title to such property which do not in the aggregate materially impair the
use or value of such property or risk the loss or forfeiture of title thereto;
(vii) statutory landlord's Liens under leases to which the Borrower or
any of its Subsidiaries is a party;
(viii) Liens arising solely by virtue of any statutory or common law
provision relating to (A) banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower in excess of those set forth by regulations promulgated
by the FRB, and (ii) such deposit account is not intended by the Borrower or any
Subsidiary to provide collateral to the depository institution and (B) Liens in
favor of securities intermediaries (in their capacity as such) holding
securities accounts of the Borrower or its Subsidiaries;
(ix) Liens (A) upon or in any property acquired or held by the Borrower
or any of its Subsidiaries to secure the purchase price of such property or
Indebtedness incurred solely for the purpose of financing the acquisition of
such property and incurred within at least 270 days from the date of such
acquisition, or (B) existing on such property at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon; and
(x) Liens on assets of Persons which become Subsidiaries after the date
of this Agreement; provided, however, that (A) such Liens existed at the time
the respective Persons became Subsidiaries and were not created in anticipation
thereof, (B) any such Lien does not by its terms cover any assets after the time
such Person becomes a Subsidiary which were not covered immediately prior
thereto, and (C) any such Lien does not by its terms secure any Indebtedness
other than Indebtedness existing immediately prior to the time such Person
becomes a Subsidiary.
8
15
(xi) rights of lessees and sublessees under leases or subleases granted
to third Persons not interfering with the ordinary course of business of the
Borrower or any of its Subsidiaries;
(xii) Liens on the proceeds of insurance granted to insurance carriers
solely to secure the payment of financed premiums;
(xiii) Liens in favor of a trustee under any indenture securing amounts
due to the trustee in connection with its services under such indenture;
(xiv) rights of licensees or licensors under licensing agreements for
use of intellectual property entered into in the ordinary course of business;
(xv) Liens securing Exchangeable Indebtedness; and
(xvi) consensual Liens not described in subclauses (i) through (xv)
above; provided, that the aggregate amount of obligations (whether direct or
indirect, matured or unmatured, contingent or otherwise) secured by such Liens
shall not at any time exceed, in the aggregate, an amount equal to 20% of
Consolidated Tangible Net Worth as at the date of determination; provided,
further, that such Liens may not attach to accounts receivable (except
delinquent accounts receivable disposed of without recourse) or inventory.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or any
other entity of whatever nature or any Governmental Authority.
"Plan" means any employee pension benefit plan as defined in Section
3(2) of ERISA (including any Multiemployer Plan) and any employee welfare
benefit plan, as defined in Section 3(1) of ERISA (including any plan providing
benefits to former employees or their survivors).
"Premises" means any and all real property including all buildings and
improvements now or hereafter located thereon and all appurtenances thereto, now
or hereafter owned, leased, occupied or used by the Borrower and its
Subsidiaries.
"Rate Contracts" means interest rate swaps, caps, floors and collars,
currency swaps, or other similar financial products designed to provide
protection against fluctuations in interest, currency or exchange rates.
"Regulation D" means Regulation D of the FRB.
"Regulatory Change" has the meaning set forth in Section 5.03.
"Related Person" means any Affiliate, director, officer, employee,
agent, counsel or other advisor of any Person.
"Required Notice Date" has the meaning set forth in Section 2.06.
9
16
"Responsible Officer" means, with respect to any Person, the chief
executive officer, the president, the chief financial officer or the treasurer
of such Person, or any other senior officer of such Person having substantially
the same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of any such
Person, or any other senior officer of such Person involved principally in the
financial administration or controllership function of such Person and having
substantially the same authority and responsibility.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Solvent" means, as to any Person at any time, that (i) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (ii) the present fair saleable value of the
property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (iii) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subsidiary" means any corporation, association, partnership, joint
venture or other business entity of which more than 50% of the voting stock or
other equity interest is owned directly or indirectly by any Person or one or
more of the other Subsidiaries of such Person or a combination thereof.
"Swap Termination Value" means, in respect of any one or more Rate
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Rate Contracts, (i) for any date on or after
the date such Rate Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (ii) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Rate Contracts, as determined by the Borrower
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Rate Contracts (which may include the Bank).
"Taxes" has the meaning set forth in Section 6.02.
"Termination Event" means any of the following:
(i) with respect to a Pension Plan, a reportable event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
reportable event not subject to the provisions for 30-day notice to the PBGC
under such regulations);
(ii) the withdrawal of the Borrower or an ERISA Affiliate from a Plan
during a plan year in which the withdrawing employer was a "substantial
employer" as defined in Section 4001(a)(2) or 4062(e) of ERISA;
10
17
(iii) the taking of any actions (including the filing of a notice of
intent to terminate) by the Borrower, an ERISA Affiliate, the PBGC, a Plan
Administrator, or any other Person to terminate a Pension Plan or the treatment
of a Plan amendment as a termination of a Pension Plan under Section 4041 of
ERISA;
(iv) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or
(v) the complete or partial withdrawal of the Borrower or an ERISA
Affiliate from a Multiemployer Plan.
"Total Funded Debt" means, as to any date of determination, all
Indebtedness for borrowed money of the Borrower and its Subsidiaries and all
Indebtedness the Borrower and its Subsidiaries referenced in paragraphs (ii) and
(iv) of the definition of Indebtedness and any Guaranty Obligations to the
extent they relate to any of the foregoing, in each case determined on a
consolidated basis in accordance with GAAP, but excluding Exchangeable
Indebtedness.
"UCC" means the Uniform Commercial Code of the jurisdiction the law of
which governs the Loan Document in which such term is used.
"Unfunded Accrued Benefits" means the excess of a Pension Plan's accrued
benefits, as defined in Section 3(23) of ERISA, over the current value of that
Plan's assets, as defined in Section 3(26) of ERISA.
"United States" and "U.S." each means the United States of America.
SECTION 1.02 Accounting Principles.
(a) Accounting Terms. Unless otherwise defined or the context otherwise
requires, all accounting terms not expressly defined herein shall be construed,
and all accounting determinations and computations required under the Loan
Documents shall be made, in accordance with GAAP, consistently applied.
(b) GAAP Changes. If GAAP shall have been modified after the Closing
Date and the application of such modified GAAP shall have a material effect on
any financial computations hereunder (including the computations required for
the purpose of determining compliance with the covenants set forth in Section
9.02), then such computations shall be made and the financial statements,
certificates and reports due hereunder shall be prepared, and all accounting
terms not otherwise defined herein shall be construed, in accordance with GAAP
as in effect prior to such modification, unless and until the Bank and the
Borrower shall have agreed upon the terms of the application of such modified
GAAP.
(c) "Fiscal Year" and "Fiscal Quarter". References herein to "fiscal
year" and "fiscal quarter" refer to such fiscal periods of the Borrower.
SECTION 1.03 Interpretation. In the Loan Documents, except to the extent
the context otherwise requires:
11
18
(i) Any reference to an Article, a Section, a Schedule or an Exhibit is
a reference to an article or section thereof, or a schedule or an exhibit
thereto, respectively, and to a subsection or a clause is, unless otherwise
stated, a reference to a subsection or a clause of the Section or subsection in
which the reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and the like
mean and refer to this Agreement or any other Loan Document as a whole and not
merely to the specific Article, Section, subsection, paragraph or clause in
which the respective word appears.
(iii) The meaning of defined terms shall be equally applicable to both
the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall be deemed to
be followed by the words "without limitation."
(v) References to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of the Loan Documents.
(vi) References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings are for convenience
of reference only and shall not affect the construction of this Agreement or any
other Loan Document.
(viii) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding"; and the word "through" means "to and
including."
(ix) The use of a word of any gender shall include each of the
masculine, feminine and neuter genders.
(x) This Agreement and the other Loan Documents are the result of
negotiations between the Bank and the Borrower, have been reviewed by counsel to
the Bank and the Borrower, and are the products of both parties. Accordingly,
they shall not be construed against the Bank merely because of the Bank's
involvement in their preparation.
ARTICLE II
THE LOANS
SECTION 2.01 The Loans.
The Bank agrees, on the terms and conditions hereinafter set forth, to
make term loans (each a "Loan" and, collectively, the "Loans") to the Borrower
from time to time on any Business Day during the period from the Closing Date
until the Final Maturity Date, in an
12
19
aggregate principal amount up to but not exceeding the Commitment. Any amount of
the Loans repaid may not be reborrowed.
SECTION 2.02 Borrowing Procedure. Each Loan shall be made on a Business
Day upon written or telephonic notice (in the latter case to be confirmed
promptly in writing) from the Borrower to the Bank, which notice shall be
received by the Bank not later than 10:00 A.M. (California time) on the Required
Notice Date. Each such notice, except as provided in Sections 5.01 and 5.04,
shall be irrevocable and binding on the Borrower, shall be in substantially the
form of Exhibit B (a "Notice of Borrowing") and shall specify whether the
borrowing consists of a Base Rate Loan or Eurodollar Rate Loan, and the other
information required thereby. Upon fulfillment of the applicable conditions set
forth in Article VII, and unless other payment instructions are provided by the
Borrower, the Bank shall make the Loan available to the Borrower by crediting
the Borrower's Account with same day or immediately available funds on such
borrowing date.
SECTION 2.03 Lending Offices. The Loans made by the Bank may be made
from and maintained at such offices of the Bank (each a "Lending Office") as the
Bank may from time to time designate (whether or not such office is specified on
Schedule 1). The Bank shall not elect a Lending Office that, at the time of
making such election, increases the amounts which would have been payable by the
Borrower to the Bank under this Agreement in the absence of such election. With
respect to Eurodollar Rate Loans made from and maintained at the Bank's non-U.S.
offices, the obligation of the Borrower to repay such Eurodollar Rate Loans
shall nevertheless be to the Bank and shall, for all purposes of this Agreement
be deemed made or maintained by it, for the account of any such office.
SECTION 2.04 Evidence of Indebtedness. The Bank shall record in its
internal records the date and amount of each Loan made, each conversion to a
different interest rate, each relevant Interest Period, the amount of principal
and interest due and payable from time to time hereunder, each payment thereof
and the resulting unpaid principal balance of such Loan. Any such recordation
shall be rebuttable presumptive evidence of the accuracy of the information so
recorded. Any failure so to record or any error in doing so shall not, however,
limit or otherwise affect the obligations of the Borrower hereunder to pay any
amount owing with respect to the Loans.
SECTION 2.05 Minimum Amounts. Any borrowing, conversion, continuation,
Commitment reduction or prepayment of any Loan hereunder shall be in the amount
of $5,000,000 or a greater amount which is an integral multiple of $5,000,000
and any partial Commitment reduction under Section 4.01(a) shall be in the
amount of $5,000,000 or a greater amount which is an integral multiple of
$5,000,000 (each such specified amount a "Minimum Amount").
SECTION 2.06 Required Notice. Any Notice hereunder shall be given not
later than the date determined as follows (each such specified date a "Required
Notice Date"): (a) any Notice with respect to a borrowing of, or conversion
into, any Base Rate Loan shall be given at least 1 Business Day prior to the
date of the proposed borrowing or conversion; (b) any Notice with respect to any
borrowing or continuation of, or conversion into, any Eurodollar Rate Loan shall
be given at least 3 Eurodollar Business Days prior to the date of the proposed
13
20
borrowing, conversion or continuation; and (c) any Notice with respect to any
prepayment under Section 4.01(a) or Commitment reduction under Section 4.01(a)
shall be given at least 5 Business Days prior to the proposed prepayment or
Commitment reduction date.
ARTICLE III
INTEREST AND FEES; CONVERSION OR CONTINUATION
SECTION 3.01 Interest
(a) Interest Rate. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date of such Loan until such principal
amount shall be paid in full, at the following rates:
(i) during such periods as such Loan is a Base Rate Loan, at a rate per
annum equal at all times to the Base Rate;
(ii) during such periods as such Loan is a Eurodollar Rate Loan, at a
rate per annum equal at all times during each Interest Period for such
Eurodollar Rate Loan to the Eurodollar Rate for such Interest Period plus the
Applicable Margin.
(b) Interest Periods. The initial and each subsequent Interest Period
for the Eurodollar Rate Loans, shall be a period of one, two, three or six
months, or such other period as requested by the Borrower and acceptable to the
Bank. The determination of Interest Periods shall be subject to the following
provisions:
(i) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period pertaining to a Eurodollar Rate Loan would
otherwise end on a day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day;
(iii) no Interest Period shall extend beyond the Final Maturity Date
with respect to any Loan;
(iv) any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the ending calendar month of such
Interest Period) shall end on the last Business Day of the ending calendar month
of such Interest Period; and
(v) there shall be no more than 6 Interest Periods in effect at any one
time.
14
21
(c) Interest Payment Dates. Subject to Section 3.02, interest on the
Loans shall be payable in arrears at the following times:
(i) interest on each Base Rate Loan shall be payable quarterly on the
last Business Day in each calendar quarter and on the Final Maturity Date;
(ii) interest on each Eurodollar Rate Loan shall be payable on the last
day of each Interest Period for such Eurodollar Rate Loan on the Final Maturity
Date, provided that (A) in the case of any such Interest Period which is greater
than three months, interest on such Eurodollar Rate Loan shall be payable on
each date that is three months, or any integral multiple thereof, after the
beginning of such Interest Period and on the last day of such Interest Period
and (B) if any prepayment, conversion or continuation is effected other than on
the last day of such Interest Period, accrued interest on such Eurodollar Rate
Loan shall be due on such prepayment, conversion or continuation date as to the
principal amount of such Eurodollar Rate Loan prepaid, converted or continued.
(d) Notice to the Borrower. Each determination by the Bank hereunder of
a rate of interest and of any change therein, including any changes in (i) the
Base Rate during any periods in which Base Rate Loans shall be outstanding, (ii)
the Eurodollar Reserve Percentage (if any) during any periods in which
Eurodollar Rate Loans shall be outstanding, shall be rebuttable presumptive
evidence of the accuracy of such determination. The Bank shall promptly notify
the Borrower of such determination. Such notice shall set forth in reasonable
detail the basis for any such determination or change. The failure of the Bank
to give any such notice specified in this subsection shall not affect the
Borrower's obligation to pay such interest or fees.
SECTION 3.02 Default Rate of Interest. Notwithstanding Section 3.01, in
the event that any amount of principal of or interest on any Loan, or any other
amount payable hereunder or under the Loan Documents, is not paid in full when
due (whether at stated maturity, by acceleration or otherwise), the Borrower
shall pay interest on such unpaid principal, interest or other amount, from the
date such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment to the extent permitted by law,
payable on demand, at a rate per annum equal at all times to the Base Rate plus
2%.
SECTION 3.03 Fees. The Borrower agrees to pay to the Bank a commitment
fee on the average daily unused portion of the Commitment as in effect from time
to time from the Closing Date until the Final Maturity Date at the rate of 0.30%
per annum, payable quarterly in arrears on the last Business Day of each
calendar quarter in each year, commencing on December 31, 1999, and on the
earlier of the date the Commitment is terminated hereunder or the Final Maturity
Date. All fees payable under this Section 3.03 shall be nonrefundable.
SECTION 3.04 Computations. All computations of interest based upon the
Base Rate (unless accruing based upon the Federal Funds Rate) shall be made on
the basis of a year of 365 or 366 days, as the case may be, for the actual
number of days occurring in the period for which such interest is payable. All
computations of commitment fee and of interest based upon the Federal Funds Rate
or Eurodollar Rate shall be made on the basis of a year of 360 days for the
actual number of days occurring in the period for which such commitment fee
15
22
or interest is payable, which results in more interest being paid than if
computed on the basis of a 365-day year. Notwithstanding the foregoing, if any
Loan is repaid on the same day on which it is made, such day shall be included
in computing interest on such Loan.
SECTION 3.05 Conversion or Continuation.
(a) Election. The Borrower may elect (i) to convert all or any part of
(A) any outstanding Base Rate Loan into a Eurodollar Rate Loan, (B) any
outstanding Eurodollar Rate Loan into a Base Rate Loan; or (ii) to continue all
or any part of a Loan with one type of interest rate as such; provided, however,
that if the amount of any Eurodollar Rate Loan shall have been reduced, by
payment, prepayment, or conversion of part thereof to be less than $5,000,000,
such Eurodollar Rate Loan shall automatically convert into a Base Rate Loan, and
on and after such date the right of the Borrower to continue such Loan as, and
convert such Loan into, a Eurodollar Rate Loan, as the case may be, shall
terminate. Any conversion or continuation of any Eurodollar Rate Loan shall be
made on the last day of the current Interest Period for such Eurodollar Rate
Loans. No outstanding Loan may be converted into or continued as a Eurodollar
Rate Loan if any Default has occurred and is continuing.
(b) Automatic Conversion. On the last day of any Interest Period for any
Eurodollar Rate Loan, such Eurodollar Rate Loan shall, if not repaid,
automatically convert into a Base Rate Loan unless the Borrower shall have made
a timely election to continue such Eurodollar Rate Loan as such for an
additional Interest Period as provided in subsection (a).
(c) Notice to the Bank. The conversion or continuation of any Loans
contemplated by subsection (a) shall be made upon written or telephonic notice
(in the latter case to be confirmed promptly in writing) from the Borrower to
the Bank, which notice shall be received by the Bank not later than 10:00 A.M.
(California time) on the Required Notice Date. Each such notice (a "Notice of
Conversion or Continuation") shall, except as provided in Sections 5.01 and
5.04, be irrevocable and binding on the Borrower, shall refer to this Agreement
and shall specify: (i) the proposed date of the conversion or continuation,
which shall be a Business Day or Eurodollar Business Day in the case of
Eurodollar Rate Loans; (ii) the outstanding Loan (or part thereof) to be
converted into or continued as a Base Rate or Eurodollar Rate Loan, which shall
be in a Minimum Amount; (iii) if the conversion or continuation consists of any
Eurodollar Rate Loan, the duration of the Interest Period with respect thereto;
and (iv) that no Default exists hereunder.
SECTION 3.06 Highest Lawful Rate. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other payments
which are treated as interest under applicable law, as provided for herein or in
any other Loan Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received or collected by the Bank in
connection with this Agreement under applicable law (the "Maximum Rate"), the
Borrower shall not be obligated to pay, and the Bank shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Maximum
Rate, and during any such period the interest payable hereunder shall be limited
to the Maximum Rate.
16
23
ARTICLE IV
REDUCTION OF COMMITMENTS;
REPAYMENT; PREPAYMENT
SECTION 4.01 Reduction or Termination of the Commitment.
(a) Reduction or Termination. The Borrower may, upon prior notice to the
Bank as provided herein, terminate in whole or reduce in part, as of the date
specified by the Borrower in such notice, any then unused portion of the
Commitment, provided that each partial reduction shall be in a Minimum Amount.
Notwithstanding the foregoing the Commitment shall terminate in full on the
Final Maturity Date.
(b) Adjustment of Commitment Fee; No Reinstatement. From the effective
date of any reduction or termination prior to the Final Maturity Date, the
commitment fee payable under Section 3.03(a) shall be computed on the basis of
the Commitment as so reduced or terminated. Once reduced or terminated, the
Commitment may not be increased or otherwise reinstated.
SECTION 4.02 Repayment of the Loans. The Borrower shall repay to the
Bank in full on the Final Maturity Date the aggregate principal amount of the
Loans outstanding on such date.
SECTION 4.03 Prepayments.
(a) Optional Prepayments. Subject to Section 5.02, Borrower may, upon
prior notice to the Bank not later than the Required Notice Date, prepay the
outstanding amount of the Loans in whole or in part, without premium or penalty.
Any partial prepayments shall be in Minimum Amounts.
(b) Notice; Application. The notice given of any prepayment (a "Notice
of Prepayment") shall specify the date and amount of the prepayment and whether
the prepayment is of Base Rate or Eurodollar Rate Loans or a combination
thereof, and if of a combination thereof the amount of the prepayment allocable
to each. If the Notice of Prepayment is given, the Borrower shall make such
prepayment and the prepayment amount specified in such Notice shall be due and
payable on the date specified therein, with accrued interest to such date on the
amount prepaid.
ARTICLE V
YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 Inability to Determine Rates. If the Bank shall determine
that adequate and reasonable means do not exist to ascertain the Eurodollar
Rate, or the Bank shall determine that the Eurodollar Rate does not accurately
reflect the cost to it of making or maintaining Eurodollar Rate Loans, then the
Bank shall give telephonic notice (promptly confirmed in writing) to the
Borrower of such determination. Any such written notice shall specify in
reasonable detail the basis for such determination and shall be rebuttable
presumptive evidence of the accuracy of such determination. Thereafter, the
obligation of the Bank to make or (other than through the end of the current
Interest Period) maintain Eurodollar Rate Loans
17
24
hereunder shall be suspended until the Bank revokes such notice. Upon receipt of
such notice, the Borrower may revoke any Notice then submitted by it. If the
Borrower does not revoke such Notice, the Bank shall make, convert or continue
Loans, as proposed by the Borrower, in the amount specified in the Notice
submitted by the Borrower, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Eurodollar Rate Loans, as the case may be.
SECTION 5.02 Funding Losses. In addition to such amounts as are required
to be paid by the Borrower pursuant to Section 5.03, the Borrower shall
compensate the Bank, promptly upon receipt of the Bank's written request, for
all losses, costs and expenses (including any loss or expense incurred by the
Bank in obtaining, liquidating or re-employing deposits or other funds to fund
or maintain the Eurodollar Rate Loans), if any, which the Bank sustains: (i) if
the Borrower repays, converts or prepays any Eurodollar Rate Loan on a date
other than the last day of an Interest Period for such Eurodollar Rate Loan
(whether as a result of an optional prepayment, a mandatory prepayment, a
payment as a result of acceleration or otherwise); (ii) if the Borrower fails to
borrow a Eurodollar Rate Loan after giving its Notice (other than as a result of
the operation of Section 5.01 or 5.04); (iii) if the Borrower fails to convert
into or continue a Eurodollar Rate Loan after giving its Notice (other than as a
result of the operation of Section 5.01 or 5.04); or (iv) if the Borrower fails
to prepay a Eurodollar Rate Loan after giving its Notice. Any such request for
compensation shall set forth in reasonable detail the basis for requesting such
compensation and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
SECTION 5.03 Regulatory Changes.
(a) Increased Costs. If, after the date hereof, there is announced the
adoption of, or any change in, any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof (a "Regulatory Change"), or compliance by the Bank (or its Lending
Office) with any request, guideline or directive (whether or not having the
force of law) of any such Governmental Authority shall impose, modify or deem
applicable any reserve, special deposit or similar requirement (including any
such requirement imposed by the FRB, but excluding with respect to any
Eurodollar Rate Loan any such requirement included in the calculation of the
Eurodollar Rate) against assets of, deposits with or for the account of, or
credit extended by, the Bank's Lending Office or shall impose on the Bank (or
its Lending Office) or on the United States market for certificates of deposit
or the interbank eurodollar market any other condition affecting its Eurodollar
Rate Loans or its obligation to make such Eurodollar Rate Loans, and the result
of any of the foregoing is to increase the cost to the Bank (or its Lending
Office) of making or maintaining any Eurodollar Rate Loan, or to reduce the
amount of any sum received or receivable by the Bank (or its Lending Office)
under this Agreement with respect thereto, by an amount deemed by the Bank to be
material, then from time to time, within 15 days after demand by the Bank, the
Borrower shall pay to the Bank such additional amounts as shall compensate the
Bank for such increased cost or reduction; provided, that, if such demand is
made more than 180 days after the date of the event or circumstance giving rise
to such demand, the Borrower shall not be required to compensate the Bank for
such increased costs or reduction incurred more than 180 days before the date of
such demand.
18
25
(b) Capital Requirements. If the Bank shall have determined that any
Regulatory Change regarding capital adequacy, or compliance by the Bank (or any
corporation controlling the Bank) with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any
Governmental Authority, has or shall have the effect of reducing the rate of
return on the Bank's or such corporation's capital as a consequence of the
Bank's obligations hereunder to a level below that which the Bank or such
corporation would have achieved but for such adoption, change or compliance
(taking into consideration the Bank's or such corporation's policies with
respect to capital adequacy), by an amount deemed by the Bank to be material,
then from time to time, within 15 days after demand by the Bank, the Borrower
shall pay to the Bank such additional amounts as shall compensate the Bank for
such reduction; provided, that, if such demand is made more than 180 days after
the date of the event or circumstance giving rise to such demand, the Borrower
shall not be required to compensate the Bank for such increased costs or
reduction incurred more than 180 days before the date of such demand.
(c) Requests. Any such request for compensation by the Bank under this
Section 5.03 shall set forth in reasonable detail the basis of calculation
thereof and shall be rebuttable presumptive evidence of the accuracy of such
determination. In determining the amount of such compensation, the Bank may use
any reasonable averaging and attribution methods.
SECTION 5.04 Illegality. If the Bank shall determine that it has become
unlawful, as a result of any Regulatory Change, for the Bank to make, convert
into or maintain Eurodollar Rate Loans as contemplated by this Agreement, the
Bank shall promptly give notice of such determination to the Borrower, and (I)
the obligation of the Bank to make or convert into Eurodollar Rate Loans, as the
case may be, shall be suspended until the Bank gives notice that the
circumstances causing such suspension no longer exist; and (ii) each of the
Bank's outstanding Eurodollar Rate Loans, as the case may be, shall, if
requested by the Bank, be converted into a Base Rate Loan not later than upon
expiration of the Interest Period related to such Eurodollar Rate Loan, or, if
earlier, on such date as may be required by the applicable Regulatory Change, as
shall be specified in such request. Any such determination shall, in the absence
of manifest error, be conclusive and binding for all purposes.
SECTION 5.05 Funding Assumptions. Solely for purposes of calculating
amounts payable by the Borrower to the Bank under this Article V, each
Eurodollar Rate Loan made by the Bank (and any related reserve, special deposit
or similar requirement) shall be conclusively deemed to have been funded at the
Interbank Rate used in determining the Eurodollar Rate for such Eurodollar Rate
Loan by a matching deposit or other borrowing in the interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan is in fact so funded.
SECTION 5.06 Obligation to Mitigate. The Bank agrees that as promptly as
practicable after it becomes aware of the occurrence of an event that would
entitle it to give notice pursuant to Section 5.03(a) or 5.04, and in any event
if so requested by the Borrower, the Bank shall use reasonable efforts to make,
fund or maintain its affected Eurodollar Rate Loans through another Lending
Office if as a result thereof the increased costs would be avoided or materially
reduced or the illegality would thereby cease to exist and if, in the reasonable
opinion
19
26
of the Bank, the making, funding or maintaining of such Eurodollar Rate Loans
through such other Lending Office would not in any material respect be
disadvantageous to the Bank or contrary to the Bank's normal banking practices.
ARTICLE VI
PAYMENTS
SECTION 6.01 Payments.
(a) Payments. The Borrower shall make each payment under the Loan
Documents, unconditionally in full without set-off, counterclaim or other
defense, not later than 11:00 A.M. (California time) on the day when due to the
Bank in Dollars and in same day or immediately available funds to the Bank's
Payment Office.
(b) Authorization to Bank. The Bank may (but shall not be obligated to),
and the Borrower hereby authorizes the Bank to, charge any deposit account of
the Borrower with the Bank for the amount of any payment which is not made by
the time specified in subsection (a). The Bank shall promptly notify the
Borrower after charging any such account.
(c) Extension. Whenever any payment hereunder shall be stated to be due,
or whenever any Interest Payment Date or any other date specified hereunder
would otherwise occur, on a day other than a Business Day, then, except as
otherwise provided herein, such payment shall be made, and such Interest Payment
Date or other date shall occur, on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest or commitment fee hereunder.
(d) Application. (i) Unless the Bank shall receive a timely election by
the Borrower with respect to the application of any principal payments, each
payment of principal by the Borrower shall be applied (in such manner as the
Bank shall determine in its sole discretion) (A) first, to the Base Rate Loans
then outstanding, and (B) second, to the Eurodollar Rate Loans then outstanding.
SECTION 6.02 Taxes.
(a) No Reduction of Payments. The Borrower shall pay all amounts of
principal, interest, fees and other amounts due under the Loan Documents free
and clear of, and without reduction for or on account of, any present and future
taxes, levies, imposts, duties, fees, assessments, charges, deductions or
withholdings and all liabilities with respect thereto excluding, in the case of
the Bank, income and franchise taxes imposed on it by the jurisdiction under the
laws of which the Bank is organized or in which its principal executive offices
may be located or any political subdivision or taxing authority thereof or
therein, and by the jurisdiction of the Bank's Lending Office and any political
subdivision or taxing authority thereof or therein (all such nonexcluded taxes,
levies, imposts, duties, fees, assessments, charges, deductions, withholdings
and liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted or withheld from any payment, the Borrower shall
increase the amount paid so that the Bank receives when due (and is entitled to
retain), after deduction or withholding for or on account of such Taxes
(including deductions or withholdings applicable to
20
27
additional sums payable under this Section 6.02), the full amount of the payment
provided for in the Loan Documents.
(b) Deduction or Withholding; Tax Receipts. If the Borrower makes any
payment hereunder in respect of which it is required by law to make any
deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed for
such payment under applicable law and promptly thereafter shall furnish to the
Bank an original or certified copy of a receipt evidencing payment thereof,
together with such other information and documents as the Bank may reasonably
request.
(c) Indemnity. If the Bank is required by law to make any payment on
account of Taxes, or any liability in respect of any Tax is imposed, levied or
assessed against the Bank, the Borrower shall indemnify the Bank for and against
such payment or liability, together with any incremental taxes, interest or
penalties, and all costs and expenses, payable or incurred in connection
therewith, including Taxes imposed on amounts payable under this Section 6.02,
whether or not such payment or liability was correctly or legally asserted;
provided, that, the Borrower shall not be liable to the Bank for any portion of
such amounts to the extent that they are found by a final decision of a court of
competent jurisdiction to have resulted from the Bank's gross negligence or
willful misconduct, provided, further, however, that the Borrower shall not be
responsible for any increase in such penalty, interest or expense directly
attributable to the period of time commencing two (2) Business Days after the
Bank receives notice of the levying of such amount and ending on the Business
Day on which Bank gives notice of such levy to the Borrower. A certificate of
the Bank as to the amount of any such payment shall be rebuttable presumptive
evidence of the amount due. Any such certificate shall set forth in reasonable
detail the calculation of the amounts so payable.
(d) Mitigation. The Bank agrees that as promptly as practicable after it
becomes aware of the occurrence of an event that would cause the Borrower to
make any payment in respect of Taxes to the Bank or a payment in indemnification
with respect to any Taxes, and in any event if so requested by the Borrower
following such occurrence, the Bank shall use reasonable efforts to make, fund
or maintain its affected Loan (or relevant part thereof) through another Lending
Office if as a result thereof the additional amounts so payable by the Borrower
would be avoided or materially reduced and if, in the reasonable opinion of the
Bank, the making, funding or maintaining of such Loan (or relevant part thereof)
through such other Lending Office would not in any material respect be
disadvantageous to the Bank or contrary to the Bank's normal banking practices.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 Conditions Precedent to the Initial Loan. The obligation of
the Bank to make its initial Loan shall be subject to the satisfaction of each
of the following conditions precedent on or before the Closing Date:
21
28
(a) Fees and Expenses. The Borrower shall have paid (i) all fees then
due in accordance with Section 3.03 and (ii) all invoiced costs and expenses
then due in accordance with Section 11.04(a).
(b) Closing Certificate. The Bank shall have received, in form and
substance satisfactory to it a certificate of a Responsible Officer of the
Borrower, dated the Closing Date, stating that (A) the representations and
warranties contained in Section 8.01 and in the other Loan Documents are true
and correct on and as of the date of such certificate as though made on and as
of such date and (B) on and as of the Closing Date, no Default shall have
occurred and be continuing or shall result from the initial borrowing;
(c) Corporate Documents. The Bank shall have received the following, in
form and substance satisfactory to it:
(i) certified copies of the certificate or articles, as the case may be,
of incorporation of the Borrower, together with certificates as to good standing
and tax status, from the Secretary of State or other Governmental Authority, as
applicable, of the Borrower's state of incorporation, each dated as of a recent
date prior to the Closing Date;
(ii) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying (A) copies of the bylaws of the
Borrower and the resolutions of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of the Loan Documents and
(B) the incumbency, authority and signatures of each officer of the Borrower
authorized to execute and deliver the Loan Documents and act with respect
thereto, upon which certificate the Bank may conclusively rely until it shall
have received a further certificate of the Secretary or an Assistant Secretary
of the Borrower canceling or amending such prior certificate;
(d) Legal Opinions . The Bank shall have received an opinion of counsel
to the Borrower, dated the Closing Date, in form and substance satisfactory to
Bank.
SECTION 7.02 Conditions Precedent to All Loans. The obligation of the
Bank to make each Loan shall be subject to the satisfaction of each of the
following conditions precedent:
(a) Notice. The Borrower shall have given the Notice of Borrowing as
provided in Section 2.02.
(b) Material Adverse Effect. On and as of the date of such Loan, there
shall have occurred no Material Adverse Effect since the date of this Agreement.
(c) Representations and Warranties; No Default. On the date of such
Loan, both before and after giving effect thereto and to the application of
proceeds therefrom: (i) the representations and warranties contained in Section
8.01 and in the other Loan Documents shall be true and correct on and as of the
date of such Loan as though made on and as of such date; and (ii) no Default
shall have occurred and be continuing or shall result from the making of such
Loan. For purposes of this Section 7.02(c), clause (i) shall be deemed instead
to refer to the last day of the most recent quarter and year for which financial
statements have then been delivered
22
29
in respect of the representation and warranty made in Section 8.01(n); clause
(i) and shall not be deemed to refer to any other representations and warranties
which relate solely to an earlier date (provided that such other representations
and warranties shall be true and correct as of such earlier date); and clause
(i) shall take into account any amendments to the Schedules and other
disclosures made in writing by the Borrower to the Bank after the Closing Date
and approved by the Bank. The giving of any Notice of Borrowing and the
acceptance by the Borrower of the proceeds of each Loan made following the
Closing Date shall each be deemed a certification to the Bank that on and as of
the date of such Loan such statements are true.
(d) Additional Documents. The Bank shall have received, in form and
substance satisfactory to it, such additional approvals, opinions, documents and
other information as the Bank may reasonably request.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01 Representations and Warranties. The Borrower represents and
warrants to the Bank that:
(a) Organization and Powers. Each of the Borrower and its Material
Subsidiaries is a corporation or partnership duly organized or formed, as the
case may be, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would result in a Material Adverse Effect and has all
requisite power and authority to own its assets and carry on its business and,
with respect to the Borrower, to execute, deliver and perform its obligations
under the Loan Documents.
(b) Authorization; No Conflict. The execution, delivery and performance
by the Borrower of the Loan Documents have been duly authorized by all necessary
corporate action of the Borrower and do not and will not (i) contravene the
terms of the certificate or articles, as the case may be, of incorporation and
the bylaws of the Borrower or result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (ii) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree or the like binding on or affecting
the Borrower; or (iii) except as contemplated by this Agreement, result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties of the Borrower.
(c) Binding Obligation. The Loan Documents constitute, or when delivered
under this Agreement will constitute, legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms; except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally or equitable principles relating to enforceability.
(d) Consents. No authorization, consent, approval, license, exemption
of, or filing or registration with, any Governmental Authority, or approval or
consent of any other
23
30
Person, is required for the due execution, delivery or performance by the
Borrower of any of the Loan Documents.
(e) No Defaults. Neither the Borrower nor any of its Material
Subsidiaries is in default under any contract, lease, agreement, judgment,
decree or order to which it is a party or by which it or its properties may be
bound, which default could reasonably be expected to have a Material Adverse
Effect or result in an Event of Default if such default had occurred after the
Closing Date.
(f) Title to Properties; Liens. The Borrower and its Material
Subsidiaries have good and marketable title to, or valid and subsisting
leasehold interests in their properties and assets, and there is no Lien upon or
with respect to any of such properties or assets, except for Permitted Liens.
(g) Litigation. There are no actions, suits or proceedings pending or,
to the best of the Borrower's knowledge, threatened against or affecting the
Borrower or any of its Material Subsidiaries or the properties of the Borrower
or any of its Subsidiaries before any Governmental Authority or arbitrator which
could reasonably be expected to result in a Material Adverse Effect.
(h) Compliance with Environmental Laws. Each of the Borrower and its
Material Subsidiaries complies in all respects with all Environmental Laws,
whether in connection with the ownership, use, maintenance or operation of its
Premises or the conduct of any business thereon, or otherwise except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Neither the Borrower, any of its Material Subsidiaries nor to the best
of the Borrower's knowledge, any previous owner, tenant, occupant, user or
operator of the Premises, or any present tenant or other present occupant, user
or operator of the Premises has used, generated, manufactured, installed,
treated, released, stored or disposed of any Hazardous Substances on, under, or
at the Premises, except in compliance with all applicable Environmental Laws
except to the extent such non-compliance could not reasonably be expected to
have a Material Adverse Effect. There are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best of
the Borrower's knowledge, threatened against or affecting the Borrower or any of
its Material Subsidiaries or with respect to the ownership, use, maintenance and
operation of the Premises, relating to Environmental Laws or Hazardous
Substances except to the extent that the same could not reasonably be expected
to have a Material Adverse Effect.
(i) Governmental Regulation. Neither the Borrower nor any of its
Material Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940,
the Interstate Commerce Act, any state public utilities code or any other
federal or state statute or regulation limiting its ability to incur
Indebtedness.
(j) Taxes. Each of the Borrower and its Material Subsidiaries has duly
filed all material tax and information returns required to be filed, and has
paid all material taxes, fees, assessments and other governmental charges or
levies that have become due and payable, except
24
31
to the extent such taxes or other charges are being contested in good faith and
are adequately reserved against in accordance with GAAP.
(k) Patents and Other Rights. Each of the Borrower and its Material
Subsidiaries possesses all permits, franchises, licenses, patents, trademarks,
trade names, service marks, copyrights and all rights with respect thereto, (or
could obtain such rights on terms not materially adverse to Borrower and its
Material Subsidiaries taken as a whole), that are necessary for the ownership,
maintenance and operation of its business and to the best of the Borrower's
knowledge neither the Borrower nor any such Material Subsidiary is in violation
of any rights of others with respect to the foregoing.
(l) Insurance. The properties of the Borrower and its Material
Subsidiaries are insured, with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the Borrower or such Subsidiary
operates.
(m) Financial Statements. (i) The audited consolidated balance sheet of
the Borrower and its Subsidiaries as at July 2, 1999, and the related
consolidated statements of income, shareholders' equity and cash flows for the
fiscal year then ended, and the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at October 1, 1999, and the related
consolidated statements of income, shareholders' equity and cash flows, for the
quarter then ended and the three month period then ended, fairly present in all
material respects the financial condition of the Borrower and its Subsidiaries
as at such dates and the results of operations of the Borrower and its
Subsidiaries for the periods covered by such statements, in each case in
accordance with GAAP consistently applied, subject, in the case of the October
1, 1999 financial statements, to normal year-end adjustments and the absence of
notes. (ii) Since October 1, 1999, there has been no Material Adverse Effect.
(n) Liabilities. Neither the Borrower nor any of its Material
Subsidiaries has any material liabilities, fixed or contingent, that are not
reflected in the financial statements referred to in subsection (m), in the
notes thereto or otherwise disclosed in writing to the Bank, other than
liabilities arising in the ordinary course of business since October 1, 1999.
(o) Solvency. Each of the Borrower and its Material Subsidiaries is
Solvent.
(p) Year 2000. On the basis of a comprehensive review and assessment of
the Borrower's and its Material Subsidiaries' systems and equipment and inquiry
made of the Borrower's and its Subsidiaries' material suppliers and vendors, the
Borrower believes that the "Year 2000 problem" (that is, the inability of
computers, as well as embedded microchips in non-computing devices, to perform
properly date-sensitive functions with respect to certain dates prior to and
after December 31, 1999), including costs of remediation, cannot reasonably be
expected to result in a Material Adverse Effect. The Borrower and its Material
Subsidiaries have developed feasible contingency plans which Borrower believes
are adequate to ensure uninterrupted and unimpaired business operation in the
event of failure of their own or a third party's systems or equipment due to the
Year 2000 problem, including those of vendors, customers, and suppliers.
25
32
(q) Disclosure. None of the representations or warranties made by the
Borrower in the Loan Documents as of the date of such representations and
warranties (when taken together with the Borrower's SEC filings made since July
2, 1999), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading, as of the time made or delivered.
ARTICLE IX
COVENANTS
SECTION 9.01 Reporting Covenants. So long as any of the Obligations
shall remain unpaid or the Bank shall have any Commitment, the Borrower agrees
that:
(a) Financial Statements and Other Reports. The Borrower shall furnish
to the Bank:
(i) as soon as available and in any event within 60 days after the end
of the first three fiscal quarters of each fiscal year or 120 days (in the case
of the fourth fiscal quarter), a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter, and the related consolidated
statements of income, shareholders' equity and cash flows of the Borrower and
its Subsidiaries for such quarter and the portion of the fiscal year through the
end of such quarter, prepared in accordance with GAAP consistently applied, all
in reasonable detail and setting forth in comparative form the figures for the
corresponding period in the preceding fiscal year, together with a certificate
of a Responsible Officer of the Borrower stating that such financial statements
fairly present the financial condition of the Borrower and its Subsidiaries as
at such date and the results of operations of the Borrower and its Subsidiaries
for the period ended on such date and have been prepared in accordance with GAAP
consistently applied, subject to changes resulting from normal, year-end audit
adjustments and except for the absence of notes;
(ii) as soon as available and in any event within 120 days after the end
of each fiscal year, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year, and the related consolidated
statements of income, shareholders' equity and cash flows of the Borrower and
its Subsidiaries for such fiscal year, prepared in accordance with GAAP
consistently applied, all in reasonable detail and setting forth in comparative
form the figures for the previous fiscal year, accompanied by a report thereon
of a firm of independent certified public accountants of recognized national
standing, which report shall not be qualified as to (1) going concern, (2) any
limitation in the scope of the audit, or (3) possible errors generated by
financial reporting and related systems due to the Year 2000 problem;
(iii) together with the financial statements required pursuant to
clauses (i) and (ii), a Compliance Certificate of a Responsible Officer as of
the end of the applicable accounting period;
(iv) promptly after the same are released, copies of all press releases;
and
(v) promptly after the giving, sending or filing thereof, copies of all
reports, if any, which the Borrower or any of its Subsidiaries sends to the
holders of its respective capital
26
33
stock or other securities and of all reports or filings, if any, by the Borrower
or any of its Subsidiaries with the SEC or any national securities exchange.
As to any information contained in materials furnished pursuant to clause (v),
the Borrower shall not be separately required to furnish such information under
clause (i) or (ii), but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described in
clauses (i) and (ii) at the times specified therein.
(b) Additional Information. The Borrower will furnish to the Bank:
(i) after a Responsible Officer of the Borrower has knowledge, or
becomes aware, or should with reasonable prudence have become aware thereof,
notice of the occurrence of any Default;
(ii) written notice of any condition or event which has resulted, or
that could reasonably be expected to result, in a Material Adverse Effect; and
(iii) such other information respecting the operations, properties,
business or condition (financial or otherwise) of the Borrower or its
Subsidiaries (including with respect to the Collateral) as the Bank may from
time to time reasonably request.
Each notice pursuant to subsection (b)(i) or (ii) shall be accompanied by a
written statement by a Responsible Officer of the Borrower setting forth details
of the occurrence referred to therein, and stating what action the Borrower
proposes to take with respect thereto.
SECTION 9.02 Financial Covenants. So long as any of the Obligations
shall remain unpaid or the Bank shall have any Commitment, the Borrower agrees
that:
(a) Quick Ratio. The Borrower shall maintain a ratio of Consolidated
Quick Assets to Consolidated Current Liabilities of not less than 0.9 to 1.0,
determined as at the end of each Fiscal Quarter;
(b) Total Funded Debt. The Borrower shall not permit Total Funded Debt
to exceed $1,500,000,000 in the aggregate.
(c) Consolidated Net Income. The Borrower shall not permit the
cumulative total of Consolidated Net Losses or Consolidated Operating Losses for
each Fiscal Quarter ending after the Closing Date to equal or exceed, in either
case, $100,000,000.
SECTION 9.03 Additional Affirmative Covenants. So long as any of the
Obligations shall remain unpaid or the Bank shall have any Commitment, the
Borrower agrees that:
(a) Preservation of Existence, Etc. The Borrower shall, and shall cause
each of its Material Subsidiaries to, maintain and preserve its legal existence,
its rights to transact business and all other rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of its properties, except in connection
27
34
with any transactions permitted by Section 9.04 and except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
(b) Payment of Obligations. The Borrower shall, and shall cause each of
its Material Subsidiaries to, pay and discharge (i) all taxes, fees, assessments
and governmental charges or levies imposed upon it or upon its properties or
assets prior to the date on which penalties attach thereto, and all lawful
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any properties or assets of the Borrower or any Material Subsidiary, except
to the extent such taxes, fees, assessments or governmental charges or levies,
or such claims, are being contested in good faith by appropriate proceedings and
are adequately reserved against in accordance with GAAP; and (ii) all lawful
claims which, if unpaid, would by law become a Lien upon its property not
constituting a Permitted Lien.
(c) Maintenance of Insurance. The Borrower shall, and shall cause each
of its Material Subsidiaries to, carry and maintain in full force and effect, at
its own expense and with financially sound and reputable insurance companies,
insurance in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where the Borrower or such Material
Subsidiary operates, including fire, extended coverage, business interruption,
public liability, property damage and worker's compensation. Notwithstanding the
foregoing, the Borrower and its Subsidiaries may maintain a plan or plans of
self-insurance to such extent and covering such risks as is usual for companies
of similar size engaged in the same or similar businesses and owning similar
properties.
(d) Keeping of Records and Books of Account. The Borrower and each of
its Subsidiaries shall , keep proper records and books of account, in accordance
with GAAP, sufficient to prepare financial statements in accordance with GAAP.
(e) Inspection Rights. The Borrower shall at any reasonable time and
upon reasonable notice and from time to time permit the Bank or any of its
agents or representatives to visit and inspect any of the properties of the
Borrower and its Subsidiaries and to examine and make copies of and abstracts
from the records and books of account of the Borrower and its Subsidiaries, and
to discuss the business affairs, finances and accounts of the Borrower and any
such Subsidiary with any of the officers, employees or accountants of the
Borrower or such Subsidiary.
(f) Compliance with Laws, Etc. The Borrower shall, and shall cause each
of its Material Subsidiaries to, comply in all respects with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws) and the terms of any indenture, contract or
other instrument to which it may be a party or under which it or its properties
may be bound, except to the extent that such non-compliance could not reasonably
be expected to result in a Material Adverse Effect.
(g) Maintenance of Properties, Etc. The Borrower shall, and shall cause
each of its Material Subsidiaries to, maintain and preserve all of its
properties necessary or useful in the proper conduct of its business in good
working order and condition in accordance with the general practice of other
corporations of similar character and size, ordinary wear and tear
28
35
excepted, except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
(h) Licenses. The Borrower shall, and shall cause each of its Material
Subsidiaries to, obtain and maintain all licenses, authorizations, consents,
filings, exemptions, registrations and other governmental approvals necessary or
useful in connection with the execution, delivery and performance of the Loan
Documents, the consummation of the transactions therein contemplated or the
operation and conduct of its business and ownership of its properties, except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
(i) [intentionally omitted]
(j) Use of Proceeds. The Borrower shall use the proceeds of the Loans
solely for general working capital purposes and to repurchase capital stock of
the Borrower; provided, that, Borrower shall not use any such proceeds to
finance any hostile acquisition.
(k) Further Assurances and Additional Acts. The Borrower shall execute,
acknowledge, deliver, file, notarize and register at its own expense all such
further agreements, instruments, certificates, documents and assurances and
perform such acts as the Bank shall deem necessary or reasonably require to
effectuate the purposes of the Loan Documents, and provide the Bank with
evidence of the foregoing satisfactory in form and substance to the Bank.
SECTION 9.04 Negative Covenants. So long as any of the Obligations shall
remain unpaid or the Bank shall have any Commitment, the Borrower agrees that:
(a) Liens; Negative Pledges. (i) The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to any of its properties, revenues or assets, whether
now owned or hereafter acquired, other than Permitted Liens. (ii) The Borrower
shall not, and shall not permit any of its Subsidiaries to, enter into or suffer
to exist any agreement (other than this Agreement, any other Loan Document)
prohibiting or conditioning the creation or assumption of any Lien upon any of
its properties, revenues or assets, whether now owned or hereafter acquired
except for; (i) any credit agreement between the Borrower and Citibank, N.A.;
(ii) agreements in effect on the date of this Agreement, and any amendments,
extensions, refinancings, renewals or replacements of such agreements, provided
that any such restrictions in any such extensions, refinancings, renewals or
replacements are no less favorable than those restrictions that are then in
effect and that are being extended, refinanced, renewed or replaced; (iii)
agreements existing prior to the date on which a Subsidiary became a Subsidiary
which were not incurred in anticipation of such Subsidiary becoming a
Subsidiary; (iv) agreements relating to a Permitted Lien, but only to the extent
such restrictions restrict the transfer of the property subject to such Lien;
(v) agreements containing customary nonassignment, restriction on subletting or
restriction on transfer provisions or restrictions on cash or other deposits or
net worth maintenance provisions entered into in the ordinary course of
business; (vi) with respect to a Subsidiary, agreements which have been entered
into for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary; provided that consummation of such
transaction would not result in a Default, that such restriction terminates if
such transaction is closed or abandoned and that the closing or
29
36
abandonment of such transaction shall occur within one year of the date such
agreement was entered into; (vii) agreements for the sale of assets with respect
to the assets to be sold pursuant to such agreement;
(b) Change in Nature of Business. The Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it at the
date hereof or businesses that are reasonably related or complementary or
(provided such activity is not a material enterprise) incidental to such
businesses.
(c) Restrictions on Fundamental Changes. The Borrower will not, and will
not permit any of its Subsidiaries to, merge with or consolidate into, or
acquire all or substantially all of the assets of, any Person, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets, except that:
(i) any of the Borrower's Subsidiaries may merge with, consolidate into
or transfer all or substantially all of its assets to another of the Borrower's
Subsidiaries or to the Borrower and in connection therewith such Subsidiary may
be liquidated or dissolved;
(ii) the Borrower may merge with or consolidate into any other Person,
provided that (A) the Borrower is the surviving corporation, (B) that the
surviving entity will comply with the covenants in Section 9.02 on a pro forma
basis (as if the entity acquired had been acquired at the beginning of the
period over which such covenants are calculated), and (C) no such merger or
consolidation shall be made while there exists a Default or if a Default would
occur as a result thereof; or
(iii) any Subsidiary may merge with or into any other Person in
connection with an acquisition, disposition or investment not otherwise
prohibited under this Agreement and the Borrower may spin-off a Subsidiary.
(d) [intentionally omitted](e)Transactions with Related Parties. The
Borrower shall not, and shall not permit any of its Material Subsidiaries to,
enter into any transaction, including the purchase, sale or exchange of property
or the rendering of any services, with any Affiliate, any officer or director
thereof (a "Related Party"), except a transaction or contract which is in the
ordinary course of the Borrower's or such Subsidiary's business and which is
upon fair and reasonable terms not less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's length transaction with a
Person not a Related Party.
(f) Hazardous Substances. The Borrower shall not, and shall not permit
any of its Material Subsidiaries to, use, generate, manufacture, install, treat,
release, store or dispose of any Hazardous Substances, except in compliance in
all material respects with all applicable Environmental Laws.
(g) Accounting Changes. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required or permitted by GAAP, or
change its fiscal year or that of
30
37
any of its consolidated Subsidiaries, except to change the fiscal year of a
Subsidiary acquired in connection with a permitted acquisition to conform its
fiscal year to the Borrower's.
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01 Events of Default. Any of the following events which shall
occur shall constitute an "Event of Default":
(a) Payments. The Borrower shall fail to pay (i) when due any amount of
principal of, or interest on, any Loan, or (ii) within two Business Days any fee
or other amount payable under any Loan Document.
(b) Representations and Warranties. Any representation or warranty by
the Borrower under or in connection with the Loan Documents shall prove to have
been incorrect in any material respect when made or deemed made.
(c) Failure by Borrower to Perform Certain Covenants. The Borrower shall
fail to perform or observe any term, covenant or agreement contained in Section
9.02, subsections (a), (e), or (j) of Section 9.03 or Section 9.04.
(d) Failure by Borrower to Perform Other Covenants. The Borrower shall
fail to perform or observe any other term, covenant or agreement contained in
this Agreement or any other Loan Document on its part to be performed or
observed and any such failure shall remain unremedied for a period of 30 days
after a Responsible Officer knew or should with reasonable prudence have become
aware thereof.
(e) Insolvency; Voluntary Proceedings. The Borrower or any Material
Subsidiary (i) ceases or fails to be Solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing.
(f) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding
is commenced or filed against the Borrower or any Material Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Borrower's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Borrower or any Material Subsidiary
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Borrower or any Material
Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business.
31
38
(g) Acceleration Indebtedness. (i) The Borrower or any of its
Subsidiaries shall fail (A) to make any payment of any principal of, or interest
or premium on, any Indebtedness (other than in respect of the Loans) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $100 million (or its equivalent in another currency)
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness as of the date of such failure; or (B) to perform or observe any
term, covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such Indebtedness, which results in an
acceleration of the maturity of such Indebtedness.
(h) Judgments. (i) A final judgment or order for the payment of money in
excess of $100 million (or its equivalent in another currency) which is not
fully covered by third-party insurance shall be rendered against the Borrower or
any of its Subsidiaries; or (ii) any non-monetary judgment or order shall be
rendered against the Borrower, or any such Subsidiary which has or would
reasonably be expected to have a Material Adverse Effect; and in each case there
shall be any period of 30 consecutive days during which such judgment continues
unsatisfied or during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
(i) ERISA. (i) The Borrower or an ERISA Affiliate shall fail to satisfy
its contribution requirements in an amount in excess of $100 million under
Section 412(c)(11) of the Internal Revenue Code, whether or not it has sought a
waiver under Section 412(d) of the Internal Revenue Code; (ii) in the case of a
Termination Event involving the withdrawal from a Pension Plan of a "substantial
employer" (as defined in Section 4001(a)(2) or Section 4062(e) of ERISA), the
Borrower's or an ERISA Affiliate's proportionate share of that Pension Plan's
Unfunded Accrued Benefits is more than $100 million; (iii) in the case of a
Termination Event involving the complete or partial withdrawal from a
Multiemployer Plan, the Borrower or an ERISA Affiliate has incurred a withdrawal
liability in an aggregate amount exceeding $100 million ; (iv) in the case of a
Termination Event not described in clause (ii) or (iii), the Unfunded Accrued
Benefits of the relevant Pension Plan or Plans exceed $100 million; (v) a Plan
of the Borrower or an ERISA Affiliate that is intended to be qualified under
Section 401(a) of the Internal Revenue Code shall lose its qualification, and
the loss can reasonably be expected to impose on the Borrower or an ERISA
Affiliate liability (for additional taxes, to Plan participants, or otherwise)
in the aggregate amount of $100 million or more; (vi) the commencement or
increase of contributions to, the adoption of, or the amendment of a Plan by,
the Borrower or an ERISA Affiliate shall result in a net increase in unfunded
liabilities to the Borrower or an ERISA Affiliate in excess of $100 million; or
(vii) the occurrence of any combination of events listed in clauses (ii) through
(vi) that involves a net increase in aggregate Unfunded Accrued Benefits and
unfunded liabilities in excess of $100 million.
SECTION 10.02 Effect of Event of Default. If any Event of Default shall
occur and be continuing, the Bank may (i) by notice to the Borrower, (A) declare
its Commitment to be terminated, whereupon the same shall forthwith terminate,
and (B) declare the entire unpaid principal amount of the Loans, all interest
accrued and unpaid thereon and all other Obligations to be forthwith due and
payable, whereupon the Loans, all such accrued
32
39
interest and all such other Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, provided that if an event
described in Sections 10.01(e) or 10.01(f) shall occur, the result which would
otherwise occur only upon giving of notice by the Bank to the Borrower as
specified in this clause (i) shall occur automatically, without the giving of
any such notice; and (ii) whether or not the actions referred to in clause (i)
have been taken, proceed to enforce all other rights and remedies available to
the Bank under the Loan Documents and applicable law.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Amendments and Waivers. No amendment to any provision of
this Agreement and the other Loan Documents shall be effective unless it is in
writing and has been signed by the Bank and the Borrower (or other party
thereto), and no waiver of any provision of this Agreement or any other Loan
Document, or consent to any departure by the Borrower or other party therefrom,
shall be effective unless it is in writing and has been signed by the Bank. Any
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 11.02 Notices.
(a) Notices. All notices and other communications provided for hereunder
and under the other Loan Documents shall, unless otherwise stated herein, be in
writing (including by facsimile transmission) and mailed, sent or delivered to
the respective parties hereto at or to their respective addresses or facsimile
numbers set forth in Schedule 1, or at or to such other address or facsimile
number as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be effective (i) if
delivered by hand, when delivered; (ii) if sent by mail, upon the earlier of the
date of receipt or five Business Days after deposit in the mail, first class (or
air mail, with respect to communications to be sent to or from the United
States), postage prepaid; and (iii) if sent by facsimile transmission, when
sent; provided, however, that notices and communications to the Bank pursuant to
Articles II, III and IV shall not be effective until received.
(b) Facsimile and Telephonic Notice. The Borrower acknowledges and
agrees that the agreement of the Bank herein and in any other Loan Document to
receive certain notices by telephone and facsimile is solely for the convenience
and at the request of the Borrower. The Bank shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Borrower to
give such notice and the Bank shall not have any liability to the Borrower or
other Person on account of any action taken or not taken by the Bank in reliance
upon such telephonic or facsimile notice. The obligation of the Borrower to
repay the Loans and the other Obligations shall not be affected in any way or to
any extent by any failure by the Bank to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Bank of a confirmation
which is at variance with the terms understood by the Bank to be contained in
the telephonic or facsimile notice.
33
40
SECTION 11.03 No Waiver; Cumulative Remedies. No failure on the part of
the Bank to exercise, and no delay in exercising, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies under the Loan
Documents are cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to the Bank.
SECTION 11.04 Costs and Expenses; Indemnification.
(a) Costs and Expenses. The Borrower agrees to pay on demand, whether or
not the transactions contemplated hereby shall be consummated:
(i) the reasonable out-of-pocket costs and expenses of the Bank and any
of its Affiliates, and the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel) to the Bank, in connection with
the negotiation, preparation, execution, delivery and administration of the Loan
Documents, and any amendments, modifications or waivers of the terms thereof;
(ii) all costs and expenses of the Bank and its Affiliates, and
reasonable fees and disbursements of counsel (including allocated costs of
internal counsel), in connection with (A) any Default, (B) the enforcement or
attempted enforcement of, and preservation of any rights or interests under, the
Loan Documents, (C) any out-of-court workout or other refinancing or
restructuring or any Insolvency Proceeding, and (D) any losses, costs and
expenses sustained by the Bank as a result of any failure by the Borrower to
perform or observe its obligations contained in the Loan Documents.
(b) Indemnification. Whether or not the transactions contemplated hereby
shall be consummated, the Borrower hereby agrees to indemnify the Bank and any
Related Person thereof (each an "Indemnified Person") against, and hold each of
them harmless from, any and all liabilities, obligations, losses, claims,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including the reasonable fees and
disbursements of counsel to an Indemnified Person (including allocated costs of
internal counsel), which may be imposed on, incurred by, or asserted against any
Indemnified Person, (i) in any way relating to or arising out of any of the Loan
Documents, the use or intended use of the proceeds of the Loans, the
transactions contemplated hereby or thereby, (ii) with respect to any
investigation, litigation or other proceeding relating to any of the foregoing,
irrespective of whether the Indemnified Person shall be designated a party
thereto, or (iii) in any way relating to or arising out of the use, generation,
manufacture, installation, treatment, storage or presence, or the spillage,
leakage, leaching, migration, dumping, deposit, discharge, disposal or release,
at any time, of any Hazardous Substances on, under, at or from any Premises,
including any personal injury or property damage suffered by any Person, and any
investigation, site assessment, environmental audit, feasibility study,
monitoring, clean-up, removal, containment, restoration, remedial response or
remedial work undertaken by or on behalf of the any Indemnified Person at any
time, voluntarily or involuntarily, with respect to the Premises (the
"Indemnified Liabilities"); provided that the Borrower shall not be liable to
any Indemnified Person for any portion of such Indemnified Liabilities to the
extent they are found by a final decision of a court
34
41
of competent jurisdiction to have resulted from such Indemnified Person's gross
negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Borrower agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
(c) Other Charges. The Borrower agrees to indemnify the Bank against and
hold it harmless from any and all present and future stamp, transfer,
documentary and other such taxes, levies, fees, assessments and other charges
made by any jurisdiction by reason of the execution, delivery, performance and
enforcement of the Loan Documents.
SECTION 11.05 Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default the Bank hereby is authorized at any time
and from time to time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Bank to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement and the other Loan Documents,
irrespective of whether or not the Bank shall have made any demand under this
Agreement or any such other Loan Document and although such Obligations may be
unmatured. The Bank agrees promptly to notify the Borrower after any such
set-off and application made by the Bank; provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Bank under this Section 11.05 are in addition to other rights and
remedies (including other rights of set-off) which the Bank may have.
SECTION 11.06 Survival. All covenants, agreements, representations and
warranties made in any Loan Documents shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
making of the Loans and shall continue in full force and effect so long as the
Bank has any Commitment, any Loans remain outstanding or any other Obligations
remain unpaid or any obligation to perform any other act under any Loan Document
remains unsatisfied. Without limiting the generality of the foregoing, the
obligations of the Borrower under Sections 5.02, 5.03, 6.02 and 11.04, and all
similar obligations under the other Loan Documents (including all obligations to
pay costs and expenses and all indemnity obligations), shall survive the
repayment of the Loans and the termination of the Commitment.
SECTION 11.07 Benefits of Agreement. The Loan Documents are entered into
for the sole protection and benefit of the parties hereto and their successors
and assigns, and no other Person shall be a direct or indirect beneficiary of,
or shall have any direct or indirect cause of action or claim in connection
with, any Loan Document.
SECTION 11.08 Binding Effect; Assignment.
(a) Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Bank and thereafter shall be binding
upon, inure to the benefit of and be enforceable by the Borrower, the Bank and
their respective successors and assigns.
35
42
(b) Assignment. The Bank may sell, assign, transfer or grant
participations in all or any portion of the Bank's rights and obligations
hereunder and under the other Loan Documents to any Affiliate of the Bank and
with the consent of the Borrower (not to be unreasonably withheld or delayed),
to any other bank or financial institution, provided, that the consent of the
Borrower to any such transfer, assignment, sale or participation shall not be
required upon and during the continuation of an Event of Default.
(i) The Borrower agrees that in connection with any such grant or
assignment, the Bank may deliver to the prospective participant or assignee
financial statements and other relevant information relating to the Borrower and
its Subsidiaries.
SECTION 11.09 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 11.10 Submission to Jurisdiction.
(a) Submission to Jurisdiction. The Borrower hereby (i) submits to the
non-exclusive jurisdiction of the courts of the State of California and the
Federal courts of the United States sitting in the State of California for the
purpose of any action or proceeding arising out of or relating to the Loan
Documents, (ii) agrees that all claims in respect of any such action or
proceeding may be heard and determined in such courts, (iii) irrevocably waives
(to the extent permitted by applicable law) any objection which it now or
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the foregoing courts, and any objection on the ground that any
such action or proceeding in any such court has been brought in an inconvenient
forum and (iv) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner permitted by law.
(b) No Limitation. Nothing in this Section 11.10 shall affect the right
of the Bank to bring any action or proceeding against the Borrower or its
property in the courts of other jurisdictions.
SECTION 11.11 Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER AND THE BANK HEREBY AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT IN
ANY WAY LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE
36
43
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS. A COPY OF THIS SECTION 11.11 MAY BE FILED WITH ANY COURT
AS WRITTEN EVIDENCE OF THE WAIVER OF THE RIGHT TO TRIAL BY JURY AND CONSENT TO
TRIAL BY COURT.
SECTION 11.12 Limitation on Liability. No claim shall be made by the
Borrower or its Affiliates against the Bank or any of its Related Persons for
any special, indirect, exemplary, consequential or punitive damages in respect
of any breach or wrongful conduct (whether or not the claim therefor is based on
contract, tort or duty imposed by law), in connection with, arising out of or in
any way related to the transactions contemplated by the Loan Documents or any
act or omission or event occurring in connection therewith; and the Borrower
hereby waives, releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
SECTION 11.13 Entire Agreement. The Loan Documents reflect the entire
agreement between the Borrower and the Bank with respect to the matters set
forth herein and therein and supersede any prior agreements, commitments,
drafts, communication, discussions and understandings, oral or written, with
respect thereto.
SECTION 11.14 Severability. Whenever possible, each provision of the
Loan Documents shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of any of
the Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
SECTION 11.15 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement.
37
44
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE BORROWER
SEAGATE TECHNOLOGY, INC.
By /s/ SEAGATE TECHNOLOGY, INC.
---------------------------------
Title:
THE BANK
BANK OF AMERICA, N.A.
By /s/ BANK OF AMERICA, N.A.
---------------------------------
Title:
45
SCHEDULE 1
BANK PAYMENT OFFICE; ADDRESSES FOR NOTICES
COMPANY
Address for Notices:
[920 Disc Drive
Scotts Valley, CA 95066]
Attention: Mr. Charles Pope, Chief Financial Officer
Telephone:
-------------------------
Facsimile:
-------------------------
BANK OF AMERICA, N.A.
Bank of America, N.A.
Credit Products Group
High Technology - SF #3697
555 California Street, 41st Floor
San Francisco, CA 94104
Attention: Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-4057
Bank's Payment Office:
Bank of America, N.A.
1850 Gateway Boulevard
Concord, CA 94520
Attention: Karen Garnick
Reference: Seagate
ABA No. 111-000-012
For credit to Bancontrol Acct. No. 37508-36479
Credit Service West
1.
46
SCHEDULE 2
EXISTING LIENS
1.
47
EXHIBIT A
TO THE CREDIT AGREEMENT
NOTICE OF BORROWING
Date: ____________ , 1999
To: Bank of America, N.A.
Credit Products Group
High Technology-SF #3697
555 California Street, 41st Floor
San Francisco, CA 94104
Attn: Kevin McMahon
Re: Seagate Technology, Inc.
Ladies and Gentlemen:
The undersigned, Seagate Technology, Inc. (the "Borrower"), refers to
the Credit Agreement dated as of November 4, 1999 (as amended, modified, renewed
or extended from time to time, the "Credit Agreement"), between the Borrower and
Bank of America, N.A. (the "Bank"), the terms defined therein being used herein
as therein defined, and hereby gives you notice irrevocably, pursuant to Section
2.02 of the Credit Agreement, of the borrowing of the Loan specified herein:
1. The Business Day of the proposed borrowing is __________, ____.
2. The amount of the proposed borrowing is $___________.
3. The borrowing is to consist of a [Base Rate] [Eurodollar Rate] Loan.
4. The duration of the Interest Period for the Eurodollar Rate Loan
shall be ________ months.
5. The payment instructions with respect to the funds to be made
available to the Borrower are as follows: ______________.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed borrowing of the
Loan, before and after giving effect thereto and to the application of the
proceeds therefrom:
(i) the representations and warranties of the Borrower contained in
Section 8.01 of the Credit Agreement and in the other Loan Documents are true
and correct as though
A-1.
48
made on and as of each such date (except to the extent such representations and
warranties relate solely to an earlier date, in which case they are true and
correct as of such date, and except that Section 8.01(m) of the Credit Agreement
shall be deemed instead to refer to the last day of the most recent fiscal year
and quarter for which financial statements have then been delivered; and
(ii) no Default exists or would result from such proposed borrowing.
SEAGATE TECHNOLOGY, INC.
By:
---------------------------------
Title:
------------------------------
A-2.
49
EXHIBIT B
to the Credit Agreement
FORM OF COMPLIANCE CERTIFICATE
Bank of America, N.A.
Credit Products
High Technology #3697
555 California Street, 41st Floor
San Francisco, CA 94104-1502
Attn: Kevin McMahon
Re: Seagate Technology, Inc.
Ladies and Gentlemen:
This Compliance Certificate is made and delivered pursuant to the Credit
Agreement dated as of November 4, 1999 (as amended, modified, renewed or
extended from time to time, the "Credit Agreement") between Seagate Technology,
Inc. (the "Borrower") and Bank of America N.A., and reference is made thereto
for full particulars of the matters described therein. All capitalized terms
used in this Compliance Certificate and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement. This Compliance
Certificate relates to the accounting period ending __________, _____.
I am the chief financial officer of the Borrower. I have reviewed the
terms of the Credit Agreement and I have made, or caused to be made under my
supervision, a detailed review of the transactions and conditions of the
Borrower and its Subsidiaries during such accounting period. I hereby certify
that the information set forth on Schedule 1 hereto (and on any additional
schedules hereto setting forth further supporting detail) is true, accurate and
complete as of the end of such accounting period.
I hereby further certify that (i) as of the date hereof that no Default
has occurred and is continuing, and (ii) on and as of the date hereof, there has
occurred no Material Adverse Effect since October 1, 1999, except as may be set
forth in a separate attachment hereto describing in detail the nature of each
condition or event constituting an exception to the foregoing statements, the
period during which it has existed and the action which the Borrower is taking
or proposes to take with respect to each such condition or event.
B-1.
50
IN WITNESS WHEREOF, the undersigned officer has signed this Compliance
Certificate this ____ day of ______________, _____.
------------------------------------
Chief Financial Officer
B-2.
51
SCHEDULE 1
TO COMPLIANCE CERTIFICATE
Dated _______________, _______
For the Fiscal Quarter ended ______________, ______
Actual Required
1. Section 9.02(a) Quick Ratio
(A) Consolidated Quick Assets ___________
(B) Consolidated Current Liabilities ___________
Quick Ratio (ratio of A to B) ___________ Not less than
0.9 to 1.0
2. Section 9.02(b) Total Funded Debt
(A) Indebtedness for borrowed money $___________
(excluding Subordinated Debt)
(B) Obligations evidenced by notes, $___________
debentures, bonds or similar instruments
(C) Capital Lease Obligations $___________
(D) Guaranty Obligations re above $___________
Total Funded Debt. $___________ Not more than $1.5 billion
2. Section 9.02(c) Consolidated Net Income
A. Cumulative Consolidated Net Loss $___________ Not exceeding $100 million
for Fiscal Quarters ended after
Closing Date
B. Consolidated Net Operating Loss $___________ Not exceeding $100 million
for Fiscal Quarters ended after
Closing Date
B-3.