EXHIBIT 10.4
INTERCOMPANY CREDIT AGREEMENT
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This INTERCOMPANY CREDIT AGREEMENT (the "Agreement") by and between
Electronic Data Systems Corporation, a Delaware corporation ("EDS"), and
Unigraphics Solutions Inc., a Delaware corporation ("USI"), is dated to be
effective as of January 1, 1998.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
(a) "Advance" means an advance by EDS or USI, as applicable, pursuant to
Section 2.01 or 2.02, which shall include, without limitation,
advances by EDS to USI or on behalf of USI and amounts owed by USI for
fees, costs and expenses under the Management Services Agreement.
(b) "EDS Balance" means, with respect to an Interest Period, the net daily
balance of funds owed by EDS to USI as set forth in the intercompany
account maintained by EDS pursuant to Section 2.05 hereof.
(c) "Interest Period" means each calendar month ending after the date of
this Agreement and prior to the termination of this Agreement and any
portion of a calendar month during which this Agreement terminates.
(d) "Interest Rate" has the meaning ascribed to it in Section 2.03.
(e) "LIBID" shall mean LIBOR, minus 0.125%.
(f) "LIBOR" means the Official British Bankers' Association one month U.S.
LIBOR Fixings at 11:00 a.m. London time, as reported on Bloomberg.
LIBOR shall be determined monthly, on the first business day of each
month, which rate shall be applicable for such month.
(g) "Management Services Agreement" means the Management Services
Agreement effective as of January 1, 1998, between EDS and USI, as it
may be amended from time to time. If the Management Services
Agreement is terminated prior to the termination of this Agreement,
any references to the Management Services Agreement after the
termination of the Management Services Agreement shall mean the
version of the Management Services Agreement in effect immediately
prior to the termination of the Management Services Agreement.
(h) "USI Balance" means, with respect to an Interest Period, the net daily
balance of funds owed by USI to EDS as set forth in the intercompany
account maintained by EDS pursuant to Section 2.05 hereof.
ARTICLE II
ADVANCES
SECTION 2.01. Advances from USI to EDS. Any funds of USI and its U.S.
subsidiaries that are not required to meet the daily cash requirements of USI
and its U.S. subsidiaries will be transferred to EDS as an Advance hereunder
and/or applied to decrease the outstanding balance of Advances from EDS pursuant
to Section 2.02, as applicable. Any funds transferred from USI to EDS will be
deemed as either an Advance to EDS, if there are no outstanding Advances from
EDS to USI, OR a decrease of Advances from EDS to USI, if such Advances exist.
Any interest payable by EDS on an Advance from USI (other than interest payable
upon or after termination of this Agreement) shall be treated (effective as of
the first day of the following Interest Period) as an Advance from USI for the
purposes of this Agreement. Each Advance by USI under this Section 2.01 shall
be deemed to be made by USI notwithstanding the fact that such Advance may
involve cash of one or more U.S. subsidiaries of USI.
SECTION 2.02. Advances from EDS to USI. Any funds needed by USI and its
U.S. subsidiaries in order to meet daily cash requirements of USI and its U.S.
subsidiaries will be advanced by EDS. In addition, subject to repayment as
provided in Section 2.04, EDS will advance funds hereunder to USI in the amount
of $107,000,000 in connection with the Solid Edge Transaction (herein so
called). The outstanding balance of all Advances from EDS to USI and all of its
subsidiaries (including its non-U.S. subsidiaries that are parties to credit
arrangements with EDS Finance plc) shall never exceed (i) $177,000,000 in the
aggregate at any time prior to an initial public offering of stock of USI and
repayment of Advances made to USI for the Solid Edge Transaction, or (ii)
$70,000,000 in the aggregate at any time thereafter. Any funds transferred from
EDS to USI will be deemed as either an Advance to USI, if there are no
outstanding Advances from USI to EDS, OR a decrease of the Advances from USI, if
such Advances to EDS exist. Any interest payable by USI on an Advance from EDS
(other than interest payable upon or after termination of this Agreement) shall
be treated (effective as of the first day of the following Interest Period) as
an Advance from EDS for the purposes of this Agreement. Interest that accrues
after the maximum borrowing amount has been reached shall be considered an
Advance notwithstanding the limits set forth in this Section. Each Advance by
EDS under this Section 2.02 shall be deemed made by EDS notwithstanding the fact
that such Advance may involve cash of one or more subsidiaries of EDS.
SECTION 2.03. Interest.
(a) Subject to the other provisions of this Section 2.03, interest shall
accrue at the applicable interest rates set forth in Sections 2.03(c)
and 2.03(d) below (each an "Interest Rate"). Interest shall be
calculated on the basis of a 360 day year for the actual number of
days elapsed. Interest payments for Interest Periods ending (i) prior
to the termination of this Agreement shall be treated as Advances
pursuant
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to Sections 2.01 and 2.02 herein, as applicable, on the first day of
the following Interest Period and (ii) on the termination of this
Agreement shall be payable not later than the 15th day following the
termination of this Agreement (each an "Interest Payment").
Outstanding Advances and Interest Payments for the final Interest
Period not repaid when they become due and payable upon the
termination of this Agreement as provided in Section 3.03 shall bear
interest from and after the required date of payment to the date of
payment at an annual rate of 18% (or, if lower, the highest lawful
rate).
(b) The interest payable by EDS under this Agreement shall be calculated
by multiplying the Interest Rate specified in Section 2.03(c) hereof
by the EDS Balance for the applicable days in the Interest Period.
The interest payable by USI under this Agreement shall be calculated
by multiplying the Interest Rate specified in Section 2.03(d) hereof
by the USI Balance for the applicable days in the Interest Period.
The Interest Payment required to be made by each party is independent
of the Interest Payment required to be paid by the other party, and
interest may be paid by both EDS and USI for any given Interest
Period. EDS shall calculate the amount of interest payable by both
EDS and USI for each Interest Period and, upon request, shall provide
notice thereof to USI, together with supporting calculations.
(c) The Interest Rate per annum applicable to Advances from USI to EDS
outstanding during an Interest Period shall equal LIBID, minus 0.50%.
(d) The Interest Rate per annum applicable to Advances from EDS to USI
outstanding during an Interest Period shall equal LIBOR, plus 0.50%.
(e) All calculations shall be performed by EDS and shall be subject to
the dispute resolution mechanisms set forth in Section 3.01.
SECTION 2.04. Repayment. During the term of this Agreement, all Advances
received by either party under this Agreement shall be offset against and shall
be treated as repaid to the extent of any Advances made by such party to the
other party. Repayments can be made at any time by either party with interest
payable up to the date of repayment. No prepayment penalty may be levied. Upon
termination of this Agreement, any Advances that have not theretofore been
repaid, together with accrued interest, will be payable in full not later than
the 15th day following termination of this Agreement. Upon consummation of a
public offering of stock of USI, all outstanding Advances made hereunder by EDS
to USI for the Solid Edge Transaction, together with accrued interest, will be
due and payable in full.
SECTION 2.05. Intercompany Account. EDS shall maintain a ledger in which
all EDS Advances and USI Advances and all repayments of such Advances shall be
recorded. EDS shall give USI access, during normal business hours, to such
ledger and the other records relating to Advances and payments made with respect
thereto. EDS shall have until the 30th day following
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the end of each Interest Period to make any calculations required to be made by
it under the provisions of this Agreement.
SECTION 2.06. Requests for Advances. Notice of a request for an Advance
hereunder (other than Advances made by EDS to USI through intercompany accounts)
to meet the daily cash requirements of USI and its wholly owned U.S.
subsidiaries will be made pursuant to a form and instructions provided
separately by EDS. Advances will be made according to a schedule to be agreed
between the parties.
SECTION 2.07. Transfers of Funds. All transfers of funds between EDS and
USI will be initiated by EDS Treasury. All funds will be transferred through
intercompany accounts, or as otherwise agreed by the parties.
SECTION 2.08 Taxes. If USI or EDS shall be required by law to deduct any
tax from or in respect of any sum payable hereunder to the other party:
(a) as soon as such party is aware that any such deduction, withholding or
payment of a tax is required, or of any change in any such
requirement, it shall notify the other party;
(b) such party shall make such deductions, or pay such tax, before any
interest or penalty becomes payable;
(c) such party shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law; and
(d) within thirty (30) days after paying such tax, such party shall
deliver to the other party satisfactory evidence of that deduction,
withholding or payment and (where remittance is required) of the
remittance thereof to the relevant taxing or other authority.
SECTION 2.09. Requirement to Borrow. USI shall not borrow any funds from
any person other than EDS in order to satisfy its financial requirements unless
such borrowing is either consented to by EDS in writing or EDS has not provided
the funds under this Agreement.
SECTION 2.10. Usury. All agreements between the parties, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of demand for payment or acceleration
of the maturity hereof or otherwise, shall the interest contracted for, charged
or received by either party exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, interest would otherwise
be payable to either party in excess of the maximum lawful amount, the interest
payable to such party shall be reduced to the maximum amount permitted under
applicable law; and if from any circumstance either party shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal hereof and not to the payment of
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interest, or if such excessive interest exceeds the unpaid balance of principal
hereof such excess shall be refunded to the party deemed to have made such
payment. All interest paid or agreed to be paid to either party shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full period until payment in full of the principal
(including the period of any renewal or extension hereof) so that the interest
hereon for such full period shall not exceed the maximum amount permitted by
applicable law. This paragraph shall control all agreements between the parties.
ARTICLE III
ADMINISTRATION
SECTION 3.01. Disputes. All disputes under this Agreement shall be
handled in the manner provided for in Article 16 of the Management Services
Agreement.
SECTION 3.02. Limitations on Liability. Neither party shall have any
liability under this Agreement (including any liability for its own negligence)
for damages, losses or expenses (including expenses or higher interest rates
incurred in order to obtain alternative financing sources) suffered by the other
party or its subsidiaries as a result of the performance or non-performance of
such party's obligations hereunder, unless such damages, losses or expenses are
caused by or arise out of the willful misconduct or gross negligence of such
party or a breach by such party. In no event shall either party have any
liability to the other party for indirect, incidental or consequential damages
that such other party or its subsidiaries or any third party may incur or
experience on account of the performance or non-performance of such party's
obligations hereunder. The provisions of this Section 3.02 shall survive any
termination of this Agreement.
SECTION 3.03. Term of the Agreement. This Agreement commences on the
effective date of this Agreement as set forth above and will continue in effect
until 11:59 p.m., Central Time, on December 31, 2002. Notwithstanding the
foregoing, this Agreement may be sooner terminated, without liability to the
terminating party:
(a) by either party, upon 30 days' notice to the other party, if EDS
ceases to own, directly or indirectly, 51% or more of the stock of
USI.
(b) by either party, immediately upon notice to the other party, if
(i) that other party makes a general assignment of all or
substantially all of its assets for the benefit of its
creditors;
(ii) that other party applies for, consents to or acquiesces in the
appointment of a receiver, trustee, custodian or liquidator for
its business or all or substantially all of its assets;
(iii) that other party files, or consents to or acquiesces in a
petition seeking relief or reorganization under any bankruptcy
or insolvency laws; or
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(iv) a petition seeking relief or reorganization under any bankruptcy
or insolvency laws is filed against that other party and is not
dismissed within 90 days after it was filed.
(c) by either party, immediately upon notice to the other party, if that
other party's material breach of this Agreement continues uncured or
uncorrected for 30 days after both the nature of that breach and the
necessary cure or correction has been agreed upon by the parties or
otherwise determined by the dispute resolution procedure described in
Section 3.01; provided that if the parties agree or it is determined
by the dispute resolution procedure that the material breach is not
capable of being cured or corrected, the termination shall be
effective immediately upon notice.
(d) by either party, immediately upon notice to the other party, if it
determines that performance of its rights or obligations under this
Agreement is or becomes illegal.
(e) by either party, immediately upon notice to the other party, if
payments made by the other party are subject to any deduction or
withholding for or on account of any tax, unless the other party
agrees to increase its payments such that, after all required
deductions have been made, the party receives a net amount equal to
the sum it would have received had no such deductions been made.
(f) by either party, immediately upon notice to the other party, if it
determines that its compliance with any law or regulation or any
guideline or request from any central bank or governmental or
regulatory authority would create a cost or increase the cost of
providing credit under this Agreement, unless the other party agrees
to pay amounts sufficient to indemnify for such cost or increase in
cost.
(g) by either party, immediately upon notice to the other party, if the
Management Services Agreement has been terminated.
SECTION 3.04. Renewal. The parties may consent to successive one-year
renewal terms by following this procedure: If USI wishes to renew the term of
this Agreement, it shall provide notice to EDS of that intention by September
30, 2002 and the same date of each subsequent year. If EDS wishes to concur
with that renewal, it shall provide notice to USI of that concurrence by October
31 of that year. If no notice of intent to renew or no concurrence is given,
this Agreement will terminate when the then current term expires.
SECTION 3.05. Confidentiality. Confidentiality of matters will be
maintained in the manner set forth in Article 10 of the Management Services
Agreement.
SECTION 3.06. Successors and Assigns. Matters regarding succession and
assignment shall be determined in the manner set forth in the Management
Services Agreement.
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SECTION 3.07. No Third-Party Beneficiaries. Nothing expressed or implied
in this Agreement shall be construed to give any person or entity other than the
parties hereto any legal or equitable rights hereunder.
SECTION 3.08. Entire Agreement. This Agreement constitutes the entire
agreement of the parties on this subject, except that any administrative matters
not addressed herein shall be addressed in the manner set forth in the
Management Services Agreement. This Agreement replaces and supersedes any prior
agreement or understanding of the parties, whether written or oral, on this
subject not expressed or referred to in this Agreement.
SECTION 3.09. Amendment. This Agreement may not be amended except by a
written instrument signed by the parties hereto.
SECTION 3.10. Waivers. Either party hereto may (a) extend the time for
performance of any of the obligations or other act of the other party or (b)
waive compliance with any of the agreements contained herein. No waiver of any
term shall be construed as a waiver of the same term in any other situation or a
waiver of any other term of this Agreement. The failure of any party to assert
any of its rights hereunder will not constitute a waiver of any such rights.
SECTION 3.11. Severability. If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, such provision shall be deemed severable and all other provisions of
this Agreement shall nevertheless remain in full force and effect.
SECTION 3.12. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
SECTION 3.13. Notices. All notices required hereunder shall be given in
the manner set forth in Article 18 of the Management Services Agreement.
SECTION 3.14. Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Texas, without
giving effect to any choice-of-law rules that may require the application of the
laws of another jurisdiction.
SECTION 3.15. Counterparts. This Agreement may be signed in any number of
counterparts, with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together to constitute one, and
the same, document.
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IN WITNESS WHEREOF, EDS and USI have caused this Agreement to be executed
as of the date first above written.
ELECTRONIC DATA SYSTEMS CORPORATION
By: /s/ D. Xxxxxxx Xxxxxxxxxxx
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Name: D. Xxxxxxx Xxxxxxxxxxx
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Title: Senior Vice President
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UNIGRAPHICS SOLUTIONS INC.
By: /s/ H. Xxxxxxx Xxxxxxxx
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Name: H. Xxxxxxx Xxxxxxxx
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Title: Vice President
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