EXHIBIT 10.40
REVOLVING CREDIT FACILITY
This REVOLVING CREDIT FACILITY ("Loan Agreement"), dated as of
October 5, 1995, is entered into by and between:
(1) Micron Technology, Inc., a Delaware corporation
("Lender"); and
(2) Micron Electronics, Inc., a Minnesota corporation
("Borrower").
In consideration of the covenants, conditions and agreements set
forth herein, the parties agree as follows:
ARTICLE 1 DEFINITIONS.
1.01 "Advance" shall have the meaning given in
Section 2.01 of the Loan Agreement.
1.02 "Business Day" shall mean every day that most
commercial banks in Idaho, Oregon and Washington are open for
business.
1.03 "Collateral" shall have the meaning set forth in
Section 7.01.
1.04 "Collateral Net Book Value" shall mean an amount
equal to the sum of the Borrower's net book value of the following
assets as of the determination date: (i) Inventory, less any
reserves for obsolescence; (ii) Receivables, less (A) receivables
owed to Borrower by Lender or any of its Subsidiaries or by any of
Borrower's Subsidiaries, and (B) reserves for bad debts and
allowances for discounts and returns; and (iii) Equipment,
unencumbered by any Liens, except those that constitute a first
priority perfected security interest in favor of the Lender, less
accumulated depreciation.
1.05 "Commitment" shall mean an amount equal to
$40,000,000.
1.06 "Commitment to Net Worth Ratio" shall mean 1.00 to
1.00.
1.07 "Default" shall mean any event or circumstance not
yet constituting an Event of Default but which, with the giving of
any notice or the lapse of any period of time or both, would become
an Event of Default.
1.08 "Equipment" shall have that meaning set forth in
Section 7.01.
1.09 "Equity Securities" with respect to a Person shall
mean (a) all common stock, preferred stock, participations, shares,
partnership interests or other equity interests in and of such
Person (regardless of how designated and whether or not voting or
non-voting) and (b) all warrants, options, convertible securities
and other rights to acquire any of the foregoing.
1.10 "Event of Default" shall have the meaning given to
that term in Section 6.01.
1.11 "GAAP" shall mean generally accepted accounting
principles and practices as promulgated by the Financial Accounting
Standards Board and as in effect in the United States of America
from time to time, consistently applied. Unless otherwise indicated
in this Loan Agreement, all accounting terms used in this Loan
Agreement shall be construed, and all accounting and financial
computations hereunder or thereunder shall be computed, in
accordance with GAAP.
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1.12 "Governmental Authority" shall mean any domestic or
foreign national, state or local government, any political
subdivision thereof, any department, agency, authority or bureau of
any of the foregoing, or any other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.13 "Governmental Charges" shall mean all taxes, levies,
assessments, fees, claims or other charges imposed by any
Governmental Authority upon or relating to (i) Borrower, (ii) the
Advances, (iii) employees, payroll, income or gross receipts of
Borrower, (iv) the ownership or use of any of its assets by
Borrower or (v) any other aspect of the business of Borrower.
1.14 "Indebtedness" shall mean, as to the Borrower, to
the extent of the Borrower's liability, or potential liability
therefor, all items of indebtedness, obligation or liability,
whether matured or unmatured, liquidated or unliquidated, direct or
indirect, primary or otherwise, absolute or contingent, joint or
several.
1.15 "Inventory" shall have that meaning set forth in
Section 7.01.
1.16 "LIBOR Rate" shall mean the rate per annum,
calculated to the nearest .01%, at which U.S. dollar deposits are
offered in the London interbank market for three month periods as
quoted in the "Money Rates" column of The Wall Street Journal on
the first Business Day of each calendar month. All computations of
such interest shall be based on a year of 360 days and actual days
elapsed. Such LIBOR Rate shall remain in effect until it is
adjusted on the first Business Day of the following calendar month.
The effect of this definition is to cause the LIBOR Rate to change
on a month-to-month basis as of the first Business Day thereof.
1.17 "Lien" shall mean, with respect to any property, any
security interest, mortgage, pledge, lien, claim, charge or other
encumbrance in, of, or on such property or any proceeds therefrom,
including, without limitation, the interest of a vendor or lessor
under a conditional sale agreement, capital lease or other title
retention agreement, or any agreement to provide any of the
foregoing, or the filing of any financing statement or similar
instrument under the Uniform Commercial Code or comparable law of
any jurisdiction.
1.18 "Loan Agreement" shall have the meaning set forth in
the opening paragraph of this document.
1.19 "Loan Documents" shall mean and include this Loan
Agreement, the Note, each Notice of Borrowing, and any other
documents, instruments and agreements delivered to Lender in
connection with this Loan Agreement.
1.20 "Note" shall mean the Note as defined in Section
2.07 of the Loan Agreement, the form of which is set forth as
Exhibit B.
1.21 "Notice of Borrowing" shall mean the form set forth
herein as Exhibit A.
1.22 "Obligations" shall mean and include all Advances,
debts, liabilities, and financial obligations, howsoever arising,
owed by Borrower to Lender of every kind and description (whether
or not evidenced by any note or instrument), direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising pursuant to the terms of any of the Loan
Documents, including, without limitation, all interest, fees,
charges, expenses, reasonable attorneys' fees (and expenses) and
accountants' fees (and expenses) chargeable to Borrower or payable
by Borrower hereunder or thereunder.
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1.23 "Permitted Liens" shall mean and include:
(a) Liens that constitute a first priority
perfected security interest in favor of the Lender;
(b) Liens on Borrower's Equipment if, after taking
into account the effect of such Liens, the requirements of Sections
2.05 and 5.01(c) continue to be satisfied; and
(c) Liens, if any, that Lender and Borrower shall
have agreed in writing to be included within this definition.
1.24 "Person" shall mean and include an individual, a
partnership, a corporation (including a business trust), a joint
stock company, a limited liability company, an unincorporated
association, a joint venture or other entity or a Governmental
Authority.
1.25 "Receivables" shall have that meaning set forth in
Section 7.01.
1.26 "Subsidiary" of any Person shall mean (a) any
corporation of which more than 50% of the issued and outstanding
equity securities having ordinary voting power to elect a majority
of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of
such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries, or (b) any other Person included in
the financial statements of such Person on a consolidated basis.
Any reference to a Subsidiary without designation of the ownership
of such Subsidiary shall be deemed to refer to a Subsidiary of
Borrower.
1.27 "Tangible Net Worth" shall mean the Borrower's and
its Subsidiaries' consolidated net worth, less goodwill and other
intangibles.
1.28 "Termination Date" shall mean the date on which
Lender's commitment to make Advances under this Loan Agreement is
terminated following any required notice periods in accordance with
Article 8.
1.29 "UCC" shall mean the Uniform Commercial Code as in
effect in Idaho from time to time, unless the context requires
otherwise.
ARTICLE 2 ADVANCES.
2.01 Terms. Subject to the terms and conditions of this
Loan Agreement, Lender agrees to advance to Borrower from time to
time and until the Termination Date, such sums as Borrower may
request (the "Advances") but which shall not exceed, in the aggregate
principal amount at any one time outstanding, the Commitment, as
adjusted pursuant to Section 2.08. Advances shall be made in
lawful currency of the United States of America and shall be made
in same day or immediately available funds. Each Advance shall be
in an amount equal to at least $1,000,000 or any integral multiple
of $250,000 in excess thereof and shall be made no later than the
time period set forth in Exhibit C subsequent to the delivery to
Lender of a Notice of Borrowing in the manner specified in Section
9.01.
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2.02 Payments of Principal.
(a) Borrowings. Subject to all other terms of this
Loan Agreement, including, but not limited to, Section 2.05,
Borrower may borrow, repay without penalty or premium, and reborrow
hereunder, from the date of this Loan Agreement until the
Termination Date, up to the full principal amount of the
Commitment, as adjusted pursuant to Section 2.08.
(b) Repayment Upon Downward Adjustment. If the
outstanding principal balance of Advances should exceed the
Commitment (in effect and as adjusted pursuant to Section 2.08),
due to a downward adjustment pursuant to Section 2.08, then
Borrower shall be required to repay within sixty (60) Business Days
of the adjustment date, so much of the principal balance of the
outstanding Advances such that the outstanding Advances no longer
exceed the Commitment (in effect and as adjusted pursuant to
Section 2.08) as of the adjustment date.
(c) Repayment Upon Termination. If not paid
earlier, the outstanding principal balance of all Advances shall be
due and payable to the Lender on the Termination Date.
2.03 Interest. Interest on the outstanding principal
balance under the Advances shall accrue at the LIBOR Rate in effect
plus 100 basis points. All computations of such interest shall be
based on a year of 360 days and actual days elapsed for each day
on which any principal balance is outstanding under the terms of
the Loan Agreement.
2.04 Interest Payments. All accrued and unpaid interest
shall be due on the first Business Day of each month. The parties
agree that Borrower shall have the right, without penalty or
premium, to remit such interest up to ten (10) calendar days
following the first Business Day of each month. If not paid
earlier, all outstanding accrued interest hereunder shall be due
and payable to the Lender on the Termination Date.
2.05 Total Outstanding Advances. At any time the
aggregate principal amount of the outstanding Advances shall not
exceed the lesser of (i) and (ii), where (i) equals seventy five
percent (75%) of the Collateral Net Book Value, and (ii) equals the
amount of the Commitment. Except as expressly provided for in
Section 2.02(b), at no time shall the aggregate principal amount of
outstanding Advances exceed the Commitment, as adjusted pursuant to
Section 2.08.
2.06 Other Payment Terms.
(a) Place and Manner. Borrower shall make all
payments due to Lender hereunder in lawful money of the United
States and in same day or immediately available funds.
(b) Date. Whenever any payment due hereunder
shall fall due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such
extension of time shall be included in the computation of interest
or fees, as the case may be.
(c) Default Rate. From and after the occurrence
of an Event of Default and during the continuance thereof, Borrower
shall pay interest on all Obligations not paid when due, from the
date due thereof until such amounts are paid in full at a per annum
rate equal to the three (3) percentage points in excess of the rate
otherwise applicable to Advances. All computations of such
interest shall be based on a year of 360 days and actual days
elapsed.
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2.07 Note. The obligation of Borrower to repay the
Advances hereunder, and to pay interest thereon at the rates
provided herein, shall be evidenced by a promissory note in the
form of Exhibit B (the "Note").
2.08 Adjustment to Revolving Line of Credit.
(a) Upward Adjustment. Upon written request of
the Borrower, the Commitment shall be increased to, but not in
excess of, an amount equal to the lesser of (i) and (ii), where (i)
equals the sum of (A) and (B), where (A) equals $40,000,000 and (B)
equals the product of (the Commitment to Net Worth Ratio)
multiplied by (Borrower's Tangible Net Worth determined as of the
most recent practicable date, less $175,000,000, provided, however,
such remainder shall not be less than zero); and (ii) equals
$80,000,000.
(b) Downward Adjustment. If the Tangible Net
Worth of Borrower and its Subsidiaries at the end of a fiscal
quarter is less than it was at the end of the immediately
preceeding fiscal quarter, then as of the first Business Day
immediately following the day on which financial results are
released to the public for such fiscal quarter then ended, the
Commitment shall be decreased to an amount equal to the greater of
(i) and (ii), where (i) equals the product of .5 multiplied by the
Tangible Net Worth of Borrower and its Subsidiaries determined as
of the end of such fiscal quarter then ended; and (ii) equals
$40,000,000. Additionally, during the term of this Loan Agreement,
Borrower may at any time request in writing Lender to reduce the
Commitment down to any amount, including zero, and if so requested
Lender shall reduce, the Commitment per Borrower's request.
(c) Condition to Adjustment. In no event shall
the adjustment provided by Section 2.08(a) be effective if, at the
time the adjustment would otherwise occur, the Borrower is not in
compliance with the covenants set forth in Sections 5.01(c) and
5.02. Furthermore, unless Lender agrees in writing to the
contrary, no more than one adjustment per month shall be made at
the request of the Borrower.
2.09 Commitment Fees. Borrow agrees to pay to Lender
a commitment fee for the period from and including October 5,
1995 to and excluding the Termination Date equal to the average
daily Commitment calculated for each calendar quarter ending on
March 31, June 30, September 30 and December 31 of each year,
multiplied by a rate equal to .0005 /360, times actual number of
days elapsed during such quarter. Such fee shall be due
quarterly in arrears on the first Business Day immediately
following the end of each such calendar quarter. The parties
agree that Borrower shall have the right, without penalty or
premium, to remit such fees up to ten (10) calendar days
following the first Business Day of each calendar quarter.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BORROWER.
To induce Lender to enter into this Loan Agreement and to make
Advances hereunder, Borrower represents and warrants to Lender as
follows:
3.01 Due Incorporation, Qualification, etc. Each of
Borrower and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its state
of incorporation.
3.02 Authority. The execution, delivery and
performance by Borrower of each Loan Document to be executed by
Borrower and the consummation of the transactions contemplated
thereby (i) are within the power of Borrower and (ii) have been
duly authorized by all necessary actions on the part of Borrower.
3.03 Enforceability. Each Loan Document executed, or to be
executed, by Borrower has been, or will be, duly executed and delivered
by Borrower and constitutes, or will constitute, a legal, valid
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and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.
3.04 Collateral. After due diligence and reasonable
inquiry, Borrower represents and warrants to Lender that (a)
Borrower is the owner of the Collateral (or, in the case of after-
acquired Collateral, at the time Borrower acquires rights in the
Collateral, will be the owner thereof) and that no other Person has
(or, in the case of after-acquired Collateral, at the time Borrower
acquires rights therein, will have) any right, title, claim or
interest (by way of Lien or otherwise) in, against or to the
Collateral, other than Permitted Liens; (b) Lender has (or in the
case of after-acquired Collateral, at the time Borrower acquires
rights therein, will have) a first priority perfected security
interest in the Collateral, except for Permitted Liens; (c) all
Inventory has been (or, in the case of hereafter produced
Inventory, will be) produced in compliance with applicable laws,
including the Fair Labor Standards Act; and (d) each Receivable is
genuine and enforceable against the party obligated to pay the
same.
3.05 Default. Borrower is not in default with respect to
any Indebtedness owed to Lender.
3.06 Total Outstanding Advances. Except as
expressly provided for in Section 2.02(b), the total aggregate
principal amount of outstanding Advances does not exceed the
Commitment, as adjusted pursuant to Section 2.08.
ARTICLE 4 CONDITIONS TO MAKING ADVANCES.
Lender's obligation to make the initial Advance and each
subsequent Advance is subject to the prior satisfaction or waiver
of all the conditions set forth in this Article 4.
4.01 Principal Loan Documents. Borrower shall have duly
executed and delivered to Lender: (a) the Loan Agreement; (b) the
Note; (c) one or more UCC-1 Financing Statements, in a form
acceptable to Lender; (d) a Notice of Borrowing; and (e) such other
documents, instruments and agreements as Lender may reasonably
request.
4.02 Representations and Warranties Correct. The
representations and warranties made by Borrower in Article 3 hereof
shall be true and correct as of the date on which each Advance is
made and after giving effect to the making of the Advance. The
submission by Borrower to Lender of the Notice of Borrowing with
respect to the Advance shall be deemed to be a certification by the
Borrower that as of the date of borrowing, the representations and
warranties made by Borrower in Article 3 hereof are true and
correct and that all matters set forth in such Notice of Borrowing
are true and correct.
4.03 No Event of Default or Default. No Event of Default
or Default has occurred or is continuing.
4.04 Total Outstanding Advances. The total aggregate
principal amount of outstanding Advances does not exceed the
Commitment, as adjusted pursuant to Section 2.08
ARTICLE 5COVENANTS OF BORROWER.
5.01 Affirmative Covenants. Until the termination of the
commitment to make Advances under this Loan Agreement and the
satisfaction in full by Borrower of all Obligations, Borrower shall
comply at all times with the following affirmative covenants unless
Lender shall otherwise consent in writing:
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(a) Certificates, Reports, etc. Borrower shall
furnish to Lender the following, each in such form and such detail
as Lender shall reasonably request:
(i) Within thirty (30) Business Days following
the end of each fiscal quarter of Borrower, a certificate from
Borrower's president or chief financial officer stating that
with respect to such quarter then ended and as of the date of
the certificate: (a) no Event of Default has occurred, or, if
any Event of Default has occurred, a statement as to the
nature thereof and what action Borrower proposes to take with
respect thereto; (b) the Lender has a valid and enforceable
first priority perfected security interest in and to the
Collateral, except for Permitted Liens; (c) Borrower is in
compliance with all covenants set forth in Article 5; and (d)
each of the representations and warranties contained in
Article 3 is true and correct in all respects. The
certificate shall be accompanied by an attachment, which shall
be incorporated into the certificate, that demonstrates
Borrower's compliance with the covenants set forth in (A)
Section 5.01(c), broken down by type of Collateral (i.e.,
Receivables, Inventory and Equipment) and (B) Section 5.02(c).
(ii) As soon as possible and in no event later
than five (5) Business Days after the occurrence or existence of:
any Event of Default or Default, a written statement of the
president or chief financial officer of Borrower setting forth
details of such event, condition, Event of Default or Default and
the action which Borrower proposes to take with respect thereto;
and
(iii) Such other instruments, agreements,
certificates, opinions, statements, documents and
information relating to the operations or condition
(financial or otherwise) of Borrower or its Subsidiaries,
and compliance by Borrower with the terms of this Loan
Agreement and the other Loan Documents as Lender may from
time to time reasonably request.
(b) Inspections. Borrower and its Subsidiaries
shall permit any Person designated by Lender, upon reasonable
notice and during normal business hours, to visit and inspect any
of the properties and offices of Borrower and its Subsidiaries, to
examine the books of account of Borrower, and its Subsidiaries and
to discuss the affairs, finances and accounts of Borrower and its
Subsidiaries with, and to be advised as to the same by, their
officers, auditors, consultants, advisors and accountants, all at
such times and intervals as Lender may reasonably request.
(c) Ratio. Borrower shall maintain a ratio of
outstanding Advances to Collateral Net Book Value equal to or less
than .75 to 1.00.
5.02 Negative Covenants. Until the termination of the
commitment to make Advances under this Loan Agreement and the
satisfaction in full by Borrower of all Obligations, Borrower shall
not at any time:
(a) create, incur, assume or permit to exist any
Lien on or with respect to any Collateral whether now owned or
hereafter acquired, except for Permitted Liens;
(b) except upon express written consent by Lender,
issue, offer or sell any Equity Securities the result of which
shall be, after taking into account the issuance, offering or sale
thereof, the failure by Lender to own at least sixty percent (60%)
of Borrower's outstanding Equity Securities; or
(c) except as expressly provided for in Section
2.02(b), allow the total aggregate principal amount of outstanding
Advances to exceed the Commitment, as adjusted pursuant to Section
2.08.
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ARTICLE 6 EVENTS OF DEFAULT.
6.01 Events of Default. The occurrence of any of the
following shall constitute an "Event of Default" under this Loan
Agreement and the Note:
(a) Failure to Pay. Borrower shall fail to pay (i)
the principal amount of all outstanding Advances on the Termination
Date hereunder; (ii) that portion of the principal amount of
outstanding Advances described in Section 2.02(b) within the time
period set forth therein; (iii) any interest, Obligation or other
payment required under the terms of this Loan Agreement, the Note
or any other Loan Document on the date due and such failure shall
continue for twenty (20) Business Days after Borrower's receipt of
Lender's written notice thereof to Borrower; or (iv) any
Indebtedness (excluding Obligations) owed by Borrower to Lender on
the date due and such failure shall continue for twenty (20)
Business Days after Borrower's receipt of Lender's written notice
thereof to Borrower.
(b) Breaches of Covenants. Borrower shall fail to
observe or perform any other covenant, obligation, condition or
agreement contained in this Loan Agreement or any other Loan
Document and (i) such failure shall continue for ten (10) Business
Days, or (ii) if such failure is not curable within such ten (10)
Business Day period, but is reasonably capable of cure within
thirty (30) Business Days, either (A) such failure shall continue
for thirty (30) Business Days or (B) Borrower shall not have
commenced a cure in a manner reasonably satisfactory to Lender
within the initial ten (10) Business Day period; or
(c) Representations and Warranties. Any
representation, warranty, certificate, or other statement (financial
or otherwise) made or furnished by or on behalf of Borrower to
Lender in writing in connection with any of the Loan Documents,
or as an inducement to Lender to enter into this Loan Agreement,
shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished; or
(d) Voluntary Bankruptcy or Insolvency Proceedings.
Borrower shall (i) apply for or consent to the appointment of a
receiver, trustee, liquidation or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in
writing its inability, to pay its debts generally as they mature,
(iii) make a general assignment for the benefit of its or any of
its creditors, (iv) be dissolved or liquidated in full or in part,
(v) become insolvent (as such term is defined in 11 U.S.C. Section
101 (32), as amended from time to time), (vi) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case
or other proceeding commenced against it, or (vii) take any action
for the purpose of effecting any of the foregoing; or
(e) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator
or custodian of Borrower or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings
seeking liquidation, reorganization or other relief with respect to
Borrower or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and
an order for relief entered or such proceeding shall not be
dismissed or discharged within sixty (60) calendar days of
commencement.
6.02 Rights of Lender upon Default.
(a) Acceleration. Upon the occurrence or existence
of any Event of Default described in Sections 6.1(d) and 6.1(e),
immediately and without notice, (or at the option of the Lender
upon five (5) Business Days advance written notice upon the
occurrence of any other Event of Default), all outstanding
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Obligations payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Note to the
contrary notwithstanding.
(b) Remedies. Upon the occurrence and during the
continuance of any such Event of Default, Lender shall have the
rights of a secured creditor under the UCC (as enacted in any
jurisdiction in which Collateral may be located), all rights
granted by this Loan Agreement and by law, including, but not
limited to, the right to: (a) require Borrower to assemble the
Collateral and make it available to Lender at a place to be
designated by Lender; (b) prior to the disposition of the
Collateral, store, process, repair or recondition it or otherwise
prepare it for disposition in any manner and to the extent Lender
deems appropriate and in connection with such preparation and
disposition, without charge, use any trademark, tradename,
copyright, patent or technical process used by Borrower; provided,
however, that the use of such intellectual property rights granted
under this subparagraph (b) shall be used only in connection with
and to the extent necessary to effect Lender's remedies hereunder;
and (c) sell at public or private sale or otherwise realize upon in
any place where the Collateral may be located, the whole or, from
time to time, any part of the Collateral or any interest that the
Borrower may have therein. Borrower hereby agrees that ten (10)
Business Days notice of any intended sale or disposition of any
Collateral is reasonable. In furtherance of Lender's rights
hereunder, Borrower hereby grants to Lender an irrevocable, non-
exclusive license (exercisable without royalty or other payment by
Lender, but only in connection with and to the extent necessary to
effect Lender's remedies hereunder) to use, license or sublicense
any patent, trademark, tradename, copyright or other intellectual
property in which Borrower now or hereafter has any right, title or
interest together with the right of access to all media in which
any of the foregoing may be recorded or stored.
(c) Cumulative Rights, etc. The rights, powers and
remedies of Lender under this Loan Agreement shall be in addition
to all rights, powers and remedies given to Lender by virtue of any
applicable law, rule or regulation of any Governmental Authority,
any transaction contemplated thereby or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Lender's
rights hereunder. Borrower waives any right to require Lender to
proceed against any particular Collateral or to pursue any
particular remedy in Lender's power.
ARTICLE 7 GRANT OF SECURITY INTEREST.
7.01 Grant of Security Interest. As security for the
Obligations, Borrower hereby pledges and assigns to Lender and
grants to Lender a first priority perfected security interest,
except for Permitted Liens, in all right, title and interest of
Borrower now owned or hereafter acquired in and to the following
(all of which, collectively and severally, constitutes the
"Collateral"):
(a) All equipment (including, without limitation,
vehicles and other machinery and office equipment), together with
all additions and accessions thereto and replacements therefor
(collectively, the "Equipment");
(b) All inventory (including, without limitation,
(i) all raw materials, work in process and finished goods and (ii)
all such goods which are returned to or repossessed by Borrower),
together with all additions and accessions thereto, replacements
therefor, products thereof and documents therefor (collectively, the
"Inventory");
(c) All accounts receivables, chattel paper, contract
rights and rights to the payment of money (including without limitation,
tax refunds and royalties) (collectively, the "Receivables"); and
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(d) All proceeds of the foregoing (including, without
limitation, whatever is receivable or received when Collateral or
proceeds is sold, collected, exchanged, returned, substituted or
otherwise disposed of, whether such disposition is voluntary or
involuntary, including rights to payment and return premiums and
insurance proceeds under insurance with respect to any Collateral,
and all rights to payment with respect to any cause of action
affecting or relating to the Collateral).
7.02 Covenants Relating to Collateral. Borrower hereby
agrees (a) to perform all acts that may be necessary to maintain,
preserve, protect and perfect the Collateral, the Lien granted to
Lender therein and the first priority of such Lien, except for
Permitted Liens; (b) not to use or permit any Collateral to be used
(i) in violation of any provision of any transaction contemplated
thereby, (ii) in violation of any applicable law, rule or
regulation, or (iii) in violation of any policy of insurance
covering the Collateral; (c) to pay promptly when due all taxes and
other Governmental Charges (except where Lender has expressly
agreed to pay such taxes or Governmental Charges on Borrower's
behalf), all Liens and all other charges now or hereafter imposed
upon or affecting any Collateral; and (d) to procure, execute and
deliver from time to time any endorsements, assignments, financing
statements and other writings reasonably deemed necessary or
appropriate by Lender to perfect, maintain and protect its Lien
hereunder and the priority thereof.
7.03 Authorized Action by Agent. Borrower hereby irrevocably
appoints Lender as its attorney-in-fact and agrees that Lender may
perform (but Lender shall not be obligated to and shall incur no
liability to Borrower or any third party for failure so to do) any
act which Borrower is obligated by this Loan Agreement to perform,
and to exercise such rights and powers as Borrower might exercise
with respect to the Collateral, including but not limited to the
right to (a) collect by legal proceedings or otherwise and endorse,
receive and receipt for all dividends, interest, payments, proceeds
and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension, deposit,
or other agreement pertaining to the Collateral, or deposit,
surrender, accept, hold or apply other property in exchange for the
Collateral; (c) insure, process and preserve the Collateral; (d)
make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any Indebtedness
of Borrower relating to the Collateral; and (f) execute UCC
financing statements and other documents, instruments and
agreements required hereunder; provided, however, that Lender shall
not exercise any such powers prior to the occurrence of an Event of
Default and shall only exercise such powers during the continuance
of an Event of Default. Borrower agrees to reimburse Lender upon
demand for any reasonable costs and expenses, including reasonable
attorneys' fees, Lender may incur while acting as Borrower's
attorney-in-fact hereunder.
ARTICLE 8 TERMINATION.
Lender's commitment to make Advances under this Loan Agreement
may be terminated at any time within Lender's sole discretion upon
twenty four (24) months prior written notice to Borrower. Borrower
may terminate its right to request Advances under the Loan
Agreement at any time within Borrower's sole discretion upon twenty
(20) Business Days prior written notice to Lender. Upon the
earlier to expire of the foregoing notice periods, Lender shall
have no obligation to make Advances hereunder. As of such
Termination Date, Borrower shall be required to pay Lender all
accrued interest then due, all principal amounts then outstanding
and any commitment fees, costs and expenses due or outstanding as
of the Termination Date or attributable to Advances made prior to
the Termination Date.
ARTICLE 9 MISCELLANEOUS.
9.01 Notices. Except as otherwise provided herein, all
notices, requests, demands, consents, instructions or other
communications to or upon Lender or Borrower under this Agreement
or the other Loan Documents
10
shall be in writing and telecopied, mailed or delivered to each
party at its telecopier number or address set forth below (or
to such other telecopier number or address for any party as
indicated in any notice given by that party to the other party).
All such notices and communications shall be effective (a) when
sent by Federal Express or other overnight service of recognized
standing, on the Business Day following the deposit with such
service; (b) when mailed by registered or certified mail, first
class postage prepaid and addressed as aforesaid through the United
States Postal Service, upon receipt; (c) when delivered by hand,
upon delivery; and (d) when telecopied, upon confirmation of receipt;
provided, however, that any notice delivered to Lender under Article
2 shall not be effective until received by Lender.
Lender: Attention: Treasurer
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
X.X. Xxx 0
Xxxxx, XX 00000-0000
with copy to: Attention: Chief Financial Officer
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
X.X. Xxx 0
Xxxxx, XX 00000-0000
and
Attention: General Counsel
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
X.X. Xxx 0
Xxxxx, XX 00000-0000
Borrower: Attention: Chief Financial Officer
Micron Electronics, Inc.
000 X. Xxxxxxx Xx.
X.X. Xxx 0000
Xxxxx, XX 00000
9.02 Expenses. Borrower shall pay on demand all reasonable
fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Lender with respect to the exercise of its
duties under this Loan Agreement and the other Loan Documents or
with respect to any amendments or waivers hereof requested by
Borrower or in the enforcement or attempted enforcement of any of
the Obligations or in preserving any of Lender's rights and
remedies (including, without limitation, all such fees and expenses
incurred in connection with any "workout" or restructuring
affecting the Loan Documents or the Obligations or any bankruptcy
or similar proceeding involving Borrower or any of its
Subsidiaries).
9.03 Waivers; Amendments. Any term, covenant, agreement or
condition of this Loan Agreement or any other Loan Document may be
amended or waived if such amendment or waiver is in writing and is
signed by Borrower and Lender. No failure or delay by Lender in
exercising any right hereunder shall operate as a waiver thereof or
of any other right nor shall any single or partial exercise of any
such right preclude any other further exercise thereof or of any
other right. A waiver or consent given hereunder shall be
effective only if in writing and in the specific instance and for
the specific purpose for which given.
9.04 Successors and Assigns. This Loan Agreement and the
other Loan Documents shall be binding upon and inure to the benefit
of Borrower, Lender, any future holder of the Note and their
respective
11
successors and permitted assigns, except that (i)
Borrower may not assign or transfer (and any such attempted
assignment or transfer shall be void) any of its rights or
obligations under any Loan Document without the prior written
consent of Lender and (ii) Lender may not assign or transfer (and
any such attempted assignment or transfer shall be void) any of its
rights or obligations under any Loan Document without the prior
written consent of Borrower.
9.05 Set-off. In addition to any rights and remedies of
Lender provided by law, Lender shall have the right, without prior
notice to Borrower, any such notice being expressly waived by
Borrower to the extent permitted by applicable law, upon the
occurrence and during the continuance of a Default or an Event of
Default, to set-off and apply against any Indebtedness, whether
matured or unmatured, of Borrower to Lender (including, without
limitation, the Obligations), any amount owing from Lender to
Borrower. The aforesaid right of set-off may be exercised by
Lender against Borrower or against any trustee in bankruptcy,
Borrower-in-possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of Borrower
or against anyone else claiming through or against Borrower or such
trustee in bankruptcy, Borrower-in-possession, assignee for the
benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by Lender prior to the
occurrence of a Default or an Event of Default. Lender agrees
promptly to notify Borrower after any such set-off and application
made by Lender, provided that the failure to give such notice shall
not affect the validity of such set-off and application.
9.06 No Third Party Rights. Nothing expressed in or to be
implied from this Agreement or any other Loan Document is intended
to give, or shall be construed to give, any Person, other than the
parties hereto and thereto and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim
under or by virtue of this Agreement or any other Loan Document.
9.07 Partial Invalidity. If at any time any provision of this
Loan Agreement or any of the Loan Documents is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of the Loan Agreement or such other Loan
Documents, nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction, shall in any way
be affected or impaired thereby.
9.08 Governing Law. This Loan Agreement and each of the
other Loan Documents shall be governed by and construed in
accordance with the laws of the State of Idaho without reference to
conflicts of law rules.
9.09 Construction. Each of this Loan Agreement and the other
Loan Documents is the result of negotiations among, and has been
reviewed by, Borrower, Lender and their respective counsel.
Accordingly, this Loan Agreement and the other Loan Documents shall
be deemed to be the product of all parties hereto, and no ambiguity
shall be construed in favor of or against Borrower or Lender.
9.10 Entire Agreement. This Loan Agreement and the other Loan
Documents, taken together, constitute and contain the entire
agreement of Borrower and Lender with respect to the subject matter
hereby and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter
hereof.
12
IN WITNESS WHEREOF, the parties have executed this Loan
Agreement as of the date first set forth above.
BORROWER:
Micron Electronics, Inc.
a Minnesota corporation
By: /s/ T. Xxxx Xxxx
-----------------------------------
T. Xxxx Xxxx,
Vice President, Finance and
Chief Financial Officer
LENDER:
Micron Technology, Inc.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxxxx X. Xxxxxx, Xx.,
Vice President, Finance and
Chief Financial Officer
13
EXHIBIT A
NOTICE OF BORROWING
, 199
----------------- --
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
X.X. Xxx 0
Xxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxxxxx
1. Reference is made to that certain Loan Agreement,
dated as of October 5, 1995 (the "Loan Agreement"), between Micron
Electronics, Inc. ("Borrower") and Micron Technology, Inc.
("Lender"). Unless otherwise indicated, all terms defined in the
Loan Agreement have the same respective meanings when used herein.
2. Pursuant to Section 2.01 of the Loan Agreement,
Borrower hereby requests a Advance upon the following terms:
(a) The principal amount of the requested
Advance is to be $__________;
(b) The date of the requested Advance is to be
__________, 199 .
3. Borrower hereby certifies to Lender that, on the
date of such Advance and after giving effect to the requested
Advance:
(a) The representations and warranties set
forth in Article 3 of the Loan Agreement will be true and
correct as if made on such date;
(b) No Event of Default or Default has
occurred or is continuing;
(c) Each of the Loan Documents remains in full
force and effect; and
(d) Borrower is in compliance with each of the
covenants contained in Article 5 of the Loan Agreement
and the attachment hereto setting forth Borrower's
compliance with Sections 5.01(c) and 5.02(c) of the Loan
Agreement is true and correct.
4. Please disburse the proceeds of the requested
Advance to Account No:___________.
IN WITNESS WHEREOF, Borrower has executed this Notice of
Borrowing on the date set forth above.
Micron Electronics, Inc.
By:_______________________________
EXHIBIT B
PROMISSORY NOTE
(Revolving Line of Credit)
Date: October 5, 0000
Xxxxx, XX
FOR VALUE RECEIVED, Micron Electronics, Inc., a Minnesota
corporation ("Borrower"), hereby agrees to pay to the order of
Micron Technology, Inc., a Delaware corporation ("Lender"), at
Lender's principal office, the principal balance of sums advanced
("Advances") to Borrower under a Revolving Credit Facility entered
into between Lender and Borrower as of October 5, 1995 (the "Loan
Agreement"), together with interest accrued as set forth in Section
2.03 of the Loan Agreement, all of which shall be payable at those
times set forth in Article 2 of the Loan Agreement. Except as
expressly provided for in Section 2.02(b), the aggregate principal
amount of the outstanding Advances shall not exceed at any time the
Commitment. The principal amount of Advances outstanding at any
time shall be the total principal amount advanced less the amount
of principal payments made from time to time.
Borrower shall make all payments hereunder to Lender as
indicated in the Loan Agreement, in lawful money of the United
States and in same day or immediately available funds.
This Note is the note referred to in the Loan Agreement and is
subject to the terms of the Loan Agreement, including all of the
remedies available to Lender in the Loan Agreement.
If any action should be undertaken to collect this Note or
enforce the Lender's security interest herein, Borrower agrees to
pay all costs and expenses, including reasonable attorney's fees,
incurred in connection with such action.
Borrower hereby waives notice of presentment, demand, protest
or notice of any other kind. This Note shall be governed by and
construed in accordance with the laws of the State of Idaho.
Micron Electronics, Inc.
By:/s/ T. Xxxx Xxxx
-------------------------------
T. Xxxx Xxxx
EXHIBIT C
TIME PERIODS
Amount of the Advance Time Period in Which Lender Shall
(expressed in Millions of Dollars) Make Advances (exclusive of the
day on which the Notice of Borrowing
is Received)
---------------------------------- ------------------------------------
$0 to 5 3 Business Days
5+ to 20 5 Business Days
20+ to 40 10 Business Days
40+ to 60 20 Business Days
60+ to 80 30 Business Days
REVOLVING CREDIT FACILITY
BETWEEN
MICRON TECHNOLOGY, INC.
AND
MICRON ELECTRONICS, INC.
October 5, 1995
