EXHIBIT 10.14
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of
---------
October 10, 2001 is made by and among Storage Technology Corporation, a Delaware
corporation (the "Company") and Bank of America, N.A., as Collateral Agent for
-------
itself and the other Secured Parties referred to below (in such capacity, the
"Collateral Agent").
----------------
RECITALS
WHEREAS, the Company, as borrower, certain lending
institutions, as lenders, Keybank National Association as documentation agent,
Fleet Bank as syndication agent and Bank of America, N.A., as administrative
agent (in such capacity "Agent") are parties to a Credit Agreement dated as of
October 10, 2001 (as amended, restated, modified, renewed or extended from time
to time, the "Credit Agreement");
----------------
WHEREAS, it is a condition precedent to the closing of the
Credit Agreement that the Company enter into this Agreement and grant to the
Collateral Agent, for itself and for the ratable benefit of the other Secured
Parties, the security interests hereinafter provided to secure the obligations
of the Company described below.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation
---------------------------
(a) Terms Defined in the Credit Agreement. All capitalized terms used in this
-------------------------------------
Agreement and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the following terms shall
---------------------
have the following meanings:
"Accounts" means any and all of the Company's accounts as such
--------
term is defined in Section 9-102 of the UCC owing or payable by a Domestic
Obligor, provided that "Accounts shall not include Chattel Paper, intercompany
--------
obligations and purchased accounts subject to the Multicurrency Note Purchase
Facility.
"Affiliate" means, as to any Person, any other Person which,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"Aggregate Credit" means, at any time, (a) the aggregate
----------------
principal amount of the Loans outstanding under the Credit Agreement at such
time or (b) if no such Loans are outstanding at such time under the Credit
Agreement, the aggregate amount of the Commitments in effect under the Credit
Agreement at such time.
1
"Attorney Costs" means and includes all fees and disbursements
--------------
of any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Banks" means the "Banks" from time to time party to the
-----
Credit Agreement.
"BofA" means Bank of America, N.A., a national banking
----
association.
"Books" means all books, records and other written, electronic
-----
or other documentation in whatever form maintained now or hereafter by or for
the Company in connection with the ownership of its assets or the conduct of its
business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing the
Company's assets, business operations or financial condition; (iii) computer
programs and software; (iv) computer discs, tapes, files, manuals and
spreadsheets; (v) computer printouts and output of whatever kind; (vi) any other
computer prepared or electronically stored, collected or reported information
and equipment of any kind; and (vii) any and all other rights now or hereafter
arising out of any contract or agreement between the Company and any service
bureau, computer or data processing company or other Person charged with
preparing or maintaining any of the Company's books or records or with credit
reporting, including with regard to the Company's Accounts; provided that
--------
"Books" shall not include any books, records, or software sold by the Company to
BofA or any of its Affiliates pursuant to the Multicurrency Note Purchase
Facility.
"Chattel Paper" means any and all of the Company's chattel
-------------
paper as such term is defined in Section 9 102 of the UCC, including Electronic
Chattel Paper, provided, however, that "Chattel Paper" shall not include any
-------- -------
interests of the Company in purchased accounts subject to the Multicurrency Note
Purchase Facility.
"Collateral" has the meaning set forth in Section 2.
----------
"Credit Agreement" has the meaning set forth in the Recitals.
----------------
"Directing Banks" means at any time Banks then holding at
---------------
least 51% of the Aggregate Credit.
"Documents" means any of the Borrower's documents, as such
---------
term is defined in Section 9-102 of the UCC.
"Domestic Obligor" means any Person obligated on an Account or
----------------
other Right to Payment who is a resident of or otherwise located in the United
States.
"Electronic Chattel Paper" means any and all of the Company's
------------------------
electronic chattel paper, as such term is defined in Section 9-102 of the UCC.
"Event of Default" means any "Event of Default" under and as
----------------
defined in the Credit Agreement or any other Loan Document
"Financing Statements" has the meaning set forth in Section 3.
--------------------
2
"GAAP" means generally accepted accounting principles set
----
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.
"Governmental Authority" means any nation or government, any
----------------------
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Instruments" means any and all of the Company's instruments
-----------
as such term is defined in Section 9-102 of the UCC; provided, however that
-------- -------
"Instruments" shall not include any interests of the Company in its
Subsidiaries.
"Inventory" means any of the Company's inventory, as such term
---------
is defined in Section 9-102 of the UCC which is located in the United States.
"Lien" means any security interest, mortgage, deed of trust,
----
pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance,
lien (statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an operating lease.
"Loan Documents" means the Loan Documents as defined in the
--------------
Credit Agreement.
"Material Adverse Effect" means (a) a material adverse change
-----------------------
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Company to perform under any Loan Document and to avoid any Event of Default; or
(c) a material adverse effect upon (i) the legality, validity, binding effect or
enforceability against the Company of any Loan Document or (ii) the perfection
or priority of any Lien on any material portion of the Collateral granted under
any of the Collateral Documents.
"Multicurrency Note Purchase Facility" means the facility
------------------------------------
pursuant to the Second Amended and Restated Contingent Multicurrency Note
Purchase Commitment Agreement dated as of January 15, 1998 (as amended,
restated, modified or supplemented from time to time) between the Company and
BofA, whereby BofA has agreed to purchase certain notes of the Company subject,
in certain cases, to collateralization in cash and other investments or any
similar facility designed to accomplish the same objectives.
3
"Permitted Lien" means a Lien which is a "Permitted Lien"
--------------
under the Credit Agreement.
"Person" means an individual, partnership, corporation,
------
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any other
entity of whatever nature.
"Proceeds" means all proceeds, as such term is defined in
--------
Section 9-102 of the UCC; provided that "Proceeds" shall not include any
--------
purchased accounts subject to the Multicurrency Note Purchase Facility.
"Proceeds Account" has the meaning specified in subsection
----------------
10(c) hereof.
"Rights to Payment" means all Accounts and any and all rights
-----------------
and claims to the payment or receipt of money or other forms of consideration of
any kind in, to and under all Chattel Paper, Documents, Instruments and
Proceeds.
"Secured Obligations" means all indebtedness, liabilities and
-------------------
other obligations of the Company to the Secured Parties created under, or
arising out of or in connection with, the Credit Agreement, the Notes or any of
the other Loan Documents, including all unpaid principal of the Loans, all
interest accrued thereon, all fees due under the Credit Agreement and all other
amounts payable by the Company to any Secured Party thereunder or in connection
therewith, whether now existing or hereafter arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined.
"Secured Parties" means the Collateral Agent, the Banks, the
---------------
Lead Arranger, the Agent, and each of their respective successors, transferees
and assigns.
"Subsidiary" of a Person means any corporation, association,
----------
partnership, limited liability company, joint venture, trust or other business
entity of which more than 50% of the voting stock, membership interests or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
"Supporting Obligations" means all supporting obligations as
----------------------
such term is defined in Section 9-102 of the UCC.
"UCC" means the Uniform Commercial Code as the same may, from
---
time to time, be in effect in the State of California; provided, however, in the
-------- -------
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
4
(b) Terms Defined in UCC. Where applicable and except as
--------------------
otherwise defined herein, terms used in this Agreement shall have the meanings
assigned to them in the UCC.
(c) Interpretation. (i) The meanings of defined terms are
--------------
equally applicable to the singular and plural forms of the defined terms.
(ii) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(iii) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(iv) The term "including" is not limiting and means "including
without limitation."
(v) 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."
(vi) The term "property" includes any kind of property or
asset, real, personal or mixed, tangible or intangible.
(vii) Unless otherwise expressly provided herein, (A)
references to agreements (including this Agreement) 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 any Loan Document, and (B)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(viii) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(ix) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Collateral Agent or the Banks by
way of consent, approval or waiver shall be deemed modified by the phrase "in
its/their sole discretion."
(x) This Agreement is the result of negotiations among the
Collateral Agent, the Company and the other parties, have been reviewed by
counsel to the Collateral Agent, the Company and such other parties, and are the
product of all parties. Accordingly, they shall not be construed against the
Banks or the Collateral Agent merely because of the Collateral Agent's or Banks'
involvement in their preparation.
5
SECTION 2 Security Interest
-----------------
(a) Grant of Security Interest. As security for the payment and performance of
--------------------------
the Secured Obligations, the Company hereby pledges, assigns, transfers,
hypothecates and sets over to the Collateral Agent, for itself and on behalf of
and for the ratable benefit of the other Secured Parties, and hereby grants to
the Collateral Agent, for itself and on behalf of and for the ratable benefit of
the other Secured Parties, a security interest in all of the Company's right,
title and interest in, to and under the following property, wherever located and
whether now existing or owned or hereafter acquired or arising (including,
without limitation, any accounts subject to the Multicurrency Note Purchase
Facility which may hereafter become Collateral pursuant to the operation of the
Loan Documents): (i) all Accounts; (ii) all Chattel Paper; (iii) all Documents;
(iv) all Instruments; (v) all Inventory; (vi) all Books; and (vii) all products
and Proceeds of any and all of the foregoing (collectively, the "Collateral")
and all supporting obligations of any and all of the foregoing.
(b) Company Remains Liable. Anything herein to the contrary notwithstanding, (i)
----------------------
the Company shall remain liable under any contracts, agreements and other
documents included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Collateral Agent
of any of the rights hereunder shall not release the Company from any of its
duties or obligations under such contracts, agreements and other documents
included in the Collateral, and (iii) the Collateral Agent shall not have any
obligation or liability under any contracts, agreements and other documents
included in the Collateral by reason of this Agreement, nor shall the Collateral
Agent be obligated to perform any of the obligations or duties of the Company
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.
(c) Continuing Security Interest. The Company agrees that this Agreement shall
----------------------------
create a continuing security interest in the Collateral which shall remain in
effect until terminated in accordance with Section 22.
SECTION 3 Perfection Procedures.
---------------------
(a) Financing Statements. The Company shall execute and deliver to the
--------------------
Collateral Agent concurrently with the execution of this Agreement, and the
Company hereby authorizes the Agent to file (with or without the Company's
signature) at any time and from time to time thereafter, all financing
statements, continuation financing statements, termination statements, security
agreements, assignments, warehouse receipts, documents of title, affidavits,
reports, notices, schedules of account, letters of authority and all other
documents and instruments, in form satisfactory to the Collateral Agent (the
"Financing Statements"), and take all other action, as the Collateral Agent may
request, to perfect and continue perfected, maintain the priority of or provide
notice of the Collateral Agent's security interest in the Collateral and to
accomplish the purposes of this Agreement. Without limiting the generality of
the foregoing, the Company ratifies and authorizes the filing by the Agent of
any financing statements filed prior to the date hereof.
(b) Bailees. Any Person (other than the Agent) at any time and from time to time
-------
holding all or any portion of the Collateral shall be deemed to, and shall, hold
the Collateral as the agent of, and as pledge holder for, the Collateral Agent.
At any time and from time to time, the Collateral Agent may give notice to any
6
such Person holding all or any portion of the Collateral that such third person
is holding the Collateral as the agent of, and as pledge holder for, the
Collateral Agent, and obtain such Person's written acknowledgement thereof.
Without limiting the generality of the foregoing, the Company will join with the
Collateral Agent in notifying any Person who has possession of any Collateral of
the Collateral Agent's security interest therein and obtaining an
acknowledgement from such Person that is holding the Collateral for the benefit
of the Collateral Agent.
(c) Documents, Etc. The Company shall deliver to the Collateral Agent, or an
--------------
agent designated by it, appropriately endorsed or accompanied by appropriate
instruments of transfer or assignment, all Documents and Chattel Paper, and all
other Rights to Payment at any time evidenced by promissory notes, trade
acceptances or other instruments, not already delivered hereunder pursuant to
this Section 3; provided, however, that unless an Event of Default shall have
-------- -------
occurred and be continuing, the Company shall not be required to deliver any
Document, Chattel Paper, promissory note, trade acceptance or other instrument.
Upon the request of the Collateral Agent, the Company shall xxxx all Documents,
Instruments and Chattel Paper with such legends as the Collateral Agent shall
reasonably specify.
(d) Purchase Money Security Interests. To the extent the Company uses the
---------------------------------
proceeds of any of the Secured Obligations to purchase Collateral, the Company's
repayment of the Secured Obligations shall apply on a "first-in, first-out"
basis so that the portion of the Secured Obligations used to purchase a
particular item of Collateral shall be paid in the chronological order the
Company purchased the Collateral.
SECTION 4 Representations and Warranties.
------------------------------
In addition to the representations and warranties of the Company set forth in
the Credit Agreement, which are incorporated herein by this reference, the
Company represents and warrants to the Collateral Agent and each other Secured
Party that:
(a) Location of Chief Executive Office and Collateral. The Company's chief
-------------------------------------------------
executive office and principal place of business (as of the date of this
Agreement) is located at the address set forth in Schedule 1.
----------
(b) Locations of Books. All locations where Books pertaining to the Rights to
------------------
Payment are kept, including all equipment necessary for accessing such Books and
the names and addresses of all service bureaus, computer or data processing
companies and other Persons keeping any Books or collecting Rights to Payment
for the Company, are set forth in Schedule 1.
----------
(c) Jurisdiction of Organization and Names. The Company's jurisdiction of
--------------------------------------
organization is as set forth in Schedule 1; and the Company's exact legal name
----------
is as set forth in the first paragraph of this Agreement. All trade names and
trade styles under which the Company presently conducts its business operations
are set forth in Schedule 1, and, except as set forth in Schedule 1, the Company
---------- ----------
has not, at any time in the past two years: (i) been known as or used any other
corporate, trade or fictitious name; (ii) changed its name; (iii) been the
surviving or resulting corporation in a merger or consolidation; or (iv)
acquired through asset purchase or otherwise any business of any Person with a
purchase price in excess of $25 million.
7
(d) Collateral. The Company has rights in or power to transfer the Collateral
----------
and the Company is, and will continue to be, the sole and complete owner of the
Collateral (or, in the case of after-acquired Collateral, at the time the
Company acquires rights in such Collateral, will be the sole and complete owner
thereof), free from any Lien other than Liens created by or pursuant to the Loan
Documents and Permitted Liens.
(e) Enforceability; Priority of Security Interest. (i) This Agreement creates a
---------------------------------------------
security interest which is enforceable against the Collateral in which the
Company now has rights and will create a security interest which is enforceable
against the Collateral in which the Company hereafter acquires rights at the
time the Company acquires any such rights; and (ii) upon the filing of Uniform
Commercial Code financing statements in the appropriate filing offices in each
jurisdiction identified in Schedule 1 where Collateral is located and except for
Permitted Liens, the Collateral Agent has a perfected and first priority
security interest in the Collateral in which the Company now has rights, and
will have a perfected and first priority security interest in the Collateral in
which the Company hereafter acquires rights at the time the Company acquires any
such rights, in each case securing the payment and performance of the Secured
Obligations and in each case in which a security interest can be filed by the
filing of a financing statement.
(f) Other Financing Statements. Other than (i) Financing Statements disclosed to
--------------------------
the Collateral Agent prior to the date hereof and (ii) Financing Statements in
favor of the Collateral Agent on behalf of itself and the other Secured Parties,
no effective Financing Statement naming the Company as debtor, assignor,
grantor, mortgagor, pledgor or the like and covering all or any part of the
Collateral is on file in any filing or recording office in any jurisdiction.
(g) Rights to Payment.
-----------------
(i) The Rights to Payment represent valid, binding and enforceable obligations
of the account debtors or other Persons obligated thereon, representing
undisputed, bona fide transactions completed in accordance with the terms and
provisions contained in any documents related thereto, and are and will be
genuine, free from Liens, and not subject to any adverse claims, counterclaims,
setoffs, defaults, disputes, defenses, discounts, retainages, holdbacks or
conditions precedent of any kind or character, in each case material to the
Company and except to the extent reflected by the Company's reserves for
uncollectible Rights to Payment or to the extent, if any, that such account
debtors or other Persons may be entitled to normal and ordinary course trade
discounts, returns, adjustments and allowances in accordance with Section 5(m),
or as otherwise disclosed to the Collateral Agent and the Banks in writing;
(ii) to the best of the Company's knowledge and belief (but without independent
investigation), all account debtors and other obligors on the Rights to Payment
are solvent and generally paying their debts as they come due (except for Rights
to Payment of account obligors for which the Company has taken adequate reserves
in accordance with GAAP);
(iii) all Rights to Payment comply in all material respects with all applicable
laws concerning form, content and manner of preparation and execution, including
8
where applicable any federal or state consumer credit laws if and when taken as
a whole noncompliance therewith could reasonably result in a Material Adverse
Effect;
(iv) the Company has not assigned any of its rights under the Rights to Payment
except as provided in this Agreement or as set forth in or permitted by the
other Loan Documents;
(v) all statements made, all unpaid balances and all other information in the
Books and other documentation relating to the Rights to Payment are in all
material respects true and correct and what they purport to be; and
(vi) the Company has no knowledge of any fact or circumstance which would impair
in any material respect the validity or collectibility of any material part of
the Rights to Payment.
(h) Inventory. Other than spare parts Inventory located at customer sites and
---------
Inventory in the possession of a subcontractor of the Company, as of the date
hereof, no Inventory is stored with any bailee, warehouseman or similar Person
or on any premises leased to the Company, nor has any Inventory been consigned
to the Company or consigned by the Company to any Person or is held by the
Company for any Person under any "xxxx and hold" or other arrangement except as
permitted by Section 5(n) and, in each case, except as set forth in Schedule 1.
----------
(i) Instruments. All Instruments held by the Company are set forth in
Schedule 1.
----------
SECTION 5 Covenants.
---------
In addition to the covenants of the Company set forth in the Credit Agreement,
which are incorporated herein by this reference, so long as any of the Secured
Obligations remain unsatisfied or any Bank shall have any commitment to lend
money or otherwise extend credit to the Company under the Loan Documents, the
Company agrees that:
(a) Defense of Collateral. The Company will appear in and defend any action,
---------------------
suit or proceeding which may affect to a material extent its title to, or right
or interest in, or the Collateral Agent's right or interest in, the Collateral
consistent with customary and prudent business practices.
(b) Preservation of Collateral. The Company will do and perform all reasonable
--------------------------
acts that may be necessary and appropriate to maintain, preserve and protect the
value of the Collateral.
(c) Compliance with Laws, Etc. The Company will comply with all laws,
-------------------------
regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral if the noncompliance therewith could reasonably result in a Material
Adverse Effect.
(d) Location of Books and Chief Executive Office. The Company will: (i) keep all
--------------------------------------------
Books pertaining to the Rights to Payment at the locations set forth in Schedule
--------
1; and (ii) give at least 30 days' prior written notice to the Collateral Agent
-
of (A) any changes in any such location where Books pertaining to the Rights to
9
Payment are kept, including any change of name or address of any service bureau,
computer or data processing company or other Person preparing or maintaining any
Books or collecting Rights to Payment for the Company or (B) any change in the
location of the Company's chief executive office or principal place of business.
(e) Change in Name, Identity or Structure. The Company will give at least 30
-------------------------------------
days' prior written notice to the Collateral Agent of (i) any change in its
name; (ii) any change in its jurisdiction of organization, (iii) any change in
the details of its registration as an organization (or any new such
registration); and (iv) any changes in its identity or structure in any manner
which might make any Financing Statement filed hereunder incorrect or
misleading; provided that the Company shall not change its jurisdiction of
--------
organization to a jurisdiction outside of the United States.
(f) Maintenance of Records. The Company will keep separate, accurate and
----------------------
complete Books with respect to the Collateral.
(g) Invoicing of Sales. The Company will invoice all of its sales upon forms
------------------
customary in the industry and maintain proof of delivery and customer acceptance
of goods.
(h) Disposition of Collateral. The Company will not surrender or lose possession
-------------------------
of (other than to the Collateral Agent), sell, lease, rent, or otherwise dispose
of or transfer any of the Collateral or any right or interest therein, except to
the extent permitted by the Credit Agreements.
(i) Liens. The Company will keep the Collateral free of all Liens except
-----
Permitted Liens and Liens arising under the Loan Documents.
(j) Expenses. The Company will pay all validly assessed or incurred expenses of
--------
protecting, storing, warehousing, insuring, handling and shipping the
Collateral.
(k) Leased Premises. At the Collateral Agent's request, the Company will use its
---------------
reasonable best efforts to obtain from each Person from whom the Company leases
any premises at which any Collateral is at any time present such subordination,
waiver, consent and estoppel agreements as the Collateral Agent may require, in
form and substance satisfactory to the Collateral Agent. Without limiting the
generality of the preceding sentence, the Company hereby covenants to use its
reasonable efforts to obtain, within sixty (60) days after the date hereof, such
subordination, waiver, consent and estoppel agreements as the Collateral Agent
may require, in form and substance satisfactory to the Collateral Agent, from
each Person identified on Schedule 1 from whom the Company leases premises as of
----------
the date hereof.
(l) Rights to Payment. The Company will:
-----------------
(i) if requested by the Collateral Agent (but not more frequently than annually
or, if there exists an Event of Default and the Directing Banks so require, then
with such frequency as the Directing Banks may require), furnish to the
Collateral Agent full and complete reports, in form and substance satisfactory
to the Collateral Agent, with respect to the Accounts, including information as
to concentration, aging, identity of account debtors, letters of credit securing
10
Accounts, disputed Accounts and other matters, as the Collateral Agent shall
request;
(ii) give only normal discounts, allowances and credits as to Accounts and other
Rights to Payment, in the ordinary course of business, according to normal trade
practices utilized by the Company, and enforce all Accounts and other Rights to
Payment strictly in accordance with their terms, and take all such action to
such end as may from time to time be reasonably requested by the Collateral
Agent, except that the Company may grant any extension of the time for payment
or enter into any agreement to make a rebate or otherwise to reduce the amount
owing on or with respect to, or compromise or settle for less than the full
amount thereof, any Account or other Right to Payment, in the ordinary course of
business, according to normal trade practices utilized by the Company;
(iii) except to the extent arising in the ordinary course of business, if any
discount, allowance, credit, extension of time for payment, agreement to make a
rebate or otherwise to reduce the amount owing on, or compromise or settle, an
Account or other Right to Payment exists or occurs, or if, to the knowledge of
the Company, any dispute, setoff, claim, counterclaim or defense exists or has
been asserted or threatened with respect to an Account or other Right to
Payment, disclose such fact fully to the Collateral Agent in the Books relating
to such Account or other Right to Payment and in connection with any invoice or
report furnished by the Company to the Collateral Agent relating to such Account
or other Right to Payment;
(iv) in accordance with its sound business judgment perform and comply in all
material respects with its obligations in respect of the Accounts and other
Rights to Payment;
(v) upon the request of the Collateral Agent during the continuance of any Event
of Default, (A) notify all or any designated portion of the account debtors and
other obligors on the Rights to Payment of the security interest hereunder, and
(B) notify the account debtors and other obligors on the Rights to Payment or
any designated portion thereof that payment shall be made directly to the
Collateral Agent or to such other Person or location as the Collateral Agent
shall specify; and
(vi) during the continuance of any Event of Default, establish such lockbox or
similar arrangements for the payment of the Accounts and other Rights to Payment
as the Directing Banks acting through the Collateral Agent shall require.
(m) Inventory. The Company will:
---------
(i) if requested by the Collateral Agent (but not more frequently than annually
or, if there exists an Event of Default and the Directing Banks so require, then
at such times as the Directing Banks shall request), prepare and deliver to the
Collateral Agent a report of all Inventory, in form and substance satisfactory
to the Collateral Agent;
(ii) (A) other than with respect to any Inventory in the possession of a
subcontractor of the Company, not store any material portion of Inventory with a
bailee, warehouseman or similar Person or on premises leased to the Company
without prior notice to the Collateral Agent and (B), except with respect to
demonstration models, Inventory transferred as upgrades to existing customers
and Inventory shipped to customers awaiting customer acceptance, in each
11
instance in the ordinary course of the Company's business, not dispose of any
material portion of Inventory on a xxxx-and-hold, guaranteed sale, sale and
return, sale on approval, consignment or similar basis, nor acquire any material
portion of Inventory from any Person on any such basis without in each case
giving the Collateral Agent prior written notice thereof.
(n) Notices, Reports and Information. The Company will (i) notify the Collateral
--------------------------------
Agent of any material claim made or asserted against the Collateral by any
Person and of any change in the basic nature of the Collateral or other event
which could materially adversely affect the value of the Collateral or the
Collateral Agent's Lien thereon (other than commodity fluctuations affecting the
Company's industry generally); (ii) furnish to the Collateral Agent such
statements and schedules further identifying and describing the Collateral and
such other reports and other information in connection with the Collateral as
the Collateral Agent (acting on behalf of the Directing Banks) may reasonably
request, all in reasonable detail; and (iii) upon request of the Collateral
Agent make such demands and requests for information and reports as the Company
is entitled to make in respect of the Collateral.
(o) Insurance. (i) The Company shall carry and maintain in full force and
---------
effect, at the expense of the Company and with financially sound and reputable
insurance companies, insurance with respect to the Inventory in such amounts,
with such deductibles and covering such risks as is customarily carried by
Persons engaged in the same or similar business. Upon the request of the
Collateral Agent or the Directing Banks, and in any event not less often than
annually, the Company shall furnish the Collateral Agent with full information
as to such insurance carried by it and, if so requested, copies of all such
insurance policies.
(ii) If Inventory with a book value exceeding $40,000,000 of
the Company shall be materially damaged or destroyed, in whole or in part, by
fire or other casualty, the Company shall give prompt notice thereof to the
Collateral Agent. No settlement on account of any loss on any such Inventory
covered by insurance shall be made for less than net book value without the
consent of the Directing Banks. Any payment exceeding $40,000,000 at any time
made to the Company by any insurer with respect to a casualty relating to all or
any part of the Collateral shall be, at the Company's option, (A) paid to the
Collateral Agent for application to the Secured Obligations in accordance with
subsection 10(d), or (B) reinvested in the production of Inventory constituting
Collateral hereunder, in each case, within 90 days of the Company's receipt of
such insurance payment (it being understood that the Company may elect to make
payment to the Collateral Agent under the preceding clause (A), reinvest the
applicable insurance proceeds under the preceding clause (B), or a combination
of both).
(p) Ownership by Subsidiaries. The Company will not permit the aggregate value
-------------------------
of all assets of its Subsidiaries that, if owned directly by the Company, would
constitute Collateral hereunder to exceed $5,000,000 at any time.
SECTION 6 Collection of Rights to Payment.
-------------------------------
Until the Collateral Agent exercises its rights hereunder to collect Rights to
Payment, the Company shall endeavor in the first instance diligently to collect
all amounts due or to become due on or with respect to the Rights to Payment. At
the request of the Collateral Agent, during the continuance of any Event of
Default, all remittances received by the Company shall be held in trust for the
12
Collateral Agent and, in accordance with the Collateral Agent's instructions
(acting on behalf of the Directing Banks), remitted to the Collateral Agent or
deposited to an account with the Collateral Agent in the form received (with any
necessary endorsements or instruments of assignment or transfer).
SECTION 7 Authorization; Collateral Agent Appointed Attorney-in-Fact.
----------------------------------------------------------
The Collateral Agent shall have the right to, in the name of the Company, or in
the name of the Collateral Agent or otherwise, without notice to or assent by
the Company, and the Company hereby constitutes and appoints the Collateral
Agent (and any of the Collateral Agent's officers or employees or Collateral
Agents designated by the Collateral Agent) as the Company's true and lawful
attorney-in-fact, with full power and authority to:
(i) file any of the financing statements which must be executed or filed to
perfect or continue perfected, maintain the priority of or provide notice of the
Collateral Agent's security interest in the Collateral;
(ii) take possession of and endorse any notes, acceptances, checks, drafts,
money orders or other forms of payment or security and collect any Proceeds of
any Collateral;
(iii) sign and endorse any invoice or xxxx of lading relating to any of the
Collateral, warehouse or storage receipts, drafts against customers or other
obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;
(iv) notify the U.S. Postal Service and other postal authorities to change the
address for delivery of mail addressed to the Company to such address as the
Collateral Agent may designate (provided that, if the U.S. Postal Service or
--------
such other postal authorities agree to do so, and it is not impractical to do
so, only such mail as relates to the Collateral shall be sent to such address as
the Collateral Agent shall designate, and provided further that the Collateral
----------------
Agent agrees it will promptly deliver over to the Company any mail that does not
relate to the Collateral); and, without limiting the generality of the
foregoing, establish with any Person lockbox or similar arrangements for the
payment of the Rights to Payment;
(v) receive, open and dispose of all mail addressed to the Company that purports
to be from a Domestic Obligor (provided that the Collateral Agent agrees it will
--------
promptly deliver over to the Company any mail that does not relate to the
Collateral);
(vi) send requests for verification of Rights to Payment to the customers or
other obligors of the Company;
(vii) contact, or direct the Company to contact, all account debtors and other
obligors on the Rights to Payment and instruct such account debtors and other
obligors to make all payments directly to the Collateral Agent;
(viii) assert, adjust, xxx for, compromise or release any claims under any
policies of insurance in respect of Collateral;
13
(ix) notify each Person maintaining lockbox or similar arrangements for the
payment of the Rights to Payment to remit all amounts representing collections
on the Rights to Payment directly to the Collateral Agent;
(x) ask, demand, collect, receive and give acquittances and receipts for any and
all Rights to Payment, enforce payment or any other rights in respect of the
Rights to Payment and other Collateral, grant consents, agree to any amendments,
modifications or waivers of the agreements and documents governing the Rights to
Payment and other Collateral, and otherwise file any claims, take any action or
institute, defend, settle or adjust any actions, suits or proceedings with
respect to the Collateral, as the Collateral Agent may deem necessary or
desirable to maintain, preserve and protect the Collateral, to collect the
Collateral or to enforce the rights of the Collateral Agent with respect to the
Collateral;
(xi) execute any and all endorsements, assignments or other documents and
instruments necessary to sell, lease, assign, convey or otherwise transfer title
in or dispose of the Collateral;
(xii) execute and deliver to any securities intermediary or other Person any
entitlement order, account control agreement or other notice, document or
instrument which the Collateral Agent may deem necessary of advisable to realize
upon the Collateral; and
(xiii) execute any and all such other documents and instruments, and do any and
all acts and things for and on behalf of the Company, which the Collateral Agent
may deem necessary or advisable to (A) realize upon the Collateral, and (B)
maintain, protect and preserve the Collateral and the Collateral Agent's
security interest therein and to accomplish the purposes of this Agreement.
The Collateral Agent agrees that, except during the continuance of an Event of
Default, it shall not exercise the power of attorney, or any rights granted to
the Collateral Agent, pursuant to clauses (ii) through (xii) and (xiii)(A). The
foregoing power of attorney is coupled with an interest and irrevocable so long
as the Banks have any commitments to lend money or otherwise extend credit to
the Company or the Secured Obligations have not been paid and performed in full.
The Company hereby ratifies, to the extent permitted by law, all that the
Collateral Agent shall lawfully and in good faith do or cause to be done by
virtue of and in compliance with this Section 7.
SECTION 8 Collateral Agent Performance of Company Obligations.
---------------------------------------------------
The Collateral Agent may perform or pay any obligation which the Company has
agreed to perform or pay under or in connection with this Agreement, and the
Company shall reimburse the Collateral Agent on demand for any amounts paid by
the Collateral Agent pursuant to this Section 8.
SECTION 9 Collateral Agent's Duties.
-------------------------
Notwithstanding any provision contained in this Agreement, the Collateral Agent
shall have no duty to exercise any of the rights, privileges or powers afforded
to it and shall not be responsible to the Company or any other Person for any
failure to do so or delay in doing so. Beyond the exercise of reasonable care to
assure the safe custody of Collateral in the Collateral Agent's possession and
14
the accounting for moneys actually received by the Collateral Agent hereunder,
the Collateral Agent shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Collateral.
SECTION 10 Remedies.
--------
(a) Remedies. During the continuance of any Event of Default, the Collateral
Agent shall have, in addition to all other rights and remedies granted to it in
this Agreement or any other Loan Document, all rights and remedies of a secured
party under the UCC and other applicable laws. Without limiting the generality
of the foregoing, the Company agrees that:
(i) The Collateral Agent may peaceably and without notice enter any premises of
the Company, take possession of any Collateral, remove or dispose of all or part
of the Collateral on any premises of the Company or elsewhere, and otherwise
collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or xxx for all or any part of the Collateral, as the
Collateral Agent may determine.
(ii) The Collateral Agent may require the Company to assemble all or any part of
the Collateral and make it available to the Collateral Agent, at any place and
time designated by the Collateral Agent.
(iii) The Collateral Agent may secure the appointment of a receiver of the
Collateral or any part thereof (to the extent and in the manner provided by
applicable law).
(iv) The Collateral Agent may sell, resell, lease, use, assign, transfer or
otherwise dispose of any or all of the Collateral in its then condition or
following any commercially reasonable preparation or processing (utilizing in
connection therewith any of the Company's assets, without charge or liability to
the Collateral Agent therefor) at public or private sale, by one or more
contracts, in one or more parcels, at the same or different times, for cash or
credit or for future delivery without assumption of any credit risk, all as the
Collateral Agent deems advisable; provided, however, that the Company shall be
-------- -------
credited with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall have the right
upon any such public sale, and, to the extent permitted by law, upon any such
private sale, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption, which right or equity of redemption the
Company hereby releases, to the extent permitted by law. The Company hereby
agrees that the sending of notice by ordinary mail, postage prepaid, to the
address of the Company set forth in Section 12, of the place and time of any
public sale or of the time after which any private sale or other intended
disposition is to be made, shall be deemed reasonable notice thereof if such
notice is sent ten days prior to the date of such sale or other disposition or
the date on or after which such sale or other disposition may occur, provided
--------
that the Collateral Agent may provide the Company shorter notice or no notice,
to the extent permitted by the UCC or other applicable law.
(v) Neither the Collateral Agent nor any Bank shall have any obligation to clean
up or otherwise prepare the Collateral for sale. The Collateral Agent has no
obligation to attempt to satisfy these Secured Obligations by collecting them
from any other Person liable for them and the Collateral Agent and the Banks may
15
release, modify or waive any Collateral provided by any other Person to secure
any of the Secured Obligations, all without affecting the Collateral Agent's or
any Bank's right against the Company. The Company waives any right it may have
to require the Collateral Agent or any Bank to pursue any third Person or any of
the Secured Obligations. The Collateral Agent and the Bank may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and compliance will not be considered adversely to affect the
commercial reasonableness of any sale of the Collateral. The Collateral Agent
may sell the Collateral without giving any warranty as to the Collateral. The
Collateral Agent may specifically disclaim any warranties of title or the like.
This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If the Collateral Agent sells any
of the Collateral upon credit, the Borrower will be credited only with payments
actually made by the purchaser, received by the Agent, and applied to the
Indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, the Agent may resell the Collateral and the Company shall be
credited with the proceeds of the sales.
(b) License. For the purpose of enabling the Collateral Agent to exercise its
-------
rights and remedies under this Section 10 or otherwise in connection with this
Agreement and the other Loan Documents, the Company hereby grants to the
Collateral Agent an irrevocable, non-exclusive and assignable license
(exercisable without payment or royalty or other compensation to the Company) to
use, license or sublicense any patents, copyrights, trademarks, trade styles,
trade names and all intellectual property, to enable the Collateral Agent (among
other things) to transfer any of the tangible assets of the Company that are
included in the Collateral.
(c) Proceeds Account. To the extent that any of the Secured Obligations may be
----------------
contingent, unmatured or unliquidated (including with respect to undrawn amounts
under any letters of credit outstanding under the Credit Agreement) at such time
as there may exist an Event of Default, the Collateral Agent may, at its
election, (i) retain the proceeds of any sale, collection, disposition or other
realization upon the Collateral (or any portion thereof) in a special purpose
non-interest-bearing restricted deposit account (the "Proceeds Account") created
and maintained by the Collateral Agent for such purpose (which shall constitute
a Deposit Account included within the Collateral hereunder) until such time as
the Collateral Agent may elect to apply such proceeds to the Secured
Obligations, and the Company agrees that such retention of such proceeds by the
Collateral Agent shall not be deemed strict foreclosure with respect thereto;
(ii) in any manner elected by the Collateral Agent, estimate the liquidated
amount of any such contingent, unmatured or unliquidated claims and apply the
proceeds of the Collateral against such amount; or (iii) otherwise proceed in
any manner permitted by applicable law. The Company agrees that the Proceeds
Account shall be a blocked account and that upon the irrevocable deposit of
funds into the Proceeds Account, the Company shall not have any right of
withdrawal with respect to such funds. Accordingly, the Company irrevocably
waives until the termination of this Agreement in accordance with Section 22 the
right to make any withdrawal from the Proceeds Account and the right to instruct
the Collateral Agent to honor drafts against the Proceeds Account.
(d) Application of Proceeds. Subject to subsection (c), cash proceeds actually
-----------------------
received from the sale or other disposition or collection of Collateral, and any
16
other amounts received in respect of the Collateral the application of which is
not otherwise provided for herein, shall be applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 8 or Section 14) in
whole or in part by the Collateral Agent for the benefit of the Secured Parties
(as their interests may appear) against all or any part of the Secured
Obligations in the following order: (i) first, to any fees due in respect of the
-----
Secured Obligations; (ii) next, to any interest due in respect of the Secured
----
Obligations; (iii) next, to any principal due in respect of the Secured
----
Obligations ; and (iv) last, to any other Secured Obligations. Any surplus
----
thereof which exists after payment and performance in full of the Secured
Obligations shall be promptly paid over to the Company or otherwise disposed of
in accordance with the UCC or other applicable law. The Company shall remain
liable to the Collateral Agent and other Secured Parties for any deficiency
which exists after any sale or other disposition or collection of Collateral.
SECTION 11 Certain Waivers.
---------------
The Company waives, to the fullest extent permitted by law, (i) any right of
redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling of the Collateral or other
collateral or security for the Secured Obligations; (ii) any right to require
the Collateral Agent or the Banks (A) to proceed against any Person, (B) to
exhaust any other collateral or security for any of the Secured Obligations, (C)
to pursue any remedy in the Collateral Agent's or any of the Banks' power, or
(D) to make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (iii) all claims, damages, and
demands against the Collateral Agent or any Bank arising out of the
repossession, retention, sale or application of the proceeds of any sale of the
Collateral.
SECTION 12 Notices.
-------
All notices and other communications hereunder shall be given
and shall be effective as provided for in Section 11.2 of the Credit Agreement.
SECTION 13 No Waiver; Cumulative Remedies.
------------------------------
No failure on the part of the Collateral Agent or any Bank to exercise, and no
delay in exercising, any right, remedy, power or privilege hereunder 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 this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges that may otherwise be available to the
Collateral Agent or any Bank.
SECTION 14 Costs and Expenses; Indemnification; Other Charges.
--------------------------------------------------
(a) Costs and Expenses. The Company agrees to pay or reimburse on demand:
------------------
(i) the reasonable out-of-pocket costs and expenses of the Collateral Agent
(including reasonable Attorney Costs and search, recording and filing fees and
expenses, provided, that the Collateral Agent shall deliver reasonably detailed
--------
statements for such fees and expenses), in connection with the negotiation,
preparation, execution, delivery and administration of this Agreement, and any
amendments, modifications or waivers of the terms thereof, and the custody of
the Collateral;
17
(ii) upon the occurrence of an Event of Default, all title, appraisal (including
the allocated costs of internal appraisal services, provided, that the
--------
Collateral Agent shall deliver reasonably detailed statements for such fees and
expenses), survey, audit, consulting and similar fees, costs and expenses
incurred or sustained by the Collateral Agent in connection with this Agreement
or the Collateral; and
(iii) all costs and expenses of the Collateral Agent, the other Secured Parties
(including reasonable Attorney Costs and search, recording and filing fees and
expenses, provided, that the Collateral Agent shall deliver reasonably detailed
statements for such fees and expenses), in connection with the enforcement or
attempted enforcement of, and preservation of any rights or interests under,
this Agreement, any out-of-court workout or other refinancing or restructuring
or in any bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Collateral, including all expenses of taking,
collecting, holding, sorting, handling, preparing for sale, selling, or the
like, and other such expenses of sales and collections of Collateral, and any
and all losses, costs and expenses sustained by the Collateral Agent or any Bank
as a result of any failure by the Company to perform or observe its obligations
contained herein.
(b) Indemnification. The Company hereby agrees to indemnify the Collateral Agent
---------------
and each Bank, and their respective directors, officers, employees, agents,
counsel and other advisors (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 reasonable Attorney Costs, provided
--------
that the Collateral Agent shall deliver reasonably detailed statements for such
fees and expenses), which may be imposed on, incurred by, or asserted against
any Indemnified Person, in any way relating to or arising out of this Agreement
or the transactions contemplated hereby or any action taken or omitted to be
taken by it hereunder (the "Indemnified Liabilities"); provided that the Company
--------
shall not be liable to any Indemnified Person with respect to Indemnified
Liabilities arising 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 Company 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 Company agrees to indemnify the Collateral Agent and each
-------------
of the Banks against and hold each of them 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 this Agreement.
(d) Interest. During the existence of any Event of Default, any amounts payable
--------
to the Collateral Agent or any Bank under this Section 14 or otherwise under
this Agreement if not paid within two Business Days of demand shall bear
interest from the date of such demand until paid in full, at the rate of
interest per annum equal to the rate of interest publicly announced from time to
time by BofA as its "prime rate" plus 2%.
----
18
SECTION 15 Binding Effect.
--------------
This Agreement shall be binding upon, inure to the benefit of and be enforceable
by the Company, the Collateral Agent, each Bank and each Indemnified Person and
their respective successors and assigns.
SECTION 16 Governing Law.
-------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF CALIFORNIA, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW
AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS
HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY COLLATERAL ARE GOVERNED
BY THE LAW OF A JURISDICTION OTHER THAN CALIFORNIA.
SECTION 17 Entire Agreement; Amendment.
---------------------------
This Agreement, together with the other Loan Documents, embodies the entire
agreement and understanding among the Company, the Banks, the Collateral Agent
and the other Secured Parties, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof and shall not be amended except by the
written agreement of the parties as provided in the Credit Agreement.
SECTION 18 Severability.
------------
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under all applicable laws and regulations.
If, however, any provision of this Agreement 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 this Agreement, or the validity or
effectiveness of such provision in any other jurisdiction.
SECTION 19 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.
SECTION 20 Incorporation of Provisions of the Credit Agreement.
---------------------------------------------------
To the extent the Credit Agreement contain provisions of general applicability
to the Loan Documents, such provisions are incorporated herein by this
reference.
SECTION 21 No Inconsistent Requirements.
----------------------------
The Company acknowledges that this Agreement and the other Loan Documents may
contain covenants and other terms and provisions variously stated regarding the
same or similar matters, and agrees that all such covenants, terms and
provisions are cumulative and all shall be performed and satisfied in accordance
with their respective terms.
SECTION 22 Termination.
-----------
Upon the termination of the commitments of the Banks to
lend money or otherwise extend credit to the Company under the Loan Documents
and payment and performance in full of all Secured Obligations (other than any
inchoate indemnification obligations thereunder), this Agreement shall terminate
and the Collateral Agent shall promptly execute and deliver to the Company such
documents and instruments reasonably requested by the Company as shall be
necessary to evidence termination of all security interests given by the Company
19
to the Collateral Agent hereunder; provided, however, that the obligations of
the Company under Section 14 shall survive such termination.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as
of the date first above written.
THE COMPANY
-----------
STORAGE TECHNOLOGY CORPORATION
By:
---------------------------
Title: Treasurer
THE COLLATERAL AGENT
--------------------
BANK OF AMERICA, N.A., as Collateral Agent
By:
---------------------------
Title:
20
