Exhibit 10.43
CREDIT AGREEMENT
among
MICRON ELECTRONICS, INC.
as Borrower
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
UNITED STATES NATIONAL BANK OF OREGON
ABN AMRO BANK, N.V.
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH
FLEET NATIONAL BANK
KEYBANK NATIONAL ASSOCIATION
THE BANK OF NOVA SCOTIA
THE SUMITOMO BANK, LIMITED
as Lenders,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
UNITED STATES NATIONAL BANK OF OREGON
as Co-Agents for the Lenders
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent for the Lenders
June 27, 1997
$130,000,000
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of the 27th
day of June, 1997, by and among BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION d/b/a SEAFIRST BANK, UNITED STATES
NATIONAL BANK OF OREGON, ABN AMRO BANK, N.V., DEUTSCHE BANK AG,
NEW YORK BRANCH AND/OR CAYMAN ISLANDS BRANCH, FLEET NATIONAL
BANK, KEYBANK NATIONAL ASSOCIATION, THE BANK OF NOVA SCOTIA and
THE SUMITOMO BANK, LIMITED (each individually a "Lender" and
collectively the "Lenders") BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION d/b/a SEAFIRST BANK and UNITED STATES
NATIONAL BANK OF OREGON as co-agents for Lenders, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION d/b/a SEAFIRST BANK as
administrative agent for Lenders (the "Agent"), and MICRON
ELECTRONICS, INC., a Minnesota corporation (the "Borrower").
AGREEMENT
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Defined Terms. As used in this
Agreement, the following terms have the following meanings:
"Adjusted LIBOR Rate" means a per annum interest rate
equal to the sum of (i) the LIBOR Margin and (ii) the LIBOR Rate.
"Adjusted Reference Rate" means a per annum interest
rate equal to the sum of (i) the Reference Rate Margin and
(ii) the Reference Rate.
"Advances" means Loans and Letters of Credit.
"Agent" means Bank of America National Trust and
Savings Association and any successor administrative agent
selected pursuant to Section 9.6.
"Applicable Interest Period" means, with respect to any
Loan accruing interest at the Adjusted LIBOR Rate, the period
commencing on the first day Borrower elects to have such Adjusted
LIBOR Rate apply to such Loan and ending on a day one, two, three
or six months thereafter, as specified in the Interest Rate
Notice given in respect of such Loan or as otherwise determined
pursuant to Section 2.7(b) provided, however, that no Applicable
Interest Period may be selected for a Loan if it extends beyond
the Maturity Date.
"Applicable Interest Rate" means for each Loan (or
portion thereof), the Adjusted Reference Rate or the Adjusted
LIBOR Rate as designated by Borrower in an Interest Rate Notice
given with respect to such Loan (or portion thereof) or as
otherwise determined pursuant to Section 2.7(b).
"Borrower" means Micron Electronics, Inc., a Minnesota
corporation, and any permitted Successor or assign pursuant to
Section 11.6.
"Borrower Documents" means this Agreement, the Notes,
the Disclosure Letter, and that certain letter agreement
referenced in Section 2.13(c) hereof.
"Borrowing Base" means, at any time, an amount equal to
seventy percent (70%) of the accounts receivables of Borrower on
a consolidated basis determined in accordance with GAAP.
"Borrowing Base Activation Event" has the meaning given
in Section 2.2.
"Business Day" means any day other than Saturday,
Sunday or another day on which banks are authorized or obligated
to close in Seattle, Washington, or Boise, Idaho except that in
the context of the selection of a Loan accruing interest at the
Adjusted LIBOR Rate or the calculation of the LIBOR Rate for any
Applicable Interest Period, in which event "Business Day" means
any day other than Saturday or Sunday on which dealings in
foreign currencies and exchange between banks may be carried on
in London, England and Seattle, Washington.
"Capital Leases" means all leases which shall have
been, or in accordance with GAAP, should be recorded as capital
leases.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" has the meaning given in Section 2.1.
"Commitment Period" has the meaning given in
Section 2.1.
"Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with
Borrower or any Subsidiary, are treated as a single employer
under Section 414(b) or 414(c) of the Code.
"Default" means any event which but for the passage of
time or the giving of notice or both would be an Event of
Default.
"Disclosure Letter" means that certain letter and the
schedules thereto dated as of the date hereof, executed by a
Responsible Officer, and delivered to Agent and Lenders.
"Dividend Payment" has the meaning given in
Section 7.1.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least
$500,000,000; (ii) a commercial bank organized under the laws of
any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital
and surplus of at least $500,000,000, provided that such bank is
acting through a branch or agency located in the United States of
America; or (iii) a person that is primarily engaged in the
business of commercial banking and that is (A) a subsidiary of a
Lender, (B) a subsidiary of a person of which a Lender is a
subsidiary, or (C) a person of which a Lender is a subsidiary.
"Environmental Laws" means all federal, state and local
statutes, regulations, ordinances, and requirements, now or
hereafter in effect, pertaining to environmental protection,
contamination or cleanup, including without limitation (i) the
Federal Resource Conservation and Recovery Act of 1976 (42 U.S.C.
section 6901, et seq.), (ii) the Federal Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. section 9601
et seq.), (iii) the Federal Hazardous Materials Transportation
Control Act (49 U.S.C. section 1801, et seq.), (iv) the Federal Clean
Air Act (42 U.S.C. section 7401, et seq.), (v) the Federal Water
Pollution Control Act, Federal Clean Water Act (33 U.S.C. section 1251
et seq.), (vi) the Federal Insecticide, Fungicide, and
Rodenticide Act, Federal Pesticide Act (7 U.S.C. section 136, et seq.),
(vii) the Federal Toxic Substances Control Act (15 U.S.C. section 2601
et seq.), and (viii) the Federal Safe Drinking Water Act
(42 U.S.C. section 300f et seq.), all as now or hereafter amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurodollar Reserves" means a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including, without limitation, any
special, supplemental, marginal or emergency reserves) expressed
as a decimal established by the Board of Governors of the Federal
Reserve System or any other banking authority to which Lenders
are subject for Eurocurrency Liability (as defined in
Regulation D of such Board of Governors). It is agreed that for
purposes hereof, each Loan (or portion thereof) accruing interest
at the Adjusted LIBOR Rate shall be deemed to constitute a
Eurocurrency Liability and to be subject to the reserve
requirements of Regulation D, without benefit of credit or
proration, exemptions or offsets which might otherwise be
available to Lenders from time to time under such Regulation D.
Eurodollar Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage and
shall apply to Applicable Interest Periods commencing after the
effective date of change.
"Event of Default" has the meaning given in
Section 8.1.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Agent from three federal funds brokers
of recognized standing selected by it.
"GAAP" has the meaning given in Section 1.3.
"Government Approval" means an approval, permit,
license, authorization, certificate, or consent of any
Governmental Authority.
"Governmental Authority" means the government of the
United States or any State or any foreign country or any
political subdivision of any thereof or any branch, department,
agency, instrumentality, court, tribunal or regulatory authority
which constitutes a part or exercises any sovereign power of any
of the foregoing.
"Hazardous Substances" means any substance or material
defined or designated as hazardous or toxic waste, hazardous or
toxic material, a hazardous, toxic or radioactive substance, or
other similar terms, by any federal, state or local environmental
statute, regulation or ordinance presently in effect, including
but not limited to the Environmental Laws.
"Indebtedness" means, for any person, without
duplication, (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment
obligations with respect to letters of credit, bankers
acceptances, surety bonds and similar instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement (excluding
any operating lease), or incurred as financing, in either case
with respect to property acquired by the person (even though the
rights and remedies of the seller or bank under such agreement in
the event of default are limited to repossession or sale of such
property); (f) all obligations with respect to Capital Leases or
Synthetic Leases; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such person, even though such
person has not assumed or become liable for the payment of such
Indebtedness; and (h) all liabilities in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a)
through (g) above for which such person is directly or
contingently liable as obligor, guarantor, or otherwise, or in
respect of which such person otherwise assures a creditor against
loss. For all purposes of this Agreement, the Indebtedness of
any person shall include all recourse Indebtedness of any
partnership or joint venture formed as a partnership where such
person is a general partner or is otherwise liable for the
Indebtedness of such partnership or joint venture.
"Interest Rate Notice" has the meaning given in
Section 2.7(b).
"Lenders" means Bank of America National Trust and
Savings Association, United States National Bank of Oregon, ABN
AMRO Bank, N.V., Deutsche Bank AG, New York Branch and/or Cayman
Islands Branch, Fleet National Bank, KeyBank National
Association, The Bank of Nova Scotia and The Sumitomo Bank,
Limited, and any Successors thereto or permitted assigns thereof.
"Letter of Credit" means any standby letter of credit
issued by Agent pursuant to the terms of Article 3 hereof.
"Letter of Credit Risk Participation" means a risk
participation purchased by a Lender pursuant to Article 10 hereof
with respect to a Letter of Credit (including risk participations
deemed purchased by Agent in its capacity as Lender).
"Letter of Credit Usage" means, as of any date of
determination, the sum of (i) the aggregate face amount of all
outstanding unmatured Letters of Credit plus (ii) the aggregate
amount of all payments made by Agent under Letters of Credit and
not yet reimbursed by Borrower pursuant to Section 3.4.
"Leverage Rating" means a rating determined in
accordance with the following table:
Leverage Ratio Leverage Rating
-------------- ---------------
less than 0.50 to 1.0 Level 1
equal to or greater than 0.50 to 1.0, Level 2
but less than 0.75 to 1.0
equal to or greater than 0.75 to 1.0, Level 3
but less than 1.0 to 1.0
equal to or greater than 1.0 to 1.0, Level 4
but less than 1.25 to 1.0
equal to or greater than 1.25 to 1.0, Xxxxx 0
Xxx Xxxxxxxx Rating for each fiscal quarter (the "Current
Quarter") shall be determined in accordance with the following
procedures on the basis of the Leverage Ratio as of the end of
the immediately preceding fiscal quarter (the "Prior Quarter")
and shall be effective as of the first day of the Current
Quarter. All resulting adjustments in interest rate margins and
fees shall likewise be effective as of the first day of the
Current Quarter including adjustments to the Adjusted LIBOR Rate
during any Applicable Interest Period. Until the earlier of
(i) the date on which the financial reports are due in respect of
the Prior Quarter pursuant to Sections 6.10(a) and (b) hereof; or
(ii) the date on which such financial reports are received, any
payments of fees or interest due hereunder shall be calculated
and paid, on an interim basis, as if the Leverage Rating
applicable for the Prior Quarter were the Leverage Rating
applicable to the Current Quarter. If the financial reports due
in respect of the Prior Quarter are not provided by the date
required pursuant to Sections 6.10(a) and (b) hereof, from and
after the date on which such financial statements are due, any
payments of fees or interest due hereunder shall be calculated
and paid, on an interim basis, as if the Leverage Rating
applicable for the Current Quarter was one level higher than the
Leverage Rating applicable to the Prior Quarter. Upon receipt of
the financial reports due in respect of the Prior Quarter
pursuant to Sections 6.10(a) and (b) hereof, any prior
overpayment shall be paid by Lenders to Agent for delivery to
Borrower, and any prior underpayment shall be paid by Borrower to
Agent for the account of the Lenders, in each case, without
interest and within one (1) Business Day of notice thereof.
"Leverage Ratio" means the ratio of Borrower's Total
Liabilities to Borrower's Tangible Net Worth.
"LIBOR Margin" means on any date, a per annum interest
rate determined in accordance with the following table:
Borrower's Leverage Rating Margin (expressed per annum)
-------------------------- ----------------------------
Level 1 62.5 basis points (0.625%)
Xxxxx 0 87.5 basis points (0.875%)
Xxxxx 0 000 xxxxx xxxxxx (1.00%)
Xxxxx 0 112.5 basis points (1.125%)
Xxxxx 0 137.5 basis points (1.375%)
"LIBOR Rate" means, for any Applicable Interest Period,
an interest rate per annum equal to the product of (i) the
Euro-dollar Rate in effect for such Applicable Interest Period
and (ii) the Eurodollar Reserves in effect on the first day of
such Applicable Interest Period. The "Euro-dollar Rate" will be
determined by reference to that rate (rounded upward, if
necessary, to the next one-sixteenth of one percent (.0625%))
which appears on the display designated as "Page 3750" on the
Telerate Service (or on such other page on that service or such
other service designated by the British Banker's Association for
the display of that Association's Interest Settlement Rates for
U..S. Dollar deposits) as of 11:00 a.m., London time, on the day
that is two (2) Business Days prior to the first date of the
proposed Applicable Interest Period. If there are no applicable
quotes available through Telerate Service, the Euro-dollar Rate
will be determined by reference to that rate (rounded upward, if
necessary, to the next one-sixteenth of one percent (.0625%))
appearing on the Reuters Screen LIBO Page as of 11:00 a.m.,
London time, on the day that is two (2) Business Days prior to
the first date of the proposed Applicable Interest Period. If
more than one such rate appears on the display, the rate will be
the arithmetic mean of such rates. If there is no period equal
to the Applicable Interest Period on the display, the LIBOR Rate
shall be determined by straight-line interpolation to the nearest
month (or week or day if expressed in weeks or days)
corresponding to the Applicable Interest Period between the two
nearest neighboring periods on the display. If there are no
applicable quotes available through Telerate Service or on the
Reuters Screen LIBO Page, then the Adjusted LIBOR Rate shall be
deemed unavailable as provided in Section 2.7(d).
"LIBOR Rate Loan" means a Loan or portion thereof
bearing interest at the Adjusted LIBOR Rate.
"Lien" means, for any person, any security interest,
pledge, mortgage, charge, assignment, hypothecation, encumbrance,
attachment, garnishment, execution or other voluntary or
involuntary lien upon such person's interest in real or personal
property whether now owned or hereafter acquired, except
(i) liens for Taxes which are not delinquent or which remain
payable without penalty or the validity or amount of which is
being contested in good faith by appropriate proceedings with
appropriate reserves having been established therefor in
accordance with GAAP; (ii) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course
of business which are not delinquent or which remain payable
without penalty or the validity or amount of which is being
contested in good faith by appropriate proceedings with, in the
case of liens on property of Borrower, provision having been made
to the satisfaction of Agent for the payment thereof in the event
the contest is determined adversely to Borrower; (iii) deposits
or pledges under worker's compensation, unemployment insurance,
social security or other similar laws or made to secure the
performance of bids, tenders, contracts (except for repayment of
borrowed money), or leases, or to secure statutory obligations or
surety or appeal bonds or to secure indemnity, performance or
other similar bonds given in the ordinary course of business;
(iv) reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions and other similar
title exceptions or encumbrances affecting real property,
provided such liens do not interfere in any material respect with
the use of such property in the ordinary conduct of business of
Borrower or any Subsidiary; (v) liens on real or personal
property of a Subsidiary to secure obligations of such Subsidiary
(or of another Subsidiary) to Borrower; (vi) liens which
constitute rights of set-off of a customary nature or "bankers'
liens" with respect to amounts on deposit, whether arising by
operation of law or by contract to secure the payment of
customary bank charges assessed for the maintenance of accounts
and related facilities maintained with banks in the ordinary
course of business, but not in connection with working capital
facilities, lines of credit, term loans, or other credit
facilities and similar arrangements.
"Loan Documents" means the Borrower Documents, the
Letters of Credit and all other certificates, instruments and
other documents executed in connection with this Agreement, any
other Loan Document, or the transactions contemplated hereby or
thereby.
"Majority Lenders" means at any time Lenders having an
aggregate Percentage Interest of at least sixty-six and two
thirds percent (66 2/3%).
"Maturity Date" means June 27, 2000.
"Net Income" means for any accounting period the net
income of any person for such period, determined in accordance
with GAAP, excluding, however, (i) proceeds of any life insurance
policy, (ii) gain or loss arising from any write-up or write-down
of capital assets and (iii) special credits or charges,
including, without limitation, extraordinary gains and losses.
"Notes" has the meaning given in Section 2.10.
"Notice of Borrowing" means a written request for a
Loan executed by Borrower substantially in the form attached
hereto as Exhibit B which shall be delivered to Agent prior to
11:00 a.m. (Seattle, Washington time) on the requested date of
borrowing provided, however, if Borrower shall at the same time
elect to have interest accrue on such Loan at an Adjusted LIBOR
Rate, the Notice of Borrowing shall be given prior to 11:00 a.m.
(Seattle, Washington time), on a Business Day at least three (3)
Business Days before the requested date of borrowing. Requests
for borrowing received after the designated hour will be deemed
received on the next succeeding Business Day.
"Officer's Certificate" means a certificate signed in
the name of Borrower by its President, Chief Financial Officer,
Treasury Director or any Vice President.
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Pension Plan" means an "employee pension benefit plan"
(as such term is defined in ERISA) from time to time maintained
by Borrower, any Subsidiary or a member of the Controlled Group.
"Percentage Interest" has the meaning given in
Section 2.1 as the same may be adjusted pursuant to Section 11.6
from time to time hereafter.
"Permitted Swap Obligations" means all obligations
(contingent or otherwise) of Borrower or any Subsidiary existing
or arising under Swap Contracts, provided that each of the
following criteria is satisfied: (a) such obligations are (or
were) entered into by such person in the ordinary course of
business for the purpose of directly mitigating risks associated
with liabilities, commitments or assets held by such person, or
changes in the value of securities issued by such person in
conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or
taking a "market view;" and (b) such Swap Contracts do not
contain any provision ("walk-away" provision) exonerating the non-
defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party. As used
herein, "Swap Contract" shall mean any agreement, whether or not
in writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or xxxx
option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other,
similar transaction (including any option to enter into any of
the foregoing) or any combination of the foregoing, and, unless
the context otherwise clearly requires, any master agreement
relating to or governing any or all of the foregoing.
"Plan" means, at any time, an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is
either (i) maintained by Borrower, any Subsidiary or any member
of a Controlled Group for employees of Borrower, any Subsidiary
or any member of such Controlled Group or (ii) maintained
pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes
contributions and to which Borrower, any Subsidiary or any member
of a Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five (5) plan
years made contributions.
"Prior Credit Agreement" means that certain Credit
Agreement dated as of July 3, 1996 by and among Borrower, Bank of
America National Trust and Savings Association d/b/a Seafirst
Bank (successor by merger to Bank of America NW, N.A.) and United
States National Bank of Oregon.
"Purchase Money Lien" means a Lien securing
Indebtedness incurred in connection with the acquisition of fixed
assets (including both equipment and real estate) where such Lien
arises after the date of this Agreement so long as (i) such Lien
shall attach only to the property to be acquired (together with
attachments, accessions, and additions thereto or proceeds
thereof), and (ii) the debt incurred shall not exceed the
purchase price of the item or items of fixed assets purchased.
"Reference Rate Margin" means, as of any day, a per
annum interest rate determined in accordance with the following
table:
Leverage Rating Margin (expressed per annum)
--------------- ----------------------------
Levels 1 and 2 0 basis points (0.0%)
Xxxxx 0 00 xxxxx xxxxxx (0.25%)
Xxxxx 0 00 xxxxx xxxxxx (0.50%)
Xxxxx 0 00 xxxxx xxxxxx (0.75%)
"Reference Rate" means on any day, the rate of interest
publicly announced from time to time by Agent in San Francisco,
California, as its "Reference Rate." The Reference Rate is set
based on various factors, including Agent's costs and desired
return, general economic conditions, and other factors, and is
used as a reference point for pricing some loans. Agent may
price loans to its customers at, above, or below the Reference
Rate. Any change in the Reference Rate shall take effect at the
opening of business on the day specified in the public
announcement of a change in the Reference Rate.
"Reference Rate Loan" means a Loan or portion thereof
bearing interest at the Adjusted Reference Rate.
"Responsible Officer" means Borrower's Chief Executive
Officer, Chief Financial Officer, President, Treasury Director,
any Executive Vice President, or any other officer having
substantially the same authority and responsibility.
"Restricted Payments" means, for any period, the sum of
(i) all Dividend Payments made by Borrower during such period
other than Dividend Payments described in Section 7.1(z) hereof;
(ii) all Dividend Payments made by any Subsidiary during such
period to any person in which Borrower has no direct or indirect
ownership interest (an "Unaffiliated Person"); (iii) the product
of (A) all Dividend Payments made by any Subsidiary to any person
which is not an Unaffiliated Person (an "Affiliated Person") and
(B) a percentage equal to the percentage of such Affiliated
Person which is owned directly or indirectly by an Unaffiliated
Person; (iv) an amount equal to the product of (A) the Tangible
Net Worth of any Subsidiary which during such period was the
surviving corporation in any merger or consolidation with any
other Subsidiary calculated as of the moment immediately
following the consummation of such merger or consolidation and
(B) a percentage equal to the percentage of such Subsidiary which
is owned directly or indirectly by an Unaffiliated Person
immediately following the consummation of such merger or
consolidation; (v) an amount equal to the fair market value of
all property distributed to an Unaffiliated Person in connection
with the liquidation or dissolution of a Subsidiary occurring
during such period; and (vi) an amount equal to the product of
(A) the fair market value of all property distributed to an
Affiliated Person in connection with the liquidation or
dissolution of a Subsidiary occurring during such period and
(B) a percentage equal to the percentage of such Affiliated
Person which is owned directly or indirectly by an Unaffiliated
Person.
"Subordinated Indebtedness" means Indebtedness of
Borrower which is expressly subordinated to all obligations of
Borrower under this Agreement and the other Loan Documents either
(i) by the terms of the instrument evidencing such Subordinated
Indebtedness, which terms are acceptable to Majority Lenders in
their sole discretion, or (ii) pursuant to one or more
subordination agreements each in form and substance acceptable to
Majority Lenders in their sole discretion.
"Subsidiary" of a person means any corporation, limited
liability company or partnership of which more than 50% of the
voting stock, membership interests or partnership interests 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
Borrower.
"Successor" means, for any corporation or banking
association, any successor by merger or consolidation, or by
acquisition of substantially all of the assets of the
predecessor.
"Synthetic Lease" means a lease which (i) in accordance
with GAAP, including, without limitation, the requirements of
FASB-13, is accounted for as an "operating lease"; and
(ii) where, under the Code and applicable regulations and rulings
issued thereunder, the lessee thereunder is characterized as the
owner of the leased property.
"Tangible Net Worth" means for any person, the excess
of total assets over Total Liabilities, excluding, however, from
the determination of total assets (i) all assets which should be
classified as intangible assets (such as goodwill, patents,
trademarks, copyrights, franchises, and deferred charges
including unamortized debt discount and research and development
costs), (ii) cash held in a sinking or other similar fund
established for the purpose of redemption or other retirement of
capital stock, (iii) to the extent not already deducted from
total assets, reserves for depreciation, depletion, obsolescence
or amortization of properties and other reserves or
appropriations of retained earnings which have been or should be
established in connection with the business conducted by the
relevant corporation, and (iv) any revaluation or other write-up
in book value of assets subsequent to the fiscal year of such
corporation last ended at the date of this Agreement.
"Tax" means for any person any tax, assessment, duty,
levy, impost or other charge imposed by any Governmental
Authority on such person or on any property, revenue, income, or
franchise of such person and any interest or penalty with respect
to any of the foregoing.
"Total Commitment" means One Hundred Thirty Million
Dollars ($130,000,000) as the same may be reduced or terminated
pursuant to Sections 2.4.
"Total Liabilities" means for any person, all items of
indebtedness or liability of such person which would be included
in determining total liabilities as shown on the liability side
of a balance sheet in accordance with GAAP other than
Subordinated Indebtedness.
"Total Utilization" means, as of any date of
determination, the sum of (i) the aggregate outstanding principal
balance of all Loans; plus (ii) the Letter of Credit Usage.
"Unfunded Vested Liabilities" means, with respect to
any Plan, at any time, the amount (if any) by which (i) the
present value of all vested nonforfeitable benefits under such
Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of Borrower, any
Subsidiary or any member of the Controlled Group to the PBGC or
the Plan under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any corporation,
limited liability company, or partnership in which 100% of the
voting stock, membership interests or partnership interests
(excluding directors qualifying shares and shares issued to
comply with local ownership requirements) is owned beneficially
and of record by Borrower (or by one or more Wholly-Owned
Subsidiaries or by a combination thereof).
Section 1.2 General Principles Applicable to Definitions.
Definitions given in Section 1.1 shall be equally applicable to
both singular and plural forms of the terms therein defined and
references herein to "he" or "it" shall be applicable to persons
whether masculine, feminine or neuter. References herein to any
document including, but without limitation, this Agreement shall
be deemed a reference to such document as it now exists, and as,
from time to time hereafter, the same may be amended. References
herein to a "person" or "persons" shall be deemed to be
references to an individual, corporation, partnership, trust,
unincorporated association, limited liability company, joint
venture, joint-stock company, government (including political
subdivisions), Governmental Authority or agency or any other
entity.
Section 1.3 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be
construed, and all accounting procedures shall be performed, in
accordance with generally accepted United States accounting
principles consistently applied ("GAAP") and as in effect on the
date of application.
ARTICLE 2
THE LOANS
Section 2.1 Loans. Subject to the terms and conditions of
this Agreement, each Lender hereby severally agrees during the
period from the date hereof until the Maturity Date (the
"Commitment Period") to make loans (the "Loans") to Borrower in
amounts equal to the percentage interest set forth opposite such
Lender's name below (such Lender's "Percentage Interest") of the
aggregate amount requested by Borrower in a Notice of Borrowing
given hereunder provided that, after giving effect to any such
requested borrowing (a) the aggregate of all Loans from such
Lender will not exceed at any one time outstanding the sum set
forth opposite its name below (such Lender's "Commitment"); (b)
the Total Utilization will not exceed the Total Commitment; and,
(c) at all times after the occurrence and during the continuance
of a Borrowing Base Activation Event, the Total Utilization will
not exceed the Borrowing Base.
Percentage
Lender Interest Commitment
------ -------- ----------
Bank of America National 15.38462% $ 20,000,000
Trust and Savings Assoc.
United States National 15.38462% $ 20,000,000
Bank of Oregon
ABN AMRO Bank, N.V. 11.53846% $ 15,000,000
Deutsche Bank AG,
New York Branch and/or
Cayman Island Branch 11.53846% $ 15,000,000
Fleet National Bank 11.53846% $ 15,000,000
KeyBank National 11.53846% $ 15,000,000
Association
The Bank of Nova Scotia 11.00000% $ 15,000,000
The Sumitomo Bank, Limited 11.53846% $ 15,000,000
--------- ------------
Total 100.00000% $130,000,000
The line of credit extended hereunder is a revolving line of
credit and, subject to the terms and conditions hereof, Borrower
may borrow, repay and reborrow.
Section 2.2 Borrowing Base Activation. The occurrence of
any of the following events shall constitute a "Borrowing Base
Activation Event" hereunder: (a) the Leverage Ratio, on a
consolidated basis, exceeds 1.35 to 1 as of the end of any fiscal
quarter; or (b) Borrower shall incur on a consolidated basis,
pretax losses for two (2) consecutive fiscal quarters. Once a
Borrowing Base Activation Event shall have occurred it shall be
deemed to be continuing for all purposes hereunder until Borrower
shall have delivered financial statements in accordance with
Section 6.10 hereof demonstrating that as of the last day of the
applicable fiscal quarter the Leverage Ratio was equal to or less
than 1.35 to 1 and Borrower had not incurred (on a consolidated
basis) pretax losses for such fiscal quarter and the immediately
preceding fiscal quarter.
Section 2.3 Manner of Borrowing. Borrower shall give Agent
the Notice of Borrowing specifying the date of the borrowing of
any Loan and the amount thereof, which shall be an integral
multiple of One Million Dollars ($1,000,000) and not less than
Five Million Dollars ($5,000,000). Such Notice of Borrowing
shall be irrevocable and shall be deemed to constitute a
representation and warranty by Borrower that as of the date of
the notice, the statements set forth in Article 5 hereof are true
and correct and that no Default or Event of Default has occurred
and is continuing. On receipt of such notice, Agent shall
promptly notify each Lender by telephone (confirmed immediately
by telex, facsimile transmission or cable), telex, facsimile
transmission, or cable of the date of the borrowing. Each Lender
shall before 12:00 noon (Seattle, Washington time), on the date
of the borrowing, pay the lesser of (a) such Lender's Percentage
Interest of the aggregate principal amount of the requested
borrowing identified in the Notice of Borrowing or (b) the
maximum amount such Lender is committed to advance pursuant to
the terms of Section 2.1 hereof in immediately available funds to
Agent. Upon fulfillment to Agent's reasonable satisfaction of
the applicable conditions set forth in Article 4, and after
receipt by Agent of such funds, Agent will on that same day make
such funds available to Borrower by depositing them to an account
maintained by Borrower with Bank of America National Trust and
Savings Association, which account may be designated by Borrower
in a writing delivered to Agent from time to time.
Section 2.4 Reduction of Commitments. Upon not less than
five (5) Business Days' written notice to Agent, Borrower may
terminate the Total Commitment, in whole or in part, provided
that each partial reduction of the Total Commitment shall be in
an amount not less than Ten Million Dollars ($10,000,000) and,
provided, further, that in no event may the Total Commitment be
reduced to an amount less than the Total Utilization. Any
reduction in the Total Commitment shall be deemed to be a
proportionate reduction in each Lender's Commitment such that
after making such reduction, each Lender's Commitment will be in
an amount equal to its Percentage Interest of the then-reduced
Total Commitment.
Section 2.5 Repayment of Principal.
(a) Borrowing Base Payments. Borrower shall at all
times after the occurrence and during the continuance of a
Borrowing Base Activation Event, repay to Agent for the account
of Lenders, the amount, if any, by which the Total Utilization
exceeds the Borrowing Base. All amounts payable under this
Section 2.5(a) shall be due and payable three (3) Business Days
after the day in each calendar month when a new Borrowing Base is
to be established, including, without limitation, the day
Borrower is required under this Agreement to deliver to Agent a
new borrowing base certificate setting forth calculations
computing the Borrowing Base as of the end of the preceding
calendar month.
(b) At Maturity Date. Borrower shall repay to Agent
for the account of Lenders the then outstanding principal balance
of each Loan on the Maturity Date.
Section 2.6 Agent's Right to Fund. Unless Agent shall have
received notice from a Lender prior to 12:00 noon (Seattle,
Washington time) on the date of any Loan that such Lender will
not make available to Agent such Lender's Percentage Interest of
the requested borrowing, Agent may assume that such Lender has
made such funds available to Agent on the date of such Loan in
accordance with Section 2.3 hereof and Agent may, in reliance
upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have made such portion available to Agent and if Agent
shall have advanced such portion to Borrower, such Lender and
Borrower severally agree to pay to Agent forthwith on demand such
corresponding amount, together with interest thereon for each day
from the date such amount is made available to Borrower until the
date such amount is repaid to Agent, at (a) in the case of
Borrower, the Applicable Interest Rate (b) in the case of such
Lender, the Federal Funds Rate. Any such repayment by Borrower
shall be without prejudice to any rights it may have against any
Lender that has failed to make its funds available for any
requested borrowing.
Section 2.7 Interest on Loans.
(a) General Provisions. Borrower agrees to pay to
Agent for the account of each Lender interest on the unpaid
principal amount of each Loan from the date of such Loan until
such Loan shall be due and payable at a per annum rate equal to
the Applicable Interest Rate, and, if default shall occur in the
payment when due of any such Loan, from the maturity of that Loan
until it is paid in full at a per annum rate equal to two
percentage points (2%) above the Adjusted Reference Rate
(changing as the Reference Rate changes). Accrued but unpaid
interest on each LIBOR Rate Loan shall be paid in arrears on the
last day of each Applicable Interest Period, on the date of any
principal payment (to the extent accrued on the principal amount
paid), on the Maturity Date, and, for each LIBOR Rate Loan having
an Applicable Interest Period longer than three months, on the
90th day of such Applicable Interest Period or at the end of the
first three months of such Applicable Interest Period, as the
case may be. Accrued but unpaid interest on each Reference Rate
Loan shall be paid on the last Business Day of each calendar
quarter commencing on June 30, 1997 and continuing on the last
Business Day of each calendar quarter thereafter and on the date
of any principal payment (to the extent accrued on the principal
amount paid) and on the Maturity Date. Unpaid interest accruing
on amounts in default shall be payable on demand.
(b) Selection of Alternative Rates. Borrower may,
subject to the requirements of this Section 2.7(b), on at least
three (3) Business Days' prior written notice elect to have
interest accrue on any Loan or any portion thereof at an Adjusted
LIBOR Rate for an Applicable Interest Period. Such notice
(herein, an "Interest Rate Notice") shall be deemed delivered on
receipt by Agent except that an Interest Rate Notice received by
Agent after 11:00 a.m. (Seattle, Washington time) on any Business
Day shall be deemed to be received on the immediately succeeding
Business Day. Such Interest Rate Notice shall identify, subject
to the conditions of this Section 2.7(b), the Loan or portions
thereof and the Applicable Interest Period which Borrower
selects. Any such Interest Rate Notice shall be irrevocable. On
receipt of such Interest Rate Notice, Agent shall promptly notify
each Lender by telephone (confirmed promptly by telex or
facsimile transmission) of the information set forth in the
Interest Rate Notice. Borrower's right to select an Adjusted
LIBOR Rate to apply to a Loan or any portion thereof shall be
subject to the following conditions: (i) the aggregate of all
Loans or portions thereof to accrue interest at a particular
Adjusted LIBOR Rate for the same Applicable Interest Period shall
be an integral multiple of One Million Dollars ($1,000,000) and
not less than Five Million Dollars ($5,000,000); (ii) Borrower
shall not have selected more than six (6) different Adjusted
LIBOR Rates or Applicable Interest Periods to be applicable to
portions of the Loans at any one time; (iii) an Adjusted LIBOR
Rate may not be selected for any Loan or portion thereof which is
already accruing interest at an Adjusted LIBOR Rate unless such
selection is only to become effective at the maturity of the
Applicable Interest Period then in effect; (iv) Agent or any
Lender shall not have given notice pursuant to Section 2.7(d)
hereof that the Adjusted LIBOR Rate selected by Borrower is not
available; (v) no Default or Event of Default shall have occurred
and be continuing and (vi) if Borrower elects to have some
portion (but less than all) of the Loans accrue interest at a
designated Adjusted LIBOR Rate, Borrower shall select a portion
of each Lender's Loans to accrue interest at such rate in
proportion to its respective Percentage Interest. In the absence
of an effective request for the application of an Adjusted LIBOR
Rate, the Loans or remaining portions thereof shall accrue
interest at the Adjusted Reference Rate. Any Interest Rate
Notice which specifies an Adjusted LIBOR Rate but fails to
identify an Applicable Interest Period shall be deemed to be a
request for an Adjusted LIBOR Rate for an Applicable Interest
Period of one (1) month. The Interest Rate Notice may be given
with and contained in any Notice of Borrowing. If Borrower
delivers an Interest Rate Notice with any Notice of Borrowing for
a Loan and Borrower thereafter declines to take such Loan or a
condition precedent to the making of such Loan is not satisfied
or waived, Borrower shall indemnify Agent and each Lender for all
losses and any costs which Agent or any Lender may sustain as a
consequence thereof including, without limitation, the costs of
redeployment of funds at rates lower than the cost to Lenders of
such funds. A certificate of Agent or any Lender setting forth
the amount due to it pursuant to this subparagraph (b) and the
basis for, and the calculation of, such amount shall be prima
facie evidence of the amount due pursuant to this
subparagraph (b). Payment of the amount owed shall be due within
fifteen (15) days after Borrower's receipt of such certificate.
(c) Applicable Days For Computation of Interest. All
computations of interest for Reference Rate Loans shall be made
on the basis of a year of three hundred sixty-five (365) or three
hundred sixty-six (366) days, as the case may be, in each case,
for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such
interest is payable. All other computations of interest shall be
made on the basis of a year of three hundred sixty (360) days, in
each case, for the actual number of days (including the first day
but excluding the last day) occurring in the period for which
such interest is payable.
(d) Unavailable LIBOR Rate. If any Lender determines
that for any reason fair and adequate means do not exist for
establishing a particular LIBOR Rate or that accruing interest on
any Loan at an Adjusted LIBOR Rate by such Lender has become
unlawful, such Lender may give notice of that fact to Agent and
Borrower and such determination shall be conclusive and binding
absent manifest error. After such notice has been given and
until such Lender notifies Borrower and Agent that the
circumstances giving rise to such notice no longer exist, such
Adjusted LIBOR Rate shall no longer be available in respect of
Loans. Thereafter, any request by Borrower to have interest
accrue on a Loan at such an Adjusted LIBOR Rate shall be deemed
to be a request for interest to accrue at the Adjusted Reference
Rate. If the circumstances giving rise to the notice described
herein no longer exist, the Lender shall notify Borrower and
Agent in writing of that fact, and Borrower shall then once again
become entitled to request that such an Adjusted LIBOR Rate apply
to the Loans in accordance with Section 2.7(b) hereof.
Section 2.8 Compensation for Increased Costs. In the event
that after the date hereof any change occurs in any applicable
law, regulation, guideline, treaty or directive or interpretation
thereof by any authority charged with the administration or
interpretation thereof or in any applicable condition imposed by
any such authority, or any condition is imposed by any authority
after the date hereof which:
(a) subjects any Lender to any Tax, or changes the
basis of taxation of any payments to any Lender on account of
principal of or interest on any LIBOR Rate Loan, such Lender's
Note (to the extent such Note evidences LIBOR Rate Loans) or
other amounts payable with respect to LIBOR Rate Loans (other
than a change in the rate of Taxes based solely on the overall
net or gross income of such Lender); or
(b) imposes, modifies or determines applicable any
reserve, deposit or similar requirements against any assets held
by, deposits with or for the account of, or loans or commitments
by, any office of any Lender in connection with its LIBOR Rate
Loans to the extent the amount of which is in excess of, or was
not applicable at the time of computation of, the amounts
provided for in the definition of the related LIBOR Rate; or
(c) affects the amount of capital required to be
maintained by banks generally or by corporations controlling
banks and any Lender determines that the amount by which such
Lender or any corporation controlling such Lender is required or
expected to maintain or increase its capital is increased by, or
based upon, the existence of this Agreement or of such Lender's
Loans or Commitment hereunder;
(d) imposes upon any Lender any other condition with
respect to its LIBOR Rate Loans or its obligation to make LIBOR
Rate Loans;
which, as a result thereof, (i) increases the cost to any Lender
of making or maintaining its Loans or its Commitment hereunder,
or (ii) reduces the net amount of any payment received by any
Lender in respect of its Loans (whether of principal, interest,
commitment fees or otherwise), or (iii) requires any Lender to
make any payment on or calculated by reference to the gross
amount of any sum received by it in respect of its Loans, in each
case by an amount which such Lender in its sole judgment deems
material, then and in such case Borrower shall pay to Agent for
the account of such Lender on demand such amount or amounts as
will compensate such Lender (on an after-tax basis) for any
increased cost, deduction or payment actually incurred or made by
such Lender. The demand for payment by any Lender shall be
delivered to both Agent and Borrower and shall state the
subjection or change which occurred or the reserve or deposit
requirements or other conditions which have been imposed upon
such Lender or the request, direction or requirement with which
it has complied, together with the date thereof, the amount of
such cost, reduction or payment and the manner in which such
amount has been calculated. The statement of any Lender as to
the additional amounts payable pursuant to this Section 2.8 shall
be prima facie evidence of the amounts payable hereunder
provided, however, that the Borrower shall not be liable for any
such amount attributable to any period prior to the date one
hundred eighty (180) days prior to the date that any officer at
such Lender knew or reasonably should have known of such claim
for reimbursement or compensation.
The protection of this Section 2.8 shall be available to
each Lender regardless of any possible contention of invalidity
or inapplicability of the relevant law, regulation, guideline,
treaty, directive, condition or interpretation thereof. In the
event that Borrower pays any Lender the amount necessary to
compensate such Lender for any charge, deduction or payment
incurred or made by such Lender as provided in this Section 2.8,
and such charge, deduction or payment or any part thereof is
subsequently returned to such Lender as a result of the final
determination of the invalidity or inapplicability of the
relevant law, regulation, guideline, treaty, directive or
condition, then such Lender shall remit to Borrower the amount
paid by Borrower which has actually been returned to such Lender
(together with any interest actually paid to Lender on such
returned amount), less Borrower's pro rata share of such Lender's
costs and expenses incurred in connection with such governmental
regulation or any challenge made by such Lender with respect to
its validity or applicability.
Section 2.9 Prepayments. Upon one (1) Business Day's prior
written notice to Agent specifying the amount and date of any
proposed prepayment, Borrower shall have the right to prepay the
Loans in whole or in part, provided that each partial prepayment
of principal shall be an integral multiple of One Million Dollars
($1,000,000) but not less than Five Million Dollars ($5,000,000).
Reference Rate Loans may be repaid at any time without penalty or
premium. If a LIBOR Rate Loan is paid prior to the end of the
Applicable Interest Period, Borrower shall indemnify Agent and
each Lender for all reasonable losses and any reasonable costs
which Agent or any Lender may sustain as a consequence thereof
including, without limitation, the reasonable costs of
redeployment of funds at rates lower than the cost to Lenders of
such funds. A certificate of Agent or any Lender setting forth
the amount due to it pursuant to this Section 2.9 and the basis
for, and the calculation of, such amount shall be prima facie
evidence of the amount due pursuant to this Section 2.9. Payment
of the amount owed shall be due within fifteen (15) days after
Borrower's receipt of such certificate. Such an indemnity
payment will be required in all circumstances where such a Loan
is paid prior to the end of the Applicable Interest Period,
regardless of whether such payment is voluntary, mandatory,
required pursuant to Section 2.5(a) hereof, or the result of
Agent's or Lenders' collection efforts.
Section 2.10 Notes. The Loans shall be evidenced by
promissory notes of Borrower substantially in the form of
Exhibit A hereto, with appropriate insertions, payable to the
order of the Lenders, dated as of the date hereof, and for each
Lender in the face amount of such Lender's Commitment (the
"Notes").
Section 2.11 Manner of Payments.
(a) All payments and prepayments of principal and
interest on any Loan and all other amounts payable hereunder by
Borrower to Agent or any Lender shall be made by paying the same
in United States Dollars and in immediately available funds to
Agent at its Commercial Loan Service Center, Seattle, Washington
not later than 10:00 a.m. (Seattle, Washington time) on the date
on which such payment or prepayment shall become due. All
payments to be made by Borrower shall be made without set-off,
recoupment or counterclaim.
(b) Whenever any payment hereunder or under any other
Loan Document shall be stated to be due or whenever the last day
of any interest period would otherwise occur on a day other than
a Business Day, such payment shall be made and the last day of
such interest period shall occur on the next succeeding Business
Day and such extension of time shall in such case be included in
the computation and payment of interest or commitment fees, as
the case may be, unless such extension would cause such payment
to be made or the last day of such interest period to occur in
the next following calendar month, in which case such payment
shall be due and the last day of such interest period shall occur
on the next preceding Business Day and such reduction of time
shall in such case reduce the amount of interest and commitment
fees accruing in such period accordingly.
Section 2.12 Application of Payments. Any payments made by
Borrower in respect of amounts owing by it hereunder or under any
other Loan Document shall be applied in the manner directed by
Borrower and, in the absence of any such direction, such payments
and any prepayments of any Loan shall be applied first against
fees, expenses and indemnities due hereunder; second, against
interest due on matured obligations in respect of any Letter of
Credit, if any; third, against interest due on amounts in default
on any Loan, if any; fourth, against interest due on any Loan;
fifth, against matured obligations in respect of any Letter of
Credit, if any; sixth, against Loan principal amounts in default;
seventh, against Loan principal until the Loans are paid in full;
and thereafter as collateral security for obligations in respect
of unmatured Letters of Credit. Any payments received by Agent
or any Lender by any means and from any source after the
occurrence and during the continuation of an Event of Default
shall be applied to such portions of Borrower's obligations
hereunder or under any other Loan Document and in such order as
Majority Lenders may elect in their sole discretion or, in the
absence of such an election, in such order as Agent may elect in
its sole discretion.
Section 2.13 Fees.
(a) Unused Commitment Fees. Borrower agrees to pay to
Agent for the account of Lenders in proportion to their
Percentage Interests an unused commitment fee on the unused
portion of the Total Commitment computed daily at a per annum
rate equal to the Unused Commitment Fee Rate. Unused commitment
fees shall be payable in arrears on the last Business Day of each
calendar quarter, on the Maturity Date, and on demand after
default. Computations of unused commitment fees shall be made on
the basis of a year of three hundred sixty (360) days for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such fees are
payable. As used herein the "Unused Commitment Fee Rate" shall
be determined in accordance with the following table:
Unused Commitment Fee Rate
Leverage Rating (expressed per annum)
-------------- ---------------------
Xxxxx 0 12.5 basis points (0.125%)
Xxxxx 0 00 xxxxx xxxxxx (0.25%)
Xxxxx 0 00 xxxxx xxxxxx (0.30%)
Xxxxx 0 37.5 basis points (0.375%)
Xxxxx 0 00 xxxxx xxxxxx (0.45%)
(b) Facility Fee. Borrower agrees to pay to Agent for
the account of Lenders in proportion to their Percentage
Interests, a facility fee in an amount equal to 5 basis points
(0.05%) of the Total Commitment payable on the execution and
delivery of this Agreement.
(c) Agency Fees. Borrower agrees to pay to Agent, for
its own account the fees described in that certain letter
agreement dated as of the date hereof by and between Borrower and
Agent.
Section 2.14 Sharing of Payments, Etc. Each borrowing of
Loans from Lenders under Section 2.1 hereof will be made pro rata
in accordance with each Lender's Percentage Interest. Each
payment and prepayment of the Loans and each payment of interest
on the Loans will be made pro rata to each Lender in accordance
with its Percentage Interest. If any Lender shall obtain any
payment in respect of Borrower's obligations under this Agreement
or the Notes (whether voluntary or involuntary, through the
exercise of any right of set-off or otherwise) in excess of the
share which it would have been entitled to receive had such
payment been made to Agent for the account of the Lenders, such
Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably
with each of them, but if any of such excess payment is afterward
recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored, without interest, to
the extent of such recovery. Borrower authorizes the purchase of
such participations and agrees that any Lender so purchasing a
participation from another Lender may exercise all its rights to
payment (including the right of set off) with respect to such
participation as fully as if such Lender were the direct creditor
of Borrower in the amount of such participation.
Section 2.15 Extension of Maturity Date. Borrower may
request that Lenders extend the Maturity Date for a period of one
(1) additional calendar year by notifying Lenders and Agent in
writing on a day after the first anniversary date of this
Agreement and not less than ninety (90) days prior to the
Maturity Date. Each Lender shall provide Borrower and Agent with
written notice of its consent or refusal to consent to such
extension within forty-five (45) days of the date on which
Borrower provides Agent and Lenders with a written request for
such an extension. If all Lenders provide Borrower and Agent
with such a written notice the Maturity Date shall be extended
for a period of one (1) additional calendar year. If any Lender
in its sole discretion does not provide a written notice
evidencing its consent as herein provided, the request for
extension shall be deemed denied by all Lenders.
Section 2.16 Replacement of Lender.
(a) In the event that any Lender makes a demand for
payment pursuant to Section 2.8 hereof or any Lender has
suspended its funding of LIBOR Rate Loans hereunder, Borrower
shall have the right, if no Default or Event of Default then
exists, to replace such Lender in accordance with this
Section 2.16.
(b) If Borrower determines to replace a Lender pursuant
to this Section 2.16, Borrower shall have the right to replace
such Lender with an entity that is an Eligible Assignee (a
"Replacement Lender") provided that such Replacement Lender
(i) if it is not already a Lender, shall be acceptable to Agent,
which acceptance shall not be unreasonably withheld, (ii) shall,
in its sole discretion, unconditionally agree in writing (with a
copy to Agent) to purchase on a date therein specified all of the
rights hereunder and under the other Loan Documents of the Lender
being replaced and all of the interest in the Loans owing to such
Lender without recourse at the principal amount of such Note (the
interest and fees accrued thereon to the date of such purchase
shall be paid to the Lender being replaced when the same become
due and owing) and an amount equal to losses and costs which will
be sustained by the Lender being replaced as a consequence of
such sale resulting from the selling Lenders redeployment of
funds at rates lower than the Applicable Interest Rate thereunder
shall be reimbursed by Borrower as provided herein, and
(iii) shall, if such Replacement Lender is not already a Lender,
execute and deliver to Agent an Assignment and Acceptance
substantially in the form of Exhibit D hereto pursuant to which
such Replacement Lender becomes a party hereto with a Commitment
equal to that of the Lender being replaced.
(c) Upon (i) satisfaction of the requirements set forth
in subsection 2.16(b) hereof, (ii) payment to such Lender by the
Replacement Lender of the purchase price in immediately available
funds, (iii) payment to the Lender being replaced by Borrower of
all requested increased costs or additional amounts accrued to
the date of such purchase which Borrower is obligated to pay
under Section 2.8 hereof, all amounts which would have been paid
for the account of such Lender under Section 2.9 hereof had all
of the Loans been fully prepaid on the date of replacement, and
all other amounts owed by Borrower to such Lender hereunder
(other than the principal of and interest on the Loans of such
Lender purchased by the Replacement Lender and interest and fees
accrued thereon to the date of purchase), and (iv) the
Replacement Lender shall constitute a "Lender" hereunder with a
Commitment as so specified and the Lender being so replaced shall
no longer constitute a "Lender" hereunder (and this Agreement
shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Replacement
Lender) and the Lender being replaced shall be relieved of its
obligations hereunder. Notwithstanding anything in this
Section 2.16 to the contrary, the provisions of the Loan
Documents shall continue to inure to the benefit of the Lender
being replaced as to all matters occurring prior to the date of
replacement.
ARTICLE 3
LETTERS OF CREDIT
Section 3.1 Letters of Credit. Borrower may request that
Agent issue letters of credit for Borrower's account in
accordance with the terms and conditions of this Article 3.
Section 3.2 Manner of Requesting Letters of Credit.
(a) Letter of Credit Requests. From time to time
during the Commitment Period, Borrower may request that Agent
issue standby letters of credit for Borrower's account or extend
or renew existing Letters of Credit. Such a request will be made
by delivering a written request for the issuance, extension or
renewal of such a letter of credit to Agent not later than 11:00
a.m. (Seattle, Washington time) at least one (1) Business Day
prior to the date a new letter of credit is to be issued or an
existing letter of credit is scheduled to expire, provided that,
any request given orally shall be confirmed by Borrower in a
writing delivered to Agent not later than 12:00 noon (Seattle,
Washington time) on the date such oral request is made. Each
such request shall be deemed to constitute a representation and
warranty by Borrower that as of the date of such request, the
statements set forth in Article 5 hereof are true and correct and
that no Default or Event of Default has occurred and is
continuing. Each such request shall specify the face amount of
the requested Letter of Credit, the proposed date of expiration,
the name of the intended beneficiary thereof, and whether such
Letter of Credit is an extension or renewal of an existing Letter
of Credit. Each letter of credit requested hereunder (i) shall
be in a face amount such that after issuance of such letter of
credit (A) the Total Utilization will not exceed the Total
Commitment and (B) the Letter of Credit Usage would not exceed
$20,000,000; (ii) shall be in a face amount which is an integral
multiple of $100,000 and not less than $1,000,000; (iii) shall
have an expiration date not later than the earlier of (A) twelve
(12) months after the issuance or renewal date of such Letter of
Credit or (B) ninety (90) days after the Maturity Date; and
(iv) at all times after the occurrence of a Borrowing Base
Activation Event shall be in a face amount such that after
issuance of such Letter of Credit, the Total Utilization will not
exceed the Borrowing Base. Each request for the issuance,
renewal or extension of a letter of credit hereunder where such
letter of credit will have an expiration date later than the
Maturity Date shall be accompanied by a deposit of cash
collateral in the amount of such proposed letter of credit to be
held by Agent in an interest bearing account as security for all
of Borrower's obligations under this Agreement and the other Loan
Documents. Any such deposits together with any interest accrued
thereon shall be returned to Borrower upon the expiration of the
applicable Letter of Credit and the payment by Borrower of all
amounts owing hereunder in respect thereof.
(b) Letter of Credit Fees. Borrower agrees to pay to
Agent for the account of Lenders in proportion to their
Percentage Interests, a standby letter of credit fee on the face
amount of each Letter of Credit from the date such Letter of
Credit is issued until such Letter of Credit shall be terminated
or drawn at a per annum rate equal to the Letter of Credit Fee
Rate. Standby letter of credit fees shall be payable in arrears
on the last Business Day of each calendar quarter, on the
Maturity Date, and on demand after default. Computations of
standby letter of credit fees shall be made on the basis of a
year of three hundred sixty (360) days for the actual number of
days (including the first day but excluding the last day)
occurring in the period for which such fees are payable.
Borrower agrees to pay to Agent for its own account (a) an
issuance fee equal to 12.5 basis points (0.125%) of the face
amount of each Letter of Credit issued hereunder, and (b) other
standby letter of credit fees calculated and payable in
accordance with Agent's normal and customary practices. As used
herein the "Letter of Credit Fee Rate" shall be determined in
accordance with the following table:
Letter of Credit Fee Rate
Leverage Rating (expressed per annum)
--------------- ---------------------
Xxxxx 0 00 xxxxx xxxxxx (0.50%)
Xxxxx 0 62.5 basis points (0.625%)
Xxxxx 0 00 xxxxx xxxxxx (0.75%)
Xxxxx 0 87.5 basis points (0.875%)
Xxxxx 0 000 xxxxx xxxxxx (1.00%)
(c) Letter of Credit Application Forms. At the
request of Agent, Borrower shall execute a letter of credit
application in the standard form then used by Agent (which shall
not include terms inconsistent with this Agreement), in respect
of each Letter of Credit requested hereunder.
(d) Issuance of Letter of Credit. Subject to the
satisfaction of the conditions precedent set forth in Article 4
and Borrower's compliance with the terms of this Section 3.2,
Agent shall issue and deliver its letter of credit to Borrower or
to the designated beneficiary at such address as Borrower may
specify. New Letters of Credit and extensions or renewals of
existing Letters of Credit shall be in a form acceptable to
Agent.
Section 3.3 Indemnification; Increased Costs. Borrower
agrees to indemnify Agent and any Lender on demand for any and
all additional costs, expenses, or damages incurred by such Agent
or Lender, directly or indirectly, arising out of the issuance,
extension or renewal of any Letter of Credit or the purchase of
any Letter of Credit Risk Participation, including, without
limitation, any costs of maintaining reserves in respect thereof
and any premium rates imposed by the Federal Deposit Insurance
Corporation in connection therewith. A certificate as to such
additional amounts submitted to Borrower by Agent or such Lender
shall be prima facie evidence of the amounts due hereunder.
If at any time after the date hereof the introduction of or
any change in applicable law, rule, or regulation or in the
interpretation or the administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof, or compliance by Agent or Lender with any requests
directed by any such Governmental Authority (whether or not
having the force of law) shall, with respect to any Letter of
Credit or Letter of Credit Risk Participation subject Agent or
such Lender to any Tax or impose, modify, or deem applicable any
reserve, special deposit, or similar requirements against assets
of, deposits with or for the account of, credit extended by Agent
or such Lender or shall impose on Agent or such Lender any other
conditions affecting the Letters of Credit or Letter of Credit
Risk Participations and the result of any of the foregoing is to
increase the cost to Agent or such Lender of issuing a Letter of
Credit or holding a Letter of Credit Risk Participation or to
reduce the amount of any sum received or receivable by Agent or
such Lender hereunder with respect to the Letters of Credit or
Letter of Credit Risk Participations, then, upon demand by Agent
or such Lender, Borrower shall pay to Agent or such Lender such
additional amount or amounts as will compensate Agent or such
Lender for such increased cost or reduction. The written
statement of any Lender as to the additional amounts payable
pursuant to this Section 3.3 shall be prima facie evidence of the
amounts due hereunder provided, however, that the Borrower shall
not be liable for any such amount attributable to any period
prior to the date one hundred eighty (180) days prior to the date
that any officer at such Lender knew or reasonably should have
known of such claim for reimbursement or compensation.
Borrower agrees to indemnify and hold Agent and each Lender
(an "Indemnitee") harmless from and against any and all (a) Taxes
and other fees payable in connection with Letters of Credit,
Letter of Credit Risk Participations or the provisions of this
Agreement relating thereto, and (b) any and all actions, claims,
damages, losses, liabilities, fines, penalties, costs, and
expenses of every nature, including reasonable attorneys' fees,
suffered or incurred by the Indemnitee otherwise arising out of
or relating to this Article 3, any Letter of Credit, or any
Letter of Credit Risk Participation; provided, however, any
indemnification under this Section 3.3 shall not apply to the
extent that any such action, claim, damage, loss, liability,
fine, penalty, cost, or expense arises out of or is based solely
upon the Indemnitee's willful misconduct or gross negligence.
Section 3.4 Payment by Borrower. Borrower agrees to fully
reimburse Agent for all amounts paid by Agent under any Letter of
Credit and to pay interest thereon at the Adjusted Reference Rate
from the date Agent makes such payment until the next Business
Day following the date of any demand for reimbursement by Agent.
Such payment shall be made in immediately available funds at
Agent's Commercial Loan Processing Center not later than 11:00
a.m. (Seattle, Washington time) on the next Business Day
following the date of any demand for reimbursement by Agent;
provided, that, if Agent so elects pursuant to the terms of
Section 8.2 hereof, following the occurrence and during the
continuance of an Event of Default, an amount equal to the face
amount of each Letter of Credit shall become immediately due and
payable. If Borrower shall default in its obligations to
reimburse Agent or to make any other payment required hereunder,
interest shall accrue on the unpaid amount thereof at a per annum
rate equal to two (2) percentage points above the Adjusted
Reference Rate (changing as the Reference Rate changes) from the
date such amount becomes due and payable until payment in full by
Borrower. Interest payable under this Section 3.4 on amounts
paid by Agent under any Letter of Credit shall be calculated on
the basis of a year of 360 days and shall be payable on demand.
ARTICLE 4
CONDITIONS TO ADVANCES
Section 4.1 Conditions to Initial Advance. In addition to
the conditions set forth in Section 4.2 hereof, the obligations
of each Lender to make its initial Loan hereunder and the
obligation of Agent to issue its initial Letter of Credit
hereunder, are subject to fulfillment of the following:
(a) Borrower Documents. Agent shall have received the
Borrower Documents, each duly executed and delivered by Borrower
and the other parties thereto.
(b) Borrower Authority. Agent shall have received in
form and substance satisfactory to it (i) a copy of a resolution
adopted by the Board of Directors of Borrower authorizing the
execution, delivery and performance of this Agreement and the
other Borrower Documents certified by the Secretary of Borrower;
(ii) evidence of the authority and specimen signatures of the
persons who have signed this Agreement and the other Borrower
Documents; (iii) Certificates of Good Standing dated as of a
recent date issued by the Secretary of State of Minnesota in
respect of Borrower; and (iv) such other evidence of corporate
authority as Agent shall reasonably require.
(c) Legal Opinion. Agent, on behalf of each Lender,
shall have received the legal opinions of Xxxxxx Xxxxxxx Xxxxxxxx
& Xxxxxx, Xxxxxx & Xxxxxxx LLP and Xxxxxx X. Xxxxxx, each as
counsel to Borrower, substantially in the forms attached hereto
as Exhibits C-1, C-2 and C-3 and each dated as of the date
hereof.
(d) Officer's Certificate. Agent shall have received
an Officer's Certificate of Borrower as to the accuracy of
Borrower's representations and warranties set forth in Article 5
and as to the absence of any Default or Event of Default.
(e) Evidence of Insurance. Agent shall have received
certificates of insurance evidencing insurance required to be
maintained by Borrower under this Agreement or, in the
alternative, an Officer's Certificate of Borrower setting forth a
schedule of the insurance so maintained by Borrower.
(f) Other Information. Agent shall have received such
other statements, opinions, certificates, documents, undertakings
and information with respect to the matters contemplated by this
Agreement and the other Loan Documents as Agent or any Lender may
reasonably request.
(g) Prior Credit Agreement. Agent shall have received
evidence satisfactory to it that the Prior Credit Agreement has
been terminated and that all amounts owing thereunder, including,
without limitation, accrued interest and commitment fees, have
been paid in full.
Section 4.2 Conditions to All Advances. The obligations of
each Lender to make any Advance hereunder, including the initial
Advance, and the obligation of Agent to issue any Letter of
Credit, are subject to fulfillment of the following conditions:
(a) Notice of Borrowing. If such Advance is a Loan,
Agent shall have received the Notice of Borrowing in respect of
such Loan, and, if such Advance is a Letter of Credit, Agent
shall have received from Borrower a request therefor complying
with the requirements of Section 3.2 hereof.
(b) Default, Etc. At the date of the Advance, no
Default or Event of Default shall have occurred and be continuing
or will have occurred as the result of the making of the Advance;
and the representations and warranties of Borrower in Article 5
shall be true on and as of such date with the same force and
effect as if made on and as of such date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders and Agent as
follows:
Section 5.1 Corporate Existence and Power. Borrower is a
corporation duly incorporated, validly existing and in good
standing under the laws of the state of Minnesota. Borrower is
duly qualified to do business in each other jurisdiction where
the nature of its activities or the ownership of its properties
requires such qualification, except where the failure to so
qualify would not be reasonably expected to have a material
adverse effect on the business, operations or financial condition
of Borrower. Borrower has full corporate power, authority and
legal right to carry on its business as presently conducted, to
own and operate its properties and assets, and to execute,
deliver and perform the Loan Documents.
Section 5.2 Corporate Authorization. The execution,
delivery and performance by Borrower of this Agreement and the
other Loan Documents and any borrowing hereunder or thereunder,
and the request for the issuance of any Letter of Credit
hereunder or thereunder, have been duly authorized by all
necessary corporate action of Borrower, do not require any
shareholder approval or the approval or consent of any trustee or
the holders of any Indebtedness of Borrower, except such as have
been obtained (certified copies thereof having been delivered to
Agent), do not contravene any law, regulation, rule or order
binding on it or its Articles of Incorporation or Bylaws and do
not contravene the provisions of or constitute a default under
any material indenture, mortgage, contract or other agreement or
instrument to which Borrower is a party or by which Borrower or
any of its properties may be bound or affected.
Section 5.3 Government Approvals, Etc. No Government
Approval or filing or registration with any Governmental
Authority is required for the execution and delivery of the Loan
Documents, in connection with the performance by Borrower of all
its obligations required to be performed under the Loan Documents
prior to the date on which this representation is made or deemed
to have been made, or in connection with any of the transactions
contemplated thereby, except such as have been heretofore
obtained and are in full force and effect.
Section 5.4 Binding Obligations, Etc. This Agreement has
been duly executed and delivered by Borrower and constitutes, and
the other Loan Documents when duly executed and delivered will
constitute, the legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms, except that the enforceability thereof may be affected by
bankruptcy, insolvency, moratorium and other similar laws
affecting the rights and remedies of creditors generally and by
the effect of general principles of equity.
Section 5.5 Litigation. Except as reflected in the
financial statements referred to in Section 5.6 hereof or
otherwise set forth on Schedule 2 to the Disclosure Letter, there
are no actions, proceedings, investigations, or claims against or
affecting Borrower or any Subsidiary now pending before any
court, arbitrator or Governmental Authority (nor to the knowledge
of Borrower has any thereof been threatened nor does any basis
exist therefor) which would be reasonably expected to have a
material adverse effect on (a) the business, operations or
consolidated financial condition of Borrower; or (b) the ability
of Borrower to perform its obligations under this Agreement and
the other Loan Documents.
Section 5.6 Financial Condition. The consolidated balance
sheet of Borrower and the Subsidiaries as at August 29, 1996, and
the related statements of income and retained earnings of
Borrower and the Subsidiaries for the fiscal year then ended, and
the consolidated balance sheet of Borrower and the Subsidiaries
as at February 27, 1997, and the related statements of income and
retained earnings of Borrower and the Subsidiaries for the fiscal
quarter then ended, copies of which have been furnished to Agent
and Lenders, fairly present in all material respects the
consolidated financial condition of Borrower and the Subsidiaries
as at such dates and the consolidated results of operations of
Borrower for the periods then ended, all in accordance with GAAP.
Since February 27, 1997 there has been no material adverse change
in the financial condition or operations of Borrower or any
Subsidiary.
Section 5.7 Title and Liens. Borrower and each Subsidiary
has good and indefeasible title to the respective real properties
reflected in the financial statements referred to in Section 5.6
hereof and good title to all of its other properties and assets
(other than patents, trademarks, service marks, trade names,
copyrights, mask works, contractual franchises and other
comparable items of intellectual property) reflected in such
financial statements (in each case, except such as have been
since sold or otherwise disposed prior to the date of this
Agreement in the ordinary course of business or after the date of
this Agreement in accordance with the terms hereof). All such
real and personal properties are subject to no Lien of any kind
except Liens permitted under this Agreement. All leases
necessary in any material respect for the conduct of the business
of Borrower and each Subsidiary are valid and subsisting and are
in full force and effect.
Section 5.8 Environmental Laws, Etc. All properties of
Borrower and each Subsidiary and Borrower's and such Subsidiary's
use thereof comply in all material respects with applicable
zoning and use restrictions and with applicable laws and
regulations relating to the environment including, without
limitation, the Environmental Laws. Except as disclosed on
Schedule 8 to the Disclosure Letter, without limiting the
foregoing, no Hazardous Substances have been generated,
manufactured, refined, transferred, stored, treated, transported,
handled, managed, discharged or disposed of, whether by Borrower
or, to the best of Borrower's knowledge, by any other person
onto, upon, over, beneath or from any real property owned by
Borrower or other premises owned, leased, operated, used or held
at any time by Borrower or any of the ground water beneath any
such premises (collectively, the "Premises") which in any fashion
could reasonably be expected to result in Borrower, Agent or any
Lender incurring or suffering at any time any material loss,
liability, damages, or obligations including liability for
cleanup and recovery costs and expenses. Except as disclosed on
Schedule 8 to the Disclosure Letter, there are no past or present
events, conditions, circumstances, activities, practices,
incidents or actions at or in connection with the Premises which
could reasonably be expected to interfere with or prevent
continued compliance with any material laws or regulations
pertaining to underground storage tanks or any other
Environmental Laws or give rise to any legal liability or
otherwise form the basis of any claim, action, suit, proceedings,
hearing or investigation against or affecting Borrower under the
Environmental Laws. There has been no disposal from the Premises
by Borrower (or to the best of Borrower's knowledge, by any other
person) directly or indirectly of any Hazardous Substances to, on
or in any site currently listed or formally proposed to be listed
on the National Priorities List under Superfund or any site
listed on any priority cleanup list compiled by any Governmental
Authority.
Section 5.9 Taxes. Borrower and each Subsidiary has filed
all tax returns and reports required of it, and to the best of
Borrower's knowledge, has paid all Taxes which are due and
payable, or has provided adequate reserves for payment of any
Taxes whose payment is being contested. The charges, accruals
and reserves on the books of Borrower and each Subsidiary in
respect of Taxes for all fiscal periods to date are accurate.
There are no material disputes between Borrower or any Subsidiary
and any Governmental Authority with respect to any Taxes except
as disclosed in the balance sheet referred to in Section 5.6
hereof or otherwise disclosed to Agent and Lenders in writing
prior to the date of this Agreement.
Section 5.10 Pari Passu Ranking. The obligations of
Borrower to pay the principal of and interest on any Loan and all
other amounts payable hereunder rank at least pari passu both as
to payment and as to security with all other Indebtedness and
other obligations of Borrower now existing or hereafter incurred
(except (i) Indebtedness given preference as a matter of law
including, without limitation, salary obligations and pension
contribution claims; and (ii) as to security, for Indebtedness
secured by Liens permitted pursuant to Section 7.6 hereof).
Section 5.11 Laws, Orders, Other Agreements. Neither
Borrower nor any Subsidiary is in violation of or subject to any
contingent liability on account of any laws, statutes, rules,
regulations and orders of any Governmental Authority, except for
violations which in the aggregate would not be reasonably
expected to have a material adverse effect on the business,
operations or financial condition of Borrower or such Subsidiary.
Neither Borrower nor any Subsidiary is in material breach of or
default under any material agreement to which it is a party or
which is binding on it or any of its assets.
Section 5.12 Federal Reserve Regulations. Neither Borrower
nor any Subsidiary is engaged principally or as one of its
important activities in the business of extending credit for the
purpose of purchasing or carrying any margin stock (within the
meaning of Federal Reserve Regulation U), and no part of the
proceeds of any Loan will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any other
purpose that violates the applicable provisions of any Federal
Reserve Regulation. Borrower will furnish to Agent or any Lender
on request a statement conforming with the requirements of
Regulation U.
Section 5.13 ERISA.
(a) The present value of all benefits vested under all
Pension Plans did not, as of the most recent valuation date of
such Pension Plans, exceed the value of the assets of the Pension
Plans allocable to such vested benefits by an amount which would
represent a potential material liability of Borrower or affect
materially the ability of Borrower to perform the Loan Documents.
(b) No Plan or trust created thereunder, or any
trustee or administrator thereof, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which is not otherwise exempt and which
could subject such Plan or any other Plan, any trust created
thereunder, or any trustee or administrator thereof, or any party
dealing with any Plan or any such trust to the tax or penalty on
prohibited transactions imposed by Section 502 of ERISA or
Section 4975 of the Code.
(c) No Pension Plan or trust has been terminated,
except in accordance with the Code, ERISA, and the regulations of
the Internal Revenue Service and the PBGC as applicable to
solvent plans in which benefits of participants are fully
protected. No "reportable event" as defined in Section 4043 of
ERISA has occurred for which notice has not been waived or for
which alternative notice procedures are permitted.
(d) No Pension Plan or trust created thereunder has
incurred any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) whether or not waived, since the
effective date of ERISA.
(e) The required allocations and contributions to
Pension Plans will not violate Section 415 of the Code.
(f) Neither Borrower nor any Subsidiary has any
withdrawal liability to any trust created pursuant to a
multi-employer pension or benefit plan nor would it be subject to
any such withdrawal liability in excess of One Million Dollars
($1,000,000) if it withdrew from any such plan or if its
participation therein were otherwise terminated.
Section 5.14 Subsidiaries. Schedule 1 to the Disclosure
Letter accurately sets forth the names and jurisdictions of
incorporation or organization of each Subsidiary.
Section 5.15 Patents, Licenses, Franchises, Etc. Except as
set forth in the Forms 10K for the fiscal year ended August 29,
1996 and the Forms 10Q for the fiscal quarters ended November 28,
1996 and February 27, 1997, respectively, and in each case as
filed or amended and filed with the Securities and Exchange
Commission by Borrower, (a) Borrower and the Subsidiaries own or
are licensed to use or otherwise have the right to use (or could
obtain such ownership or licenses or rights on terms and under
circumstances that could not reasonably be expected to have a
material adverse effect on Borrower's ability to perform its
obligations under this Agreement or on the business, operations
or financial condition of Borrower and the Subsidiaries, taken as
a whole) all of the patents, trademarks, service marks, trade
names, copyrights, mask works, contractual franchises and other
items of comparable intellectual property together with all other
rights that are reasonably necessary for the operation of their
respective businesses, and (b) there are no pending or, to the
best knowledge of Borrower, threatened claims that any slogan or
other advertising device, product, process, method, substance,
part or other material now employed by Borrower or any Subsidiary
infringes upon any rights held by any other person, except where
the consequences of any failure to possess any right under
clause (a) or such infringement under clause (b) could not
reasonably be expected to have a material adverse effect on
Borrower's ability to perform its obligations under this
Agreement or on the business, operations or financial condition
of Borrower and the Subsidiaries, taken as a whole.
Section 5.16 Not Investment Company, Etc. Borrower is not
(a) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company
Act of 1940, as amended; or (b) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
Section 5.17 Representations as a Whole. This Agreement,
the other Loan Documents and the financial statements referred to
in Section 5.6 hereof, taken as a whole and taken together with
the Form 10K most recently filed by Borrower with the Securities
and Exchange Commission and the Forms 10Q filed by Borrower since
the filing of such Form 10K, do not contain any untrue statement
of a material fact or omit to state any material fact necessary
in order to make the statements contained herein or therein not
misleading in the context made. Projections and forecasts
clearly identified as such and provided by Borrower to Agent or
any Lender are not "facts" for purposes of this Section 5.17.
Each such projection and forecast was made by Borrower in good
faith and represents Borrower's best estimate of the matters
projected or forecasted therein as of the date on which such
projection or forecast was made.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as Agent or any Lender shall have any Commitment
hereunder or there shall be any outstanding Letter of Credit
Usage and until payment in full of each Loan and the Notes and
performance of all other payment obligations of Borrower under
this Agreement and the other Loan Documents, Borrower agrees to
do all of the following unless Agent (with the consent of
Majority Lenders) shall otherwise consent in writing.
Section 6.1 Use of Proceeds. Borrower shall use the
proceeds of the Loans and the Letters of Credit for acquisitions
and general corporate purposes.
Section 6.2 Payment. Borrower shall pay the principal of
and interest on the Loans in accordance with the terms of this
Agreement and the Notes and will pay when due all other amounts
payable by Borrower hereunder and under any other Loan Document.
Section 6.3 Preservation of Corporate Existence, Etc.
Except as permitted by Section 7.2 hereof, Borrower shall, and
shall cause each Subsidiary to, preserve and maintain their
corporate existence, rights, franchises and privileges in the
jurisdictions of their incorporation and will, and will cause
each Subsidiary to, qualify and remain qualified as foreign
corporations in each jurisdiction where qualification is
necessary or advisable in view of their business and operations
or the ownership of their properties, except where the failure to
so qualify would not have a material adverse effect on the
business, operations or financial condition of Borrower (on a
consolidated basis).
Section 6.4 Visitation Rights. At any reasonable time, and
from time to time, Borrower shall permit Agent or any Lender to
examine and make copies of and abstracts from its and any
Subsidiary's records and books of account, to visit its and any
Subsidiary's properties and to discuss the affairs, finances and
accounts of Borrower and any Subsidiary with any of Borrower's
officers, directors or employees provided, however, that so long
as no Default or Event of Default shall have occurred and be
continuing, all visits to the properties of Borrower or any
Subsidiary shall be made during regular business hours upon
reasonable prior notice.
Section 6.5 Keeping of Books and Records. Borrower shall
keep and maintain and shall cause each Subsidiary to keep and
maintain financial books of record and account sufficient to
permit Borrower to prepare consolidated and consolidating
financial statements in accordance with GAAP.
Section 6.6 Maintenance of Property, Etc. Borrower shall
maintain and preserve and shall cause each Subsidiary to maintain
and preserve all of its properties in reasonably good working
order and condition, ordinary wear and tear excepted, and will
from time to time make (and cause each Subsidiary to make) all
needed repairs, renewals and replacements to the extent required
by prudent business practice.
Section 6.7 Compliance with Laws, Etc. Borrower shall
comply and shall cause each Subsidiary to comply in all material
respects with all laws, regulations, rules, and orders of
Governmental Authorities applicable to Borrower or any Subsidiary
or to their respective operations or property, except any thereof
whose validity is being contested in good faith by appropriate
proceedings where reserves or other appropriate provisions
required by GAAP shall have established therefor.
Section 6.8 Other Obligations. Borrower shall pay and
discharge and shall cause each Subsidiary to pay and discharge
before the same shall become delinquent all material
Indebtedness, Taxes and other obligations for which Borrower or
any Subsidiary is liable or to which its income or property is
subject and all claims for labor and materials or supplies which,
if unpaid, could reasonably be expected to become by law a Lien
upon assets of Borrower or any Subsidiary, except any thereof
whose validity or amount is being contested in good faith by
Borrower or such Subsidiary in appropriate proceedings where
reserves or other appropriate provisions required by GAAP shall
have established therefor.
Section 6.9 Insurance. Borrower shall keep in force and
shall cause each Subsidiary to keep in force upon all of
Borrower's or such Subsidiary's properties and operations
policies of insurance carried with responsible companies in such
amounts and covering all such risks as shall be customary in the
industry. From time to time, on request, Borrower will furnish
to Agent certificates of insurance or, at Agent's request,
certified copies of insurance policies evidencing such coverage.
Section 6.10 Financial Information. Borrower shall deliver
to Agent and each Lender:
(a) Annual Audited Financial Statements. As soon as
available and in any event within ninety (90) days after the end
of each fiscal year of Borrower, the consolidated balance sheet
of Borrower and the Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and
retained earnings and statement of cash flows of Borrower and the
Subsidiaries for such year, accompanied by the audit report
thereon by independent certified public accountants selected by
Borrower and reasonably satisfactory to Agent (which reports
shall be prepared in accordance with generally accepted auditing
standards and shall not be qualified by reason of restricted or
limited examination of any material portion of the records of
Borrower or any Subsidiary and shall contain no disclaimer of
opinion or adverse opinion except such as Agent in its sole
discretion determines to be immaterial);
(b) Quarterly Unaudited Financial Statements. As soon
as available and in any event within forty-five (45) days after
the end of each of the first three fiscal quarters of Borrower,
the unaudited consolidated and consolidating balance sheet of
Borrower as of the end of such fiscal quarter and the unaudited
consolidated and consolidating statement of income and retained
earnings of Borrower for the fiscal year to the end of such
fiscal quarter, accompanied by an Officer's Certificate of
Borrower certifying that such balance sheet and statement of
income and retained earnings have been prepared in accordance
with GAAP and present fairly the consolidated financial position
and the results of operations of Borrower as of the end of and
for such fiscal quarter and that since the fiscal year-end report
referred to in clause (a) there has been no material adverse
change in the financial condition or operations of Borrower or
any Subsidiary as shown on the balance sheet as of said date;
(c) Quarterly Compliance Certificates. As soon as
available and in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of Borrower and
within ninety (90) days after the end of each of Borrower's
fourth fiscal quarter, an Officer's Certificate in form
reasonably acceptable to Agent certifying that as of the close of
such fiscal quarter no Default or Event of Default had occurred
and was continuing, and, further, setting forth calculations
demonstrating compliance as of the end of such fiscal quarter
with the financial covenants set forth in Sections 6.13 through
6.16 hereof, and, further, identifying the amount and nature of
the Restricted Payments made during such fiscal quarter and the
amount and nature of the Restricted Payments made during the
period beginning on the date of this Agreement and continuing
through the end of such fiscal quarter;
(d) Monthly Borrowing Base Certificate, Etc. If a
Borrowing Base Activation Event shall have occurred and be
continuing, as soon as available and in any event within twenty
(20) days after the end of each calendar month ending after the
occurrence of such Borrowing Base Activation Event (i) a
borrowing base certificate setting forth calculations computing
the Borrowing Base as of the end of the preceding calendar month,
and (ii) a summary of aging of accounts receivable for Borrower
in form acceptable to Agent as of the end of the preceding
calendar month;
(e) Financial Projections. As soon as available and
in any event within ninety (90) days after the beginning of each
fiscal year of Borrower, (i) a consolidated annual set of
financial projections for Borrower for such fiscal year
projecting the expected operations and expected financial
condition of Borrower on a quarter-by-quarter basis; and (ii) an
annual set of financial projections for Micron Custom
Manufacturing Services, Inc. for such fiscal year projecting the
expected operations and expected financial condition of Micron
Custom Manufacturing Services, Inc. on a quarter-by-quarter
basis;
(f) Shareholder, SEC and Government Reports. As soon
as available, all reports sent by Borrower to its shareholders
and all 8K, 10Q and 10K reports filed by Borrower with the
Securities and Exchange Commission ("SEC"), all within ten (10)
days after filing with the SEC;
(g) Schedule of Insurance. Within ninety (90) days
after the beginning of each fiscal year of Borrower, certificates
of insurance evidencing all insurance required to be maintained
by Borrower under this Agreement, or, in the alternative, an
Officer's Certificate setting forth a schedule of such insurance
coverage; and
(h) Other Information. All other statements, reports
and other information as Agent or any Lender may reasonably
request concerning the financial condition and business affairs
of Borrower or any Subsidiary.
Section 6.11 Notification. Promptly after any Responsible
Officer learns thereof, Borrower shall notify Agent of (a) the
details of any action, proceeding, investigation or claim against
or affecting Borrower or any Subsidiary, instituted before any
court, arbitrator or Governmental Authority or, to Borrower's
knowledge threatened to be instituted, which, if determined
adversely would be likely to result in a judgment or order
against Borrower or any Subsidiary for more than Five Million
Dollars ($5,000,000) or to have a material adverse effect on the
business, operations or financial condition of Borrower and the
Subsidiaries taken as a whole; (b) any substantial dispute
between Borrower or any Subsidiary and any Governmental
Authority; (c) any labor controversy which has resulted in or, to
Borrower's knowledge, threatens to result in a strike which would
materially affect the business operations of Borrower or any
Subsidiary; (d) if Borrower, any Subsidiary or any member of the
Controlled Group gives or is required to give notice to the PBGC
of any "reportable event" (as defined in subsections (b)(1), (2),
(5) or (6) of section 4043 of ERISA) with respect to any Plan (or the
Internal Revenue Service gives notice to the PBGC of any
"reportable event" as defined in subsection (c)(2) of section 4043 of
ERISA and Borrower obtains knowledge thereof) which might
constitute grounds for a termination of such Plan under Title IV
of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event,
the notice of such reportable event given or required to be given
to the PBGC; and (e) the occurrence of any Default or Event of
Default.
Section 6.12 Additional Payments; Additional Acts. From
time to time and within thirty (30) days of demand by Agent,
Borrower shall (a) pay or reimburse Agent and Lenders for all
Taxes imposed on this Agreement and any other Loan Document; and
(b) pay or reimburse Agent for all reasonable expenses, including
reasonable legal fees, actually incurred by Agent in connection
with the preparation of this Agreement and the other Loan
Documents, the making of any Loan or the issuance of any Letter
of Credit. From time to time, promptly upon demand by Agent,
Borrower shall (a) pay or reimburse Agent and Lenders for all
reasonable expenses including reasonable out-of-pocket legal fees
(including allocated charges of internal legal counsel) incurred
in connection with the enforcement by judicial proceedings or
otherwise of any of the rights of Agent or Lenders under this
Agreement or any other Loan Document, (b) obtain and furnish to
Agent evidence of all such Government Approvals as may be
required to enable Borrower to comply with its obligations under
the Loan Documents; and (c) execute and deliver all such other
instruments and perform all such other acts as Agent or any
Lender may reasonably request to carry out the transactions
contemplated by this Agreement and the other Loan Documents.
Section 6.13 Minimum Tangible Net Worth. Borrower shall
maintain on a consolidated basis as of the end of each fiscal
quarter a Tangible Net Worth equal to or greater than the sum of
(a) Two Hundred Twenty-five Million Dollars ($225,000,000),
(b) seventy-five percent (75%) of Borrower's Net Income for each
fiscal quarter after the fiscal quarter ended November 28, 1996
in which Borrower has a positive Net Income and (c) seventy-five
percent (75%) of the amount, if any, by which the shareholders'
equity of Borrower has increased since the fiscal quarter ended
November 28, 1996 as a result of the issuance of common stock or
the conversion of debt securities into common stock.
Section 6.14 Minimum Current Ratio. Borrower shall
maintain on a consolidated basis as of the end of each fiscal
quarter a Current Ratio of at least 1.3 to 1 through the fiscal
quarter ended September 3, 1998, and at least 1.4 to 1 as of the
end of each fiscal quarter thereafter. As used herein, "Current
Ratio" shall mean, at any time, (i) Borrower's current assets as
determined in accordance with GAAP divided by (ii) the sum of the
then-outstanding Total Utilization and Borrower's current
liabilities as determined in accordance with GAAP.
Section 6.15 Minimum Cash Flow. Borrower shall maintain on
a consolidated basis its EBITDA for each period of four
consecutive fiscal quarters at an amount greater than or equal to
the applicable minimum EBITDA requirement set forth below:
For Fiscal Minimum EBITDA
Quarter Ending Requirement
-------------- --------------
May 29, 1997 $120,000,000
August 28, 1997 $135,000,000
On or after
November 27, 1997
and before
September 3, 1998 $160,000,000
September 3, 1998
and thereafter $200,000,000
As used herein, "EBITDA" shall mean, for any period, Borrower's
Net Income (or net loss), excluding any taxes associated
therewith, plus the sum of (a) interest expense, (b) income tax
expense, (c) depreciation expense and (d) amortization expense,
in each case determined on a consolidated basis in accordance
with GAAP for such period.
Section 6.16 Maximum Leverage Ratio. Borrower shall
maintain on a consolidated basis as of the end of each fiscal
quarter a Leverage Ratio of not more than 1.35 to 1.
ARTICLE 7
NEGATIVE COVENANTS
So long as Agent or any Lender shall have any Commitment
hereunder or there shall be any outstanding Letter of Credit
Usage and until payment in full of each Loan and the Notes and
performance of all other payment obligations of Borrower under
this Agreement and the other Loan Documents, Borrower agrees that
it will not, and will cause each Subsidiary not to, do any of the
following unless Agent (with the consent of Majority Lenders)
shall otherwise consent in writing.
Section 7.1 Dividends, Purchase of Stock, Etc. Borrower
shall not and shall cause each Subsidiary (other than a Wholly-
Owned Subsidiary) to not (a) pay any dividend (except dividends
payable in its capital stock) on any shares of any class of its
capital stock, or (b) apply any assets to the purchase,
redemption or other retirement of, or set aside any sum for the
payment of any dividends on or for the purchase, redemption or
other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, any shares of any class of
capital stock of Borrower or such Subsidiary (each of the
foregoing being a "Dividend Payment"), provided, however, that
(y) Borrower or any Subsidiary may during any fiscal quarter,
make any Dividend Payment, provided that after giving effect to
such Dividend Payment the sum of all Restricted Payments made
during such fiscal quarter, when taken together with all other
Restricted Payments made after the date of this Agreement and
prior to such fiscal quarter would not exceed twenty-five percent
(25%) of Borrower's consolidated Net Income for the period
commencing on the date of this Agreement and ending on the last
day of the immediately preceding fiscal quarter; and (z) Borrower
may make Dividend Payments to redeem any class of its corporate
stock where the amount of such Dividend Payment is not more than
the net proceeds received by Borrower from the concurrent issue
of replacement shares of its capital stock. Nothing in this
Section 7.1 is intended to limit the payments of interest or
principal on convertible Subordinated Indebtedness prior to
conversion and to the extent expressly provided for by the
Majority Lenders in connection with the approval of any
Subordinated Indebtedness, nothing in this Section 7.1 shall
limit the payment with respect to or the deliveries of
securities, cash or other property upon conversion of such
convertible Subordinated Indebtedness.
Section 7.2 Liquidation, Merger, Sale of Assets. Borrower
shall not and shall cause each Subsidiary to not merge or enter
into consolidations or liquidate, nor sell, lease or dispose of
all or any portion of its assets, except (a) sales, leases, or
other dispositions of assets in the ordinary course of business,
(b) licenses or sublicenses of software on an exclusive or
nonexclusive basis in accordance with prudent business practices
and in the ordinary course of business, and (c) mergers or
consolidations in connection with any Investment permitted under
Section 7.7 hereof, provided that in the case of any such merger
or consolidation involving Borrower, Borrower shall be the
surviving corporation; (d) mergers or consolidations entered into
for the purposes of changing the jurisdiction of incorporation of
Borrower or any Subsidiary; provided that if such merger or
consolidation involves Borrower, the successor entity shall
assume all obligations of Borrower hereunder and under the other
Borrower Loan Documents pursuant to documentation satisfactory to
the Majority Lenders; (e) any Subsidiary may merge or consolidate
with or into Borrower or another Subsidiary provided that
Borrower or a Wholly-Owned Subsidiary is the surviving person;
(f) any Subsidiary may merge or consolidate with any other
Subsidiary where the surviving person is not a Wholly-Owned
Subsidiary provided that, after giving effect to such merger or
consolidation, the aggregate of all Restricted Payments made
after the date of this Agreement would not exceed twenty-five
percent (25%) of Borrower's consolidated Net Income for the
period commencing on the date of this Agreement and ending on the
last day of the immediately preceding fiscal quarter; and (g) any
Subsidiary may dissolve or liquidate; provided that after giving
effect to such dissolution or liquidation, the aggregate of all
Restricted Payments made after the date of this Agreement would
not exceed twenty-five percent (25%) of Borrower's consolidated
Net Income for the period commencing on the date of this
Agreement and ending on the last day of the immediately preceding
fiscal quarter; and (h) other sales, leases or other dispositions
of assets made after the date of this Agreement, which on an
aggregate basis for Borrower and the Subsidiaries since the date
of this Agreement, do not exceed an amount equal to ten percent
(10%) of Borrower's consolidated tangible assets as of the last
day of the immediately preceding fiscal quarter of Borrower.
Section 7.3 Indebtedness. Borrower shall not and shall
cause each Subsidiary to not create, incur or become liable for
any Indebtedness except (a) the Loans and Indebtedness hereunder
in respect of the Letters of Credit, (b) existing Indebtedness
reflected on the balance sheets referred to in Section 5.6 hereof
or in Schedule 3 to the Disclosure Letter, (c) current accounts
payable or accrued or other current liabilities (other than
liabilities for borrowed monies) incurred by Borrower or such
Subsidiary in the ordinary course of business, (d) Subordinated
Indebtedness, (e) Indebtedness of Borrower owing to Subsidiaries,
Indebtedness of a Subsidiary owing to Borrower, and Indebtedness
of a Subsidiary owing to another Subsidiary, in each case solely
to the extent such Indebtedness constitutes a permitted
Investment under Section 7.7 hereof and (f) additional
Indebtedness secured by Purchase Money Liens or evidenced by
Capital Leases not to exceed in the aggregate for Borrower and
all Subsidiaries at any time an amount equal to fifty percent
(50%) of Borrower's consolidated net book value of all property,
plant and equipment as at the end of the immediately preceding
fiscal quarter; (g) Permitted Swap Obligations; (h) Indebtedness
permitted under Section 7.4 or Sections 7.5(a) through and
including Section 7.5(e) hereof; and (i) Indebtedness in addition
to that set forth above is in an amount which when aggregated
with the obligations described in Section 7.5(f) hereof does not
exceed fifteen percent (15%) of Borrower's consolidated Tangible
Net Worth as of the end of the immediately preceding fiscal
quarter.
Section 7.4 Foreign Subsidiary Indebtedness. Without
limiting the restrictions set forth in Section 7.3 above,
Borrower shall not permit the Indebtedness of any Foreign
Subsidiary (a) when taken together with the Indebtedness of all
Foreign Subsidiaries, to exceed at any time the sum of Forty
Million Dollars ($40,000,000), and (b) to be evidenced by
instruments or documents containing terms and conditions more
restrictive than the terms and conditions contained in this
Agreement. As used herein, "Foreign Subsidiary" shall mean any
Subsidiary organized under the laws of any jurisdiction other
than the United States or any of its constituent states.
Section 7.5 Guaranties, Etc. Borrower shall not and shall
cause each Subsidiary to not assume, guaranty, endorse or
otherwise become directly or contingently liable for, nor
obligated to purchase, pay or provide funds for payment of, any
obligation or Indebtedness of any other person, except (a) by
endorsement of negotiable instruments for deposit or collection
or by similar transaction in the ordinary course of business; or
(b) in the case of Borrower, a guaranty of any Indebtedness of
any Subsidiary permitted under Section 7.3 hereof; (c) in the
case of a Subsidiary, a guaranty of any Indebtedness of Borrower
permitted under Section 7.3 hereof other than Subordinated
Indebtedness; or (d) in the case of a Subsidiary, a guaranty of
any Indebtedness of another Subsidiary permitted under Section
7.3 hereof provided, that the percentage of Borrower's direct or
indirect ownership interest in the Subsidiary providing the
guaranty is not greater than the percentage of Borrower's direct
or indirect ownership interest in the Subsidiary whose
obligations are being guaranteed; (e) guaranty obligations
existing on the date hereof and described on Schedule 6 to the
Disclosure Letter; and (f) guaranty obligations in addition those
described above in an amount which when aggregated with the
obligations described in Section 7.3(i) hereof does not exceed
fifteen percent (15%) of Borrower's consolidated Tangible Net
Worth as of the end of the immediately preceding fiscal quarter.
Section 7.6 Liens. Borrower shall not and shall cause each
Subsidiary to not create, assume or suffer to exist any Lien on
any of its assets, except (a) existing Liens reflected in the
balance sheets referred to in Section 5.6 hereof, or otherwise
disclosed on Schedule 4 to the Disclosure Letter, (b) Purchase
Money Liens, (c) Liens on the property of any corporation at the
time such corporation becomes a Subsidiary or such corporation is
acquired by, consolidated with or merged into Borrower or a
Subsidiary, and Liens on any property at the time acquired by
Borrower a Subsidiary, provided, in each case, that such Lien was
not incurred in contemplation of such transaction; (d) any Lien
securing renewed, extended or refunded Indebtedness secured by a
Lien prior to such renewal, extension or refunding permitted
under this Section 7.6, provided that the principal amount of
such Indebtedness outstanding at the time of such renewal,
extension or refunding is not increased and such Lien is not
extended to any new property (other than pursuant to its original
terms); (e) Liens in respect of judgments or judicial attachment
liens which secure Indebtedness not exceeding Five Million
Dollars ($5,000,000) in the aggregate at any one time
outstanding; (f) leases and subleases of surplus property at fair
market rental values where Borrower or a Subsidiary is the lessor
or sublessor, provided that such leases and subleases do not in
the aggregate materially interfere with the business of Borrower
and the Subsidiaries taken as a whole; (g) licenses and
sublicenses entered into in the ordinary course of Borrower's or
any Subsidiary's business where Borrower or a Subsidiary is the
licensor or sublicensor provided that such licenses and
sublicenses do not in the aggregate materially interfere with the
business of Borrower and the Subsidiaries taken as a whole;
(h) Liens in favor of a trustee under any indenture relating to
Subordinated Indebtedness with respect to property in the
possession of the trustee securing only amounts due to the
trustee for its trustee fees and indemnities under such
indenture; and (i) additional Liens which do not at any one time
secure Indebtedness exceeding Five Million Dollars ($5,000,000)
in the aggregate for Borrower and the Subsidiaries.
Section 7.7 Investments. Borrower shall not and shall
cause each Subsidiary to not purchase or otherwise acquire the
capital stock, assets or obligations of, or any interest in, any
person or make any loan or advance to any person ("Investments"),
except (a) Investments permitted under Borrower's investment
policy as disclosed on Schedule 7 to the Disclosure Letter, as
such investment policy may be amended from time to time to permit
other substantially comparable Investments or other Investments
acceptable to Agent, (b) extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or
lease of goods or services in the ordinary course of business,
(c) loans or advances by any Subsidiary to Borrower,
(d) Investments received in connection with the bankruptcy or
reorganization of customers and suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or
suppliers, arising in the ordinary course of business and in the
exercise of the reasonable business judgment of Borrower or a
Subsidiary; (e) loans or advances to employees in the ordinary
course of business or as part of their overall compensation
package; (f) Investments in Permitted Swap Obligations;
(g) Investments existing as of the date hereof disclosed on
Schedule 5 to the Disclosure Letter, (h) Investments by Borrower
to or in any Subsidiary (or any other person which as a result of
the Investment becomes a Subsidiary) or to or in any joint
venture in which Borrower or any Subsidiary is a joint venturer,
provided that after making any such Investment the total amount
of all Investments made by Borrower after the date of this
Agreement to or in all Subsidiaries and joint ventures (net of
repayments and return of capital) shall not exceed the sum of
Seventy Million Dollars ($70,000,000) and provided, further, that
the total amount of all equity Investments (as opposed to
Investments consisting of loans or advances) made by Borrower
after the date of this Agreement in all Subsidiaries and joint
ventures (net of return of capital) shall not exceed the sum of
Thirty-five Million Dollars ($35,000,000), and (i) any other
Investments in any person by Borrower provided that after making
such additional Investment that the total amount of all such
additional Investments made by Borrower after the date of this
Agreement does not exceed five percent (5%) of Borrower's
Tangible Net Worth as of the end of the immediately preceding
fiscal quarter.
Section 7.8 Transactions With Affiliates. Borrower shall
not, and shall not suffer or permit any Subsidiary to, enter into
any material transaction with any Affiliate of Borrower, except
(a) with respect to any Affiliate which is not a Subsidiary upon
fair and reasonable terms not materially less favorable to
Borrower or such Subsidiary than it would obtain in a comparable
arms-length transaction with a person not an Affiliate of
Borrower or such Subsidiary; and (b) with respect to any
Affiliate which is a Subsidiary, upon fair and reasonable terms.
As used herein, "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.
Section 7.9 Accounting Change. Borrower shall maintain a
fiscal year ending on the Thursday closest to August 31 and shall
not make any significant change in accounting policies or
reporting practices other than changes permitted or required by
GAAP or otherwise required by law.
Section 7.10 ERISA Compliance. Neither Borrower, any
Subsidiary nor any member of the Controlled Group nor any Plan
will: (a) engage in any "prohibited transaction" (as such term
is defined in Section 406 or Section 2003(a) of ERISA) which is
not otherwise exempt and which could result in a material
liability to Borrower or any Subsidiary; (b) incur any
"accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA) whether or not waived which could result in
a material liability to Borrower or any Subsidiary; (c) terminate
any Pension Plan in a manner which could result in a material
liability to Borrower or any Subsidiary or could result in the
imposition of a material Lien on any property of Borrower, any
Subsidiary or any member of the Controlled Group pursuant to
Section 4068 of ERISA; or (d) violate state or federal securities
laws applicable to any Plan in any material respect.
ARTICLE 8
EVENTS OF DEFAULT
Section 8.1 Events of Default. The occurrence of any of
the following events shall constitute an "Event of Default"
hereunder.
(a) Loan Payment Default. Borrower shall fail to pay
when due (i) any amount of principal on any Loan; (ii) any amount
of interest or unused commitment fees and such failure shall
remain unremedied for five (5) Business Days; or (iii) any
amounts due in respect of Letters of Credit and such failure
shall remain unremedied for five (5) Business Days; or
(b) Other Payment Default. Borrower shall fail to pay
any other amount payable by it hereunder or under any Loan
Document and such failure shall remain unremedied for ten (10)
Business Days; or
(c) Breach of Warranty. Any representation or
warranty made or deemed made by Borrower under or in connection
with this Agreement or the other Loan Documents shall prove to
have been incorrect in any material respect when made or deemed
made; or
(d) Breach of Certain Covenants. Borrower shall have
failed to perform or observe any covenant set forth in
Sections 6.3 (in respect of the corporate existence of Borrower
or any Subsidiary), 6.11(e), 6.13 through 6.16 and 7.1 through
7.3 hereof; or
(e) Breach of Other Covenants. Borrower shall fail to
perform or observe any other covenant, obligation or term of this
Agreement or any other Loan Document and such failure shall
remain unremedied for thirty (30) days after the earlier of
(i) the date on which written notice thereof shall have been
given to Borrower by Agent, or (ii) the date upon which a
Responsible Officer knows of such failure; or
(f) Cross-default. Borrower or any Subsidiary shall
fail (i) to pay when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) any Indebtedness
in excess of Ten Million Dollars ($10,000,000) or any interest or
premium thereon and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness, or (ii) to perform any
term or covenant on its part to be performed under any agreement
or instrument relating to any such Indebtedness and required to
be performed and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument,
if the effect of such failure to perform is to accelerate or to
legally and in accordance with the applicable documents permit
the acceleration of the maturity of such Indebtedness; or
(g) Voluntary Bankruptcy, Etc. Borrower or any
Subsidiary shall: (i) file a petition seeking relief for itself
under Title 11 of the United States Code, as now constituted or
hereafter amended, or file an answer consenting to, admitting the
material allegations of or otherwise not controverting, or fail
timely to controvert a petition filed against it seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended; or (ii) file such petition or answer with
respect to relief under the provisions of any other now existing
or future applicable bankruptcy, insolvency, or other similar law
of the United States of America or any state thereof or of any
other country or jurisdiction providing for the reorganization,
winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or
(h) Involuntary Bankruptcy, Etc. An order for relief
shall be entered against Borrower or any Subsidiary under
Title 11 of the United States Code, as now constituted or
hereafter amended, which order is not stayed; or upon the entry
of an order, judgment or decree by operation of law or by a court
having jurisdiction in the premises which is not stayed adjudging
Borrower or any Subsidiary a bankrupt or insolvent under, or
ordering relief against it under, or approving as properly filed
a petition seeking relief against it under the provisions of any
other now existing or future applicable bankruptcy, insolvency or
other similar law of the United States of America or any state
thereof or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or any
arrangement, composition, extension or adjustment with creditors,
or appointing a receiver, liquidator, assignee, sequestrator,
trustee or custodian of Borrower, or any Subsidiary or of any
substantial part of its or their property, or ordering the
reorganization, winding-up or liquidation of its affairs, or upon
the expiration of sixty (60) days after the filing of any
involuntary petition against Borrower or such Subsidiary seeking
any of the relief specified in Section 8.1(g) hereof or this
Section 8.1(h) without the petition being dismissed prior to that
time; or
(i) Insolvency, Etc. Borrower or any Subsidiary shall
(i) make a general assignment for the benefit of its creditors or
(ii) consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, or custodian of all or a
substantial part of the property of Borrower or any Subsidiary,
as the case may be, or (iii) admit in writing its insolvency or
inability to pay its debts generally as they become due, or
(iv) fail generally to pay its debts as they become due, or
(v) take any action (or suffer any action to be taken by its
directors or shareholders) looking to the dissolution or
liquidation of Borrower or any Subsidiary, as the case may be; or
(j) ERISA. Borrower, any Subsidiary or any member of
the Controlled Group shall fail to pay when due an amount or
amounts aggregating in excess of One Million Dollars ($1,000,000)
which it shall have become liable to pay to the PBGC or to a Plan
under Section 515 of ERISA or Title IV of ERISA; or notice of
intent to terminate a Plan or Plans (other than a multi-employer
plan, as defined in Section 4001(3) of ERISA), having aggregate
Unfunded Vested Liabilities in excess of One Million Dollars
($1,000,000) shall be filed under Title IV of ERISA by Borrower,
any Subsidiary, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate
any such Plan or Plans; or
(k) Judgment. One or more final judgments (which are
not subject to appeal by any party) or orders for the payment of
money in excess of Five Million Dollars ($5,000,000) in the
aggregate or its equivalent in another currency shall be rendered
against Borrower or any Subsidiary and such judgments or orders
shall continue unsatisfied and in effect for a period of thirty
(30) consecutive days; or
(l) Government Approvals, Etc. Any Government
Approval or registration or filing with any Governmental
Authority now or hereafter required in connection with the
performance by Borrower of its obligations set forth the Loan
Documents is revoked, withdrawn or withheld or shall fail to
remain in full force and effect, or any act of any Governmental
Authority is taken which, in the reasonable opinion of Agent,
deprives Borrower of any right, privilege or franchise or
substantially restricts the exercise thereof, where such
deprivation or restriction would be likely to have a material
adverse effect on the business, operations or financial condition
of Borrower and the Subsidiaries taken as a whole, and such act
shall not be revoked or rescinded within thirty (30) days after
it shall have become effective; or
(m) Change of Control. If (i) any person or two or
more persons acting in concert, other than Micron Technology,
Inc., shall either acquire beneficial ownership, directly or
indirectly, of, or acquire by contract or otherwise, or enter
into a contract or arrangement which upon consummation will
result in its or their acquisition of, or control over,
securities of Borrower (or other securities convertible into such
securities) representing forty percent (40%) or more of the
combined voting power of all securities of Borrower entitled to
vote in the election of directors; or (ii) during any period of
twelve (12) consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such twelve- (12-)
month period were directors of Borrower shall cease for any
reason to constitute a majority of the Board of Directors of
Borrower unless the persons replacing such individuals were
nominated by the Board of Directors of Borrower.
Section 8.2 Consequences of Default. If an Event of
Default described in Section 8.1(g) or 8.1(h) hereof shall occur
and be continuing, then in any such case, the Total Commitment
and Lender's respective Commitments shall be immediately
terminated and, if any Loans or Letters of Credit shall have been
made or issued, the principal of and interest on the Loans, the
face amounts of all issued and outstanding Letters of Credit, and
all other sums payable by Borrower hereunder and under the other
Loan Documents shall become immediately due and payable all
without protest, presentment, notice or demand, all of which
Borrower expressly waives. If any other Event of Default shall
occur and be continuing, then in any such case and at any time
thereafter so long as any such Event of Default shall be
continuing, Agent may, or shall at the request of the Majority
Lenders, immediately terminate the Total Commitment and Lenders'
respective Commitments and, if any Loans or Letters of Credit
shall have been made, Agent may, or shall at the request of the
Majority Lenders, declare the principal of and the interest on
the Loans and the Notes, the face amounts of all issued and
outstanding Letters of Credit, and all other sums payable by
Borrower hereunder and under the other Loan Documents to be
immediately due and payable, whereupon the same shall become
immediately due and payable all without protest, presentment,
notice, or demand, all of which Borrower expressly waives. Agent
agrees to provide Borrower with prompt notice of any election to
declare the principal of and the interest on the Loans to be
immediately due and payable pursuant to the preceding sentence,
it being agreed that such notice may be provided after any such
acceleration is effective and after Agent and Lenders have
exercised any rights of set-off or recoupment to which they are
entitled hereunder or under applicable law and it being further
agreed that the failure to give such notice shall not affect the
validity of such acceleration, set-off or recoupment. Amounts
paid or received hereunder in respect of issued and outstanding
Letters of Credit which exceed amounts paid by Agent under such
Letters of Credit shall be held (and applied) as cash collateral
to secure the performance of all obligations of Borrower owing to
Agent and Lenders hereunder and under the other Loan Documents.
ARTICLE 9
THE AGENT
Section 9.1 Authorization and Action. Each Lender hereby
appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are
delegated to Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. Agent shall have no duties
or responsibilities except those expressly set forth in this
Agreement. The duties of Agent shall be mechanical and
administrative in nature; Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or the other Loan Documents, expressed
or implied, is intended to or shall be so construed as to impose
upon Agent any obligations in respect of this Agreement or the
other Loan Documents except as expressly set forth herein. As to
any matters not expressly provided for by this Agreement,
including enforcement or collection of the Loans and Indebtedness
owed in respect of the Letters of Credit, Agent shall not be
required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon
all Lenders and any holders of any Note provided that Agent shall
not be required to take any action which exposes Agent to
personal liability or which is contrary to the Loan Documents or
applicable law and provided, further, that without the consent of
Majority Lenders, Agent shall not amend this Agreement or waive
Borrower's compliance with any provision of this Agreement and
provided, further, that without the consent of all Lenders, Agent
shall not release any cash collateral received under
Section 3.2(a) except in accordance with the terms of such
Section and shall not change or modify the Total Commitment
(other than reductions made pursuant to Section 2.4 hereof), any
Lender's Commitment (other than reductions made pursuant to
Section 2.4 hereof), the definition of "Majority Lenders", the
timing or rates of interest payments, the timing or amount of
fees, the timing, amounts or forgiveness of principal payments
due in respect of Loans, the terms of Section 3.2(a)(iii), or the
definition of "Borrowing Base," and provided, further, that the
terms of Section 2.6, Section 2.13(c) hereof, this Article 9 and
Article 10 shall not be amended without the prior written consent
of Agent (acting for its own account). In the absence of
instructions from the Majority Lenders, Agent shall have
authority (but no obligation), in its sole discretion, to take or
not to take any action, unless this Agreement specifically
requires the consent of Lenders or the consent of the Majority
Lenders and any such action or failure to act shall be binding on
all Lenders and on all holders of the Notes. Each Lender and
each holder of any Note shall execute and deliver such additional
instruments as may be necessary or desirable to enable Agent to
exercise its powers hereunder.
Section 9.2 Duties and Obligations.
(a) Neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or
omitted to be taken by it or any of them under or in connection
with this Agreement except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the
foregoing, Agent (i) may treat each Lender which is a party
hereto as the party entitled to receive payments hereunder until
Agent receives written notice of the assignment of such Lender's
interest herein signed by such Lender and made in accordance with
the terms hereof and a written agreement of the assignee that it
is bound hereby as it would have been had it been an original
party hereto, in each case in form satisfactory to Agent;
(ii) may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such experts; (iii) makes no warranty or representation
to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in
connection with this Agreement, the other Loan Documents or in
any instrument or document furnished pursuant hereto or thereto;
(iv) shall not have any duty to ascertain or to inquire as to the
performance of any of the terms, covenants, or conditions of the
Loan Documents on the part of Borrower or as to the use of the
proceeds of any Loan, or the proceeds received in respect of any
Letter of Credit or as to the existence or possible existence of
any Default or Event of Default; (v) shall not be responsible to
any Lender for the due execution, legality, validity,
enforceability, genuineness, effectiveness, or value of this
Agreement or of any instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect to
this Agreement by acting upon any oral or written notice,
consent, certificate or other instrument or writing (which may be
by telegram, facsimile transmission, cable or telex) believed by
it to be genuine and signed or sent by the proper party or
parties or by acting upon any representation or warranty of
Borrower made or deemed to be made hereunder. Agent may execute
any of its duties under this Agreement or any other Loan Document
by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it
selects without gross negligence.
(b) Agent will account to each Lender for its
Percentage Interest of payments of principal of, interest on and
fees in respect of the Loans (other than fees payable to Agent
for its own account) which are received by Agent from Borrower
and will promptly remit to Lenders entitled thereto all such
payments. Agent will transmit to each Lender copies of all
documents received from Borrower pursuant to the requirements of
this Agreement other than documents which by the terms of this
Agreement Borrower is obligated to deliver directly to Lenders.
(c) Each Lender or its assignee organized outside of
the United States shall furnish to Agent in a timely fashion such
documentation (including, but not by way of limitation, IRS
Forms Nos. 1001 and 4224) as may be required by applicable law or
regulation to establish such Lender's status for tax withholding
purposes.
Section 9.3 Dealings Between Agent and Borrower. With
respect to its Commitment and the Loans made by it, Agent shall
have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the
same as though it were not the Agent, and the term "Lender" shall
unless otherwise expressly indicated include Agent in its
individual capacity. Agent may accept deposits from, lend money
to, act and generally engage in any kind of business with
Borrower or any Subsidiary and any person which may do business
with Borrower or any Subsidiary, all as if Agent were not Agent
hereunder and without any duty to account therefor to Lenders.
Section 9.4 Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
Agent or any other Lender and based upon such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based upon such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement.
Section 9.5 Indemnification. Lenders agree to indemnify
Agent (to the extent not reimbursed by Borrower) ratably
according to their respective Percentage Interests from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in any way
relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this
Agreement or any other Loan Document, except any such as result
from Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse Agent
promptly on demand in proportion to its Percentage Interest for
any out-of-pocket expenses, including legal fees, incurred by
Agent in connection with the administration or enforcement of or
the preservation of any rights under this Agreement or any other
Loan Document (to the extent that Agent is not reimbursed for
such expenses by Borrower) including without limitation, expenses
incurred in connection with any Letter of Credit.
Section 9.6 Successor Agent. Agent may give written notice
of resignation at any time to Lenders and Borrower and may be
removed at any time with cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after Agent's
giving of notice of resignation or the Majority Lenders' removal
of Agent, then Agent may on behalf of Lenders, appoint a
successor Agent, which shall be (a) a Lender or (b) another bank
organized under the laws of the United States or of any state
thereof, or any affiliate of such bank, and having a combined
capital and surplus of at least Five Hundred Million Dollars
($500,000,000). Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. Until the acceptance by such a
successor Agent, the retiring Agent shall continue as "Agent"
hereunder. Notwithstanding any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 9
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. Any
company into which Agent may be merged or converted or with which
it may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any
company to which Agent may sell or transfer all or substantially
all of its agency relationships shall be the successor to Agent
without the execution or filing of any paper or further act,
anything herein to the contrary notwithstanding.
ARTICLE 10
RISK PARTICIPATIONS
Section 10.1 Sale of Risk Participations. Agent shall be
deemed to have sold to each Lender (including itself), and each
Lender severally shall be deemed to have unconditionally and
irrevocably purchased from Agent, an undivided risk participation
in each Letter of Credit as of the date such Letter of Credit is
issued. Each risk participation sold hereunder shall be sold to
Lenders in fractional amounts in proportion to their Percentage
Interest.
Section 10.2 Notice of Participations. Via telex,
facsimile transmission, telegram or cable, Agent will advise each
Lender of its respective Percentage Interest of each Letter of
Credit on the same day Agent issues such Letter of Credit as
requested by Borrower pursuant to Article 3 hereof. Said notice
shall contain the following information: (i) the face amount of
the Letter of Credit issued, (ii) the number of such Letter of
Credit, (iii) the date of issuance, and (iv) the maturity or
expiration date of such Letter of Credit. Agent shall not have
any duty to ascertain or to inquire as to the accuracy of any
information furnished by Borrower to Agent in respect of any
Letter of Credit.
Section 10.3 Payment Obligations.
(a) Reimbursements to Agent. In the event Borrower
fails to fully reimburse Agent for amounts disbursed under a
Letter of Credit ("Letter of Credit Payment") by 12:00 noon
(Seattle, Washington time) on the date reimbursement is demanded,
each Lender shall, upon receipt of notice from Agent of such
failure, pay to Agent the amount of such Lender's Percentage
Interest of the face amount of such Letter of Credit Payment, as
the case may be, provided, however, if Borrower pays a portion
but less than all of the face amount of any such Letter of Credit
Payment, Lenders shall pay Agent only their respective Percentage
Interests of the difference between the face amount of the Letter
of Credit Payment and the amount paid by Borrower on account of
such Letter of Credit Payment. Each and every payment to be made
by Lenders to Agent under this Section 10.3(a) shall be made by
federal wire transfer in immediately available funds. If any
Lender receives notice from Agent by 1:00 p.m. (Seattle,
Washington time) on any Business Day of its obligation to make
payments under this subsection, then such Lender shall make such
payment no later than 2:00 p.m. (Seattle, Washington time) on the
day such notice is received. If any Lender receives such notice
after 1:00 p.m. (Seattle, Washington time) on any Business Day,
then such Lender shall make such payment by no later than
1:00 p.m. (Seattle, Washington time) on the next succeeding
Business Day. If any Lender fails to make such payment by the
date and time required, its obligation shall bear interest from
and including the date when such payment was due until paid at
the per annum rate equal to the Federal Funds Rate.
(b) Payments to Lenders. Agent shall promptly remit
to each Lender such Lender's Percentage Interest of any letter of
credit fees or other amounts received from or for the account of
Borrower in respect of any Letter of Credit. In the event Agent
is required to refund any amount which is paid to it or received
by it from or for the account of Borrower, then Lenders, to the
extent they shall have previously received their Percentage
Interest of such amount, agree to repay to Agent their respective
Percentage Interest of such amount.
(c) Reimbursements to Lenders. Borrower agrees to
reimburse any Lender for amounts paid by such Lender to Agent
pursuant to Section 10.3(a) hereof.
ARTICLE 11
MISCELLANEOUS
Section 11.1 No Waiver; Remedies Cumulative. No failure by
Agent or any Lender to exercise, and no delay in exercising, any
right, power or remedy under this Agreement or any other Loan
Document in and of itself shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
remedy under this Agreement or any other Loan Document preclude
any other or further exercise thereof or the exercise of any
other right, power, or remedy. The exercise of any right, power,
or remedy shall in no event constitute a cure or waiver of any
Event of Default under this Agreement or any other Loan Document
nor prejudice the rights of Agent or any Lender in the exercise
of any right hereunder or thereunder. The rights and remedies
provided herein and therein are cumulative and not exclusive of
any right or remedy provided by law.
Section 11.2 Governing Law. This Agreement and the other
Loan Documents shall be governed by and construed in accordance
with the laws of the State of Washington, U.S.A.
Section 11.3 Consent to Jurisdiction. Borrower hereby
irrevocably submits to the nonexclusive jurisdiction of any state
or federal court sitting in Seattle, King County, Washington, in
any action or proceeding brought to enforce or otherwise arising
out of or relating to this Agreement or any other Loan Document
and irrevocably waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of
venue in any such action or proceeding in any such forum, and
hereby further irrevocably waives any claim that any such forum
is an inconvenient forum. Borrower agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in
any other manner provided by law. Nothing in this Section 11.3
shall impair the right of Agent or any other Lender or the holder
of any Note to bring any action or proceeding against Borrower or
its property in the courts of any other jurisdiction, and
Borrower irrevocably submits to the nonexclusive jurisdiction of
the appropriate courts of the jurisdiction in which Borrower is
incorporated or sitting in any place where property or an office
of Borrower is located.
Section 11.4 Waiver of Jury Trial. THE PARTIES HERETO
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, AND AGREE THAT (A) ANY SUCH ACTION OR
PROCEEDING SHALL NOT BE TRIED BEFORE A JURY AND (B) ANY PARTY
HERETO MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY.
Section 11.5 Notices. All notices and other communications
provided for in this Agreement (unless otherwise specified) shall
be in writing (including, without limitation, telex, facsimile
transmission, telegram or cable) and shall be mailed (return
receipt requested, except with respect to notices provided by
Agent to Lenders which may be mailed merely with first class
postage prepaid), or sent or delivered to each party at the
address set forth under its name on the signature pages hereof,
or at such other address as shall be designated by such party in
a written notice to each other party. Except as otherwise
specified all notices sent by a nationally recognized overnight
courier service, if duly given, shall be effective one (1)
Business Day after delivery to such courier service and all other
notices and communications if duly given or made shall be
effective upon receipt.
Section 11.6 Assignment and Participations. This Agreement
shall be binding upon and inure to the benefit of the parties and
their respective Successors and assigns, provided that Borrower
may not assign or otherwise transfer all or any part of its
rights or obligations hereunder or under any other Loan Document
without the prior written consent of Agent and all Lenders, and
any such assignment or transfer purported to be made without such
consent shall be ineffective. Any Lender may at any time sell to
any Eligible Assignee participation interests in its Loans and
Commitment. Such sales may be made without the consent of Agent,
any other Lender or Borrower provided, however, (a) that the
selling Lender shall have provided Borrower with prior written
notice of the sale of any participation interest in any Loan or
in such Lender's Commitment; and (b) that the selling Lender
retains the right to vote as a Lender hereunder in respect of the
interest sold without being bound to obtain the consent of its
participant or to exercise its rights in accordance with
instructions received from its participant (except that the
participant's consent can be required for proposed changes to the
timing or amount of principal payments or changes to the timing,
rate or amount of payments of interest or fees). Any Lender may
pledge or assign all or any part of its interest under the Loan
Documents for security purposes to any Federal Reserve Bank. Any
Lender may assign or otherwise transfer to any Eligible Assignee
all or any part of its interest under the Loan Documents pursuant
to an Assignment and Assumption Agreement, substantially in the
form of Exhibit D hereto (y) without the consent of Agent, any
other Lender, or Borrower to any of the assigning Lender's
affiliates or to any other Lender; or (z) with the prior written
consent of Agent and, if no Event of Default shall have occurred
and be continuing, Borrower, (such consents not to be
unreasonably withheld or delayed) but without the consent of the
other Lenders, to any other Eligible Assignee provided, however,
that in either case no such assignment (as distinguished from the
sale of a participation) other than an assignment of a Lender's
entire interest under the Loan Documents (i) shall be made in an
amount less than Ten Million Dollars ($10,000,000) nor (ii) shall
be made if after giving effect to such assignment the aggregate
amount of the Loans and unused Commitment of the assigning Lender
would be less than Ten Million Dollars ($10,000,000) and
provided, further, that in connection with any assignment (as
distinguished from the sale of a participation) the assigning
Lender shall pay to Agent a fee of Two Thousand Five Hundred
Dollars ($2,500) for each proposed assignee that is not then a
Lender or an affiliate thereof. The assignee of any permitted
sale or assignment (including assignments for security and sales
of participations) shall have the same rights and benefits
against Borrower under the Loan Documents (excepting however, in
the case of sales of participations, the right to grant or
withhold consents or otherwise vote in respect thereof) including
the right of setoff, and in the case of any outright assignment
(as distinguished from an assignment for security or the sale of
a participation) the same obligations in respect thereof, as if
such assignee were an original Lender. Except to the extent
otherwise required by the context of this Agreement, the word
"Lender" where used in this Agreement shall mean and include any
holder of a Note originally issued to a Lender hereunder, and
each such holder shall be bound by and have the benefits of this
Agreement the same as if such holder had been a signatory hereto.
Any outright assignment of a Lender's interest hereunder to
another Lender made in conformance with the terms of this
Section 11.6 shall result in a corresponding adjustment to the
selling and purchasing Lenders' Commitments and Percentage
Interests.
Section 11.7 Borrower's Indemnity. Whether or not the
transactions contemplated hereby shall be consummated, Borrower
shall pay, indemnify and hold each Lender, Agent and each of
their respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including reasonable attorney's fees,
which may include the allocated charges of internal legal
counsel) of any kind or nature whatsoever (collectively,
"Losses") which may at any time (including at any time following
repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such person in favor of
any third-party in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein,
or the transactions contemplated hereby, or any action taken or
omitted by any such person under or in connection with any of the
foregoing, including any Losses resulting from the inaccuracy of
any representation or warranty by Borrower when made or deemed
made by Borrower hereunder and including Losses incurred with
respect to any investigation, litigation or proceeding (including
any insolvency proceeding or appellate proceeding) related to
this Agreement or any other Loan Document or any actual or
proposed use of proceeds of the Loans hereunder, whether or not
any Indemnified Person is a party thereto (all of the foregoing,
collectively the "Indemnified Liabilities"); provided, that
Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified
Person. All amounts owing under this Section 11.8 shall be paid
promptly upon demand. At the election of any Indemnified Person,
Borrower shall defend such Indemnified Person in respect of any
Indemnified Liabilities using legal counsel reasonably
satisfactory to such Indemnified Person at the sole cost and
expense of Borrower.
Section 11.8 Set-off. In addition to any rights and
remedies of the Lenders provided by law, if an Event of Default
exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior
notice to Borrower, any such notice being waived by Borrower to
the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of
Borrower against any and all obligations owing to such Lender,
now or hereafter existing, irrespective of whether or not Agent
or such Lender shall have made demand under this Agreement or any
Loan Document and although such obligations may be contingent or
unmatured. Each Lender agrees promptly to notify Borrower and
Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
Section 11.9 Severability. Any provision of this Agreement
or any other Loan Document which is prohibited or unenforceable
in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the
parties waive any provision of law which renders any provision
hereof prohibited or unenforceable in any respect.
Section 11.10 Survival. The indemnities of Borrower in
favor of Agent and Lenders shall survive indefinitely and,
without limiting the foregoing, shall survive the execution and
delivery of this Agreement and the other Loan Documents, the
making of any Loans, the issuance of any Letters of Credit the
expiration of the Total Commitment and the repayment of all Loans
and other amounts due hereunder.
Section 11.11 Conditions Not Fulfilled. If the Commitments
are not borrowed owing to nonfulfillment of any condition
precedent specified in Article 4, no party hereto shall be
responsible to any other party for any damage or loss by reason
thereof, except that Borrower shall in any event be liable to pay
the fees, Taxes, and expenses for which it is obligated
hereunder. If the conditions precedent specified in Article 4
shall have been satisfied and any Lender (the "Defaulting
Lender") fails to make its Commitment available in accordance
with the terms hereof, neither Agent nor any Lender other than
the Defaulting Lender shall be responsible to Borrower for any
damage or loss by reason thereof, nor shall Borrower or any
Lender other than the Defaulting Lender be excused from its
performance hereunder.
Section 11.12 Entire Agreement; Amendment. This Agreement,
together with the Exhibits and Schedule hereto, the Disclosure
Letter and the letter agreement described in Section 2.13(c)
hereof, comprise the entire agreement of the parties and may not
be amended or modified except by written agreement of Borrower
and Agent executed in conformance with the terms of Section 9.1
hereof. No provision of this Agreement may be waived except in
writing and then only in the specific instance and for the
specific purpose for which given.
Section 11.13 Confidentiality. Each Lender agrees to take
and to cause its affiliates to take normal and reasonable
precautions and exercise due care to maintain the confidentiality
of all confidential information provided to it by Borrower or any
Subsidiary, or by Agent on Borrower's or such Subsidiary's
behalf, under this Agreement or any other Loan Document, and
neither it nor any of its affiliates shall use any such
information other than in connection with or in enforcement of
this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with
Borrower or any Subsidiary; except to the extent such information
(i) was or becomes generally available to the public other than
as a result of disclosure by any Lender, or (ii) was or becomes
available on a non-confidential basis from a source other than
Borrower, provided that such source is not bound by a
confidentiality agreement with Borrower known to Lender;
provided, however, that any Lender may disclose such information
(A) at the request or pursuant to any requirement of any
Governmental Authority to which such Lender is subject or in
connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process,
provided that such Lender shall use its reasonable, good faith
efforts to provide prior written notice (unless prohibited from
doing so by any applicable laws) to Borrower to allow Borrower to
seek a protective order; (C) when required to do so in accordance
with the provisions of any applicable requirement of law; (D) to
the extent reasonably required in connection with any litigation
or proceeding to which Agent, any Lender or their respective
affiliates may be party provided that except as set forth in
clause (E), provided that such Lender shall use its reasonable,
good faith efforts to provide prior written notice (unless
prohibited from doing so by any applicable laws) to Borrower to
allow Borrower to seek a protective order; (E) to the extent
reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors provided
such advisors have a need to know such information; (G) to any
participant or assignee, actual or potential, provided that such
person agrees in writing to keep such information confidential to
the same extent required of Lenders hereunder; (H) as to any
Lender or its affiliate, as expressly permitted under the terms
of any other document or agreement regarding confidentiality to
which Borrower or any Subsidiary is party or is deemed party with
such Lender or such affiliate; and (I) to its affiliates. Upon
the execution and delivery of this Agreement by all the parties,
the confidentiality undertaking set forth in this Section 11.13
shall replace and supersede the terms of any confidentiality
agreement between Borrower and any of Agent or Lenders previously
executed prior to the date of this Agreement and shall survive
the termination of this Agreement for a period of twelve (12)
months.
Section 11.14 Headings. The headings of the various
provisions of this Agreement are for convenience of reference
only, do not constitute a part hereof, and shall not affect the
meaning or construction of any provision hereof.
Section 11.15 Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which taken together shall
constitute one and the same Agreement.
Section 11.16 Oral Agreements Not Enforceable.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT,
OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or agents
thereunto duly authorized as of the date first above written.
BORROWER: MICRON ELECTRONICS, INC.
By /s/T. Xxxx Xxxx
-------------------------------------
T. Xxxx Xxxx
Its Executive Vice President, Finance
& CFO
Address: 000 Xxxx Xxxxxxx Xxxx
Xxxxx, XX 00000
Attn: Chief Financial Officer
Telefax: (000) 000-0000
with a copy to
Address: 000 Xxxx Xxxxxxx Xxxx
Xxxxx, XX 00000
Attn: General Counsel
LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/Xxxxxx X. Xxxx
-----------------------------------
Its Vice President
---------------------------------
Address: Western Wholesale Banking
00000 X.X. Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telefax: (000) 000-0000
UNITED STATES NATIONAL BANK OF OREGON
By /s/Xxxxxx X. Xxxxx
------------------------------------
Its Senior Vice President
---------------------------------
Address: Corporate Banking Division
000 X.X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telefax: (000) 000-0000
ABN AMRO BANK, N.V.
By /s/Xxx-Xxx Miao
------------------------------------
Its Vice President
---------------------------------
By /s/Xxxx Xxxxxx
------------------------------------
Its Senior Vice President
---------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxx-Xxx Miao
Telefax: (000) 000-0000
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By /s/Xxxxxxx X. Xxxxxxxxx
------------------------------------
Its Director
---------------------------------
By /s/Xxxx Xxxxxxxxxx
------------------------------------
Its Vice President
---------------------------------
Address: 00 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telefax: (000) 000-0000
FLEET NATIONAL BANK
By /s/Xxxxx X. Xxxxxx, III
------------------------------------
Its Vice President
---------------------------------
Address: 00 Xxxxx Xxxxxx
XX BOF 00 X
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telefax: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
By /s/ X. X. Xxxxxx
------------------------------------
Its Assistant Vice President
---------------------------------
Address: 000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attn: X.X. Xxxxxx
Telefax: (000) 000-0000
THE BANK OF NOVA SCOTIA
By /s/ Maarten Van Otterloo
------------------------------------
Its Senior Relationship Manager
---------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Maarten Van Otterloo
Telefax: (000) 000-0000
THE SUMITOMO BANK, LIMITED
By /s/Gordo Hirai
------------------------------------
Its Joint General Manager
---------------------------------
Address: 000 X. Xxxxxxxx Xx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Gordo Hirai
Telefax: (000) 000-0000
and:
Address: 0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx
Telefax: (000) 000-0000
AGENT: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By /s/Xxx Xxxx
------------------------------------
Its Vice President
---------------------------------
Address: Seafirst Agency Services
000 Xxxxx Xxxxxx
Xxxxx 00
Xxxxxxx, XX 00000
Attn: Xxx Xxxx
Telefax: (000) 000-0000
CO-AGENTS: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By /s/ Xxxxxx X. Xxxx
------------------------------------
Its Vice President
---------------------------------
Address: Western Wholesale Banking
00000 X.X. Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Telefax: (000) 000-0000
UNITED STATES NATIONAL BANK OF OREGON
By /s/ Xxx Xxxxx
------------------------------------
Its Senior Vice President
---------------------------------
Address: Corporate Banking Division
000 X.X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telefax: (000) 000-0000
EXHIBIT A
PROMISSORY NOTE
$______________ June 27, 0000
Xxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned, MICRON ELECTRONICS,
INC., a Minnesota corporation (the "Borrower"), hereby promises
to pay to the order of ________________________, a _____________
_____________ (the "Lender") on the Maturity Date the unpaid
principal balance of all Loans made by Lender under this Note, in
a maximum amount not to exceed ___________ Million Dollars
($__________), together with interest thereon from the date
hereof until maturity at a per annum rate equal to the Interest
Rate as defined below (changing as the Interest Rate changes),
and, if default shall occur in the payment when due (whether by
acceleration or otherwise) of any principal amount hereunder,
from the maturity of that amount until it is paid in full at a
per annum rate equal to the Adjusted Reference Rate (changing as
the Reference Rate changes), plus two percent (2%).
Notwithstanding anything herein to the contrary, interest shall
not accrue at a rate in excess of the maximum rate permitted by
applicable law.
Borrower further agrees as follows:
1. All payments of principal and interest on this Note
shall be made in immediately available funds to Bank of America
National Trust and Savings Association, as the agent for Lender
(the "Agent"), in accordance with wire transfer instructions as
may be provided to Borrower from time to time, at Agent's
Commercial Loan Service Center, Fifth Avenue Plaza Building, 13th
Floor, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, or at such
other address as Agent shall from time to time designate.
2. As used herein "Interest Rate" shall mean the Adjusted
Reference Rate unless Borrower shall elect to have some or all of
the loans made hereunder accrue interest at an Adjusted LIBOR
Rate as provided in Section 2.7(b) of the Credit Agreement (as
defined below). Accrued but unpaid interest on each Loan
accruing interest at an Adjusted LIBOR Rate shall be paid on the
last day of each Applicable Interest Period, on the date of any
principal payment (to the extent accrued on the principal amount
paid) and at the Maturity Date, and, for each LIBOR Rate Loan
having an Applicable Interest Period longer than three months, on
the 90th day of such Applicable Interest Period or at the end of
the first three months of such Applicable Interest Period, as the
case may be. Accrued but unpaid interest on each Reference Rate
Loan shall be paid on the last Business Day of each calendar
quarter commencing on June 30, 1997 and continuing on the last
Business Day of each calendar quarter thereafter and on the date
of any principal payment (to the extent accrued on the principal
amount paid) and at the Maturity Date. Unpaid interest accruing
on amounts in default shall be payable on demand.
3. This Note is issued under and is subject to the terms
of a Credit Agreement dated as of the date hereof, among Bank of
America National Trust and Savings Association and United States
National Bank of Oregon as co-agents, Bank of America National
Trust and Savings Association, as administrative agent, Lender
and certain other banks as "Lenders" and the undersigned as
"Borrower" (as amended from time to time, the "Credit
Agreement"). Capitalized terms not defined herein have the
meanings set forth in the Credit Agreement.
4. It is expressly provided that if any of the Events of
Default defined in Sections 8.1(g) or (h) of the Credit Agreement
shall occur, the entire unpaid balance of the principal and
interest hereunder shall be immediately due and payable in
accordance with the terms of the Credit Agreement. It is also
expressly provided that upon the occurrence of any other Event of
Default, the entire remaining unpaid balance of the principal and
interest may be declared by Agent to be immediately due and
payable in accordance with the terms of the Credit Agreement.
5. Borrower may repay Reference Rate Loans at any time
without penalty or premium. Prepayment of any LIBOR Rate Loan,
whether voluntary, mandatory, required by Section 2.5(a) of the
Credit Agreement or as the result of Agent's or Lender's
collection efforts, shall be subject to the payment of fees as
described in Section 2.9 of the Credit Agreement.
6. The unpaid principal balance of the Loans made
hereunder shall be the total amount advanced hereunder, less the
amount of the principal payments made hereon. This Note is given
to avoid the execution of an individual note for each Loan by
Lender to Borrower. This Note evidences a revolving credit and,
within the limits and on the conditions set forth in the Credit
Agreement, prior to the Maturity Date Borrower may borrow, repay
and reborrow hereunder. Lender is hereby authorized to record
the date and amount of each Loan it makes hereunder and the date
and amount of each payment of principal and interest thereon on a
schedule annexed hereto and constituting a part of this Note or
maintained in connection herewith. Any such recordation by
Lender shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that the failure
to make any such recordation or any error in any such recordation
shall not affect the obligations of Borrower hereunder.
7. Each maker, surety, guarantor and endorser of this Note
expressly waives all notices, demands for payment, presentations
for payment, notices of intention to accelerate the maturity,
protest and notice of protest.
8. In the event this Note is placed in the hands of an
attorney for collection, or suit is brought on the same, or the
same is collected through bankruptcy or other judicial
proceedings, Borrower agrees and promises to pay reasonable
attorneys' fees and collection costs, including all out-of-pocket
expenses and the allocated costs and disbursements of internal
counsel, incurred by Lender or Agent.
9. This Note has been executed and delivered in and shall
be governed by and construed in accordance with the internal laws
of the State of Washington. Borrower hereby irrevocably submits
to the jurisdiction of any state or federal court sitting in
Seattle, King County, Washington, U.S.A., in any action or
proceeding brought to enforce or otherwise arising out of or
relating to this Note and hereby waives any objection to venue in
any such court and any claim that such forum is an inconvenient
forum.
MICRON ELECTRONICS, INC.
By
------------------------------------
Its
---------------------------------
Schedule 1
to Micron Electronics, Inc. Promissory Note
----------------------------------------------------------------------
Applicable Amount of Unpaid
Amount of Interest Interest Principal Principal Notation
Date Loan Option Period Paid Balance By
----------------------------------------------------------------------
EXHIBIT B
NOTICE OF BORROWING
Reference is hereby made to that certain Credit Agreement by and
among Micron Electronics, Inc., as Borrower, certain banks as Lenders,
Bank of America National Trust and Savings Association d/b/a Seafirst
Bank and United States National Bank of Oregon as co-agents for
Lenders and Bank of America National Trust and Savings Association
d/b/a Seafirst Bank as administrative agent (the "Agent") for the
Lenders dated as of June 27, 1997 (as the same may be amended from
time to time, the "Credit Agreement"). This notice is being given
pursuant to Section 2.3 of the Credit Agreement. The undersigned
hereby advises Agent that it intends to borrow a Loan in the amount of
[AMOUNT OF BORROWING]1 on [PROPOSED DATE OF BORROWING].2
Optional. The undersigned elects to have interest accrue on the
above-referenced Loan from the date made for a period of [SPECIFY
APPLICABLE INTEREST PERIOD]3 at the Adjusted LIBOR Rate.
This notice is irrevocable, constitutes a representation and
warranty by the undersigned that as of the date hereof, the statements
set forth in Article 5 of the Credit Agreement are true and correct
and that no Default or Event of Default (as such words are defined in
the Credit Agreement) has occurred and is continuing.
MICRON ELECTRONICS, INC.
By
-----------------------------------------
Its 4
--------------------------------------
_______________________________
1 The amount specified shall be an integral multiple of One
Million Dollars ($1,000,000) and not less than Five Million
Dollars ($5,000,000).
2 The date of the proposed borrowing may be the same date as
the date of this notice provided this notice is delivered to the
Agent prior to 11:00 o'clock a.m. and provided further that if an
Adjusted LIBOR Rate is selected to accrue as of the proposed date
of borrowing the notice must be delivered prior to 11:00 o'clock
a.m. three Business Days before the requested date of borrowing.
3 The undersigned may select applicable interest periods of
one, two, three or six months provided that no such interest
period may be selected if it extends beyond the Maturity Date as
such term is defined in the Credit Agreement.
4 This notice is to be executed by the Borrower's_______________,
____ ___________, _______________, _________________, or such other
person as may be designated in a writing delivered to the Agent by
the Borrower's _________ ______ or_________________.
EXHIBIT C-1
June 27, 1997
Bank of America National Trust
and Savings Association, as
Administrative Agent
for the Lenders Named
in the Credit Agreement
Bank of America National Trust
and Savings Association and United
States National Bank of Oregon, as
Co-Agents for the Lenders Named
in the Credit Agreement
and
The Lenders Named in
the Credit Agreement
Re: Credit Agreement, dated as of June 27,
1997, among Micron Electronics, Inc., the
Lenders Named therein, Bank of America
National Trust and Savings Association and
United States National Bank of Oregon, as
Co-Agents for such Lenders and Bank of
America National Trust and Savings
Association, as Administrative Agent for
such Lenders
Ladies and Gentlemen:
We have acted as special counsel to Micron
Electronics, Inc., a Minnesota corporation ("Borrower"), in
connection with the negotiation, execution and delivery of
the Credit Agreement dated, as of June 27, 1997 (including
the exhibits and schedules thereto, the "Credit
Agreement"), among Borrower, the Lenders named in the
Credit Agreement (the "Lenders"), Bank of America National
Trust and Savings Association and United States National
Bank of Oregon, as Co-Agents for the Lenders (the "Co-
Agents") and Bank of America National Trust and Savings
Association, as Administrative Agent for the Lenders
("Administrative Agent"). This opinion is rendered to you
pursuant to Section 4.1(c) of the Credit Agreement. All
capitalized terms used but not defined herein shall have
the respective meanings assigned to such terms in the
Credit Agreement.
In rendering the opinions expressed below, we have
examined originals or copies of the following documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the legal opinion of Xxxxxx & Xxxxxxx
LLP, special Minnesota counsel to
Borrower, dated the date hereof; and
(d) a certificate of certain officers of
Borrower as to certain factual matters.
We have also relied upon and obtained from public
officials and officers of Borrower such other certificates
and assurances as we consider necessary for the rendering of
thisopinion. The Credit Agreement and the Notes are
sometimes referred to herein collectively as the "Transaction
Documents."
With your permission and without any verification by
us, we have assumed the following for purposes of rendering
the opinions set forth herein:
(i) The genuineness of all signatures, the legal
capacity of all natural persons to execute
and deliver documents, the authenticity and
completeness of documents submitted to us as
originals and the completeness and conformity
with authentic original documents of all
documents submitted to us as copies, and that
all documents, books and records made
available to us by Borrower are accurate and
complete.
(ii) That there are no agreements or
understandings between or among Borrower,
Administrative Agent, the Co-Agents, the
Lenders of third parties which would expand,
modify or otherwise affect the terms of the
Transaction Documents or the respective
rights or obligations of the parties
thereunder and that the Transaction Documents
correctly and completely set forth the intent
of all parties thereto.
(iii) That all parties to the Transaction
Documents have filed all required franchise
tax returns, if any, and paid all required
taxes, if any, under the California Revenue &
Taxation Code.
(iv) That the Transaction Documents have been duly
authorized, executed and delivered by
Administrative Agent, the Co-Agents and the
Lenders to the extent Administrative Agent,
the Co-Agents or the Lenders are contemplated
to be a party thereto and that each party
thereto has full power, authority and legal
right to enter into and perform the terms and
conditions of the Transaction Documents to be
performed by such party and that the
Transaction Documents constitute legal, valid
and binding obligations of Administrative
Agent, such Co-Agent or such Lender, as
applicable, enforceable against it in
accordance with its terms.
(v) That each Lender is either (i) a "Bank" as
defined in and operating under that certain
act known as the "Bank Act" approved March 1,
1909, as amended, (ii) a bank created and
operating under and pursuant to the laws of
the State of California or of the United
States or (iii) a foreign bank complying with
the criteria set forth in Section 1716 of the
California Financial Code, as amended, and
that the Lenders are therefore exempt from
the restrictions of Section 1 of Article XV
of the California Constitution and related
statutes relating to usury.
(vi) With respect to certain matters of fact, that
the representations and warranties of
Borrower set forth in the Credit Agreement,
the certificates of certain officers of
Borrower delivered to you in connection with
the transactions contemplated by the Credit
Agreement and the certificates of certain
officers of Borrower referred to in paragraph
(d) above are true and correct.
As used in this opinion, the expression "to our
knowledge" or "known to us" with reference to matters of
fact means that during the course of our representation of
Borrower in connection with the Transaction Documents, no
information has come to the attention of the attorneys of
our firm involved in this engagement which would give them
actual knowledge of the existence or absence of such facts;
however, we have made no independent investigation to
determine the existence or absence of such facts, and any
limited inquiry undertaken by us during the preparation of
this opinion should not be regarded as such an
investigation. No inference as to our knowledge of the
existence or absence of any facts underlying any opinion
given "to our knowledge" should be drawn from the fact of
our representation of Borrower.
On the basis of the foregoing and in reliance thereon,
and based upon examination of such questions of law as we
have deemed appropriate, and subject to the assumptions,
exceptions, qualifications, and limitations set forth
herein, we advise you that in our opinion:
1. The Transaction Documents constitute valid
and binding obligations of Borrower,
enforceable against Borrower in accordance
with their terms.
2. The execution and delivery of the Transaction
Documents, the undertaking of the covenants
set forth in Credit Agreement and the
borrowing of Advances in accordance with the
Credit Agreement and repayment of any
Advances by Borrower do not violate or
contravene any United States federal or
California state law, statute, rule or
regulation applicable to Borrower.
3. No consents, approvals, authorizations,
registrations, declarations or filings are
required to be made or obtained by or in
respect of the Borrower (or on its behalf)
with or from any governmental or regulatory
authority or agency of the United States or
the State of California for the due
authorization, execution and delivery by the
Borrower of the Transaction Documents, the
undertaking of the covenants set forth in the
Transaction Documents, the borrowing of
Advances in accordance with the Agreement or
the repayment of any such Advances by the
Borrower.
4. Borrower is not an "investment company," or,
to our knowledge, an "affiliated person" of,
or a "promoter" or "principal underwriter"
for, an "investment company," as such terms
are defined in the Investment Company Act of
1940, as amended.
5. The extension of credit under the Transaction
Documents does not violate the provisions of
Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
The opinions set forth above are subject to the
following exceptions, qualifications, limitations, comments
and additional assumptions:
A. We express no opinion as to any matter
relating to laws of any jurisdiction other
than the laws of the State of California
and the federal laws of the United States,
as such are in effect on the date hereof,
and we have made no inquiry into, and we
express no opinion as to, the statutes,
regulations, treaties, common laws or
other laws of any other nation, state or
jurisdiction. In that regard, we note
that the Transaction Documents purport to
be governed by the laws of the State of
Washington. The opinions expressed herein
concerning the validity, binding effect
and enforceability of the Transaction
Documents are intended to express our
views on those matters as if the
substantive law of the State of California
were applicable. In addition, in
rendering our opinion set forth in
paragraph 1 above, we have relied solely
on the opinion of Xxxxxx & Xxxxxxx LLP, as
to matters of due authorization, execution
and delivery of the Transaction Documents.
B. We express no opinion as to (i) the effect
of any bankruptcy, insolvency,
reorganization, arrangement, fraudulent
conveyance, moratorium or other similar
laws relating to or affecting the rights
of creditors generally, or (ii) the effect
of general principles of equity, including
without limitation, concepts of
materiality, reasonableness, good faith
and fair dealing, and the possible
unavailability of specific performance,
injunctive relief or other equitable
relief, whether considered in a proceeding
in equity or at law.
C. We express no opinion regarding any of (i)
the rights or remedies available to any
party for violations or breaches of any
provisions which are immaterial or the
enforcement of which would be unreasonable
under the then existing circumstances,
(ii) the rights or remedies available to
any party which takes discretionary action
which is arbitrary, unreasonable or
capricioius, or is not taken in good faith
orin a commercially reasonable manner,
whether or not the Transaction Documents
permit such action, or (iii) the
enforceability of any provision deemed to
be "unconscionable" within the meaning of
Section 1670.5 of the California Civil
Code.
D. We express no opinion as to the legality,
validity, binding nature or enforceability
of (i) any provisions in the Transaction
Documents providing for the payment or
reimbursement of costs or expenses or
indemnifying a party, to the extent such
provisions may be held unenforceable as
contrary to public policy, (ii) any
provision of any Transaction Document
insofar as it provides for the payment or
reimbursement of costs and expenses or
indemnification for claims, losses or
liabilities in excess of a reasonable
amount determined by any court or other
tribunal, (iii) any provisions regarding
any party's ability to collect attorneys'
fees and costs in an action involving the
Transaction Documents, if the party is not
the prevailing party in such action (we
call your attention to the effect of
Section 1717 of the California Civil Code,
which provides that, where a contract
permits one party thereto to recover
attorneys' fees, the prevailing party in
any action to enforce any provisions of
the contract shall be entitled to recover
its reasonable attorneys' fees), (iv) any
provisions of the Transaction Documents
imposing penalties or forfeitures, late
payment charges or any increase in
interest rate, upon delinquency in payment
or the occurrence of a default to the
extent they bear no reasonable relation to
the damage suffered by the damaged party,
constitute a penalty or forfeiture or are
otherwise contrary to public policy, or
(v) any provision of the Transaction
Documents to the effect that a statement,
certificate, determination or record shall
be deemed conclusive absent manifest
error.
E. We express no opinion with respect to the
legality, validity, binding nature or
enforceability of (i) any vaguely or
broadly stated waiver, including, without
limitation, the waivers of diligence,
presentment, demand, protest or notice,
(ii) any waivers or consents (whether or
not characterized as a waiver or consent
in the Transaction Documents) relating to
the rights of Borrower or duties owing to
it existing as a matter of law, including,
without limitation, waivers of the
benefits of statutory or constitutional
provisions, to the extent such waivers or
consents are found by courts ot be against
public policy or which are ineffective
pursuant to California statutes and
judicial decisions, or (iii) any waivers
of any statute of limitations to the
extent such waivers are in excess of four
years beyond the statutory period.
F. We express no opinion with respect to the
legality, validity, binding nature or
enforceability of any provision of the
Transaction Documents to the effect that
rights or remedies are not exclusive, that
every right or remedy is cumulative and
may be exercised in addition to any other
right or remedy, that the election of some
particular remedy or remedies does not
preclude recourse to one or more other
remedies or that failure ot exercise or
xxxxx in exercising rights or remedies
will not operate as a waiver of any such
right or remedy.
G. We express no opinion as to any provision
of the Transaction Documents requiring
written amendments or waivers of such
documents insofar as it suggests that oral
or other modifications, amendments or
waivers could not be effectively agreed
upon by the parties or that the doctrine
of promissory estoppel might not apply.
H. Except to the extent specifically set
forth in paragraph 5 above, we express no
opinion as to the applicability or effect
of compliance or non-compliance by any
Lender (or its agent) with any state,
federal or other laws applicable to such
Lender (or its agent) or to the
transactions contemplated by the
Transaction Documents because of the
nature of its business, including its
legal or regulatory status.
I. We express no opinion regarding compliance
or non-compliance (or the effect thereof)
with applicable anti-fraud provisions of
federal or state securities laws, or with
respect to the "Blue Sky" laws of any
state, although in the course of our
representation of the Borrower in
connection with matters to which this
opinion is addressed (without further
investigation), nothing has come to our
attention that would lead us to believe
that, with respect to such matters, any
such provisions of federal or state
securities laws or "Blue Sky" laws would
be applicable.
J. We express no opinion as to the
enforceability or legal effect of any
provision of any Transaction Document
purporting to reinstate, as against any
obligor or guarantor, obligations or
liabilities of such obligor which have
been avoided or which have arisen from
transactions which have been rescinded or
the payment of which has been required to
be returned by any court of competent
jurisdiction.
K. Our opinions in paragraph 2 above are
intended to express our opinion that the
execution, delivery and performance by
Borrower of the Credit Agreement are
neither prohibited by, nor do they subject
Borrower to a fine, penalty or similar
sanction that would be materially adverse
to Borrower, under or any law, rule,
regulation of the State of California or
United States federal law or any order,
writ, judgment, decree, determination or
award of any United States federal or
California state governmental authority
that a lawyer practicing in the State of
California exercising customary
professional diligence would reasonably
recognize to be applicable to Borrower and
the transactions contemplated by the
Transaction Documents; accordingly, our
opinions set forth above are limited by
the foregoing.
L. The opinion speaks only at and as of its
date and is based solely on the facts and
circumstances known to us at and as of
such date. We express no opinion as to
the effect on Administrative Agent's, the
Co-Agents' or any Lender's rights under
the Transaction Documents of any statute,
rule, regulation or other law which is
enacted or becomes effective after, or of
any court decision which changes the law
relevant to such rights which is rendered
after, the date of this opinion or the
conduct of the parties following the
closing of the contemplated transaction.
In addition, in rendering this opinion, we
assume no obligation to revise or
supplement this opinion should the present
laws of the jurisdictions mentioned herein
be changed by legislative action, judicial
decision or otherwise.
This opinion is made with the knowledge and
understanding that you (but no other person) may relay
thereon in entering into the Transaction Documents and is
solely for your benefit, and this opinion may not be
disclosed to or relied upon by any person other than you,
except that (i) this opinion may not be disclosed to
(A) bank regulatory and other governmental authorities
having jurisdiction over you requesting (or requiring) such
disclosure, and (B) prospective assignees and participants
in connection with the potential transfer of all or part of
the Advances or Commitments of any Lender, and (ii) this
opinion may be relied upon by assignees of or participants
in the Advances or Commitments if the assignments or
participations relating thereto are permitted under and
made in accordance with the Transaction Documents; provided
that in no event does this opinion extend to any issue or
matter related to any such assignment or participation or
arising from or out of any such assignment or participation
(as distinct from the subject of the transaction).
Very truly yours,
WILSON, SONSINI, XXXXXXXX & XXXXXX
Professional Corporation
EXHIBIT C-2
(Legal Opinion of Xxxxxx & Whitney)
Bank of America National Trust and Savings Association,
doing business as Seafirst Bank, and its successors and
assigns, as Agent
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Re: Micron Electronics, Inc. Credit Agreement (the
"Agreement") dated as of June 27, 1997, by and among
Micron Electronics, Inc., Bank of America National
Trust and Savings Association and United States
National Bank of Oregon, as Co-Agents for the Lenders,
and Bank of America National Trust and Savings
Association, doing business as Seafirst Bank, as
Administrative Agent for the Lenders, and the Lenders
(as defined in the Agreement)
Ladies and Gentlemen:
We have acted as local counsel to Micron Electronics, Inc.
(the "Company") in connection with the Agreement. This opinion
is being delivered to you pursuant to Section 4.1(c) of the
Agreement. All capitalized terms used herein and not defined
herein have the meanings assigned to them in the Agreement.
We have examined such documents and have reviewed such
questions of law as we have considered necessary and appropriate
for the purposes of our opinions set forth below.
In rendering our opinions set forth below, we have assumed
the authenticity of all documents submitted to us as originals,
the genuineness of all signatures and the conformity to authentic
originals of all documents submitted to us as copies. We have
also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to
agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority
(corporate or otherwise) to execute, deliver and perform such
agreements or instruments, that such agreements or instruments
have been duly authorized by all requisite action (corporate or
otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable
obligations of such parties. As to questions of fact material to
our opinions, we have relied upon certificates of officers of the
Company and of public officials.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Minnesota, with corporate power and authority to own and operate
its property or lease the property it operates and to conduct any
lawful business activity, including its business as described in
the Company's Annual Report on Form 10-K for the fiscal year
ended August 29, 1996.
2. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each U.S.
jurisdiction in which the character of the business conducted by
it or the location of the properties owned or leased by it makes
such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the
financial position of the Company.
3. The Company has corporate power to execute, deliver and
perform the Agreement and the Notes. The execution, delivery and
performance of the Agreement and the Notes have been duly
authorized by all requisite corporate action on the part of the
Company, and the Agreement and the Notes have been duly executed
and delivered by the Company.
Our opinions expressed above are limited to the law of the
State of Minnesota.
The foregoing opinions are being furnished to you solely for
your benefit and may not be relied upon by, nor may copies be
delivered to, any other person, other than the Lenders, without
our prior written consent.
Dated: June 27, 1997
Very truly yours,
Xxxxxx & Xxxxxxx, LLP
EXHIBIT C-3
(Legal Opinion of Xxxxxx X. Xxxxxx)
June 27, 1997
Bank of America National Trust
and Savings Association, as
Administrative Agent
for the Lenders Named
in the Credit Agreement
Bank of America National Trust
and Savings Association and United
States National Bank of Oregon, as
Co-agents for the Lenders Named
in the Credit Agreement
and
The Lenders Named in
the Credit Agreement
Re: Credit Agreement, dated as of June 27, 1997, among
Micron Electronics, Inc., the Lenders Named therein, Bank of
America National Trust and Savings Association and United States
National Bank of Oregon, as Co-Agents for such Lenders and Bank
of America National Trust and Savings Association, as
Administrative Agent for such Lenders
Ladies and Gentlemen:
I am General Counsel of Micron Electronics, Inc., a
Minnesota corporation ("Borrower"), in connection with the
negotiation, execution and delivery of the Credit Agreement dated
as of June 27, 1997 (including the exhibits and schedules
thereto, the "Credit Agreement") among Borrower, the Lenders
named in the Credit Agreement (the "Lenders"), Bank of America
National Trust and Savings Association and United States National
Bank of Oregon, as Co-Agents for the Lenders (the "Co-Agents")
and Bank of America National Trust and Savings Association as
Administrative Agent for the Lenders ("Administrative Agent").
This opinion is rendered to you pursuant to Section 4.1(c) of the
Credit Agreement. All capitalized terms used but not defined
herein shall have the respective meanings assigned to such terms
in the Credit Agreement.
In rendering the opinion expressed herein, I have reviewed
original or copies, certified or otherwise identified to my
satisfaction, of the Credit Agreement and the Notes (the "Credit
Documents"), such documents, corporate records and other
instruments and have made such other investigations and
considered such questions of law as I have deemed necessary or
advisable for the purpose of rendering this opinion. The law
covered by the opinions expressed herein is limited to the
federal law of the United States and the laws of the State of
Idaho.
As used in this opinion, the expression "to my knowledge" or
"known to me" with reference to matters of fact means that during
the course of my representation of Borrower in connection with
the Credit Documents, no information has come to my attention
which would give me actual knowledge of the existence or absence
of such facts; however, I have made no independent investigation
to determine the existence or absence of such facts and any
limited inquiry undertaken by me during the preparation of this
opinion should not be regarded as such an investigation. No
inference as to my knowledge of the existence or absence of any
facts underlying any opinion given "to my knowledge" should be
drawn from the fact of my representation of Borrower.
Specifically in rendering the opinion set forth in paragraph 4
below, I have not made any independent investigation of court
records to determine whether any actions have been filed.
On the basis of the foregoing and in reliance thereon, and
subject to the assumptions, exceptions, qualifications, and
limitations set forth herein, I advise you that in my opinion:
1. The execution, delivery and performance by
Borrower of the Credit Documents and any borrowing
thereunder, and the request for the issuance of any
Letter of Credit thereunder, have been duly authorized
by all necessary corporate action of Borrower, do not
require any shareholder approval or the approval or
consent of any trustee or the holders of any
Indebtedness of Borrower, and, to the best of my
knowledge, do not contravene any law, regulation, rule
or order binding on it or its Articles of Incorporation
or Bylaws and do not contravene the provisions of or
constitute a default under any material indenture,
mortgage, contract or other agreement or instrument to
which Borrower is a party or by which Borrower or any
of its properties may be bound or affected.
2. No consents, approvals, authorizations,
registrations, declarations or filings are required to
be made or obtained by or in respect of the Borrower
(or on its behalf) with or from any governmental or
regulatory authority or agency of the State of Idaho
for the due authorization, execution and delivery by
the Borrower of the Credit Documents, the undertaking
of the covenants set forth in the Credit Documents, the
borrowing of Advances in accordance with the Agreement
or the repayment of any such Advances by the Borrower.
3. The courts of the State of Idaho will give effect
to the parties' choice of law of the State of
Washington to govern the Credit Documents except
insofar as application of the law of the chosen
jurisdiction would be contrary to a fundamental public
policy of Idaho. In my opinion, no provision of the
Credit Documents so violates a fundamental public
policy of the State of Idaho as to render any of the
Credit Documents invalid as a whole or make the
remedies provided in the Credit Documents inadequate
for the practical realization of the principal benefits
intended to be provided thereby.
4. To the best of my knowledge, except as reflected
in the financial statements referred to in Section 4.6
of the Credit Agreement or otherwise set forth on
Schedule 3 to the Disclosure Letter, there are no
actions, proceedings, investigations, or claims against
or affecting Borrower or any Subsidiary now pending
before any court, arbitrator or Governmental Authority
(nor to my knowledge has any thereof been threatened
nor does any basis exist therefor) which if determined
adversely to Borrower or such Subsidiary would be
likely to result in a judgment or order against
Borrower or any Subsidiary for more than Five Million
Dollars ($5,000,000) or to have a material adverse
effect on (a) the business, operations or consolidated
financial condition of Borrower; or (b) the ability of
Borrower to perform its obligations under this
Agreement and the other Loan Documents.
With respect to the opinions expressed in Paragraphs 1 and 2
above, I express no opinion as to any state or federal banking
laws or regulations or other laws or regulations regulating banks
or financial institutions. I express no opinion regarding
compliance or non-compliance (or the effect thereof) with
applicable anti-fraud provisions of federal or state securities
laws or with respect to the "Blue Sky" laws of any state.
This opinion speaks only at and as of its date and is based
solely on the facts and circumstances known to me at and as of
such date. I express no opinion as to the effect on Agent's or
any Bank's rights under the Credit Documents of any statute,
rule, regulation or other law which is enacted or becomes
effective after, or of any court decision which changes the law
relevant to such rights which is rendered after the date of this
opinion or the conduct of the parties following the closing of
the contemplated transaction. In addition, in rendering this
opinion, I assume no obligation to revise or supplement this
opinion should the present laws of the jurisdictions mentioned
herein be changed by legislative action, judicial decision or
otherwise.
This opinion is rendered solely in connection with the
Credit Agreement and shall not be relied upon by the addressees
for any other purpose. No party, other than Agent, Banks or a
potential or actual Participant or Assignee, shall be entitled to
rely on this opinion for any purpose not expressly stated herein,
nor may it be quoted to or relied upon by any other person, other
than Agent, Banks or a potential or actual Participant or
Assignee, or filed with any Governmental Authority, without my
prior written consent.
Very truly yours,
Xxxxxx X. Xxxxxx
Vice President, Legal
and General Counsel
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is
made as of this ____ day of __________, 199__, by and between
___________________ (the "Assignor") and ______________________
_________ (the "Assignee").
RECITALS
A. Micron Electronics, Inc., a Minnesota corporation (the
"Borrower"), Assignor, Assignee, _______________________________,
_______________________________, _______________________________,
_______________________________, _______________________________
and _______________________________, (collectively, the
"Lenders") Bank of America National Trust and Savings Association
d/b/a Seafirst Bank and United States National Bank of Oregon as
co-agents for Lenders and Bank of America National Trust and
Savings Association d/b/a Seafirst Bank as administrative agent
for Lenders (the "Agent") are parties to that certain Credit
Agreement dated as of June 27, 1997 (as the same may be amended,
modified or extended from time to time the "Credit Agreement").
Capitalized terms not otherwise defined herein shall have the
meanings given in the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, Assignor
has a Commitment to make Loans to Borrower under the Credit
Agreement in an aggregate principal amount at any time
outstanding not to exceed ____________________ Dollars
($_____________).
C. Assignor proposes to assign to Assignee [all] [a
portion] of Assignor's rights under the Credit Agreement, and
Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as
follows:
AGREEMENT
1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings given in the Credit
Agreement.
2. Assignment and Assumption. Assignor hereby assigns and
sells to Assignee a _______________ percent (____%) undivided
interest in all of its Loans and in all of its rights under the
Credit Agreement and the other Loan Documents, and Assignee
hereby accepts such assignment from Assignor and assumes a
corresponding _______________ percent (____%) undivided interest
of the obligations of Assignor under the Credit Agreement and the
other Loan Documents. The percentage interest assigned to and
assumed by Assignee from Assignor as set forth in the preceding
sentence is sometimes hereafter referred to as Assignee's
"Assigned Interest." Assignee hereby agrees, for the benefit of
Agent, to be responsible for its Assigned Interest of each
Assignor's obligations to Agent, whether now existing or
hereafter arising, including, but not limited to, the
indemnification obligations arising under Section 9.5 of the
Credit Agreement. Upon the execution and delivery hereof by
Assignor, Assignee, Agent and Borrower and the payment of the
amounts specified in Section 3 hereof required to be paid on the
date hereof (a) Assignee shall enjoy the rights and be obligated
to perform the obligations of a "Lender" under the Credit
Agreement and the other Loan Documents with respect to the
Assigned Interest to the same extent as if Assignee had been the
original Lender with respect thereto and (b) the Commitment of
Assignor and Assignee under the Credit Agreement shall be
$___________ and $___________ respectively. The assignment
provided for herein shall be without recourse to Assignor.
3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, Assignee shall pay to Assignor
on the date hereof in immediately available funds the amount of
$___________, such amount being the product of (a) the Assigned
Interest and (b) principal of and accrued interest on Assignor's
Loans outstanding as of the date hereof. It is understood that
the facility fee paid by Borrower upon the execution of the
Credit Agreement and the unused commitment fees accrued to the
date hereof in respect of the Assigned Interest are for the
account of Assignor and that the unused commitment fees accruing
from and including the date hereof are for the account of
Assignor and Assignee in accordance with their respective
Percentage Interests after giving effect to the assignment and
sale contemplated in Section 2 hereof. Assignor and Assignee
each hereby agree that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the
extent of such other party's interest therein and shall promptly
pay the same to such other party.
4. Non-Reliance on Assignor. Assignor makes no
representation or warranty and assumes no responsibility with
respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Assigned
Interest, the Loans, the Credit Agreement, any other Loan
Document, any other instrument or document furnished pursuant
thereto or in connection therewith or the transactions
contemplated herein or therein except that Assignor represents
and warrants that it is legally authorized to enter into this
Agreement, that it has good title to the interest being assigned
by it and that the interest being assigned by it is not subject
to any liens or claims of others arising by, through or under
Assignor. Assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of Borrower. Assignor assumes no responsibility for the
performance or observance by Borrower of any of its obligations
under the Credit Agreement or any other Loan Document or any
other certificate, instrument or document furnished pursuant
thereto. Assignee confirms and agrees that it has received a
copy of the Credit Agreement, any amendments or waivers thereto
and any other documents furnished pursuant thereto, together with
copies of any financial statements requested by it, and that it
has independently and without reliance on Assignor or Agent, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and
financial condition of Borrower.
5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
6. 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 an original, and all of which when taken together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or agents
thereunto duly authorized as of the date first above written.
ASSIGNOR: ____________________________________
By____________________________________
Its_________________________________
ASSIGNEE: ____________________________________
By____________________________________
Its_________________________________
BORROWER'S CONSENT AND AGREEMENT
Borrower hereby consents to the terms of the foregoing
Agreement. Borrower hereby agrees, as of the date hereof, to
recognize Assignee as a "Lender" under the Credit Agreement and
the other Loan Documents.
BORROWER: MICRON ELECTRONICS, INC.
By____________________________________
Its_________________________________
AGENT'S CONSENT AND AGREEMENT
Agent hereby consents to the terms of the foregoing
Agreement. Agent hereby agrees, as of the date hereof, to
recognize Assignee as a "Lender" under the Credit Agreement and
the other Loan Documents.
AGENT: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By____________________________________
Its_________________________________
