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CREDIT AGREEMENT
DATED AS OF APRIL 9, 1997
AMONG
STORAGE TECHNOLOGY CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
SWINGLINE BANK,
AND
LETTER OF CREDIT ISSUING BANK
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BANCAMERICA SECURITIES, INC.
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS ..................................... 1
1.1 Certain Defined Terms ........................... 1
1.2 Other Interpretive Provisions ................... 19
1.3 Accounting Principles ........................... 20
ARTICLE II THE CREDITS ..................................... 20
2.1 Amounts and Terms of Commitment ................. 20
2.2 Loan Accounts ................................... 21
2.3 Procedure for Borrowing ......................... 21
2.4 Conversion and Continuation Elections ........... 22
2.5 Voluntary Termination or Reduction of Commitments 24
(a) Termination or Reduction of Commitments ..... 24
(b) Automatic Reduction of Swingline Commitment . 24
2.6 Optional Prepayments ............................ 24
2.7 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions ........................... 25
2.8 Repayment ....................................... 25
2.9 Interest ........................................ 25
2.10 Swingline Loans ................................. 26
2.11 Fees ............................................ 28
(a) Commitment Fees ............................ 28
(b) Arrangement Fee ............................. 29
2.12 Computation of Fees and Interest ................ 29
2.13 Payments by the Borrower ........................ 29
2.14 Payments by the Banks to the Agent .............. 30
2.15 Sharing of Payments, Etc. ....................... 31
ARTICLE III THE LETTERS OF CREDIT ........................... 31
3.1 The Letter of Credit Subfacility ................ 31
3.2 Issuance, Amendment and Renewal of Letters of
Credit .......................................... 32
3.3 Existing BofA Letters of Credit; Risk
Participations, Drawings and Reimbursements ..... 34
3.4 Repayment of Participations ..................... 36
3.5 Role of the Issuing Bank ........................ 37
3.6 Obligations Absolute ............................ 38
3.7 Cash Collateral Pledge .......................... 39
3.8 Letter of Credit Fees ........................... 39
3.9 Uniform Customs and Practice .................... 40
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY .......... 40
4.1 Taxes ........................................... 40
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Section Page
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4.2 Illegality ...................................... 42
4.3 Increased Costs and Reduction of Return ......... 42
4.4 Funding Losses .................................. 43
4.5 Inability to Determine Rates .................... 43
4.6 Survival ........................................ 44
4.7 Notice of Claims ................................ 44
ARTICLE V CONDITIONS PRECEDENT ............................ 44
5.1 Conditions of Initial Credit Extensions ......... 44
(a) Credit Agreement and Notes .................. 44
(b) Resolutions; Incumbency ..................... 44
(c) Organization Documents; Good Standing ....... 45
(d) Legal Opinions .............................. 45
(e) Payment of Fees ............................. 45
(f) Certificate ................................. 45
(g) Prior Loan Documents ........................ 45
(h) Other Documents ............................. 45
5.2 Conditions to All Credit Extensions ............. 45
(a) Notice, Application ......................... 46
(b) Continuation of Representations and
Warranties .................................. 46
(c) No Existing Default ......................... 46
(d) Cash Collateral ............................. 46
ARTICLE VI REPRESENTATIONS AND WARRANTIES .................. 46
6.1 Corporate Existence and Power ................... 46
6.2 Corporate Authorization; No Contravention ....... 47
6.3 Governmental Authorization ...................... 47
6.4 Binding Effect .................................. 47
6.5 Litigation ...................................... 48
6.6 No Default ...................................... 48
6.7 ERISA Compliance ................................ 48
6.8 Use of Proceeds; Margin Regulations ............. 49
6.9 Title to Properties; Liens ...................... 49
6.10 Taxes ........................................... 49
6.11 Financial Condition ............................. 49
6.12 Environmental Matters ........................... 50
6.13 Regulated Entities .............................. 50
6.14 Copyrights, Patents, Trademarks and
Licenses, Etc. .................................. 50
6.15 Subsidiaries .................................... 50
6.16 Insurance ....................................... 51
6.17 Full Disclosure ................................. 51
6.18 Projections ..................................... 51
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Section Page
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ARTICLE VII AFFIRMATIVE COVENANTS ........................... 51
7.1 Financial Statements ............................ 51
7.2 Certificates; Other Information ................. 52
7.3 Notices ......................................... 52
7.4 Preservation of Corporate Existence, Etc. ....... 53
7.5 Maintenance of Property ......................... 53
7.6 Insurance ....................................... 53
7.7 Payment of Obligations .......................... 53
7.8 Compliance with Laws ............................ 54
7.9 Compliance with ERISA ........................... 54
7.10 Inspection of Property and Books and Records .... 54
7.11 Use of Proceeds ................................. 54
7.12 Disclosure; Further Assurances .................. 54
7.13 Financial Covenants ............................. 55
(a) Maintenance of Consolidated Tangible
Net Worth ................................... 55
(b) Consolidated Net Income ..................... 55
(c) Consolidated Total Leverage Ratio ........... 55
7.14 Patents and Permits ............................. 55
ARTICLE VIII NEGATIVE COVENANTS .............................. 56
8.1 Limitation on Liens ............................. 56
8.2 Disposition of Assets ........................... 58
8.3 Consolidations and Mergers ...................... 58
8.4 Loans and Investments ........................... 59
8.5 Transactions with Affiliates .................... 60
8.6 Use of Proceeds ................................. 60
8.7 Contingent Obligations .......................... 61
8.8 Restricted Payments ............................. 61
8.9 ERISA ........................................... 62
8.10 Change in Business .............................. 62
8.11 Accounting Changes .............................. 62
ARTICLE IX EVENTS OF DEFAULT ............................... 62
9.1 Event of Default ................................ 62
(a) Non-Payment ................................. 62
(b) Representation or Warranty .................. 62
(c) Specific Defaults ........................... 63
(d) Other Defaults .............................. 63
(e) Cross-Default ............................... 63
(f) Insolvency; Voluntary Proceedings ........... 63
(g) Involuntary Proceedings ..................... 63
(h) ERISA ....................................... 64
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Section Page
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(i) Monetary Judgments .......................... 64
(j) Non-Monetary Judgments ...................... 64
(k) Change of Control ........................... 64
(l) Adverse Change .............................. 64
9.2 Remedies ........................................ 64
9.3 Certain Financial Covenant Defaults ............. 65
ARTICLE X THE AGENT ....................................... 65
10.1 Appointment and Authorization; "Agent" .......... 65
10.2 Delegation of Duties ............................ 66
10.3 Liability of Agent .............................. 66
10.4 Reliance by Agent ............................... 66
10.5 Notice of Default ............................... 67
10.6 Credit Decision ................................. 67
10.7 Indemnification of Agent ........................ 68
10.8 Agent in Individual Capacity .................... 68
10.9 Successor Agent ................................. 68
10.10 Withholding Tax ................................. 69
ARTICLE XI MISCELLANEOUS ................................... 71
11.1 Amendments and Waivers .......................... 71
11.2 Notices ......................................... 71
11.3 No Waiver; Cumulative Remedies .................. 72
11.4 Costs and Expenses .............................. 72
11.5 Borrower's Indemnification ...................... 73
11.6 Payments Set Aside .............................. 74
11.7 Successors and Assigns .......................... 74
11.8 Assignments, Participations, Etc. ............... 74
11.9 Confidentiality ................................. 76
11.10 Set-off ......................................... 76
11.11 Automatic Debits of Fees ........................ 76
11.12 Notification of Addresses, Lending Offices, Etc. 77
11.13 Counterparts .................................... 77
11.14 Severability .................................... 77
11.15 No Third Parties Benefited ...................... 77
11.16 Governing Law and Jurisdiction .................. 77
11.17 Waiver of Jury Trial ............................ 78
11.18 Entire Agreement ................................ 78
11.19 Certain Closing Date Transitional Matters ....... 78
11.20 Termination of Prior Loan Documents ............. 79
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SCHEDULES
Schedule 2.1 Commitments and Pro Rata Shares
Schedule 2.9(e) Applicable Margin
Schedule 2.11(a) Commitment Fees
Schedule 3.3(a) Existing BofA Letters of Credit
Schedule 6.5 Litigation
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.15 Subsidiaries and Minority Interests
Schedule 6.16 Insurance Matters
Schedule 8.1(i) Permitted Liens
Schedule 8.2 Permitted Dispositions
Schedule 8.4(f) Permitted Investments
Schedule 8.7(e) Contingent Obligations
Schedule 11.2 Addresses for Notices; Lending Offices
Schedule 11.19 Closing Date Transitional Matters
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Shearman & Sterling
Exhibit D-2 Form of Legal Opinion of Internal Borrower's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
v
CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of April 9, 1997, among
Storage Technology Corporation, a Delaware corporation ("the Borrower"), the
several financial institutions from time to time party to this Credit
Agreement (individually, a "Bank"; collectively, the "Banks"), and Bank of
America National Trust and Savings Association, as swingline bank, letter of
credit issuing bank and as agent for the Banks.
WHEREAS, the Borrower, Storage Technology de Puerto Rico, Inc., the
Agent and certain financial institutions (the "Original Banks") were parties
to that certain Second Amended and Restated Credit Agreement dated as of
March 28, 1996 (as modified, the "Prior Credit Agreement") and certain other
documents executed in connection therewith (together with the Prior Credit
Agreement, referred to at times as the "Prior Loan Documents);
WHEREAS, the Borrower has requested that the Agent and the Original
Banks terminate the Prior Credit Agreement and the other Prior Loan Documents
in order to enter into this Credit Agreement and the Loan Documents with the
parties hereto;
WHEREAS, the Banks are willing to extend certain credit facilities to
the Borrower on the basis of this Credit Agreement and the Loan Documents and
to facilitate the termination of the Prior Credit Agreement and the other
Prior Loan Documents as provided in this Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in
(a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Borrower or its Subsidiary is the
surviving entity.
1
"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.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 10.9.
"Agent-Related Persons" means BofA and any successor agent
arising under Section 10.9 and any successor letter of credit issuing
bank hereunder, together with their respective Affiliates (including, in
the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth
on Schedule 11.2 or such other address as the Agent may from time to
time specify.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to the commitment fee
payable hereunder, the amount set forth opposite the indicated level
below the heading "Commitment Fee" in the pricing grid set forth on
Schedule 2.11(a) in accordance with the parameters for calculations of
such amount also set forth in Section 2.11(a).
"Applicable Margin" means the amount set forth opposite the
indicated level below the heading "Base Rate Spread" or "Offshore Rate
Spread," as appropriate, in the pricing grid set forth in Schedule
2.9(e) in accordance with the parameters for calculations of such amount
also set forth in Section 2.9(e).
"Arranger" means BancAmerica Securities, Inc., a Delaware
corporation.
"Assignee" has the meaning specified in subsection 11.8(a).
"Attorney Costs" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal
legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include BofA, including in its
capacity as Issuing Bank and Swingline Bank; for purposes of
clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Banks due to its status as
Issuing Bank and Swingline Bank, its status as such will be specifically
referenced.
2
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978
(11 U.S.C. Section101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
in San Francisco, California, as its "reference rate." (The "reference
rate" is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Revolving Loan, a Swingline Loan or an
L/C Advance, that bears interest based on the Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrower" has the meaning specified in the introductory clause
of this Agreement.
"Borrowing" means a borrowing hereunder consisting of Revolving
Loans of the same Type made to the Borrower on the same day by the Banks
under Article II, or Swingline Loans of the same Type made to the
Borrower on the same day by the Swingline Bank under Article II and, in
each case, other than for Base Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on
which dealings are carried on in the applicable offshore Dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Lease" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would,
at the time a
3
determination is made, be required to be recorded as a capital lease in
respect of which such Person is liable as lessee.
"Cash Collateralize" means, as provided in Section 3.7 hereof, to
pledge and deposit with or deliver to the Agent, for the benefit of the
Agent, the Issuing Bank, the Swingline Bank and the Banks, as collateral
for the Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Agent, the
Swingline Bank and the Issuing Bank (which documents are hereby
consented to by the Banks). Derivatives of such term shall have
corresponding meanings.
"Change of Control" means the occurrence, after the date of this
Agreement, of any of the following: (a) any Person or two or more
Persons acting in concert acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Exchange Act), directly or
indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing 30% or more of the
combined voting power of all securities of the Borrower entitled to vote
in the election of directors; or (b) during any period of up to 12
consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 12-month period were directors of the Borrower
ceasing for any reason to constitute a majority of the Board of
Directors of the Borrower unless the Persons replacing such individuals
were nominated by the Board of Directors of the Borrower; or (c) any
Person or two or more Persons acting in concert acquiring by contract or
otherwise, or entering into a contract or arrangement which upon
consummation will result in its or their acquisition of, or control
over, securities of the Borrower (or other securities convertible into
such securities) representing 30% or more of the combined voting power
of all securities of the Borrower entitled to vote in the election of
directors.
"Closing Date" means the date on which all conditions precedent
set forth in Section 5.1 are satisfied or waived by all Banks (or, in
the case of subsection 5.1(e), waived by the Person entitled to receive
such payment).
"Closing Date Percentage" has the meaning specified in Section
11.19.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in
Section 2.1.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C.
"Consolidated" and any derivative thereof each means, with
reference to the accounts or
4
financial reports of any Person, the consolidated accounts or financial
reports of such Person and each Subsidiary of such Person determined in
accordance with GAAP.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or provide funds
for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or otherwise to assure or hold harmless the holder of any
such primary obligation against loss in respect thereof; (b) with
respect to primary obligations of a primary obligor in connection with
any synthetic lease or similar off balance sheet lease transaction or
securitization transaction (each of (a) and (b) a "Guaranty
Obligation"), (c) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings or payments; (d) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the primary purpose of the contract or other
related document or obligation requires that payment for such materials,
supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed
or tendered, or (e) in respect of any Swap Contract. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be
deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof, and in the case of other Contingent
Obligations, shall be equal to the maximum reasonably anticipated
liability in respect thereof. Notwithstanding anything to the contrary
herein, Contingent Obligations shall not include sales of Permitted
Receivables (and books, chattel paper, records, and software relating to
the Permitted Receivables) sold pursuant to the Permitted Receivables
Purchase Facility and recourse or repurchase obligations thereunder.
"Contractual Obligation" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, the Borrower (a) converts Loans of one Type to another
Type, or
5
(b) continues as Loans of the same Type, but with a new Interest Period,
Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any
Revolving Loans or Swingline Loans hereunder, and (b) the Issuance of
any Letters of Credit hereunder (including the Existing BofA Letters of
Credit).
"Default" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Dollars," "dollars" and "$" each mean lawful money of the United
States.
"EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the Net Income (or Net Loss) for such period plus
(b) all amounts treated as expenses for depreciation, interest and the
amortization of intangibles of any kind to the extent included in the
determination of such Net Income (or Net Loss), plus (c) all accrued
taxes on or measured by income to the extent included in the
determination of such Net Income (or Net Loss).
"Effective Amount" means (a) with respect to any Revolving Loans
or Swingline Loans, as the case may be, on any date, the aggregate
outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Revolving Loans or Swingline
Loans occurring on such date; and (b) with respect to any outstanding
L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any Issuances of Letters of Credit occurring
on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements
of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Eligible Assignee" means (a) 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 $200,000,000; (b) 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 $200,000,000, provided that such bank is
acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
6
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate."
"Event of Default" means any of the events or circumstances
specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934.
"Existing BofA Letters of Credit" means the letters of credit
described in Schedule 3.3(a).
7
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York with
respect to the preceding Business Day opposite the caption "Federal
Funds (Effective)"; or, if for any relevant day such rate is not so
published with respect to any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Agent of the
rates for the last transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the
Agent.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession),
which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition
of "Contingent Obligation."
"Honor Date" means each date that any amount is paid by the
Issuing Bank under any Letter of Credit.
"Indebtedness" of any Person means, 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 reimbursement or payment obligations
(contingent or otherwise) with respect to Surety 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, or incurred
8
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; (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 Guaranty Obligations in
respect of indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above.
Notwithstanding anything to the contrary herein, Indebtedness shall not
include sales of Permitted Receivables (and books, chattel paper,
records and software relating to the Permitted Receivables) sold
pursuant to the Permitted Receivables Purchase Facility and recourse or
repurchase obligations thereunder. For all purposes of this Agreement,
the Indebtedness of any Person shall include all recourse Indebtedness
of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member.
"Indemnified Liabilities" has the meaning specified in
Section 11.5.
"Indemnified Person" has the meaning specified in Section 11.5.
"Independent Auditor" has the meaning specified in subsection
7.1(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in either case undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such
Loan, (b) as to any Base Rate Loan other than a Swingline Loan, the last
Business Day of each calendar quarter and each date such Loan is
converted into another Type, and (c) as to any Base Rate Loans which are
Swingline Loans, the Business Day agreed upon by the Borrower and the
Swingline Bank which shall not be later than the seventh Business Day
following the Borrowing Date thereof; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, the date
that falls three months after the beginning of such Interest
9
Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Borrower in its Notice
of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall
be extended to the following Business Day unless the result
of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period for any Loan shall extend
beyond the Revolving Termination Date.
"Investments" has the meaning specified in Section 8.4.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.1(a).
"Issue" means, with respect to any Letter of Credit, to
incorporate the Existing BofA Letters of Credit into this Agreement, or
to issue or to extend the expiry of, or to renew or increase the amount
of, such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuing Bank" means BofA in its capacity as issuer of one or
more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under subsection 10.1(b) or Section 10.9.
"Joint Venture" means a single-purpose corporation, partnership,
limited liability company, joint venture or other similar legal
arrangement (whether
10
created by contract or conducted through a separate legal entity) now or
hereafter formed by the Borrower or any of its Subsidiaries with another
Person in order to conduct a common venture or enterprise with such
Person.
"L/C Advance" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application for amendment of
outstanding standby or commercial documentary letters of credit, in the
form as shall at any time be in use at the Issuing Bank, as the Issuing
Bank shall reasonably request.
"L/C Application" means an application for issuances of standby
or commercial documentary letters of credit, in the form as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall reasonably
request.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under subsection 3.3(c).
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit (including the Existing BofA Letters of Credit) from
time to time Issued or outstanding under Article III, in an aggregate
amount not to exceed on any date the amount of $75,000,000, as the same
shall be reduced as a result of a reduction in the L/C Commitment
pursuant to Section 2.5; provided that the L/C Commitment is a part of
the combined Commitments, rather than a separate, independent
commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit,
including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of
such Bank specified as its "Lending Office" on Schedule 11.2, or such
other office or offices as such Bank may from time to time notify the
Borrower and the Agent.
11
"Letters of Credit" means the Existing BofA Letters of Credit and
any letters of credit (whether standby letters of credit or commercial
documentary letters of credit) Issued by the Issuing Bank pursuant to
Article III.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank or the Swingline
Bank to the Borrower under Article II or Article III in the form of a
Revolving Loan, Swingline Loan or L/C Advance.
"Loan Documents" means this Agreement, any Notes, the L/C-Related
Documents, and all other documents delivered to the Agent or any Bank in
connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability
of the Borrower to perform under any Loan Document and to avoid any
Event of Default; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower of any
Loan Document.
"Material Subsidiary" means any Subsidiary that at any time
either (a) owns or holds title to 5% or more of the Consolidated assets
of the Borrower and its Consolidated Subsidiaries or (b) accounts for 5%
or more of the Consolidated revenue of the Borrower and its Consolidated
Subsidiaries, in each case as determined in accordance with GAAP.
"Multicurrency Note Purchase Facility" means the facility
pursuant to the Contingent Multicurrency Note Purchase Commitment
Agreement dated as of December 12, 1996 (as amended, restated, modified
or supplemented from time to time) between Borrower and BofA, whereby
BofA has agreed to purchase
12
certain notes of the Borrower subject, in certain cases, to
collateralization in cash and other investments.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Borrower or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"Net Income" means, with respect to any Person for any period,
net income of such Person, as determined by such Person in accordance
with GAAP.
"Net Loss" means, with respect to any Person for any period,
negative Net Income of such Person, as determined by such Person in
accordance with GAAP.
"Note" means a promissory note executed by the Borrower in favor
of a Bank pursuant to subsection 2.2(b), in substantially the form of
Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Borrower to any Bank, the Issuing Bank, the Swingline Bank, the
Agent, or any Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become
due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined
by the Agent as follows:
Offshore Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100 of 1%) in effect on
such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve
13
requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by
the Agent to be the arithmetic mean (rounded upward to the next
1/16 of 1%) of the rates of interest per annum notified to the
Agent by BofA as the rate of interest at which Dollar deposits in
the approximate amount of the amount of the Loan to be made or
continued as, or converted into, an Offshore Rate Loan by BofA
and having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their
request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Operating Lease" means, for any Person, any lease of any
property of any kind by that Person as lessee which is not a Capital
Lease.
"Operating Loss" of any Person means, as of the date of
determination, operating losses as calculated in accordance with GAAP.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Original Bank" has the meaning specified in the recitals hereto.
"Original Percentage" has the meaning specified in Section 11.19.
"Participant" has the meaning specified in subsection 11.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case
14
of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five
(5) plan years.
"Permitted Liens" has the meaning specified in Section 8.1.
"Permitted Receivable" shall mean at any time a Receivable which
constitutes an "account," "chattel paper" or a "general intangible" and
any "proceeds" thereof (each as defined in the UCC) and collections
thereon, which has been sold by the Borrower to BofA or any of its
Affiliates pursuant to the Permitted Receivables Purchase Facility with
or without recourse.
"Permitted Receivables Purchase Facility" shall mean that certain
Multicurrency Receivables Transfer Agreement dated January 29, 1996, as
amended, between the Borrower and BofA pursuant to which Permitted
Receivables may be sold or otherwise transferred by the Borrower to BofA
or any Affiliate of BofA, provided, that the aggregate purchase price
paid therefor shall not exceed $40,000,000 (with the aggregate face
value thereof not to exceed at any time outstanding $50,000,000).
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Borrower or any Subsidiary existing or arising under
Swap Contracts, provided that such obligations are (or were) entered
into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any
other entity of whatever nature.
"Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA) which the Borrower sponsors or maintains or to which the
Borrower makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Prior Credit Agreement" has the meaning specified in the
recitals hereto.
"Prior Loan Documents" has the meaning specified in the recitals
hereto.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks (or, if all Commitments have been
terminated, the aggregate principal amount of such Bank's Loans divided
by the aggregate principal amount of the Loans then held by all Banks).
The initial Pro Rata Share of each Bank is set
15
forth opposite such Bank's name in Schedule 2.1 under the heading Pro
Rata Share.
"Receivable" means any right to payment from an account
receivable obligor, arising from the sale of goods or services or the
licensing of intellectual property rights by the Borrower in the
ordinary course of its business.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Required Banks" means at any time Banks then holding at least
66-2/3% of the aggregate amount of the Commitments or, if no Commitments
are outstanding, Banks then having at least 66-2/3% of the then
aggregate unpaid principal amount of the Loans (including the Swingline
Loans).
"Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of
its property is subject.
"Responsible Officer" means, with respect to the Borrower, the
chief executive officer, the president, any vice president, the
treasurer, chief operating officer or chief financial officer, assistant
treasurer, or the secretary of the Borrower, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer,
assistant treasurer or the treasurer of the Borrower, or any other
officer having substantially the same authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.1, and
may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type" of
Revolving Loan).
"Revolving Termination Date" means the earlier to occur of:
(a) May 31, 2000; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Subordinated Indebtedness" means Indebtedness which is expressly
subordinated to the Obligations on terms consented to in writing by the
Required Banks.
16
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture, trust or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Borrower.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Swap Contract" means 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.
"Swingline Bank" means BofA.
"Swingline Commitment" has the meaning specified in
Section 2.10(a).
"Swingline Loan" has the meaning specified in Section 2.10(a).
"Tangible Net Worth" means, with respect to any Person as of any
date of determination, Total Assets of such Person as of such date minus
Total Liabilities of such Person as of such date and minus the carrying
value of (a) goodwill, organizational expenses, patents, patent
applications, trademarks, trademark applications, trade names, service
marks, service xxxx applications, copyrights, designs and other
intellectual property and licenses therefor and rights therein, and
other similar intangibles, (b) all amortizing debt issuance expenses
carried as an asset, (c) all reserves carried and not deducted from
assets or not reflected as a liability, and (d) cash held in a sinking
or other analogous fund established for the purpose of redemption,
retirement or prepayment of any capital stock or any Indebtedness or
Contingent Obligation, if no offsetting liability exists with respect to
such Indebtedness or Contingent Obligation on the balance sheet of such
Person.
"Taxes" means any and all present or future taxes (including any
taxes on any additional amounts required to be paid to the Agent or the
Banks), levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges, and all liabilities with respect
thereto, excluding, in the case of each Bank and the
17
Agent, respectively, (a) taxes imposed on its income by the United
States and taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank or the Agent
(as the case may be) is organized or any political subdivision thereof,
and (b) taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Bank's Lending Office, or any political
subdivision thereof.
"Total Assets" of any Person means all property, whether real,
personal, tangible, intangible or otherwise, which, in accordance with
GAAP, should be included in determining total assets as shown on the
assets portion of a balance sheet of such Person.
"Total Capital" of any Person means the sum of the Consolidated
Tangible Net Worth of such Person and Subordinated Indebtedness of such
Person. Notwithstanding anything to the contrary herein, Subordinated
Indebtedness may only be included in Total Capital to the extent such
Subordinated Indebtedness remains subordinated to the Obligations in the
manner consented to by the Agent and the Required Banks.
"Total Leverage Ratio" means, with respect to any Person, the
ratio that (i) Total Liabilities less Subordinated Indebtedness of such
Person bears to (ii) Total Capital of such Person. Notwithstanding
anything to the contrary herein, Subordinated Indebtedness may only be
subtracted from Total Liabilities in clause (i) to the extent such
Subordinated Indebtedness remains subordinated to the Obligations, in
the manner consented to by the Agent and the Required Banks.
"Total Liabilities" of any Person means all obligations,
including, without limitation, all Indebtedness (other than Guaranty
Obligations) of such Person, which, in accordance with GAAP, should be
included in determining total liabilities as shown on the liabilities
portion of a balance sheet of such Person.
"Type" has the meaning specified in the definition of "Revolving
Loan."
"UCC" means the Uniform Commercial Code as in effect in the State
of California.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
"Wholly Owned Subsidiary" means any corporation in which 100% of
the capital stock of each class having ordinary voting power, and 100%
of the capital
18
stock of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by
the Borrower, or by one or more of the other Wholly Owned Subsidiaries,
or both; provided that, as to foreign Subsidiaries this definition means
any corporation in which at least 99% of the capital stock of each class
having ordinary voting power and at least 99% of the capital stock of
every other class, at the time as of which any determination is made, in
each case is owned beneficially and of record by the Borrower or one or
more of the other Wholly Owned Subsidiaries or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(a) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(b) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(iv) The term "property" includes any kind of property or
asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in
19
accordance with their terms. Unless otherwise expressly provided, any
reference to any action of the Agent, the Issuing Bank, the Swingline Bank or
the Banks by way of consent, approval or waiver shall be deemed modified by
the phrase "in its/their sole discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among the Agent, the Issuing Bank, the Swingline Bank, the
Borrower and the other parties, have been reviewed by counsel to the Agent,
the Borrower and such other parties, and are the product of all parties.
Accordingly, they shall not be construed against the Banks, the Issuing Bank,
the Swingline Bank or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Borrower.
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms of Commitment. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Borrower
(each such loan, a "Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in
an aggregate amount not to exceed at any time outstanding the amount set
forth on Schedule 2.1 under the heading "Commitment" (such amount, inclusive
of such Bank's L/C Commitment and, in the case of BofA, its Swingline
Commitment, as the same may be reduced under Section 2.5 and Section 2.7 or
reduced or increased as a result of one or more assignments under
Section 11.8, the Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing of Revolving Loans, (i) the Effective Amount of all
outstanding Revolving Loans, the Effective Amount of all Swingline Loans and
the Effective Amount of all L/C Obligations, shall not at any time exceed the
combined Commitments; and (ii) the Effective Amount of the Revolving Loans of
any Bank and the Effective Amount of all Swingline Loans of any Bank plus the
participation of such Bank in the Effective Amount of all L/C Obligations
shall not at any time exceed such Bank's Commitment (except for BofA, but
solely with respect to its Swingline Commitment). Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.1, prepay under Section 2.6 and
reborrow under this Section 2.1.
20
2.2 Loan Accounts. (a) The Loans made by each Bank (including the
Swingline Bank) and the Letters of Credit Issued by the Issuing Bank shall be
evidenced by one or more accounts or records maintained by such Bank or
Issuing Bank, as the case may be, in the ordinary course of business. The
accounts or records maintained by the Agent, the Issuing Bank and each Bank
(including the Swingline Bank) shall be conclusive absent manifest error of
the amount of the Loans made by the Banks (including the Swingline Bank) to
the Borrower and the Letters of Credit Issued for the account of the
Borrower, and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to
the Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or
in addition to loan accounts. Each such Bank shall endorse on the schedules
annexed to its Notes the date, amount and maturity of each Loan made by it
and the amount of each payment of principal made by the Borrower with respect
thereto. Each such Bank is irrevocably authorized by the Borrower to endorse
its Notes and each Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of a Bank to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any such Note to
such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing of Revolving Loans
shall be made upon the Borrower's irrevocable written notice delivered to the
Agent in the form of a Notice of Borrowing (which notice must be received by
the Agent prior to 9:00 a.m. San Francisco time) (i) three Business Days
prior to the requested Borrowing Date, in the case of Offshore Rate Loans;
and (ii) on the Business Day which is the requested Borrowing Date, in the
case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $10,000,000 or any integral multiple
of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest Period
shall be one month.
provided, however, that with respect to the Borrowing to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Agent not
later than 9:00 a.m. (San
21
Francisco time) one Business Day before the Closing Date and such Borrowing
will consist of Base Rate Loans only.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of
that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Borrower at the
Agent's Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing
Date requested by the Borrower in funds immediately available to the Agent.
The proceeds of all such Loans will then be made available to the Borrower by
the Agent by (i) wire transfer of immediately available funds to the Borrower
at, Xxxxxx Trust, ABA No. 071 000 288, Account No. 0000000, for credit to
Storage Technology Corporation or such other account as the Borrower shall
specify to the Agent or (ii) at the option of the Borrower, by crediting the
account of the Borrower on the books of BofA with the aggregate of the
amounts made available to the Agent by the Banks and, in each case, in like
funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than five different Interest Periods
in effect.
(e) Any Notice of Borrowing received after the time noted in
subsection 2.3(a) but prior to 5:00 p.m. (San Francisco time) on any Business
Day, shall be deemed to have been received prior to 9:00 a.m. (San Francisco
time) on the next Business Day.
2.4 Conversion and Continuation Elections. (a) The Borrower may with
respect to its Loans, upon irrevocable written notice to the Agent in
accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base
Rate Loans, or as of the last day of the applicable Interest Period, in
the case of any other Type of Revolving Loans, to convert any such
Revolving Loans (or any part thereof in an amount not less than
$10,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Revolving Loans of any other Type; or
(ii) elect as of the last day of the applicable Interest
Period, to continue any Revolving Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $10,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans shall
automatically convert into Base
22
Rate Loans, and on and after such date the right of the Borrower to continue
such Revolving Loans as, and convert such Loans into, Offshore Rate Loans
shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 9:00 a.m.
(San Francisco time) with respect to its Revolving Loans at least (i) three
Business Days in advance of the Conversion/Continuation Date, if the
Revolving Loans of the Borrower are to be converted into or continued as
Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the
Revolving Loans of the Borrower are to be converted into Base Rate Loans,
specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Revolving Loans to be
converted or continued;
(C) the Type of Revolving Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans of the Borrower, the Borrower has failed to select timely
a new Interest Period to be applicable to such Offshore Rate Loans or if any
Default or Event of Default then exists, the Borrower shall be deemed to have
elected to convert such Offshore Rate Loans into Base Rate Loans effective as
of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Revolving Loans with respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
existence of a Default or Event of Default, the Borrower may not elect to
have Loans converted into or continued as an Offshore Rate Loans.
(f) After giving effect to any conversion or continuation of
Revolving Loans, unless the Agent shall otherwise consent, there may not be
more than five different Interest Periods for all Loans in effect.
23
2.5 Voluntary Termination or Reduction of Commitments.
(a) Termination or Reduction of Commitments. The Borrower may,
upon not less than five Business Days' prior notice to the Agent, terminate
the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $10,000,000 or any integral multiple of $1,000,000 in
excess thereof; unless, after giving effect thereto and to any prepayments of
any Loans made on the effective date thereof, (a) the Effective Amount of all
Revolving Loans, Swingline Loans and L/C Obligations together would exceed
the amount of the combined Commitments then in effect, or (b) the Effective
Amount of all L/C Obligations then outstanding would exceed the L/C
Commitment. Once reduced in accordance with this Section, the Commitments
may not be increased or reinstated. Any reduction of the Commitments shall
be applied to each Bank's Commitment according to its Pro Rata Share. If and
to the extent specified by the Borrower in the notice to the Agent, some or
all of the reduction in the combined Commitments shall be applied to reduce
the L/C Commitment. All accrued commitment and letter of credit fees to, but
not including, the effective date of any termination of Commitments shall be
paid on the effective date of such termination.
(b) Automatic Reduction of Swingline Commitment. At no time
shall the Swingline Commitment exceed the combined amount of all Commitments,
and any reduction of the combined amount of all Commitments which reduces the
combined amount of all Commitments below the then current amount of the
Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the combined Commitments, as so
reduced, without any action on the part of the Swingline Bank.
2.6 Optional Prepayments. Subject to Section 4.4, the Borrower may,
at any time or from time to time, upon delivery of an irrevocable Notice of
Prepayment to the Agent prior to 9:00 a.m. (San Francisco time) (a) not less
than three Business Days prior to the date of prepayment in the case of
Offshore Rate Loans, and (b) the same day as the date of prepayment in the
case of Base Rate Loans,
(i) ratably prepay Revolving Loans in whole or in part,
in minimum amounts of $10,000,000 or any integral multiple of $1,000,000
in excess thereof, and
(ii) prepay in whole or in part Swingline Loans, in
amounts of $1,000,000 or any integral multiple of $100,000 in excess
thereof, or in other amounts with the consent of the Swingline Bank.
Any notice of prepayment received after 9:00 a.m. (San Francisco
time) on a Business Day but prior to 5:00 p.m. (San Francisco time) on such
Business Day shall be deemed to have been given prior to 9:00 a.m. (San
Francisco time) on the next Business Day. Any such notice of prepayment
shall specify the date and amount of such prepayment and the Type(s) of Loans
to be prepaid.
24
The Agent will promptly notify each Bank of its receipt of any
such notice, and of such Bank's Pro Rata Share of such prepayment other than
for prepayments of Swingline Loans. If any such notice is given the Borrower
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to Section 4.4.
2.7 Mandatory Prepayments of Loans; Mandatory Commitment Reductions.
If on any date on or prior to the Revolving Termination Date the Effective
Amount of L/C Obligations exceeds the L/C Commitment, the Borrower shall Cash
Collateralize on such date the outstanding Letters of Credit in an amount
equal to the excess of the maximum amount then available to be drawn under
the Letters of Credit over the aggregate L/C Commitment. Subject to
Section 4.4, if on any date after giving effect to any Cash Collateralization
made on such date pursuant to the preceding sentence, the Effective Amount of
all Revolving Loans and Swingline Loans then outstanding plus the Effective
Amount of all L/C Obligations exceeds the combined Commitments, the Borrower
shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans, L/C Advances and Swingline Loans (as
necessary) by an amount equal to the applicable excess. Additionally, to the
extent the Borrower receives any payments with respect to purchases of
Permitted Receivables under the Permitted Receivables Purchase Facility from
BofA or any Affiliate, such payments shall be immediately used, without
demand or notice from any Person, by the Borrower to prepay the amount of
Revolving Loans, L/C Advances and Swingline Loans (as necessary) by the
amounts of any such payments.
2.8 Repayment. The Borrower agrees to repay to the Banks on the
Revolving Termination Date the aggregate principal amount of its Loans
(together with accrued interest and fees thereon) outstanding on such date.
Additionally, with respect to Swingline Loans, the Borrower agrees to repay
to the Swingline Bank the principal amount of each Swingline Loan (together
with accrued interest and fees thereon) no later than the seventh Business
Day after the date each such Swingline Loan was made.
2.9 Interest. (a) Each Revolving Loan and Swingline Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base
Rate as the case may be (provided that with respect to Swingline Loans
interest shall only be at the Base Rate unless and until the Swingline Bank
agrees to a different basis pursuant to Section 2.10(a)) and subject also to
the Borrower's right to convert to other Types of Revolving Loans under
Section 2.4), plus the Applicable Margin.
(b) Interest on each Revolving Loan and Swingline Loan of the
Borrower shall be paid by the Borrower in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans
under Section 2.6 or 2.7 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of
any Event of Default, interest shall be paid on demand of the Agent at the
request or with the consent of the Required Banks.
25
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Borrower shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all outstanding Obligations, at
a rate per annum which is determined by adding 2% per annum to the Applicable
Margin then in effect for such Loans and, in the case of Obligations not
subject to an Applicable Margin, at a fluctuating rate per annum equal to the
Base Rate plus 2%; provided, however, that, on and after the expiration of
any Interest Period applicable to any Offshore Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of Default
or after acceleration, bear interest at a fluctuating rate per annum equal to
the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary
to the provisions of any law applicable to such Bank limiting the highest
rate of interest that may be lawfully contracted for, charged or received by
such Bank, and in such event the Borrower shall pay such Bank interest at the
highest rate permitted by applicable law.
(e) Subject to the effect of subsection 2.9(a), the Applicable
Margin will be determined by the Agent from time to time in accordance with
the pricing grid set forth in Schedule 2.9(e) based on the most recent
Compliance Certificate delivered by the Borrower pursuant hereto. Such
determination shall be based on the calculations of the Borrower's EBITDA (on
a rolling four-quarter basis) and Consolidated Total Liabilities to
Consolidated Tangible Net Worth set forth in such Compliance Certificate and
shall apply from the first Business Day after the Agent receives such
Compliance Certificate until and through the Business Day when the Agent
receives the applicable Compliance Certificate for the next fiscal quarter.
The initial Applicable Margin, applicable from the Closing Date
to the date of delivery of the first Compliance Certificate hereunder, shall
be as set forth in the Note to Schedule 2.9(e).
2.10 Swingline Loans.
(a) Subject to the terms and conditions hereof, the Swingline
Bank severally agrees to make a portion of the combined Commitments available
to the Borrower by making swingline loans (individually, a "Swingline Loan";
collectively, the "Swingline Loans") to the Borrower on any Business Day
during the period from the Closing Date to the Revolving Termination Date in
accordance with the procedures set forth in this Section in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000
notwithstanding the fact that such Swingline Loans, when aggregated with the
Swingline Bank's outstanding Revolving Loans, may exceed the Swingline Bank's
Commitment (the amount of such commitment of the Swingline Bank to make
Swingline
26
Loans to the Borrower pursuant to this subsection 2.10(a), as the same shall
be reduced pursuant to subsection 2.5(b) and Section 2.7 or as a result of
any assignment pursuant to Section 11.8, the Swingline Bank's "Swingline
Commitment"); provided, that at no time shall (i) the sum of the Effective
Amount of all Swingline Loans plus the Effective Amount of all Revolving
Loans plus the Effective Amount of all L/C Obligations exceed the total of
all Commitments, or (ii) the Effective Amount of all Swingline Loans exceed
the Swingline Commitment. Additionally, no more than an aggregate of three
Swingline Loans may be outstanding at any one time, and all Swingline Loans
shall at all times be Base Rate Loans unless otherwise agreed to by the
Swingline Bank in its sole discretion. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow
under this subsection 2.10(a), prepay pursuant to Section 2.6 and reborrow
pursuant to this subsection 2.10(a).
(b) Each borrowing of a Swingline Loan shall be made upon the
Borrower's irrevocable written notice to the Agent (with a copy to the
Swingline Bank) in the form of a Notice of Borrowing of any Swingline Loan
requested hereunder specifying (i) the amount to be borrowed, and (ii) the
requested Borrowing date, which must be a Business Day (which notice must be
received by the Swingline Bank and the Agent prior to 9:00 a.m. (San
Francisco time) on the requested Borrowing date; any notice received by the
Swingline Bank after 9:00 a.m. (San Francisco time) on a Business Day but
before 5:00 p.m. (San Francisco time) on such Business Day shall be deemed to
be received by 9:00 a.m. (San Francisco time) on the next Business Day).
Upon receipt of the Notice of Borrowing, the Swingline Bank will
immediately confirm with the Agent (by telephone or in writing) that the
Agent has received a copy of the Notice of Borrowing from the Borrower and,
if not, the Swingline Bank will provide the Agent with a copy thereof.
Unless the Swingline Bank has received notice prior to 11:30 a.m.
on such Borrowing date from the Agent or any Bank (A) directing the Swingline
Bank not to make the requested Swingline Loan as a result of the limitations
set forth in the proviso set forth in the first sentence of
subsection 2.10(a); or (B) that one or more conditions specified in Article V
are not then satisfied; then, subject to the terms and conditions hereof, the
Swingline Bank will, not later than 12:30 p.m. (San Francisco time) on the
Borrowing date specified in such Notice, make the amount of its Swingline
Loan available to the Agent for the account of the Borrower at the Agent's
Payment Office in funds immediately available to the Agent. The proceeds of
such Swingline Loan will then be made available to the Borrower by (i) wire
transfer of immediately available funds to the Borrower at, Xxxxxx Trust, ABA
No. 071 000 288, Account No. 0000000, for credit to Storage Technology
Corporation or such other account as the Borrower shall specify to the Agent
or (ii) at the option of the Borrower by the Agent crediting the account of
the Borrower on the books of BofA with the aggregate of the amounts made
available to the Agent by the Swingline Bank and in like funds as received by
the Agent. Each Borrowing pursuant to this Section shall be in an aggregate
principal amount equal to $1,000,000 or an integral multiple of $100,000 in
excess thereof, unless otherwise agreed by the Swingline Bank.
27
(c) The Borrower agrees to repay any Swingline Loan to the
Swingline Bank when required by Section 2.8.
(d) If any Swingline Loans shall remain outstanding during the
existence of a Default or Event of Default and the Swingline Bank shall in
its sole discretion notify the Agent that the Swingline Bank desires that
such Swingline Loans be converted into Revolving Loans, then the Agent shall
be deemed to have received a Notice of Borrowing from the Borrower pursuant
to Section 2.3 requesting that Base Rate Loans be made pursuant to
Section 2.1 on the first Business Day subsequent to the date of such notice
from the Swingline Bank in an amount equal to the aggregate amount of such
Swingline Loans, and the procedures set forth in subsections 2.3(b) and
2.3(c) shall be followed in making such Base Rate Loans; provided, that such
Base Rate Loans shall be made notwithstanding the Borrower's failure to
comply with subsections 5.2(b) and 5.2(c); and provided, further, that if a
Borrowing of Revolving Loans becomes legally impracticable and if so required
by the Swingline Bank at the time such Revolving Loans are required to be
made by the Banks in accordance with this subsection 2.10(d), each Bank
agrees that in lieu of making Revolving Loans as described in this
subsection 2.10(d), such Bank shall purchase a participation from the
Swingline Bank in the applicable Swingline Loans in an amount equal to such
Bank's Pro Rata Share of such Swingline Loans, and the procedures set forth
in subsections 2.3(b) and 2.3(c) shall be followed in connection with the
purchases of such participations. Upon such purchases of participations the
prepayment requirements of subsection 2.10(d) shall be deemed waived with
respect to such Swingline Loans. The proceeds of such Base Rate Loans, or
participations purchased, shall be applied to repay such Swingline Loans.
A copy of each notice given by the Agent to the Banks pursuant to
this subsection 2.10(d) with respect to the making of Revolving Loans, or the
purchases of participations, shall be promptly delivered by the Agent to the
Borrower. Each Bank's obligation in accordance with this Agreement to make
the Revolving Loans, or purchase the participations, as contemplated by this
subsection 2.10(d), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Swingline Bank, the Borrower or any other Person for any reason whatsoever;
(2) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (3) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.11 Fees. (a) Commitment Fees. In addition to certain fees
described in Section 3.8, the Borrower agrees to pay to the Agent for the
ratable account of each Bank a commitment fee on the average daily unused
portion of such Bank's Commitment, computed on a quarterly basis in arrears
on the last Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Agent, equal to the amount
set forth in the next paragraph. For purposes of calculation of such unused
portion of a Bank's Commitment, (i) the making of any Swingline Loans shall
not be considered a use of a portion of the Swingline Bank's Commitment, and
28
(ii) each Bank's Commitment shall be considered used on any date to the
extent of its participation on such date in any Letter of Credit and any L/C
Advance made by it (exclusive of any Swingline Loans).
Such commitment fee shall accrue from the Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in arrears
on (A) the last Business Day of the period ending on June 30, 1997, (B) on
the last Business Day of each calendar quarter commencing after June 30, 1997
and (C) on the Revolving Termination Date; provided that, in connection with
any reduction or termination of Commitments under Section 2.5 or Section 2.7,
the accrued commitment fee calculated for the period ending on such date
shall also be paid on the date of such reduction or termination. The
commitment fees provided in this subsection shall accrue at all times after
the above-mentioned commencement date, including at any time during which one
or more conditions in Article V are not met.
For the period from the Closing Date through the Business Day
when the Agent receives the Borrower's Compliance Certificate for the fiscal
period ending March 28, 1997, the Applicable Fee Amount will be 0.200%.
Thereafter, the Applicable Fee Amount will be determined by the Agent from
time to time in accordance with the pricing grid set forth in Schedule
2.11(a) based on the most recent Compliance Certificate of the Borrower
delivered by the Borrower pursuant hereto. Such determination shall be based
on the calculations of the Borrower's EBITDA (on a rolling four-quarter
basis) and Consolidated Total Liabilities to Consolidated Tangible Net Worth
set forth in such Compliance Certificate of the Borrower and shall apply from
the first Business Day after the Agent receives such Compliance Certificate
until and through the Business Day when the Agent receives the applicable
Compliance Certificate for the next fiscal quarter as provided herein.
(b) Arrangement Fee. The Borrower will pay the Agent and
Arranger such other fees as are set forth in that certain fee letter dated
March 7, 1997.
2.12 Computation of Fees and Interest. (a) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof to the
last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Banks in the absence of
manifest error.
2.13 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except
as otherwise expressly provided herein, all payments by the Borrower shall be
made to the
29
Agent for the account of the Banks at the Agent's Payment Office, and shall
be made in Dollars and in immediately available funds, no later than
10:30 a.m. (San Francisco time) on the date specified herein. The Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable
share as expressly provided herein) of such payment in like funds as
received. Any payment received by the Agent later than 10:30 a.m. (San
Francisco time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to
the date on which any payment is due to the Banks that the Borrower will not
make such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the
Borrower has not made such payment in full to the Agent, each Bank shall
repay to the Agent on demand such amount distributed to such Bank, together
with interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Bank until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent
receives notice from a Bank on or prior to the Closing Date or, with respect
to any Borrowing after the Closing Date, at least one Business Day prior to
the date of such Borrowing, that such Bank will not make available as and
when required hereunder to the Agent for the account of the Borrower the
amount of that Bank's Pro Rata Share of the Borrowing, the Agent may assume
that each Bank has made such amount available to the Agent in immediately
available funds on the Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent any Bank shall not
have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the Borrower
such amount, that Bank shall on the Business Day following such Borrowing
Date make such amount available to the Agent, together with interest at the
Federal Funds Rate for each day during such period. A notice of the Agent
submitted to any Bank with respect to amounts owing under this subsection (a)
shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent on the Business Day following the Borrowing Date,
the Agent will notify the Borrower of such failure to fund and, upon demand
by the Agent, the Borrower shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the interest rate applicable
at the time to the Loans comprising such Borrowing.
30
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Loan on such Borrowing Date, but no Bank shall be responsible for the failure
of any other Bank to make the Loan to be made by such other Bank on any
Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other
share contemplated hereunder), such Bank shall immediately (a) notify the
Agent of such fact, and (b) purchase from the other Banks such participations
in the Loans made by them as shall be necessary to cause such purchasing Bank
to share the excess payment pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered
from the purchasing Bank, such purchase shall to that extent be rescinded and
each other Bank shall repay to the purchasing Bank the purchase price paid
therefor, together with an amount equal to such paying Bank's ratable share
(according to the proportion of (i) the amount of such paying Bank's required
repayment to (ii) the total amount so recovered from the purchasing Bank) of
any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Borrower agrees that any Bank
so purchasing a participation from another Bank may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 11.10) with respect to such participation as
fully as if such Bank were the direct creditor of each the Borrower in the
amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
3.1 The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein (i) the Issuing Bank agrees, (A) from time to
time on any Business Day during the period from the Closing Date to the
Revolving Termination Date to issue Letters of Credit for the account of the
Borrower, and to amend or renew Letters of Credit previously issued by it, in
accordance with subsections 3.2(c) and 3.2(d), and (B) to honor drafts under
the Letters of Credit; and (ii) the Banks severally agree to participate in
Letters of Credit Issued for the account of the Borrower; provided, that the
Issuing Bank shall not Issue, and no Bank shall be obligated to participate
in, any Letter of Credit if as of the date of Issuance of such Letter of
Credit (the "Issuance Date") (1) the Effective Amount of all L/C Obligations
plus the Effective Amount of all Revolving Loans plus the Effective Amount of
all Swingline Loans exceeds the combined Commitments, (2) the participation
of any Bank in the Effective Amount of all L/C Obligations plus the Effective
Amount of the Revolving Loans plus the Effective Amount of all Swingline
Loans of such Bank exceeds such Bank's Commitment, or (3)the
31
Effective Amount of L/C Obligations exceeds the L/C Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been
drawn upon and reimbursed.
(b) The Issuing Bank shall not Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from Issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or request that
the Issuing Bank refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon
the Issuing Bank with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or
shall otherwise impose upon the Issuing Bank any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which the
Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice from any
Bank (and the Required Banks concur with the determination of such Bank)
or the Agent, on or prior to the Business Day prior to the requested
date of Issuance of such Letter of Credit, that no further Letters of
Credit are to be issued due to a continuing failure to meet one or more
of the applicable conditions contained in Article V and such notice has
not expired or been withdrawn by the applicable Bank and/or the Agent;
(iii) the expiry date of any requested Letter of Credit is
more than 360 days after the Revolving Termination Date, unless all of
the Banks have approved such expiry date in writing;
(iv) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance reasonably acceptable
to the Issuing Bank, or the Issuance of a Letter of Credit shall violate
any applicable policies of the Issuing Bank for extensions of credit; or
(v) such Letter of Credit is in a face amount less than
$50,000 or to be denominated in a currency other than Dollars.
3.2 Issuance, Amendment and Renewal of Letters of Credit. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of the
Borrower received by the Issuing Bank (with a copy sent by the Borrower to
the Agent) at least three Business Days (or such shorter time as the Issuing
Bank may agree in a particular
32
instance in its sole discretion) prior to the proposed date of issuance.
Each such request for issuance of a Letter of Credit shall be by facsimile,
confirmed immediately by an original writing in the mail, in the form of an
L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit
(which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof (which beneficiary may be a Bank or an
Affiliate of a Bank); (v) the documents to be presented by the beneficiary of
the Letter of Credit in case of any drawing thereunder; (vi) the full text of
any certificate to be presented by the beneficiary in case of any drawing
thereunder; (vii) if such Letter of Credit will be a standby or commercial
documentary Letter of Credit; and (viii) such other matters as the Issuing
Bank may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit, the Issuing Bank will confirm with the Agent (by telephone
or in writing) that the Agent has received a copy of the L/C Application or
L/C Amendment Application from the Borrower and, if not, the Issuing Bank
will provide the Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date
the Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under subsection 3.1(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or subsection
3.1(b)(ii); or (B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, the Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account
of the Borrower in accordance with the Issuing Bank's usual and customary
business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Termination Date, the Issuing Bank will, upon the
written request of the Borrower received by the Issuing Bank (with a copy
sent by the Borrower to the Agent) at least two Business Days (or such
shorter time as the Issuing Bank may agree in a particular instance in its
sole discretion) prior to the proposed date of amendment, amend any Letter of
Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing,
made in the form of an L/C Amendment Application and shall specify in form
and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as the Issuing Bank may require. The Issuing Bank
shall not amend any Letter of Credit if: (A) the Issuing Bank would have no
obligation at such time to issue such Letter of Credit in its amended form
under the terms of this Agreement; or (B) the beneficiary of any such Letter
of Credit does not accept the proposed amendment to the Letter of Credit.
The Agent will promptly notify the Banks of the receipt by it of any L/C
Application or L/C Amendment Application.
33
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the
option and upon the written request of the Borrower received by the Issuing
Bank (with a copy sent by the Borrower to the Agent) at least two Business
Days (or such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification
of renewal, the Issuing Bank shall be entitled to authorize the automatic
renewal of any Letter of Credit issued by it. Each such request for renewal
of a Letter of Credit shall be made by facsimile, confirmed immediately in an
original writing, in the form of an L/C Amendment Application, and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the Letter
of Credit to be renewed; (ii) the proposed date of notification of renewal of
the Letter of Credit (which shall be a Business Day); (iii) the revised
expiry date of the Letter of Credit; and (iv) such other matters as the
Issuing Bank may require. The Issuing Bank shall not renew any Letter of
Credit if: (A) the Issuing Bank would have no obligation at such time to
issue or amend such Letter of Credit in its renewed form under the terms of
this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed renewal of the Letter of Credit.
If any outstanding Letter of Credit for the account of the
Borrower shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the automatic renewal of such Letter of Credit
in accordance with this subsection 3.2(d) upon the request of the Borrower
but the Issuing Bank shall not have received any L/C Amendment Application
from the Borrower with respect to such renewal or other written direction by
the Borrower with respect thereto, the Issuing Bank shall nonetheless be
permitted to allow such Letter of Credit to renew, and, notwithstanding
anything in this Agreement to the contrary, the Borrower and the Banks hereby
authorize such renewal and, accordingly, the Issuing Bank shall be deemed to
have received an L/C Amendment Application from the Borrower requesting such
renewal; provided, however, that the aggregate principal amount of all such
automatically renewable Letters of Credit shall not exceed $3,000,000, which
amount shall be a sublimit within the L/C Commitment.
(e) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(f) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
3.3 Existing BofA Letters of Credit; Risk Participations, Drawings
and Reimbursements. (a) On and after the Closing Date, the Existing BofA
Letters of Credit shall be deemed for all purposes, including for purposes of
the fees to be collected pursuant to subsections 3.8(a) and 3.8(b), and
reimbursement of costs and
34
expenses to the extent provided herein, Letters of Credit outstanding under
this Agreement and entitled to the benefits of this Agreement and the other
Loan Documents, and shall be governed by the applications and agreements
pertaining thereto and by this Agreement. Each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing
Bank on the Closing Date a participation in each such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) such Bank's
Pro Rata Share times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes
of Section 2.1 and subsection 2.11(a), the Existing BofA Letters of Credit
shall be deemed to utilize pro rata the Commitment of each Bank.
(b) Immediately upon the Issuance of each Letter of Credit in
addition to those described in subsection 3.3(a), each Bank shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Issuing Bank a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Pro Rata Share of
such Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes
of Section 2.1, each Issuance of a Letter of Credit shall be deemed to
utilize the Commitment of each Bank by an amount equal to the amount of such
participation.
(c) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the Borrower. The Borrower shall reimburse the Issuing Bank
in Dollars in same day funds (i) by no later than 3:30 p.m. (San Francisco
time) on each Honor Date if the Issuing Bank notifies the Borrower of a
request for a drawing prior to 11:00 a.m. (San Francisco time) on such Honor
Date and (ii) by no later than 11:00 a.m. (San Francisco time) on the day
immediately following each Honor Date if the Issuing Bank notifies the
Borrower of a request for drawing after 11:00 a.m. (San Francisco time) on
such Honor Date, in an amount equal to the amount so paid by the Issuing
Bank.
In the event that the Issuing Bank notifies the Borrower before
11:00 a.m. (San Francisco time) on the Honor Date and the Borrower fails to
reimburse the Issuing Bank for the full amount of any drawing under any
Letter of Credit by 3:30 p.m. (San Francisco time) on the Honor Date, the
Issuing Bank will promptly notify the Agent, and the Borrower shall be deemed
to have requested that Base Rate Loans be made by the Banks to be disbursed
on the Honor Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions
set forth in Section 5.2. In the event that the Borrower receives notice
from the Issuing Bank after 11:00 a.m. (San Francisco time) and does not
reimburse by 11:00 a.m. (San Francisco time) the day immediately following,
the Issuing Bank will promptly notify the Agent, and the Borrower shall be
deemed to have requested that Base Rate Loans be made by the Banks as of the
Honor Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions
set forth in Section 5.2. The Agent shall
35
promptly notify the Banks of the occurrence of such a Base Rate Loan and the
Banks shall thereupon advance their Pro Rata Shares of such Base Rate Loan.
Any notice given by the Issuing Bank or the Agent pursuant to
this subsection 3.3(c) may be oral if immediately confirmed in writing
(including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(d) Each Bank shall upon any notice pursuant to subsection
3.3(c) make available to the Agent for the account of the relevant Issuing
Bank an amount in Dollars and in immediately available funds equal to its Pro
Rata Share of the amount of the drawing, and the participating Banks shall
(subject to subsection 3.3(e)) each be deemed to have made a Revolving Loan
consisting of a Base Rate Loan to the Borrower in that amount. Interest
shall accrue on each Bank's obligation to participate in any Base Rate Loan
deemed disbursed pursuant to Section 3.3(c) from the Honor Date to the date
such Bank makes payment pursuant to this Section 3.3(d), at a rate per annum
equal to the Federal Funds Rate in effect from time to time during such
period. For the avoidance of doubt, any Base Rate Loan deemed disbursed
under Section 3.3(c) shall for all purposes, including the obligation of the
Banks to participate in such Base Rate Loan, be deemed made as of the Honor
date and not the date of notice of the Agent.
(e) With respect to any unreimbursed drawing that is not
converted into Revolving Loans consisting of Base Rate Loans to the Borrower
in whole or in part, because of the Borrower's failure to satisfy the
conditions set forth in Section 5.2 or for any other reason, the Borrower
shall be deemed to have incurred from the Issuing Bank an L/C Borrowing in
the amount of such drawing, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at a rate per annum
equal to the Base Rate plus 2% per annum, and each Bank's payment to the
Issuing Bank pursuant to subsection 3.3(d) shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Bank in satisfaction of its participation obligation under
this Section 3.3.
(f) Each Bank's obligation in accordance with this Agreement to
make the Revolving Loans or L/C Advances, as contemplated by this
Section 3.3, as a result of a drawing under a Letter of Credit, shall be
absolute and unconditional and without recourse to the Issuing Bank and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Issuing Bank, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (iii) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided,
however, that each Bank's obligation to make Revolving Loans under this
Section 3.3 is subject to the conditions set forth in Section 5.2.
3.4 Repayment of Participations. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of immediately available funds
from the
36
Borrower (i) in reimbursement of any payment made by the Issuing Bank under
the Letter of Credit with respect to which any Bank has paid the Agent for
the account of the Issuing Bank for such Bank's participation in the Letter
of Credit pursuant to Section 3.3 or (ii) in payment of interest thereon, the
Agent will pay to each Bank, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such Bank's Pro Rata Share
of such funds, and the Issuing Bank shall receive the amount of the Pro Rata
Share of such funds of any Bank that did not so pay the Agent for the account
of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
return to the Borrower, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made
by the Borrower to the Agent for the account of the Issuing Bank pursuant to
subsection 3.4(a) in reimbursement of a payment made under the Letter of
Credit or interest or fee thereon, each Bank shall, on demand of the Agent,
forthwith return to the Agent or the Issuing Bank the amount of its Pro Rata
Share of any amounts so returned by the Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts
are returned by such Bank to the Agent or the Issuing Bank, at a rate per
annum equal to the Federal Funds Rate in effect from time to time.
3.5 Role of the Issuing Bank. (a) Each Bank and the Borrower agrees
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall
not have any responsibility to obtain any document (other than any sight
draft, certificates or other documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable
to any Bank for: (i) any action taken or omitted in connection herewith at
the request or with the approval of the Banks (including the Required Banks,
as applicable); (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.
(c) The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the Issuing Bank, shall be
liable or responsible for any of the matters described in clauses (i) through
(vii) of Section 3.6; provided, however, anything in such clauses to the
contrary notwithstanding, that the Borrower may have a claim against the
Issuing Bank, and the Issuing Bank may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Issuing Bank's willful misconduct or gross negligence or the
37
Issuing Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason.
3.6 Obligations Absolute. The obligations of the Borrower under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under
all circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the
Borrower in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-Related
Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or
any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C-Related Documents or any
unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment
made by the Issuing Bank under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
38
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations of
the Borrower in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or
a discharge of, the Borrower or a guarantor;
provided, that, notwithstanding the foregoing, the Issuing Bank shall not be
relieved of any liability it may otherwise have as a result of its gross
negligence or willful misconduct.
3.7 Cash Collateral Pledge. (i)(A) Upon the request of the Agent, if
the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) unless otherwise consented to by the Banks, if, as of the Revolving
Termination Date, any Letter of Credit may for any reason remain outstanding
and partially or wholly undrawn, or (ii) the occurrence of the circumstances
described in Section 2.7 requiring the Borrower to Cash Collateralize Letters
of Credit, then, the Borrower shall immediately Cash Collateralize the
Obligations in an amount equal to such L/C Obligations. The Borrower hereby
grants the Agent, for the benefit of the Agent, the Issuing Bank, the
Swingline Bank and the Banks, a security interest in all such cash and
deposit account balances. Cash Collateral shall be maintained by the Agent
in blocked, interest bearing deposit accounts at BofA. After the Revolving
Termination Date the Issuing Bank may exercise a right of set off with
respect to any such Cash Collateral deposits it holds and may use such funds
to satisfy drawings under Letters of Credit. Unless otherwise agreed to by
the Banks, all such Cash Collateral (inclusive of accrued interest thereon)
shall be returned to the Borrower only when the L/C Commitment has
terminated, all Letters of Credit have been cancelled and no L/C Obligations
are outstanding.
3.8 Letter of Credit Fees. (a) The Borrower agrees to pay to the
Agent for the benefit of the Banks Letter of Credit fees. The Letter of
Credit fee shall be equal to (i) the rate per annum determined as being the
Applicable Margin for Offshore Rate Loans from time to time multiplied by
(ii) the average daily maximum amount available to be drawn of the
outstanding Letters of Credit. The Letter of Credit fees shall be payable
quarterly in arrears on the last Business Day of each calendar quarter, on
the Revolving Termination Date, and on the date when the last Letter of
Credit expires.
(b) The Borrower agrees to pay to the Agent for the benefit of
the Banks an issuance fee for each commercial documentary Letter of Credit
Issued hereunder equal to the greater of (i) $250 and (ii) 0.125% of the face
amount of such commercial documentary Letter of Credit, payable on the date
of Issuance of each such commercial documentary Letter of Credit.
39
(c) The Borrower shall pay to the Issuing Bank, for its account,
quarterly in arrears on the last Business Day of each calendar quarter, on
the Revolving Termination Date and on the date when the last Letter of Credit
expires, a letter of credit fronting fee for each Letter of Credit Issued by
the Issuing Bank equal to .075% per annum of the average daily maximum amount
available to be drawn of the outstanding Letters of Credit.
(d) The Borrower shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
3.9 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of issuance of any Letter of Credit shall (unless
otherwise expressly provided in the Letters of Credit) apply to the Letters
of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.1 Taxes. (a) Any and all payments by the Borrower to each Bank or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In
addition, the Borrower shall pay all Taxes.
(b) If the Borrower shall be required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to any
Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so
that, after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section), such Bank or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings; and
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law.
40
(c) The Borrower agrees to indemnify and hold harmless each Bank
for the full amount of Taxes in the amount (without duplication of other
amounts paid pursuant to this Section 4.1) that the respective Bank specifies
as necessary to preserve the after-tax yield (which after tax yield is
intended to compensate each Bank for Taxes deducted or withheld pursuant to
this Section 4.1 and additional Taxes imposed on amounts payable pursuant to
this Section 4.1) the Bank would have received if such Taxes had not been
imposed, and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank or the Agent makes written demand
therefor, which demand shall specify in reasonable detail the basis for such
demand.
(d) Within 30 days after the date of any payment by the Borrower
of Taxes, the Borrower shall furnish to such Bank or the Agent the original
or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to such Bank or the Agent.
(e) Without affecting its rights under this Section 4.1 or any
provision of this Agreement, the Agent, each Bank, the Swingline Bank and the
Issuing Bank agree that if any Taxes are imposed and required by law to be
paid or to be withheld from any amount payable to such Bank or its Lending
Office, the Swingline Bank or the Issuing Bank, as the case may be, with
respect to which the Borrower would be obligated pursuant to this Section 4.1
to increase any amounts payable to such Bank, the Swingline Bank or the
Issuing Bank, as the case may be, or to pay any such Taxes, such Bank shall
use reasonable efforts to select an alternative Lending Office, the Swingline
Bank shall use reasonable efforts to select an alternative office for
purposes of making and receiving payments in respect of Swingline Advances,
and the Issuing Bank shall use reasonable efforts to select an alternative
office for purposes of issuing and receiving payments in respect of Letters
of Credit, as the case may be, which would not result in the imposition of
such Taxes; provided, however, that none of the Agent, the Banks, the
Swingline Bank or the Issuing Bank shall be obligated to select any such
alternative office if such Bank, the Swingline Bank or the Issuing Bank, as
the case may be, determines that (i) as a result of such selection it would
be in violation of an applicable law, regulation, or treaty, or would incur
additional costs or expenses or (ii) such selection would be inadvisable for
regulatory reasons or inconsistent with the interests of such Bank, the
Swingline Bank or the Issuing Bank, as the case may be.
(f) So long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may, within the 30 day period
commencing on the day that the Borrower receives a demand for the payment of
Taxes from any Bank pursuant to this Section 4.1, demand that the Bank making
such demand be replaced with a Person that is an Eligible Assignee selected
by the Borrower and subject to consent by the Agent. Upon any such demand by
the Borrower, if the Agent shall have consented to the Eligible Assignee
selected by the Borrower (provided that should such Eligible Assignee be a
Bank, such Bank shall also have consented to such selection), the Bank that
made a demand pursuant to this Section 4.1 shall execute and deliver an
Assignment
41
and Acceptance to the Agent pursuant to which such Bank shall assign all of
its rights and obligations under this Agreement and the other Loan Documents
to the Eligible Assignee selected by the Borrower.
4.2 Illegality. (a) If any Bank determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by such Bank to the Borrower
through the Agent, any obligation of that Bank to make Offshore Rate Loans
shall be suspended until the Bank notifies the Agent and the Borrower that
the circumstances giving rise to such determination no longer exist. Any
Bank notifying the Borrower of such a suspension of its obligation to make
Offshore Rate Loans shall provide to the Borrower reasonable documentation
supporting such obligation.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Borrower shall, upon its receipt of notice of such
fact and demand from such Bank (with a copy to the Agent), prepay in full
such Offshore Rate Loans of that Bank then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on
the last day of the Interest Period thereof, if such Bank may lawfully
continue to maintain such Offshore Rate Loans to such day, or immediately, if
such Bank may not lawfully continue to maintain such Offshore Rate Loan. If
the Borrower is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Borrower shall borrow from the
affected Bank, in the amount of such repayment, a Base Rate Loan. Any Bank
making such a demand for prepayment of Offshore Rate Loans shall provide to
the Borrower reasonable documentation supporting such demand.
4.3 Increased Costs and Reduction of Return. (a) If any Bank
determines that, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation by any Governmental Authority
having jurisdiction over the Banks or (ii) the compliance by any Bank with
any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any
increase in the cost to such Bank of agreeing to make or making, funding or
maintaining any Offshore Rate Loans or participating in Letters of Credit,
or, in the case of the Issuing Bank, any increase in the cost to the Issuing
Bank of agreeing to issue, issuing or maintaining any Letter of Credit or of
agreeing to make or making, funding or maintaining any unpaid drawing under
any Letter of Credit, then the Borrower shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the
Agent), promptly (and in any event within 30 days) pay to the Agent for the
account of such Bank, additional amounts as are sufficient to compensate such
Bank for such increased costs. Any Bank making such a demand for payment
shall provide to the Borrower reasonable documentation supporting such
demand.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation,
42
(iii) any change in the interpretation or administration of any Capital
Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance
by the Bank (or its Lending Office) or any corporation controlling the Bank
with any Capital Adequacy Regulation, affects or would affect the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) determines that the
amount of such capital is increased as a consequence of its Commitments,
loans, credits or obligations under this Agreement, then, upon demand of such
Bank to the Borrower through the Agent, the Borrower shall promptly (and in
any event within 30 days) pay to such Bank, from time to time as specified by
such Bank, additional amounts sufficient to compensate such Bank for such
increase. Any Bank making such a demand for payment shall provide to the
Borrower reasonable documentation supporting such demand.
4.4 Funding Losses. The Borrower shall reimburse each Bank and hold
each Bank harmless from any loss or expense which the Bank sustains or incurs
as a consequence of:
(a) the failure of the Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a
Loan after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment in
accordance with any notice delivered under Section 2.6;
(d) the prepayment (including pursuant to Section 2.7) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a
day that is not the last day of the relevant Interest Period; or
(e) the conversion under Section 2.4 of any Offshore Rate Loan
to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period; including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from which such
funds were obtained.
4.5 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any requested Interest Period with respect to a proposed
borrowing of Offshore Rate Loans or conversion into or continuation of
Offshore Rate Loans, or that the Offshore Rate applicable pursuant to
Section 2.9 for any requested Interest Period with respect to a proposed
borrowing of Offshore Rate Loans or conversion into or continuation of
Offshore Rate Loans does not adequately and fairly reflect the cost to the
Agent or any
43
Bank of funding such Loans, the Agent will promptly so notify the Borrower
and each Bank and will provide such Persons with reasonable documentation
supporting such determination. Thereafter, the obligation of the Banks to
make or maintain Offshore Rate Loans hereunder shall be suspended until the
Agent shall notify the Borrower and the Banks that the circumstances causing
such suspension no longer exist. Upon receipt of such notice, the Borrower
may revoke any Notice of Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Borrower does not revoke such Notice, the Banks
shall make, convert or continue the Loans, as proposed by the Borrower, in
the amount specified in the applicable notice submitted by the Borrower, but
such Loans shall be made, converted or continued as Base Rate Loans instead
of Offshore Rate Loans.
4.6 Survival. The agreements and obligations of the Borrower in this
Article IV shall survive the payment of all other Obligations.
4.7 Notice of Claims. The Agent or the appropriate Bank will notify
the Borrower in writing of its claims under Article IV within 180 days after
any officer of the Agent or such Bank having principal responsibility for
monitoring the Borrower's performance of its obligations under the Loan
Documents has actual knowledge of facts giving rise to a claim under
Article IV.
ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.1 Conditions of Initial Credit Extensions. The obligation of each
Bank to make its initial Credit Extension hereunder is subject to the
condition that the Agent shall have received on or before the Closing Date
all of the following, in form and substance satisfactory to the Agent and
each Bank, and in sufficient copies for each Bank (other than the Notes to be
delivered pursuant to Section 5.1(a)):
(a) Credit Agreement and Notes. This Agreement and Notes
executed by the Borrower for Banks requesting Notes.
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors
of the Borrower authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or an Assistant
Secretary of the Borrower; and
(ii) A certificate of the Secretary or Assistant Secretary
of the Borrower certifying the names and true signatures of the officers
of the Borrower authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be delivered
by it hereunder;
44
(c) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the
bylaws of the Borrower as in effect on the Closing Date, certified by
the Secretary or Assistant Secretary of the Borrower as of the Closing
Date; and
(ii) a good standing and tax good standing certificate for
the Borrower from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation and from the State
of Colorado;
(d) Legal Opinions. Opinions of Shearman & Sterling and
internal counsel to the Borrower addressed to the Agent and the Banks,
substantially in the forms of Exhibit D-1 and Exhibit D-2, respectively.
(e) Payment of Fees. Evidence of payment by the Borrower of all
accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, including any such costs, fees and expenses
arising under or referenced in Sections 2.11 and 11.4 and any fronting fees
for the Existing BofA Letters of Credit, provided that the Borrower shall
have been given reasonably detailed bills for the fees and services of the
Agent's legal counsel at least one Business Day prior to the Closing Date if
it is to pay such fees and expenses on the Closing Date;
(f) Certificate. A certificate signed by a Responsible Officer
of the Borrower, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article VI are true and correct on and as of such date, as though made
on and as of such date;
(ii) no Default or Event of Default exists or would result
from the initial Borrowing.
(g) Prior Loan Documents. Evidence reasonably satisfactory to
the Banks that the loans (other than the Existing Letters of Credit), all
interest thereon and all other amounts owed to the Agent or the Banks under
the Prior Loan Documents have been repaid in full.
(h) Other Documents. Such other approvals, opinions, documents
or materials as the Agent or any Bank may reasonably request.
5.2 Conditions to All Credit Extensions. The obligation of each Bank
to make any Revolving Loan to be made by it (including its initial Revolving
Loan) or to continue or convert any Revolving Loan under Section 2.4 and the
obligation of the Issuing Bank to Issue any Letter of Credit (including the
initial Letter of Credit) is
45
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date, Conversion/Continuation Date or Issuance Date:
(a) Notice, Application. The Agent shall have received (with,
in the case of the initial Revolving Loan only, a copy for each Bank) a
Notice of Borrowing or a Notice of Conversion/Continuation, as applicable or
in the case of any Issuance of any Letter of Credit, the Issuing Bank and the
Agent shall have received an L/C Application or L/C Amendment Application, as
required under Section 3.2;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI shall be true and correct on and
as of such Borrowing Date or Conversion/Continuation Date or Issuance Date
with the same effect as if made on and as of such Borrowing Date or
Conversion/Continuation Date or Issuance Date; and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing or continuation or conversion or
Issuance.
(d) Cash Collateral. With regard to any Letter of Credit, such
Letter of Credit has been cash collateralized to the extent required by and
in accordance with this Agreement.
Each Notice of Borrowing, Notice of Conversion/Continuation and L/C
Application or L/C Amendment Application submitted by the Borrower hereunder
shall constitute a representation and warranty by the Borrower hereunder, as
of the date of each such notice and as of each Borrowing Date,
Conversion/Continuation Date, or Issuance Date, as applicable, that the
conditions in this Section 5.2 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Agent and each Bank that:
6.1 Corporate Existence and Power. The Borrower and each of its
Material Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and, in the case of the Borrower, perform
its obligations under the Loan Documents;
46
(c) is duly qualified, licensed and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property
or the conduct of its business requires such qualification or license or good
standing; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
6.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Borrower of this Agreement and each other
Loan Document to which the Borrower is party, have been duly authorized by
all necessary corporate action, and do not:
(a) contravene the terms of any of such the Borrower's
Organization Documents;
(b) conflict with or result in any breach or contravention of
any document evidencing any Contractual Obligation to which the Borrower is a
party or any order, injunction, writ or decree of any Governmental Authority
to which the Borrower or its property is subject, except where such conflict,
breach or contravention would not cause a Material Adverse Effect or render
any Loan Document unenforceable against the Borrower or any other Person;
(c) violate any Requirement of Law except, in each case, where
any such contravention, conflict, breach, or violation would not cause a
Material Adverse Effect or render any Loan Document unenforceable against the
Borrower or any other Person; or
(d) result in the creation of any Lien.
6.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or current enforcement against, the
Borrower or any of its Material Subsidiaries of the Agreement or any other
Loan Document.
6.4 Binding Effect. This Agreement and each other Loan Document to
which the Borrower is a party constitute (or, when duly executed and
delivered, shall constitute) the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms
and claims under this Agreement and each Loan Document will rank at least
pari passu with the claims of other unsecured creditors, except as
enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
47
6.5 Litigation. Except as specifically disclosed in Schedule 6.5,
there are no actions, suits, proceedings, claims or disputes pending, or to
the best knowledge of the Borrower, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, against the
Borrower, or its Subsidiaries or any of their respective properties which:
(a) relates to this Agreement or any other Loan Document, or any
of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Borrower or its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin
or restrain the execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.
6.6 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Borrower. Neither the
Borrower nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under subsection 9.1(e).
6.7 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best
knowledge of the Borrower, nothing has occurred which would cause the loss of
such qualification. The Borrower and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has
been no prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums
48
due and not delinquent under Section 4007 of ERISA); (iv) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
6.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for the purposes set forth in and permitted by
Section 7.11 and Section 8.6. Neither the Borrower nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
6.9 Title to Properties; Liens. The Borrower and each Subsidiary
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as would not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date the property (real or personal, tangible or intangible) of the
Borrower and its Material Subsidiaries is subject to no Liens, other than
Permitted Liens.
6.10 Taxes. The Borrower and its Subsidiaries have filed or caused to
be filed all federal and other material tax returns and reports required to
be filed, and have paid or caused to be paid all federal and other material
taxes, assessments, fees and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and payable,
except (i) those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP and (ii) those for which the failure to pay would not have a
Material Adverse Effect. To the Borrower's knowledge, there is no proposed
tax assessment against the Borrower or any Subsidiary that would, if made,
have a Material Adverse Effect.
6.11 Financial Condition. (a) The audited Consolidated financial
statements of the Borrower and its Subsidiaries dated December 27, 1996, and
the related Consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein;
(ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
49
(iii) except as specifically disclosed in Schedule 6.11,
show all material indebtedness and other liabilities, direct or
contingent, of the Borrower and its Consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 27, 1996, there has been no Material Adverse
Effect.
6.12 Environmental Matters. The Borrower conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and
as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 6.12, such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.13 Regulated Entities. Neither the Borrower, nor any Person
controlling the Borrower, nor any Subsidiary, is an "Investment Company"
within the meaning of the Investment Company Act of 1940. The Borrower is
not subject to regulation under the Public Utility Holding Company Act of
1935, the federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other federal or state statute or regulation limiting
its ability to incur Indebtedness.
6.14 Copyrights, Patents, Trademarks and Licenses, Etc. The Borrower
or its Subsidiaries own or are licensed or otherwise have the right to use
all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective material businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Material Subsidiary infringes upon any
rights held by any other Person. Except as specifically disclosed in
Schedule 6.5, no claim or litigation regarding any of the foregoing is
pending or, to the best knowledge of the Borrower, threatened, and no patent,
invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Borrower,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
6.15 Subsidiaries. The Borrower (a) has no Subsidiaries other than
those specifically disclosed in part (a) of Schedule 6.15 hereto as of the
Closing Date and (b) has no equity investments in any other corporation or
entity other than those specifically disclosed in part (b) of Schedule 6.15
except, in each case, for Subsidiaries created and equity investments made
after the Closing Date and otherwise permitted by this Agreement.
50
6.16 Insurance. Except as specifically disclosed in Schedule 6.16,
the properties of the Borrower and its Material Subsidiaries are insured
with, to the best knowledge of the Borrower, financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with
such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the Borrower or such Material Subsidiary operates.
6.17 Full Disclosure. None of the representations or warranties made
by the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any written exhibit, report, statement or certificate
furnished by or on behalf of the Borrower or any Subsidiary in connection
with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Borrower to the Banks prior to the Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered; provided that nothing in
this Section 6.17 shall apply to any projections, forward-looking information
or other similar or related information furnished by or on behalf of the
Borrower or any Subsidiary in connection with the Loan Documents.
6.18 Projections. All projections forward-looking information or
other similar or related information furnished by or on behalf of the
Borrower or any Subsidiary in connection with the Loan Documents were
prepared in good faith on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing at the time of
delivery of such forecasts, and represented, at the time of delivery, the
Borrower or such Subsidiary's best estimate of its future financial
performance, operations and results.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Required Banks waive compliance in
writing:
7.1 Financial Statements. The Borrower shall deliver to the Agent,
in form and detail satisfactory to the Agent and the Required Banks, with
sufficient copies for each Bank:
(a) as soon as available, but not later than 120 days after the
end of each fiscal year, a copy of the audited Consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such year and the related
Consolidated statements of income or operations, shareholders' equity and
cash flows for such year, setting forth in
51
each case in comparative form the figures for the previous fiscal year, and
accompanied by the opinion of Price Waterhouse or another
nationally-recognized independent public accounting firm ("Independent
Auditor") which report shall state that such Consolidated financial
statements present fairly the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years. Such
opinion shall not be qualified or limited because of a restricted or limited
examination by the Independent Auditor of any material portion of the
Borrower's or any Subsidiary's records;
(b) as soon as available, but not later than 55 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited Consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such quarter and the related Consolidated statements of
income, shareholders' equity and cash flows for the period commencing on the
first day and ending on the last day of such quarter, and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and
the results of operations of the Borrower and the Subsidiaries.
7.2 Certificates; Other Information. The Borrower shall furnish to
the Agent with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a Compliance Certificate executed
by a Responsible Officer;
(b) promptly, copies of all financial statements and reports
that the Borrower sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10-K,
10-Q and 8-K) that the Borrower or any Subsidiary may make to, or file with,
the SEC; and
(c) promptly, such additional information regarding the
business, financial or corporate affairs of the Borrower or any Subsidiary as
the Agent, at the request of any Bank, may from time to time reasonably
request.
7.3 Notices. The Borrower shall promptly notify the Agent and each
Bank:
(a) after a Responsible Officer of the Borrower knows or has
reason to know of the occurrence of any Default or Event of Default, and of
the occurrence or existence of any event or circumstance for which it is
reasonably foreseeable that such event or circumstance will become a Default
or Event of Default;
(b) after a Responsible Officer of the Borrower or any ERISA
Affiliate knows or has reason to know that any material ERISA Event has
occurred, with a statement of a Responsible Officer of the Borrower
describing such ERISA Event and the action, if any, that the Borrower or such
ERISA Affiliate proposes to take with respect thereto; and
52
(c) of any material change in accounting policies or financial
reporting practices by the Borrower or any of its Consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time. Each
notice under subsection 7.3(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
7.4 Preservation of Corporate Existence, Etc. The Borrower shall, and
shall cause each Material Subsidiary to preserve and maintain in full force
and effect its corporate existence and good standing under the laws of its
state or jurisdiction of incorporation and preserve and maintain in full
force and effect all governmental rights, privileges, qualifications,
permits, licenses and franchises necessary or desirable in the normal conduct
of its business except (a) if in the reasonable business judgment of the
Borrower or such Material Subsidiary, it is in its best economic interest not
to preserve or maintain such rights, privileges, qualification, permits,
licenses or franchises and (b) unless no Material Adverse Effect could
result.
7.5 Maintenance of Property. The Borrower shall maintain, and shall
cause each Material Subsidiary to maintain, and preserve all its material
property (including, without limitation, equipment) which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. The Borrower and each Material Subsidiary
shall use the standard of care typical in the industry in the operation and
maintenance of its facilities.
7.6 Insurance. The Borrower shall maintain, and shall cause each
Material Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons.
7.7 Payment of Obligations. The Borrower shall, and shall cause each
Material Subsidiary to, pay and discharge before the same shall become
delinquent:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Material
Subsidiary; and
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property.
53
7.8 Compliance with Laws. The Borrower shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including Environmental laws and the federal Fair Labor Standards Act),
except such as may be contested in good faith or as to which a bona fide
dispute may exist.
7.9 Compliance with ERISA. The Borrower shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the Code.
7.10 Inspection of Property and Books and Records. The Borrower shall
maintain and shall cause each Material Subsidiary to maintain proper books of
record and account, in which full, true and correct entries in conformity
with GAAP consistently applied shall be made of all financial transactions
and the assets and business of the Borrower and such Material Subsidiary.
During the continuance of any Event of Default, the Borrower shall permit,
and shall cause each Subsidiary to permit, representatives and independent
contractors of the Agent or any Bank to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense
of each the Borrower and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance
notice to each the Borrower.
7.11 Use of Proceeds. The Borrower shall use the proceeds of the
Loans for working capital and other general corporate purposes not in
contravention of any Requirement of Law or of any Loan Document.
7.12 Disclosure; Further Assurances.
(a) The Borrower shall ensure that all written information,
exhibits and reports furnished to the Agent and the Banks by or on behalf of
the Borrower and concerning the Borrower do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein
not misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Banks and correct any material defect or error
that may be discovered therein or in any Loan Document or in the execution,
acknowledgement or recordation thereof; provided that nothing in this Section
7.12(a) shall apply to any projections, forward-looking information or other
similar or related information furnished by or on behalf of the Borrower or
any Subsidiary in connection with the Loan Documents.
54
(b) The Borrower shall ensure that all projections, forward-
looking information or other similar or related information furnished by or
on behalf of the Borrower in connection with the Loan Documents are prepared
in good faith on the basis of the assumptions stated therein, which
assumptions are fair in the light of conditions existing at the time of
delivery of such forecasts, and represent, at the time of delivery, the
Borrower or such Subsidiary's best estimate of its future financial
performance, operations and results.
(c) The Borrower shall provide such other documentation and
cooperation as the Agent or the Required Banks reasonably request in
connection with the exercise by the Agent and the Banks of their rights and
remedies under the Loan Documents.
7.13 Financial Covenants. The Borrower will, unless the Required
Banks shall otherwise consent in writing:
(a) Maintenance of Consolidated Tangible Net Worth. Maintain as
at the end of each fiscal quarter a Consolidated Tangible Net Worth of the
Borrower and its Subsidiaries of not less than at any time the amount that
is, (i)(A) 85% of Consolidated Tangible Net Worth as at fiscal quarter ending
December 27, 1996, plus (B) 75% of Consolidated Net Income (excluding any
Consolidated Net Loss) of the Borrower and its Subsidiaries earned in each
fiscal quarter after such December 27, 1996 fiscal quarter, plus (C) 75% of
the amount of all proceeds (net of costs and expenses) received pursuant to
the issuance of any equity securities issued by the Borrower after such
December 27, 1996 fiscal quarter (excluding proceeds of any issuance made for
the purposes of fulfilling an employee stock purchase plan or compensatory
option plan), plus (D) 100% of the face amount of any Subordinated
Indebtedness that is converted into stock of the Borrower after such December
27, 1996 fiscal quarter.
(b) Consolidated Net Income. Not permit (i) any Consolidated
Net Loss or Consolidated Operating Loss of the Borrower and its Subsidiaries
to occur for each of any two consecutive fiscal quarters (calculated as of
the last day of each such fiscal quarter); or (ii) Consolidated Net Loss or
Consolidated Operating Loss of the Borrower and its Subsidiaries for any
fiscal quarter to be greater than $25,000,000.
(c) Consolidated Total Leverage Ratio. Not permit as at each
fiscal quarter end a Consolidated Total Leverage Ratio of the Borrower and
its Subsidiaries of greater than 0.80:1.00.
7.14 Patents and Permits. The Borrower will, and will cause each of
its Subsidiaries to, (i) maintain all permits, licenses, consents or other
approvals of any Government Authority or any Person and (ii) maintain in full
force and effect and protect patents, trademarks, tradenames or other
intellectual property rights, the failure of which to maintain or protect
would result in a Material Adverse Effect.
55
ARTICLE VIII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Required Banks waive compliance in
writing:
8.1 Limitation on Liens. The Borrower shall not, and shall not
suffer or permit any Material Subsidiary to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) Liens for taxes, assessments or governmental charges or
levies, and to the extent not past due or to the extent contested, in good
faith, by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(b) Liens imposed by law, such as materialman's, mechanic's,
carrier's, workman's, and repairman's Liens and other similar Liens arising
in the ordinary course of business which relate to obligations which are not
overdue for a period of more than 45 days or which are being contested in
good faith, by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP;
(c) pledges or deposits in the ordinary course of business to
secure nondelinquent obligations under xxxxxxx'x compensation or unemployment
laws or similar legislation or to secure the performance of leases or trade
contracts entered into in the ordinary course of business or of public or
nondelinquent statutory obligations, bids, or appeal bonds;
(d) Liens upon or in any property acquired or held by the
Borrower or any of its Subsidiaries to secure the purchase price or
construction costs (and, to the extent financed, sales and excise taxes,
delivery and installation costs and other related expenses) of such property
or to secure indebtedness incurred solely for the purpose of financing or
refinancing the acquisition or construction of any such property to be
subject to such Liens, or Liens existing on any such property at the time of
acquisition, or extensions, renewals or replacements of any of the foregoing
for the same or a lesser principal amount, provided that no such Lien shall
extend to or cover any property other than the property being acquired or
constructed and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended,
renewed or replaced;
(e) Liens consisting of the interest of a lessor upon any assets
subject to a Capital Lease and securing payment of the obligations arising
under such Capital Lease and provided that such Capital Lease is otherwise
permitted hereunder;
56
(f) zoning restrictions, easements, licenses, landlord's Liens
or restrictions on the use of any real property occupied by the Borrower or
its Subsidiaries, which do not materially impair the use of such property in
the operation of the business of the Borrower or any of its Subsidiaries or
the value of such property for the purpose of such business;
(g) Liens associated with judgments and awards to the extent
such judgments and awards do not create an Event of Default under subsection
9.1(i) hereof;
(h) Liens in favor of the issuer of a documentary commercial
letter of credit, provided, that such Liens are limited exclusively to the
goods covered by such letter of credit;
(i) Liens listed on Schedule 8.1(i) securing Indebtedness
outstanding on the Closing Date;
(j) Liens consisting of the interest of a lessor under Operating
Leases made in the ordinary course of business, or existing on property
leased by the Borrower or its Subsidiaries under an Operating Lease in the
ordinary course of business;
(k) Liens in connection with the Permitted Receivables Purchase
Facility (including liens on Permitted Receivables, software, chattel paper,
books and records related to the Permitted Receivables);
(l) Liens securing borrowings by the Borrower against life
insurance policies under which it is the beneficiary in an aggregate amount
not to exceed $40,000,000;
(m) Liens in connection with the Borrower's credit card
processing program in an aggregate amount not to exceed $20,000,000;
(n) Consensual Liens not described in subclauses (a) through (m)
above that; (i) relate to liabilities other than borrowed money debt
(including Liens incurred in connection with sales and leasebacks of the
Borrower's assets) and securing obligations not in excess of $30,000,000 in
the aggregate at any time for all such Liens for the Borrower and its
Subsidiaries together, or (ii) secure obligations not in excess of
$15,000,000 in the aggregate at any time for all such Liens for the Borrower
and its Subsidiaries together; provided that no Liens otherwise permitted by
clause (ii) shall be permitted against Receivables or inventories of the
Borrower or its Subsidiaries; and provided further that the obligations
secured by Liens permitted pursuant to clauses (i) and (ii) shall at no time,
in the aggregate, exceed $30,000,000; and
(o) Liens with respect to collateral (whether in cash, letters
of credit or other investments) provided in connection with the Multicurrency
Note Purchase Facility; provided that at no time shall the collateral with
respect to the Multicurrency Note Purchase Facility exceed, in the aggregate,
$125,000,000.
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Additionally, the Borrower will not, and will not permit any of
its Subsidiaries to, enter into any agreement (other than this Agreement or
any other Loan Document) prohibiting the creation or assumption of any Lien
upon any of its properties, revenues or assets, whether now owned or
hereafter acquired.
8.2 Disposition of Assets. The Borrower shall not, and shall not
suffer or permit any Material Subsidiary to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any property (including accounts and notes
receivable, with or without recourse) or enter into any agreement to do any
of the foregoing, except:
(a) dispositions of inventory, or used, worn-out, obsolete or
surplus equipment or other assets not practically usable in the business of
the Borrower, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement equipment;
(c) dispositions of assets in the ordinary course of business by
the Borrower or any of its Subsidiaries to the Borrower or any other of its
Subsidiaries pursuant to reasonable business requirements;
(d) dispositions of Permitted Receivables (including software,
books and records related to Permitted Receivables) pursuant to the Permitted
Receivables Purchase Facility;
(e) dispositions in connection with a sale/leaseback transaction
involving real or personal property of the Borrower or its Subsidiaries;
provided, that any such sale/leaseback transaction is otherwise permitted
under this Agreement; and
(f) dispositions not otherwise permitted hereunder; provided,
that (i) at the time of any disposition, no Event of Default shall exist or
shall result from such disposition, and (ii) the aggregate net book value of
all assets so sold by the Borrower and its Subsidiaries, together, shall not
exceed in any fiscal year $60,000,000; and
(g) dispositions listed on Schedule 8.2.
8.3 Consolidations and Mergers. The Borrower shall not, and shall
not suffer or permit any Subsidiary to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or acquire all or substantially
all of the assets of, any Person, except:
58
(a) any Subsidiary may merge with the Borrower, provided that
the Borrower shall be the continuing or surviving corporation, or with any
one or more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall
be the continuing or surviving corporation; and
(b) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Borrower or another
Wholly-Owned Subsidiary.
Nothing in this Section 8.3 shall prevent the Borrower or any of
its Subsidiaries from merging with, or acquiring all or substantially all of
the assets of any Person if (i) with respect to a merger, the Borrower or
such Subsidiary party to such merger is the surviving entity of such merger,
and (ii) the total assets (including securities and all other assets) so
acquired, together with the total assets for all such transactions occurring
after the Closing Date (in each case as measured on the effective date of
such merger or acquisition), do not exceed an amount greater than 20% of the
Consolidated Tangible Net Worth of the Borrower and its Subsidiaries as such
Consolidated Tangible Net Worth is determined as of the last day of the
fiscal quarter ending immediately prior to the closing of such merger or
acquisition, and (iii) the merger or acquisition involves an entity engaged
in a similar business to that of the Borrower or in a business within the
Borrower's strategic plans; and (iv) no Default or Event of Default has
occurred or would occur from such merger or acquisition.
If any Acquisition or Investment is hostile, no proceeds of any
Loan or Letter of Credit may be used, directly or indirectly, therefor
("hostile" for purposes of this sentence meaning the prior effective written
consent of the board of directors or equivalent governing body of the
acquiree is not obtained).
8.4 Loans and Investments. The Borrower shall not purchase or
acquire, or suffer or permit any Material Subsidiary to purchase or acquire,
or make any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or make
or commit to make any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person including any
Affiliate of the Borrower (together, but excluding Acquisitions,
"Investments"), except for:
(a) Investments held by the Borrower or any Material Subsidiary
in the form of cash equivalents;
(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) extensions of credit by the Borrower to any of its
Subsidiaries or by any of its Subsidiaries to another of its Subsidiaries;
59
(d) (i) Investments in any distributor of the Borrower's
products or any supplier of raw materials or services useful to the business
of the Borrower and its Subsidiaries (other than the acquisition of such
Person by the Borrower or its Subsidiaries), or in any partnership or
corporation with others, (ii) Joint-Ventures and (iii) other Investments,
provided, that (A) the book value (as to the Borrower) of any such Investment
or Joint-Venture, together with such value of all prior Investments or Joint-
Ventures described in clauses (i) through (iii) of this Section 8.4(d)
undertaken by the Borrower and its Subsidiaries after the Closing Date, shall
not exceed at the time of such Investment or Joint Venture, 15% of
Consolidated Tangible Net Worth as calculated as of the most recent fiscal
quarter prior to such Investment or Joint-Venture, (B) such Investments and
Joint-Ventures are undertaken in accordance with all applicable Requirements
of Law and (C) immediately prior to and after giving effect thereto, no
Default or Event of Default shall exist or be continuing;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) Investments complying with the investment policy for the
Borrower and its Subsidiaries described on Schedule 8.4(f), as such schedule
may be amended from time to time;
(g) contributions, loans or advances to, or guarantees of, the
Borrower or any Subsidiary in connection with the Permitted Receivables
Purchase Facility; and
(h) loans to employees of the Borrower or any of its
Subsidiaries (i) not to exceed $20,000,000, exclusive of any loans permitted
pursuant to clause (ii), (valued without regard to any write-down due to
uncollectability) at any one time outstanding for all such loans to all
employees of the Borrower and its Subsidiaries in the aggregate, or (ii) in
the ordinary course of business with respect to travel and relocation
expenses.
8.5 Transactions with Affiliates. The Borrower shall not, and shall
not suffer or permit any Material Subsidiary to, enter into any transaction
with any Affiliate of the Borrower, except (i) transactions upon fair and
reasonable terms no less favorable to the Borrower or such Material
Subsidiary than it would obtain in a comparable arm's-length transaction with
a Person not an Affiliate of the Borrower or such Material Subsidiary and
(ii) transactions between Material Subsidiaries of the Borrower and
transactions between the Borrower and its Material Subsidiaries on terms fair
and reasonable to all interested parties and undertaken by all such parties
in good faith and in the ordinary course of business.
8.6 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter
of Credit, directly or indirectly, (i) to purchase or carry Margin Stock,
(ii) to repay or otherwise refinance indebtedness of the Borrower or others
incurred to purchase or carry Margin Stock,
60
(iii) to extend credit for the purpose of purchasing or carrying any Margin
Stock, or (iv) to acquire any security in any transaction that is subject to
Section 13 or 14 of the Exchange Act.
8.7 Contingent Obligations. The Borrower shall not, and shall not
suffer or permit any Material Subsidiary to, create, incur, assume or suffer
to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) L/C Obligations in favor of BofA or any Affiliate of BofA in
connection with the Permitted Receivables Purchase Facility;
(d) Contingent Obligations in favor of BofA or any Affiliate of
BofA including, without limitation, in the form of recourse to the Borrower
or guaranties by the Borrower in connection with the Permitted Receivables
Purchase Facility or the Multicurrency Note Purchase Facility;
(e) Contingent Obligations of the Borrower and its Subsidiaries
existing as of the Closing Date and listed in Schedule 8.7(e) and any
renewals, extensions or modifications thereof so long as the aggregate amount
of such Contingent Obligations does not increase from the amount existing on
the Closing Date;
(f) Contingent Obligations incurred in the ordinary course of
business and not exceeding at any time $30,000,000 in the aggregate in
respect of the Borrower and its Subsidiaries together;
(g) Contingent Obligations arising under the Loan Documents;
(h) Contingent Obligations arising in connection with
Indebtedness of any Subsidiary of the Borrower, provided, that such
Indebtedness is otherwise permitted by this Credit Agreement; and
(i) Contingent Obligations of the Borrower pursuant to
guaranties in favor of Leasetec Corporation and other leasing partners (or
any of their successors or assigns) so long as the aggregate amount thereof
does not exceed at any time $50,000,000.
8.8 Restricted Payments. The Borrower shall not, and shall not
suffer or permit any Subsidiary to, declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, except
that the Borrower may (so long as there is no Default or Event of Default):
61
(a) declare and make dividend payments or other distributions
payable solely in its common stock; and
(b) declare and make dividend payments in cash, so long as in
the aggregate the amount of cash used by the Borrower pursuant to this clause
(b) does not exceed $50,000,000 during the initial term of this facility;
provided further that (so long as there is no Default or Event of
Default) any Subsidiary may pay cash dividends or make other distributions to
the Borrower or, in the ordinary course of business of the Borrower and its
Subsidiaries taken as a whole, any other Subsidiary.
8.9 ERISA. The Borrower shall not, and shall not suffer or permit
any of its ERISA Affiliates to: (a) engage in a prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably expected to result in liabilities of
the Borrower in an aggregate amount in excess of $10,000,000; or (b) engage
in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.10 Change in Business. The Borrower shall not make any material
change in the nature of its business as conducted on the Closing Date.
8.11 Accounting Changes. The Borrower shall not and shall not suffer
or permit any Material Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of each the Borrower or any Material Subsidiary.
ARTICLE IX
EVENTS OF DEFAULT
-----------------
9.1 Event of Default. Any of the following events shall constitute
an "Event of Default":
(a) Non-Payment. The Borrower fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or of any L/C
Obligation, or (ii) within two Business Days after the same becomes due, any
interest, fee or any other amount payable hereunder or under any other Loan
Document; or
(b) Representation or Warranty. Any representation or warranty
by the Borrower made or deemed made herein, in any other Loan Document, or
which is contained in any certificate, document or financial or other
statement by the Borrower, or any Responsible Officer, furnished at any time
under this Agreement, or in or under any other Loan Document, is incorrect in
any material respect on or as of the date made or deemed made; or
62
(c) Specific Defaults. The Borrower (i) fails to perform or
observe any term, covenant or agreement contained in Sections 7.3, 7.4, 7.11
or 7.13 or in Article VIII; or (ii) fails to perform or observe any term,
covenant or agreement contained in Sections 7.1, 7.2 or 7.9 and such failure
shall continue for five Business Days; or
(d) Other Defaults. The Borrower or any Subsidiary party
thereto fails to perform or observe any other term or covenant contained in
this Agreement or any other Loan Document, and such default shall continue
unremedied for a period of 30 days after the earlier of (i) the date upon
which a Responsible Officer knew or reasonably should have known of such
failure or (ii) the date upon which written notice thereof is given to the
Borrower by the Agent or any Bank; or
(e) Cross-Default. The Borrower or any Subsidiary (i) fails to
make any payment in respect of any Indebtedness or Contingent Obligation
(other than Indebtedness or Contingent Obligations hereunder), having an
aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $10,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure shall continue for five Business Days; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, if the effect of such failure, event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and
payable prior to its stated maturity, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any
Material Subsidiary (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Material
Subsidiary, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of the
Borrower's or any Material Subsidiary's properties, and any such proceeding
or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the
Borrower or any Material Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S.
63
law) is ordered in any Insolvency Proceeding; or (iii) the Borrower or any
Material Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $10,000,000; (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds $10,000,000; or
(iii) the Borrower or any ERISA Affiliate shall fail to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $10,000,000; or
(i) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Borrower or any Subsidiary involving in the aggregate a liability
(to the extent not covered by independent third-party insurance as to which
the insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $10,000,000 or more, and the same
shall remain unvacated and unstayed pending appeal for a period of 10 days
after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against the Borrower or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be
any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Adverse Change. There occurs a Material Adverse Effect.
9.2 Remedies. If any Event of Default occurs and is continuing, the
Agent shall, at the request of, or may, with the consent of, the Required
Banks,
(a) declare the obligation of each Bank to make Loans and the
obligation of the Swingline Bank to make Swingline Loans, and any obligation
of the Issuing Bank to Issue Letters of Credit to be terminated, whereupon
such obligations and such Bank's Commitments shall be terminated;
(b) declare an amount equal to the maximum aggregate amount that
is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately
due and payable, and declare the unpaid
64
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived
by the Borrower; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 9.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the
obligation of each Bank to make Loans and any obligation of the Issuing Bank
to Issue Letters of Credit shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all interest and other amounts
as aforesaid shall automatically become due and payable without further act
of the Agent, the Issuing Bank or any Bank.
9.3 Certain Financial Covenant Defaults. In the event that, after
taking into account any extraordinary charge to earnings taken or to be taken
as of the end of any fiscal period of the Borrower (a "Charge"), and if
solely by virtue of such Charge, there would exist an Event of Default due to
the breach of any of Section 7.13 as of such fiscal period end date, such
Event of Default shall be deemed to arise upon the earlier of (a) the date
after such fiscal period end date on which the Borrower announces publicly it
will take, is taking or has taken such Charge (including an announcement in
the form of a statement in a report filed with the SEC) or, if such
announcement is made prior to such fiscal period end date, the date that is
such fiscal period end date, and (b) the date the Borrower delivers to the
Agent its audited annual or unaudited quarterly financial statements in
respect of such fiscal period reflecting such Charge as taken.
ARTICLE X
THE AGENT
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10.1 Appointment and Authorization; "Agent". (a) Each Bank hereby
irrevocably (subject to Section 10.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Agent shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the
term "agent" in this Agreement with reference to the Agent is not intended to
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connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at
the request of the Required Banks to act for such Issuing Bank with respect
thereto; provided, however, that the Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Article X with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this Article X,
included the Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.
10.2 Delegation of Duties. The 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. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
10.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Borrower
or any Subsidiary or Affiliate of the Borrower, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document,
or for any failure of the Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
10.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other
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experts selected by the Agent. The Agent shall be fully justified in failing
or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Required Banks and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent (or made available) by the Agent to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Bank, unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Bank
prior to the Closing Date specifying its objection thereto and such objection
shall not have been withdrawn by notice to the Agent to that effect on or
prior to the Closing Date.
10.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". The Agent will notify the
Banks of its receipt of any such notice. The Agent shall take such action
with respect to such Default or Event of Default as may be requested by the
Required Banks in accordance with Article IX; provided, however, that unless
and until the Agent has received any such request, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable
or in the best interest of the Banks.
10.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each
Bank represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Borrower and its Subsidiaries, the value of and
title to any collateral, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower hereunder. Each Bank
also represents that it will,
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independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and the other Loan Documents, and
to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
the Borrower which may come into the possession of any of the Agent-Related
Persons.
10.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of
the Borrower and without limiting the obligation of the Borrower to do so),
in accordance with the Banks' Pro Rata Shares from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities to the extent that they are found by a final decision of a court
of competent jurisdiction to have resulted solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
10.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrower
and its Subsidiaries and Affiliates as though BofA were not the Agent or the
Issuing Bank hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor of
the Borrower or such Subsidiary) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent or the
Issuing Bank.
10.9 Successor Agent. The Agent may, and at the request of the
Required Banks shall, resign as Agent upon 30 days' notice to the Banks. If
the Agent resigns
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under this Agreement, the Required Banks shall appoint from among the Banks a
successor agent for the Banks. If no successor agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may appoint,
after consulting with the Banks and the Borrower, a successor agent from
among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall
be terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X and Sections 11.4 and 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment
as Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA
may not be removed as the Agent at the request of the Required Banks unless
BofA shall also simultaneously be replaced as "Issuing Bank" and "Swingline
Bank" hereunder pursuant to documentation in form and substance reasonably
satisfactory to BofA (which documentation, among other things, will deal with
replacement and cancellation of all outstanding Letters of Credit and the
payment of all outstanding Swingline Loans in a manner satisfactory to BofA).
10.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441
or 1442 of the Code, such Bank agrees to deliver to the Agent and the
Borrower:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed copies of IRS Form 1001 before the payment of any
interest or fees in the first calendar year and before the payment of
any interest or fees in each third succeeding calendar year during which
interest or fees may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224 before
the payment of any interest or fees is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during which
interest or fees may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
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Such Bank agrees to promptly notify the Agent and the Borrower of any change
in circumstances which would modify or render invalid any claimed exemption
or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Bank sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrower owing to such Bank,
such Bank agrees to notify the Agent and the Borrower of the percentage
amount in which it is no longer the beneficial owner of Obligations of the
Borrower owing to such Bank. To the extent of such percentage amount, the
Agent and the Borrower will treat such Bank's IRS Form 1001 as no longer
valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent and the Borrower
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Borrower to such Bank, such Bank agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Borrower (or if not withheld by the Borrower the Agent)
may withhold from any interest payment to such Bank, or to the Agent on
behalf of such Bank, an amount equivalent to the applicable withholding tax
after taking into account such reduction. However, if the forms or other
documentation required by subsection (a) of this Section are not delivered to
the Agent and the Borrower, then the Borrower (or the Agent, if not withheld
by the Borrower) may withhold from any interest payment to such Bank, or to
the Agent on behalf of such Bank, not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed
by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Borrower or the Agent
did not properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Borrower or the Agent of
a change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Borrower or the Agent fully for all amounts paid, directly or
indirectly, by the Borrower or the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction
on the amounts payable to the Borrower or the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The
obligation of the Banks under this subsection shall survive the payment of
all Obligations and the resignation or replacement of the Agent.
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ARTICLE XI
MISCELLANEOUS
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11.1 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure by the Borrower or any applicable Subsidiary therefrom, shall
be effective unless the same shall be in writing and signed by the Required
Banks (or by the Agent at the written request of the Required Banks) and the
Borrower and acknowledged by the Agent, and then any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Banks and the Borrower
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank or the
Swingline Commitment of the Swingline Bank;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under
any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any
of them to take any action hereunder; or
(e) amend this Section, or Section 2.14, or any provision herein
providing for consent or other action by all Banks;
and, provided, further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Issuing Bank in addition to the Required
Banks or all the Banks, as the case may be, affect the rights or duties of
the Issuing Bank under this Agreement or any L/C-Related Document relating to
any Letter of Credit Issued or to be Issued by it, and (ii) no amendment,
waiver or consent shall, unless in writing and signed by the Agent in
addition to the Required Banks or all the Banks, as the case may be, affect
the rights or duties of the Agent under this Agreement or any other Loan
Document.
11.2 Notices. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 11.2, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the
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address or facsimile number specified for notices on Schedule 11.2; or, as
directed to the Borrower or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrower and the Agent. All notices to
the Borrower shall be sent to Storage Technology Corporation, 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Assistant Treasurer, Telecopy
No.: (000) 000-0000.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the
date deposited into the U.S. mails, or if delivered, upon delivery; except
that notices pursuant to Article II, III or X to the Agent shall not be
effective until actually received by the Agent, and notices pursuant to
Article III to the Issuing Bank shall not be effective until actually
received by the Issuing Bank at the address specified for the "Issuing Bank"
on the applicable signature page hereof.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and
at the request of the Borrower. The Agent and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by
the Borrower to give such notice and the Agent and the Banks shall not have
any liability to the Borrower or other Person on account of any action taken
or not taken by the Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans and L/C
Obligations shall not be affected in any way or to any extent by any failure
by the Agent and the Banks to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms understood by the Agent and
the Banks to be contained in the telephonic or facsimile notice.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing or
hereafter arising.
11.4 Costs and Expenses. The Borrower shall:
whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent within five Business Days after
demand (subject to subsection 5.1(e)) for all costs and expenses incurred by
the Agent in
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connection with the development, preparation, delivery, ongoing
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs and search and filing fees and
expenses incurred by the Agent with respect thereto;
(b) pay or reimburse the Agent and the Arranger and each Bank
within five Business Days after demand (subject to subsection 5.1(e)) for all
costs and expenses (including reasonable Attorney Costs and search and filing
fees and expenses provided that the Borrower shall have been given statements
containing reasonably detailed bills for such fees and expenses) incurred by
them in connection with the enforcement or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence
of an Event of Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding); and
(c) during the continuance of any Event of Default, pay or
reimburse the Agent within five Business Days after demand for all appraisal
(including the allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost of such
internal services), incurred or sustained by the Agent in connection with the
matters referred to under subsections (a) and (b) of this Section.
11.5 Borrower's Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its 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 and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person 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 with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding)
related to or arising out of this Agreement or the Loans or Letters of Credit
or the use of the proceeds thereof, whether or not any Indemnified Person is
a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrower shall have no obligation hereunder
to any Indemnified Person with respect to Indemnified Liabilities to the
extent they are found by a final decision of a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
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11.6 Payments Set Aside. To the extent that the Borrower makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such set-off had not occurred, and (b) each Bank severally
agrees to pay to the Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Agent.
11.7 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
11.8 Assignments, Participations, Etc. (a) Any Bank may, with the
written consent of the Borrower at all times other than during the existence
of an Event of Default and the Agent and the Issuing Bank, (which consents in
each case shall not be unreasonably withheld), at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent
of the Borrower, the Agent or the Issuing Bank shall be required in
connection with any assignment and delegation by a Bank to an Eligible
Assignee that is an Affiliate of such Bank or that is a Bank then holding a
Commitment hereunder) (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitments, the L/C Obligations and the other rights and
obligations of such Bank hereunder, provided, that any such assigning Bank
either retains a Commitment or Loan of at least $15,000,000 or disposes of
its entire Commitment or Loans and provided further that any Assignee shall
have a Commitment or Loans of at least $15,000,000; provided, however, that
the Borrower and the Agent may continue to deal solely and directly with such
Bank in connection with the interest so assigned to an Assignee until
(i) written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have
been given to the Borrower and the Agent by such Bank and the Assignee;
(ii) such Bank and its Assignee shall have delivered to the Borrower and the
Agent an Assignment and Acceptance in the form of Exhibit E ("Assignment and
Acceptance") together with any Note or Notes subject to such assignment and
(iii) the assignor Bank or Assignee has paid to the Agent a processing fee in
the amount of $3,500. No Assignee shall be entitled to higher recoveries or
greater rights under Sections 4.1, 4.2 and 4.3 than its assignor.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations
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hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, (ii) this Agreement shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments and Loans arising therefrom, and
(iii) the assignor Bank shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents; provided, however,
that the assignor Bank shall not relinquish its rights under Article IV or
under Sections 11.4 and 11.5 to the extent such rights relate to the time
prior to the effective date of the Assignment and Acceptance. The Commitment
allocated to each Assignee shall reduce the Commitment of the assigning Bank
pro tanto.
(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, (and provided that it consents to such assignment in
accordance with subsection 11.8(a)), the Borrower shall execute and deliver
to the Agent, any new Notes requested by such Assignee evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank has
retained a portion of its Loans and its Commitment, replacement Notes as
requested by the assignor Bank evidencing the Loans and Commitment retained
by such assignor Bank (such Notes to be in exchange for, but not in payment
of, the Notes held by such Bank).
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Loans, the Commitment of that Bank and the
other interests of that Bank (the "originating Bank") hereunder and under the
other Loan Documents; provided, however, that (i) the originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the originating
Bank shall remain solely responsible for the performance of such obligations,
(iii) the Borrower, the Issuing Bank and the Agent shall continue to deal
solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Banks as described in the first proviso to
Section 11.1. In the case of any such participation, the Participant shall be
entitled to the benefit of Sections 4.1, 4.3 and 11.5 as though it were also
a Bank hereunder, and not otherwise have any rights under this Agreement, or
any of the other Loan Documents, and all amounts payable by the Borrower
hereunder shall be determined as if such Bank had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Bank under this
Agreement.
75
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held
by it in favor of any Federal Reserve Bank in accordance with Regulation A of
the FRB or U.S. Treasury Regulation 31 CFR Section203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
11.9 Confidentiality. Each Bank and the Agent agrees that it will not
disclose to any third party any written information marked "Confidential,"
"Secret," "Top Security," "Protected" or words of similar import, provided to
it by the Borrower or any Subsidiary or any oral information which is stated
to be confidential and which is confirmed as such in writing within seven
days; provided, however, that the foregoing will not (i) restrict the ability
of the Agent, the Banks and any loan participants from freely exchanging such
information among themselves (and their respective employees, attorneys,
auditors and other professional advisors), (ii) restrict the ability to
disclose such information to a prospective Eligible Assignee or participants,
provided, that such Eligible Assignee or participants execute a
confidentiality agreement with the selling Bank agreeing to be bound by the
terms hereof prior to disclosure of such information to such Eligible
Assignee or participant, or (iii) prohibit the disclosure of such information
to the extent such information (A) becomes publicly available other than
through a breach of this Section 11.9, (B) becomes available through a Person
other than the Borrower or a Subsidiary of the Borrower, (C) is required to
be disclosed pursuant to court order, subpoena, other legal process,
regulatory request or otherwise by law or (D) is disclosed in litigation with
the Borrower or any Subsidiary of the Borrower or in connection with the
enforcement of remedies by the Agent or Banks after acceleration of the Loans
or after the Termination Date.
11.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
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 Bank to
or for the credit or the account of the Borrower against any and all
Obligations owing to such Bank, now or hereafter existing, irrespective of
whether or not the Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Bank agrees promptly to notify the Borrower
and the Agent after any such set-off and application made by such Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.
11.11 Automatic Debits of Fees. With respect to any commitment fee,
letter of credit fee or other fee, or any other cost or expense (including
Attorney Costs) due and payable to the Agent, the Issuing Bank, BofA or the
Arranger under the Loan Documents, the Borrower hereby irrevocably authorizes
BofA to debit any deposit account of the Borrower with BofA in an amount such
that the aggregate amount
76
debited from all such deposit accounts does not exceed such fee or other cost
or expense. If there are insufficient funds in such deposit accounts to
cover the amount of the fee or other cost or expense then due, such debits
will be reversed (in whole or in part, in BofA's sole discretion) and such
amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
11.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of
such other administrative information as the Agent shall reasonably request.
11.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement
required hereunder.
11.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrower, the Banks,
the Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection
with, this Agreement or any of the other Loan Documents.
11.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
BORROWER, THE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWER, THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN
77
RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER, THE
AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA
LAW.
11.17 Waiver of Jury Trial. THE BORROWER, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
11.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the
Borrower, the Banks and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
11.19 Certain Closing Date Transitional Matters.
(a) On the Closing Date, each Bank and NBD Bank hereby sells and
assigns, without recourse, an amount of Loans and L/C Obligations equal to
the product of (i) the excess (if any) of its Original Percentage over its
Closing Date Percentage times (ii) the aggregate principal amount of Loans
and L/C Obligations outstanding on such date and each Bank hereby purchases
an amount of Loans and L/C Obligations equal to the product of (i) the excess
(if any) of its Closing Date Percentage over its Original Percentage times
(ii) the aggregate principal amount of Loans and L/C Obligations outstanding
on such date. Each Bank selling Loans and L/C Obligations hereunder shall be
deemed to have sold (and each Bank purchasing Loans and L/C Obligations shall
be deemed to have purchased) a pro rata portion (based on the aggregate
principal amount of Loans and L/C Obligations then outstanding) of each of
such selling Bank's Loans and L/C Obligations. Payments by each Bank
purchasing
78
Loans and L/C Obligations hereunder shall be made to the Agent not later than
12:00 noon, (San Francisco time) in immediately available funds, without
setoff, deduction or counterclaim, for the pro rata account (based upon the
outstanding principal amount of Loans and L/C Obligations being sold) of each
selling Bank in an amount equal to the aggregate principal amount of
outstanding Loans and L/C Obligations purchased by such Bank.
(b) On and after the Closing Date, each Bank shall be entitled
to receive commitment fees under Section 2.11(a) of the Agreement and
interest and fees on Loans and L/C Obligations and on any other amount due
under any Loan Document, in each case, (i) accrued and unpaid before the
Closing Date in accordance with its Original Percentage and (ii) accrued on
and after the Closing Date in accordance with its Closing Date Percentage.
(c) On and after the Closing Date, to the extent that any
commitment and the other rights and obligations of any Bank existing at the
time immediately preceding the Closing Date have been assigned or delegated,
as applicable, to any Bank hereunder, such assignee Bank hereby assumes such
commitment and other obligations and shall have the rights and obligations of
a Bank hereunder and under the other Loan Documents and, to the extent that
any commitment and other obligations of any Bank existing at the time
immediately preceding the Closing Date have been delegated by any Bank
pursuant to this Agreement, such assignor Bank shall be released from such
commitment and its obligations thereunder and under the other Loan Documents.
For purposes of this Section, (i) "Original Percentage" means, relative
to any Bank or NBD Bank, the percentage set forth with respect to such Bank
on the schedule attached hereto as Schedule 11.19 and (ii) "Closing Date
Percentage" means, relative to any Bank, the percentage set forth with
respect to such Bank on the schedule attached hereto as Schedule 11.19.
11.20 Termination of Prior Loan Documents. The Borrower and Storage
Technology de Puerto Rico, Inc., by execution of this Agreement, request as
of the Closing Date that the Agent, the Original Banks and the other
financial institutions party to the Prior Loan Documents, terminate the Prior
Loan Documents (other than the Existing BofA Letters of Credit) and all of
the Commitments thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco by their proper and duly
authorized officers as of the day and year first above written.
[Intentionally left blank]
79
STORAGE TECHNOLOGY CORPORATION
By: /s/ Xxxx XxXxxxxx
----------------------------------
Title: Vice President and Treasurer
-------------------------------
Acknowledged and agreed as to Section 11.20:
STORAGE TECHNOLOGY de PUERTO RICO, INC.
By: /s/ Xxxx XxXxxxxx
----------------------------------
Title: Vice President and Treasurer
-------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as Agent
By: /s/ Xxxxx XxXxxxx
----------------------------------
Title: Managing Director
-------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Bank, as Issuing Bank and as
Swingline Bank
By: /s/ Xxxxx XxXxxxx
----------------------------------
Title: Managing Director
-------------------------------
80
BANK OF MONTREAL
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Title: Senior Vice President
-------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Title: First Vice President
-------------------------------
Acknowledged and agreed as to Section 11.19
NBD BANK
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Title: First Vice President
-------------------------------
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxx X. Massimo
----------------------------------
Title: Vice President
-------------------------------
ROYAL BANK OF CANADA
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Title: Manager
-------------------------------
THE SUMITOMO BANK, LIMITED
By: /s/ Xxxx Xxxxx
----------------------------------
Title: Joint General Manager
-------------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
-------------------------------
SCHEDULE 2.1
------------
COMMITMENTS
AND PRO RATA SHARES
-------------------
Bank Commitment Pro Rata Share
----- ---------- --------------
Bank of America National Trust and $30,000,000 20.00000001%
Savings Association
Bank of Montreal $23,000,000 15.00000000%
The First National Bank of Chicago $23,000,000 15.33333333%
The First National Bank of Boston $18,000,000 12.00000000%
Royal Bank of Canada $23,000,000 15.00000000%
The Sumitomo Bank, Limited $15,000,000 10.00000000%
Fleet National Bank $18,000,000 12.00000000%
TOTAL $150,000,000 100.00%
.00
Schedule 2.9(e)
---------------
APPLICABLE MARGIN PRICING GRID
Consolidated Total
Liabilities divided by Liabilitiestdividedlby
Quarter EBITDA Consolidated Tangible Net Consolidated Tangible Net
Rolling 4 Worth Pounds 0.70 Worth > 0.70
-------------- ------------------------- -------------------------
Offshore Rate Base Rate Offshore Rate Base Rate
Spread Spread Spread Spread
(%) (%) (%) (%)
------------- --------- ------------- ---------
X < $300
million 1.000 0.000 1.500 0.000
$300 million
< X < $475 million 0.750 0.000 1.000 0.000
$475 million
< X < $650 million 0.625 0.000 0.750 0.000
X > $650
million 0.500 0.000 0.625 0.000
Note:
The initial Applicable Margin commencing on the Closing Date and
continuing until the first Business Day following the Agent's receipt of
the first Compliance Certificate described in Section 7.2(a) shall be:
(a) in the case of Offshore Rate Loans A 0.750%
(b) in the case of Base Rate Loans A 0.000%
Schedule 2.11(a)
----------------
COMMITMENT FEE PRICING GRID
Rolling Consolidated Total Consolidated Total
4 Quarter EBITDA Liabilities divided by Liabilities divided by
(x) Consolidated Tangible Consolidated Tangible Net
Net Worth Pounds 0.70 Worth > 0.70
----------------- ---------------------- -------------------------
Commitment Fee Commitment Fee
(%) (%)
-------------- --------------
X < $300 million 0.275 0.350
$300 million
< X < $475 million 0.200 0.275
$475 million
< X < $650 million 0.175 0.200
X > $650 million 0.150 0.175
SCHEDULE 3.3(a)
---------------
EXISTING LETTERS OF CREDIT
--------------------------
Letter of Date of Date of Current Amount
Credit Number Issuance Expiry Outstanding Beneficiary
------------- -------- ------- -------------- -----------
SBLC 227106 1/11/96 1/5/98 50,000.00 Mellon Bank
SBLC 225003 8/2/95 7/31/99 100,000.00 New England Power
Company
SBLC 3001446 9/19/96 2/7/98 262,625.00 WCB Twenty Ltd.
Partnership
SBLC 228710 5/1/96 9/30/97 35,000,000.00 Bank of America NT&SA
SCHEDULE 6.5
LITIGATION
STORAGE TECHNOLOGY CORPORATION
In January 1994, Stuff Technology Partners II, a Colorado Limited Partnership
(Stuff), filed suit in Boulder County, Colorado, District Court against the
Company and certain subsidiaries. The suit alleged that the Company breached
a 1990 settlement agreement that had resolved earlier litigation between the
parties. The suit sought injunctive relief and damages in the amount of
$2,400,000,000. On December 28, 1995, the court dismissed the complaint.
Stuff appealed the dismissal to the Colorado Court of Appeals. In April
1996, the trial court stayed discovery on the Company's counterclaim for
breach of the covenant not to xxx pending resolution of the appeal. In March
1997 the Court of Appeals reversed the District Court's judgment and remanded
the case back to the District Court for further proceedings.
On February 15, 1994, the Company filed suit in Boulder County, Colorado,
District Court against Array Technology Corporation (Array) and Tandem
Computers Incorporated (Tandem). The suit asked that the court order Array
and Tandem either to support certain disk drives purchased from them or
provide the Company with technical data necessary for StorageTek to provide
such customer support. In March 1994, Array and Tandem filed their answer
and also filed counterclaims against the Company alleging breach of contract
and claiming damages. On June 10, 1994, the court ordered Array and Tandem
to continue to provide support for these products and to maintain, in an
independent escrow account, the materials necessary to enable the Company to
support the products in the event Array and Tandem failed to provide such
services. On May 30, 1995, the Company filed an amended complaint seeking
damages. The case is in the discovery phase. A trial date has been set for
October 1997.
On June 29, 1995, Odetics, Inc. filed a patent infringement suit in the U.S.
District Court for the Eastern District of Virginia against the Company and
two of its customers alleging that the "passthrough" port in certain of the
Company's tape library products infringed U.S. Patent No. 4,779,151 (the "151
Patent"). The complaint asked the court to impose injunctive relief, treble
damages in an unspecified amount, and an award of attorney fees and costs. A
trial commenced on January 22, 1996, and on February 1, 1996, a jury found
that the Company's products did not infringe the 151 Patent. A notice of
appeal to the U.S. Court of Appeals for the Federal Circuit was filed by
Odetics, Inc. on March 8, 1996. Oral arguments were held in January 1997. A
decision is expected in the second or third quarter of
1997.
On December 8, 1995, Odetics, Inc. filed a second patent infringement suit in
the U.S. District Court for the Eastern District of Virginia against the
Company. The complaint alleges that the "cartridge access port" in certain
of the Company's tape library products infringe the 151 Patent. The
complaint seeks injunctive relief, treble damages in an unspecified amount,
and an award of attorney fees and costs. This case has been stayed pending
the outcome of the appeal to the U.S. Court of Appeals for the Federal
Circuit with respect to the case filed by Odetics, Inc. in June 1995.
On July 30, 1996, the Company received Civil Investigative Demands (CID) from
the U.S. Department of Justice Antitrust Division concerning the OEM
agreement with IBM for mainframe online storage subsystems. The Company
received two additional CIDs in October, 1996 and one additional CID in
February 1997. The CIDs requested production of documents and testimony in
connection with a review for compliance with the Xxxxxxx Act of the agreement
for compliance with the Xxxxxxx Act.
In addition, the Company is involved in various other less significant legal
proceedings. The Company believes it has adequate legal defenses with
respect to each of the suits cited above and intends to vigorously defend
against these actions. However, it is reasonably possible that these cases
could result in outcomes unfavorable to the Company. While the Company
currently believes that the amount of the ultimate potential loss would not
be material to the Company's financial position, the outcome of litigation is
inherently difficult to predict. In the event of an adverse outcome, the
ultimate potential loss could have a material affect on the Company's
financial position or reported results of operations in a particular quarter.
An adverse decision, particularly in patent litigation, could require
material changes in production processes and products or result in the
Company's inability to ship products or components found to have violated
third-party patent rights.
Schedule 6.11
STORAGE TECHNOLOGY CORPORATION
PERMITTED LIABILITIES
Operating leases (with base annual rental payments in excess
of $3,000,000):
NONE
SCHEDULE 6.12
STORAGE TECHNOLOGY CORPORATION
ENVIRONMENTAL MATTERS
NONE
SCHEDULE 6.15
SUBSIDIARIES AND MINORITY INTERESTS
STORAGE TECHNOLOGY CORPORATION
U.S. SUBSIDIARIES
-----------------
INCORPORATION
-------------
Bytex Corporation Delaware
NSC European Operations Company Minnesota
Storage Technology de Puerto Rico, Inc. Delaware
Storage Technology European Trade Corporation Delaware
Storage Technology Optical Disk Development
Corporation Delaware
StorageTek Foundation Colorado
StorageTek Holding Corporation Nevada
StorageTek International Corporation Delaware
StorageTek International Services Corporation Delaware
Vitalink Communications Corporation Delaware
NON-U.S. SUBSIDIARIES
---------------------
Storage Technology of Australia Pty., Limited Australia
Network Systems Australasia Pty. Limited Australia
Storage Technology New Zealand Pty., Limited Australia
Network Systems Austria Gesellschaft m.b.h Austria
Network Systems Foreign Sales Corp Barbados
Storage Technology (Belgium) N.V./S.A. Belgium
StorageTek Brasil Ltda Brazil
StorageTek Canada, Inc. Canada
Amperif Canada, Ltd. Canada
StorageTek A/S Denmark
StorageTek OY Finland
Network Systems France S.A. France
Storage Technology Holding France S.A. France
Storage Technology France S.A. France
Storage Technology Formation France
Storage Technology European Operations France
Bytex GmbH Germany
Storage Technology Holding GmbH Germany
Storage Technology GmbH Germany
Storage Technology Network Systems GmbH Germany
Storage Technology OEM Vertrieb GmbH Germany
Network Systems Italia S.R.l. Italy
Storage Technology Italia, SpA Italy
Network Systems Japan K.K. Japan
Storage Technology of Japan, Ltd. Japan
Storage Technology Asia/Pacific K.K. Japan
StorageTek (Malaysia) Sdn. Bhd. Malaysia
StorageTek de Mexico, S.A. de C.V. Mexico
Storage Technology (The Netherlands) B.V. Netherlands
Storage Technology (The Netherlands) B.V.
(Irish Branch) Ireland
Storage Technology Finance B.V. Netherlands
StorageTek III B.V. Netherlands
Storage Technology New Zealand Pty., Limited New Zealand
StorageTek A/S Norway
StorageTek Espana, S.A. Spain
StorageTek South Asia Pte. Ltd. Singapore
NSC Network Systems AB Sweden
Storage Technology Sweden AB Sweden
StorageTek AG Switzerland
D.M.L. StorageTek Ltd United Kingdom
Bytex DataCom Ltd. United Kingdom
Bytex Europe United Kingdom
Storage Technology Holding Limited United Kingdom
Storage Technology Limited United Kingdom
Storage Technology Manufacturing Limited United Kingdom
Schedule 6.16
STORAGE TECHNOLOGY CORPORATION
INSURANCE MATTERS
NONE
Schedule 8.1(i)
STORAGE TECHNOLOGY CORPORATION
PERMITTED LIENS
NONE
Schedule 8.2
STORAGE TECHNOLOGY CORPORATION
PERMITTED DISPOSITIONS
Manufacturing Facility located in Longmont, Colorado
Printer Operations Facility located in Palm Bay, Florida
SCHEDULE 11.2
LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Address for Funding Notices:
Bank of America National Trust
and Savings Association
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Agency Administrative Services #5596
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for all Other Notices:
Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Credit Products
High Technology-SF #3697
Xxxxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGENT'S PAYMENT OFFICE:
Bank of America National Trust
and Savings Association
(ABA 121-000-358)
Attention: Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
For credit to account:
No. 12334-15395
Ref: Storage Technology Corporation
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Swingline Bank
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
Bank of America National Trust
and Savings Association
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Agency Administrative Services #5596
Facsimile: (000) 000-0000
with a copy to:
Bank of America National Trust
and Savings Association
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Credit Products
High Technology-SF #3697
Xxxxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
0000 Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):
Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Credit Products
High Technology-SF #3697
Xxxxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Issuing Bank
Notices:
Bank of America National Trust and
Savings Association
Trade Operations Center #22621
000 X. Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Bank of America National Trust
and Savings Association
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: Account Administrator
Global Payment Operations
Account Administration #5693
Facsimile: (000) 000-0000
and to:
Bank of America National Trust
and Savings Association
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Agency Administrative Services #5596
Facsimile: (000) 000-0000
and to:
Bank of America National Trust
and Savings Association
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Credit Products
High Technology-SF #3697
Xxxxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF MONTREAL
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
Bank of Montreal
U.S. Corporate Banking
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
Bank of Montreal
Suite 4900
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
The First National Bank of Chicago
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE FIRST NATIONAL BANK OF BOSTON
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
The First National Bank of Boston
000 Xxxxxxx Xxxxxx, M/S 01-08-04
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
The First National Bank of Boston
000 Xxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copy to:
The First National Bank of Boston
000 Xxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ROYAL BANK OF CANADA
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
Royal Bank of Canada
Loans Administration
Financial Square, 23rd Floor
New York, NY 10005-3531
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
Royal Bank of Canada
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE SUMITOMO BANK, LIMITED
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
Sumitomo Bank
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing Notices and
Notices of Conversion/Continuation):
Sumitomo Bank
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FLEET NATIONAL BANK
Lending Office and Office for
Borrowing Notices and Notices of
Conversion/Continuation:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop MAOF 0305
Attention: Xxxxxxx Kowalcyzky
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing
Notices and Notices of Conversion/
Continuation:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop MAOF 0305
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SCHEDULE 11.19
CLOSING DATE TRANSITIONAL MATTERS
Closing
Original Date
Bank Percentage Percentage
Bank of America National Trust
and Savings Association 24.000000000% 20.00000000%
Bank of Montreal 18.000000000% 15.00000000%
The First National Bank of Boston 13.333333333% 12.00000000%
Royal Bank of Canada 18.000000000% 15.00000000%
The Sumitomo Bank, Limited 6.666666666% 10.00000000%
The First National Bank of Chicago 0% 15.33333333%
Fleet National Bank 0% 12.00000000%
NBD Bank 18.666666667% 0%
EXHIBIT A
--------
to the Credit Agreement
FORM OF NOTICE OF BORROWING
Date:
-----------------------------
To: Bank of America National Trust and
Savings Association as Agent
Agency Management Services (#5596)
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Re: Storage Technology Corporation
------------------------------
Ladies and Gentlemen:
The undersigned, Storage Technology Corporation (the "Company"), refers
to the Credit Agreement dated as of April 9, 1997 (as amended, modified,
renewed or extended from time to time, the "Credit Agreement"), among the
Company, the several financial institutions party to the Credit Agreement
(the "Banks") and Bank of America National Trust and Savings Association, as
Swingline Bank, Issuing Bank and Agent for the Banks, for full particulars of
the matters herein described. All capitalized terms used in this Notice of
Borrowing and not otherwise defined herein shall have the meanings assigned
to such terms in the Credit Agreement. The undersigned hereby gives you
irrevocable notice, pursuant to Section 2.3 of the Credit Agreement, of the
Borrowing specified herein and that:
1. The requested Borrowing Date for the proposed Borrowing is
, .
----- ------
2. The Borrowing is in respect of [Revolving Loans] [a Swingline Loan].
3. The aggregate amount of the proposed Borrowing is $.
4. The Borrowing is to be comprised of $ of [Offshore Rate]
-----------
[Base Rate] Loans.
5. [If applicable:] The duration of the Interest Period for the
Offshore Rate Loans included in the Borrowing shall be [one] [two] [three]
[six] months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Company contained in
Article VI of the Credit Agreement are true and correct as though made
on and as of each such date (except to the extent such representations
and warranties relate to an earlier date, in which case they are true
and correct as of such earlier date, and except that subsections 6.11(a)
and 6.11(b) of the Credit Agreement shall be deemed to refer instead to
the last day of the most recent fiscal year for which financial
statements have then been delivered);
(b) no Default or Event of Default exists, or would result from
such proposed Borrowing; and
(c) the proposed Borrowing will not cause (i) the Effective Amount
of all Revolving Loans plus the Effective Amount of all Swingline Loans
plus the Effective Amount of all L/C Obligations to exceed the total of
all Commitments, and (ii) the Effective Amount of all Swingline Loans to
exceed the Swingline Commitment.
STORAGE TECHNOLOGY CORPORATION
By:
-------------------------------------
Name:
Title:
[Copy to Swingline Bank if Notice of Borrowing relates to Borrowing of a
Swingline Loan.]
EXHIBIT B
---------
to the Credit Agreement
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date:
-----------------------
To: Bank of America National Trust and
Savings Association as Agent
Agency Management Services (#5596)
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Re: Storage Technology Corporation
------------------------------
Ladies and Gentlemen:
The undersigned, Storage Technology Corporation (the "Company"), refers
to the Credit Agreement dated as of April 9, 1997 (as amended, modified,
renewed or extended from time to time, the "Credit Agreement"), among the
Company, the several financial institutions party to the Credit Agreement
(the "Banks") and Bank of America National Trust and Savings Association, as
Swingline Bank, Issuing Bank and Agent for the Banks, for full particulars of
the matters herein described. All capitalized terms used in this Notice of
Conversion/Continuation and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The undersigned
hereby gives you irrevocable notice, pursuant to Section 2.4 of the Credit
Agreement, of the [conversion] [continuation] of the Loans specified herein
and that:
1. The date of the [conversion] [continuation] is
, .
---------------------- ----
2. The [conversion] [continuation] is in respect of outstanding
Revolving Loans.
3. The aggregate amount of the Loans to be [converted]
[continued] is $ .
-----------------
4. The Loans are to be [converted into] [continued as] [Offshore
Rate] [Base Rate] Loans.
5. [If applicable:] The duration of the Interest Period for the
Offshore Rate Loans to be [converted] [continued] shall be [one] [two]
[three] [six] months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed
[conversion][continuation], before and after giving effect thereto:
(a) the representations and warranties of the Company contained in
Article VI of the Credit Agreement are true and correct as though made
on and as of each such date (except to the extent such representations
and warranties relate to an earlier date, in which case they are true
and correct as of such earlier date, and except that subsections 6.11(a)
and 6.11(b) of the Credit Agreement shall be deemed to refer instead to
the last day of the most recent fiscal year for which financial
statements have then been delivered); and
(b) no Default or Event of Default exists, or would result from
such proposed [conversion] [continuation].
STORAGE TECHNOLOGY CORPORATION
By:
-------------------------------------
Name:
Title:
EXHIBIT C
---------
to the Credit Agreement
FORM OF COMPLIANCE CERTIFICATE
To: Bank of America National Trust and
Savings Association, as Agent
Credit Products High Technology #3697
000 Xxxxxxxxxx Xxxxxx, 00xx Xx.
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx XxXxxxx, Managing Director
Re: Storage Technology Corporation
Ladies and Gentlemen:
This Compliance Certificate is made and delivered pursuant to
Section 7.2(a) of the Credit Agreement, dated as of April 9, 1997 (as
amended, modified, renewed or extended from time to time, the "Credit
Agreement"), among Storage Technology Corporation (the "Company"), the
several financial institutions party to the Credit Agreement (the "Banks")
and Bank of America National Trust and Savings Association, as Swingline
Bank, Issuing Bank and Agent for the Banks, and reference is made thereto for
full particulars of the matters described herein. All capitalized terms used
in this Compliance Certificate and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. This Compliance
Certificate relates to the fiscal quarter ending , .
Pursuant to Section 7.1(a) and 7.1(b) the Company hereby certifies
that the information set forth on Schedule 1 hereto (and on any additional
schedules hereto setting forth further supporting detail) is true, accurate
and complete as of the end of such accounting period.
The Company further certifies that (i) as of the date hereof no
Default or Event of Default exists, and (ii) on and as of the date hereof,
there has occurred no Material Adverse Effect since the date of the end of
the last fiscal quarter, except in each case as may be set forth in a
separate attachment hereto describing in detail the nature of each condition
or event constituting an exception to the foregoing statements, the period
during which it has existed and the action which the Company is taking or
proposes to take with respect to each such condition or event.
IN WITNESS WHEREOF, the undersigned has signed this Compliance
Certificate this day of , .
STORAGE TECHNOLOGY CORPORATION
Name:
Title:
SCHEDULE 1
to the Compliance Certificate
Dated ,
For the fiscal quarter ended ,
Actual Required/Permitted
------ ------------------
1. Section 7.13(a) -
Minimum Consolidated
Tangible Net Worth
----------------------
A not less than B
(A) Consolidated Tangible
Net Worth, calculated
as at end of each fiscal
quarter
Consolidated Total Assets $ ------
minus intangible assets and
other excluded assets -------
minus amortizing debt issuance
expenses carried as an asset -------
minus reserves carried and not
deducted from assets or not
reflected as a liability -------
minus cash held in sinking or
other analogous fund -------
minus Consolidated Total Liabilities -------
Consolidated Tangible Net Worth
as at the end of the fiscal
quarter $-------
(B) Minimum Consolidated Tangible Net Worth calculation:
Beginning minimum amount 85% of Consolidated Tangible
Net Worth as at 12/27/96
plus 75% of Consolidated Net
Income (excluding Consolidated Net
Losses) of the Borrower and its
Subsidiaries earned in each fiscal
quarter after December 27, 1996. -------
plus 75% of the amount of all
proceeds (net of costs and expenses)
received pursuant to the issuance of
any equity securities issued by the
Borrower after December 27, 1996
(excluding proceeds of any issuance
made for the purposes of fulfilling
an employee stock purchase plan or
compensatory option plan.) -------
plus 100% of the face amount of any
Subordinated Indebtedness that is
converted into stock of the Borrower
after December 27, 1996 -------
Minimum Consolidated Tangible Net
Worth required $------------
Difference between A and B $------------
2. Section 7.13(b) - Consolidated Net Income
-----------------------------------------
No (i) Consolidated Net Loss orConsolidated Operating Loss of the Borrower and
its Subsidiaries to occur for each of any two consecutive fiscal quarters
(calculated as of the last day of each such fiscal quarter); or (ii)
Consolidated Net Loss or Consolidated Operating Loss of the Borrower and its
Subsidiaries for any fiscal quarter greater than $25,000,000.
(A) Consolidated Net Loss $--------
(B) Consolidated Operating Loss $--------
3. Section 7.13(c) - Consolidated Total Leverage Ratio
---------------------------------------------------
Not greater than 0.80 to 1.00 (as at the end of the fiscal quarter)
(A) Consolidated Total Liabilities
(less Subordinated Indebtedness) $---------
(B) Consolidated Total Capital $---------
Ratio of (A) to (B)
4. EBITDA
------
Consolidated Net Income (or Net Loss)
calculated on a rolling four quarter
basis $---------
plus amounts treated as expenses for
depreciation, interest and the
amortization of intangibles of
any kind to the extent included
in the determination of Net
Income or Net Loss, calculated
on a rolling four quarter basis $---------
plus accrued taxes on or measured
by income to the extent included
in the determination of Net Income
or Net Loss, calculated on a
rolling four quarter basis $---------
EBITDA, calculated on a rolling four quarter basis $------------
5. Ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth
--------------------------------------------------------------------------
(A) Consolidated Total Liabilities $---------
(B) Consolidated Tangible Net Worth $---------
Ratio of A to B
EXHIBIT D-1
------------
FORM OF OPINION OF SHEARMAN & STERLING
April , 1997
To each of the financial institutions
party to the Credit Agreement referred to
below and to Bank of America National Trust and
Savings Association, as Agent
Ladies and Gentlemen:
We have acted as special counsel for Storage Technology
Corporation, a Delaware corporation (``the Company''), in connection with the
negotiation, execution and delivery of the Credit Agreement dated as of
April 9, 1997 (the ``Credit Agreement'') among the Company, the several
financial institutions which are signatories thereto (collectively, the
``Banks''), and Bank of America National Trust and Savings Association, as
lender of the Swingline Loans (in such capacity, the ``Swingline Bank''), as
issuer of the Letters of Credit (in such capacity, the ``Issuing Bank''), and
as agent (the ``Agent'') for the Banks, the Swingline Bank and the Issuing
Bank.
This opinion is delivered to you pursuant to Section 5.1(d) of the
Credit Agreement. Capitalized terms not otherwise defined herein are used
herein with the meanings ascribed to such terms in the Credit Agreement.
In connection with this opinion, we have examined counterparts of
the Credit Agreement, together with all schedules and exhibits thereto,
executed by each of the parties thereto and such other documents, instruments
and certificates as we have deemed necessary for the purposes of rendering
this opinion, including the opinion of Xxxxxxx X. Xxxxxxxx, Esq. (the
``Stenmark Opinion''), corporate counsel to the Company.
With respect to certain factual matters relevant to this opinion,
we have relied solely upon, and assumed the accuracy of, representations made
by the Company in the Credit Agreement. We have made no independent
investigation of any of the facts stated in any of the representations;
however, nothing has come to our attention which would lead us to believe
that such facts are inaccurate. We do, however, call your attention to
the fact that we have acted as special counsel to the Company with regard to
the Credit Agreement and are not generally familiar with the operations of the
Company or its business or legal affairs.
We have assumed (i) the genuineness of all signatures of Persons
(except for the Company) executing the Credit Agreement on behalf of the
Company thereto, (ii) the authenticity of all documents submitted to us as
originals, (iii) the conformity to authentic original documents of all
documents submitted to us as certified, conformed or photostatic copies, and
(iv) the due authorization, execution and delivery of the Credit Agreement by
the parties thereto.
We have also assumed, for the purposes of California usury law,
that the Swingline Bank, the Issuing Bank and each Bank is either (i) a
national bank operating pursuant to federal banking law or (ii) a ``foreign
(other state) bank'' within the meaning of Section 1200 of the California
Financial Code.
We are qualified to practice law in the State of California, and
our opinion is restricted to the laws of the State of California and the
federal laws of the United States of America (collectively, the ``Laws'').
To the extent that our opinions expressed below involve conclusions
as to the matters set forth in paragraphs 1, 3, 4, 5, 9 or 10 of the Stenmark
Opinion, we have assumed without independent investigation the correctness of
such matters set forth in the Stenmark Opinion, our opinions being subject to
the assumptions, qualifications and limitations set forth in such opinions
with respect thereto.
Based upon the foregoing, and subject to the further assumptions,
exemptions, qualifications and limitations set forth herein, we advise you
that in our opinion:
1. The execution, delivery and performance by the Company of
the Credit Agreement does not contravene any applicable Laws, or any rule or
regulation promulgated thereunder (including, without Limitation, Regulations
T, U, G and X of the Board of Governors of the Federal Reserve System).
2. No consent, authorization, approval or other action by,
and no notice to or registration or filing with, any Governmental Authority
created or acting under any of the Laws is required for the due execution,
delivery or performance by the Company of the Credit Agreement.
3. The Credit Agreement constitutes the legal, valid and
binding obligation of the Company, enforceable against it in accordance with
its terms.
4. No taxes or governmental fees and charges are payable in
connection with the execution and delivery of the Credit Agreement.
Our opinions set forth above are subject to the following
assumptions, exceptions, qualifications and limitations:
A. Our opinion in paragraph 3 above is subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally.
B. Our opinion in paragraph 3 above is subject to the effect
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law). Such principles of equity are of general
application, and in applying such principles a court, among other things,
might not allow a creditor to accelerate the maturity of a debt upon the
occurrence of a default deemed immaterial or might decline to order a
borrower to perform covenants. Such principles applied by a court might
include a requirement that the creditors act with reasonableness and in good
faith. Such a requirement might be applied, among other situations, to the
provisions of the Credit Agreement purporting to authorize conclusive
determinations by any Bank, the Swingline Bank, the Issuing Bank or the
Agent.
C. Certain rights, remedies and waivers contained in the
Credit Agreement may be rendered ineffective or unenforceable or otherwise
limited by applicable laws or judicial decisions, but such laws and judicial
decisions do not, in our opinion, make the Credit Agreement inadequate for
the practical realization of the benefits intended to be provided thereby.
D To the extent the Credit Agreement provides for the
payment of attorneys' fees in litigation, under California law such
attorneys' fees must be reasonable (as determined pursuant to Section 1717 of
the California Civil Code) and may be granted only to the prevailing party,
and such provisions are deemed to extend to both parties, notwithstanding
that such provisions by their express terms benefit only one party.
E. Enforcement of any indemnity provision contained in the
Credit Agreement, and the effect of any exculpatory provisions contained in
the Credit Agreement, may be limited to the extent such provisions encompass
indemnification or exculpation with respect to the negligence or misconduct
of any Bank, the Swingline Bank, the Issuing Bank or the Agent or to violations
of law or are found contrary to statute or public policy.
F. Requirements in the Credit Agreement specifying that
provisions thereof may only be waived or amended in writing may not be
binding or enforceable to the extent that a non-executory oral agreement has
been created modifying or waiving any provision of the Credit Agreement or an
implied agreement, by trade practice or course of conduct, allowing a waiver
has been created.
G. We have assumed that (i) each of the Banks has the power,
authority and legal right to enter into the Credit Agreement; (ii) the Credit
Agreement is a valid, binding and enforceable obligation of each of the
Banks; and (iii) there are no agreements, understandings or negotiations,
whether written or oral, between any of the Banks and the Company that would
expand, modify or otherwise affect the terms of the Credit Agreement, or the
respective rights or obligations or the parties thereunder. We note that we
have been advised by the Company that no such agreements, understandings or
negotiations exist.
H. We have assumed that if any Bank is required by
California law to be qualified as a foreign corporation in California as a
result of transactions other than the Credit Agreement, it has filed all
required franchise tax returns, if any, and paid all required taxes, if any,
under the California Revenue & Taxation Code.
I. We express no opinion as to the extent to which rights
with respect to self help or exercise of other remedies without notice or
judicial proceedings can be validly exercised in California.
J. With respect to the enforceability of the Credit
Agreement, we have assumed that the Banks will: (i) exercise the rights and
remedies set forth in the Credit Agreement in a commercially reasonable
manner; (ii) abide by the implied covenant of good faith and fair dealing
imposed by California Law; and (iii) not take any discretionary action which
is arbitrary, unreasonable or capricious.
K. We express no opinion with respect to the legality,
validity, binding nature or enforceability (whether according to its terms or
otherwise) of any provision of the Credit Agreement regarding : (i) any
waivers or variations of rights of a debtor; and (ii) any severability
provision in the Credit Agreement as it relates to a provision or provisions,
taken as a whole, in the Credit Agreement, the existence and enforceability
of which was material to a party's decision to enter into the Credit
Agreement.
L. We express no opinion herein as to the enforceability of
provisions for a rate of interest, after failure to pay any amount when due,
in excess of the rate of interest otherwise payable or provisions for late
charges, set forth in the Credit Agreement.
This opinion is rendered as of the date hereof. We express no
opinion as to circumstances or events which may occur subsequent to such
date, and we assume no obligation to revise or supplement this opinion in the
event of any future change in the Laws, or the rules and regulations
promulgated thereunder, or the interpretations thereof or any change in the
facts upon which this opinion is based.
This opinion is furnished for the benefit of the Banks, the
Swingline Bank (including any successor of the Swingline Bank), the Issuing
Bank and the Agent and
their respective, successors and assignees (as permitted pursuant to Section
11.8 of the Credit Agreement) and may not be relied upon by any other Person
for any purpose without our prior written consent. We consent to Xxxxxxx
Xxxxxxxx'x reliance on paragraph 1 of this opinion for the purpose of her
rendering her opinion pursuant to Section 5.1(d) of the Credit Agreement
Very truly yours,
EXHIBIT D-2
FORM OF OPINION OF XXXXXXX X. XXXXXXXX, ESQ.
April , 1997
To each of the financial institutions
party to the Credit Agreement referred to
below and to Bank of America National Trust and
Savings Association, as Agent
Ladies and Gentlemen:
I am Senior Counsel to Storage Technology Corporation, a Delaware
corporation (``the Company''), and in such capacity have represented the
Company in connection with the preparation, negotiation, execution and
delivery of the Credit Agreement, dated as of April 9, 1997 (the ``Credit
Agreement''), among the Company, the several financial institutions from time
to time party to the Credit Agreement (the ``Banks''), and Bank of America
National Trust and Savings Association (``BofA''), as lender of the Swingline
Loans (BofA, in its capacity as such lender, the ``Swingline Bank''), as
issuer of the Letters of Credit (BofA, in its capacity as such issuer, the
``Issuing Bank''), and as agent (the ``Agent'') for the Banks, the Swingline
Bank and the Issuing Bank.
This opinion is delivered to you pursuant to Section 5.1(d) of the
Credit Agreement. Capitalized terms not otherwise defined herein are used
herein with the meanings ascribed to such terms in the Credit Agreement.
In connection with this opinion, I have examined the following
documents:
(a) counterparts of the Credit Agreement, together with all
schedules and exhibits thereto, executed by each of the parties thereto;
(b) certificates of public officials from the States of Delaware
and Colorado and such other states as I have deemed necessary for the purpose
of rendering this opinion;
(c) the certificate and by-laws of the Company, as amended to
date;
(d) records of proceedings of the Board of Directors of the
Company during or by which resolutions were adopted relating to matters
covered by this opinion; and
(e) such other documents, instruments and certificates as I have
deemed necessary for the purpose of rendering this opinion.
I am qualified to practice law in the State of Colorado, and my
opinion is restricted to the laws of the State of Colorado, the general
corporation laws of the State of Delaware and the federal laws of the United
States of America.
Based upon the foregoing, and subject to the assumptions and
qualifications set forth herein, I am of the opinion that:
1. The Company is duly qualified as a foreign corporation to do
business and is in good standing in the State of Colorado and all other
jurisdictions in which the character of the properties owned or held under
lease by it or the nature of business transacted by it makes such
qualification necessary, except, in each case, where the failure to qualify
as a foreign corporation and be in good standing in jurisdictions other than
Colorado would not have a material adverse effect on the Company. The
Company has been duly incorporated and is validly existing and in good
standing as a corporation under the laws of the State of Delaware.
2. The Company has full corporate power and authority and all
authorizations, consents, approvals and governmental licenses required or
advisable to own and operate (or lease, as the case may be) its properties
and to carry on its business as currently conducted and contemplated to be
conducted.
3. The Company has full corporate power and authority and all
authorizations, consents, approvals and governmental licenses required or
advisable to execute, deliver and perform the Credit Agreement.
4. The execution, delivery and performance by the Company of the
Credit Agreement (i) are within the Company's corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) do not
contravene its charter or by-laws or any other agreement, lease or instrument
to which it is a party or by which it or its properties may be bound or
affected, (iv) will not result in or require the creation or imposition of
any Lien upon or with respect to any property, assets or revenues now owned or
hereafter acquired by the Company, (v) will not violate, conflict with,
contravene, or constitute a default under any Contractual Obligation nor
contravene any applicable law, rule, regulation, order, writ, decree,
determination or award presently in effect which affects or binds it or any of
its properties, which default, contravention, violation or conflict could have
a Material Adverse Effect or render the Loan Documents unenforceable. No
consent, authorization, approval or other action by, and no notice to or
registration with, any Governmental Authority created or acting under any law,
rule or regulation is required for the due execution, delivery or performance
by any Company of the Credit Agreement.
5. The Credit Agreement has been duly executed and delivered on
behalf of each Company.
6. The Credit Agreement constitutes the legal, valid and binding
obligation of such Company enforceable against such Company in accordance
with its terms.
For purposes of the foregoing opinion, (i) I have relied upon the
opinion expressed in paragraph 1 of the opinion letter of Shearman & Sterling
(the ``Shearman & Sterling Opinion''), special counsel to the Company, (ii) I
have assumed without independent investigation the correctness of such
matters set forth in such opinion expressed in paragraph 1 of the Shearman &
Sterling Opinion, although I am unaware of any fact or circumstance which, if
brought to the attention of Shearman & Sterling, would likely result in a
further assumption, qualification or limitation with respect to such opinion,
and (iii) my opinion is subject to the assumptions, qualifications and
limitations set forth in the Shearman & Sterling Opinion with respect to the
opinion expressed in paragraph 1 therein.
7. There is no action, suit or proceeding pending or threatened,
in or before any Governmental Authority, domestic or foreign, which relates
to any aspect of the transactions contemplated by the Credit Agreement, and,
except as set forth in Schedule 6.5 to the Credit Agreement, there is no
material action, suit or proceeding pending or threatened, in or before any
Governmental Authority, domestic or foreign, which relates to any Company of
any of its Subsidiaries or any of the properties of any Company of any of its
Subsidiaries.
8. The Company does not have any issued and outstanding
indentures, convertible debentures, convertible exchangeable preferred stock
or other preferred stock, common stock or stock warrants that by its terms
has or will have any right of payment of principal or interest,
including any sinking fund payment, or redemption, or other right of
payment, that is not subordinated in right of payment to the satisfaction in
full of all of the Obligations.
9. Neither the Company, nor any Subsidiary of the Company, is, or
is required to be, registered under the Investment Company Act of 1940, as
amended.
10. To my knowledge, the Company is not engaged principally in the
business of extending credit for the purposes of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System).
11. No taxes or governmental fees and charges are payable in
connection with the execution and delivery of the Credit Agreement.
The opinions set forth above are subject to the following
qualifications:
A. The opinion expressed in paragraph 6 above is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances or preferential transfers.
B. The opinion expressed in paragraph 6 above is subject to the
effect of general principles of equity (regardless of whether considered in a
proceeding in equity or at law). Such principles of equity are of general
application, and in applying such principles a court, among other things,
might not allow a creditor to accelerate the maturity of a debt upon the
occurrence of a default deemed immaterial or might decline to order a
borrower to perform covenants. Such principles applied by a court might
include a requirement that the creditors act with reasonableness and in good
faith. Such a requirement might be applied, among other situations, to the
provisions of the Credit Agreement purporting to authorize conclusive
determinations by any Bank, the Swingline Bank, the Issuing Bank or the
Agent.
C. Enforcement of any indemnity provision contained in the Credit
Agreement, and the effect of any exculpatory provisions contained in the
Credit Agreement, may be limited to the extent such provisions encompass
indemnification or exculpation with respect to the negligence or misconduct
of any Bank, the Swingline Bank, the Issuing Bank or the Agent or to
violations of law or are found contrary to statute or public policy.
This opinion is furnished for the benefit of the Banks, the
Swingline Bank, the Issuing Bank and the Agent and their respective
successors and assignees and may not be relied upon by any other Person for
any purpose without my prior written consent. I consent to Shearman &
Sterling's reliance on this opinion for the purpose of their rendering their
opinions pursuant to Section 5.1(d) of the Credit Agreement.
Very truly yours,
Xxxxxxx X. Xxxxxxxx
Senior Counsel
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
---------------------------------
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of is made between
(the "Assignor") and (the "Assignee").
RECITALS
--------
WHEREAS, the Assignor is party to that certain Credit Agreement dated as
of April 9, 1997 (as amended, restated, modified, supplemented or renewed
from time to time, the "Credit Agreement"), among Storage Technology
Corporation (the "Company"), the several financial institutions from time to
time party thereto (including the Assignor, the "Banks") and Bank of America
National Trust and Savings Association, as Swingline Bank, Issuing Bank and
agent for the Banks (in its capacity as agent, the "Agent"). Any terms
defined in the Credit Agreement and not defined in this Assignment and
Acceptance are used herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Revolving Loans to the Company and to participate in
Letters of Credit issued for the account of the Company in an aggregate
amount not to exceed $ (the "Commitment");
WHEREAS, [the Assignor has made Loans in the aggregate principal amount
of $ to the Company] [no Loans are outstanding under the Credit
Agreement] [and the amount of Assignor's percentage share of the aggregate
amount available for drawing under outstanding Letters of Credit issued for
the account of the Company is $ ] [and no Letters of
Credit are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment pro rata in accordance with the Assignor's
Commitment and L/C Commitment (which is a part of its Commitment rather than
a separate, independent commitment), [together with a corresponding portion of
each of its outstanding Loans] [and a corresponding portion of its
participation in each of the outstanding Letters of Credit], in an amount
equal to % of the Assignor's Commitment [and Loans], on the terms and
subject to the conditions set forth herein, and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except
as provided in this Assignment and Acceptance) % (the "Assignee's
Percentage Share") of (A) the Commitment and L/C Commitment [and the Loans]
of the Assignor [and participation in outstanding Letters of Credit] and
(B) all related rights, benefits, obligations, liabilities and indemnities of
the Assignor under and in connection with the Credit Agreement and the Loan
Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the
obligations of a Bank under the Credit Agreement, including the requirements
concerning confidentiality and the payment of indemnification, with a
Commitment in the amount set forth in subsection (c) below. The Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank. It is the intent of the parties hereto that the
Commitment of the Assignor shall, as of the Effective Date, be reduced by an
amount equal to the portion thereof assigned to the Assignee hereunder, and
the Assignor shall relinquish its rights and be released from its obligations
under the Credit Agreement to the extent such obligations have been assumed
by the Assignee including with respect to its L/C Commitment; provided,
however, that the Assignor shall not relinquish its rights under Article IV
or Sections 11.4 and 11.5 of the Credit Agreement to the extent such rights
relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignee's Commitment will be
$ [; (ii) the Assignee's aggregate outstanding Loans will be
$ ;] [and (iii) the Assignor's L/C Commitment will be
$ ].
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignor's Commitment will be
$ [; (ii) the Assignor's aggregate outstanding Loans will be
$ ;] [and (iii) the Assignor's L/C Commitment will be
$ ].
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, (i) the Assignee shall pay to the Assignor
on the Effective Date in immediately available funds an amount equal to
$ , representing the Assignee's Percentage Share of the principal
amount of all Loans previously made by the Assignor to the Company under the
Credit Agreement and outstanding on the Effective Date and (ii) the Assignee
assumes the Assignee's Percentage Share of the Assignor's participation in
the Letters of Credit and each drawing under such Letter of Credit
outstanding on the Effective Date.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 11.8 of the Credit
Agreement.
3. Reallocation of Payments. Any interest, fees and other payments
accrued to the Effective Date with respect to the Commitment [and Loans] [and
Letters of Credit] of the Assignor shall be for the account of the Assignor.
Any interest, fees and other payments accrued on and after the Effective Date
with respect to the portion of such Commitment [and Loans] [and Letters of
Credit] assigned to the Assignee shall be for the account of the Assignee.
Each of the Assignor and the Assignee agrees that it will hold in trust for
the other party any interest, fees and other amounts which it may receive to
which the other party is entitled pursuant to the preceding sentence and pay
to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision. The Assignee: (a) acknowledges that
it has received a copy of the Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements
referred to in Section 6.11 or Section 7.1 of the Credit Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance
upon the Assignor, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit and legal decisions in taking or not taking action under the
Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date
for this Assignment and Acceptance shall be (the "Effective
Date"); provided that the following conditions precedent have been satisfied
on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) any consent of the Company and the Agent required under
Section 11.8 of the Credit Agreement for the effectiveness of the
assignment hereunder by the Assignor to the Assignee shall have been
duly obtained and shall be in full force and effect as of the Effective
Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof
and in Section 11.8 of the Credit Agreement shall have been paid to the
Agent; and
(v) the Assignor and Assignee shall have complied with the
other requirements of Section 11.8 of the Credit Agreement and with the
requirements of Sections 10.10 and 11.9 of the Credit Agreement (in each
case to the extent applicable).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the Agent for
acknowledgement by the Agent, a Notice of Assignment substantially in the
form attached hereto as Schedule 1.
6. Agent. The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement. [The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as Agent under the Credit
Agreement.] [INCLUDE ONLY IF ASSIGNOR IS AGENT]
7. Withholding Tax. The Assignee (a) represents and warrants to the
Assignor, the Agent and the Company that under applicable law and treaties no
tax will be required to be withheld by the Bank with respect to any payments
to be made to the Assignee hereunder, and (b) agrees to furnish (if it is
organized under the laws of any jurisdiction other than the United States or
any State thereof) to the Agent and the Company prior to the time that the
Agent or Company is required to make any payment of interest or fees under
the Credit Agreement, duplicate executed originals of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
the Assignee claims entitlement to the benefits of a tax treaty that provides
for a complete exemption from U.S. federal income withholding tax on all
payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto,
duly executed and completed by the Assignee, as and when required under the
Credit Agreement.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to
take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance
and to fulfill its obligations hereunder; (iii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than those
referred to in Section 5(a)(ii) hereof and any already given or obtained) for
its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required
by the Credit Agreement, no further action by, or notice to, or filing with,
any Person is required of it for such execution, delivery or performance; and
(iv) this Assignment and Acceptance has been duly executed and delivered by
it and constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any Loan Document or any other
instrument or document furnished pursuant thereto. The Assignor makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the solvency, financial condition or statements of the
Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than those
referred to in Section 5(a)(ii) hereof and any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance; and apart from any agreements or undertakings or filings required
by the Credit Agreement, no further action by, or notice to, or filing with,
any Person is required of it for such execution, delivery or performance;
(iii) this Assignment and Acceptance has been duly executed and delivered by
it and constitutes the legal, valid and binding obligation of the Assignee,
enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances. The Assignor and the Assignee each hereby
agrees to execute and deliver such other instruments, and take such other
action, as either party may reasonably request in connection with the
transactions contemplated by this Assignment and Acceptance, including the
delivery of any notices or other documents or instruments to the Company or
the Agent, which may be required in connection with the assignment and
assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment
and Acceptance shall be in writing and signed by the parties hereto. No
failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number
of counterparts and all of such counterparts taken together shall be deemed
to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. THE
ASSIGNOR AND THE ASSIGNEE EACH IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN CALIFORNIA OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS ASSIGNMENT AND
ACCEPTANCE AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE OR FEDERAL
COURT. EACH PARTY TO THIS ASSIGNMENT AND ACCEPTANCE HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS ASSIGNMENT AND
ACCEPTANCE OR ANY DOCUMENT RELATED HERETO, AND PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA/NEW YORK LAW.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, AND ANY RELATED DOCUMENTS
AND AGREEMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER OF THE
PARTIES AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH OF THE PARTIES ALSO AGREES THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE ASSIGNOR AND
THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT WITH THE
CREDIT AGREEMENT.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
1.
SCHEDULE 1
to the Assignment and Acceptance Agreement
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
Date:
To: Bank of America National Trust and Savings Association, as Agent
Storage Technology Corporation
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of April 9, 1997 (as amended,
restated, modified, supplemented or renewed from time to time, the "Credit
Agreement") among Storage Technology Corporation (the "Company"), the Banks
referred to therein and Bank of America National Trust and Savings
Association, as Swingline Bank, Issuing Bank and agent for the Banks (in its
capacity as agent, the "Agent"). Terms defined in the Credit Agreement are
used herein as therein defined.
1. We hereby give you notice of, and request the consent of the
Company and the Agent to, the assignment by (the
"Assignor") to (the "Assignee") of % of the right,
title and interest of the Assignor in and to the Credit Agreement (including,
without limitation, % of the right, title and interest of the Assignor in
and to the Commitment and L/C Commitment of the Assignor [and all outstanding
Loans made by the Assignor] [and corresponding portion of Assignor's
participation in each outstanding Letter of Credit]) pursuant to that certain
Assignment and Acceptance Agreement, dated as of (the "Assignment
and Acceptance") between Assignor and Assignee, a copy of which Assignment
and Acceptance is attached hereto. Before giving effect to such assignment
the Assignor's Commitment is $ [and its L/C Commitment is
$ ]. [The Assignor has made Loans to the Company in the principal
amount of $ .] [No Loans are outstanding under the Credit
Agreement.]
2. The Assignee agrees that, upon receiving the consent of the Company
and the Agent to such assignment (if applicable) and from and after the
Effective Date (as such term is defined in Section 5 of the Assignment and
Acceptance), the Assignee shall be bound by the terms of the Credit Agreement,
with respect to the interest in the Credit Agreement assigned to it as
specified above, as fully and to the same extent as if the Assignee were the
Bank originally holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Lending Office(s):
Assignee name:
Address:
Attention:
Telephone: ( )
Facsimile: ( )
Assignee name:
Address:
Attention:
Telephone: ( )
Facsimile: ( )
(B) Notice Address:
Assignee name:
Address:
Attention:
Telephone: ( )
Facsimile: ( )
(C) Payment Instructions:
Account No.:
At:
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment
and Acceptance.
5. This Notice of Assignment and Acceptance may be executed by the
Assignor and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same notice and agreement.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above
mentioned.
Very truly yours,
Adjusted Commitment: [ASSIGNOR]
$ By:
Title:
Adjusted L/C Commitment
$ ]
Adjusted Pro Rata Share:
%
Commitment: [ASSIGNEE]
$ By:
Title:
L/C Commitment
$ ]
Pro Rata Share:
%
CONSENTED TO this day
of :
STORAGE TECHNOLOGY CORPORATION
By:
Title:
ACKNOWLEDGED AND CONSENTED TO this
day of :
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Agent
By:
Title:
EXHIBIT F
--------
to the Credit Agreement
FORM OF PROMISSORY NOTE
U.S.$ , 199
FOR VALUE RECEIVED, the undersigned, Storage Technology
Corporation, a Delaware corporation (hereinafter the "Company"), hereby
promises to pay to the order of (the
"Bank") the principal sum of United States
dollars (U.S.$ ) or, if less, the aggregate unpaid principal amount
of all Loans made by the Bank to the Company pursuant to the Credit
Agreement, dated as of April 9, 1997 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter
called the "Credit Agreement"), among the Company, the Bank, the other banks
parties thereto, and Bank of America National Trust and Savings Association,
as Swingline Bank, Issuing Bank and Agent for the Banks, on the dates and in
the amounts provided in the Credit Agreement. The Company further promises
to pay interest on the unpaid principal amount of the Loans evidenced hereby
from time to time at the rates, on the dates, and otherwise as provided in
the Credit Agreement.
The Bank is authorized to endorse the amount and the date on
which each Loan is made, the maturity date therefor and each payment of
principal with respect thereto on the schedules annexed hereto and made a
part hereof, or on continuations of such schedules which continuations shall
be attached hereto and made a part hereof; provided, that any failure to
endorse such information on any such schedule or continuation thereof shall
not in any manner affect any obligation of the Company under the Credit
Agreement and this Promissory Note (the "Note") or the right of the Company
to credit for any payments made.
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The maker hereby expressly waives
presentment, demand, protest or further notice of any kind in connection
with the delivery, acceptance, performance or enforcement of this Note.
Unless otherwise defined in this Note, terms defined in the
Credit Agreement are used herein as therein defined.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.
STORAGE TECHNOLOGY CORPORATION
By:
Name:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
------------------------------------------------
(3) (4)
(2) Maturity Amount of
Amount Date of Base (5)
(1) of Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
--------- ---------- --------- ----------- --------
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
--------------------------------------------------------
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
------- ---------- --------- ---------- ----------
PROMISSORY NOTE
U.S.$30,000,000 April 9, 1997
FOR VALUE RECEIVED, the undersigned, Storage Technology
Corporation, a Delaware corporation (hereinafter the "Company"), hereby
promises to pay to the order of Bank of America National Trust and Savings
Association (the "Bank") the principal sum of thirty million United States
dollars (U.S.$30,000,000) or, if less, the aggregate unpaid principal amount
of all Loans made by the Bank to the Company pursuant to the Credit
Agreement, dated as of April 9, 1997 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, being hereinafter
called the "Credit Agreement"), among the Company, the Bank, the other banks
parties thereto, and Bank of America National Trust and Savings Association,
as Swingline Bank, Issuing Bank and Agent for the Banks, on the dates and in
the amounts provided in the Credit Agreement. The Company further promises
to pay interest on the unpaid principal amount of the Loans evidenced hereby
from time to time at the rates, on the dates, and otherwise as provided in
the Credit Agreement.
The Bank is authorized to endorse the amount and the date on
which each Loan is made, the maturity date therefor and each payment of
principal with respect thereto on the schedules annexed hereto and made a
part hereof, or on continuations of such schedules which continuations shall
be attached hereto and made a part hereof; provided, that any failure to
endorse such information on any such schedule or continuation thereof shall
not in any manner affect any obligation of the Company under the Credit
Agreement and this Promissory Note (the "Note") or the right of the Company
to credit for any payments made.
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The maker hereby expressly waives presentment, demand,
protest or further notice of any kind in connection with the delivery,
acceptance, performance or enforcement of this Note.
Unless otherwise defined in this Note, terms defined in the
Credit Agreement are used herein as therein defined.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.
STORAGE TECHNOLOGY CORPORATION
By:
Name:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(3) (4)
(2) Maturity Amount of
Amount Date of Base
(5)
(1) of Base Base Rate Loan
Notation
Date Rate Loan Rate Loan Repaid
Made By
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore
(5)
(1) Offshore Offshore Rate Loan
Notation
Date Rate Loan Rate Loan Repaid
Made By
PROMISSORY NOTE
U.S.$18,000,000 April 9, 1997
FOR VALUE RECEIVED, the undersigned, Storage Technology
Corporation, a Delaware corporation (hereinafter the "Company"), hereby
promises to pay to the order of The First National Bank of Boston (the
"Bank") the principal sum of eighteen million United States dollars
(U.S.$18,000,000) or, if less, the aggregate unpaid principal amount of all
Loans made by the Bank to the Company pursuant to the Credit Agreement, dated
as of April 9, 1997 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, being hereinafter called the "Credit
Agreement"), among the Company, the Bank, the other banks parties thereto,
and Bank of America National Trust and Savings Association, as Swingline
Bank, Issuing Bank and Agent for the Banks, on the dates and in the amounts
provided in the Credit Agreement. The Company further promises to pay
interest on the unpaid principal amount of the Loans evidenced hereby from
time to time at the rates, on the dates, and otherwise as provided in the
Credit Agreement.
The Bank is authorized to endorse the amount and the date on which
each Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part hereof,
or on continuations of such schedules which continuations shall be attached
hereto and made a part hereof; provided, that any failure to endorse such
information on any such schedule or continuation thereof shall not in any
manner affect any obligation of the Company under the Credit Agreement and
this Promissory Note (the "Note") or the right of the Company to credit for
any payments made.
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The maker hereby expressly waives presentment, demand,
protest or further notice of any kind in connection with the delivery,
acceptance, performance or enforcement of this Note.
Unless otherwise defined in this Note, terms defined in the Credit
Agreement are used herein as therein defined.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.
STORAGE TECHNOLOGY CORPORATION
By:
Name:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(3) (4)
(2) Maturity Amount of
Amount Date of Base (5)
(1) of Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid
Made By
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
PROMISSORY NOTE
U.S.$23,000,000 April 9, 1997
FOR VALUE RECEIVED, the undersigned, Storage Technology
Corporation, a Delaware corporation (hereinafter the "Company"), hereby
promises to pay to the order of the Royal Bank of Canada (the "Bank") the
principal sum of twenty-three million United States dollars (U.S.$23,000,000)
or, if less, the aggregate unpaid principal amount of all Loans made by the
Bank to the Company pursuant to the Credit Agreement, dated as of April 9,
1997 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, being hereinafter called the "Credit Agreement"),
among the Company, the Bank, the other banks parties thereto, and Bank of
America National Trust and Savings Association, as Swingline Bank, Issuing
Bank and Agent for the Banks, on the dates and in the amounts provided in the
Credit Agreement. The Company further promises to pay interest on the unpaid
principal amount of the Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the Credit Agreement.
The Bank is authorized to endorse the amount and the date on which
each Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part hereof,
or on continuations of such schedules which continuations shall be attached
hereto and made a part hereof; provided, that any failure to endorse such
information on any such schedule or continuation thereof shall not in any
manner affect any obligation of the Company under the Credit Agreement and
this Promissory Note (the "Note") or the right of the Company to credit for
any payments made.
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The maker hereby expressly waives presentment, demand,
protest or further notice of any kind in connection with the delivery,
acceptance, performance or enforcement of this Note.
Unless otherwise defined in this Note, terms defined in the Credit
Agreement are used herein as therein defined.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.
STORAGE TECHNOLOGY CORPORATION
By:
Name:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(3) (4)
(2) Maturity Amount of
Amount Date of Base (5)
(1) of Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid
Made By
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
PROMISSORY NOTE
U.S.$23,000,000 April 9, 1997
FOR VALUE RECEIVED, the undersigned, Storage Technology
Corporation, a Delaware corporation (hereinafter the "Company"), hereby
promises to pay to the order of The First National Bank of Chicago (the
"Bank") the principal sum of twenty-three million United States dollars
(U.S.$23,000,000) or, if less, the aggregate unpaid principal amount of all
Loans made by the Bank to the Company pursuant to the Credit Agreement, dated
as of April 9, 1997 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, being hereinafter called the "Credit
Agreement"), among the Company, the Bank, the other banks parties thereto,
and Bank of America National Trust and Savings Association, as Swingline
Bank, Issuing Bank and Agent for the Banks, on the dates and in the amounts
provided in the Credit Agreement. The Company further promises to pay
interest on the unpaid principal amount of the Loans evidenced hereby from
time to time at the rates, on the dates, and otherwise as provided in the
Credit Agreement.
The Bank is authorized to endorse the amount and the date on which
each Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part hereof,
or on continuations of such schedules which continuations shall be attached
hereto and made a part hereof; provided, that any failure to endorse such
information on any such schedule or continuation thereof shall not in any
manner affect any obligation of the Company under the Credit Agreement and
this Promissory Note (the "Note") or the right of the Company to credit for
any payments made.
This Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The maker hereby expressly waives presentment, demand,
protest or further notice of any kind in connection with the delivery,
acceptance, performance or enforcement of this Note.
Unless otherwise defined in this Note, terms defined in the Credit
Agreement are used herein as therein defined.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.
STORAGE TECHNOLOGY CORPORATION
By:
Name:
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(3) (4)
(2) Maturity Amount of
Amount Date of Base (5)
(1) of Base Base Rate Loan Notation
Date Rate Loan Rate Loan Repaid
Made By
Schedule B to Note
OFFSHORE RATE LOANS AND REPAYMENT OF OFFSHORE RATE LOANS
(2) (3) (4)
Amount Maturity Amount of
of Date of Offshore (5)
(1) Offshore Offshore Rate Loan Notation
Date Rate Loan Rate Loan Repaid Made By
