CREDIT AGREEMENT
between
XXXX X. XXXXX, and
ASYMETRIX CORPORATION,
as the Borrowers,
and
SEATTLE-FIRST NATIONAL BANK,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
FIRST INTERSTATE BANK OF WASHINGTON, N.A., and
FIRST INTERSTATE BANK OF OREGON, N.A.,
as LenderS,
and
SEATTLE-FIRST NATIONAL BANK,
as the Agent for the Lenders
Dated as of November 4, 1992
TABLE OF CONTENTS
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of November 4, 1992, by and among XXXX X.
XXXXX and ASYMETRIX CORPORATION, a Washington corporation, as the Borrowers, and
SEATTLE-FIRST NATIONAL BANK, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, FIRST INTERSTATE BANK OF WASHINGTON, N.A., and FIRST INTERSTATE
BANK OF OREGON, N.A., as Lenders, and SEATTLE-FIRST NATIONAL BANK, as the Agent
for the Lenders.
ARTICLE I
DEFINITIONS
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1.01 Certain Defined Terms. As used in this Agreement, the following
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terms have the following meanings, which apply to both the singular and plural
forms of the terms defined:
"Acceptable Collateral" means (i) any debt security of or guaranteed
---------------------
by the United States of America or any agency thereof; (ii) any debt security
which at the time is rated either AAA, AA, A, or BBB by Standard & Poor's
Corporation ("S&P") or Aaa, Aa, A or Baa by Xxxxx'x Investors Service, Inc.
("Moody's"); (iii) time deposits with, including certificates of deposit issued
by, any bank or trust company whose commercial paper is Rated A-1 or A-2 by S&P
or Prime-1 or Prime-2 by Moody's and/or whose long-term debt is rated as
provided in clause (ii) above; (iv) repurchase agreements secured by obligations
described in clause (i) above with primary dealers or banks whose debt
securities are rated as provided in clause (ii) above; and (v) commercial paper
which at the time is rated Prime-1 or Prime-2 by Moody's or A-1 or A-2 by S&P or
issued by issuers whose long-term debt is rated as provided in clause (ii)
above, and, in each case, which is pledged by Xxxxx under the Pledge Agreement
and is subject to a perfected first lien security interest thereunder.
"Agent" means Seattle-First National Bank in its capacity as agent for
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the Lenders, and any successor agent designated pursuant to Section 7.06.
"Xxxxx" means Xxxx X. Xxxxx.
-----
"Asymetrix" means Asymetrix Corporation, a Washington corporation, and
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any Successor.
"Bank Affiliate" means a subsidiary of a Lender or a direct or
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indirect parent of a Lender which, in either case, is engaged primarily in the
business of commercial banking.
"Borrower" or "Borrowers" means Xxxxx and Asymetrix, individually and
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collectively.
"Business Day" means a day, other than a Saturday or Sunday, on which
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all of the Lenders are open for business.
"Change in Control" means (a) any voluntary or involuntary disposition
-----------------
(including without limitation, any disposition to Xxxxx'x estate, any trust or
otherwise as a result of Xxxxx'x death) by Xxxxx of any of Asymetrix's
outstanding voting stock or (b) the issuance by Asymetrix of any voting stock
if, after giving effect to any event described in foregoing clauses (a) or (b),
Xxxxx would not have the direct ownership of fifty-one percent (51%) or more of
the then outstanding voting stock of Asymetrix.
"Collateral" means the "Collateral" as defined in the Pledge
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Agreement.
"Commitment" and "Commitment Period" have the meanings defined in
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Section 2.01.
"Coverage Ratio" has the meaning defined in Section 5.02.
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"Eligible Assignee" means (i) a commercial bank organized under the
-----------------
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $200,000,000, and (ii) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of least $200,000,000, provided such bank
is acting through a branch or agency located in the United States, and (iii) any
Bank Affiliate.
"Event of Default" has the meaning defined in Section 6.01.
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"Federal Funds Rate" means for any period, a fluctuating interest rate
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per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Government Approval" means an approval, permit, license,
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authorization, certificate, or consent of any Governmental Authority.
"Governmental Authority" means the government of the United States or
----------------------
any state or any foreign country or any political subdivision of any thereof or
any branch, department, agency, instrumentality, court, tribunal or regulatory
authority which constitutes a part or exercises any sovereign power of any of
the foregoing.
"Indebtedness" means for any person (i) all items of indebtedness or
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liability (except capital, surplus, deferred credits and reserves, as such)
which would be included in determining total liabilities as shown on the
liability side of a balance sheet as of the date as of which indebtedness is
determined, (ii) indebtedness secured by any Lien, whether or not such
indebtedness shall have been assumed, (iii) any other indebtedness or liability
for borrowed money or for the deferred purchase price of property or services
for which such person is directly
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or contingently liable as obligor, guarantor, or otherwise, or in respect of
which such person otherwise assures a creditor against loss, and (iv) any other
obligations of such person under leases which shall have been or should be
recorded as capital leases.
"Interest Period has the meaning defined in Section 2.02.
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"Lender" or "Lenders" means all or any of Seattle-First National Bank,
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Bank of America National Trust and Savings Association, First Interstate Bank of
Washington, N.A., and First Interstate Bank of Oregon, N.A., and their
Successors.
"Lien" means, for any person, any security interest, pledge, mortgage,
----
charge, assignment, hypothecation, encumbrance, attachment, garnishment,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such person or any real or personal property in which such person has or
hereafter acquires any interest, except (i) liens for Taxes which are not
------
delinquent or which remain payable without penalty or the validity or amount of
which is being contested in good faith by appropriate proceedings upon stay of
execution of the enforcement thereof; (ii) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course of business
which are not delinquent or which remain payable without penalty or the validity
or amount of which is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof; and (iii) deposits or pledges
under worker's compensation, unemployment insurance, social security or other
similar laws or made to secure the performance of bids, tenders, contracts
(except for repayment of borrowed money), or leases, or to secure statutory
obligations or surety or appeal bonds or to secure indemnity, performance or
other similar bonds given in the ordinary course of business.
"Loan" or "Loans" means the Revolving Credit Loans and Term Loans.
---- -----
"Loan Documents" means this Agreement, the Note, and the Pledge
--------------
Agreement and any other documents furnished pursuant to Article III.
"Majority Lenders" means Lenders holding sixty-seven percent (67%) of
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the aggregate Commitments.
"Market Value" means:
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(a) for purposes of determining the market value of the Pledged
Microsoft Stock, (i) the last price per share of Microsoft Corporation's common
stock as reported for the trading day immediately preceding the date of
determination on the National Association of Security Dealers Automated
Quotation System ("NASDAQ") or, if Microsoft Corporation's common stock is then
traded on a stock exchange, the closing price on such trading date on the
principal trading exchange (ii) times the number of shares of Microsoft
Corporation's common stock constituting Pledged Microsoft Stock on the date of
determination; provided, that if Microsoft Corporation's common stock is not
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reported on NASDAQ or traded on a stock exchange, in either case for a period of
five (5) consecutive calendar days, then for purposes of determining Market
Value, it shall be deemed to have no value; and
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(b) for purposes of determining the market value of Acceptable
Collateral and other collateral acceptable to the Lenders as provided in Section
5.02, the market price determined as of each date of calculation as reported in
generally available reporting services or otherwise determined in good faith by
the Agent or Lenders.
"Note" has the meaning defined in Section 2.01(d).
----
"Pledge Agreement" means a Pledge Agreement executed by Xxxxx in
----------------
favor of the Lenders and the Agent in substantially the form of Exhibit A.
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"Pledged Microsoft Stock" means the shares of common stock of
-----------------------
Microsoft Corporation pledged by Xxxxx under the Pledge Agreement.
"Prime Rate" has the meaning defined in Section 2.02(a).
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"Pro Rata Share" means for each Lender the percentage set forth
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opposite such Lender's name in Section 2.01(a).
"Qualified Microsoft Stock" means shares of Microsoft
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Corporation's common stock which were acquired, and have been owned at all
times, by Xxxxx for more than three (3) years prior to the date of this
Agreement, and the full purchase price or other consideration therefor was paid
or given by Xxxxx more than three (3) years prior to the date of this Agreement,
all within the meaning of, and as required by, the Securities and Exchange
Commission's Rules 144(d)(1) and (2) and 144(k).
"Revolving Credit Loans" means the revolving credit loans made by
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the Lenders to the Borrowers pursuant to Section 2.01(a).
"Successor" means, for any corporation or banking association,
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any successor by merger or consolidation, or by acquisition of substantially all
of the assets of the predecessor, and, for Xxxxx, his estate, personal
representative or heirs or legatees.
"Tax" means for any person any tax, assessment, duty, levy,
---
impost or other charge imposed by any Governmental Authority on such person or
on any property, revenue, income, or franchise of such person and any interest
or penalty with respect to any of the foregoing.
"Term Loans" means Revolving Credit Loans which have been
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converted to term loans as provided in Section 2.01(b).
1.02 Interest Rate-Related Definitions. Certain definitions related to
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the provisions governing the calculation and payment of interest are set forth
in Section 2.02(a).
1.03 Accounting Terms. Except as otherwise provided herein, accounting
----------------
terms not specifically defined shall be construed, and all accounting procedures
shall be performed, in accordance with generally accepted accounting principles
consistently applied.
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ARTICLE II
THE CREDIT
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2.01 Agreement to Lend. Each Lender severally agrees on the terms and
-----------------
conditions of this Agreement to make the following loans to the Borrowers:
(a) Revolving Credit Loans. Revolving Credit Loans in accordance with
----------------------
each Lender's Pro Rata Share during the period beginning on November 4, 1992,
and ending on the earlier of (i) the date on which a Change of Control occurs or
(ii) November 4, 1995 (the "Commitment Period"), in an aggregate principal
amount not to exceed at any time the sum set forth opposite such Lender's name
below, reduced by such Lender's Pro Rata Share of any outstanding Term Loans or
as a result of the Borrowers' election to reduce the Commitments (such Lender's
Commitment"):
Lender's
Lender Commitment Pro Rata Share
------ ----------- ---------------
Seattle-First National Bank $26,000,000 30.59%
Bank of America National Trust and $30,000,000 35.29%
Savings Association
First Interstate Bank of Washington, 20,000,000 23.53%
N.A.
First Interstate Bank of Oregon, N.A. 9,000,000 10.59%
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Total $85,000,000 100.00%
The Commitments are for Revolving Credit Loans and within the amount and time
specified, the Borrowers may pay, prepay and reborrow.
At any time during the Commitment Period the Borrowers may elect to reduce
the amount of the Commitments by giving the Agent not less than ten (10)
Business Days' prior written notice, specifying the amount by which the
Commitments are to be reduced and the effective date of such reduction. No such
reduction shall reduce the total remaining Commitments to less than the
principal balances of the then outstanding Loans, and each such reduction shall
remain in effect during the entire Commitment Period.
The Borrowers (or such person as the Borrowers shall have designated by
written notice to the Agent) shall give the Agent written or telephonic notice
no later than 10:00 a.m., Seattle time, at least two (2) Business Days prior to
the date of borrowing (confirmed in writing by telecopy or letter received no
later than 10:00 a.m., Seattle time, on the specified date of borrowing, but
Borrowers' failure to provide such confirmation shall not invalidate the Agent
and
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Lenders' authority to rely on such telephonic notice) specifying the amount
and date of each Revolving Credit Loan, which shall be in a minimum amount of
$500,000 and integral multiples of $100,000 above such minimum, and the intended
use of the proceeds of such Loan. Such notices shall be effective upon receipt,
except that a notice received by the Agent after 10:00 a.m., Seattle time, shall
be deemed to be received on the immediately succeeding Business Day. Such
notices shall be irrevocable.
On receipt of each such notice, the Agent shall promptly notify each Lender
by telephone (confirmed by telecopy prior to the close of business on the day of
notice) of the information set forth in the Borrowers' notice of borrowing.
Each Lender shall, before 10:00 a.m., Seattle time, on the specified date of
borrowing, make available such Lender's Pro Rata Share of the requested
borrowing in federal or other funds immediately available in Seattle, Washington
to the Agent at its Seattle Private Banking Office, Attn: Loan Processing,
Seattle, Washington. Upon fulfillment to the Agent's satisfaction of the
applicable conditions set forth in Article III, and after receipt by the Agent
of such funds, the Agent will make such funds available to the Borrowers by
depositing them to an ordinary checking account maintained by Asymetrix at the
Agent's Seattle Private Banking Office Branch. If the Borrowers do not borrow
all or part of the amount requested in their notice of borrowing on the date
indicated in that notice of borrowing, the Borrowers, to that extent, shall be
deemed to have borrowed and prepaid the Loan in question on said date.
(b) Term Loans. The Borrowers may elect by written notice to the
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Agent at any time prior to November 4, 1995, to convert the Revolving Credit
Loans into Term Loans and to commence payment of equal quarterly installments of
principal. Such elections shall be for minimum principal amounts of $10,000,000
and integral multiples of $1,000,000 above such minimum. On November 4, 1995,
all outstanding Revolving Credit Loans shall automatically convert to a Term
Loan and the Borrowers shall then commence to pay quarterly installments of
principal. The quarterly installments of principal, whether commencing before
or after November 4, 1995, shall be in equal amounts sufficient to fully
amortize the unpaid balance of the Revolving Credit Loans converted into Term
Loans, based upon a 5-year amortization of the principal amount of each such
Term Loan.
(c) Required Payment of Loans. The entire unpaid balances of the
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Loans, and all accrued interest thereon, shall be payable in full on the earlier
of (a) November 4, 2000, (b) within ninety (90) days following the date on which
a Change in Control occurs which was caused as a result of Xxxxx'x death, (c)
the date on which a Change in Control other than a Change in Control described
in clause (b) occurs, and (d) the first Business Day immediately following the
date on which the Market Value of a share of Pledged Microsoft Stock is, prior
to any stock dividend, stock split or other subdivision or combination occurring
after the date of this Agreement, less than Thirty Dollars ($30.00), and
following any such subdivision or combination, is less than Twenty-six Dollars
($26.00), and no further adjustment shall be made to give effect to any
subsequent such subdivisions or combinations. All or a portion of the unpaid
balance of the Loans, and all accrued interest thereon, shall be payable on such
date as may be required to maintain the Coverage Ratio.
6
The Term Loans may be prepaid in whole or in part at any time and any
prepayment shall be accompanied by all interest accrued thereon to the date of
such prepayment and any payment required by Section 2.01(e). All prepayments
shall be applied first to interest and then to principal installments in the
inverse order of their maturity.
(d) Note. The Loans shall be evidenced by a promissory note of the
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Borrowers substantially in the form of Exhibit B hereto payable to the order of
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the Agent, as agent for the Lenders (the "Note").
The Agent shall record in its records the date and amount of each Loan and
Loan repayment, the applicable interest rates, and the applicable Interest
Periods. The information so recorded shall be presumptive evidence of the
principal amount owing and interest payable on the Loans. The failure to so
record any such information or error in so recording such information shall not,
however, limit or otherwise affect the obligations of the Borrowers hereunder or
under the Note to repay the principal amount of the Loans together with all
interest accruing thereon.
(e) Prepayments, Failure of Interest Elections. The Borrowers shall
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pay a prepayment premium to each Lender (i) if Borrowers elect pursuant to
Section 2.02(b) to have all or any portion of a Loan bear interest based on
either the Adjusted CD Rate or the Adjusted Euro-dollar Rate and for any reason
(including the occurrence of an event which is, or upon the lapse of time or
notice or both would become, an Event of Default) such election does not become
effective (a "Failed Election") or (ii) if for any reason (including voluntary
or mandatory prepayment or acceleration) any Lender receives all or part of its
Pro Rata Share of the principal amount of a CD Rate Loan or a Euro-dollar Rate
Loan prior to the last day of the Interest Period applicable to such Loan (a
"Prepayment").
The prepayment premium shall be payable on demand by the Agent or by the
Lender entitled thereto and shall be in the amount (if any) by which (Y) exceeds
(Z) where:
(Y) is the amount of interest which would have been payable and
was not paid on such Lender's Pro Rata Share of the Loan
with respect to which there was a Failed Election or a
Prepayment had such Lender's Pro Rata Share of such Loan
been outstanding and earned interest during the elected or
applicable Interest Period; and
(Z) is the amount of interest which would have been recoverable
by such Lender if the Lender's Pro Rata Share of the Loan
with respect to which there was a Failed Election or
Prepayment had earned interest based on an Adjusted CD Rate
or the Adjusted Euro-dollar Rate, as the case may be, for an
assumed Interest Period approximately equal to the remaining
unexpired portion of the elected or applicable Interest
Period, with such Adjusted CD Rate or Adjusted Euro-dollar
Rate determined in the manner provided in Section 2.02(a) as
of the commencement of such assumed Interest Period.
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(f) Compensation for Increased Costs. In the evet that after the date
--------------------------------
hereof any change occurs in any applicable law, regulation, treaty or directive
or interpretation thereof by any authority charged with the administration or
interpretation thereof, or any condition is imposed by any authority after the
date hereof or any change occurs in any condition imposed by any authority on or
prior to the date hereof which:
(i) subjects any Lender to any tax, duties or other charges, or
changes the basis of taxation of any payments to any Lender on account of
principal of or interest on the Euro-dollar Rate Loans or CD Rate Loans or
fees in respect of any Lender's obligation to make Eurodollar Rate Loans or
CD Rate Loans or other amounts payable with respect to its Euro-dollar Rate
Loans or CD Rate Loans (other than a change in the rate of tax based solely
on the overall net or gross income of such Lender); or
(ii) imposes, modifies or determines applicable any reserve,
deposit or similar requirements against any assets held by, deposits with
or for the account of, or loans or commitments by, any office of any Lender
in connection with its CD Rate Loans or its Euro-dollar Rate Loans to the
extent the amount of which is in excess of, or was not applicable at the
time of computation of, the amounts provided for in the definition of
Adjusted Euro-dollar Rate or Adjusted CD Rate; or
(iii) affects the amount of capital required or expected to be
maintained by banks generally or corporations controlling banks and any
Lender determines the amount by which such Lender or any corporation
controlling such Lender is required or expected to maintain or increase its
capital is increased by, or based upon, the existence of this Agreement or
of such Lender's Commitment; or
(iv) imposes upon any Lender any other condition with respect to
its CD Rate or Euro-dollar Rate Loans or its obligation to make CD Rate or
Euro-dollar Rate Loans;
which, as a result thereof, (1) increases the cost to any Lender of making or
maintaining its Loans or its Commitment hereunder, or (2) reduces the net amount
of any payment received by any Lender in respect of its Euro-dollar Rate Loans
or CD Rate Loans (whether of principal, interest, commitment fees or otherwise),
or (3) requires any Lender to make any payment on or calculated by reference to
the gross amount of any sum received by it in respect of its Euro-dollar Rate
Loans or CD Rate Loans, in each case by an amount which any such Lender in its
sole judgment deems material, then and in any such case the Borrowers shall pay
to such Lender on demand such amount or amounts as will compensate such Lender
for any increased cost, reduction or payment actually incurred or made by such
Lender. The demand for payment by any Lender shall be delivered to both the
Agent and the Borrowers and shall state the subjection or change which occurred
or the reserve or deposit requirements or other conditions which have been
imposed upon such Lender or the request, direction or requirement with which it
has complied, together with the date thereof, the amount of such cost, reduction
or payment and the manner in which such amount has been calculated. (Such
Lender will provide the Borrowers with such information as the Borrowers
reasonably request in order to confirm such
8
calculations.) The statement of each Lender as to the additional amounts payable
pursuant to this Section 2.01(f) shall be prima facie evidence thereof.
The protection of this Section 2.01(f) shall be available to each Lender
regardless of any possible contention of invalidity or inapplicability of the
relevant law, regulation, treaty, directive, condition or interpretation
thereof. In the event that the Borrowers pay any Lender the amount necessary to
compensate such Lender for any charge, reduction or payment incurred or made by
such Lender as provided in this Section 2.01(f), and such charge, reduction or
payment or any part thereof is subsequently returned to such Lender as a result
of the final determination of the invalidity or inapplicability of the relevant
law, regulation, treaty, directive or condition, then such Lender shall remit to
the Borrowers the amount paid by the Borrowers which has actually been returned
to such Lender (together with any interest actually paid to Lender on such
returned amount), less the percentage share of such Lender's costs and expenses
incurred in connection with such governmental regulation or any challenge made
by such Lender with respect to its validity or applicability that is
proportionate to the percentage that the affected Loan or Commitment bears to
all of such Lender's affected assets.
2.02 Interest. The Borrowers agree to pay interest on the unpaid
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principal amount of the Loans from the date of each Loan until such Loan shall
be due and payable at a per annum rate equal to the Prime Rate, unless the
Borrowers shall have made an election under Section 2.02(b) which shall be in
effect for any particular Loan.
(a) Certain Defined Terms. The following terms have the following
---------------------
meanings, which apply to both the singular and plural forms of the terms
defined:
"Adjusted CD Rate" shall mean, with respect to any CD Rate Loan for
----------------
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/20 of 1%) equal to the sum of (a) the Fixed CD Rate in effect for
such Interest Period, (b) Statutory Reserves in effect on the first day of such
Interest Period, plus (c) the Assessment Rate in effect on the first day of such
Interest Period, with such adjustment as may be required to reflect any change
during any Interest Period in the Statutory Reserves or the Assessment Rate.
For purposes hereof, the term "Fixed CD Rate" shall mean the rate for "CDs
(Secondary Markets)" with maturities comparable to the applicable Interest
Period as reported in the Federal Reserve Statistical Release (Publication
H.15(519)) published by the Federal Reserve Bank for the first day of the
applicable Interest Period, or, if said rate is not published as of the first
day of the Interest Period, the rate for a period equal to the Interest Period
appearing as of said date under the caption "Certs of Deposit" on the display
designated as "Page 120" on the Telerate Service (or such other page as may
replace Page 120 on such service) or, if none, such other available service
displaying a composite of rates offered for U.S. dollar Certificates of Deposit
as reported by the Federal Reserve System. If there is no period equal to the
Interest Period on the display, the CD Rate shall be determined by straight-line
interpolation to the nearest month (or week or day if expressed in weeks or
days) corresponding to the Interest Period between the two nearest neighboring
periods on the display.
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For purposes hereof, "Statutory Reserves" means (a) a fraction (expressed
as a decimal), the numerator of which is the Fixed CD Rate and the denominator
of which is the number one minus the aggregate of the maximum reserve
percentages (including, without limitation, any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board of
Governors of the Federal Reserve System or any other banking authority to which
the Lenders are subject for determining the reserve requirements of the Lenders
in respect of new negotiable time deposits in dollars of over $100,000 with
maturities approximately equal to the applicable Interest Period, such reserve
requirements including, without limitation, those imposed under Regulation D of
such Board of Governors, minus (b) the Fixed CD Rate.
For purposes hereof, the term "Assessment Rate" for any Interest Period
shall mean for any date the net annual assessment rate (rounded upwards, if
necessary, to the next 1/100 of 1%) most recently estimated by the Agent to be
payable by the Agent to the Federal Deposit Insurance Corporation (or its
successor) for insurance by such Corporation (or such successor) on time
deposits made in dollars at the Agent's domestic offices.
"Adjusted Euro-dollar Rate" shall mean, with respect to any Euro-
-------------------------
dollar Rate Loan for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the sum of (a) the Euro-
dollar Rate in effect for such Interest Period and (b) the Euro-dollar Reserves
in effect on the first day of such Interest Period, with such adjustment as may
be required to reflect any change in the Euro-dollar Reserves during any
Interest Period.
For purposes hereof, the term "Euro-dollar Rate" shall mean for any
Interest Period that per annum rate equal to the arithmetic mean (rounded to the
nearest thousandth of a percentage point) of the offered rates for U.S. Dollar
deposits for a period equal to such Interest Period appearing on the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such
other page on such service as may replace said page or, if none, on such other
available service which displays two or more London interbank offered rates of
major banks for U.S. Dollar deposits) as of 11:00 a.m., London time, on the day
which is two London Banking Days (a day on which dealings are carried out in the
London interbank market) prior to the first day of such Interest Period. If
there is no period equal to the Interest Period on the display, the Euro-dollar
Rate shall be determined by straight-line interpolation to the nearest month (or
week or day if expressed in weeks or days) corresponding to such Interest Period
between the two nearest neighboring periods on the display.
For purposes hereof, the term "Euro-dollar Reserves" means (a) a fraction
(expressed as a decimal), the numerator of which is the Euro-dollar Rate and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including, without limitation, any special, supplemental,
marginal or emergency reserves) expressed as a decimal established by the Board
of Governors of the Federal Reserve System or any other banking authority to
which the Lenders are subject for Eurocurrency Liability (as defined in
Regulation D of such Board of Governors), minus (b) the Euro-dollar Rate. It is
agreed that for purposes hereof, each Euro-dollar Rate Loan shall be deemed to
constitute a Eurocurrency Liability and to be subject to the reserve
requirements of Regulation D, without benefit of credit or proration,
10
exemptions or offsets which might otherwise be available to the Lenders from
time to time under such Regulation D.
"CD Rate Loan" shall mean those portions of the Loans which bear
------------
interest based on the Adjusted CD Rate in accordance with the provisions hereof.
"Euro-dollar Rate Loan" shall mean those portions of the Loans which
---------------------
bear interest based on the Adjusted Euro-dollar Rate in accordance with the
provisions hereof.
"Interest Period" shall mean:
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(a) as to any Euro-dollar Rate Loan, the period commencing on the date
specified in the notice to the Agent under Section 2.02(b) for such Euro-
dollar Rate Loan and ending one, three or six months thereafter, as elected
under such notice, and
(b) as to any CD Rate Loan, the period commencing on the date
specified in the notice to the Agent under Section 2.02(b) for such CD Rate
Loan and ending 30, 90 or 180 days thereafter, as elected under such
notice;
provided, that (i) subject to Section 2.03(d), if any Interest Period would end
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on a day which shall not be a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, (ii) no Interest Period with
respect to any Loan shall end later than November 4, 2000, and (iii) interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
Calculation of interest based upon the Adjusted CD Rate in accordance with
the foregoing provisions is illustrated by the following example based on
annualized interest rate:
Assume that the Fixed CD Rate is .0600, the reserve requirement is
.0300, and the FDIC assessment is .0008. The Statutory Reserve
decimal is as follows:
.06
---
1 - .03 - .06 .0019
The Adjusted CD Rate is the sum of the following:
Fixed CD Rate....................................... .0600
Statutory Reserves.................................. .0019
FDIC Assessment. .0008
-----
.0627 = Adjusted CD Rate
---------------------------------------------------- --- ----------------
"Prime Rate" means on any day the rate of interest publicly announced
----------
or published by Seattle-First National Bank from time to time as its prime rate
of interest, which is not necessarily its best rate.
11
(b) Interest Rate Options. Prior to maturity and subject to the
---------------------
provisions of Sections 2.02(e) and (f), the Borrowers (or such person as the
Borrowers shall have designated by written notice to the Agent) may elect to
have all or portions of the Loans bear interest at a rate per annum equal to the
Adjusted CD Rate plus, in the case of Revolving Credit Loans, 1.00%, and, in the
case of Term Loans, 1.25%, or the Adjusted Euro-dollar Rate plus, in the case of
Revolving Credit Loans, 1.00%, and, in the case of Term Loans, 1.25%.
Such elections shall be made by written or telephonic notice (confirmed in
writing by telecopy or letter received no later than 5:00 p.m., Seattle time, on
the day of such election, but Borrowers' failure to provide such confirmation
shall not invalidate the Agent and Lenders' authority to rely on such telephonic
notice) given to the Agent by 10:00 a.m., Seattle time, on a day which is (a) in
the case of a Euro-dollar Rate Loan, not less than three (3) Business Days prior
to, and (b) in the case of a CD Rate Loan, not less than two (2) Business Days
prior to, the commencement of the Interest Period, which notice shall specify
(i) the interest rate option elected, (ii) the Interest Period, (iii) the Loan
and amount of such Loan subject to such election and (iv) the Business Day on
which such Interest Period is to commence, in each case subject to the following
further limitations:
(i) At any time only one (l) interest rate option may be in effect for
all of the Revolving Credit Loans and only one (1) interest rate option may be
in effect for all of the Term Loans;
(ii) A new interest rate option with respect to a Loan may be elected
to be effective only on the last day of any applicable Interest Period then in
effect with respect to such Loan;
(iii) No Interest Period for a Euro-dollar Rate Loan which ends
on one of the last two (2) Business Days of any calendar quarter may be elected;
and
(iv) At all times, if any, when the Agent shall have given notices
(which remain in effect) under both Sections 2.02(e) and (f) that neither the
Adjusted Euro-dollar Rate nor the Adjusted CD Rate can be ascertained, or that
such rates do not adequately reflect the cost to the Lenders of making Loans,
the Loans shall bear interest at a per annum rate equal to the Prime Rate
(changing as such Prime Rate changes).
(c) Payment of Interest. Unless otherwise provided, interest on the
-------------------
Loans shall be payable monthly on the first day of each calendar month and at
maturity.
(d) Default Interest Rate . At such times as an Event of Default has
----------------------
occurred and is continuing, the Loans and any other amount payable hereunder
shall bear interest, which shall be payable on demand, at a per annum rate equal
to the higher of (i) the Prime Rate (changing as the Prime Rate changes) plus
three percent (3%), or (ii) the interest rate otherwise then in effect with
respect to the Loans or any portion thereof.
(e) Unavailability of Euro-dollar Rates. In the event, and on each
-----------------------------------
occasion, that the Agent shall have reasonably determined (which determination
shall be conclusive and
12
binding) that dollar deposits in the amount of the requested principal amount of
a Euro-dollar Rate Loan are not generally available in the London Interbank
Market, or that the rate at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to the Lenders of making or
maintaining the principal amount of such Euro-dollar Loan during such Interest
Period, or that reasonable means do not exist for ascertaining the adjusted
Euro-dollar Rate, the Agent shall, as soon as practicable thereafter, give
notice of such determination to the Borrowers and no request for a Euro-dollar
Rate Loan pursuant to Section 2.02(b) shall be effective until after the Agent
shall have rescinded such notice.
(f) Unavailability of CD Rates. In the event, and on each occasion,
--------------------------
that the Agent shall have reasonably determined (which determination shall be
conclusive and binding) that the Adjusted CD Rate cannot be ascertained for any
reason (including, without limitation, the inability of the Lenders to obtain
sufficient bids in accordance with the terms of the definition of the Adjusted
CD Rate) or the Agent shall determine that the Adjusted CD Rate will not
adequately and fairly reflect the cost to the Lenders of making or maintaining
the principal amount of a CD Rate Loan during the Interest Period for such CD
Rate Loan, the Agent shall, as soon as practicable thereafter, give notice of
such determination to the Borrowers and no request for a CD Rate Loan pursuant
to Section 2.02(b) shall be effective until after the Agent shall have rescinded
such notice.
2.03 Manner or Payments.
------------------
(a) All payments and prepayments of principal and interest on the
Loans and Note and all other amounts payable hereunder by the Borrowers to the
Lenders shall be made by paying the same in United States Dollars and in
immediately available funds to the Agent at its Seattle Private Banking Office
not later than 10:00 a.m., Seattle time, on the date on which such payment or
prepayment is made. The Agent will, on the same day of receipt, cause to be
distributed in like funds all such payments, prepayments and receipts to the
Lenders to be applied in accordance with the terms of this Agreement; if the
Agent fails to make any such distribution on the same day, the distribution
shall be made together with interest at the Federal Funds Rate then in effect.
(b) The Borrowers hereby authorize any Lender, if and to the extent
any payment is not promptly made pursuant to this Agreement or any Note, to
charge from time to time against any or all of the accounts of either Borrower
with such Lender or any affiliate of such Lender any amount due hereunder or
under any Note.
(c) All computations of interest shall be made on the basis of a year
of three hundred sixty (360) days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest is payable.
(d) Whenever any payment hereunder or under the Note shall be stated
to be due, or whenever the last day of any Interest Period would otherwise
occur, on a day other than a Business Day, such payment shall be made on, and
the last day of such Interest Period shall occur on, the next succeeding
Business Day, and such extension of time shall, in either such case, be included
in the computation of payment of interest; but if such extension would cause
either
13
such payment to be made on, or the last date of such Interest Period to
occur in, the next following calendar month, then such payment shall be made on,
and the last day of such Interest Period shall occur on, the next preceding
Business Day.
(e) Any payment made by the Borrowers hereunder shall be applied first
against fees, expenses and indemnities due hereunder; secondly, against interest
due on amounts in default, if any; thirdly, against interest due on any Loan;
and thereafter against Loan principal.
2.04 Sharing or Payments, Etc. If the Agent or any Lender shall obtain
-------------------------
any payment from either Borrower which is applied in respect of the Loans
(whether voluntary or involuntary through the exercise of any right of setoff or
otherwise) in excess of its Pro Rata Share, the Agent or such Lender shall hold
such excess payment in trust for the other Lenders. In the case of such excess
amounts held by the Agent, it shall forthwith remit to the Lenders their Pro
Rata Shares, and, in the case of such excess amounts held by any Lender, such
Lender shall forthwith remit the sum to the Agent for distribution to the
Lenders in accordance with their Pro Rata Shares.
The Borrowers agree that the Agent and the Lenders may remit such excess
amounts to each other and that the Borrowers' obligations to the Agent and the
Lenders shall be determined after giving effect thereto.
2.05 Commitment Fee. The Borrowers agree to pay to the Agent for the
--------------
account of the Lenders a commitment fee computed daily at the rate of three-
eighths of one percent (0.375%) per annum on the unused portion of each Lender's
Commitment during the Commitment Period, payable in arrears on the last Business
Day of each calendar quarter during the Commitment Period and on demand upon the
occurrence of an Event of Default. All fees paid pursuant to this Section 2.05
shall be deemed to be fully earned and non-refundable when paid without regard
to any subsequent voluntary or involuntary prepayment of the Loans or
termination or reduction of the Commitments.
2.06 Facility Fee. The Borrowers agree to pay to the Agent, for the
------------
account of the Lenders, a facility fee in an amount equal to one-sixteenth of
one percent (.0625%)- of the total Commitments, payable on the first day of the
Commitment Period. The facility fee shall be deemed to be fully earned and non-
refundable when paid.
2.07 Agent's Fee. The Borrowers agree to pay to the Agent, for the
-----------
account of the Agent, an Agent's fee (a) during the Commitment Period in an
amount equal to one-tenth of one percent (.10%) of the total Commitments and (b)
thereafter in an amount equal to one-twelfth of one percent (.0833%) of the
balance of Term Loans outstanding on each November 4 during the period in which
any Term Loans are outstanding. The Agent's fees shall be paid annually in
advance on the first day of the Commitment Period and on each anniversary date
thereof during the periods in which Agent's fees are payable. All Agent's fees
paid pursuant to this Section 2.07 shall be deemed fully earned and non-
refundable when paid, without regard to any subsequent voluntary or involuntary
prepayment of the Loans or termination of the Commitments.
14
ARTICLE III
CONDITIONS OF LENDING
---------------------
3.01 Conditions to Initial Revolving Credit Loan. The obligation of the
-------------------------------------------
Lenders to make the initial Revolving Credit Loan is subject to fulfillment of
the following conditions:
(a) Note. The Agent shall have received the Note specified in Section
----
2.01(d), duly executed and delivered by the Borrowers.
(b) Pledge Agreement. The Agent shall have received the Pledge
----------------
Agreement duly executed end delivered by Xxxxx, together with certificates
evidencing the Pledged Microsoft Stock and stock powers duly executed in blank
by Xxxxx with signatures guaranteed, with respect to each certificate evidencing
Pledged Microsoft Stock.
(c) Corporate Authority. The Agent shall have received in form and
-------------------
substance satisfactory to it and the Lenders a certified copy of a resolution
adopted by the Board of Directors of Asymetrix authorizing the execution,
delivery and performance of this Agreement and the Note and the borrowing
hereunder, together with evidence of the authority and specimen signatures of
the persons who have signed this Agreement and who will sign the Note on behalf
of Asymetrix, and such other evidence of corporate authority as the Agent and
the Lenders shall reasonably require.
(d) Legal Opinion. the Agent shall have received in writing the legal
-------------
opinion, addressed to the Lenders and satisfactory to them in form and
substance, of Xxxxxx Pepper & Shefelman, counsel for the Borrowers.
(e) Evidence of Security; Other Information. The Agent shall have
---------------------------------------
received evidence satisfactory to it and the Lenders that the security interest
created by the Pledge Agreement on the Collateral has been duly perfected by a
possessory pledge, and, the taking of all such other or additional acts as may
be necessary or advisable to create a valid and perfected lien of first priority
enforceable against all third parties in all jurisdictions to secure all
obligations of the Borrowers to the Lenders under this Agreement and the Loan
Documents.
(f) Regulation U. The Agent shall have received a statement executed
------------
by Xxxxx conforming with the requirements of Federal Reserve Regulation U.
3.02 Conditions to Each Loan. The obligation of the Lenders to make any
-----------------------
Revolving Credit Loan, including the initial Revolving Credit Loan, is subject
to fulfillment of the following conditions:
(a) Prior Conditions. All of the conditions set forth in Section 3.01
----------------
shall have been fulfilled.
(b) Notice of Borrowing. The Agent shall have received notice of
-------------------
borrowing pursuant to Section 2.01(a).
15
(c) Market Value of Pledged Microsoft Stock. The Market Value of the
---------------------------------------
Pledged Microsoft Stock shall, after giving effect to the Loan then being
requested, be not less than two hundred percent (200%) of the principal amount
of all Loans that will then be outstanding.
(d) No Default. At the date of the Loan, no Event of Default and no
----------
event which, with notice or lapse of time or both, would constitute an Event of
Default, shall have occurred and be continuing or will have occurred as a result
of the making of the Loan, the representations of Borrowers in Article IV shall
be true on and as of such date with the same force and effect as if made on such
date, and each request for a Loan shall be deemed a certification as to all of
the foregoing.
(e) Other Information. The Agent shall have received such other
-----------------
statements, opinions, certificates, documents and information as it and the
Lenders may reasonably request in order to satisfy itself of any of the
foregoing conditions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrowers jointly and severally represent and warrant to the Lenders as
follows:
4.01 Corporate Existence and Power. Asymetrix is a corporation duly
-----------------------------
incorporated, validly existing and in good standing under the laws of
Washington, is qualified to do business in each other jurisdiction where the
conduct of its business or the ownership of its properties requires such
qualification, and has full corporate power and authority to carry on its
business as presently conducted, to own and operate its properties and assets,
and to execute, deliver and perform this Agreement and any Note.
4.02 Corporate Authorization: No Conflict. The execution, delivery and
------------------------------------
performance by Asymetrix of this Agreement and the Note and any borrowing
hereunder have been duly authorized by all necessary corporate action required
of Asymetrix, do not require any shareholder approval and do not contravene
Asymetrix's Articles of Incorporation or Bylaws, and the execution, delivery and
performance of this Agreement, the Note, the Pledge Agreement, and the other
Loan Documents, and any borrowing hereunder do not require the approval or
consent of any trustee or the holders of any Indebtedness of either of the
Borrowers, do not contravene any law, regulation, rule or order binding on
either Borrower, and do not contravene the provisions of or constitute a default
under any indenture, mortgage, contract or other agreement or instrument to
which either Borrower is a party or by which either Borrower or any of its
respective properties may be bound or affected.
4.03 Government Approvals, Etc. No Government Approval or filing or
--------------------------
registration with any Governmental Authority is required for the making and
performance by the Borrowers of this Agreement or any Note or in connection with
any of the transactions contemplated hereby.
16
4.04 Binding Obligations Etc. This Agreement has been duly executed and
------------------------
delivered by the Borrowers and constitutes, and the Note and the other Loan
Documents, when duly executed and delivered, will constitute, the legal, valid
and binding obligations of the Borrowers, enforceable against the Borrowers in
accordance with their respective terms, and the Pledge Agreement, when duly
executed and delivered by Xxxxx, xxxx constitute the legal, valid and binding
obligation of Xxxxx, enforceable against Xxxxx in accordance with its terms.
4.05 Litigation. There are no actions, proceedings, investigations, or
----------
claims against or affecting the Borrowers now pending before any court,
arbitrator or Governmental Authority (nor to the knowledge of the Borrowers has
any thereof been threatened nor does any basis exist therefor) which if
determined adversely to either Borrower would be likely to have a material
adverse effect on the financial condition of either Borrower or the operations
of Asymetrix, or to result in a judgment or order against either borrower (in
excess or insurance coverage) for more than 5500,000 in any one case or
$1,000,000 in the aggregate, or to impair or defeat the Lien of the Lenders on
any Collateral or any rights of Xxxxx therein, except as reflected in the
financial statements referred to in Section 4.06.
4.06 Financial Condition. The balance sheet of (a) Xxxxx as at December
-------------------
31, 1991, and (b) the balance sheet of Asymetrix as of December 31, 1991, and
the related statements of income and retained earnings of Asymetrix for the
fiscal year then ended, copies of which have been furnished to the Lenders,
fairly present, respectively, the financial condition of Xxxxx and Asymetrix as
at such dates and the results of operations of Asymetrix for the period then
ended, all in the case of Asymetrix in accordance with generally accepted
accounting principles consistently applied. Neither Borrower on such date had
any contingent liabilities for Taxes, unusual forward or long-term commitments
or unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in those balance sheets and in the
notes thereto. Since those dates, there has been no material adverse change in
the financial condition of Xxxxx or in the financial condition or operations of
Asymetrix.
4.07 Title and Liens. Each Borrower has good and marketable title to each
---------------
of the properties and assets reflected in its respective balance sheets referred
to in Section 4.06 (except, in the case of Asymetrix, such as have been since
sold or otherwise disposed of in the ordinary course of business). No assets or
revenues of either Borrower are subject to any Lien except as required or
permitted by this Agreement or disclosed in the balance sheets referred to in
Section 4.06. The Pledged Microsoft Stock is subject to no Lien other than the
Lien of the Pledge Agreement and Xxxxx has good and marketable title thereto.
4.08 Taxes. Each Borrower has filed all tax returns and reports required
-----
of it, has paid all Taxes which are due and payable, and has provided adequate
reserves for payment of any Tax whose payment is being contested. The charges,
accruals and reserves on the books of Asymetrix in respect of Taxes for all
fiscal periods to date are accurate. There are no questions or disputes between
either Borrower and any Governmental Authority with respect to any Taxes except
as disclosed in the balance sheets referred to in Section 4.06.
17
4.09 Lien Priority. On the date of any Loan the Agents possession of the
-------------
Collateral under the Pledge Agreement shall be continuing and such possession
will constitute a valid and perfected lien of first priority in and to all of
the Collateral and will be enforceable against all third parties in all
jurisdictions as security for all obligations of the Borrowers to the Lenders.
4.10 Other Agreements. Neither Borrower is in material breach of or
----------------
default under any material agreement to which it is a party or which is binding
on it or any of its assets.
4.11 Federal Reserve Regulations. Neither Borrower is engaged principally
---------------------------
or as one of its important activities in the business of extending credit for
the purpose of purchasing or carrying any margin stock (within the meaning of
Federal Reserve Regulation U), and no part of the proceeds of any Loan will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock or for any other
purpose that violates the applicable provisions of any Federal Reserve
Regulation. The Borrowers will furnish on request to the Agent a statement
conforming with the requirements of Regulation U.
4.12 Pension Plans. No "reportable event" as defined in Section 4043(b)
-------------
of Title IV of the Employee Retirement Income Security Act of 1974 has occurred
and is continuing with respect to any employee benefit plan or other plan
maintained for employees of Asymetrix and subject to that Title IV.
4.13 Security Offerings. Neither the Borrowers nor anyone acting on their
------------------
behalf has directly or indirectly offered any Note or similar security for sale
to any person or solicited from any person any offer to buy any such security or
approached or negotiated with any person concerning any such security, except
for the Lenders.
4.14 Ownership of Asymetrix. Xxxxx is the direct owner of not less than
----------------------
fifty-one percent (51%) of the issued and outstanding voting stock of Asymetrix,
free and clear of all Liens and subject to no options, warrants, contracts or
agreements of any kind.
4.15 Ownership of Pledged Microsoft Stock. All Pledged Microsoft Stock is
------------------------------------
Qualified Microsoft Stock.
4.16 Representations as a Whole. This Agreement, the financial statements
--------------------------
referred to in Section 4.06, and all other instruments, documents, certificates
and statements furnished to the Lenders or the Agent by the Borrowers, taken as
a whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained herein or
therein not misleading.
18
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
So long as the Lenders shall have any Commitment hereunder and until
payment in full of each Loan and the Note and performance of all other
obligations of the Borrowers under the Loan Documents, the Borrowers agree to do
all of the following:
5.01 Use of Proceeds. The Borrowers will use the Loan proceeds
---------------
exclusively for the purposes of refinancing the existing obligations of the
Borrowers to the Agent and certain lenders and for Asymetrix's working capital
needs, except that up to Twenty-five Million Dollars ($25,000,000) of the Loan
proceeds may be used for uncontested, friendly acquisitions by Asymetrix.
5.02 Maintenance of Coverage Ratio. If on any date the Market Value of
-----------------------------
the Pledged Microsoft Stock plus Acceptable Collateral and other collateral
acceptable to the Lenders is less than two hundred percent (200%) of the
principal balance of the outstanding Loans, Xxxxx shall within ten (10) days
following such date either (a) deliver to the Agent additional shares of
Qualified Microsoft Stock registered in the name of Xxxxx and evidenced by
certificates without restrictive legends, together with stock powers acceptable
to the Agent, to be held in pledge under the Pledge Agreement, (b) provide
Acceptable Collateral or such other collateral as is acceptable to all of the
Lenders in their sole discretion, or (c) pay such amount of the principal of the
Loans as is required so that, after giving effect to such action, the Market
Value of Pledged Microsoft Stock plus the market value of Acceptable Collateral
or any other collateral accepted by the Lenders shall equal or exceed two
hundred percent (200%) of the principal balance of the Loans (the "Coverage
Ratio"); provided, that the total of Pledged Microsoft Stock and common stock of
--------
Microsoft Corporation pledged to or otherwise held by the Agent or any Lender
pursuant to this Agreement or pursuant to or in connection with any other credit
facility for Xxxxx or any of Xxxxx'x affiliates shall at all times constitute
less than ten percent (10%) of the total outstanding Microsoft Corporation
common stock.
5.03 Preservation of Corporate Existence Etc. Asymetrix will preserve
----------------------------------------
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation and will qualify and remain qualified as a
foreign corporation in each jurisdiction where such qualification is necessary
or advisable in view of the business and operations of Asymetrix or the
ownership of its properties.
5.04 Visitation Rights. At any reasonable time, and from time to time,
-----------------
the Borrowers will permit the Lenders to examine and make copies of and
abstracts from the records and books of account of and to visit the properties
of Asymetrix and to discuss the affairs, finances and accounts of Asymetrix with
any of its officers or directors.
5.05 Other Obligations. Each borrower will pay and discharge before the
-----------------
same shall become delinquent all Indebtedness, Taxes and other obligations for
which such Borrower is liable, except any thereof whose validity or amount is
being contested in good faith by such Borrower in
19
appropriate proceedings with provision having been made to the satisfaction of
the Lenders for the payment thereof in the event the contest is determined
adversely to such Borrower.
5.06 Financial Information. The Borrowers will deliver to the Lenders:
---------------------
(a) Xxxxx Financial Statements.
--------------------------
(i) As soon as available and in any event (y) prior to April 30
of each year, the personal financial statement of Xxxxx as of the preceding
December 31, and (z) prior to August 31 of each year, the personal
financial statement of Xxxxx as of the preceding June 30, in each case in a
form reasonably acceptable to the Lenders (but which need not be prepared
in accordance with generally accepted accounting principles) and
accompanied by Xxxxx'x certificate of compliance with the requirements of
Section 5.10;
(ii) As soon as available and in any event within fifteen (15)
days after filing with the Internal Revenue Service, copies of Xxxxx'x
federal income tax return for each calendar year; and
(iii) All other statements, reports and other information as the
Agent may reasonably request concerning the financial condition and
business affairs of Xxxxx.
(b) Asymetrix's Financial Statements.
--------------------------------
(i) As soon as available and in any event within ninety (90) days
after the end of each fiscal year Asymetrix, the unaudited balance sheet of
Asymetrix as of the end of such fiscal year and the related statements of
operations and cash flows of Asymetrix for such fiscal year;
(ii) As soon as available and in any event within thirty (30)
days after the end of the first three fiscal quarters or Asymetrix, the
unaudited balance sheet and the related statement of operations and cash
flows of Asymetrix as of the end of such fiscal quarter (including the
fiscal year to the end of such fiscal quarter); and
(iii) All other statements, reports and other information as the
Agent may reasonably request concerning the financial condition and
business affairs of Asymetrix.
The financial statements delivered pursuant to preceding clauses (i) and
(ii) shall be accompanied by the certificate of the chief financial officer of
Asymetrix that such unaudited financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the financial condition and operations of Asymetrix as of the
end of the respective fiscal periods.
5.07 Notification. Promptly after learning thereof, the Borrowers will
------------
notify the Lenders of (a) the details of any action, proceeding, investigation
or claim against or affecting either Borrower instituted before any court,
arbitrator or Governmental Authority or, to either
20
Borrower's knowledge threatened to be instituted, which, if determined adversely
to either Borrower would be likely to impair or defeat the Lien of the Lenders
on any Collateral or any rights of either Borrower therein, or to have a
material adverse effect on the financial condition of either Borrower or the
operations of Asymetrix, or to result in a judgment or order against either
Borrower (in excess of insurance coverage) for more than $1,000,000 or, when
combined with all other pending or threatened claims, more than $1,000,000; (b)
any substantial dispute between either Borrower and any Governmental Authority;
(c) any labor controversy which has resulted in or, to either Borrower's
knowledge, threatens to result in a strike which would materially affect the
business operations of Asymetrix; and (d) the occurrence of any Event of Default
or other event which, with notice or lapse of time or both, would constitute an
Event of Default.
5.08 Additional Payments; Additional Acts. From time to time the
------------------------------------
Borrowers will (a) pay or reimburse the Lenders for all Taxes imposed on this
Agreement or any Loan Document; (b) pay all expenses, including reasonable legal
fees (including reasonable time charges of counsel that are employees of any
Lender) actually incurred by the Agent or any Lender in connection with the
preparation of this Agreement and any amendment of this Agreement or any Loan
Document; (c) obtain and promptly furnish to the Agent evidence of all such
Government Approvals as may be required to enable either Borrower to comply with
its obligations under this Agreement and the Loan Documents; (d) execute and
deliver all such instruments (such as Uniform Commercial Code continuation
statements) and perform a such other acts as may be necessary to maintain
continuously perfected as a Lien of first priority in all jurisdictions the Lien
of the Pledge Agreement on the Collateral; and (e) execute and deliver all such
other instruments and perform all such other acts as the Agent may reasonably
request to carry out the transactions contemplated by this Agreement.
5.09 Notice of Microsoft Stock Sales. At any time when the Market Value
-------------------------------
of the Pledged Microsoft Stock plus Acceptable Collateral and other collateral
acceptable to the Lenders is less than two hundred fifty percent (250%) of the
principal balance of the outstanding Loans, Xxxxx agrees that he will not make
any single sale, or series of sales within a period of three (3) months, of
common stock of Microsoft Corporation exceeding 100,000 shares without first
giving ten (10) Business Days' prior written notice to the Lenders of his
intention to make such sales. The number of shares to be included as sales by
Xxxxx for purposes of this Section 5.09 shall be determined as provided in the
Securities and Exchange Commission's Rule 144(e)(3).
5.10 Maintenance of Liquidity. Xxxxx shall at all times directly own
------------------------
Qualified Microsoft Stock, cash, cash equivalents and other readily marketable
assets acceptable to Majority Lenders which have in the aggregate a current fair
market value of not less than one hundred percent (100%) of Xxxxx'x total
Indebtedness; provided, that any assets subject to any Lien (including the Lien
--------
of the Pledge Agreement), negative pledge or other restriction on transfer shall
not be considered a qualifying asset for purposes of this Section 5.10.
21
ARTICLE VI
EVENTS OF DEFAULT
-----------------
6.01 Events of Default. The occurrence or any of the following events
-----------------
shall constitute an "Event of Default:"
(a) Payment Default. The Borrowers shall fail to pay for a period of
---------------
ten (10) days after the date when due any amount of principal of or interest on
any Loan or the Note or any other amount payable by it hereunder or under any
other Loan Document; or
(b) Breach of Warranty. Any representation or warranty made or deemed
------------------
made by the Borrowers under or in connection with this Agreement or any Loan
Document shall prove to have been incorrect in any material respect when made;
or
(c) Breach of Certain Covenants. Failure to perform or observe the
---------------------------
covenants in any of Sections 5.01, 5.02 or 5.10; or
(d) Breach of Other Covenants. Either Borrower shall fail to perform
-------------------------
or observe any other covenant, obligation or term of this Agreement or any other
Loan Document and such failure shall remain unremedied for thirty (30) days
after written notice thereof shall have been given to the Borrowers by the
Agent; or
(e) Default under Pledge Agreement. An Event of Default under the
------------------------------
Pledge Agreement shall occur; or
(f) Cross-Default. With respect to any Indebtedness with a principal
-------------
amount in excess of $1,000,000 individually or in the-aggregate, (i) either
Borrower shall fail to pay when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) any such Indebtedness or any
interest or premium thereon and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) either Borrower shall fail to perform any term or covenant
on its part to be performed under any agreement or instrument relating to any
such Indebtedness and required to be performed and such failure shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such failure to perform is to accelerate or to
permit the acceleration of the maturity of such Indebtedness, or (iii) any such
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by regularly scheduled required prepayment) prior to the stated
maturity thereof; or
(g) Insolvency Etc. Either Borrower shall admit in writing its
---------------
inability to pay its debts, shall generally not be paying its debts as such
debts become due, or shall make a general assignment for the benefit of
creditors; or either Borrower shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law, or
seeking the appointment of a trustee, receiver, liquidator or other similar
official of it or any substantial part of its assets; or shall consent to any of
the foregoing in an involuntary proceeding commenced against it; or shall
22
take any corporate action to authorize any of the foregoing; or an involuntary
case or other proceeding shall be commenced against either Borrower seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law or seeking the appointment
of a trustee, receiver, liquidator or other similar official of it or any
substantial part of its assets and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days; or an
order for relief shall be entered against either Borrower under the federal
bankruptcy laws; or
(h) Judgment. A final judgment or order for the payment of money in
--------
excess of $1,000,000, or, when combined with all other such judgments or orders,
exceeds $1,000,000, or its equivalent in another currency, or a final judgment
or order which impairs or defeats the Lien of the Lenders on any Collateral or
any rights of Xxxxx therein, shall be rendered against either Borrower or any
Collateral and such judgment or order shall continue unsatisfied and in effect
for a period of ten (10) consecutive days; or
(i) Liens. Any (i) involuntary Lien in the sum of $1,000,000 or more,
-----
individually or in the aggregate, shall attach to any asset or property of
either Borrower, or (ii) any Lien shall attach to any Collateral which, in
either case, is not discharged within sixty (60) days after such attachment or
within thirty (30) days after notice from the Agent, whichever first occurs.
(j) Failure to Give Notice of Stock Sales. Xxxxx shall fail to give
-------------------------------------
notice of stock sales as required by Section 5.09 and such failure continues for
a period of five (5) days, or shall fail within five (5) days after giving any
such notice of stock sales to either (i) deliver to the Agent additional shares
of Qualified Microsoft Stock registered in the name of Xxxxx and evidenced by
certificates without restrictive legends, together with stock powers acceptable
to the Agent, to be held in pledge under the Pledge Agreement, (ii) provide
Acceptable Collateral or such other collateral as is acceptable to the Lenders
in their sole discretion, or (iii) pay such amount of the principal of the Loans
as is required so that, after giving effect to such action, the Market Value of
Pledged Microsoft Stock plus the market value of Acceptable Collateral or any
other collateral accepted by the Lenders equals or exceeds two hundred fifty
percent (250%) of the principal balance of the outstanding Loans.
6.02 Consequences of Default. If any of the Events of Default defined in
-----------------------
Section 6.01(g) shall occur, the Commitments shall immediately terminate and the
principal of and the interest on the Loans and the Note and all other sums
payable by the Borrowers hereunder and under the other Loan Documents, shall
become immediately due and payable without protest, presentment, notice or
demand, all of which the Borrowers expressly waive. If any other Event of
Default shall occur and be continuing, then in any such case and at any time
thereafter so long as any such Event of Default shall be continuing, the Agent
may, with the consent of the Majority Lenders, and shall at the request of the
Majority Lenders, immediately terminate the Commitments and, if Loans shall have
been made, the Agent may, with the consent of the Majority Lenders, and shall at
the request of the Majority Lenders, (a) declare the principal of and the
interest on the Loans and the Note and all other sums payable by the Borrowers
hereunder or under any other Loan Document to be immediately due and payable,
whereupon the
23
same shall become immediately due and payable without protest, presentment,
notice, or demand, all of which the Borrowers expressly waive, and (b) exercise
on behalf of itself and the Lenders all other rights and remedies available to
it and the Lenders under the Loan Documents or applicable law.
ARTICLE VII
THE AGENT
---------
7.01 Authorization and Action. Each Lender hereby appoints and authorizes
------------------------
the Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. The Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement.
The duties of the Agent shall be mechanical and administrative in nature, except
as provided in Section 2.04. The Agent shall hold all payments and prepayments
of principal and interest on the Loans and Note and any payments made pursuant
to this Agreement (except pursuant to Section 2.07) or the Pledge Agreement in
trust for the Lenders. The Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender, and nothing in this Agreement
or the other Loan Documents, expressed or implied, is intended to or shall be
construed to impose upon the Agent any obligations in respect of this Agreement
or the other Loan Documents except as expressly set forth herein or therein. As
to any matters not expressly provided for by this Agreement, including
enforcement or collection of the Loans, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon all Lenders and any holder of the Note; provided that the Agent
--------
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to the Loan Documents or applicable law;
provided, further, that without the consent of all Lenders, the Agent shall not
-------- -------
increase a Lender's Commitment, change or modify the conditions precedent set
forth in Article III, the timing or rates of interest payments, the timing or
amount of commitment fees, or the timing or amounts of principal payments due in
respect of Loans, Section 5.02 or this Section 7.01, or release any Collateral
(except as provided under the Loan Documents); and Provided, further, that the
-------- -------
terms of this Article VII shall not be amended without the prior written consent
of the Agent (acting for its own account). In the absence of instructions from
the Majority Lenders, the Agent shall have authority, in its sole discretion, to
take or not to take any action unless this Agreement specifically requires the
consent of the Lenders, and any such action or failure to act shall be binding
on all the Lenders and on the holder of the Note.
7.02 Duties and Obligations.
----------------------
(a) Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
any of them under or in connection with this Agreement except for its or their
own gross negligence or willful misconduct. Without limiting the generality of
the foregoing, the Agent (i) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment
24
thereof signed by such payee and a written agreement of the assignee that it is
bound hereby as it would have been had it been an original party hereto, in each
case in form satisfactory to the Agent; (ii) may consult with legal counsel
(including counsel for either Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
experts; (iii) may appoint a third-party custodian acceptable to all Lenders and
at the expense of Lenders to monitor the value of Pledged Microsoft Stock and
Xxxxx'x compliance with Section 5.02, which custodian shall act on behalf of and
report to all of the Lenders; (iv) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or in any
instrument or document furnished pursuant hereto; (v) shall not have any duty to
ascertain or to inquire as to the performance of any of the terms, covenants, or
conditions of this Agreement on the part of the Borrowers or as to the use of
the proceeds of any Loan or, unless the officers of the Agent active in their
capacity as officers of the Agent on the Borrowers' account have actual
knowledge thereof or have been notified in writing thereof by a Lender, the
existence or possible existence of any Event of Default or any event which, with
notice or lapse of time or both, would constitute an Event of Default; (vi)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, effectiveness, or value of this Agreement
or of any instrument or document furnished pursuant hereto; and (vii) shall
incur no liability under or in respect to this Agreement by acting upon any
notice, consent, z- certificate or other instrument or writing (which may be by
X telegram/ cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties or by acting upon any representation or warranty of
the Borrowers deemed to be a made hereunder;
(b) The Agent will transmit to each Lender copies of documents
received from the Borrowers or others pursuant to the requirements of this
Agreement.
7.03 Dealings Between the Agent and Borrowers. With respect to its
----------------------------------------
Commitment, the Loan made by it, and the Note, the Agent shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Agent, and the term "Lender" shall unless
otherwise expressly indicated include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, act and generally engage in any
kind of business with the Borrowers and any person which may do business with
the Borrowers, all as if the Agent were not the Agent hereunder and without any
duty to account therefor to the Lenders.
7.04 Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Agent or any other Lender and based
upon such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
25
7.05 Indemnification. The Lenders agree to indemnify the Agent (to the
---------------
extent not reimbursed by the Borrowers) ratably according to their respective
Commitments from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
except as result from the Agent's gross negligence or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse the Agent
promptly on demand for its ratable share of any out-of-pocket expenses,
including legal fees, incurred by the Agent in connection with the
administration or enforcement of or the preservation of any rights under this
Agreement (to the extent that the Agent is not reimbursed for such expenses by
the Borrowers).
7.06 Successor Agent. The Agent may resign at any time by giving written
---------------
notice thereof to the Lenders and the Borrowers and may be removed at any time
with or without cause by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation or the Majority Lenders' removal of the
retiring Agent, then the retiring Agent may on behalf of the Lenders, appoint a
successor Agent, which shall be a bank organized under the laws of the 'United
States or of any state thereof, or any affiliate of such bank, located in the
State of Washington and having a combined capital and surplus of at least
Twenty-Five Million Dollars ($25,000,000). Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement arising after
such acceptance by a successor Agent. After any retiring Agent's resignation or
removal hereunder as the Agent, the provisions of this Article VII shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Agent under this Agreement.
7.07 Commitments Not Borrowed. If the Commitments are not borrowed owing
------------------------
to nonfulfillment of any condition precedent specified in Article III, no party
hereto shall be responsible to any other party for any damage or loss by reason
thereof, except that the Borrowers shall be in any event liable to pay the fees,
Taxes, and expenses for which they are obligated hereunder. If for any other
reason the Commitment of any Lender is not borrowed, neither the Agent nor any
other Lender shall be responsible to the Borrowers for any damage or loss by
reason thereof, nor shall any other Lender or the Borrowers be excused from
their performance hereunder.
ARTICLE VIII
MISCELLANEOUS
-------------
8.01 No Waiver: Remedies Cumulative. No failure by the Lenders or any
------------------------------
holder of the Note to exercise, and no delay in exercising, any right, power or
remedy under this Agreement or
26
any Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy under this Agreement or any Note preclude
any other or further exercise thereof or the exercise of any other right, power,
or remedy. The exercise of any right, power, or remedy shall in no event
constitute a cure or waiver of any Event of Default under this Agreement or any
Note nor prejudice the right of the Lenders or the holder of any Note in the
exercise of any right hereunder or thereunder, unless in the exercise of such
right, all obligations of the Borrowers under this Agreement and the Note are
paid in full. The rights and remedies provided herein and therein are cumulative
and not exclusive of any right or remedy provided by law.
8.02 Guarantees, Waivers, Etc. To the extent that either Borrower is, or
-------------------------
is deemed to be, a guarantor of the other Borrower's obligations under this
Agreement, the Note or any other Loan Document, such Borrower hereby waives
notice, demand, protest, presentment, prior notice thereof or of non-payment of
any of the Loans or any other obligations or amounts payable under any of the
Loan Documents (collectively, the "Obligations") and any other notices with
respect to any of the Loan Documents or the Obligations. Without affecting the
liability of any other person for payment of any of the Obligations and without
affecting the Lenders' Lien on any Collateral, such Borrower hereby agrees that
either the Lenders or the Agent may at any time and from time to time, at their
discretion and with or without notice or consideration to or consent from any
party (a) allow substitution, release or withdrawal of any Collateral or other
security owned by the other Borrower for the Obligations; (b) sell, or otherwise
realize upon, any Collateral or any other security owned by the other Borrower
for the Obligations; (c) release any party liable on the Obligations; (d)
extend, renew, rearrange, modify or amend the Obligations, whether or not for a
term or terms in excess of the original term thereof; (e) make compositions or
other arrangements with debtors or creditors; or (f) waive or delay the exercise
of any of Lenders' or the Agent's rights or remedies against any person liable
for any of the Obligations. Any of such actions may be taken without impairing
or diminishing the Obligations of such Borrower under any of the Loan Documents.
The liability of such Borrower shall not be impaired or reduced by any of the
Lenders' or the Agent's failure, refusal or neglect to collect the Obligations,
loss or subordination of any Collateral or other security or guarantee for any
of the Obligations, the existence of any unguaranteed indebtedness, or the
taking of any other security or guarantee for any of the Obligations in addition
to the security or guarantees presently existing.
To the extent that either Borrower is, or is deemed to be, a guarantor,
such Borrower hereby irrevocably waives all claims it has or may acquire against
the other Borrower in respect of the Obligations, including rights of
exoneration, reimbursement and subrogation. Each Borrower agrees to indemnify
the Agent and each Lender, and hold them harmless from and against all loss and
expense, including legal fees, suffered or incurred by any of them as a result
of claims to avoid any payment received by the Agent or any Lender from either
Borrower, or for its account or from collateral, with respect to the Obligations
of a Borrower guaranteed, or deemed to be guaranteed hereunder or under any
other Loan Document.
8.03 Governing Law. This Agreement and any Note and the other Loan
-------------
Documents shall be governed by and construed in accordance with the laws of the
State of Washington.
27
8.04 Consent to Jurisdiction; Waiver of Immunities. Each Borrower hereby
---------------------------------------------
irrevocably submits to the jurisdiction of any state or federal court sitting in
Seattle, King County, Washington, in any action or proceeding brought to enforce
or otherwise arising out of or relating to this Agreement or any Note and
irrevocably waives to the fullest extent permitted by law any objection which it
may now or hereafter have to the laying of venue in any such action or
proceeding in any such forum, and hereby further irrevocably waives any claim
that any such forum is an inconvenient forum. Each Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing herein shall impair the right of Lenders or the holder
of any Note to bring any action or proceeding against the Borrowers or their
property in the courts of any other jurisdiction, and each Borrower irrevocably
submits to the nonexclusive jurisdiction of the appropriate courts sitting in
any place where property or an office of a Borrower is located.
8.05 Notices. All notices and other communications provided for in this
-------
Agreement shall be in writing (unless otherwise specified) or by telecopy and
shall be mailed (with postage prepaid) or sent or delivered to each party at the
address or telecopy number set forth under its name on the signature page
hereof, or at such other address or telecopy number as shall be designated by
such party in a written notice to each other party. Except as otherwise
specified, all such notices and communications if duly given or made shall be
effective upon the earlier of receipt or two (2) Business Days after deposit in
the mail.
8.06 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties and their respective Successors and assigns,
except that neither Borrower may make an intervivos assignment or otherwise
transfer all or any part of its rights or obligations hereunder without the
prior written consent of the Lenders, and any such assignment or transfer
purported to be made without such consent shall be ineffective.
8.07 Assignments, Participations, Etc.
---------------------------------
(a) any Lender may at all times other than during the existence of an
Event of Default, with the written consent of the Borrowers and the Agent, which
consent of the Borrowers shall not be unreasonably withheld, assign to one or
more Eligible Assignees a ratable part of the Loans, the Commitments and the
other rights and obligations of such Lender hereunder in a minimum amount of
$5,000,000 (including outstanding Loans and such Lenders remaining Commitment);
provided, that the Borrowers, the Agent and the other Lenders may continue to
--------
deal solely and directly with such Lender in connection with the interest so
assigned until written notice of such assignment ("Notice"), together with
payment instructions, addresses and related information with respect to the
Eligible Assignee, shall have been given to the Borrowers and the Agent by such
Lender and Eligible Assignee. An assignment of less than all of a Lender's
interest in the Loans, the Commitments, and the other rights and obligations of
such Lender hereunder shall be of the same percentage interest with respect to
each of such rights and obligations. Each Eligible Assignee which is a foreign
person (i.e., a person other than a United States person for United States
Federal income tax purposes) shall comply with the Agent's
28
request for tax forms and any other related documentation prior to the
effectiveness of any assignment.
(b) From and after the date that the Agent notifies the assignor
Lender and the other Lenders that it has received a Notice, (i) the Eligible
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it by the assignor Lender, shall
have the rights and obligations of a Lender under the Loan Documents, and (ii)
the assignor Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such assignment, relinquish its rights and
be released from the obligations under the Loan Documents.
(c) Immediately upon Agent receiving a Notice and all required
consents, this Agreement, shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Eligible Assignee and
the resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Eligible Assignee shall reduce such Commitments of the
assignor Lender pro tanto.
--- -----
(d) Any Lender (an "Originating Lender") may at any time sell to one
or more commercial banks (a "Participant") participating interests in any Loans
-----------
and the Commitment and other interests of that Lender hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender's
-------- -------
obligations under this Agreement shall remain unchanged, (ii) the Originating
Lender shall remain solely responsible for the performance of such obligations,
(iii) the Borrowers, the Agent and the other Lenders shall continue to deal
solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant shall have the right 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 as described in Section 7.01. In the case of
any such participation, the Participant shall not have any rights under this
Agreement or any of the other Loan Documents, and all amounts payable by the
Borrowers hereunder and thereunder shall be determined as if such Lender 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, subject to Section 2.04, 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 Lender under this Agreement.
(e) Each Lender agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all non-public information
provided to it by the Borrowers, or by the Agent on the Borrowers' behalf, in
connection with this Agreement or any other Loan Document, and neither it nor
any of its affiliates shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement unless
such information (i) was or becomes generally available to the public other than
as a result of a disclosure by the Lender, or (ii) was or becomes available on a
non-
29
confidential basis from a source other than the Borrowers, provided that such
source is not bound by a confidentiality agreement with the Borrowers known to
the Lender. Notwithstanding the foregoing, (a) any Lender may disclose such
information (i) at the request or pursuant to any requirement of any
Governmental Authority to which the Lender is subject or in connection with an
examination of such Lender by any such authority; (ii) pursuant to subpoena or
other court process; (iii) when required to do so in accordance with the
provisions of any applicable requirement of law; and (iv) to such Lender's
independent auditors and other professional advisors, and (b) the Borrowers
authorize each Lender to disclose to any Participant or Eligible Assignee (each,
a "Transferee") and to any prospective Transferee, such financial and other
information in such Lender's possession concerning the Borrowers which has been
delivered to Agent or the Lenders pursuant to this Agreement or which has been
delivered to the Agent or the Lenders by the Borrowers in connection with the
Lenders' credit evaluation of the Borrowers prior to entering into this
Agreement if, unless otherwise agreed by the Borrowers, such Transferee or
prospective Transferee shall agree in writing with such Lender to keep such
information confidential to the same extent required of the Lenders hereunder.
8.08 Severability. Any provision of this Agreement or any other Loan
------------
Document which is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
8.09 Executed in Counterparts. This Agreement may be executed in any
------------------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which taken together shall constitute one and the same Agreement.
8.10 Entire Agreement: Amendment. This Agreement and the other Loan
---------------------------
Documents comprise the entire agreement of the parties and may not be amended or
modified except in writing. No provision of this Agreement may be waived except
in writing and then only in the specific instance and for the specific purpose
for which given.
8.11 Headings. The headings of the various provisions of this Agreement
--------
are for convenience of reference only, do not constitute a part hereof, and
shall not affect the meaning or construction of any provision hereof.
8.12 Construction. In the event of any conflict between the terms,
------------
conditions and provisions of this Agreement and those of any other document
referred to herein, the terms, conditions and provisions of this Agreement shall
control.
8.13 Attorneys' Fees and Expenses. In the case of any default by any
----------------------------
party in the performance of any of the terms, conditions or covenants of this
Agreement or any Loan Document, and if attorneys are employed for collection,
adjustment, enforcement, or settlement, whether suit be instituted or not, the
prevailing party shall be entitled to recover, upon demand, all losses,
reasonable costs and expenses, including attorneys' fees (and time charges of
counsel
30
that are employees of any Lender) that may be incurred in connection with such
collection, adjustment, settlement or suit, whether at trial or on appeal. The
Agent shall also have the right to commence an action or appear in any
proceeding or action purporting to affect the rights or duties of the Borrowers
hereunder, or the payment of said funds herein or therein required to be paid,
and in connection therewith, the Agent shall have the right to incur the
necessary expenses, employ counsel and to pay reasonable legal fees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or agents as of the date first above
written.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
BORROWERS:
/s/ Xxxx X. Xxxxx
_____________________________________
XXXX X. XXXXX
Address: 0000 Xxxx Xxxxxx Xxx
Xxxxxx Xxxxxx, XX 00000
Telecopy: (000) 000-0000
--------------
ASYMETRIX CORPORATION:
By: /s/ Xxxx X. Xxxxx
__________________________________
XXXX X. XXXXX
Its: PRESIDENT
Address: 110 - 000/xx/ Xxxxxx X.X.
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
--------------
31
Copies of Notice to:
XXXXXX PEPPER & SHEFELMAN
0000 Xxxxx Xxxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xx. Xxxxx D. Israel
LENDERS
SEATTLE-FIRST NATIONAL BANK,
individually and in its capacity as the Agent
By: /s/ Seattle-First National Bank
_________________________________
Its: Senior Vice President
Address: Seattle Private Banking
000 Xxxxx Xxx., 00/xx/ Xx.
Xxxxxxx, XX 00000
Attn: Private Banking
Telecopy: (000) 000-0000
--------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By: /s/ Xxxx Xxxxx
__________________________________
Its: Senior Vice President
Address: Peninsula Private Banking
000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
--------------
32
LENDERS
FIRST INTERSTATE BANK OF WASHINGTON, N.A.
By: /s/ First Interstate Bank of Washington
________________________________________
Its: Senior Vice President
Address: Bellevue Private Banking
000 - 000/xx/ Xxxxxx X.X.
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
--------------
FIRST INTERSTATE BANK OF OREGON, N.A.
By: /s/ First Interstate Bank of Oregon
________________________________________
Its: Senior Vice President
Address: Oregon Corporate Division
0000 X.X. 0/xx/ Xxx. X/00
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
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33
EXHIBIT A
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of November 4, 1992, by XXXX X. XXXXX (the
"Debtor") for the benefit of SEATTLE-FIRST NATIONAL BANK, BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, FIRST INTERSTATE BANK OF WASHINGTON,
N.A., and FIRST INTERSTATE BANK OF OREGON, N.A., (the "Lenders"), and SEATTLE-
FIRST NATIONAL BANK, as agent (the "Agent") for the Lenders.
R E C I T A L S
The Debtor, Asymetrix Corporation, the Lenders and the Agent entered
into a Credit Agreement dated as of November 4, 1992 (as the same may
be amended from time to time, the "Credit Agreement"); and
The execution and delivery of this Pledge Agreement is a material
condition precedent to the Lenders' obligations to make, and the
Agent's obligation to disburse, the Loans to Debtor as provided in the
Credit Agreement.
It is mutually agreed as follows:
1. Defined Terms. Capitalized terms not otherwise defined herein shall
-------------
have the meanings given in the Credit Agreement.
"Event of Default" means either (a) the Debtor s failure to perform or
----------------
observe any of the covenants contained herein, (b) any representation or
warranty made by the Debtor herein shall prove to have been incorrect in any
material respect, or (c) an Event of Default as defined under the Credit
Agreement.
2. Security Interest. Debtor hereby pledges, assigns and grants to the
-----------------
Lenders a security interest in all of his right, title and interest in and to
the following personal property, whether now owned or hereafter acquired (the
"Collateral"):
(a) Initial Shares of Microsoft Stock. Shares or common stock of
---------------------------------
Microsoft Corporation which are registered in the name of Debtor and evidenced
by the certificates identified on attached Schedule 1 (the "Microsoft Stock");
(b) Additional Shares of Microsoft Stock. Such additional shares of
------------------------------------
common stock of Microsoft Corporation as are delivered to the Agent from time to
time to be held in pledge under this Agreement for the ratable benefit of the
Lenders as required by the Credit Agreement;
(c) Acceptable Collateral and Other Collateral. Such Acceptable
------------------------------------------
Collateral or other collateral as is acceptable to all of the Lenders in their
sole discretion which is delivered to
the Agent from time to time to be held in pledge for the ratable benefit of the
Lenders under this Agreement as required by the Credit Agreement;
(d) Stock Dividends. Etc. All stock and other non-cash dividends,
---------------------
including liquidating dividends, stock rights, warrants and other rights to
subscribe, at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof; and in the
event Debtor receives any such property, Debtor will immediately deliver it to
the Agent to be held hereunder for the ratable benefit of the Lenders;
(e) Related Rights. All securities and stock powers delivered by the
--------------
Debtor in substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such securities; and
(f) Proceeds and Products. All cash and non-cash proceeds and
---------------------
products of all of the foregoing property;
provided, that Debtor shall have the right to remove Collateral from the
--------
foregoing pledge if no Event of Default has occurred, and if, after giving
effect to such removal, the Coverage Ratio will be maintained.
3. Transfer or Instruments, Etc. Debtor agrees to deliver to the Agent on
-----------------------------
the date of the initial Loan all instruments and stock certificates pertaining
to the Collateral now owned and to deliver to the Agent promptly upon receipt
thereof all instruments and stock certificates pertaining to the Collateral
hereafter acquired. Without limiting the foregoing, if Debtor shall become
entitled to receive or shall receive, in connection with any of the Collateral,
any: (i) stock certificate, including without limitation any certificate
representing a stock dividend or in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock split, spin-off, split-off or split-up, or liquidation; (ii)
option, warrant, or right, whether as an addition to or in substitution or in
exchange for any of its securities, or otherwise; or (iii) dividend (provided
that Debtor shall be entitled to retain any cash dividend declared and paid at a
time when no Event of Default has occurred and is continuing) or distribution
payable in property, including securities issued by other than the issuer of any
of its securities; then Debtor shall accept the same as the Agent's agent, in
trust for the Lenders, and shall deliver them forthwith to the Agent in the
exact form received, with, as applicable, Debtor's endorsement when necessary,
or appropriate stock powers duly executed in blank, to be held by the Agent for
the ratable benefit of the Lenders, subject to the terms hereof, as part of the
Collateral.
4. Obligations Secured. This Pledge Agreement is given to secure THE FULL
-------------------
AND timely performance by Debtor of all indebtedness, liabilities and
obligations owing to the Lenders pursuant to the terms of the Credit Agreement
and the other Loan Documents, and any other agreement now or hereafter entered
into by Debtor in favor of the Lenders in connection with the Credit Agreement,
the other Loan Documents, or the transactions contemplated thereby, and payment
of all costs and expenses to be paid hereunder and thereunder, whether now
existing or hereafter incurred, matured or unmatured, direct or contingent,
joint or several, including any
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renewals, extensions or modifications thereof and replacements or substitutions
therefor (collectively, the "Obligations").
5. Certain Agreements Regarding the Collateral. Debtor represents and
-------------------------------------------
warrants to, and agrees with, the Lenders that:
5.1 Debtor is the legal and beneficial owner of all or the Collateral
and is not prohibited by contract or otherwise from subjecting the same to the
pledge and security interest created hereby;
5.2 The Collateral is free and clear or all Liens;
5.3 No Governmental Approval or filing or registration with any
Governmental Authority by the Debtor is required for the making and performance
by the Debtor of this Agreement;
5.4 All shares of the Microsoft Stock are Qualified Microsoft Stock
that have been duly and validly issued, are fully paid and nonassessable and are
endorsed and in good order for transfer;
5.5 Debtor will neither create nor suffer to exist any Lien on the
Collateral, nor sell, transfer, lease or otherwise dispose of any item of
Collateral;
5.6 Debtor will fully and punctually perform any duty required of him
in connection with the Collateral and will not take any action which will
impair, damage or destroy the Lenders' rights with respect to the Collateral or
hereunder or the value thereof; and
5.7 Debtor (i) is not entering into this Agreement in order to
circumvent the reporting requirements of Section 13(d) or 13(g) of the
Securities and Exchange Act of 1934; (ii) to the extent required, Debtor will
continue to report the securities as beneficially owned by Debtor on Debtor's
Schedule 13D or 13G filings with the SEC; and (iii) Debtor will timely inform
the Lenders and keep the Lenders current as to all information needed to permit
timely preparation and filing by the Lenders of any statement on Schedule 13D or
13G that may be required after default.
6. Debtor's Voting Rights. So long as no Event of Default has occurred
----------------------
and is continuing, Debtor shall be entitled to exercise, or permit others to
exercise, any voting rights incident to the Collateral. Upon the occurrence and
continuation of an Event of Default, at the option of the Majority Lenders and
upon notice to the Debtor, the Debtor's right to exercise, or permit others to
exercise, such voting rights shall immediately cease and terminate and all
voting rights with respect to the Collateral shall thereupon rest solely and
exclusively in the Agent on behalf of the Lenders. The foregoing sentence shall
constitute and grant to the Agent an irrevocable proxy coupled with an interest
to vote the Collateral upon the occurrence and continuation of such an Event of
Default, and any officer of any corporation whose voting stock constitutes
Collateral, including without limitation any inspectors of elections or tellers,
may rely
-3-
hereon and on any written notice from the Agent as to the existence of
an Event of Default and the Agent's right to vote such Collateral.
7. Appointment of Agent. So long as any Obligation remains unpaid or the
--------------------
Lenders have any Commitments to make Loans to Debtor, Debtor does hereby
designate and appoint the Agent his true and lawful attorney with power
irrevocable, for him and in his name, place and xxxxx, whether or not an Event
of Default shall have occurred, to ask, demand, receive, receipt and give
acquittance for any and all amounts which may be or become due or payable to
Debtor with respect to the Collateral, and in the Agent's sole discretion to
file any claim or take any action or proceeding or either, in its own name or in
the name of Debtor, or otherwise, which the Agent deems necessary or desirable
in order to collect or enforce payment of any and all amounts which may become
due or owing with respect to the Collateral. The acceptance of this appointment
and the appointment set forth in Section 6 above by the Agent shall not obligate
it (or any Lender) to perform any duty, covenant or obligation required to be
performed by Debtor under or by virtue of the Collateral the Agent may also
execute, on behalf of Debtor, any financing statements or other instruments
which in its opinion or the opinion of any Lender may be necessary or desirable
to perfect or protect the Lenders' position with respect to the Collateral.
Without limiting the generality of the foregoing, the Agent is authorized at any
time to exercise any right of Debtor, or enforce any obligation owed to Debtor
pertaining to the Collateral and any expenses incurred by the Agent in
connection therewith shall bear interest from the date incurred until repaid by
Debtor at a per annum rate (the "Default Interest Rate") equal to the higher of
(a) the Prime Rate (changing as the Prime Rate changes) plus three percent (3%),
or (b) the interest rate otherwise then in effect with respect to the Loans or
any portion thereof. "Prime Rate" means on any day the rate of interest
publicly announced or published by the Agent from time to time as its prime rate
of interest, which is not necessarily its best rate. Any such amounts shall be
secured hereby and shall be repaid by Debtor on demand.
8. Taxes. Debtor will pay before delinquency any Taxes which are or may
-----
become through assessment or distraint or otherwise a Lien on the Collateral and
will pay any Tax which may be levied on any Obligation secured hereby.
9. Release or Collateral Etc. The obligations of Debtor shall not be
-------------------------
affected by the release or substitution of any collateral or by the release of
any renewal or extensions of time to any party to any instrument, obligation or
liability secured hereby or to which Debtor is a party. Neither the Agent nor
the Lenders shall be bound to resort to or exhaust their recourse or to take any
action against other parties or other collateral. Debtor-hereby waives
presentment, demand, protest, notice of protest and notice of nonacceptance or
nonpayment with respect to any indebtedness, obligation or liability secured
hereby. Beyond the exercise of reasonable care to assure the safe custody of
the Collateral while held hereunder, the Agent and the Lenders shall have no
duty or liability to preserve rights pertaining thereto and shall be relieved of
all responsibility for the Collateral upon surrendering it or tendering
surrender of it to Debtor.
10. Further Assurances. Debtor, at its sole cost and expense, will at any
------------------
time and from time to time hereafter (a) execute such financing statements and
other instruments and perform such other acts as the Agent may reasonably
request to establish and maintain the
-4-
security interests herein granted by Debtor to the Lenders and the priority and
continued perfection thereof; (b) obtain and promptly furnish to the Agent
evidence of all such Government Approvals as may be required to enable Debtor to
comply with its obligations hereunder and under the Credit Agreement; and (c)
execute and deliver all such other instruments and perform all such other acts
as the Agent may reasonably request to carry out the transactions contemplated
hereunder and under the Credit Agreement.
11. Expenses Incurred by Secured Party. Neither the Agent nor any Lender
----------------------------------
is required to, but the Agent may, at its option pay any Tax, filing or
recording fees, or other charges payable by Debtor hereunder or under the Credit
Agreement and any such amount shall bear interest from the date of payment Until
repaid at the Default Interest Rate. Such amounts shall be repayable by Debtor
on demand and Debtor's obligation to make such repayment shall constitute an
additional Obligation secured hereby.
12. Remedies Upon Default. If an Event of Default shall occur, the Agent
---------------------
and the Lenders shall have all of the remedies provided by law or equity and,
without limiting the generality of the foregoing, or the remedies provided in
any other paragraph hereof, shall have the following remedies:
(a) The remedies of a secured party under the Uniform Commercial Code;
(b) Vote the Pledged Shares as provided in Section 6 above;
(c) Receive all dividends and all other distributions of any kind on
all or any of the Collateral;
(d) Exercise any and all rights of collection, conversion or exchange,
and any and all other rights, privileges, options or powers of the Debtor
pertaining or relating to the Collateral (the Debtor hereby irrevocably
constituting and appointing the Agent his proxy and attorney-in-fact with full
power of substitution so to do), although the Agent shall not have any duty to
exercise any such rights, privileges, options or powers or to sell or to
otherwise realize upon any of the Collateral, as hereinafter authorized, or to
preserve the same, and the Lenders shall not be responsible for any failure to
do so or delay in so doing; and/or
(e) Sell, assign and deliver the whole or, from time to time, any part
of the Collateral at any public or private sale, public auction, or otherwise,
in each case with or without demand or advertisement of the time or place of
sale or adjournment thereof, for cash, for credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Agent in its discretion may determine, and the Agent may bid for and
purchase the whole or any part of the collateral so sold free from any such
right or equity of redemption- The Agent may, without notice of publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. For the
purposes hereof, (i) a private sale shall, in the case of the Collateral, mean a
sale after solicitation of a number of persons reasonably approximating the
maximum number which in the sole opinion of the Agent, shall not require
registration of the Collateral so being offered for sale
-5-
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), or
compliance with any applicable state securities law commonly known as a "Blue
Sky Law," and (ii) an agreement to sell all or any part of the Collate shall be
treated as a sale thereof, and the Agent shall be free to carry out such sale
pursuant to such agreement and the Debtor shall not be entitled to the return of
any Collateral subject thereto, notwithstanding the fact that after the Agent
shall have entered into such an agreement all Events of Default may have been
remedied or the obligations may have been paid in full.
In view or the possible position of the Debtor as an "affiliate" or
"control person" of the issuer of the all or a portion of securities
constituting the Collateral under the 1933 Act, the Debtor understands that
compliance with the 1933 Act may very strictly limit the course of conduct of
the Agent or Lenders if the Agent were to attempt to dispose of all or any part
of the Collateral and may also limit the extent to which or the manner in which
any subsequent transferee of the Collateral may dispose of the same. Debtor
also understands that there may be other legal restrictions or limitations
affecting the Agent or Lenders in any attempts to dispose of all or any part of
the Collateral under applicable Blue Sky or other state securities laws. The
Debtor agrees that any private sale conducted in a manner which complies with
the 1933 Act and Blue Sky or state securities laws shall be commercially
reasonable (within the meaning of Section 9-504(3) of the Uniform Commercial
Code), and the Debtor hereby waives any claims against the Lenders arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Obligations, even if
the Agent accepts the first offer received and does not Offer the Collateral to
more than one possible purchaser. Without limiting the generality of the
foregoing, the foregoing provisions would apply if, for example, the Agent were
to place all or any part of the Collateral for private placement by an
investment banking firm, or if such h investment banking firm purchased all or
any part of the Collateral for its own account, or if the Agent placed all or
any part or the Collateral privately with a purchaser or purchasers.
13. Notice. Debtor agrees that a period of ten (10) days from the date
------
notice is sent shall be a reasonable period of notification, if required, of
sale or other disposition of Collateral by the Lenders as secured party;
provided however that if the Collateral threatens to decline rapidly in value or
is of a type customarily sold on a recognized market then such notice may be
dispensed with.
14. Hold Harmless. Debtor will indemnify and hold the Lenders harmless
-------------
from all liability, loss, damage or expense, including attorneys' fees and
costs, that the Agent or the Lenders may incur in compliance with or the
enforcement of the terms of this Agreement or the Obligations. The covenants
set forth in this Section 14 shall survive the termination of this Agreement.
15. No Waiver: Remedies Cumulative. No failure by the Agent, any Lender
------------------------------
or any holder of any Note to exercise, and no delay in exercising, any right
power or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy under this
Agreement preclude any other or further exercise thereof or the
-6-
exercise of any other right, power, or remedy. The exercise of any right, power,
or remedy shall in no event constitute a cure or waiver of any Event of Default
nor prejudice the right of the Agent, any Lender or the holder of any Note in
the exercise of any right hereunder or thereunder, unless in the exercise of
such right, all Obligations are paid in full. The rights and remedies provided
herein are cumulative and not exclusive of any right or remedy provided by law.
16. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Washington, except insofar as the laws
of a jurisdiction where Collateral is located require the laws of that
jurisdiction to govern the creation, perfection, or enforcement of a Lien on any
such Collateral.
17. Consent to Jurisdiction Waiver of Immunities. Debtor hereby
--------------------------------------------
irrevocably submits to the jurisdiction of any state or federal court sitting in
Seattle, Washington, in any action or proceeding brought to enforce or otherwise
arising out of or relating to this Agreement and hereby waives any objection to
venue in any such court, and waives any claim that such forum is an inconvenient
forum. Debtor agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing herein shall impair
the right of the Agent, any Lender or the holder of any Note to bring any action
or proceeding against Debtor, or any of h property, in the courts of any other
jurisdiction.
18. Notices. All notices and other communications provided for in this
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Agreement shall be in writing (unless otherwise specified) and shall be given as
specified in the Credit Agreement.
19. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the parties and their respective Successors and assigns, except that
Debtor may not assign or transfer of all or any part of his rights or
obligations hereunder without the prior written consent of the Lenders, and any
such assignment or transfer purported to be made without such consent shall be
ineffective.
20. Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent permitted by applicable law,
Debtor waives any provision of law which renders any provision hereof prohibited
or unenforceable in any respect.
21. Entire Agreement; Amendment. This Agreement and the other Loan
---------------------------
Documents comprise the entire agreement between Debtor, Asymetrix Corporation,
the Agent, and the Lenders, and may not be amended or modified except in
writing. No provision of this Agreement may be waived except in writing and
then only in the specific instance and for the specific purpose for which given.
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22. Headings. The headings of the various provisions of this Agreement
--------
are for convenience or reference only, do not constitute a part hereof, and
shall not affect the meaning or construction of any provision hereof.
23. Construction. Except as otherwise provided, time is of the essence of
------------
the performance of each and every obligation of Debtor set forth herein.
24. Attorneys' Fees and Expenses. If attorneys are employed for
----------------------------
collection, adjustment, enforcement, or settlement, whether suit be instituted
or not, the Lenders shall be entitled to recover, upon demand, all losses,
reasonable costs and expenses, including attorney's fees (and time charges of
counsel that are employees of any Lender) that may be incurred in connection
with such collection, adjustment, settlement or such. The Lenders shall also
have the right to commence an action or appear in any proceeding or action
purporting to arrest the rights or duties of Debtor hereunder, and in connection
therewith, the Lenders shall have the right to incur the necessary expenses,
employ counsel and to pay reasonable legal fees. All such amounts owed to the
Lenders are secured hereby.
IN WITNESS WHEREOF, Debtor has executed this Agreement as or the day and
year first above written.
_______________________________________
XXXX X. XXXXX
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SCHEDULE 1
Certificate Number Shares
------------------ -------
MS46532 500,000
MS46533 500,000
MS46S35 500,000
MS46538 500,000
MS46539 420,000
MS65659 500,000
MS65668 420,000
MS100311 250,000
MS100312 250,000
MS100313 250,000
MS100322 50,000
MS100323 50,000
MS100324 50,000
MS100333 20,000
EXHIBIT B
PROMISSORY NOTE
$85,000,000 November 4, 0000
Xxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, XXXX X. XXXXX and ASYMETRIX CORPORATION ("Borrowers")
jointly and severally promise to pay to the order of SEATTLE-FIRST NATIONAL
BANK, as Agent for Seattle-First National Bank, Bank of America National Trust
and Savings Association, First Interstate Bank of Washington, N.A., and First
Interstate Bank of Oregon, N.A. (the "Lenders"), the principal sum of Eighty-
five Million Dollars ($85,000,000), or such lesser amount as shall equal the
balance outstanding of Loans made to the Borrowers under the Credit Agreement,
plus interest thereon, as hereinafter provided. This Promissory Note is issued
by the Borrowers pursuant to the Credit Agreement between the Borrowers, the
Lenders and the Agent dated as of November 4, 1992 (as the same may be amended
from time to time, the "Credit Agreement"). Capitalized terms not otherwise
defined in this Note shall have the meanings set forth in the Credit Agreement.
The Borrower further agrees as follows:
1. The principal balance of this Promissory Note, and all accrued interest
thereon, shall be paid in full on the earlier of (a) November 4, 2000, (b) the
date on which a Change of Control occurs, and (c) the first Business Day
immediately following the date on which the Market Value of a share of Pledged
Microsoft Stock is less than (i) Thirty Dollars ($30.00) or (ii) Twenty-Six
Dollars ($26.00) following any adjustment to give effect to any stock dividend,
stock split or other subdivision or combination occurring after the date of this
Promissory Note. All or a portion of the principal balance of this Promissory
Note, and all accrued interest thereon, shall be payable on such date as may be
required to maintain the Coverage Ratio.
The unpaid principal shall rear interest at a rate determined as provided
in Section 2.02 of the Credit Agreement. Unless otherwise provided in the
Credit Agreement, interest shall be payable monthly on the first day of each
calendar month and at maturity.
All payments of principal and interest on this Promissory Note shall be
made to the Agent for the account of the Lenders in accordance with their
respective Pro Rata Shares in Immediately available funds as provided in section
2.03(a) or the Credit Agreement.
2. This Promissory Note 1S issued pursuant to and 1S subject to the terms
and conditions of the Credit Agreement, reference to which is made for a
description of the Events of Default, mandatory prepayment, prepayment premium,
and certain other matters. The obligations of the Borrower hereunder are
secured by the Pledge Agreement.
3. Each party executing, endorsing or otherwise obligated hereon hereby
waives demand, notice, presentment, protest, notice thereof or of nonpayment,
and is bound as a principal and not as surety. In the event the holder of this
Promissory Note takes any action to
enforce or collect this Promissory Note, the Borrower agrees to pay the
reasonable cost thereof, including without limitation, reasonable attorneys'
fees, including any on appeal, and whether or not suit is instituted.
4. This Promissory Note shall be construed and enforced in accordance with
the laws of the State of Washington.
/s/ Xxxx X. Xxxxx
________________________________
XXXX X. XXXXX
ASYMETRIX CORPORATION
By: Xxxx X. Xxxxx
_________________________________
Its PRESIDENT
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ASYMETRIX CORPORATION
UNANIMOUS CONSENT
OF DIRECTORS
Having reviewed the loan proposal and the form of Credit Agreement dated as
of November 4, 1992 ("Credit Agreement") among Seattle-First National Bank, Bank
of America National Trust and Savings Association, First Interstate Bank of
Washington, N.A., and First Interstate Bank of Oregon, N.A., as Lenders;
Seattle-First National Bank as Agent for the Lenders; and Asymetrix Corporation
(the "Company") and Xxxx X. Xxxxx as Borrowers in the form attached hereto, and
having reviewed such other matters as they have deemed relevant and necessary,
the undersigned, being all of the directors of the Company, hereby consent to
the following corporate action in lieu of meeting:
RESOLVED, that the Company Vs hereby authorized to borrow up to $85,000,000
pursuant to the terms of the Credit Agreement; to enter into the Credit
Agreement, a note or notes evidencing such borrowings and into such other
documents as are more fully described in the Credit Agreement; and to execute
such other certificates and instruments to be provided by the Company pursuant
to the Credit Agreement or as are necessary to give effect to the Credit
Agreement.
RESOLVED, that either the Chairman and President or the Executive Vice
President and Secretary/Treasurer, be and hereby is authorized and empowered to
execute and deliver on behalf of the Company the Credit Agreement, notes and the
other loan documents described therein in substantially the form presented to
the directors or with such changes thereto as such Officers, or any one of them,
shall determine to be necessary or appropriate (the execution of such documents
to be conclusive evidence of the approval of the terms and conditions thereof).
Such Officers are authorized and empowered to execute and deliver all other
agreements, instruments and certificates and are authorized and empowered to do
and perform, or cause to be done or performed, any and all such other acts,
matters and things as in their judgment may be necessary, proper or convenient
in order, fully and effectively, to carry out the provisions of the Credit
Agreement and other loan documents and the transactions contemplated therein,
the execution and delivery of any such documents to be conclusive evidence of
the approval of the terms and conditions thereof.
RESOLVED, that each of the following persons are hereby authorized to (i)
notify the Agent under the Credit Agreement of the Company's intention to borrow
under the Revolving Credit Loans pursuant to Section 2.01(a) of the Credit
Agreement and to specify in such notice the amount of any such borrowing, (ii)
select such interest rate options as such Officer shall deem desirable on behalf
of the Company and to notify the Agent pursuant to Section 2.02(b) of the Credit
Agreement of the interest rate option selected, the interest period and the
business day on which the interest period is to commence, and (iii) convert the
Revolving Credit Leans into Term Loans and to notify the Agent of the Company's
intention to convert under Section 2.01(b) of the Credit Agreement and the
amount of the borrowing to be so converted:
Name Position
---- --------
Xxxx X. Xxxxx President and Chairman of the Board
Xxxx X. Xxxxx Executive Vice President and Secretary/Treasurer
Xxxx Xxxxxxx Controller
DATED this 12th day of November, 1992.
DIRECTORS:
/s/ Xxxx X. Xxxxx
_____________________________
XXXX X. XXXXX
/s/ Xxxx Xxxxx
______________________________
XXXX X. XXXXX
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CERTIFICATE OF XXXX X. XXXXX
AND
ASYMETRIX CORPORATION
Xxxx X. Xxxxx ("Borrower") on behalf of himself, and Xxxx X. Xxxxx .and
Xxxx X. Xxxxx, as the President and Executive Vice President, respectively, of
Asymetrix Corporation, a Washington corporation (the "Company"), hereby certify
that:
1. No action or proceeding for the merger, consolidation, male of assets
or business, liquidation, winding up or dissolution of the Company has been
commenced and no such action or proceeding is contemplated.
2. Except as described on Exhibit A attached hereto, there is no action,
proceeding or claim against the Company or the Borrower now pending before any
court, arbitrator or Governmental Authority which, if determined adversely to
the Company or to the Borrower, would be likely to have a material adverse
effect on the financial condition of the Company or the Borrower or to result in
the judgment or order against the Company or Borrower for (in each case in
excess of insurance coverage) more than $100,000 in any one case or $250,000 in
the aggregate, or impair or defeat the Lien of the Lenders on any Collateral or
any rights of the Company or Borrower therein.
3. Except for (i) the Credit Agreement dated as of November 4, 1992 among
the Borrower, Seattle-First National Bank, Bank of America National Trust and
Savings Association, First Interstate Bank of Washington, N.A., First Interstate
Bank of Oregon, N.A. and First Interstate Bank of California, as Lenders; and
Seattle-First National Bank, as Agent, (ii) the Credit Agreement dated as of
April 5, 1989, between the Borrower and Asymetrix corporation as the Borrowers
and Seattle-First National Bank, First Interstate Bank of Washington, N.A.,
First Interstate Bank of Nevada, N.A., as Lender, and Seattle-First National
Bank, as Agent, (iii) the Credit Agreement made as of August 15, 1990 by and
among Xxxx X. Xxxxx, as the Borrower and Debtor, and Seattle-First National
Bank, First Interstate Bank of Oregon, N.A., First Interstate Bank of
California, and First Interstate Bank of Washington, N.A., as Lenders, and
Seattle-First National Bank as Agent, and (iv) the Credit Agreement made as-of
June 27, 1988 by and among Xxxx X. Xxxxx as Borrower, Trail Blazers Inc.,
Guarantor and Seattle-First national Bank, First Interstate Bank of Washington,
N.A., First Interstate Banks of Oregon, N.A., and Bank of America Oregon, as
Lenders, and Seattle-First National Bank, as Agent, there are not any loan or
credit agreements which the Company or Borrower has incurred indebtedness
currently exceeding $1,000,000.
4. Borrower owns more than fifty-one percent of the issued and outstanding
voting stock: (i) of the company and (ii) of Interval Research Corporation, a
Washington corporation, ("Interval"). There are no Liens on any of the stock of
the Company or the stock of Interval, which is owned by the Borrower. None of
such stock is subject to any option, warrant, contract, or agreement of any
kind.
5. Neither the Company nor Interval has any outstanding options, warrants,
convertible securities or other agreements of any nature obligating either
entity to issue any voting securities to any person other than the Borrower.
-1-
6. The Pledged MicroSoft Stock is free and clear of all Liens other than
those created in favor of the Lenders pursuant to the Pledge Agreement.
Borrower has no notice or knowledge of any interest or claim against any of the
Pledged MicroSoft stock that is adverse to the respective interests of Xxxxx and
the Lenders in such stock. Borrower has not received any notice of deficiency
in respect of, or any assessment of, any federal, state or other tax, and
Borrower has filed all tax returns and paid all federal, state and local taxes
required to be filed or paid by him. Borrower has not executed a security
agreement with respect to or granted a security interest in the Pledged
MicroSoft stock except in favor of the lenders.
7. Borrower has not granted to any person any lien or security interest
against or in the Pledged Microsoft stock or the stock of the Company or
Interval owned by the Borrower.
Capitalized terms not otherwise defined herein have the same meaning as set
forth in the Credit Agreement dated November __, 1992 between Xxxx X. Xxxxx and
Asymetrix Corporation, as the Borrowers and Seattle-First National Bank, Bank of
America National Trust and Savings Association, First Interstate Bank of
Washington, N.A., and First Interstate Bank of Oregon, N.A., as Lenders and
Seattle-First National Bank as Agent for the Lenders. This certificate is being
furnished to you in connection with rendering your opinion dated the same date
to the Lenders. It is understood that you are relying on the certifications
herein in giving your opinion .
DATED: November 12, 1992
/s/ Xxxx X. Xxxxx
____________________________________
XXXX X. XXXXX
ASYMETRIX CORPORATION
By: /s/ Xxxx X. Xxxxx
________________________________
XXXX X. XXXXX, PRESIDENT
ASYMETRIX CORPORATION
By: /s/ Xxxx Xxxxx
________________________________
XXXX X. XXXXX, EXECUTIVE
VICE PRESIDENT
-2-
EXHIBIT A
In Asymetrix v. Merillin Paris, C 91-366 D (X.X. Xxxxxxxxxx), Ms. Paris has
---------------------------
alleged counterclaims in connection with the termination of her employment by
Asymetrix, and in connection with Asymetrix's seizure of certain software from
Ms. Paris' home pursuant to the Copyright Act. The amounts claimed by Ms. Paris
are not specified, but could potentially exceed $100,000.
-3-
November 12, 1992
Seattle-First National Bank First Interstate Bank of Oregon, N.A.
Seattle Private Banking Oregon Corporate Division
000 Xxxxx Xxxxxx 0000 X.X. Xxxxx Xxxxxx X/00
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxxxx, Xxxxxx 00000
Bank of America National Trust First Interstate Bank of
and Savings Association Washington, N.A.
Peninsula Private Banking Bellevue Private Banking
000 Xxxxxx Xxx, Xxxxx 000 225 - 108th Avenue N.E.
Palo Alto, California 94306 Xxxxxxxx, Xxxxxxxxxx 00000
Re: Loan to Xxxx X. Xxxxx and Asymetrix Corporation
Ladies and Gentlemen:
We have acted as counsel for Xxxx X. Xxxxx ("Xxxxx") and Asymetrix
Corporation, a Washington corporation ("Asymetrix" and, collectively, with
Xxxxx, the "Borrowers"), in connection with the preparation of and the
transactions contemplated by the Credit Agreement dated as of November 4, 1992
(the @'Credit Agreement") among the Borrowers; Seattle-First National Bank, Bank
of America National Trust and Savings Association, First Interstate Bank of
Washington, N.A. and First Interstate Bank of Oregon, N.A., as Lenders; and
Seattle-First National Bank, as Agent. This opinion is delivered to you
pursuant to Section 3.01(d) of the Credit Agreement. Capitalized terms not
otherwise defined herein have the respective meanings set forth in the Credit
Agreement.
In connection with our opinion, we have reviewed the following documents:
(a) the Credit Agreement;
(b) the Note;
(c) the Pledge Agreement;
(d) the Articles of Incorporation of Asymetrix and all amendments
thereto, certified by the Secretary of State of the state of Washington;
(e) the Bylaws of Asymetrix and all amendments thereto certified by
the secretary of Asymetrix;
(f) the Certificate of the Secretary of State of the state of
Washington dated October 5, 1992 as to the valid existence of Asymetrix;
November 12, 1992
Page 2
(g) the loan or credit agreements and other agreements which the
Borrowers have certified to us are the only agreements pursuant to which either
of them has incurred indebtedness, in each case where the amount of indebtedness
exceeds $1,000,000 (the "Material Financing Documents"); and
(h) such other records of the Borrowers, agreements, instruments,
certificates of public officials and documents as we have deemed necessary for
the opinions expressed in this letter.
The Credit Agreement, the Pledge Agreement and the Note are sometimes
collectively referred to herein as the "Loan Documents".
In giving our opinion, we have assumed (i) the genuineness of all
signatures, (ii) the authenticity of all documents provided to us as originals,
and the conformity to authentic, original documents of all documents provided to
us as certified, conformed or photostatic copies and (iii) the due
authorization, execution and delivery of the Credit Agreement and the Pledge
Agreement by, and the enforceability thereof against, the Lenders and the Agent.
As to questions of fact material to our opinion, we have, where relevant facts
were not independently established, relied upon certifications by the Borrowers.
In rendering the opinion expressed in paragraph 6, we have relied
exclusively and without further inquiry or independent verification (i) upon
certifications by each Borrower and (ii) in accordance with our standard audit
letter response procedures, upon inquiries of those attorneys in our firm who
handle matters for the Borrowers.
In rendering the opinions expressed in paragraphs 7(b) and 8, we have
relied exclusively and without further inquiry or independent verification (a)
upon the results of searches conducted by Prentice Hall Legal and Financial
Services of the records of the Department of Licensing for financing statements
and the offices of the County Auditor of King County, Washington for federal and
state tax liens filed against Xxxxx(which results cover financing statements
filed as of the close of business on September 24, 1992 and federal and state
tax liens filed as of the close of business on September 22, 1992), (b) on the
representations of Xxxxx in the Loan Documents and the written certifications
delivered to us in connection with the delivery of this opinion and (c) our
examination of the certificates representing the Pledged Microsoft Stock and the
stock of Asymetrix registered in the name of Xxxxx.
In rendering the opinion expressed in paragraph 9 below, we have assumed
that Xxxxx has rights in the Pledged Microsoft Stock and that the Pledged
Microsoft Stock will be duly endorsed to the Lenders or in blank.
Based on the foregoing and subject to the further qualifications below, we
are of the opinion that:
l. Asymetrix is a corporation duly incorporated and validly existing under
the laws of the state of Washington, and has full corporate power and authority
to carry on its business as presently conducted, to own and operate its
properties and assets, and to execute, deliver and perform the Credit Agreement
and the Note.
November 12, 1992
Page 3
2. The execution, delivery and performance by Asymetrix of the Credit
Agreement and the Note, and any borrowing thereunder, have been duly authorized
by all necessary corporate action required of Asymetrix, do not require any
shareholder approval and do not contravene the Articles of Incorporation or
Bylaws of Asymetrix.
3. To our knowledge, the execution, delivery and performance by each
Borrower of the Loan Documents to which such Borrower is a party and any
borrowing under the Credit Agreement and Note (a) do not require the approval or
consent of any trustee under any Material--Financing Documents or the holders of
any Indebtedness created under any Material Financing Documents, (b) do not
contravene any law, regulation, rule or order of a Governmental Authority
binding on such Borrower and (c) do not constitute a default under any of the
Material Financing Documents.
4. No Governmental Approval or filing or registration with any Government
Authority is required for the making and performance by either Borrower of the
Loan Documents to which such Borrower is a party, or in connection with any of
the transactions contemplated thereby.
5. The Credit Agreement, the Note and the Pledge Agreement have been duly
executed and delivered by each Borrower party to such instrument and constitute
the valid and binding obligations of such Borrower, enforceable in accordance
with their respective terms, subject to the following qualifications:
(a) Enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws relating to the rights and remedies of
creditors and by general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair dealing and the
possible-unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law.
(b) No opinion is expressed as to the ability of the Lenders to
collect a prepayment fee under the Note and Credit Agreement to the extent such
fee is not determined to be reasonable in amount and to reflect demonstrable
compensation or adjustment for actual damages, losses or costs.
(c) We express no opinion as to title to or ownership of any of the
Collateral, the priority of any lien or security interest in the Collateral or
the perfection of any lien or security interest in the Collateral (other than
the Pledged Microsoft Stock). We express no opinion as to title to or ownership
of any stock of Asymetrix, except for record title as noted in paragraph 7(a)
below.
(d) The courts of the state of Washington will consider extrinsic
evidence of circumstances surrounding the making of the Loan Documents to
ascertain the intent of the parties in using the language employed in the Loan
Documents, regardless of whether or not the language used in the Loan Documents
is plain and unambiguous on its face, and may incorporate additional or
supplementary terms into the Loan Documents.
November 12, 1992
Page 4
(e) Applicable laws, including judicial decisions, may limit or render
ineffective certain rights, remedial provisions (including without limitation
self-help remedies) and waivers in the Credit Agreement and Pledge Agreement,
provided that in our opinion such laws do not make the remedies or procedures
afforded by the Credit Agreement and Pledge Agreement inadequate for the
practical realization of the principal benefits intended to be provided by the
Credit Agreement and Pledge Agreement.
6. To our knowledge, except as set forth on Exhibit A, there are no
actions, proceedings or claims against either Borrower now pending before any
court, arbitrator or Governmental Authority which, if determined adversely to
such Borrower, would be likely to have a material adverse effect on the
financial condition of such Borrower or to result in the judgment or order
against such Borrower for (in each case in excess of insurance coverage) more
than $100,000 in any one case or $250,000 in the aggregate, or impair or defeat
the Lien of the Lenders on any Collateral or any rights of such Borrower
therein.
7. (a) Based upon our review of the corporate records of Asymetrix, we
confirm that Xxxxx is listed on the registration books of Asymetrix as the
holder of record of not less than fifty-one percent of the issued and
outstanding voting stock of Asymetrix.
(b) To our knowledge, the voting stock registered in the name of Xxxxx
is free and clear of all Liens and subject to no options, warrants, contracts or
agreements of any kind.
(c) To our knowledge, Asymetrix does not have any outstanding options,
warrants, convertible securities or other agreements of any nature obligating it
to issue any voting securities to any person other than Xxxxx.
8. To our knowledge, all of the Pledged Microsoft Stock pledged under the
Pledge Agreement on the date hereof is free and clear of all Liens other than
those created in favor of the Lenders pursuant to the Pledge Agreement.
9. No filings, recordings, registrations or other actions are required to
perfect the Lien of the Pledge Agreement on the Pledged Microsoft Stock, other
than the Lenders taking and maintaining continuous possession of the Pledged
Microsoft Stock.
The opinions herein expressed are limited to matters governed by the
federal laws of the United States and the laws of the state of Washington, in
each case as they exist at the date hereof, and we express no opinion as to the
laws of any other jurisdiction. This opinion is addressed solely to you for
your information in connection with the transactions described herein, any may
not be relied upon by any other person or for any-.other purpose without our
prior written consent.
Very truly yours,
XXXXXX PEPPER & SHEFELMAN
/s/ Xxxx Xxxxxxx
Xxxx X. Xxxxxxx
LJL/kmg
cc: Xx. Xxxx X. Xxxxx
November 12, 1992
Page 5
EXHIBIT A
In Asymetrix v. Merillin Paris, C 91-366 D (X.X. Xxxxxxxxxx), Ms. Paris has
---------------------------
alleged counterclaims in connection with the termination of her employment by
Asymetrix, and in connection with Asymetrix's seizure of certain software from
Ms. Paris' home pursuant to the Copyright Act. The amounts claimed by Ms. Paris
are not specified, but could potentially exceed $100,000.
FEDERAL RESERVE FORM U-1
FIRST AMENDMENT TO
CREDIT AGREEMENT
THIS AGREEMENT DATED as of September 30, 1994, amends that Credit Agreement
between XXXX X. XXXXX and ASYMETRIX CORPORATION as Borrowers and SEATTLE-FIRST
NATIONAL BANK, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, FIRST
INTERSTATE BANK OF WASHINGTON, N.A. AND FIRST INTERSTATE BANK OF OREGON, N.A. as
Lenders and SEATTLE-FIRST NATIONAL BANK as Agent for the Lenders dated as of
November 4, 1992 (the "Credit Agreement").
1. Capitalized terms not otherwise defined herein shall have the meanings
as defined in the Credit Agreement.
2. Subsection 2.01(a) of the Credit Agreement is amended to change the
respective sum set forth opposite each Lender's name and thereby change each
such Lender's Commitment and Pro Rata Share for that portion of the Commitment
Period remaining from and after the effective date of this Amendment as follows;
Lender's
Lender Commitment Pro Rata Share
--------------------------------------------------------------------------------
Seattle-First National Bank $ 51,000,000 42.50%
Bank of America, National $ 30,000,000 25.00%
Trust and Savings Association
First Interstate Bank of $ 30,000,000 25.00%
Washington, N.A.
First Interstate Bank of $ 9,000,000 7.50%
Oregon, N.A. ------------ -------
Total $120,000,000 100.00%
3. Subsection 2.01(b) is amended to read as follows:
(b) Term Loans. The Borrowers may elect, by written notice to the
----------
Agent at any time prior to November 4, 1995, to convert the Revolving
Credit Loans to Term Loans and to commence payment of 20 consecutive equal
quarterly, fully amortizing installments of principal. Such elections
shall be for minimum principal amounts of $10,000,000 and integral
multiples of $1,000,000 above such minimum and shall be effective on the
first to occur of the 4th day of February, May, August or November after
Agent's receipt of said notice of election. On November 40 1995 all
outstanding Revolting Credit Loans shall automatically convert to a Term
Loan repayable in 20 equal quarterly, fully amortizing installments of
principal. The quarterly installments of principal shall be payable on the
4th day of each February, May, August and November thereafter, commencing
with the
first such date occurring after the conversion, until the 5th year
anniversary of the conversion when the entire unpaid principal balance
together with any unpaid interest thereon shall paid in full .
4. On the date of this First Amendment Borrowers shall execute and deliver
to Agent, as agent for the Lenders, a promissory note of Borrowers substantially
in the form of Exhibit A to this Amendment. Such note shall be payable to the
order of the Agent as agent for the Lenders and will replace the promissory note
of Borrowers dated November 4, 1992 (such replacement note together with any
extensions, modifications or renewals thereof, the "Note").
5. Except as hereby expressly amended all of the terms and conditions of
the Credit Agreement and Loan Documents remain in full force and effect.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
EFFECTIVE as of the date set forth above.
BORROWERS:
/s/ Xxxx X. Xxxxx
____________________________________
XXXX X. XXXXX
ASYMETRIX CORPORATION
By: /s/ Xxxx Xxxxx
________________________________
Its PRESIDENT
---------
LENDERS:
SEATTLE-FIRST NATIONAL BANK
By: /s/ Seattle-First National Bank
________________________________
Its VICE PRESIDENT
--------------
-2-
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Bank of America National Trust
__________________________________
Its VICE PRESIDENT
--------------
FIRST INTERSTATE BANK OF
WASHINGTON, N.A.
By: /s/ First Interstate of Washington
__________________________________
Its VICE PRESIDENT
--------------
FIRST INTERSTATE BANK OF OREGON, N.A.
By: /s/ First Interstate of Oregon
__________________________________
Its VICE PRESIDENT
--------------
AGENT:
SEATTLE-FIRST NATIONAL BANK
By: /s/ Seattle-First National Bank
__________________________________
Its
-3-
