EXHIBIT 10.135
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of September 1, 1998
among
MICRON TECHNOLOGY, INC.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANCAMERICA SECURITIES, INC.
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TABLE OF CONTENTS
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Page
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ARTICLE I - DEFINITIONS; OTHER INTERPRETIVE PROVISIONS; ACCOUNTING PRINCIPLES... 1
1.01 Certain Defined Terms............................................... 1
1.02 Other Interpretive Provisions....................................... 17
1.03 Accounting Principles............................................... 17
ARTICLE II - THE REVOLVING CREDIT................................................ 18
2.01 Amounts and Terms of Commitments.................................... 18
2.02 Loan Accounts....................................................... 18
2.03 Procedure for Borrowing............................................. 18
2.04 Conversion and Continuation Elections............................... 19
2.05 Termination or Reduction of Commitments............................. 20
2.06 Prepayments......................................................... 20
2.07 Repayment........................................................... 21
2.08 Interest............................................................ 21
2.09 Fees................................................................ 22
2.10 Computation of Fees and Interest.................................... 22
2.11 Payments by the Company............................................. 22
2.12 Payments by the Banks to the Agent.................................. 23
2.13 Sharing of Payments, Etc. .......................................... 23
2.14 Optional Extension of Commitments................................... 24
2.15 Certain Closing Date Transitional Matters........................... 24
ARTICLE III - TAXES, YIELD PROTECTION AND ILLEGALITY............................. 24
3.01 Taxes............................................................... 24
3.02 Illegality.......................................................... 26
3.03 Increased Costs and Reduction of Return............................. 27
3.04 Funding Losses...................................................... 27
3.05 Inability to Determine Rates........................................ 28
3.06 Certificates of Banks............................................... 28
3.07 Replacement of Bank................................................. 28
3.08 Survival............................................................ 29
ARTICLE IV - CONDITIONS PRECEDENT................................................ 29
4.01 Conditions to Effectiveness......................................... 29
(a) Credit Agreement, Guaranty and Notes........................... 29
(b) Resolutions; Incumbency; Organization Documents................ 29
(c) Good Standing.................................................. 30
(d) Legal Opinions................................................. 30
(e) Payment of Fees................................................ 30
(f) Certificate.................................................... 30
(g) Collateral Documents and Actions Relating to Collateral........ 30
(h) Other Documents................................................ 31
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TABLE OF CONTENTS
(continued)
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4.02 Conditions to All Borrowings........................................ 31
(a) Notice of Borrowing or Conversion/Continuation................. 31
(b) Continuation of Representations and Warranties................. 31
(c) No Existing Default............................................ 31
ARTICLE V - REPRESENTATIONS AND WARRANTIES....................................... 32
5.01 Corporate Existence and Power....................................... 32
5.02 Corporate Authorization; No Contravention........................... 32
5.03 Governmental Authorization.......................................... 32
5.04 Binding Effect...................................................... 32
5.05 Litigation.......................................................... 32
5.06 No Default.......................................................... 33
5.07 ERISA Compliance.................................................... 33
5.08 Use of Proceeds; Margin Regulations................................. 33
5.09 Title to Properties; Liens.......................................... 33
5.10 Taxes............................................................... 34
5.11 Financial Condition................................................. 34
5.12 Environmental Matters............................................... 34
5.13 Regulated Entities.................................................. 34
5.14 Intellectual Property............................................... 35
5.15 Subsidiaries; Minority Interests.................................... 35
5.16 Insurance........................................................... 35
5.17 Swap Obligations.................................................... 35
5.18 Full Disclosure..................................................... 36
5.19 Projections......................................................... 36
5.20 Year 2000........................................................... 36
5.21 Collateral Documents................................................ 36
ARTICLE VI - AFFIRMATIVE COVENANTS............................................... 37
6.01 Financial Statements................................................ 37
6.02 Certificates; Other Information..................................... 38
6.03 Notices............................................................. 38
6.04 Preservation of Corporate Existence, Etc. .......................... 40
6.05 Maintenance of Property............................................. 40
6.06 Insurance........................................................... 40
6.07 Payment of Obligations.............................................. 40
6.08 Compliance with Laws................................................ 41
6.09 Compliance with ERISA............................................... 41
6.10 Inspection of Property and Books and Records........................ 41
6.11 Environmental Laws.................................................. 42
6.12 Use of Proceeds..................................................... 42
6.13 Ranking; Designated Senior Indebtedness............................. 42
6.14 New Semiconductor Operations Subsidiaries........................... 42
6.15 Further Assurances.................................................. 42
ARTICLE VII - NEGATIVE COVENANTS................................................. 42
7.01 Limitation on Liens................................................. 42
ii.
TABLE OF CONTENTS
(continued)
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7.02 Exclusive Negative Pledge........................................... 45
7.03 Disposition of Assets............................................... 46
7.04 Consolidations and Mergers.......................................... 47
7.05 Loans and Investments............................................... 47
7.06 Limitation on Indebtedness and Contingent Obligations............... 49
7.07 Transactions with Affiliates........................................ 50
7.08 Use of Proceeds..................................................... 51
7.09 Restricted Payments................................................. 51
7.10 Permitted Subordinated Debt......................................... 51
7.11 ERISA............................................................... 52
7.12 Business or Accounting Changes...................................... 52
7.13 Minimum Cash and Equivalents........................................ 52
7.14 Combined Tangible Net Worth......................................... 53
7.15 Leverage Ratio...................................................... 53
7.16 Maximum Indebtedness to Capitalization.............................. 53
7.17 [Reserved].......................................................... 53
7.18 Material Semiconductor Operations................................... 53
ARTICLE VIII - EVENTS OF DEFAULT................................................. 53
8.01 Event of Default.................................................... 53
(a) Non-Payment.................................................... 53
(b) Representation or Warranty..................................... 53
(c) Specific Defaults.............................................. 53
(d) Other Defaults................................................. 54
(e) Cross-Acceleration -- Indebtedness............................. 54
(f) Cross-Acceleration - Swap Obligations.......................... 54
(g) Insolvency; Voluntary Proceedings.............................. 54
(h) Involuntary Proceedings........................................ 55
(i) ERISA.......................................................... 55
(j) Monetary Judgments............................................. 55
(k) Non-Monetary Judgments......................................... 55
(l) Change of Control.............................................. 55
(m) Loss of Governmental Licenses.................................. 56
(n) Permitted Subordinated Debt; Loss of Subordination............. 56
(o) Guarantor Defaults............................................. 56
(p) Collateral..................................................... 56
8.02 Remedies............................................................ 56
8.03 Rights Not Exclusive................................................ 57
8.04 Certain Financial Covenant Defaults................................. 57
ARTICLE IX - THE AGENT........................................................... 57
9.01 Appointment and Authorization; "Agent".............................. 57
9.02 Delegation of Duties................................................ 57
9.03 Liability of Agent.................................................. 58
9.04 Reliance by Agent................................................... 58
9.05 Notice of Default................................................... 58
9.06 Credit Decision..................................................... 59
iii.
TABLE OF CONTENTS
(continued)
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9.07 Indemnification of Agent............................................ 59
9.08 Agent in Individual Capacity........................................ 59
9.09 Successor Agent..................................................... 60
9.10 Withholding Tax..................................................... 60
9.11 Co-Agents........................................................... 61
9.12 Collateral Matters.................................................. 62
ARTICLE X - MISCELLANEOUS........................................................ 62
10.01 Amendments and Waivers.............................................. 62
10.02 Notices............................................................. 63
10.03 No Waiver; Cumulative Remedies...................................... 63
10.04 Costs and Expenses.................................................. 63
10.05 Company Indemnification............................................. 64
10.06 Payments Set Aside.................................................. 64
10.07 Successors and Assigns.............................................. 65
10.08 Assignments, Participations, etc. .................................. 65
10.09 Confidentiality..................................................... 66
10.10 Set-off............................................................. 67
10.11 Notification of Addresses, Lending Offices, Etc. ................... 67
10.12 Counterparts........................................................ 67
10.13 Severability........................................................ 68
10.14 No Third Parties Benefited.......................................... 68
10.15 Governing Law and Jurisdiction...................................... 68
10.16 Waiver of Jury Trial................................................ 68
10.17 Entire Agreement.................................................... 69
10.18 Amendment and Restatement of Existing Facility...................... 69
iv.
ANNEXES, SCHEDULES AND EXHIBITS
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ANNEXES:
I Pricing Grid
SCHEDULES:
2.01 Commitments and Pro Rata Shares
4.01 Filing Offices
10.02 Lending and Payment Offices; Addresses for Notices
EXHIBITS:
A Form of Notice of Borrowing
B Form of Notice of Conversion/Continuation
C Form of Note
D Form of Compliance Certificate
E Form of Guaranty
F Form of Company Security Agreement
G Form of Guarantor Security Agreement
H Form of Idaho Deed of Trust
I Form of Utah Deed of Trust
J Form of Legal Opinion of Company's Assistant General Counsel
K Form of Legal Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx PC
L Form of Opinion of Hawley, Troxell, Xxxxx & Xxxxxx LLP
M Form of Opinion of Xxxxxxx Xxxxx & Xxxxxxx
N Form of Assignment and Acceptance
v.
SECOND AMENDED AND RESTATED
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REVOLVING CREDIT AGREEMENT
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This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is entered
into as of September 1, 1998, among Micron Technology, Inc., a Delaware
corporation (the "Company"), the several financial institutions from time to
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time to this Agreement (individually, a "Bank" and, collectively, the "Banks"),
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and Bank of America National Trust and Savings Association, as administrative
agent for the Banks (in such capacity, the "Agent").
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RECITALS
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A. The Company, the Banks and the Agent entered into that certain First
Amended and Restated Revolving Credit Agreement, dated as of May 28,
1997, as amended (as amended, the "Existing Facility").
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B. The Company, the Banks and the Agent desire to amend and restate the
Existing Facility on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS; OTHER INTERPRETIVE PROVISIONS;
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ACCOUNTING PRINCIPLES
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1.01 Certain Defined Terms. The following terms have the following meanings:
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"Acquisition" means any transaction or series of related transactions
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for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
1.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
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and any successor agent arising under Section 9.09.
"Agent-Related Persons" means BofA and any successor agent arising
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under Section 9.09, together with their respective Affiliates (including, in the
case of BofA, the Lead Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
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Schedule 10.02 or such other address as the Agent may from time to time specify.
"Agreement" means this Second Amended and Restated Revolving Credit
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Agreement.
"Applicable Fee Percentage" means with respect to the commitment fee
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payable hereunder, the amount set forth opposite the indicated Level below the
heading "Commitment Fee" in the pricing grid set forth on Annex I in accordance
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with the parameters for calculations of such amount also set forth on Annex I.
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"Applicable Margin" means, with respect to the interest payable on
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Base Rate Loans and Offshore Rate Loans outstanding hereunder, the amount set
forth opposite the indicated Level below the heading "LIBOR Margin" or "Base
Rate Margin," as applicable, in the pricing grid set forth on Annex I in
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accordance with the parameters for calculations of such amounts also set forth
on Annex I.
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"Assignee" has the meaning specified in subsection 10.08(a).
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"Attorney Costs" means and includes all reasonable fees and
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disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory paragraph hereof.
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"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
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U.S.C. (S)101, et seq.).
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"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
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above the latest Federal Funds Rate; and (b) the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "Reference Rate." (The "reference rate" is a rate set by
BofA based upon various factors including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
2.
"BofA" means Bank of America National Trust and Savings Association, a
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national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the
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same Type made to the Company on the same day by the Banks under Article II,
and, other than in the case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York, New York, Portland, Oregon, Boise,
Idaho, or San Francisco, California are authorized or required by law to close
and, if the applicable Business Day relates to any Offshore Rate Loan, means
such a day on which dealings are carried on in the applicable offshore Dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capitalization", on any date, means the sum of (i) all Indebtedness
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of the Company and the Semiconductor Operations Subsidiaries on a combined basis
on such date, plus (ii) Combined Tangible Net Worth on such date.
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"Charge" has the meaning specified in Section 8.04.
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"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.01 are satisfied or waived by all Banks (or, in the case of
subsection 4.01(e), waived by the Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and regulations
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promulgated thereunder.
"Collateral" means all property and interests in property and proceeds
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thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien now or hereafter exists in favor of the Banks, or the Agent on behalf of
the Banks, whether under this Agreement or under any other documents executed by
any such Person, and delivered to the Agent or the Banks.
"Collateral Documents" means, collectively, (i) the Security
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Agreements, the Deeds of Trusts and all other security agreements, mortgages,
deeds of trust, lease assignments, guarantees and other similar agreements
between any Loan Party and the Banks or the Agent for the benefit of the Banks
now or hereafter delivered to the Banks or the Agent pursuant to or in
connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the Uniform Commercial Code or comparable law) against any Loan Party as debtor
in favor of the Banks or the Agent for the
3.
benefit of the Banks as secured party, and (ii) any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions and
extensions of any of the foregoing.
"Combined Adjusted Total Liabilities" means, as of any date of
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determination, without duplication, the total liabilities of the Company and the
Semiconductor Operations Subsidiaries on a combined basis, as shown in the
Semiconductor Operations Supplemental Schedules, plus all Guaranty Obligations
of the Company and the Semiconductor Operations Subsidiaries on a combined basis
with respect to indebtedness or obligations of Persons other than the Company
and the Semiconductor Operations Subsidiaries of the kinds referred to in
clauses (a) through (g) of the definitions of the term "Indebtedness", plus all
obligations of the Company and the Semiconductor Operations Subsidiaries on a
combined basis under synthetic leases in excess of $500,000, individually, which
obligations shall be discounted to present value at the interest rate implicit
in each such lease in effect at any date of determination, less Permitted
Subordinated Debt.
"Combined Net Income" and "Combined Net Loss" mean, respectively, for
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any period, the aggregate net income or loss for such period of the Company and
the Semiconductor Operations Subsidiaries on a combined basis, as shown in the
Semiconductor Operations Supplemental Schedules.
"Combined Tangible Assets" means, as of any date of determination, (a)
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the total assets of the Company and the Semiconductor Operations Subsidiaries on
a combined basis, as shown in the Semiconductor Operations Supplemental
Schedules, minus (b) the net book value of all assets of the Company and the
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Semiconductor Operations Subsidiaries on a combined basis, as shown in the
Semiconductor Operations Supplemental Schedules which would be treated as
intangible assets under GAAP, including (without duplication or limitation)
intangible deferred charges, franchise rights, non-compete agreements,
capitalized research and development costs, capitalized costs associated with
software development expenses, goodwill, patents, patent applications,
trademarks, trade names, copyrights and licenses.
"Combined Tangible Net Worth" means, as of any date of determination,
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(a) the total net assets of the Company and the Semiconductor Operations
Subsidiaries on a combined basis, as shown in the Semiconductor Operations
Supplemental Schedules minus (b) the net book value of all assets of the Company
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and the Semiconductor Operations Subsidiaries on a combined basis as shown in
the Semiconductor Operations Supplemental Schedules which would be treated as
intangibles under GAAP, including (without duplication or limitation) intangible
deferred charges, franchise rights, non-compete agreements, capitalized research
and development costs, capitalized costs associated with software development
expenses, goodwill, patents, patent applications, trademarks, trade names,
copyrights and licenses.
"Commitment", as to each Bank, has the meaning specified in Section
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2.01.
"Company" means Micron Technology, Inc., a Delaware corporation.
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"Company Security Agreement" means the Security Agreement between the
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Company and the Agent in substantially the form of Exhibit F.
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4.
"Compliance Certificate" means a certificate, duly executed by a
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Responsible Office of the Company, substantially in the form of Exhibit D.
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"Contingent Obligation" means, as to any Person, any direct or
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indirect liability of that Person, whether or not contingent, with or without
recourse: (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "primary obligations") of another Person (the
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"primary obligor"), including any obligation of that Person (i) to purchase,
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repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); (b) with
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respect to any Surety Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered, or (d) in respect of any Swap Contract.
"Contractual Obligation" means, as to any Person, any provision of any
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security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
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2.04, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Deeds of Trust" means the Idaho Deed of Trust and the Utah Deed of
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Trust.
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Disclosure Letter" means the disclosure letter dated the Original
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Closing Date delivered to the Agent pursuant to Section 4.01(g) of the Existing
Facility.
"Dispositions" has the meaning specified in Section 7.03.
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"Distributions" has the meaning specified in Section 7.09.
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"Dollars", "dollars" and "$" each mean lawful money of the United
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States.
5.
"EBITDA" means, for any period, Combined Net Income or Combined Net
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Loss, as the case may be, for such period, plus the sum of (a) interest expense,
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(b) income tax expense, (c) depreciation expense, and (d) amortization expense,
which were deductible in determining Combined Net Income or Combined Net Loss.
"Eligible Assignee" means (a) a commercial bank organized under the
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laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
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country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; and (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (iii) a Person of which a Bank is a
Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Indemnity" means the Environmental and Hazardous
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Substance Indemnity Agreement, dated as of September 1, 1998, made by the
Company in favor of the Banks and the Agent.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
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Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer
6.
Plan; or (f) the imposition of any material liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
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definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
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in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
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regulations promulgated thereunder.
"Existing Facility" has the meaning set forth in Recital A to this
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Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, and any
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Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
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weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate is
not so published with respect to any day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
"FRB" means the Board of Governors of the Federal Reserve System, and
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any Governmental Authority succeeding to any of its principal functions.
"Filing Offices" has the meaning set forth in Section 4.01.
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"Further Taxes" means any and all present or future taxes, levies,
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assessments, imposts, duties, deductions, fees, withholdings or similar charges
(including net income taxes and franchise taxes), and all liabilities with
respect thereto, imposed by any jurisdiction on account of amounts payable or
paid pursuant to Section 3.01.
"GAAP" means generally accepted accounting principles set forth from
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time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
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other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
7.
"Guarantor" means Micron Semiconductor Products, Inc., an Idaho
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corporation and a Semiconductor Operations Subsidiary for purposes hereof.
"Guarantor Security Agreement" means the Security Agreement between
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the Guarantor and the Agent in substantially the form of Exhibit G.
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"Guaranty" means the Guaranty executed by the Guarantor in
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substantially the form of Exhibit E.
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"Guaranty Obligation" has the meaning specified in the definition of
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"Contingent Obligation."
"Idaho Deed of Trust" means the Deed of Trust with Assignment of
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Rents, Security Agreement and Fixture Filing, from the Company, as trustor, to
the trustee named therein and for the Agent, as beneficiary, in substantially
the form of Exhibit H.
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"Idaho Facility" means the Company's facility in Boise, Idaho, located
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on the "Land" described in the Idaho Deed of Trust.
"Indebtedness" of any Person means, without duplication: (a) all
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indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
royalty payables and trade payables entered into in the ordinary course of
business on ordinary terms); (c) all non-contingent reimbursement or payment
obligations with respect to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property); (f) all obligations with
respect to capital leases; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above.
For all purposes of this Agreement, (i) the Indebtedness of any Person shall
include all recourse Indebtedness of any partnership or joint venture or limited
liability company in which such Person is a general partner or a joint venturer
or a member, and (ii) indebtedness secured by a Lien permitted under Section
7.01(m) shall not constitute Indebtedness hereunder.
"Indemnified Liabilities" has the meaning specified in Section 10.05.
-----------------------
"Indemnified Person" has the meaning specified in Section 10.05.
------------------
"Independent Auditor" has the meaning specified in subsection 6.01(a).
-------------------
"Insolvency Proceeding" means, with respect to any Person, (a) any
---------------------
case, action or proceeding with respect to such Person before any court or other
Governmental Authority
8.
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Intellectual Property Licenses" has the meaning specified in Section
------------------------------
6.03(b).
"Interest Payment Date" means, as to any Loan other than a Base Rate
---------------------
Loan, the last day of each Interest Period applicable to such Loan and, as to
any Base Rate Loan, the last Business Day of each calendar quarter and each date
such Loan is converted into another Type of Loan; provided, however, that if any
-------- -------
Interest Period for an Offshore Rate Loan exceeds three months, the date that
falls three months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
---------------
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided, that:
-------- ----
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless, in the case of an Offshore Rate Loan, the result of such extension
would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Revolving
Termination Date as in effect on the date such Loan is made, converted or
continued, as the case may be.
"Investments" has the meaning specified in Section 7.05.
-----------
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code
"Lead Arranger" means BancAmerica Securities, Inc.
-------------
"Lending Office" means, as to any Bank, the office or offices of such
--------------
Bank specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 10.02, or such other office or
--------------
offices as such Bank may from time to time notify the Company and the Agent.
9.
"Leverage Ratio" means, as of any date of determination, the ratio of
--------------
(a) Combined Adjusted Total Liabilities, after giving effect to any payments or
prepayments hereunder made on such date, to (b) Combined Tangible Net Worth.
"Lien" means any security interest, mortgage, deed of trust, pledge,
----
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Company under
----
Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type"
----
of Loan).
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
--------------
Collateral Documents, the Environmental Indemnity, the Disclosure Letter, all
fee letters and all other certificates, documents or financial or other
statements delivered at any time to the Agent or any Bank in connection herewith
or with any other Loan Document.
"Loan Party" means each of the Company and the Guarantor.
----------
"Majority Banks" means at any time Banks then holding at least 66-2/3%
--------------
of the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks then having at least 66-2/3% of the
Commitments.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of the Company or the Company and its Semiconductor
Operations Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its payment obligations under the Loan
Documents; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document.
"Material Semiconductor Operations" means, at any time, semiconductor
---------------------------------
operations (excluding any existing Subsidiary that is not a Wholly-Owned
Subsidiary, and its Subsidiaries, if any) which both (a) comprise assets having
a net book value equal to or greater than ten percent (10%) of the combined
total assets of the Company and its Semiconductor Operations Subsidiaries as
shown in the Semiconductor Operations Supplemental Schedules, and (b) for the
most recent fiscal quarter or the most recent fiscal year, generated operating
income equal to or greater than ten percent (10%) of the combined income from
operations for the Company and its Semiconductor Operations Subsidiaries as
shown in the Semiconductor Operations Supplemental Schedules.
10.
"Material Semiconductor Operations Subsidiary" means, at any time, (a)
--------------------------------------------
any Semiconductor Operations Subsidiary conducting Material Semiconductor
Operations, and (b) any Semiconductor Operations Subsidiary owning 50% or more
of the voting stock or other equity interest of any Material Semiconductor
Operations Subsidiary.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
------------------
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Negative Pledge" has the meaning specified in Section 7.02.
---------------
"Net Proceeds" means, as to any Disposition by a Person, the gross
------------
proceeds received by such Person from such Disposition less all direct costs and
expenses incurred or to be incurred, and all federal, state, local and foreign
taxes assessed or to be assessed, in connection therewith.
"Note" means a promissory note executed by the Company in favor of a
----
Bank pursuant to Section 2.02(b), in substantially the form of Exhibit C.
---------
"Notice of Borrowing" means a notice in substantially the form of
-------------------
Exhibit A.
---------
"Notice of Conversion/Continuation" means a notice in substantially
---------------------------------
the form of Exhibit B.
---------
"Obligations" means all advances, debts, liabilities, obligations,
-----------
covenants and duties arising under any Loan Document owing by the Company to any
Bank, the Agent, or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
-------------
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/16th of 1%) determined by the Agent as
follows:
LIBOR
Offshore Rate = ------------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day in any Interest
-----------------------------
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
11.
"LIBOR" means, for any Interest Period, the rate of interest per
-----
annum determined by the Agent to be the arithmetic mean (rounded upward
to the next 1/16 of 1%) equal to the rates of interest per annum notified
to the Agent by BofA as the rate of interest at which Dollar deposits in
the approximate amount of the amount of the Loan to be made or continued
as, or converted into, an Offshore Rate Loan by BofA and having a
maturity comparable to such Interest Period would be offered to major
banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
------------------
Offshore Rate.
"Organization Documents" means, for any corporation, the certificate
----------------------
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"Original Closing Date" means the "Closing Date" of the Existing
---------------------
Facility.
"Other Taxes" means any present or future stamp, court or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies imposed
by any Governmental Authority which arise from any payment made hereunder by the
Company or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Participant" has the meaning specified in Section 10.08(d).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation, or any
----
Governmental Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which the Company sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, or in the case
of a multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.01.
---------------
"Permitted Sale-Leaseback Transaction" means a transaction pursuant to
------------------------------------
which the Company or any of the Semiconductor Operations Subsidiaries purchases
equipment and, within 12 months thereafter, sells such equipment to, and leases
back such equipment from, a third-party pursuant to an operating or capital
lease.
12.
"Permitted Subordinated Debt" means (a) Indebtedness issued under the
---------------------------
Subordinated Note Indenture in an aggregate principal amount not to exceed the
amount outstanding as of the Closing Date; (b) any TI Subordinated Debt; and (c)
any other Indebtedness of the Company (issued in compliance with the limitations
set forth in Section 7.06(j)) under a written instrument which, unless otherwise
consented to by the Majority Banks prior to the issuance thereof:
(i) without giving effect to the first clause of Section 1501 of the
Subordinated Note Indenture providing for modifications in a supplemental
indenture or pursuant to Section 301, contains subordination provisions at
least as favorable to the Banks as those contained in Article Fifteen of
the Subordinated Note Indenture;
(ii) provides that the stated maturity date of such subordinated
Indebtedness shall be at least one year after the Revolving Termination
Date in effect on the date of its issuance;
(iii) requires no mandatory or scheduled amortization, prepayments,
redemptions, repurchases, defeasances or sinking fund payments prior to one
year after the Revolving Termination Date in effect on the date of its
issuance, except for mandatory redemptions and purchases upon the
------
occurrence of certain changes in control or fundamental changes with
respect to the Company which are approved by the Majority Banks prior to
the issuance of such subordinated Indebtedness, which mandatory redemptions
and purchases shall be subject to the subordination provisions set forth in
this definition;
(iv) contains no representations, warranties or covenants other than
those set forth in Articles Eight and Ten of the Subordinated Note
Indenture other than those which are not otherwise inconsistent with the
other clauses of this definition or are not more restrictive on the Company
than, or are in addition to, the representations, warranties or covenants
concerning the operation or condition of the Company contained in the
Agreement;
(v) contains no events of default other than those set forth in
Section 501(1)-(6) of the Subordinated Note Indenture other than a cross-
acceleration clause substantially in the form set forth in the Disclosure
Letter;
(vi) contains no modifications, additions or deletions to the
Subordinated Note Indenture (made pursuant to a supplemental indenture,
pursuant to Section 301 or 901 of the Subordinated Note Indenture or
otherwise) unless the Majority Banks have determined that such
modifications, additions or deletions are not otherwise inconsistent with
the other clauses of this definition or adverse to the interests of the
Banks from the standpoint of senior lenders;
(vii) is unsecured except for Liens granted in favor of the trustee for
such Permitted Subordinated Debt as described in the Disclosure Letter to
secure fees and other amounts owing to such trustee;
13.
(viii) contains conversion features, including the type of security or
property into which such subordinated Indebtedness may be converted,
consented to by the Majority Banks prior to the issuance of such
subordinated Indebtedness; and
(ix) the Agent and the Majority Banks have determined is in form and
substance not otherwise inconsistent with the requirements of this
definition.
"Permitted Swap Obligations" means all obligations (contingent or
--------------------------
otherwise) of the Company or any Semiconductor Operations Subsidiary existing or
arising under Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person in conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or taking a "market
view;" and (b) such Swap Contracts do not contain (i) any provision ("walk-away"
provision) exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii) any
provision creating or permitting the declaration of an event of default,
termination event or similar event upon the occurrence of an Event of Default
hereunder (other than an Event of Default under Section 8.01(a)).
"Person" means an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions and includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of all Banks.
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, president,
-------------------
chief financial officer or treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
14.
"Revolving Termination Date" means the earlier to occur of (a) May 28,
--------------------------
2000, and (b) the date on which the Commitments terminate in accordance with the
provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"Security Agreements" means the Company Security Agreement and the
-------------------
Guarantor Security Agreement.
"Semiconductor Operations Subsidiaries" means all Wholly-Owned
-------------------------------------
Subsidiaries of the Company conducting from time to time semiconductor
operations and as specified and described in the notes to the most recent
Semiconductor Operations Supplemental Schedules (individually, a "Semiconductor
-------------
Operations Subsidiary").
---------------------
"Semiconductor Operations Supplemental Schedules" means the
-----------------------------------------------
Supplemental Schedules of Net Assets of Semiconductor Operations and Other
Operations, the Supplemental Schedules of Semiconductor Operations, the
Supplemental Schedules of Cash Flows of Semiconductor Operations and the notes
thereto, which are to present fairly, in all material respects, the net assets
and operations and cash flows of the Company and its Semiconductor Operations
Subsidiaries (on a combined basis) for the periods covered thereby, on the basis
specified and described in the notes to such schedules. The items "Investments
in other affiliated operations" and "Net assets - other operations, at cost"
shall be excluded for all purposes in computing covenant compliance in this
Agreement, and all references to the Semiconductor Operations Supplemental
Schedules shall be deemed to exclude such items for computing covenant
compliance.
"Subordinated Note Indenture" means that certain Indenture between the
---------------------------
Company and Norwest Bank Minnesota, National Association, dated as of June 15,
1997, as amended, supplemented or otherwise modified from time to time (with the
prior written consent of the Majority Banks if such amendment, supplement or
other modification would allow for the issuance of Indebtedness not satisfying
all the conditions set forth in the definition of "Permitted Subordinated
Debt").
"Subsidiary" of a Person means any corporation, association,
----------
partnership, limited liability company, joint venture or other business entity
of which 50% or more of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby
------------------
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
-------------
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or xxxx option, interest rate
15.
option, forward foreign exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swaption, currency option or any other,
similar transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined by the Company
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contracts (which may include any Bank).
"Taxes" means any and all present or future taxes, levies,
-----
assessments, imposts, duties, deductions, fees, withholdings or similar charges,
and all liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, respectively, taxes imposed on or measured by its net income by
the jurisdiction (or any political subdivision thereof) under the laws of which
such Bank or the Agent, as the case may be, is organized or maintains a lending
office.
"TI" means Texas Instruments Incorporated.
--
"TI Acquisition" means the transactions contemplated under the
--------------
Acquisition Agreement dated as of June 18, 1998, as amended, between the Company
and TI.
"TI Subordinated Debt" means any subordinated Indebtedness issued by
--------------------
the Company to TI, in an aggregate principal amount not exceeding $950,000,000,
pursuant to the instruments contemplated by the TI Acquisition, as amended,
supplemented or otherwise modified from time to time (with the prior written
consent of the Majority Banks if such amendment, supplement or other
modification would allow for the issuance of Indebtedness not satisfying all the
conditions set forth in the definition of "Permitted Subordinated Debt").
"Type" has the meaning specified in the definition of "Loan."
----
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Utah Deed of Trust" means the Deed of Trust, Assignment of Rents,
------------------
Security Agreement and Financing Statement, from the Company, as trustor, to the
trustee named therein and for the Agent, as beneficiary, in substantially the
form of Exhibit I.
---------
"Utah Facility" means the Company's facility in Lehi, Utah, located on
-------------
the "Real Property" described in the Utah Deed of Trust.
16.
"Wholly-Owned Subsidiary" means any corporation or limited liability
-----------------------
company in which (other than directors' qualifying shares or local ownership
shares required by law) 100% of the capital stock of each class having ordinary
voting power, and 100% of the capital stock of every other class, in each case,
at the time as of which any determination is being made, is owned, beneficially
and of record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions. (a) The meanings of defined
-----------------------------
terms are equally applicable to the singular and plural forms of the defined
terms. The words "hereof", "herein", "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified. The term "documents" includes any
and all instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced. The term "including" is not limiting
and means "including without limitation." In the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including." The captions and headings of
this Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.
(b) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(c) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(d) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Loan
Parties and the Banks, and are the products of all the parties. Accordingly,
they shall not be construed against the Agent or the Banks merely because of
the Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles. Unless the context otherwise clearly
---------------------
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied. References herein to "fiscal year"
and "fiscal quarter" refer to such fiscal periods of the Company.
17.
ARTICLE II - THE REVOLVING CREDIT
-------------------------------------
2.01 Amounts and Terms of Commitments. Each Bank severally agrees,
--------------------------------
on the terms and conditions set forth herein, to make loans to the Company
from time to time on any Business Day during the period from the Closing Date
to the Revolving Termination Date, in an aggregate amount not to exceed at any
time outstanding the amount set forth on Schedule 2.01 (such amount, as the
-------------
same may be reduced under Section 2.05 or as a result of one or more
assignments under Section 10.08, the Bank's "Commitment"); provided, however,
---------- -------- -------
that, after giving effect to any Borrowing, the aggregate principal amount of
all outstanding Loans shall not at any time exceed the combined Commitments.
Within the limits of each Bank's Commitment, and subject to the other terms
and conditions hereof, the Company may borrow under this Section 2.01, prepay
under Section 2.06 and reborrow under this Section 2.01.
2.02 Loan Accounts. (a) The Loans made by the Banks shall be
-------------
evidenced by one or more accounts or records maintained by the Banks in the
ordinary course of business. The accounts or records maintained by the Agent
and each Bank shall be conclusive absent manifest error of the amount of the
Loans made by the Banks to the Company, and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount
owing with respect to the Loans.
(b) Upon the request of any Bank made through the Agent, the Loans
made by each Bank shall be evidenced by a Note executed by the Company in
favor of such Bank, instead of loan accounts. Each Bank may endorse on
schedules annexed to its Note the date, amount and maturity of each Loan made
by it and the amount of each payment of principal made by the Company with
respect thereto. Each Bank is irrevocably authorized by the Company to endorse
its Note and each Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of a Bank to make, or an error in making,
-------- -------
a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Bank.
2.03 Procedure for Borrowing. (a) Each Borrowing shall be made upon
-----------------------
the Company's irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing, which notice must be received by the Agent prior to (i) in
the case of Offshore Rate Loans, 9:00 a.m. (San Francisco time) three Business
Days prior to the requested Borrowing Date and (ii) in the case of Base Rate
Loans, 9:00 a.m. (San Francisco time) on the requested Borrowing Date,
specifying: (A) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $10,000,000 or any multiple of $5,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day; (C) the Type of
Loans comprising the Borrowing; and (D) the duration of the Interest Period
applicable to such Loans included in such notice (if the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing comprised
of Offshore Rate Loans, such Interest Period shall be one month). After giving
effect to any Borrowing, unless the Agent shall otherwise consent, there may not
be more than six different Interest Periods in effect.
18.
(b) The Agent will promptly notify each Bank of its receipt of any
Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing. Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the Agent's
Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA (or any successor Agent pursuant to Section 9.09) with the aggregate of
the amounts made available to the Agent by the Banks and in like funds as
received by the Agent or, if requested by the Company, by wire transfer in
accordance with written instructions provided to the Agent by the Company of
like funds as received by the Agent.
2.04 Conversion and Continuation Elections. (a) The Company may,
-------------------------------------
upon irrevocable written notice to the Agent in accordance with Section
2.04(b): (i) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of any other
Type of Loans, to convert any such Loans (or any part thereof in an amount not
less than $10,000,000, or that is in an integral multiple of $5,000,000 in
excess thereof) into Loans of any other Type; or (ii) elect, as of the last
day of the applicable Interest Period, to continue any Loans having Interest
Periods expiring on such day (or any part thereof in an amount not less than
$10,000,000, or that is in an integral multiple of $5,000,000 in excess
thereof); provided, that if at any time the aggregate amount of Offshore Rate
--------
Loans in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $10,000,000, such Offshore Rate
Loans shall automatically convert into Base Rate Loans, and on and after such
date the right of the Company to continue such Loans as, and convert such
Loans into, Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to
be received by the Agent not later than (i) 9:00 a.m. (San Francisco time) at
least three Business Days in advance of the Conversion/Continuation Date, if
the Loans are to be converted into or continued as Offshore Rate Loans, and
(ii) 9:00 a.m. (San Francisco time) on the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying: (A) the
proposed Conversion/Continuation Date; (B) the aggregate amount of Loans to be
converted or continued; (C) the Type of Loans resulting from the proposed
conversion or continuation; and (D) other than in the case of conversions into
Base Rate Loans, the duration of the requested Interest Period. After giving
effect to any conversion or continuation of Loans, unless the Agent shall
otherwise consent, there may not be more than six different Interest Periods
in effect.
(c) During the existence of an Event of Default, the Company may not
elect to have a Loan converted into or continued as an Offshore Rate Loan. If
upon the expiration of any Interest Period applicable to Offshore Rate Loans,
the Company has failed to select timely a new Interest Period to be applicable
to such Offshore Rate Loans, as the case may be, or if any Event of Default then
exists, the Company shall be deemed to have elected to convert such Offshore
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a Notice
of Conversion/Continuation, or, if no timely notice is provided by the Company,
or if the Agent has received a notice of an Event of Default pursuant to Section
9.05, the Agent will promptly notify
19.
each Bank of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans held by each Bank with respect to which the
notice was given.
2.05 Termination or Reduction of Commitments. (a) Subject to Section
---------------------------------------
3.04, the Company may, upon not less than three Business Days' prior notice to
the Agent by 9:00 a.m. (San Francisco time), terminate the Commitments, or
permanently reduce the Commitments by an aggregate minimum amount of
$10,000,000, or any multiple of $5,000,000 in excess thereof; unless, after
------
giving effect thereto and to any prepayments of Loans made on the effective date
thereof, the then-outstanding principal amount of the Loans would exceed the
amount of the combined Commitments then in effect.
(b) Upon the making of any Disposition under subsections 7.03(e) or
(f) in excess of the aggregate amount then permitted to be made thereunder,
the Commitments of the Banks shall automatically reduce by an amount equal to
the excess of the cumulative amount of Net Proceeds received over the amount
of Net Proceeds permitted to be received under such subsections, effective as
of the date of such Disposition. If after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the then-outstanding
principal amount of the Loans would exceed the amount of the combined
Commitments then in effect, the Company shall make the mandatory prepayment of
Loans required by Section 2.06(b). The Company shall give prior notice to the
Banks of any Disposition resulting in a Commitment reduction hereunder
(including in such notice the amount of the estimated Net Proceeds to be
received by the Company or a Subsidiary in respect thereof).
(c) Once reduced or terminated in accordance with this Section, the
Commitments may not be increased or reinstated. Any reduction or termination of
the Commitments shall be applied to each Bank according to its Pro Rata Share.
The Agent will promptly notify each Bank of its receipt of any notice under this
Section 2.05, and of the amount of reduction or termination of such Bank's
Commitment. All accrued commitment fees to, but not including, the effective
date of any reduction or termination of Commitments shall be paid on the
effective date of such reduction or termination.
2.06 Prepayments. (a) Subject to Section 3.04, the Company may, at
-----------
any time or from time to time, upon (a) in the case of Offshore Rate Loans,
irrevocable notice to the Agent given prior to 9:00 a.m. (San Francisco time)
not less than three Business Days and (b) in the case of Base Rate Loans,
irrevocable notice to the Agent given prior to 9:00 a.m. (San Francisco time) on
the date of prepayment, ratably prepay Loans in whole or in part, in minimum
amounts of $10,000,000, or any multiple of $5,000,000 in excess thereof.
(b) If as a result of any required Commitment reduction under Section
2.05 the then-outstanding principal amount of the Loans would exceed the
amount of the combined Commitments (after giving effect to the Revolving
Commitment reduction), then (i) the Company shall promptly notify the Agent of
the Company's intent to make a mandatory prepayment of Loans hereunder, and
(ii) promptly upon, and in no event later than one Business Day after, receipt
by the Company or the Subsidiary of the Net Proceeds of the Disposition, the
Company shall prepay Loans in an aggregate amount equal to the amount of such
excess;
20.
provided, however, that any such prepayment shall not be required if such amount
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is less than $1,000,000.
(c) Each such notice of prepayment under this Section 2.06 shall
specify the date and amount of such prepayment and the Type(s) of Loans to be
prepaid. The Agent will promptly notify each Bank of its receipt of any such
notice, and of such Bank's Pro Rata Share of such prepayment. If such notice
is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 3.04.
2.07 Repayment. The Company shall repay to the Banks on the
---------
Revolving Termination Date the aggregate principal amount of Loans outstanding
on such date.
2.08 Interest. (a) Each Loan shall bear interest on the outstanding
--------
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be (and subject to
the Company's right to convert to other Types of Loans under Section 2.04), plus
----
the Applicable Margin; provided, however, that (i) if at any time the
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aggregate outstanding principal amount of Loans equals or exceeds 50% of the
combined Commitments, the Applicable Margin in respect of any Offshore Rate
Loans and Base Rate Loans then outstanding shall be increased by an additional
0.25% per annum, and/or (ii) if the TI Acquisition has not closed by December
31, 1998, the interest rate in effect for the Loans as provided above shall be
increased by an additional 0.25% per annum, effective January 1, 1999 (such
increase to terminate effective upon any closing of the TI Acquisition
occurring after December 31, 1998).
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.06 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of
any Event of Default, interest shall be paid on demand of the Agent at the
request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Company agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable
on demand, at a fluctuating rate per annum equal to the Base Rate plus 2%.
----
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest
is computed hereunder, to the extent (but only to the extent) that contracting
for or receiving such payment by such Bank would be contrary to the provisions
of any law applicable to such Bank limiting the highest rate of interest that
may be lawfully contracted for, charged or received by such Bank, and in such
event the Company shall pay such Bank interest at the highest rate permitted
by applicable law.
21.
2.09 Fees. (a) Arrangement, Agency Fee. The Company shall pay
---- -----------------------
arrangement fee to the Lead Arranger for the Lead Arranger's own account, and
shall pay an agency fee to the Agent for the Agent's own account, as required
by the letter agreement between the Company and the Agent dated August 28,
1998.
(b) Upfront Fee. The Company shall pay to the Agent for the
-----------
account of each Bank consenting hereto (as evidenced by its signature hereto)
(a "Consenting Bank") an upfront fee equal to 0.25% of such Bank's Commitment,
payable on the Closing Date. If the TI Acquisition has not closed by December
31, 1998, the Company shall pay to the Agent for the account of each
Consenting Bank additional upfront fee equal to 0.125% of such Bank's
Commitment, payable on January 1, 1999.
(c) Commitment Fee. The Company shall pay to the Agent for the
--------------
account of each Bank a commitment fee on the actual daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for
that quarter as calculated by the Agent, at a rate per annum equal to the
Applicable Fee Percentage; provided, however, that if the TI Acquisition has
-------- -------
not closed by December 31, 1998, the commitment fee in effect as provided
above shall be increased by an additional .125% per annum, effective January
1, 1999 (such increase to terminate effective upon any closing of the TI
Acquisition occurring after December 31, 1998). Such commitment fee shall
accrue from the Closing Date to the Revolving Termination Date and shall be
due and payable quarterly in arrears on the last Business Day of each calendar
quarter commencing on September 30, 1998 through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date;
provided that, in connection with any reduction or termination of Commitments
--------
under Section 2.05, the accrued commitment fee calculated for the period
ending on such date shall also be paid on the date of such reduction or
termination. The commitment fee provided in this subsection shall accrue at
all times after the above-mentioned commencement date, including at any time
during which one or more conditions in Section 4.02 are not met.
2.10 Computation of Fees and Interest. All computations of
--------------------------------
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof. Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error.
2.11 Payments by the Company. (a) All payments to be made by the
-----------------------
Company shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company shall be made
to the Agent for the account of the Banks at the Agent's Payment Office, and
shall be made in Dollars and in immediately available funds, no later than
10:00 a.m. (San Francisco time) on the date specified herein. The Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable share
as expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent
22.
later than 10:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the
Company has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Bank on such due date an amount equal
to the amount then due such Bank. If and to the extent the Company has not
made such payment in full to the Agent, each Bank shall repay to the Agent on
demand such amount distributed to such Bank, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed
to such Bank until the date repaid.
2.12 Payments by the Banks to the Agent. Unless the Agent receives
----------------------------------
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date
of such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Company the amount of that
Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank
has made such amount available to the Agent in immediately available funds on
the Borrowing Date and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in immediately available funds and the
Agent in such circumstances has made available to the Company such amount,
that Bank shall on the Business Day following such Borrowing Date make such
amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this Section shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
the Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent
on the Business Day following the Borrowing Date, the Agent will notify the
Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing. The failure of any Bank to make any Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Loan on such Borrowing Date, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other Bank on
any Borrowing Date.
2.13 Sharing of Payments, Etc. If, other than as expressly
------------------------
provided elsewhere herein, any Bank shall obtain on account of the Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise), other than pursuant to Article III, in excess
of its ratable share (or other share contemplated hereunder),
23.
such Bank shall immediately (a) notify the Agent of such fact, and (b)
purchase from the other Banks such participations in the Loans made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; provided, however, that if all or any portion of
-------- -------
such excess payment is thereafter recovered from the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's ratable share (according to the proportion of (i)
the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
The Company agrees that any Bank so purchasing a participation from another
Bank may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 10.10) with
respect to such participation as fully as if such Bank were the direct
creditor of the Company in the amount of such participation. The Agent will
keep records (which shall be conclusive and binding in the absence of manifest
error) of participations purchased under this Section and will in each case
notify the Banks following any such purchases or repayments.
2.14 Optional Extension of Commitments. The Company may request
---------------------------------
the Banks to extend the Revolving Termination Date for a period of one year by
delivering a written request for such extension to the Agent (who shall
promptly notify the Banks) at any time on or before the 45th day prior to the
Revolving Termination Date. Each Bank shall respond in writing to such
extension request by providing written notice of its acceptance or rejection
of such request to the Agent within 30 Business Days after it receives such
request from the Agent. Any Bank not responding within such period shall be
deemed to have rejected such request for extension. Such extension shall
require the unanimous consent of the Banks, and if such unanimous consent is
obtained, the Revolving Termination Date shall thereupon be so extended by one
year after the then current Revolving Termination Date.
2.15 Certain Closing Date Transitional Matters. On and after the
-----------------------------------------
Closing Date, each Bank shall be entitled to receive commitment fees and
interest on the Loans and on any other amount due under any Loan Document, in
each case (i) accrued and unpaid up to the Closing Date in accordance with the
applicable rates in effect under the Existing Facility and (ii) accrued on and
after the Closing Date in accordance with the applicable rates under this
Agreement. All such accrued and unpaid amounts due under the Existing Facility
shall be paid together with any amounts due hereunder on the next occurring
payment dates therefor set forth herein.
ARTICLE III - TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------------------------
3.01 Taxes. (a) Any and all payments by the Company to each Bank or
-----
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In
addition, the Company shall pay all Other Taxes.
24.
(b) If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then, subject to Section 3.01(e): (i) the
sum payable shall be increased as necessary so that, after making all required
deductions and withholdings (including deductions and withholdings applicable
to additional sums payable under this Section), such Bank or the Agent, as the
case may be, receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been made; (ii)
the Company shall make such deductions and withholdings; (iii) the Company
shall pay the full amount deducted or withheld to the relevant taxing
authority or other authority in accordance with applicable law; and (iv) the
Company shall also pay to such Bank or the Agent for the account of such Bank,
at the time interest is paid, Further Taxes in the amount that such Bank
specifies as necessary to preserve the after-tax yield such Bank would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed (but
only if such Taxes, Other Taxes or Further Taxes are imposed because the
Company has made any payment to the Agent or any Bank hereunder or under any
other Loan Document from a Person or entity outside of the United States to a
Person or entity inside of the United States or from a Person or entity inside
of the United States to a Person or entity outside of the United States).
(c) Subject to Section 3.01(e), the Company agrees to indemnify and
hold harmless each Bank and the Agent for the full amount of (i) Taxes, (ii)
Other Taxes, and (iii) Further Taxes referred to in Section 3.01(b) in the
yield such Bank would have received if such Taxes, Other Taxes or Further
Taxes had not been imposed (but only if such Taxes, Other Taxes or Further
Taxes are imposed because the Company has made any payment to the Agent or any
Bank hereunder or under any other Loan Document from a Person or entity
outside of the United States to a Person or entity inside of the United States
or from a Person or entity inside of the United States to a Person or entity
outside of the United States), and any liability (including penalties,
interest, additions to tax and expenses; provided, however, that the Company
-------- -------
shall not be responsible for any such penalty, interest or expense resulting
from the gross negligence or willful misconduct of the Agent or any Bank)
arising therefrom or with respect thereto, whether or not such Taxes, Other
Taxes or Further Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date such Bank or the
Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Bank or
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) The Company will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to Section 3.01(b) or (c)
to any Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional amounts
arose solely as a result of such Bank's failure to comply with
its obligations under Section 9.10 in respect of such Lending
Office;
25.
(ii) if such Bank shall have delivered to the Company
a Form 4224 in respect of such Lending Office pursuant to Section
9.10, and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for
the account of such Lending Office for any reason other than a
change in United States law or regulations or in the official
interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration
thereof (whether or not having the force of law) after the date
of delivery of such Form 4224; or
(iii) if the Bank shall have delivered to the Company
a Form 1001 in respect of such Lending Office pursuant to Section
9.10, and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Company hereunder for
the account of such Lending Office for any reason other than a
change in United States law or regulations or any applicable tax
treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any governmental authority
charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of
delivery of such Form 1001.
(f) If the Company is required to pay any amount to any Bank or the
Agent pursuant to Section 3.01(b) or (c), then such Bank shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the sole
judgment of such Bank is not otherwise disadvantageous to such Bank.
(g) Each of the Banks and the Agent agrees that it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available
pursuant to treaty, existing administrative waiver, or otherwise); provided,
--------
however, that neither the Agent nor any Bank shall be obligated by reason of
-------
this Section 3.01(g) to disclose any information regarding its tax affairs or
tax computations, to reorder or alter in any way its general tax or other
affairs or tax planning, or to undertake any action that such Person deems to
involve the incurrence of any risk of liability or cost to itself or which
requires any expenditure of effort which such Person deems unreasonable under
the circumstances.
3.02 Illegality. If any Bank determines that the introduction of
----------
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office to
make Offshore Rate Loans, then, on notice thereof by such Bank to the Company
through the Agent, any obligation of that Bank to make Offshore Rate Loans
shall be suspended until such Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist, and (a) if
such Bank may lawfully continue to maintain such Offshore Rate Loans to the
last day of the Interest Period with respect thereto, the Company shall repay
in full such Offshore Rate Loans, together with interest accrued thereon, on
the last day of the Interest Period thereof, or (b) if such Bank may not
lawfully continue to
26.
maintain such Offshore Rate Loans to the last day of the Interest Period with
respect thereto, such Offshore Rate Loans shall automatically be converted
into Base Rate Loans and the Company shall pay, within five Business Days of
such conversion, all interest accrued on such Offshore Rate Loans prior to
such conversion and all amounts required under Section 3.04 in connection with
such conversion.
3.03 Increased Costs and Reduction of Return. (a) If any Bank
---------------------------------------
determines that, due to either (i) the introduction announced after the date
hereof of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate or in respect of the assessment rate payable by any Bank to the FDIC for
insuring U.S. deposits or a change in the rate of taxation imposed on or
measured by a Bank's net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank is organized or
maintains a lending office) in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority announced after the date
hereof (whether or not having the force of law), there shall be any increase
in the cost to such Bank of agreeing to make or making, funding or maintaining
any Offshore Rate Loans, then the Company shall be liable for, and shall from
time to time, within 30 days after written notice from such Bank (with a copy
of such demand to be sent to the Agent), pay to the Agent for the account of
such Bank, additional amounts as are sufficient to compensate such Bank for
such increased costs.
(b) If any Bank shall have determined that (i) the introduction
announced after the date hereof of any Capital Adequacy Regulation, (ii) any
change announced after the date hereof in any Capital Adequacy Regulation,
(iii) any change announced after the date hereof in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by such Bank (or its Lending Office) or any
corporation controlling such Bank with any Capital Adequacy Regulation,
affects or would affect the amount of capital required to be maintained by the
Bank or any corporation controlling such Bank and (taking into consideration
such Bank's or such corporation's policies with respect to capital adequacy
and such Bank's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment, Loans, credits or
obligations under this Agreement, then, upon demand of such Bank to the
Company through the Agent, the Company shall pay to such Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate
such Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank and hold
--------------
each Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of: (a) the failure of the Company to make on a timely basis
any payment of principal of any Offshore Rate Loan, (b) the failure of the
Company to borrow, continue or convert a Loan after the Company has given (or is
deemed to have given) a Notice of Borrowing or a Notice of Conversion/
Continuation, (c) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.06, (d) the prepayment or
other payment (including after acceleration thereof) of an Offshore Rate Loan on
a day that is not the last day of the relevant Interest Period, or (e) the
conversion under Section 2.04 or Section 3.02 of any Offshore Rate Loan to a
Base Rate Loan on a day that is not the last day of the relevant Interest
Period; including any such loss or expense arising from the liquidation or
reemployment of funds
27.
obtained by it to maintain its Offshore Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained; provided, however,
-------- -------
that any such loss or expense shall not include lost profit due solely to a
failure to receive the Applicable Margin relating to any such Loan for the
portion of the applicable Interest Period remaining after the date of such
prepayment.
3.05 Inability to Determine Rates. If either the Agent or the
----------------------------
Majority Banks determine (a) that for any reason adequate and reasonable means
do not exist for determining the Offshore Rate for any requested Interest
Period with respect to a proposed Offshore Rate Loan, or (b) that the Offshore
Rate applicable pursuant to Section 2.08(a) for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to the Agent or such Banks of funding such Loan, the Agent
will promptly so notify the Company and each Bank. Thereafter, the obligation
of the Banks to make or maintain Offshore Rate Loans, as the case may be,
hereunder shall be suspended until the Agent upon the instruction of the
Majority Banks revokes such notice in writing. Upon receipt of such notice,
the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed
by the Company, in the amount specified in the applicable notice submitted by
the Company, but such Loans shall be made, converted or continued, as the case
may be, as Base Rate Loans instead of Offshore Rate Loans.
3.06 Certificates of Banks. Any Bank claiming reimbursement or
---------------------
compensation under this Article III shall deliver to the Company (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder and such certificate shall be conclusive and
binding on the Company in the absence of manifest error; provided, however,
-------- -------
that the Company shall not be liable for any such amount attributable to any
period prior to the date 180 days prior to the date that an officer at such
Bank responsible for the administration of this Agreement knew or reasonably
should have known of such claim for reimbursement or compensation.
3.07 Replacement of Bank. (a) In the event that any Bank makes a
-------------------
demand for payment pursuant to Section 3.01 or 3.03, or any Bank has suspended
its funding of Offshore Loans pursuant to Section 3.02 or 3.05, the Company
shall have the right, if no Event of Default then exists, to replace such Bank
in accordance with this Section 3.07.
(b) If the Company determines to replace a Bank pursuant to this
Section 3.07, the Company shall have the right to replace such Bank with a
Person that is an Eligible Assignee (a "Replacement Bank"); provided that such
---------------- --------
Replacement Bank: (i) if it is not already a Bank, shall be reasonably
acceptable to the Agent, (ii) shall unconditionally agree in writing (with a
copy to the Agent) to purchase all of such Bank's rights hereunder and
interest in the Loans owing to such Bank and the Note held by such Bank
without recourse at the principal amount of such Note plus interest and fees
accrued thereon to the date of such purchase on a date therein specified, and
(iii) shall, if such Replacement Bank is not already a Bank, execute and
deliver to the Agent an Assignment and Acceptance substantially in the form of
Exhibit N pursuant to which such Replacement Bank becomes a party hereto with
---------
a Commitment equal to that of the Bank being replaced.
28.
(c) Upon (i) satisfaction of the requirements set forth in Section
3.07(b), (ii) payment to such Bank by the Replacement Bank of the purchase
price in immediately available funds, (iii) payment to such Bank by the
Company of all requested increased costs or additional amounts accrued to the
date of such purchase which the Company is obligated to pay under Article III
(including any break funding costs under Section 3.04) and all other amounts
owed by the Company to such Bank hereunder (other than the principal of and
interest on the Loans of such Bank purchased by the Replacement Bank and
interest and fees accrued thereon to the date of purchase), and (iv) payment
to the Agent by the Replacement Bank or the Company of a non-refundable
processing fee of $3,500, the Replacement Bank shall constitute a "Bank"
hereunder with a Commitment as so specified and the Bank being so replaced
shall no longer constitute a "Bank" hereunder (and this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Replacement Bank) and such Bank shall be relieved
of its obligations hereunder; provided, however, that such Bank being replaced
-------- -------
shall not relinquish its rights under Article III or under Sections 10.04 and
10.05 to the extent such rights relate to the time prior to the effective date
of such replacement as provided in this Section.
(d) If, however, the conditions to replacement set forth in this
Section are for any reason not satisfied, or the proposed Replacement Bank for
any reason fails to purchase such rights and interest in accordance with the
terms hereof, the Company shall continue to be obligated to pay the increased
costs or additional amounts due to such Bank pursuant to Section 3.01 or 3.03,
as applicable.
(e) In no event shall the Agent or any Bank have any obligation to be
a Replacement Bank or to assist the Company in finding a Replacement Bank.
3.08 Survival. The agreements and obligations of the Company in
--------
Section 3.01 and 3.03 shall survive the payment of all other Obligations.
ARTICLE IV - CONDITIONS PRECEDENT
---------------------------------
4.01 Conditions to Effectiveness. The effectiveness of this
---------------------------
Agreement is subject to the condition that (i) the Agent shall have received
executed counterparts of this Agreement signed by the Agent, the Company and
the Majority Banks, and (ii) the Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and the Majority Banks, and in sufficient copies for each Bank:
(a) Credit Agreement, Guaranty and Notes. This Agreement, the
------------------------------------
Guaranty and the Notes executed by each party thereto;
(b) Resolutions, Incumbency.
-----------------------
(i) Copies of the resolutions of the board of
directors of each Loan Party authorizing the transactions
contemplated hereby and the performance of the Loan Documents,
certified as of the Closing Date by the Secretary of such Loan
Party; and
29.
(ii) A certificate of the Secretary of each Loan
Party certifying the names, titles and true signatures of the
officers of such Loan Party authorized to execute, deliver and
perform, as applicable, this Agreement and all other Loan
Documents to be delivered by it hereunder;
(c) Good Standing. Certificates as of a recent date for each Loan
-------------
Party (i) as to good standing and tax good standing from the Secretary of State
(or similar, applicable Governmental Authority) of its state of incorporation
and (ii) as to good standing from the Secretary of State (or similar,
applicable Governmental Authority) of the states of Idaho and Utah;
(d) Legal Opinions. Opinions of (i) Xxxxx X. Xxxxxxx, Esq.,
--------------
Assistant General Counsel to the Company, addressed to the Agent and the
Banks, substantially in the form of Exhibit J, dated the Closing Date; (ii)
---------
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx PC, California counsel to the Loan Parties,
addressed to the Agent and the Banks, substantially in the form of Exhibit K,
---------
dated the Closing Date; (iii) Hawley, Troxell, Xxxxx & Xxxxxx LLP, Idaho
counsel to the Loan Parties, addressed to the Agent and the Banks,
substantially in the form of Exhibit L, dated the Closing Date; and (iv)
---------
Xxxxxxx Xxxxx & Xxxxxxx, Utah counsel to the Company, addressed to the Agent
and the Banks, substantially in the form of Exhibit M, dated the Closing Date;
---------
(e) Payment of Fees. Evidence of payment by the Company of all
---------------
accrued and unpaid fees, costs and expenses to the extent then due and payable
hereunder, under the Existing Facility or the fee letter referred to in
Section 2.09 on the Closing Date, together with Attorney Costs of BofA to the
extent invoiced prior to or on the Closing Date;
(f) Certificate. A certificate signed by a Responsible Officer,
-----------
dated as of the Closing Date, stating that: (i) the representations and
warranties contained in Article V are true and correct on and as of such date,
as though made on and as of such date; (ii) no Default or Event of Default
exists; and (iii) there has occurred since May 28, 1998, no event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect, other than the material adverse changes, if any, as
may have been disclosed in the written projections dated August 5, 1998
delivered to the Banks prior to the date hereof;
(g) Collateral Documents and Actions Relating to Collateral. Fully
-------------------------------------------------------
executed counterparts of the Environmental Indemnity, the Deeds of Trust and
the Security Agreements, together with:
(i) evidence that all filings, registrations and
recordings have been made in the appropriate governmental
offices, and all other action has been taken, which shall be
necessary to create, in favor of the Agent on behalf of the
Banks, a perfected first priority Lien on the Collateral,
including evidence of recordation of the Deeds of Trust (which
may consist of a written or telephonic confirmation from the
title insurance company), and filing of completed UCC-1 financing
statements, in each case in the filing or recording offices
described in Schedule 4.01 (the "Filing Offices");
------------- --------------
(ii) written advice relating to such Lien and judgment
searches as the Agent or any Bank shall have requested, and such
termination statements or other
30.
documents as may be necessary, to confirm that the Collateral is
subject to no other Liens in favor of any Persons (other than
Permitted Liens);
(iii) evidence that all other actions necessary or, in
the opinion of the Agent and the Banks, desirable to perfect and
protect the first priority security interest created by the
Collateral Documents have been taken;
(iv) evidence that the Agent, for the ratable benefit of
the Banks, has been named as loss payee under all policies of
casualty insurance, and as additional insured under all policies
of liability insurance, required by the Security Agreements and
the Deeds of Trust; and
(v) such environmental site assessments, surveys,
appraisals, consents of landlords, estoppels from landlords,
tenant subordination agreements and other documents and
instruments in connection with the Deeds of Trust as shall
reasonably be deemed necessary by the Agent or the Banks; and
(h) Other Documents. Such other approvals, opinions, documents or
---------------
materials as the Agent or any Bank may request.
4.02 Conditions to All Borrowings. The obligation of each Bank to
----------------------------
make any Loan to be made by it, or to continue or convert any Loan under
Section 2.04, is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation. The Agent shall
----------------------------------------------
have received a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties in Article V shall be true and correct on and
as of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except (i) to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date, (ii) that this subsection (b) shall be deemed
instead to refer to the last day of the most recent quarter and year for which
financial statements have then been delivered in respect of the
representations and warranties made in subsections 5.11(a) and 5.11(b); and
(iii) the representations and warranties in Sections 5.05 and 5.14 shall be
true and correct as of the Closing Date and the end of each fiscal quarter);
and
(c) No Existing Default. No Default or Event of Default shall exist
-------------------
or shall result from such Borrowing.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date that the conditions in this Section
4.02 are satisfied.
31.
ARTICLE V - REPRESENTATIONS AND WARRANTIES
------------------------------------------
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company and each of its
-----------------------------
Semiconductor Operations Subsidiaries: (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, (b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets and to
carry on its business, (c) in the case of each Loan Party, has the power and
authority to execute, deliver and perform its obligations under the Loan
Documents, (d) is duly qualified as a foreign corporation and is licensed and
in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license, and (e) is in compliance in all material respects
with all Requirements of Law; except, in each case referred to in subsection
(b), (d) or (e), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.02 Corporate Authorization; No Contravention. The execution,
-----------------------------------------
delivery and performance by each Loan Party of this Agreement and each other
Loan Document to which each Loan Party is party, have been duly authorized by
all necessary corporate action, and do not: (a) contravene the terms of any of
such Loan Party's Organization Documents, (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any document
evidencing any material Contractual Obligation to which such Loan Party is a
party or any order, injunction, writ or decree of any Governmental Authority
to which such Loan Party or its property is subject, or (c) violate any
Requirement of Law.
5.03 Governmental Authorization. No approval, license, consent,
--------------------------
exemption, authorization, or other action by, or notice to, or filing with,
any Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party
of the Agreement or any other Loan Document except as required by this
Agreement.
5.04 Binding Effect. This Agreement and each other Loan Document
--------------
to which any Loan Party is a party constitute the legal, valid and binding
obligations of such Loan Party , enforceable against such Loan Party in
accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
5.05 Litigation. Except as set forth in the Forms 10K for the fiscal
----------
year ended August 28, 1997, and the Forms 10Q for the fiscal quarters ended
November 27, 1997, February 26, 1998 and May 28, 1998, respectively, and in
each case as filed or amended and filed with the SEC by the Company, there are
no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or any
of its Semiconductor Operations Subsidiaries or any of their respective
properties which (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or
thereby, or (b) could reasonably be expected to have a Material Adverse
32.
Effect. No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would
----------
result from the incurring of any Obligations by the Loan Parties. Neither the
Company nor any Semiconductor Operations Subsidiary is in default under or
with respect to any Contractual Obligation in any respect which, individually
or together with all such defaults, could reasonably be expected to have a
Material Adverse Effect, or that would create an Event of Default under
Section 8.01(e).
5.07 ERISA Compliance. (a) Each Plan is in compliance in all
----------------
material respects with the applicable provisions of ERISA, the Code and other
federal or state law. Each Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS
and to the best knowledge of the Company, nothing has occurred which would
cause the loss of such qualification. The Company and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur, (ii) no Pension Plan has any Unfunded Pension Liability, (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA), (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan, and
(v) neither the Company nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the
-----------------------------------
Loans are to be used solely for the purposes set forth in and permitted by
Section 6.12 and Section 7.08. Neither the Company nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
5.09 Title to Properties; Liens. The Company and each
--------------------------
Semiconductor Operations Subsidiary have good and marketable title to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of their respective businesses, except for such defects in
title as could not, individually or in the aggregate, reasonably be expected
to result in a
33.
Material Adverse Effect. The property of the Company and the Semiconductor
Operations Subsidiaries is subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and the Semiconductor Operations
-----
Subsidiaries have filed all Federal and other material tax returns and reports
required to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them
or their properties, income or assets otherwise due and payable, except those
which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been provided in accordance with GAAP. There is
no final tax assessment against the Company or any Semiconductor Operations
Subsidiary that could reasonably be expected to result in a Material Adverse
Effect.
5.11 Financial Condition.
-------------------
(a) The unaudited consolidated balance sheet of the Company and its
Subsidiaries dated May 28, 1998 and the related consolidated statements of
operations and cash flows for the interim periods then ended: (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, subject to
ordinary, good faith year end adjustments, (ii) present fairly in all material
respects the consolidated financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations and cash flows
for the period covered thereby, and (iii) include or disclose all material
indebtedness and other liabilities, direct or contingent, of the Company and
its Subsidiaries on a consolidated basis as of the date thereof, including
liabilities for taxes, material commitments and material Contingent
Obligations.
(b) The unaudited Semiconductor Operations Supplemental Schedules
dated May 28, 1998, for the interim periods then ended: (i) include amounts
based on estimates of annual amounts and are subject to changes in estimates
and ordinary year-end adjustments, (ii) present fairly, in all material
respects, the net assets and operations and cash flows of the Company and its
Semiconductor Operations Subsidiaries (on a combined basis) for the periods
covered thereby, on the basis specified and described in the notes to such
schedules, and (iii) were prepared on a basis consistent with the basic
consolidated financial statements of the Company and its Subsidiaries except
as disclosed in the notes thereto.
(c) Since May 28, 1998, there has been no Material Adverse Effect
other than the material adverse changes, if any, as may have been disclosed in
the written projections dated August 5, 1998 delivered to the Banks prior to
the date hereof.
5.12 Environmental Matters. The Company conducts in the ordinary
---------------------
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and
as a result thereof the Company has reasonably concluded that it is in
material compliance with all such Environmental Laws and that any
Environmental Claims could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person
------------------
controlling the Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment
34.
Company Act of 1940. The Company is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
5.14 Intellectual Property. Except as set forth in the Forms 10K
---------------------
for the fiscal year ended August 28, 1997 and the Forms 10Q for the fiscal
quarters ended November 27, 1997, February 26, 1998 and May 28, 1998,
respectively, and in each case as filed or amended and filed with the SEC by
the Company, (a) the Company and its Semiconductor Operations Subsidiaries own
or are licensed to use or otherwise have the right to use (or could obtain
such ownership or licenses or rights on terms not materially adverse to the
Company and its Semiconductor Operations Subsidiaries, taken as a whole, and
under circumstances that could not reasonably be expected to have a Material
Adverse Effect) all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises and other rights that are reasonably
necessary for the operation of their semiconductor operations business, and
(b) there are no pending or, to the best knowledge of Company, threatened
claims that any slogan or other advertising device, product, process, method,
substance, part or other material now employed by the Company or any
Semiconductor Operations Subsidiary infringes upon any rights held by any
other Person, except where the consequences of such infringement could not
reasonably be expected to have a Material Adverse Effect.
5.15 Subsidiaries; Minority Interests. As of the Original Closing
--------------------------------
Date, the Company has no subsidiaries other than those specifically disclosed
in part (a) of Schedule 5.15 to the Disclosure Letter and has no equity
investments in any other Person in excess of $10,000,000, individually, other
than those specifically disclosed in part (b) of Schedule 5.15 to the
Disclosure Letter. No Material Semiconductor Operations are conducted,
individually or in the aggregate, by Subsidiaries which are not Semiconductor
Operations Subsidiaries. All Semiconductor Operations Subsidiaries are Wholly-
Owned Subsidiaries, and all Wholly-Owned Subsidiaries which conduct any active
semiconductor operations are Semiconductor Operations Subsidiaries.
5.16 Insurance. The properties of the Company and its
---------
Semiconductor Operations Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Company, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the Company or such Semiconductor Operations Subsidiaries
operate.
5.17 Swap Obligations. Neither the Company nor any of its
----------------
Semiconductor Operations Subsidiaries has incurred any outstanding obligations
under any Swap Contracts, other than Permitted Swap Obligations. The Company
has undertaken its own independent assessment of its consolidated assets,
liabilities and commitments and has considered appropriate means of mitigating
and managing risks associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in determining whether
to enter into any Swap Contract.
35.
5.18 Full Disclosure. None of the representations or warranties
---------------
made by the Company in the Loan Documents as of the date such representations
and warranties are made or deemed made, and none of the statements contained
in any exhibit, report, written statement or certificate furnished by or on
behalf of the Company or any Semiconductor Operations Subsidiary in connection
with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Company to the Banks prior to the Original
Closing Date, taken together with all such exhibits, reports, written
statements and certificates filed or amended and filed by the Company with the
SEC, but excluding the items listed in Section 5.19), contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when
made or delivered. In addition, any factual information, forecasts and
projections by industry analysts, including those set forth in the information
memorandum distributed to the Banks prior to closing, have been developed
solely by such analysts and are not adopted by the Company, notwithstanding
their inclusion in such information memorandum, and the Company makes no
representations or warranties concerning same, unless such representation or
warranty is separately made by the Company.
5.19 Projections. All projections, forward-looking information or
-----------
other similar or related information furnished by or on behalf of the Company
in connection with this Agreement were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of preparation of such forecasts, and
represented, at the time of preparation, the Company's reasonable estimate of
its future financial performance; provided, however, that such projections and
-------- -------
other forward-looking information are not to be viewed as factual and actual
results during the period or periods covered thereby may differ from the
projected or forecasted results.
5.20 Year 2000. The Company and its Semiconductor Operations
---------
Subsidiaries have a comprehensive program to address the "Year 2000 problem"
(that is, the inability of computers, as well as embedded microchips in
manufacturing and other equipment, to perform properly date-sensitive
functions with respect to certain dates prior to and after December 31, 1999).
The Company and its Semiconductor Operations Subsidiaries have implemented
that program substantially in accordance with its timetable, and the Company
reasonably anticipates that they will substantially avoid the Year 2000
problem as to all computers, as well as embedded microchips in manufacturing
and other equipment, that are material to the Company's and its Semiconductor
Operations Subsidiaries' business, properties or operations.
5.21 Collateral Documents.
--------------------
(a) The provisions of each of the Security Agreements are effective to
create in favor of the Agent for the benefit of the Banks, a legal, valid and
enforceable first priority Lien in all right, title and interest of the
Company and the Guarantor in the Collateral described therein, subject to
Permitted Liens; and financing statements have been filed in the Filing
Offices listed in Part 1 of Schedule 4.01.
-------------
(b) Each Deed of Trust when executed and delivered will be effective to
grant to the Agent for the benefit of the Banks a legal, valid and enforceable
Lien on all the right, title and interest of the Company in the "Property"
described therein. When each such Deed of Trust is
36.
duly recorded in the applicable Filing Offices listed in Part 2 of Schedule
--------
4.01 and the recording fees and taxes in respect thereof are paid and
----
compliance is otherwise had with the formal requirements of state law
applicable to the recording of deeds of trust generally, such Property,
subject to the encumbrances and exceptions to title set forth therein and
except for any other Permitted Liens applicable thereto, is subject to a
legal, valid, enforceable and perfected first priority Lien; and when
Financing Statements have been filed in the applicable Filing Offices listed
in Part 2 of Schedule 4.01, such Deed of Trust also creates a legal, valid,
-------------
enforceable and perfected first priority Lien on all right, title and interest
of the Company under such Deed of Trust in all personal property and fixtures
which are covered by such Deed of Trust, subject to no other Liens, except the
encumbrances and exceptions to title set forth therein and Permitted Liens.
(c) All representations and warranties of the Company and the
Guarantor contained in the Collateral Documents are true and correct.
ARTICLE VI - AFFIRMATIVE COVENANTS
----------------------------------
So long as any Bank shall have any Commitment hereunder, or any
Loan or other Obligation (other than indemnity obligations which remain
inchoate at such time) shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the
--------------------
Agent, in form and detail satisfactory to the Agent and the Majority Banks,
with sufficient copies for each Bank:
(a) promptly after becoming available, but not later than 100 days
after the end of each fiscal year (commencing with the fiscal year ended
September 3, 1998), a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of operations and cash flows for such year, setting
forth in each case in comparative form the figures for the previous fiscal
year, together with the related Semiconductor Operations Supplemental
Schedules, and accompanied by the opinion of PricewaterhouseCoopers LLP or
another nationally-recognized independent public accounting firm ("Independent
-----------
Auditor") which opinion shall state that (i) such consolidated financial
-------
statements present fairly in all material respects the financial position of
the Company and its Subsidiaries on a consolidated basis as of the date
thereof and the results of operations for the periods indicated in conformity
with GAAP, except as otherwise indicated therein and (ii) such related
Semiconductor Operations Supplemental Schedules were prepared on a basis
consistent with the basic consolidated financial statements of the Company and
its Subsidiaries except as disclosed in the notes thereto and the information
therein is fairly stated in all material respects in relation to the basic
consolidated financial statements taken as a whole except as specifically
noted therein. Such financial statements shall be accompanied by a certificate
of a Responsible Officer which shall state that such Semiconductor Operations
Supplemental Schedules present fairly, in all material respects, the net
assets and operations and cash flows of the Company and its Semiconductor
Operations Subsidiaries (on a combined basis) for the periods covered thereby,
on the basis specified and described in the notes to such schedules. The
Company will
37.
not place restrictions on the examinations of the auditors or any material
portion of the Company's or any Subsidiary's records; and
(b) promptly after becoming available, but not later than 60 days
after the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended December 3, 1998), a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such quarter and the related consolidated statements of operations
for the period commencing on the first day and ending on the last day of such
quarter, and statement of cash flows for the year to date, together with the
related Semiconductor Operations Supplemental Schedules, accompanied by a
certificate of a Responsible Officer which shall state that (i) such unaudited
consolidated financial statements (A) fairly present in all material respects,
in accordance with GAAP (subject to ordinary, good faith year-end adjustments,
the financial position and the results of operations of the Company and its
Subsidiaries on a consolidated basis, and (B) include or disclose all material
indebtedness and other liabilities, direct or contingent, of the Company and
its Subsidiaries on a consolidated basis as of the date thereof, including
liabilities for taxes, material commitments and material Contingent
Obligations, and (ii) such related Semiconductor Operations Supplemental
Schedules (A) include amounts based on estimates of annual amounts and are
subject to changes in estimates and ordinary year-end adjustments, (B) present
fairly, in all material respects, the net assets and operations and cash flows
of the Company and its Semiconductor Operations Subsidiaries (on a combined
basis) for the periods covered thereby, on the basis specified and described
in the notes to such schedules, and (C) were prepared on a basis consistent
with the basic consolidated financial statements of the Company and its
Subsidiaries except as disclosed in the notes thereto.
6.02 Certificates; Other Information. The Company shall furnish
-------------------------------
to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer;
(b) promptly after becoming available, but not later than 20 days
after the filing thereof with the SEC or the delivery thereof to its
Shareholders, as applicable, copies of all annual reports and proxy statements
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K,
10Q, 8K, S-1 and S-3) that the Company or any Subsidiary may make to, or file
with, the SEC; and
(c) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Semiconductor Operations
Subsidiary as the Agent, at the request of any Bank, may from time to time
reasonably request in writing.
6.03 Notices. The Company shall promptly, after any Responsible
-------
Officer becomes aware thereof or should have become aware thereof, notify the
Agent and each Bank:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;
38.
(b) of the occurrence of any breach or termination of any material
Contractual Obligation pursuant to which the Company or any of its Material
Semiconductor Operations Subsidiaries is licensed or otherwise has the right
to use any patented technology, trademarks, service marks, trade names,
copyrights or contractual franchises that are reasonably necessary for the
operation of their respective businesses ("Intellectual Property Licenses");
------------------------------
or the receipt of any written claim with respect to any Intellectual Property
License in which the licensor, seller or grantor of such intellectual property
rights states its intention (i) to terminate such Intellectual Property
License, (ii) to require the Company or any Semiconductor Operations
Subsidiary to cease using such intellectual property rights (or any material
portion thereof), or to cease marketing or selling products developed based on
intellectual property rights (or any material portion thereof) covered by such
Intellectual Property License, or (iii) to cease performing its obligations
thereunder, and which, in each of the cases set forth in clauses (i), (ii) and
(iii), could reasonably be expected to have a Material Adverse Effect;
(c) of the commencement of, or any material development in, any
litigation, arbitration or other similar proceeding affecting the Company or
any Semiconductor Operations Subsidiary with respect to any Intellectual
Property License, in which injunctive or similar relief (whether temporary or
permanent) is sought and which could reasonably be expected to have a Material
Adverse Effect;
(d) of any other matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, which matters include, for
example (but not by way of limitation): (i) breach or non-performance of, or
any default under, a Contractual Obligation of the Company or any
Semiconductor Operations Subsidiary, (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any
Semiconductor Operations Subsidiary and any Governmental Authority, or (iii)
the commencement of, or any material development in, any litigation or
proceeding affecting the Company or any Semiconductor Operations Subsidiary,
including pursuant to any applicable Environmental Laws;
(e) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with
respect to such event that is filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Company or any ERISA
Affiliate with respect to such event: (i) an ERISA Event, (ii) a material
increase in the Unfunded Pension Liability of any Pension Plan, (iii) the
adoption of, or the commencement of contributions to, any Plan subject to
Section 412 of the Code by the Company or any ERISA Affiliate, or (iv) the
adoption of any amendment to a Plan subject to Section 412 of the Code, if
such amendment results in a material increase in contributions or Unfunded
Pension Liability;
(f) of any material change in accounting policies or financial
reporting practices by the Company and its Subsidiaries on a consolidated
basis or the Company and its Semiconductor Operations Subsidiaries on a
combined basis; provided that the description of any such changes set forth in
--------
the Company's filings with the SEC, or the notes to any financial statements
or Semiconductor Operations Supplemental Schedules included therein, when
delivered to Agent and the Banks, shall constitute notice sufficient under
this subsection (f);
39.
(g) of the issuance of any Permitted Subordinated Debt, together with
a copy of any written instrument evidencing, or which is proposed to evidence,
such Indebtedness; and
(h) of any existing Subsidiary that is not a Wholly-Owned Subsidiary
that conducts semiconductor operations (i) becoming a Wholly-Owned Subsidiary,
or (ii) having Material Semiconductor Operations.
Each notice under this Section (other than under subsections
(f) and (g)) shall be accompanied by a written statement by a Responsible
Officer setting forth details of the occurrence referred to therein, and
stating what action the Company or any affected Subsidiary proposes to take
with respect thereto and at what time. Each notice under Section 6.03(a) shall
describe with particularity any and all sections or clauses of this Agreement
or other Loan Document that have been (or could reasonably be expected to be)
breached or violated.
6.04 Preservation of Corporate Existence, Etc. The Company
----------------------------------------
shall, and shall cause each Material Semiconductor Operations Subsidiary to:
(a) preserve and maintain in full force and effect its corporate existence and
good standing under the laws of its state or jurisdiction of incorporation,
except, with respect to any Material Semiconductor Operations Subsidiary, in
connection with transactions permitted by Section 7.03 or 7.04; (b) preserve
and maintain in full force and effect all material governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except in connection with
transactions permitted by Section 7.03 or 7.04; (c) use reasonable efforts, in
the ordinary course of business, to preserve its business organization and
goodwill, except, with respect to any Material Semiconductor Operations
Subsidiary, in connection with transactions permitted by Section 7.03 or 7.04;
and (d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, except where the non-preservation of which could not
reasonably be expected to have a Material Adverse Effect.
6.05 Maintenance of Property. The Company shall maintain, and
-----------------------
shall cause each Material Semiconductor Operations Subsidiary to maintain, and
preserve all its property which is used or useful in its business in good
working order and condition, ordinary wear and tear excepted and make all
reasonably necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.06 Insurance. The Company shall maintain, and shall cause each
---------
Semiconductor Operations Subsidiary to maintain, with financially sound and
reputable independent insurers or through self-insurance, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons.
6.07 Payment of Obligations. The Company shall, and shall cause
----------------------
each Semiconductor Operations Subsidiary to, pay and discharge as the same
shall become due and payable (or within any applicable grace period), all
their respective material obligations and liabilities, which matters may
include, for example (but not by way of limitation): (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets,
40.
unless the same are being contested in good faith by appropriate proceedings
and adequate reserves in accordance with GAAP are being maintained by the
Company or such Semiconductor Operations Subsidiary, and (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property, except for
Permitted Liens.
6.08 Compliance with Laws. The Company shall comply, and shall
--------------------
cause each Material Semiconductor Operations Subsidiary to comply, in all
material respects, with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and shall cause
---------------------
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law, (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification, and (c) make all required
contributions to any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. (a) The
--------------------------------------------
Company shall maintain and shall cause each Semiconductor Operations
Subsidiary to maintain financial books of record and account sufficient to
permit the Company to prepare financial statements in accordance with GAAP.
(b) The Company shall permit, and shall cause each Semiconductor
Operations Subsidiary to permit, representatives and independent contractors
of the Agent (i) to visit and inspect any of their respective material
properties, (ii) to examine their respective financial records, and make
copies thereof or abstracts therefrom, and (iii) to discuss their respective
affairs, finances and accounts with their respective directors, officers, and
independent public accountants, all at the expense of the Banks and at such
reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance written notice to the Company;
provided, however, that when an Event of Default exists, the Agent or any Bank
-------- -------
may do any of the foregoing at the expense of the Company at any time during
normal business hours and without advance written notice. At any time when no
Event of Default has occurred and is continuing, any such representative,
independent contractor or independent public accountants (other than employees
of the Agent) selected by the Agent to perform such inspections or audits,
must be reasonably acceptable to the Company.
(c) Notwithstanding the foregoing, while no Event of Default exists,
neither the Company nor any of its Semiconductor Operations Subsidiaries will
be required to disclose, permit the inspection, examination, copying or making
extracts of, or discussions of, any document, information or other matter that
(i) constitutes non-financial trade secrets or non-financial proprietary
information, or (ii) in respect to which disclosure to the Agent or any Bank
(or designated representative) is then prohibited by law or any agreement
binding upon the Company or such Semiconductor Operations Subsidiary that was
not entered into by the Company or such Semiconductor Operations Subsidiary
for the primary purpose of concealing information from Agent and the Banks or
evading the provisions of this Agreement.
41.
6.11 Environmental Laws. The Company shall, and shall cause each
------------------
Material Semiconductor Operations Subsidiary to, conduct its operations and
keep and maintain its property in compliance in all material respects with all
Environmental Laws.
6.12 Use of Proceeds. The Company shall use the proceeds of the
---------------
Loans for working capital and other general corporate purposes not in
contravention of any Requirement of Law or of any Loan Document.
6.13 Ranking; Designated Senior Indebtedness. The Company shall
---------------------------------------
take, or cause to be taken, all actions necessary to ensure that the
Obligations are and continue to rank at least pari passu in right of payment
---- -----
with all other unsecured Indebtedness of the Company. The Obligations shall be
deemed "Designated Senior Debt" for purposes of Permitted Subordinated Debt
issued under the Subordinated Note Indenture and any TI Subordinated Debt.
6.14 New Semiconductor Operations Subsidiaries. The Company shall
-----------------------------------------
cause each new Wholly-Owned Subsidiary which from time to time conducts any
active semiconductor operations to be included as a Semiconductor Operations
Subsidiary in the Semiconductor Operations Supplemental Schedules.
6.15 Further Assurances. Promptly upon request by the Agent or
------------------
the Majority Banks, the Company shall (and shall cause the Guarantor to) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as the
Agent or such Banks, as the case may be, may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
or any other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests covered by any
of the Collateral Documents, (iii) to perfect, protect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, and (iv) to better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Agent and Banks
the rights granted or now or hereafter intended to be granted to the Banks
under any Loan Document or under any other document executed in connection
therewith.
ARTICLE VII - NEGATIVE COVENANTS
--------------------------------
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation (other than indemnity obligations which remain inchoate at
such time) shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall not
-------------------
suffer or permit any Semiconductor Operations Subsidiary to, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien upon or
with respect to any part of its properties, revenues or assets, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):
---------------
42.
(a) Liens existing on the Original Closing Date and set forth in
Schedule 7.01 to the Disclosure Letter securing Indebtedness outstanding on
such date (including any such Lien securing Indebtedness that is renewed,
extended or refunded after the Original Closing Date, provided that the
--------
principal amount of such Indebtedness outstanding at the time of such renewal,
extension or refunding is not increased and such Lien is not extended to any
other property, other than replacements or substitutions for such property);
(b) Liens created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.07;
(d) Liens consisting of carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings are for the purpose of preventing the
forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations with respect to surety and appeal bonds, or letters of
credit issued in lieu thereof, and (iii) other non-delinquent obligations of a
like nature; in each case, incurred in the ordinary course of business,
provided all such Liens in the aggregate could not reasonably be expected to
result (even if enforced) in a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens, arising
in circumstances not constituting an Event of Default under Section 8.01(j);
(h) Liens consisting of easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business
(including the easements, rights-of-way, restrictions and other similar
encumbrances incurred in connection with the interchange and new road to be
located on the Company's headquarters property in Boise, Idaho) which, in the
aggregate, do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the businesses of the
Company and its Semiconductor Operations Subsidiaries taken as a whole;
(i) Liens on (i) assets of corporations which become Semiconductor
Operations Subsidiaries after the date of this Agreement, (ii) assets which
are acquired at the time a corporation merges with or into the Company or a
Semiconductor Operations Subsidiary pursuant to Section 7.04, and (iii) assets
acquired in connection with the TI Acquisition and any other assets acquired
by the Company or a Semiconductor Operations Subsidiary pursuant to Section
7.05; provided, however, that such Liens existed at the time the respective
-------- -------
corporations
43.
became Semiconductor Operations Subsidiaries or at the time the assets were
acquired and were not created in anticipation thereof;
(j) purchase money and other security interests, and liens in the
nature of capital leases, in personal or real property where the security
interests do not extend beyond the property purchased or financed, any
replacements, additions, attachments and accessions thereto, and the proceeds
(including insurance proceeds) thereof and the amount of indebtedness secured
thereby does not materially exceed the value of the property (except in
connection with the Italian operations acquired in the TI Acquisition) and, in
the aggregate, the amount of all indebtedness so secured does not at any time
exceed (i) in the case of U.S. domestic net property, plant and equipment, 25%
of the Company's and the Semiconductor Operations Subsidiaries' combined U.S.
domestic net property, plant and equipment and (ii) in the case of total net
property, plant and equipment, 30% of the Company's and the Semiconductor
Operations Subsidiaries' combined total net property, plant and equipment (in
each case as reflected on the Semiconductor Operations Supplemental Schedules)
as of the last day of the fiscal quarter most recently ended prior thereto
(including any such Lien securing any such indebtedness that is renewed,
extended or refunded, provided that the principal amount of such indebtedness
outstanding at the time of such renewal, extension or refunding is not
materially increased and such Lien is not extended to any other property);
(k) Liens arising solely by virtue of any statutory, common law or
contractual provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is not
--------
a dedicated cash collateral account and is not subject to restrictions against
access by the Company or any Semiconductor Operations Subsidiary in excess of
those set forth by regulations promulgated by the FRB, and (ii) such deposit
account is not intended by the Company or any Semiconductor Operations
Subsidiary to provide collateral to the depository institution;
(l) Liens securing extensions of credit made by the Company or another
Semiconductor Operations Subsidiary to such Semiconductor Operations
Subsidiaries, to the extent such extensions of credit are permitted by Section
7.06;
(m) Liens on amounts owed to the Company by a joint venture, an
interest in which is being acquired by the Company in the TI Acquisition,
which amounts are held in an escrow account by the lenders to such joint
venture and which amounts constitute Investments permitted under Section 7.05;
(n) leases and subleases of, and licenses and sublicenses with respect
to, property where the Company or a Semiconductor Operations Subsidiary is the
lessor or licensor (or sublessor or sublicensor); provided that such leases,
--------
subleases, licenses and sublicenses do not in the aggregate materially
interfere with the business of the Company and its Semiconductor Operations
Subsidiaries taken as a whole;
(o) Liens with respect to operating leases otherwise permitted by this
Agreement; provided, that such Liens encumber only property financed or
--------
leased, any replacements,
44.
additions, attachments and accessions thereto, and the proceeds (including
insurance proceeds) thereof;
(p) Liens incurred in the ordinary course of business used to secure
cash reserves that have been deposited with the Company or its Semiconductor
Operations Subsidiaries by customers to obtain the rights to delivery of
future goods or services;
(q) Liens consisting of pledges of cash collateral or government
securities to secure on a xxxx-to-market basis Permitted Swap Obligations
only, provided that the counterparty to any Swap Contract relating to any such
--------
Permitted Swap Obligation is under a similar requirement to deliver similar
collateral from time to time to the Company or the Semiconductor Operations
Subsidiary party thereto on a xxxx-to-market basis; provided, however, that,
-------- -------
as of any determination date, the amount of all such outstanding secured
Permitted Swap Obligations, together with all outstanding secured Indebtedness
permitted by subsection (r) below, shall not in the aggregate exceed 5% of
Combined Tangible Assets;
(r) Liens incurred in the ordinary course of business securing
Indebtedness other than borrowed money; provided, however, that the amount of
-------- -------
all such outstanding secured Indebtedness, together with all outstanding
secured Permitted Swap Obligations permitted by subsection (q) above, shall
not in the aggregate exceed 5% of Combined Tangible Assets as of the end of
the most recent fiscal quarter;
(s) Liens securing Indebtedness permitted by Section 7.06(n); and
(t) Liens in favor of a trustee granted pursuant to any Permitted
Subordinated Debt of the type described in clause (vii) of the definition of
Permitted Subordinated Debt.
Notwithstanding the foregoing, no Liens securing Indebtedness
may exist at any time with respect to the Intellectual Property (as such term
is defined in the Company Security Agreement) of the Company and its
Semiconductor Operations Subsidiaries.
7.02 Exclusive Negative Pledge. The Company shall not, and shall
-------------------------
not permit any of its Semiconductor Operations Subsidiaries to, enter into any
Contractual Obligation (other than this Agreement) which prohibits the
creation or assumption of any Lien upon or with respect to any part of such
Persons properties or assets (including all Intellectual Property (as defined
in the Company Security Agreement) and the capital stock of Semiconductor
Operations Subsidiaries and Micron Electronics, Inc.) (such Contractual
Obligation, a "Negative Pledge"), whether now owned or hereafter acquired,
---------------
other than:
(a) Negative Pledges in favor of the Company or a Semiconductor
Operations Subsidiary with respect to the assets of a Semiconductor Operations
Subsidiary in connection with extensions of credit made by the Company or a
Semiconductor Operations Subsidiary to such Semiconductor Operations
Subsidiary, to the extent such extensions of credit are permitted by Section
7.07;
(b) Negative Pledges granted in connection with extensions of credit
(whether or not guaranteed by the Company or a Semiconductor Operations
Subsidiary) made available by
45.
Persons other than the Company to a Semiconductor Operations Subsidiary to the
extent such extensions of credit are permitted by Sections 7.06(h);
(c) Negative Pledges granted in connection with Permitted Subordinated
Debt;
(d) Negative Pledges granted in connection with real or personal
property financing arrangements to the extent permitted by Section 7.01(j), in
favor of the Person providing such financing, pursuant to which the Company or
a Semiconductor Operations Subsidiary, as applicable, agrees not to create or
assume any Lien upon or with respect to the real property and equipment being
financed (together with replacements, additions, attachments, accessions and
proceeds (including insurance proceeds) thereof and accessories thereto); and
(e) Negative Pledges in connection with Indebtedness permitted under
Section 7.06(p).
7.03 Disposition of Assets. The Company shall not, and shall not
---------------------
suffer or permit any Semiconductor Operations Subsidiary to, directly or
indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any property (including accounts
and notes receivable, with or without recourse) (together, "Dispositions") or
------------
enter into any agreement to do any of the foregoing, except for:
(a) Dispositions by a Semiconductor Operations Subsidiary of all or
substantially all of its assets (upon voluntary dissolution, liquidation or
otherwise) to the Company or any other Person, provided that if such a
--------
Disposition is to a Person other than the Company or another Semiconductor
Operations Subsidiary (or a Wholly-Owned Subsidiary which, immediately
following such dissolution or liquidation, will become a Semiconductor
Operations Subsidiary), such Disposition would be a Distribution permitted
under Section 7.09(d);
(b) Dispositions of assets in the ordinary course of business (the
parties hereby agreeing that Dispositions of inventory, or used, worn-out or
surplus equipment, or equipment pursuant to Permitted Sale-Leaseback
Transactions shall be considered to be Dispositions in the ordinary course of
business);
(c) Dispositions of immaterial ($1,000,000 or less individually)
assets outside the ordinary course of business;
(d) Dispositions of material (greater than $1,000,000 individually)
assets outside the ordinary course of business (other than accounts and notes
receivable); provided that, except to the extent Commitment reductions are
--------
effected and any related prepayments made as contemplated by the last
paragraph of this Section 7.03, the aggregate Net Proceeds of all material
assets so sold, together with the aggregate Net Proceeds of any material
(greater than $1,000,000 individually) assets disposed of pursuant to sale-
leaseback transactions which do not constitute Permitted Sale-Leaseback
Transactions since the Original Closing Date, shall not exceed $200,000,000
(the disposition of assets acquired in the TI Acquisition being excluded from
the foregoing calculation);
(e) Subject to Subsection 7.03(f), dispositions of non-semiconductor
operations assets, including dispositions of the capital stock of Subsidiaries
that are not Semiconductor Operations Subsidiaries;
46.
(f) Disposition of shares of Micron Electronics, Inc. stock, provided
--------
that, except to the extent Commitment reductions are effected and any related
prepayments made as contemplated by the last paragraph of this Section 7.03,
the aggregate Net Proceeds therefrom since the Original Closing Date shall not
exceed $200,000,000; and
(g) Disposition of assets acquired in the TI Acquisition.
Notwithstanding the foregoing, (i) subject to clause (ii)
below, the aggregate amount of Dispositions under subsections (d) and (f)
since the Original Closing Date shall not exceed $300,000,000 in the
aggregate; and (ii) Dispositions described in subsections (d) and (f) which
involve an amount exceeding the maximum amount permitted under this Section
7.03 will be permitted hereunder if the Commitments are reduced as
contemplated by Section 2.05 and, if required by Section 2.06 as a result of
such Commitment reductions, the Net Proceeds are paid over to the Agent for
the account of the Banks as a prepayment of the Loans in accordance with the
requirements of Section 2.06.
7.04 Consolidations and Mergers. The Company shall not, and shall
--------------------------
not suffer or permit any Semiconductor Operations Subsidiary to, liquidate,
dissolve or reorganize, or merge or consolidate with or into any other Person,
except that:
(a) the Company or any Semiconductor Operations Subsidiary may merge,
consolidate or reorganize with or into another Person (other than the Company
or another Subsidiary) in connection with an Acquisition permitted pursuant to
Section 7.05(g) or (o), provided that (i) no Default or Event of Default has
--------
occurred or would occur as a result thereof on a pro forma basis, and (ii) in
the case of a transaction involving the Company, the Company shall be the
surviving corporation, and (iii) in the case of a transaction involving a
Semiconductor Operations Subsidiary, the resulting Person shall be a
Semiconductor Operations Subsidiary;
(b) any Semiconductor Operations Subsidiary may merge, consolidate or
reorganize with or into the Company or a Semiconductor Operations Subsidiary
(or a Wholly-Owned Subsidiary which, immediately following such merger or
consolidation, will become a Semiconductor Operations Subsidiary), provided
--------
that the Company or such Wholly-Owned Subsidiary shall be the continuing or
surviving corporation;
(c) any Semiconductor Operations Subsidiary may consolidate or merge
with or into any other Semiconductor Operations Subsidiary; and
(d) any Semiconductor Operations Subsidiary may liquidate or dissolve as
permitted under Section 7.03(a).
7.05 Loans and Investments. The Company shall not purchase or
---------------------
acquire, or suffer or permit any Semiconductor Operations Subsidiary to
purchase or acquire, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make any Acquisitions,
or make any advance, loan, extension of credit or capital contribution to or
any other investment in, any Person including any Affiliate of the Company
(together, "Investments"), except for:
-----------
47.
(a) Investments held by the Company or a Semiconductor Operations
Subsidiary in the form of cash equivalents and liquid investments;
(b) Investments in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services or licensing of
property in the ordinary course of business;
(c) Investments made by the Company to or in its Semiconductor
Operations Subsidiaries, or by a Semiconductor Operations Subsidiary to or in
the Company or another Semiconductor Operations Subsidiary, to the extent
permitted by Section 7.07;
(d) Investments in Micron Electronics, Inc.; provided, however, that
-------- -------
the aggregate principal amount of all advances, loans and other extensions of
credit to Micron Electronics, Inc. outstanding at any time plus the cumulative
----
amount of all equity contributions in Micron Electronics, Inc. since the
Original Closing Date shall not exceed $100,000,000 in the aggregate;
(e) [reserved];
(f) incidental loans or advances to employees in the ordinary course
of business or as part of their overall compensation package;
(g) Investments incurred in order to consummate Acquisitions or to
acquire equity minority interests in any Person that is not a Subsidiary;
provided, however, that (i) the Investment is being made in a Person that is
-------- -------
engaged in a line of business that would be permitted under Section 7.12 if
such Person were a Semiconductor Operations Subsidiary, (ii) no Default or
Event of Default has occurred or would occur as a result of such Investment on
a pro forma basis, (iii) such Investments are undertaken in accordance with
all applicable Requirements of Law, (iv) if such Investment constitutes an
Acquisition, the prior, effective written consent or approval to such
Investment of the board of directors or equivalent governing body of the
Person acquired or in which the Investment is being made is obtained, and (v)
the cumulative aggregate consideration paid (including the assumption of
debt), the aggregate principal amount of all outstanding advances, loans and
other extension of credit, plus the cumulative amount of all equity
----
contributions made since the Original Closing Date in connection with such
Investments (excluding the consideration paid in the TI Acquisition, and
Indebtedness assumed in connection therewith and any Contingent Obligations in
respect thereof) shall not exceed an amount equal to 25% of Combined Tangible
Assets as of the last day of the most recently ended fiscal quarter;
(h) Investments consisting of guarantees by the Company and its
Semiconductor Operations Subsidiaries of the obligations of vendors and
suppliers of the Company or its Semiconductor Operations Subsidiaries entered
into in the ordinary course of business;
(i) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;
(j) Investments existing on the Original Closing Date;
(k) Investments received in settlement of delinquent obligations or
disputes, including Investments received in connection with the bankruptcy or
reorganization of third Persons;
48.
(l) Investments consisting of deposit accounts maintained in the
ordinary course of business;
(m) Investments accepted in connection with Dispositions of assets
permitted under Section 7.03;
(n) any Investment made in connection with a transaction permitted under
Section 7.04;
(o) the TI Acquisition, provided that (i) no Default or Event of
--------
Default has occurred or would occur as a result of such Investment on a pro
forma basis, and (ii) such Investment is undertaken in accordance with all
applicable Requirements of Law; and
(p) Investments in non-Semiconductor Operations Subsidiaries (other
than Micron Electronics, Inc.), and other Investments not described or covered
by any of the foregoing subsections (a) through (o) of this Section; provided
--------
that (i) no Default or Event of Default has occurred or would occur as a
result of such Investment on a pro forma basis, (ii) such Investments are
undertaken in accordance with all applicable Requirements of Law, (iii) if
such Investment constitutes an Acquisition, the prior, effective written
consent or approval to such Investment of the board of directors or equivalent
governing body of the Person acquired or in which the Investment is being made
is obtained, and (iv) the cumulative aggregate consideration paid (including
the assumption of debt), the aggregate principal amount of all outstanding
advances, loans and other extension of credit, plus the cumulative amount of
----
all equity contributions made since the Original Closing Date in connection
with such Investments shall not exceed an amount equal to 5% of Combined
Tangible Assets as of the last day of the most recently ended fiscal quarter.
7.06 Limitation on Indebtedness and Contingent Obligations.
-----------------------------------------------------
The Company shall not, and shall not suffer or permit any Semiconductor
Operations Subsidiary to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness or Contingent Obligations, except, without duplication:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness and Contingent Obligations existing on the Original
Closing Date and set forth in Schedule 7.06 to the Disclosure Letter;
(c) Contingent Obligations in the form of endorsements for collection or
deposit in the ordinary course of business;
(d) Indebtedness with respect to cash deposited by customers to obtain
the rights to delivery of future goods or services;
(e) Permitted Swap Obligations;
(f) Indebtedness permitted by Section 7.01(j);
(g) Indebtedness incurred in connection with Investments permitted by
Section 7.05;
49.
(h) Indebtedness incurred by the Company or any of the Semiconductor
Operations Subsidiaries from Persons other than the Company or another
Semiconductor Operations Subsidiary up to a maximum aggregate principal amount
outstanding of $50,000,000;
(i) Indebtedness with respect to deferred compensation or employee
benefit programs incurred in the ordinary course of business or in connection
with the discontinuance or sale of businesses or facilities;
(j) (A) Indebtedness under the Subordinated Note Indenture outstanding
as of the Closing Date; and (B) Permitted Subordinated Debt incurred by the
Company in respect of TI Subordinated Debt and, subject to Section 7.10, other
Permitted Subordinated Debt incurred by the Company in an aggregate principal
amount not to exceed at any time $600,000,000;
(k) [reserved];
(l) Indebtedness or Contingent Obligations incurred in connection with
the bonding requirements of Micron Construction, Inc.;
(m) Indebtedness incurred in the ordinary course of business by the
Company or any Semiconductor Operations Subsidiary in connection with the
payment of foreign currency amounts owed to the Company or any Semiconductor
Operations Subsidiary by a customer;
(n) Indebtedness consisting of obligations with respect to standby
letters of credit issued in the ordinary course of business;
(o) Contingent Obligations of the Company with respect to Indebtedness
of its Semiconductor Operations Subsidiaries to the extent such Indebtedness
is otherwise permitted under this Section 7.06, and Contingent Obligations of
the Company with respect to Indebtedness of the Company or another
Semiconductor Operations Subsidiaries to the extent such Indebtedness is
otherwise permitted under this Section 7.06;
(p) Indebtedness of the Company and its Subsidiaries relating to or
provided for in connection with the TI Acquisition;
(q) Indebtedness and Contingent Obligations other than for borrowed
money, to the extent not otherwise permitted by this Section 7.06, in an
aggregate principal amount not exceeding $50,000,000 at any time; and
(r) any extensions, renewals and refinancings of Indebtedness
described in subsections (b), (j) and (p), provided that the principal amount
--------
of such Indebtedness being extended, renewed or refinanced does not increase;
and provided further that if any such Indebtedness being extended, renewed or
-------- -------
refinanced is Permitted Subordinated Debt, the extended, renewed or refinanced
Indebtedness shall constitute Permitted Subordinated Debt satisfying all the
conditions in the definition thereof.
7.07 Transactions with Affiliates. The Company shall not, and
----------------------------
shall not suffer or permit any Semiconductor Operations Subsidiary to, enter
into any transaction with any Affiliate of the Company, except (a) with
respect to any Affiliate which is not a Semiconductor
50.
Operations Subsidiary, upon fair and reasonable terms no less favorable to the
Company or such Semiconductor Operations Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate of the
Company or such Semiconductor Operations Subsidiary, and (b) with respect to
any Affiliate which is a Semiconductor Operations Subsidiary, upon fair and
reasonable terms.
7.08 Use of Proceeds. The Company shall not, and shall not suffer
---------------
or permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (a) to purchase or carry Margin Stock, (b) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (c) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (d) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.09 Restricted Payments. The Company shall not, and shall not
-------------------
suffer or permit any Semiconductor Operations Subsidiary to, declare or make
any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any shares of any class of its
capital stock (in connection with a reclassification of such stock or
otherwise), or purchase, redeem or otherwise acquire for value any shares of
its capital stock or any warrants, rights or options to acquire such shares or
any Permitted Subordinated Debt, or make any voluntary payments on Permitted
Subordinated Debt consisting of sinking fund payments, defeasances or
redemptions thereof, now or hereafter outstanding (collectively "Restricted
----------
Payments"), except that, so long as no Default or Event of Default exists or
--------
would result therefrom:
(a) the Company may make Restricted Payments payable solely in its
capital stock, and may distribute rights under any stockholder rights plan;
(b) the Company may make Restricted Payments with the proceeds
received from the substantially concurrent issue of new shares of its capital
stock and may redeem rights distributed under any stockholder rights plan;
(c) any Semiconductor Operations Subsidiary may declare and make
Restricted Payments on account of any shares of any class of its capital stock
or redeem or otherwise acquire for value any shares of its capital stock or
any warrants, rights or options to acquire such shares, to or from the Company
or to or from another Semiconductor Operations Subsidiary; and
(d) the Company and its Semiconductor Operations Subsidiaries may make
Restricted Payments from earnings available therefor; provided, that the
--------
aggregate amount of all such Restricted Payments paid during the then current
fiscal quarter and the three fiscal quarters immediately preceding such
quarter may not at any time exceed 25% of Combined Net Income for the most
recently ended fiscal quarter and the three fiscal quarters immediately
preceding such quarter.
7.10 Permitted Subordinated Debt. The Company shall not:
---------------------------
(a) (i) issue any Permitted Subordinated Debt if the aggregate issue
price thereof (defined as the aggregate principal amount at maturity less the
aggregate original issue discount) which, when aggregated with all other
subordinated indebtedness, would exceed the amount permitted
51.
under Section 7.06(j) immediately after giving effect to the issuance thereof;
or (ii) issue or refinance any Permitted Subordinated Debt if a Default or
Event of Default shall exist either immediately prior to, or after giving
effect to, the incurrence of such Permitted Subordinated Debt;
(b) except as permitted under Section 7.09, pay any principal
(including sinking fund payments) or any other amount (including scheduled
interest payments) with respect to any Permitted Subordinated Debt (including
the payment of cash in connection with such a conversion thereof), or purchase
or redeem (or offer to purchase or redeem) any Permitted Subordinated Debt, or
deposit any monies, securities or other Property with any trustee or other
Person to provide assurance that the principal or any portion thereof of any
Permitted Subordinated Debt will be paid when due or otherwise to provide for
the defeasance of any Permitted Subordinated Debt; except, subject to the
------
subordination provisions contained in any Permitted Subordinated Debt therein,
the Company may: (i) pay scheduled interest payments on Permitted Subordinated
Debt; (ii) make mandatory payments consisting of prepayments or redemptions of
Permitted Subordinated Debt in each case scheduled at the time of issuance of
Permitted Subordinated Debt; and (iii) deliver securities, cash and other
property upon the conversion of the Permitted Subordinated Debt in accordance
with the terms thereof (including the payment of cash in lieu of fractional
shares in connection with such a conversion); or
(c) amend, waive, supplement or otherwise modify any instrument
relating to any Permitted Subordinated Debt (including any modifications to
the Subordinated Note Indenture made pursuant to a supplemental indenture,
Section 301 of the Subordinated Note Indenture or otherwise) if, as a result
thereof, such Permitted Subordinated Debt would no longer satisfy all the
conditions set forth in the definition of "Permitted Subordinated Debt" or as
otherwise approved by the Majority Banks.
7.11 ERISA. The Company shall not, and shall not suffer or permit
-----
any of its ERISA Affiliates to: (a) engage in a prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could be reasonably expected to result in liability of the
Company in an aggregate amount in excess of 5% of Combined Tangible Net Worth,
or (b) engage in a transaction that could reasonably be expected to subject
the Company to liability under Section 4069 or 4212(c) of ERISA.
7.12 Business or Accounting Changes. The Company shall not, and
------------------------------
shall not suffer or permit any Semiconductor Operations Subsidiary to: (a)
engage in any material line of business substantially different from those
lines of business carried on by the Company and its Semiconductor Operations
Subsidiaries on the date hereof, together with businesses which are
appropriate extensions of or are reasonably related or incidental to the
current businesses of the Company and its Semiconductor Operations
Subsidiaries, or (b) make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP, or change the
convention for determining the fiscal year of the Company or of any
Semiconductor Operations Subsidiary.
7.13 Minimum Cash and Equivalents. The Company shall not permit
----------------------------
the sum of its cash, cash equivalents and liquid investments as of the last
day of any fiscal quarter
52.
occurring (i) prior to the TI Acquisition to be less than $100,000,000, and
(ii) on or after the closing date of the TI Acquisition to be less than
$200,000,000.
7.14 Combined Tangible Net Worth. The Company shall not permit,
---------------------------
as of the last day of any fiscal quarter, Combined Tangible Net Worth to be
less than an amount equal to $1,900,000,000, plus the sum of (a) 75% of
----
Combined Net Income (not reduced by Combined Net Loss for any period) earned
in each fiscal quarterly accounting period commencing with the fiscal quarter
ending September 3, 1998, and (b) 50% of the amount by which Combined Tangible
Net Worth increases as a result of any secondary public or private offering of
equity securities by the Company and its Semiconductor Operations Subsidiaries
(not in connection with an Acquisition or employee stock option or purchase
plans or the TI Acquisition) after the Closing Date.
7.15 Leverage Ratio. The Company shall not permit, as of the last
--------------
day of any fiscal quarter, the Leverage Ratio to exceed 1.00 to 1.00.
7.16 Maximum Indebtedness to Capitalization. The Company shall
--------------------------------------
not permit, as of the last day of any fiscal quarter, the aggregate amount of
all Indebtedness of the Company and the Semiconductor Operations Subsidiaries
on a combined basis to be an amount which exceeds 60% of Capitalization.
7.17 [Reserved]
7.18 Material Semiconductor Operations. The Company shall not
---------------------------------
permit any Material Semiconductor Operations to be conducted, individually or
in the aggregate, by any Subsidiaries which are not Semiconductor Operations
Subsidiaries. The Company shall not permit any Semiconductor Operations
Subsidiary to be a non Wholly-Owned Subsidiary.
ARTICLE VIII - EVENTS OF DEFAULT
--------------------------------
8.01 Event of Default. Any of the following shall constitute an
----------------
"Event of Default":
----------------
(a) Non-Payment. (i) The Company fails to pay, when and as required to
-----------
be paid herein, (A) any amount of principal of any Loan, or (B) any amount of
interest or commitment fee payable hereunder within five days after the same
becomes due; or (ii) any Loan Party fails to pay any other amount payable
hereunder or under any other Loan Document within 30 days after the same
becomes due; or
(b) Representation or Warranty. Any representation or warranty by any
--------------------------
Loan Party or any Semiconductor Operations Subsidiary made or deemed made
herein or in any other Loan Document is incorrect in any material respect on
or as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any
-----------------
term, covenant or agreement contained in Section 6.13 or in Article VII; or
53.
(d) Other Defaults. (i) The Company fails to perform or observe any
--------------
term, covenant or agreement contained in any of Sections 6.01, 6.02(a),
6.02(b), 6.03 or 6.10(b), and such default shall continue unremedied for a
period of five days after the earlier of (a) the date upon which a Responsible
Officer knew or reasonably should have known of such failure, and (b) the date
upon which written notice thereof is given to the Company by the Agent or any
Bank; or (ii) any Loan Party fails to perform or observe any other term or
covenant contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 20 days after the earlier of
(x) the date upon which a Responsible Officer knew or reasonably should have
known of such failure, and (y) the date upon which written notice thereof is
given to the Company by the Agent or any Bank; or
(e) Cross-Acceleration -- Indebtedness. The Company or any
----------------------------------
Semiconductor Operations Subsidiary (i) fails to make any payment in respect
of any individual item of Indebtedness having an aggregate principal amount
(including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $10,000,000, or with respect to any multiple
items of Indebtedness having an aggregate principal amount (including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than $20,000,000, when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure continues
after the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure, or (ii) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such Indebtedness
described in Section 8.01(e)(i) hereof and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document
on the date of such failure, if, in the case of clause (i) or clause (ii), the
effect of such failure, event or condition results in the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) declaring such Indebtedness to be due and payable prior to its
stated maturity; or
(f) Cross-Acceleration - Swap Obligations. There occurs under any
-------------------------------------
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (i) any event of default under such Swap Contract as to which
the Company or any Semiconductor Operations Subsidiary is the Defaulting Party
(as defined in such Swap Contract), or (ii) any Termination Event (as defined
in such Swap Contract) as to which the Company or any Semiconductor Operations
Subsidiary is an Affected Party (as defined in such Swap Contract), and, in
either event, the Swap Termination Value owed by the Company or such
Semiconductor Operations Subsidiary as a result thereof is greater than
$10,000,000; or
(g) Insolvency; Voluntary Proceedings. The Company or any
---------------------------------
Semiconductor Operations Subsidiary (i) ceases or fails to be solvent, or
generally fails to pay, or admits in writing its inability to pay, its debts
as they become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise, (ii) voluntarily ceases to conduct its business
in the ordinary course, except as may otherwise be permitted herein, (iii)
voluntarily commences any Insolvency Proceeding with respect to itself, or
(iv) takes any action to effectuate or authorize any of the foregoing; or
54.
(h) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against the Company or any Semiconductor
Operations Subsidiary, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of the
Company's or any Semiconductor Operations Subsidiary's properties, and any
such proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded within 60 days after commencement, filing or levy,
(ii) the Company or any Semiconductor Operations Subsidiary admits the
material allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding, or (iii) the Company or any Semiconductor Operations
Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or
business; or
(i) ERISA. (i) An ERISA Event shall occur with respect to a Pension
-----
Plan or Multiemployer Plan which has resulted or could reasonably be expected
to result in liability of the Company under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of 5% of
Combined Tangible Net Worth, (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds 5% of Combined Tangible
Net Worth, or (iii) the Company or any ERISA Affiliate shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of 5% of Combined
Tangible Net Worth; or
(j) Monetary Judgments. One or more non-interlocutory judgments, non-
------------------
interlocutory orders, decrees or arbitration awards is entered against the
Company or any Semiconductor Operations Subsidiary involving in the aggregate
a liability (to the extent not covered by independent third-party insurance as
to which the insurer does not dispute coverage) as to any single or related
series of transactions, incidents or conditions, of $20,000,000 or more, and
the same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 consecutive days after the entry thereof; or
(k) Non-Monetary Judgments. Any non-monetary judgment, order or
----------------------
decree is entered against the Company or any Semiconductor Operations
Subsidiary which could reasonably be expected to have a Material Adverse
Effect, and there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(l) Change of Control. If (i) any Person or two or more Persons
-----------------
acting in concert, other than TI, J.R. Simplot, J.R. Simplot Company, Simplot
Canada Limited, a member of J.R. Simplot's immediate family and any other
Persons controlled by or under common control with any of the foregoing, shall
either acquire beneficial ownership, directly or indirectly, of, or acquire by
contract or otherwise, or enter into a contract or arrangement which upon
consummation will result in its or their acquisition of, or control over,
securities of the Company (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Company entitled to vote in the election of directors; or
(ii) during any period of up to 12 consecutive months, commencing after the
Original Closing Date,
55.
individuals who at the beginning of such 12-month period were directors of the
Company shall cease for any reason to constitute a majority of the Board of
Directors of the Company unless the persons replacing such individuals were
nominated by the Board of Directors of the Company; or
(m) Loss of Governmental Licenses. Any Governmental Authority revokes
-----------------------------
or fails to renew any material license, permit or franchise of the Company or
any Semiconductor Operations Subsidiary, or the Company or any Semiconductor
Operations Subsidiary for any reason loses any material governmental license,
permit or franchise, or the Company or any Semiconductor Operations Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any material governmental license, permit or franchise and the
effect of such revocation, failure to renew, loss or imposition could
reasonably be expected to have a Material Adverse Effect; or
(n) Permitted Subordinated Debt; Loss of Subordination. Any event
--------------------------------------------------
occurs which gives the holder or holders of any Permitted Subordinated Debt
(or an agent or trustee on its or their behalf) the right to declare such
Permitted Subordinated Debt due before the date on which it otherwise would
become due, or the right to require the issuer thereof to redeem or purchase,
or offer to redeem or purchase, all or any portion of any Permitted
Subordinated Debt; or a final unstayed judgment is entered by a court of
competent jurisdiction that any Permitted Subordinated Debt is not
subordinated in accordance with its terms to the Obligations.
(o) Guarantor Defaults. The Guarantor fails in any material respect
------------------
to perform or observe any term, covenant or agreement in the Guaranty; or the
Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or the Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.
(p) Collateral. (i) Any provision of any Collateral Document shall
----------
for any reason cease to be valid and binding on or enforceable against the
Company or any Subsidiary party thereto or the Company or any Subsidiary party
thereto shall so state in writing or bring an action to limit its obligations
or liabilities thereunder; (ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof) cease to create a valid security
interest in the Collateral purported to be covered thereby or such security
interests shall for any reason cease to be a perfected and first priority
security interest subject only to Permitted Liens; or (iii) any "Event of
Default" (as defined) shall occur and be continuing under any Collateral
Document.
8.02 Remedies. If any Event of Default occurs, the Agent shall, at
--------
the request of, or may, with the consent of, the Majority Banks: (a) declare
the obligation of each Bank to make Loans to be terminated, whereupon such
obligation and such Bank's Commitment shall be terminated, (b) declare the
unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Company, and (c) exercise on behalf of itself and the Banks all
rights and remedies available to it and the Banks under the Loan Documents or
applicable law; provided, however, that upon the occurrence of any event
-------- -------
56.
specified in subsection (g) or (h) of Section 8.01 (in the case of clause (i)
of subsection (h) upon the expiration of the 60-day period mentioned therein),
the obligation of each Bank to make Loans shall automatically terminate and
the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without
further act of the Agent or any Bank.
8.03 Rights Not Exclusive. The rights provided for in this
--------------------
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
8.04 Certain Financial Covenant Defaults. In the event that,
-----------------------------------
after taking into account any extraordinary charge to earnings taken or to be
taken as of the end of any fiscal period of the Company (a "Charge"), and if
------
solely by virtue of such Charge, there would exist an Event of Default due to
the breach of any of Sections 7.13, 7.14, 7.15 or 7.16 as of such fiscal
period end date, such Event of Default shall be deemed to arise upon the
earlier of (a) the date after such fiscal period end date on which the Company
announces publicly it will take, is taking or has taken such Charge (including
an announcement in the form of a statement in a report filed with the SEC) or,
if such announcement is made prior to such fiscal period end date, the date
that is such fiscal period end date, and (b) the date the Company delivers to
the Agent its audited annual or unaudited quarterly financial statements in
respect of such fiscal period reflecting such Charge as taken.
ARTICLE IX - THE AGENT
----------------------
9.01 Appointment and Authorization; "Agent". Each Bank hereby
--------------------------------------
irrevocably (subject to Section 9.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its
--------------------
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The
57.
Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall
------------------
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure
of the Company or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company or any of the Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) The Agent shall be entitled to rely,
-----------------
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the Majority Banks and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of
the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the
Agent shall have received written notice from a Bank or the Company referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". The Agent will notify the Banks of
its receipt of any such notice. The Agent shall take such action with respect
to such Default or Event of Default as may be
58.
requested by the Majority Banks in accordance with Article VIII; provided,
--------
however, that unless and until the Agent has received any such request, the
-------
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
---------------
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
credit worthiness of the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Company
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and credit worthiness of
the Company. Except for notices, reports and other documents expressly herein
required to be furnished to the Banks by the Agent, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Company which may
come into the possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions
------------------------
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
-------- -------
that no Bank shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of rights or responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA (and any successor Agent
----------------------------
pursuant to Section 9.09) and its Affiliates may make loans to, issue letters
of credit for the account of, accept deposits from, acquire equity interests
in and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with the Company and its Subsidiaries
59.
and Affiliates as though BofA (or such successor Agent) were not the Agent
hereunder and without notice to or consent of the Banks. The Banks acknowledge
that, pursuant to such activities, BofA (and any successor Agent pursuant to
Section 9.09) or its Affiliates may receive information regarding the Company
or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA (and any successor Agent
pursuant to Section 9.09) shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
the Agent, and the terms "Bank" and "Banks" include BofA (or such successor
Agent) in its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the
---------------
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If
the Agent resigns under this Agreement, the Majority Banks shall appoint from
among the Banks a successor agent for the Banks, which successor agent shall
be approved by the Company. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
9.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
---------------
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest or fees in the first calendar year and before
the payment of any interest or fees in each third succeeding calendar
year during which interest or fees may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest or fees are due in the first
taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest or fees may be paid under this Agreement;
and
60.
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Company owing to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company owing
to such Bank, such Bank agrees to notify the Agent of the percentage amount
which it is no longer the beneficial owner of Obligations of the Company to
such Bank. To the extent of such percentage amount, the Agent will treat such
Bank's IRS Form 4224 as no longer valid.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into
account such reduction. However, if the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
Agent may withhold from any interest payment to such Bank not providing such
forms or other documentation an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code, without
reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank because the
appropriate form was not delivered or was not properly executed, or because
such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses including Attorney Costs). The obligation of the
Banks under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Agent.
9.11 Co-Agents. None of the Banks identified on the facing page
---------
or signature pages of this Agreement as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such. Without limiting the
foregoing, none of the Banks so identified as a "co-agent" shall have or be
deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
61.
9.12 Collateral Matters. (a) The Agent is authorized on behalf
------------------
of all the Banks to execute the Collateral Agreements and, without the
necessity of any notice to or further consent from the Banks, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the
security interest in and Liens upon the Collateral granted pursuant to the
Collateral Documents.
(b) The Banks irrevocably authorize the Agent, at its option and in
its discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations known to the Agent and payable under this
Agreement or any other Loan Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which the Company or any Subsidiary
owned no interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property to be leased by the Company or the Guarantor or
constituting security for Indebtedness to be incurred by the Company or the
Guarantor, in each case in a transaction permitted under this Agreement; (v)
consisting of an instrument evidencing Indebtedness or other debt instrument,
if the indebtedness evidenced thereby has been paid in full; or (vi) if
approved, authorized or ratified in writing by the Majority Banks (as
specifically contemplated in the Loan Documents) or all the Banks, as the case
may be, as provided in subsection 10.01(f). Upon request by the Agent at any
time, the Banks will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this subsection 9.12(b),
provided that the absence of any such confirmation for whatever reason shall
--------
not affect the Agent's rights under this Section 9.12.
ARTICLE X - MISCELLANEOUS
-------------------------
10.01 Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Company or any applicable Subsidiary
therefrom, shall be effective unless the same shall be in writing and signed
by the Majority Banks (or by the Agent at the written request of the Majority
Banks) and the Company and acknowledged by the Agent, and then any such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
-------- -------
amendment, or consent shall, unless in writing and signed by all the Banks and
the Company and acknowledged by the Agent, do any of the following: (a)
increase or extend the Commitment of any Bank (or reinstate any Commitment
terminated pursuant to Section 8.02), (b) postpone or delay any date fixed by
this Agreement or any other Loan Document for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any other Loan Document, (c) reduce the principal of, or the rate of
interest specified herein on any Loan, or (subject to clause (ii) below) any
fees or other amounts payable hereunder or under any other Loan Document, (d)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans which is required for the Banks or any of them to take any
action hereunder, (e) amend this Section, Section 2.13 or Section 2.14, or any
provision herein providing for consent or other action by all Banks, or (f)
discharge the Guarantor, or release any of the Collateral, except as otherwise
may be provided herein or in the Collateral Documents or except where the
consent of the Majority Banks only is
62.
specifically provided for; and, provided further, that (i) no amendment,
-------- -------
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Majority Banks or all the Banks, as the case may be, affect the rights
or duties of the Agent under this Agreement or any other Loan Document, (ii)
the fee letter referred to in Section 2.09 may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto;
and (iii) nothing herein shall be construed to prohibit deemed amendments from
taking effect pursuant to Sections 3.07 or 10.08(c) hereof.
10.02 Notices. (a) All notices, requests, consents, approvals,
-------
waivers and other communications shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 10.02, and (ii) shall be followed promptly by delivery of a hard copy
-------- -----
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 10.02; or, as directed to the Company
-------- -----
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery; except that notices pursuant to Article II or IX to
the Agent shall not be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Banks to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and
------------------------------
no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) and
the Lead Arranger for all reasonable costs and expenses incurred by them in
connection with the development, preparation, delivery,
63.
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in connection herewith or
therewith, the consummation of the transactions contemplated hereby and
thereby, and in connection with any borrowing base audit of the Company by the
Agent, including Attorney Costs incurred by them with respect thereto, and
including all title, appraisal (including the allocated cost of internal
appraisal services), survey, audit, environmental inspection, consulting,
search, recording, filing and similar costs, fees and expenses incurred or
sustained by the Agent or any of its Affiliates in connection with the
Collateral Documents or the Collateral; and
(b) pay or reimburse the Agent, the Lead Arranger and each Bank for
all costs and expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding). The
agreements in this Section shall survive the payment of all other Obligations.
10.05 Company Indemnification. Whether or not the transactions
-----------------------
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each,
an "Indemnified Person") harmless from and against any and all liabilities,
------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Company shall
----------------------- --------
have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a
------------------
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or
64.
such set-off had not occurred, and (b) each Bank severally agrees to pay to
the Agent upon demand its pro rata share of any amount so recovered from or
repaid by the Agent.
10.07 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
10.08 Assignments, Participations, etc. (a) Any Bank may, with
---------------------------------
the written consent of the Company (at all times other than during the
existence of an Event of Default) and the Agent, which consents shall not
unreasonably be withheld, at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Company or the
Agent shall be required in connection with any assignment and delegation by a
Bank to an Eligible Assignee that is an Affiliate of such Bank or to another
Bank party hereto) (each an "Assignee") all, or any ratable part of all, of
--------
the Loans, the Commitments and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000, or such lesser amount which
represents a Bank's entire Commitment (provided that no minimum amount
--------
limitation shall apply in connection with any assignment and delegation by a
Bank to an Eligible Assignee that is an Affiliate of such Bank or to another
Bank party hereto); provided, however, that the Company and the Agent may
-------- -------
continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
substantially in the form of Exhibit N ("Assignment and Acceptance"), together
--------- -------------------------
with any Note or Notes subject to such assignment, and (iii) the assignor Bank
or Assignee has paid to the Agent a processing fee in the amount of $3,500.
(b) From and after the date that the Agent notifies the assignor Bank
that the Agent and the Company have received (and provided their consent, if
required, with respect to) an executed Assignment and Acceptance and payment
of the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, shall have the
rights and obligations of a Bank under the Loan Documents, and (ii) the
assignor Bank shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents; provided, however, that the assignor
-------- -------
Bank shall not relinquish its rights under Article III or under Sections 10.04
and 10.05 to the extent such rights relate to the time prior to the effective
date of the Assignment and Acceptance.
(c) Within five Business Days after the Company's receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee, (and provided that the Company consents to such
assignment in accordance with Section 10.08(a)), the Company shall execute and
deliver to the Agent, new Notes evidencing such Assignee's assigned Loans and
Commitment and, if the assignor Bank has retained a portion of its Loans and
its Commitment, replacement Notes in the principal amount of the Loans
retained by the assignor Bank (such Notes to be in exchange for, but not in
payment of, the Notes held by such
65.
Bank). Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
---------
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
-----------
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan
Documents; provided, however, that (i) the originating Bank's obligations
-------- -------
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii) the
Company and the Agent shall continue to deal solely and directly with the
originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Bank shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the
extent such amendment, consent or waiver would require unanimous consent of
the Banks as described in the first proviso to Section 10.01. In the case of
----- -------
any such participation, the Participant shall be entitled to the benefit of
Sections 3.01, 3.03 and 10.05 as though it were also a Bank hereunder
(provided, however, that no Participant shall be entitled to greater benefits
-------- -------
under any such Section than the Bank which sold such participation would have
been entitled to), and if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this
Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time, without the consent of any Person, create a security interest
in, or pledge, all or any portion of its rights under and interest in this
Agreement and any Note held by it in favor of any Federal Reserve Bank in
accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
(S)203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
10.09 Confidentiality. Each Bank agrees to take and to cause its
---------------
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all confidential information provided to it by
the Company or any Subsidiary, or by the Agent on the Company's or such
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Company or any Subsidiary; except to the extent such
information (i) was or becomes generally available to the public other than as
a result of disclosure by the Bank, or (ii) was or becomes available on a non-
confidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company known to
the Bank; provided, however, that any Bank may disclose such information (A)
-------- -------
at the request or pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an examination of
66.
such Bank by any such authority; (B) pursuant to subpoena or other court
process, provided, that the Bank shall use its reasonable, good faith efforts
to provide prior written notice (unless prohibited from doing so by any
applicable Requirement of Law) to the Company to allow the Company to seek a
protective order; (C) when required to do so in accordance with the provisions
of any applicable Requirement of Law; (D) to the extent reasonably required in
connection with any litigation or proceeding (except as set forth in clause
(E)) to which the Agent, any Bank or their respective Affiliates may be party,
provided, that the Bank shall use its reasonable, good faith efforts to
provide prior written notice (unless prohibited from doing so by any
applicable Requirement of Law) to the Company to allow the Company to seek a
protective order; (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (F) to such
Bank's independent auditors and other professional advisors, provided such
persons have a need to know such information and agree to be bound by the
terms of this Section 10.09 as so they were a party hereto; (G) to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required
of the Banks hereunder; (H) as to any Bank or its Affiliate, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Bank or such Affiliate; and (I) to its Affiliates. Upon the
execution hereof by all the parties, the confidentiality undertaking set forth
in this Section shall replace and supersede the terms of any confidentiality
agreement between the Company and any of the Agent or the Banks executed prior
to the Original Closing Date and shall survive the termination of this
Agreement for a period of 12 months.
10.10 Set-off. In addition to any rights and remedies of the Banks
-------
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, upon
obtaining the prior written consent of the Agent, and without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the
account of the Company against any and all Obligations owing to such Bank, now
or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made
by such Bank; provided, however, that the failure to give such notice shall
-------- -------
not affect the validity of such set-off and application.
10.11 Notification of Addresses, Lending Offices, Etc. Each Bank
-----------------------------------------------
shall notify the Agent in writing of any changes in the address to which
notices to the Bank should be directed, of addresses of any Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably
request.
10.12 Counterparts. This Agreement may be executed in any number
------------
of separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement and any other Loan Document
67.
may be delivered by any party hereto or thereto either in the form of an
executed original or an executed original sent by facsimile transmission to be
followed promptly by mailing of a hard copy original, and that receipt by the
Agent of a facsimile transmitted document purportedly bearing the signature of
a Bank or the Company shall bind such Bank or the Company, respectively, with
the same force and effect as the delivery of a hard copy original. Any failure
by the Agent to receive the hard copy executed original of such document shall
not diminish the binding effect of receipt of the facsimile transmitted
executed original of such document of the party whose hard copy page was not
received by the Agent.
10.13 Severability. The illegality or unenforceability of any
------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
thereunder.
10.14 No Third Parties Benefited. This Agreement is made and
--------------------------
entered into for the sole protection and legal benefit of the Company, the
Banks, the Agent, the Indemnified Persons, and the Agent-Related Persons, and
their permitted successors and assigns, and no other Person shall be a direct
or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.
10.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
------------------------------
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE
AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT
AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
--------------------
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
CALIFORNIA LAW.
10.16 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT
--------------------
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY
68.
OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS
AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.17 Entire Agreement. This Agreement, together with the other
----------------
Loan Documents, embodies the entire agreement and understanding among the
Company, the Banks and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
10.18 Amendment and Restatement of Existing Facility. From and
----------------------------------------------
after the Closing Date, this Agreement amends and restates the Existing
Facility.
69.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
MICRON TECHNOLOGY, INC.
By:
---------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Treasurer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
ABN AMRO BANK N.V., as Co-Agent and a Bank
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By:
---------------------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Managing Director
THE BANK OF NOVA SCOTIA, as Co-Agent
and a Bank
By:
---------------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Co-Agent and a Bank
By:
---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Co-Agent and a Bank
By:
---------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as Co-Agent
and a Bank
By:
---------------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By:
---------------------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
---------------------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED,
LOS ANGELES AGENCY
By:
---------------------------------------
Name:
Title:
THE FUJI BANK, LIMITED, LOS ANGELES AGENCY
By:
---------------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
SAN FRANCISCO AGENCY
By:
---------------------------------------
Name:
Title:
THE SUMITOMO BANK LIMITED
By:
---------------------------------------
Name:
Title:
FIRST SECURITY BANK, N.A.
By:
---------------------------------------
Name:
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
By:
---------------------------------------
Name:
Title:
THE SAKURA BANK, LIMITED
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
---------------------------------------
Name:
Title:
PARIBAS
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
ANNEX I
-------
PRICING GRID
------------
-------------------------------------------------------------------------------------------------------------------------
INDEBTEDNESS TO CAPITALIZATION LESS THAN 40% INDEBTEDNESS TO
CAPITALIZATION GREATER THAN
OR EQUAL TO 40%
LEVEL EBITDA LIBOR Base Rate Commitment LIBOR Base Rate Commitment
Margin Margin Fee Margin Margin Fee
-------------------------------------------------------------------------------------------------------------------------
1 Greater than
$2.0 BN 0.875% 0.000% 0.3500% 1.125% 0.1250% 0.3500%
2 $1.6-$2.0 BN 1.000% 0.000% 0.3500% 1.250% 0.2500% 0.3750%
3 $1.2-$1.6 BN 1.250% 0.250% 0.3750% 1.500% 0.5000% 0.4000%
4 $0.8-$1.2 BN 1.500% 0.500% 0.4000% 1.750% 0.7500% 0.5000%
5 $0.4-$0.8 BN 1.625% 0.625% 0.4375% 1.875% 0.8750% 0.5000%
6 Less than $0.4 BN 1.750% 0.750% 0.5000% 2.000% 1.0000% 0.5000%
-------------------------------------------------------------------------------------------------------------------------
EBITDA and Indebtedness to Capitalization used to compute the LIBOR Margin,
the Base Rate Margin and the Commitment Fee set forth above shall be EBITDA
and Indebtedness to Capitalization as set forth in the Compliance Certificate
most recently delivered by the Company to the Agent pursuant to Section
6.02(a) of the Credit Agreement. EBITDA shall be determined (i) as of 9/3/98
by multiplying EBITDA for the fiscal quarter ending 9/3/98 by four; (ii) as
of 12/3/98 by multiplying the sum of EBITDA for the fiscal quarters ending
9/3/98 and 12/3/98 by two; (iii) as of 3/4/99 by dividing the sum of EBITDA
for the fiscal quarters ending 9/3/98, 12/3/98 and 3/4/99 by three, and then
multiplying such amount by four; and (iv) and thereafter for the four
consecutive fiscal quarters ending on the date of the financial statements
referred to in the Compliance Certificate.
The Applicable Fee Percentage shall be adjusted automatically as to the
commitment fee then accruing effective as of the 100th day after the end of
each fiscal year and the 60th day after the end of the first three fiscal
quarters of each fiscal year based on EBITDA and Indebtedness to
Capitalization set forth in the most recently delivered Compliance
Certificate; provided, however, that for the period from the Closing Date
-------- -------
through the 100th day after the end of the Company's fiscal year ending
9/3/98, the Applicable Fee Percentage shall be 0.5000%.
The Applicable Margin shall be adjusted automatically as to all Loans then
outstanding effective as of the 100th day after the end of each fiscal year
and the 60th day after the end of the first three fiscal quarters of each
fiscal year based on EBITDA and Indebtedness to Capitalization as set forth
in the most recently delivered Compliance Certificate; provided, however,
-------- -------
that for the period from the Closing Date through the 100th day after the end
of the Company's fiscal year ending 9/3/98, the Applicable Margin shall be
1.750% (LIBOR Margin) and 0.750% (Base Rate Margin).
If the Company shall fail to deliver a Compliance Certificate within the
number of days after the end of any fiscal quarter or fiscal year as required
pursuant to Section 6.02(a) (without giving effect to any grace period), the
Applicable Fee Percentage and the Applicable Margin from the first day after
the date on which such Compliance Certificate was required to be delivered to
the
PRICING GRID
1.
Agent to the day the Company delivers to the Agent a Compliance Certificate
shall conclusively equal the highest Applicable Fee Percentage and Applicable
Margin set forth above.
PRICING GRID
2.
SCHEDULE 2.01
-------------
COMMITMENTS AND PRO RATA SHARES
-------------------------------
Pro Rata
Bank Commitment Share
---- ------------ --------
Bank of America National
Trust and Savings Association $ 35,200,000 8.8%
ABN AMRO Bank, N.V. 28,000,000 7.0
The Bank of Nova Scotia 28,000,000 7.0
Fleet National Bank 28,000,000 7.0
PNC Bank, National Association 28,000,000 7.0
U.S. Bank National Association 28,000,000 7.0
Royal Bank of Canada 24,000,000 6.0
Banque Nationale de Paris 20,000,000 5.0
KeyBank National Association 20,000,000 5.0
Mellon Bank, N.A. 20,000,000 5.0
The Dai-Ichi Kangyo Bank, Limited,
Los Angeles Agency 20,000,000 5.0
The Fuji Bank, Limited,
Los Angeles Agency 20,000,000 5.0
The Industrial Bank of Japan, Limited,
San Francisco Agency 20,000,000 5.0
The Sumitomo Bank Limited 20,000,000 5.0
First Security Bank, N.A. 12,800,000 3.2
The Long-Term Credit Bank of Japan, Ltd.,
Los Angeles Agency 12,800,000 3.2
The Sakura Bank, Limited 12,800,000 3.2
The Bank of New York 11,200,000 2.8
Paribas 11,200,000 2.8
============ =====
TOTAL $400,000,000 100.0
COMMITMENTS AND PRO RATA SHARES
1.
SCHEDULE 4.01
-------------
FILING OFFICES
--------------
1. FILING OFFICES AS TO COLLATERAL PROVIDED PURSUANT TO THE SECURITY
AGREEMENTS.
a) Secretary of State of the State of Idaho (Company and Guarantor)
b) Office of the County Recorder of Ada County, Idaho (Company and
Guarantor)
c) Division of Corporations and Commercial Code, Utah Department of
Commerce (Company and Guarantor)
d) Office of the County Recorder of Utah County, Utah (Company and
Guarantor)
e) Secretary of State of the State of Texas (Company and Guarantor)
f) Secretary of State of California (Company and Guarantor)
g) Secretary of State of North Carolina, UCC Division (Company and
Guarantor)
h) Office of the County Recorder of Durham County, North Carolina (Company
and Guarantor)
i) Secretary of State of the State of South Dakota, UCC Division Central
Filing (Company and Guarantor)
j) State Corporation Commission of the State of Virginia (Company and
Guarantor)
k) Office of the County Recorder of Richmond County, Virginia (Company and
Guarantor)
2. FILING OFFICES AS TO COLLATERAL PROVIDED PURSUANT TO THE DEEDS OF TRUST
a) Office of the County Recorder of Ada County, Idaho (Company)
b) Office of the County Recorder of Utah County, Utah (Company)
FILING OFFICES
1.
SCHEDULE 10.02
--------------
OFFSHORE AND DOMESTIC LENDING OFFICES,
--------------------------------------
ADDRESSES FOR NOTICES
---------------------
MICRON TECHNOLOGY, INC.
Notices:
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
Mail Stop 157
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS AGENT
Address for Notices of Borrowing and
Notices of Conversion/Continuation:
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Xx. Associate Agency Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
1.
Notices (other than Notice of Borrowing
and Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
Agency Management #10831
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment Office:
Bank of America National Trust
and Savings Association
ABA No. 000-000-000
0000 Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Account No.: 12332-15032
Reference: Micron Technology, Inc.
Attention: Agency Administrative Services #0000
XXXX XX XXXXXXX NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
Notices (other than Notice of Borrowing
and Notices of Conversion/Continuation):
Bank of America National Trust
and Savings Association
Credit Products-High Technology-SF #3697
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxxxx
Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
2.
Domestic and Offshore Lending Office:
Bank of America National Trust
and Savings Association
0000 Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Reference: Micron Technology, Inc.
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION
Notices:
PNC Bank, National Association
One PNC Plaza
249 5th Avenue, Mail Stop: X-0-X0XX-00-0
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
PNC Bank, National Association
One PNC Plaza
249 5th Avenue, Mail Stop: X-0-X0XX-00-0
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
3.
U.S. BANK NATIONAL ASSOCIATION
Notices:
U.S. Bank National Association
000 X.X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Treasury Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
U.S. Bank National Association
Oregon Corporate Loan Servicing
000 X.X. Xxx
Xxxxx XX0
Xxxxxxxx, XX 00000
Attention: Xxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ABN AMRO BANK, N.V.
Notices:
ABN AMRO Bank, N.V.
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Credit Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
4.
With a copy to:
ABN AMRO Bank, N.V.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx-Xxx Miao
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
ABN AMRO Bank, N.V.
000 X. XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Loan Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE BANK OF NOVA SCOTIA
Notices:
The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Maarten Van Otterloo
Senior Relationship Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Maarten Van Otterloo
Senior Relationship Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
5.
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
SAN FRANCISCO AGENCY
Notices:
The Industrial Bank of Japan, Limited,
San Francisco Agency
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Industrial Bank of Japan, Limited,
San Francisco Agency
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxx X'Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
Notices:
KeyBank National Association
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Senior Vice President and Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
KeyBank National Association
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
LENDING OFFICES AND ADDRESSES
6.
ROYAL BANK OF CANADA
Notices:
Royal Bank of Canada
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
Royal Bank of Canada
000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
BANQUE NATIONALE DE PARIS
Notices:
Banque Nationale de Paris
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx XxXxxxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
Banque Nationale de Paris, San Xxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
7.
THE FUJI BANK, LIMITED, LOS ANGELES AGENCY
Notices:
The Fuji Bank, Limited,
Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx
25th Floor, Suite 3900
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Vice President and Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Fuji Bank, Limited,
Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx
25th Floor, Suite 3900
Los Angeles, CA 90071
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE BANK OF NEW YORK
Notices:
The Bank of New York
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
8.
Domestic and Offshore Lending Office:
The Bank of New York
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE DAI-ICHI KANGYO BANK, LIMITED,
LOS ANGELES AGENCY
Notices:
The Dai-Ichi Kangyo Bank, Limited,
San Francisco Agency
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Dai-Ichi Kangyo Bank, Limited,
Los Angeles Agency
Credit Administration
000 X. Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
9.
FIRST SECURITY BANK, N.A.
Notices:
First Security Bank, N.A.
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
First Security Bank, N.A.
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FLEET NATIONAL BANK
Notices:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND ADDRESSES
10.
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY
Notices:
The Long-Term Credit Bank of Japan,
Ltd., Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Vice President
Telephone: (000) 000-00000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Long-Term Credit Bank of Japan,
Ltd., Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
MELLON BANK, N.A.
Notices:
Mellon Bank, N.A.
Info Tech Group Rep Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
First Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND XXXXXXXXX
00.
Domestic and Offshore Lending Office:
Mellon Bank, N.A.
3 Mellon Bank Center
Room 2304
Xxxxxxxxxx, XX 00000
Attention: X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE SUMITOMO BANK LIMITED
Notices:
The Sumitomo Bank Limited
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
The Sumitomo Bank Limited
000 X. Xxxxxxxx #0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE SAKURA BANK, LIMITED
Notices:
The Sakura Bank, Limited
U.S. Corporate Finance Department
Los Angeles Agency
000 Xxxxx Xxxxxxxx Xx., Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LENDING OFFICES AND XXXXXXXXX
00.
Domestic and Offshore Lending Office:
The Sakura Bank, Limited
New York Branch
Loan Administration Dept.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PARIBAS
Notices:
Paribas
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Domestic and Offshore Lending Office:
Paribas
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 OR (000) 000-0000
LENDING OFFICES AND ADDRESSES
13.
EXHIBIT A
---------
FORM OF NOTICE OF BORROWING
---------------------------
Date: _____________
To: Bank of America National Trust and Savings Association, as Agent for the
Banks party to the Second Amended and Restated Revolving Credit Agreement
dated as of September 1, 1998 (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Micron Technology, Inc.,
----------------
the several financial institutions from time to time party to the Credit
Agreement (the "Banks"), and Bank of America National Trust and Savings
-----
Association, as Agent
Ladies and Gentlemen:
The undersigned, Micron Technology, Inc. (the "Company"), refers to the
-------
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.03 of
the Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is ______________.
2. The aggregate amount of the proposed Borrowing is $_______________.
3. The Borrowing is to be comprised of $___________ of [Base Rate]
[Offshore Rate] Loans.
[4. The duration of the Interest Period for the Offshore Rate Loans
included in the Borrowing shall be _____ months.]
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Company contained in
Article V of the Credit Agreement are true and correct as though made on
and as of such date, except (i) to the extent such representations and
warranties relate to an earlier date, in which case they were true and
correct as of such earlier date, (ii) that this subparagraph (a) shall be
deemed instead to refer to the last day of the most recent quarter and year
for which financial statements have then been delivered in respect of the
representations and warranties made in subsections 5.11(a) and 5.11(b),
and (iii) the representations and warranties contained in Sections 5.05 and
5.14 shall be true and correct as of the Closing Date and as of the end of
each fiscal quarter;
NOTICE OF BORROWING
A-1.
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
(c) the proposed Borrowing will not cause the aggregate principal
amount of all outstanding Loans to exceed the combined Commitments of the
Banks.
MICRON TECHNOLOGY, INC.
By:______________________________
Title:
NOTICE OF BORROWING
A-2.
EXHIBIT B
---------
FORM OF NOTICE OF CONVERSION/CONTINUATION
-----------------------------------------
Date: _____________
To: Bank of America National Trust and Savings Association, as Agent for the
Banks party to the Second Amended and Restated Revolving Credit Agreement
dated as of September 1, 1998 (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Micron Technology, Inc.,
----------------
the several financial institutions from time to time party to the Credit
Agreement (the "Banks"), and Bank of America National Trust and Savings
-----
Association, as Agent
Ladies and Gentlemen:
The undersigned, Micron Technology, Inc. (the "Company"), refers to
-------
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.04 of
the Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Conversion/Continuation Date is ______________.
2. The aggregate amount of the Loans to be [converted] [continued]
is $_______________.
3. The Loans are to be [converted into] [continued as] [Offshore
Rate] [Base Rate] Loans.
[4. The duration of the Interest Period for the Offshore Rate Loans
included in the [conversion] [continuation] shall be ___ months.]
MICRON TECHNOLOGY, INC.
By:________________________________
Title:
FORM OF NOTICE OF CONVERSION/CONTINUATION
B-1.
EXHIBIT C
---------
FORM OF MASTER PROMISSORY NOTE
------------------------------
$____________________ _________, 1998
FOR VALUE RECEIVED, the undersigned Micron Technology, Inc., a
Delaware corporation (the "Company"), hereby promises to pay to the order of
-------
______________________ (the "Bank"), at the Agent's Payment Office, the
----
aggregate unpaid principal amount of all Loans made by the Bank to the Company
from time to time pursuant to the Credit Agreement described below at the times
and in the amounts specified in the Credit Agreement. The Company also promises
to pay interest on such unpaid principal amount at the times and at the rates
specified in the Credit Agreement.
The Bank is hereby authorized to endorse the date, amount, and
maturity of each Loan made by it and the amount and date of each payment of
principal made by the Company with respect thereto on the schedule annexed to
this Note and on continuations of such schedule, both schedule and continuations
being hereby made a part of this Note; provided, that any failure to endorse
such information on such schedule or continuation thereof shall not in any
manner affect any obligation of the Company under the Credit Agreement and this
Note.
This Master Promissory Note is one of the Notes referred to in, and is
issued under, the Second Amended and Restated Revolving Credit Agreement dated
as of September 1, 1998 (as extended, renewed, amended or restated from time to
time, the "Credit Agreement") among the Company, the several financial
----------------
institutions from time to time party to the Credit Agreement (the "Banks"), and
-----
Bank of America National Trust and Savings Association, as Agent, and amends and
restates any prior promissory noted delivered to the holder under the Existing
Facility.
The holder of this Master Promissory Note shall be entitled to the
benefits provided for in the Credit Agreement. Reference is made to the Credit
Agreement for the provisions on (i) the obligation of the Bank to advance funds
under this Master Promissory Note, (ii) the manner in which interest is computed
and accrued, (iii) the Company's rights, if any, to prepay all or part of the
Loans, (iv) the events upon which the maturity of this Master Promissory Note
may be accelerated or shall be automatically accelerated, as the case may be,
(v) Attorneys Costs and other fees and expenses incurred in any enforcement of
this Master Promissory Note, (vi) the Company's right to cure certain Events of
Default, and (vii) the Bank's rights to assign all or part of this Master
Promissory Note to Eligible Assignees and/or to sell participating interests in
any Loans, as more fully set forth in the Credit Agreement. Terms defined in
the Credit Agreement shall have the same meanings herein.
This Master Promissory Note shall be governed by and construed and
enforced in accordance with the laws of the State of California.
FORM OF PROMISSORY NOTE
C-1.
IN WITNESS WHEREOF, the undersigned has caused this Master Promissory
Note to be executed by its officer thereunto duly authorized.
MICRON TECHNOLOGY, INC.
By:________________________________
Title:
FORM OF PROMISSORY NOTE
C-2.
SCHEDULE
Date Loan Amount of Loan Maturity Date Principal Date Principal
Disbursed Payment Paid
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FORM OF PROMISSORY NOTE
C-3.
EXHIBIT D
---------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
Micron Technology, Inc.
Financial Statement Date: ______________
Reference is made to that certain Second Amended and Restated Revolving
Credit Agreement dated as of September 1, 1998 (as extended, renewed, amended or
restated from time to time, the "Credit Agreement") among Micron Technology,
----------------
Inc. (the "Company"), the several financial institutions from time to time party
-------
to this Credit Agreement (the "Banks"), and Bank of America National Trust and
-----
Savings Association, as agent for the Banks (in such capacity, the "Agent").
-----
Unless otherwise defined herein, capitalized terms used herein have the
respective meanings assigned to them in the Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as of
the date hereof that he/she is the [Chief Financial Officer] [Treasurer] of the
Company, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Banks and the Agent on the behalf of the Company and its
consolidated Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by Section 6.01(a) of the Credit Agreement.]
1. Attached as Schedule 1 hereto are true and correct copies of the audited
----------
consolidated balance sheet of the Company and its Subsidiaries as at the end of
the fiscal year ended _______________, and the related consolidated statements
of operations and cash flows for the year then ended, setting forth in each case
in comparative form the figures for the previous fiscal year, together with the
related Semiconductor Operations Supplemental Schedules, and accompanied by the
report of the Independent Auditor, whose opinion (a) states (i) that such
consolidated financial statements present fairly in all material respects the
financial position of the Company and its Subsidiaries on a consolidated basis
as of the date thereof and the results of operations for the periods indicated
in conformity with GAAP, except as otherwise indicated therein, and (ii) such
related Semiconductor Operations Supplemental Schedules were prepared on a basis
consistent with the basic consolidated financial statements of the Company and
its Subsidiaries except as disclosed in the notes thereto and the information
therein is fairly stated in all material respects in relation to the basic
consolidated financial statements taken as a whole except as specifically noted
therein. Such Semiconductor Operations Supplemental Schedules present fairly, in
all material respects, the net assets and operations and cash flows of the
Company and its Semiconductor Operations Subsidiaries (on a combined basis) for
the periods covered thereby, on the basis specified and described in the notes
to such schedules.
FORM OF COMPLIANCE CERTIFICATE
D-1.
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by Section 6.01(b) of the Credit Agreement.]
1. Attached as Schedule 1 hereto are true and correct copies of the
----------
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of the fiscal quarter ended ______________ and the related consolidated
statements of operations and cash flows for the interim periods then ended,
together with the related Semiconductor Operations Supplemental Schedules. The
unaudited consolidated financial statements of the Company and its Subsidiaries
(a) fairly present in all material respects, in accordance with GAAP (subject to
ordinary, good faith year-end adjustments, the financial position and the
results of operations of the Company and its Subsidiaries on a consolidated
basis, and (b) include or disclose all material indebtedness and other
liabilities, direct or contingent, of the Company and its Subsidiaries on a
consolidated basis as of the date thereof, including liabilities for taxes,
material commitments and material Contingent Obligations. Such related
Semiconductor Operations Supplemental Schedules (x) include amounts based on
estimates of annual amounts and are subject to changes in estimates and ordinary
year-end adjustments, (y) present fairly, in all material respects, the net
assets and operations and cash flows of the Company and its Semiconductor
Operations Subsidiaries (on a combined basis) for the periods covered thereby,
on the basis specified and described in the notes to such schedules, and (z)
were prepared on a basis consistent with the basic consolidated financial
statements of the Company and its Subsidiaries except as disclosed in the notes
thereto.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and conditions (financial or
otherwise) of the Company during the accounting period covered by the attached
financial statements.
3. The Company, during such period, has observed, performed or satisfied
all of its covenants and other agreements, and satisfied every condition in the
Credit Agreement to be observed, performed or satisfied by the Company, and the
undersigned has no knowledge of any Default or Event of Default.
4. The representations and warranties of the Company contained in Article V
of the Credit Agreement are true and correct as though made on and as of the
date hereof (except (i) to the extent such representations and warranties relate
to an earlier date, in which case they were true and correct as of such earlier
date, (ii) that this paragraph (4) shall be deemed instead to refer to the last
day of the most recent quarter and year for which financial statements have then
been delivered in respect of the representations and warranties made in
subsections 5.11(a) and 5.11(b), and (iii) the representations and warranties
contained in Sections 5.05 and 5.14 shall be true and correct as of the Closing
Date and as of the end of each fiscal quarter.
5. The following financial covenant analyses and information set forth on
Schedule 2 attached hereto are true and accurate on and as of the date of this
----------
Certificate.
FORM OF COMPLIANCE CERTIFICATE
D-2.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________.
MICRON SEMICONDUCTOR PRODUCTS, INC.
By: __________________________
Title:
FORM OF COMPLIANCE CERTIFICATE
D-3.
SCHEDULE 2
----------
to the Compliance Certificate
($ in 000's)
Date: ___________________
For the fiscal quarter/year
ended ___________________
(Unless otherwise noted, all calculations are to be made on
basis of the Company and the Semiconductor Operations
Subsidiaries on a combined basis.)
A. Section 7.13: Minimum Cash and Equivalents:
--------------------------------------------
1. Sum of cash, cash equivalents and liquid
investments: $__________
Line A.1 not to exceed $100,000,000 (prior to TI Acquisition)
and $200,000,000 (on or after date of TI Acquisition)
B. Section 7.14: Combined Tangible Net Worth.
------------------------------------------
1. Total net assets:/1/ $__________
2. Net book value of intangible assets:/1/ $__________
3. Line B.1 less Line B.2: $
==========
4. 75% of Combined Net Income (not reduced
by Combined Net Loss) commencing with
FQ ending 9/3/98: $__________
5. 50% of increases in Combined Tangible Net
Worth resulting from certain equity offerings
after Original Closing Date: $__________
6. $1,900,000,000 + Line B.4 + B.5: $
==========
Line B.3 not to be less than Line B.6
____________________
/1/ Excluding non-semiconductor operations and assets otherwise included
therein.
SCHEDULE TO COMPLIANCE CERTIFICATE
1.
C. Section 7.15: Leverage Ratio.
-----------------------------
1. Combined Adjusted Total Liabilities:
a. Total liabilities:
(excluding operating leases) $_____________
b. Certain off-balance sheet obligations: $_____________
c. Total liabilities (Lines C.1a + C.1b): $_____________
d. Permitted Subordinated Debt $_____________
e. Adjusted total liabilities
(line C.1c less line C.1d): $
=============
2. Line B.3 (Combined Tangible Net Worth): $_____________
3. Leverage Ratio (Line C.1e divided by
Line C.2): ___ to 1.00
Leverage Ratio not to exceed 1.0 to 1.0
D. Section 7.16: Maximum Indebtedness to Capitalization.
-----------------------------------------------------
1. Combined Indebtedness: $_____________
2. Capitalization:
a. Line D.1 (Combined Indebtedness) $_____________
b. Line B.3 (Combined Tangible Net Worth) $_____________
c. Capitalization (lines D.2a + D.2b) $
=============
3. 60% of Line D.2c $_____________
Line D.1 not to exceed Line D.3
E. Section 7.01(j): Purchase Money Liens.
---------------------------------------
1. Indebtedness secured by purchase money and
other security interests on combined U.S. net
property, plant and equipment: $_____________
2. Combined U.S. net property, plant and
equipment: $_____________
3. 25% of Line E.2: $_____________
SCHEDULE TO COMPLIANCE CERTIFICATE
2.
Line E.1 not to exceed Line E.3
4. Indebtedness secured by purchase money and
other security interests on combined total
U.S. property, plant and equipment $_____________
5. Combined total net property, plant and
equipment: $_____________
6. 30% of Line E.5 $_____________
Line E.4 not to exceed Line E.6
F. Sections 7.01(q), (r): Secured Permitted Swap Obligations; Ordinary
--------------------------------------------------------------------
Course Secured Indebtedness.
---------------------------
1. Permitted Swap Obligations secured by cash
collateral or government securities: $_____________
2. Ordinary course secured Indebtedness for
other than borrowed money: $_____________
3. Combined Tangible Assets: $_____________
a. Total assets:/2/ $_____________
b. Line B.2: $_____________
c. Line F.3a less Line F.3b: $
=============
4. 5% of Line F.3c: $_____________
Lines F.1 + F.2 not to exceed Line F.4
G. Sections 7.03(d), (f): Certain Dispositions.
--------------------------------------------
1. Aggregate Net Proceeds from all material
(greater than $1,000,000 individually)
assets sold outside ordinary course of
business since Original Closing Date: $_____________
2. Aggregate Net Proceeds of all material
(greater than $1,000,000 individually)
assets disposed of pursuant to sale-leaseback
transactions not constituting Permitted
Sale-Leaseback Transactions since Original
Closing Date: $_____________
__________________________
/2/ Excluding non-semiconductor operations and assets otherwise included
therein.
SCHEDULE TO COMPLIANCE CERTIFICATE
3.
3. Lines G.1 + G.2: $
============
Line G.3 not to exceed $200,000,000
4. Aggregate Net Proceeds of all Micron
Electronics, Inc. stock sold since Original
Closing Date: $____________
Line G.4 not to exceed $200,000,000
5. Lines G.3 + G.4 $____________
Line G.5 not to exceed $300,000,000 (unless
Commitment reductions and any related Loan
prepayments effected under Sections 2.05
and 2.06)
H. Section 7.05(d): Investments in Micron Electronics, Inc.
--------------------------------------------------------
1. Aggregate principal amount of all outstanding
extensions of credit to, plus cumulative
amount of all equity contributions made since
Original Closing Date in, Micron Electronics,
Inc: $____________
Line H.1 not to exceed $100,000,000
I. Section 7.05(g): Acquisitions or Minority Interests.
----------------------------------------------------
Cumulative aggregate consideration paid
(including assumption of debt), aggregate
principal amount of all outstanding extensions
of credit, plus cumulative amount of all equity
contributions made since Original Closing Date
(excluding TI Acquisition) in connection with: $____________
1. Acquisitions: $____________
2. Acquisitions of minority interests: $____________
3. Lines I.1 + I.2: $
============
4. 25% of Line F.3c (Combined Tangible Assets): $____________
Line I.3 not to exceed Line I.4
J. Section 7.05(p): Other Investments.
-----------------------------------
1. Cumulative aggregate consideration paid
(including assumption of debt), aggregate
principal amount of all
SCHEDULE TO COMPLIANCE CERTIFICATE
4.
outstanding extensions of credit,
plus cumulative amount of all equity
contributions made in non-Semiconductor
Operations Subsidiaries (other than Micron
Electronics, Inc.) since Original Closing
Date not otherwise permitted by
Section 7.05. $____________
2. 5% of Line F.3c (Combined Tangible Assets): $____________
Line J.1 not to exceed Line J.2
K. Section 7.06(h): Indebtedness Incurred from other than Company or
------------------------------------------------------------------
Semiconductor Operations Subsidiaries.
-------------------------------------
1. Indebtedness incurred by the Company or any
Semiconductor Operations Subsidiaries from
Persons other than Company or Semiconductor
Operations Subsidiaries: $____________
Line K.1 not to exceed $50,000,000
L. Sections 7.06(j) and 7.06(r): Permitted Subordinated Debt.
----------------------------------------------------------
1. TI Subordinated Debt of Company (and/or any
Indebtedness resulting from a refinancing
thereof) $____________
Line L.1 not to exceed $950,000,000
2. Other Permitted Subordinated Debt of Company: $____________
Line L.2 not to exceed $600,000,000
M. Section 7.06(q): Other Indebtedness and Contingent Obligations for Other
------------------------------------------------------------------------
Than Borrowed Money.
-------------------
1. Other Indebtedness and Contingent Obligations
other than for borrowed money: $____________
Line M.1 not to exceed $50,000,000
N. Section 7.09(d): Restricted Payments.
------------------------------------
1. Restricted Payments during Subject Period: $____________
2. Combined Net Income for four consecutive
quarters ending on date of above financial
statements: $____________
3. 25% of Line O.2 (Combined Net Income): $
============
SCHEDULE TO COMPLIANCE CERTIFICATE
5.
Line N.1 not to exceed Line N.3
O. Section 1.01: EBITDA.
---------------------
1. EBITDA for applicable period or periods
(as set forth in the Annex I) ("Subject
Period")
Subject Period ______________:
a. Combined Net Income or
Combined Net Loss: $____________
b. Interest expense:/3/ $____________
c. Income tax expense:/3/ $____________
d. Depreciation expense:/3/ $____________
e. Amortization expense:/3/ $____________
f. EBITDA (Lines O.1a + b +c + d + e): $
============
(Repeat O.1a-f as required by Annex I)
________________________
/3/ To the extent deducted in determining Combined Net Income or Combined
Net Loss.
SCHEDULE TO COMPLIANCE CERTIFICATE
6.
EXHIBIT E
---------
FORM OF GUARANTY
----------------
THIS GUARANTY (this "Guaranty"), dated as of September 1, 1998, is
--------
made by Micron Semiconductor Products, Inc., an Idaho corporation (the
"Guarantor"), in favor of the Banks party to the Credit Agreement referred to
----------
below and Bank of America National Trust and Savings Association, as agent for
itself and such Banks (in such capacity, the "Agent").
-----
RECITALS
--------
WHEREAS, Micron Technology, Inc., a Delaware corporation (the
"Company"), certain financial institutions as lenders (the "Banks") and the
------- -----
Agent are parties to a Second Amended and Restated Revolving Credit Agreement
among the Company, the Banks and the Agent dated as of September 1, 1998 (as
amended, modified, renewed or extended from time to time, the "Credit
------
Agreement");
WHEREAS, it is a condition precedent to the occurrence of the Closing
Date under the Credit Agreement that the Guarantor guarantee the indebtedness
and other obligations of the Company to the Agent and the Banks under or in
connection with the Credit Agreement as set forth herein; and
WHEREAS, the Guarantor, as a subsidiary of the Company, will derive
substantial direct and indirect benefits from the credit extensions to the
Company pursuant to the Credit Agreement and the amendments contemplated by the
Credit Agreement (which benefits are hereby acknowledged by the Guarantor).
NOW, THEREFORE, to induce the Banks to enter into the Credit Agreement
and in consideration thereof, the Guarantor hereby agrees as follows:
SECTION 1 Definitions; Interpretation.
---------------------------
(a) Terms Defined in Credit Agreement. All capitalized terms used in
---------------------------------
this Guaranty and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Guaranty, the following
---------------------
terms shall have the following meanings:
"Guaranteed Obligations" has the meaning set forth in Section 2.
----------------------
"Guarantor Documents" means this Guaranty, the Guarantor Security
-------------------
Agreement and all other certificates, documents, agreements and instruments
delivered to the Agent and the Banks under or in connection with this Guaranty.
FORM OF GUARANTY
E-1.
"Solvent" means, as to any Person at any time, that (a) the fair value
-------
of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
California Uniform Fraudulent Transfer Act; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured; (c) such Person is able to realize upon its property and
pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (d)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Debt" has the meaning set forth in Section 7.
-----------------
(c) Interpretation. The rules of interpretation set forth in Section
--------------
1.03 of the Credit Agreement shall be applicable to this Guaranty and are
incorporated herein by this reference.
SECTION 2 Guaranty.
--------
(a) Guaranty. The Guarantor hereby unconditionally and irrevocably
--------
guarantees to the Agent and the Banks, and their respective successors,
endorsees, transferees and assigns, the full and prompt payment when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise) and performance of the indebtedness, liabilities and other
obligations of the Company to the Agent and the Banks under or in connection
with the Credit Agreement, the Notes and the other Loan Documents, including all
unpaid principal of the Loans, all interest accrued thereon, all fees due under
the Credit Agreement and all other amounts payable by the Company to the Agent
and the Banks thereunder or in connection therewith. The terms "indebtedness,"
"liabilities" and "obligations" are used herein in their most comprehensive
sense and include any and all advances, debts, obligations and liabilities, now
existing or hereafter arising, whether voluntary or involuntary and whether due
or not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such indebtedness, liabilities and
obligations may be or hereafter become unenforceable or shall be an allowed or
disallowed claim under the Bankruptcy Code or other applicable law. The
foregoing indebtedness, liabilities and other obligations of the Company, and
all other indebtedness, liabilities and obligations to be paid or performed by
the Guarantor in connection with this Guaranty (including any and all amounts
due under Section 15), shall hereinafter be collectively referred to as the
"Guaranteed Obligations."
-----------------------
(b) Limitation of Guaranty. To the extent that any court of competent
----------------------
jurisdiction shall impose by final judgment under applicable law (including the
California Uniform Fraudulent Transfer Act and (S)(S)544 and 548 of the
Bankruptcy Code) any limitations on the amount of the Guarantor's liability with
respect to the Guaranteed Obligations which the Agent or the Banks can enforce
under this Guaranty, the Agent and the Banks by their acceptance hereof accept
such limitation on the amount of the Guarantor's liability hereunder to
FORM OF GUARANTY
E-2.
the extent needed to make this Guaranty and the Guarantor Documents fully
enforceable and nonavoidable.
SECTION 3 Liability of Guarantor. The liability of the Guarantor
----------------------
under this Guaranty shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
payment and performance in full of all Guaranteed Obligations. In furtherance
of the foregoing and without limiting the generality thereof, the Guarantor
agrees as follows:
(i) the Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of the Guarantor and shall not be contingent upon
the Agent's or any Bank's exercise or enforcement of any remedy it may have
against the Company or any other Person, or against any Collateral;
(ii) this Guaranty is a guaranty of payment when due and not merely of
collectibility;
(iii) the Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge the
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and
(iv) the Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and shall
not be impaired or affected by, nor shall the Guarantor be exonerated or
discharged by, any of the following events:
(A) any Insolvency Proceeding with respect to the Company, any
other guarantor or any other Person;
(B) any limitation, discharge, or cessation of the liability of
the Company, any other guarantor or any other Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity or
unenforceability in whole or in part of any of the Guaranteed Obligations or the
Loan Documents;
(C) any merger, acquisition, consolidation or change in structure
of the Company, the Guarantor or any other guarantor or Person, or any sale,
lease, transfer or other disposition of any or all of the assets or shares of
the Company, the Guarantor, any other guarantor or other Person;
(D) any assignment or other transfer, in whole or in part, of the
Agent's or any Bank's interests in and rights under this Guaranty or the other
Loan Documents, including the Agent's or any Bank's right to receive payment of
the Guaranteed Obligations, or any assignment or other transfer, in whole or in
part, of the Agent's or any Bank's interests in and to any of the Collateral;
(E) any claim, defense, counterclaim or setoff, other than that
of prior performance, that the Company, the Guarantor, any other guarantor or
other Person may have or assert, including any defense of incapacity or lack of
corporate or other authority to execute any of the Loan Documents;
FORM OF GUARANTY
E-3.
(F) the Agent's or any Bank's amendment, modification, renewal,
extension, cancellation or surrender of any Loan Document, any Collateral, or
the Agent's or any Bank's exchange, release, or waiver of any Collateral;
(G) the Agent's or any Bank's exercise or nonexercise of any
power, right or remedy with respect to any of the Collateral, including the
Agent's or any Bank's compromise, release, settlement or waiver with or of the
Company, any other guarantor or any other Person;
(H) the Agent's or any Bank's vote, claim, distribution,
election, acceptance, action or inaction in any Insolvency Proceeding related to
the Guaranteed Obligations;
(I) any impairment or invalidity of any of the Collateral or any
other collateral securing any of the Guaranteed Obligations or any failure to
perfect any of the Liens of the Agent and the Banks thereon or therein; and
(J) any other guaranty, whether by the Guarantor or any other
Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of the Company to the Agent or the
Banks.
SECTION 4 Consents of Guarantor. The Guarantor hereby
---------------------
unconditionally consents and agrees that, without notice to or further assent
from the Guarantor:
(i) the principal amount of the Guaranteed Obligations may be
increased or decreased and additional indebtedness or obligations of the Company
under the Loan Documents may be incurred, by one or more amendments,
modifications, renewals or extensions of any Loan Document or otherwise;
(ii) the time, manner, place or terms of any payment under any Loan
Document may be extended or changed, including by an increase or decrease in the
interest rate on any Guaranteed Obligation or any fee or other amount payable
under such Loan Document, by an amendment, modification or renewal of any Loan
Document or otherwise;
(iii) the time for the Company's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Loan Document may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as the Agent and the Banks may deem proper;
(iv) the Agent or the Banks may discharge or release, in whole or in
part, any other guarantor or any other Person liable for the payment and
performance of all or any part of the Guaranteed Obligations, and may permit or
consent to any such action or any result of such action, and shall not be
obligated to demand or enforce payment upon any of the Collateral or any other
collateral, nor shall the Agent or the Banks be liable to the Guarantor for any
failure to collect or enforce payment or performance of the Guaranteed
Obligations from any Person or to realize on the Collateral or other collateral
therefor;
FORM OF GUARANTY
E-4.
(v) in addition to the Collateral, the Agent and the Banks may take
and hold other security (legal or equitable) of any kind, at any time, as
collateral for the Guaranteed Obligations, and may, from time to time, in whole
or in part, exchange, sell, surrender, release, subordinate, modify, waive,
rescind, compromise or extend such security and may permit or consent to any
such action or the result of any such action, and may apply such security and
direct the order or manner of sale thereof;
(vi) the Agent and the Banks may request and accept other guaranties
of the Guaranteed Obligations and any other indebtedness, obligations or
liabilities of the Company to the Agent or the Banks and may, from time to time,
in whole or in part, surrender, release, subordinate, modify, waive, rescind,
compromise or extend any such guaranty and may permit or consent to any such
action or the result of any such action; and
(vii) the Agent and the Banks may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege (including
the right to accelerate the maturity of any Loan and any power of sale) granted
by any Loan Document or other security document or agreement, or otherwise
available to the Agent and the Banks, with respect to the Guaranteed Obligations
or any of the Collateral, even if the exercise of such right, remedy, power or
privilege affects or eliminates any right of subrogation or any other right of
the Guarantor against the Company;
all as the Agent and the Banks may deem advisable, and all without impairing,
abridging, releasing or affecting this Guaranty.
SECTION 5 Guarantor's Waivers.
-------------------
(a) Certain Waivers. The Guarantor waives and agrees not to assert:
---------------
(i) any right to require the Agent or any Bank to marshal assets in
favor of the Company, the Guarantor, any other guarantor or any other Person, to
proceed against the Company, any other guarantor or any other Person, to proceed
against or exhaust any of the Collateral, to give notice of the terms, time and
place of any public or private sale of personal property security constituting
the Collateral or other collateral for the Guaranteed Obligations or comply with
any other provisions of (S)9504 of the California UCC (or any equivalent
provision of any other applicable law) or to pursue any other right, remedy,
power or privilege of the Agent or any Bank whatsoever;
(ii) the defense of the statute of limitations in any action hereunder
or for the collection or performance of the Guaranteed Obligations;
(iii) any defense arising by reason of any lack of corporate or other
authority or any other defense of the Company, the Guarantor or any other
Person;
(iv) any defense based upon the Agent's or any Bank's errors or
omissions in the administration of the Guaranteed Obligations;
(v) any rights to set-offs and counterclaims;
FORM OF GUARANTY
E-5.
(vi) any defense based upon an election of remedies (including, if
available, an election to proceed by nonjudicial foreclosure) which destroys or
impairs the subrogation rights of the Guarantor or the right of the Guarantor to
proceed against the Company or any other obligor of the Guaranteed Obligations
for reimbursement; and
(vii) without limiting the generality of the foregoing, to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties, or which may conflict with the terms of this Guaranty,
including any and all benefits that otherwise might be available to the
Guarantor under California Civil Code (S)(S)1432, 2809, 2810, 2815, 2819, 2839,
2845, 2848, 2849, 2850, 2899 and 3433 and California Code of Civil Procedure
(S)(S)580a, 580b, 580d and 726, and any similar laws in any states in which any
real property Collateral is situated. Accordingly, the Guarantor waives all
rights and defenses that the Guarantor may have because the Company's debt is
secured by real property. This means, among other things: (A) the Agent and
the Banks may collect from the Guarantor without first foreclosing on any real
or personal property Collateral pledged by the Company; and (B) if the Agent
forecloses on any real property Collateral pledged by the Company: (1) the
amount of the debt may be reduced only by the price for which that Collateral is
sold at the foreclosure sale, even if the Collateral is worth more than the sale
price, and (2) the Agent and the Banks may collect from the Guarantor even if
the Agent, by foreclosing on the real property Collateral, has destroyed any
right the Guarantor may have to collect from the Company. This is an
unconditional and irrevocable waiver of any rights and defenses the Guarantor
may have because the Company's debt is secured by real property. These rights
and defenses include, but are not limited to, any rights of defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure
(b) Additional Waivers. The Guarantor waives any and all notice of
------------------
the acceptance of this Guaranty, and any and all notice of the creation,
renewal, modification, extension or accrual of the Guaranteed Obligations, or
the reliance by the Agent and the Banks upon this Guaranty, or the exercise of
any right, power or privilege hereunder. The Guaranteed Obligations shall
conclusively be deemed to have been created, contracted, incurred and permitted
to exist in reliance upon this Guaranty. The Guarantor waives promptness,
diligence, presentment, protest, demand for payment, notice of default, dishonor
or nonpayment and all other notices to or upon the Company, the Guarantor or any
other Person with respect to the Guaranteed Obligations.
(c) Independent Obligations. The obligations of the Guarantor
-----------------------
hereunder are independent of and separate from the obligations of the Company
and any other guarantor and upon the occurrence and during the continuance of
any Event of Default, a separate action or actions may be brought against the
Guarantor, whether or not the Company or any such other guarantor is joined
therein or a separate action or actions are brought against the Company or any
such other guarantor.
(d) Financial Condition of Company. The Guarantor shall not have any
------------------------------
right to require the Agent or the Banks to obtain or disclose any information
with respect to: (i) the financial condition or character of the Company or the
ability of the Company to pay and perform the Guaranteed Obligations; (ii) the
Guaranteed Obligations; (iii) the Collateral; (iv) the existence or nonexistence
of any other guarantees of all or any part of the Guaranteed
FORM OF GUARANTY
E-6.
Obligations; (v) any action or inaction on the part of the Agent or the Banks or
any other Person; or (vi) any other matter, fact or occurrence whatsoever.
SECTION 6 Subrogation. Until the Guaranteed Obligations shall be
-----------
satisfied in full and the Commitments shall be terminated, the Guarantor shall
not have, and shall not directly or indirectly exercise, (i) any rights that it
may acquire by way of subrogation under this Guaranty, by any payment hereunder
or otherwise, (ii) any rights of contribution, indemnification, reimbursement or
similar suretyship claims arising out of this Guaranty or (iii) any other right
which it might otherwise have or acquire (in any way whatsoever) which could
entitle it at any time to share or participate in any right, remedy or security
of the Banks or the Agent as against the Company or other guarantors, whether in
connection with this Guaranty, any of the other Loan Documents or otherwise. If
any amount shall be paid to the Guarantor on account of the foregoing rights at
any time when all the Guaranteed Obligations shall not have been paid in full,
such amount shall be held in trust for the benefit of the Agent and the Banks
and shall forthwith be paid to the Agent to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Loan Documents.
SECTION 7 Subordination.
-------------
(a) Subordination to Payment of Guaranteed Obligations. All payments
--------------------------------------------------
on account of all indebtedness, liabilities and other obligations of the Company
to the Guarantor, whether created under, arising out of or in connection with
any documents or instruments evidencing any credit extensions to Company or
otherwise, including all principal on any such credit extensions, all interest
accrued thereon, all fees and all other amounts payable by the Company to the
Guarantor in connection therewith, whether now existing or hereafter arising,
and whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined (the "Subordinated Debt") shall be
-----------------
subject, subordinate and junior in right of payment and exercise of remedies, to
the extent and in the manner set forth herein, to the prior payment in full in
cash or cash equivalents of the Guaranteed Obligations.
(b) No Payments. As long as any of the Guaranteed Obligations shall
-----------
remain outstanding and unpaid, the Guarantor shall not accept or receive any
payment or distribution by or on behalf of the Company, directly or indirectly,
of assets of the Company of any kind or character, whether in cash, property or
securities, including on account of the purchase, redemption or other
acquisition of Subordinated Debt, as a result of any collection, sale or other
disposition of collateral, or by setoff, exchange or in any other manner, for or
on account of the Subordinated Debt ("Subordinated Debt Payments"), except that
--------------------------
if no Event of Default exists and no notice described below has been received by
the Guarantor, the Guarantor shall be entitled to accept and receive regularly
scheduled payments and other payments in the ordinary course on the Subordinated
Debt, in accordance with the terms of the documents and instruments governing
the Subordinated Debt and other Subordinated Debt Payments in respect of
Subordinated Debt not evidenced by documents or instruments (including in
respect of Dispositions), in each case to the extent permitted under Article VII
of the Credit Agreement. During the existence of an Event of Default (or if any
Event of Default would exist immediately after the making of a Subordinated Debt
Payment), and upon receipt by the Company of notice from the Agent or any Bank
of such Default, and until such Event of Default is cured or waived,
FORM OF GUARANTY
E-7.
the Company shall not make, accept or receive any Subordinated Debt Payment. In
the event that, notwithstanding the provisions of this Section 7, any
Subordinated Debt Payments shall be received in contravention of this Section 7
by the Guarantor before all Guaranteed Obligations are paid in full in cash or
cash equivalents, such Subordinated Debt Payments shall be held in trust for the
benefit of the Agent and the Banks and shall be paid over or delivered to the
Agent for application to the payment in full in cash or cash equivalents of all
Guaranteed Obligations remaining unpaid to the extent necessary to give effect
to this Section 7, after giving effect to any concurrent payments or
distributions to the Agent and the Banks in respect of the Guaranteed
Obligations.
(c) Subordination of Remedies. As long as any Guaranteed Obligations
-------------------------
shall remain outstanding and unpaid, the Guarantor shall not, without the prior
written consent of the Agent:
(i) accelerate or bring suit or institute any other actions or
proceedings to enforce its rights or interests under or in respect of the
Subordinated Debt;
(ii) exercise any rights under or with respect to (A) any guaranties
of the Subordinated Debt, or (B) any collateral held by it, including causing or
compelling the pledge or delivery of any collateral, any attachment of, levy
upon, execution against, foreclosure upon or the taking of other action against
or institution of other proceedings with respect to any collateral held by it,
notifying any account debtors of the Company or asserting any claim or interest
in any insurance with respect to any collateral, or attempt to do any of the
foregoing;
(iii) exercise any rights to set-offs and counterclaims in respect of
any indebtedness, liabilities or obligations of the Guarantor to the Company
against any of the Subordinated Debt; or
(iv) commence, or cause to be commenced, or join with any creditor
other than the Agent and the Banks in commencing, any Insolvency Proceeding.
(d) Subordination Upon Any Distribution of Assets of the Company. In
------------------------------------------------------------
the event of any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, upon any Insolvency
Proceeding with respect to or involving the Company, (i) all amounts owing on
account of the Guaranteed Obligations, including all interest accrued thereon at
the contract rate both before and after the initiation of any such proceeding,
whether or not an allowed claim in any such proceeding, shall first be paid in
full in cash, or payment provided for in cash or in cash equivalents, before any
Subordinated Debt Payment is made; and (ii) to the extent permitted by
applicable law, any Subordinated Debt Payment to which the Guarantor would be
entitled except for the provisions hereof, shall be paid or delivered by the
trustee in bankruptcy, receiver, assignee for the benefit of creditors or other
liquidating agent making such payment or distribution directly to the Agent (on
behalf of the Banks) for application to the payment of the Guaranteed
Obligations in accordance with clause (i), after giving effect to any concurrent
payment or distribution or provision therefor to the Agent or the Banks in
respect of such Guaranteed Obligations.
FORM OF GUARANTY
E-8.
(e) Authorization to Agent. If, while any Subordinated Debt is
----------------------
outstanding, any Insolvency Proceeding is commenced by or against the Company or
its property:
(i) the Agent, when so instructed by the Majority Banks, is hereby
irrevocably authorized and empowered (in the name of the Banks or in the name of
the Guarantor or otherwise), but shall have no obligation, to demand, xxx for,
collect and receive every payment or distribution in respect of the Subordinated
Debt and give acquittance therefor and to file claims and proofs of claim and
take such other action (including voting the Subordinated Debt) as it may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Agent and the Banks; and
(ii) the Guarantor shall promptly take such action as the Agent (on
instruction from the Majority Banks) may reasonably request (A) to collect the
Subordinated Debt for the account of the Banks and to file appropriate claims or
proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver
to the Agent, such powers of attorney, assignments and other instruments as it
may request to enable it to enforce any and all claims with respect to the
Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt
Payments.
SECTION 8 Continuing Guaranty; Reinstatement.
----------------------------------
(a) Continuing Guaranty. This Guaranty is a continuing guaranty and
-------------------
agreement of subordination and shall continue in effect and be binding upon the
Guarantor until termination of the Commitments and payment and performance in
full of the Guaranteed Obligations.
(b) Reinstatement. This Guaranty shall continue to be effective or
-------------
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of the Company (or receipt
of any proceeds of Collateral) shall be rescinded, invalidated, declared to be
fraudulent or preferential, set aside, voided or otherwise required to be repaid
to the Company, its estate, trustee, receiver or any other Person (including
under the Bankruptcy Code or other state or federal law), or must otherwise be
restored by the Agent or any Bank, whether as a result of Insolvency Proceedings
or otherwise. To the extent any payment is so rescinded, set aside, voided or
otherwise repaid or restored, the Guaranteed Obligations shall be revived in
full force and effect without reduction or discharge for such payment. All
losses, damages, costs and expenses that the Agent or the Banks may suffer or
incur as a result of any voided or otherwise set aside payments shall be
specifically covered by the indemnity in favor of the Banks and the Agent
contained in Section 16.
SECTION 9 Payments. The Guarantor hereby agrees, in furtherance of
--------
the foregoing provisions of this Guaranty and not in limitation of any other
right which the Agent or any Bank or any other Person may have against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under (S)362(a) of the Bankruptcy Code), the Guarantor shall forthwith pay,
or cause to be paid, in cash, to the Agent an amount equal to the amount of the
Guaranteed Obligations then due as
FORM OF GUARANTY
E-9.
aforesaid (including interest which, but for the filing of a petition in any
Insolvency Proceeding with respect to the Company, would have accrued on such
Guaranteed Obligations, whether or not a claim is allowed against the Company
for such interest in any such Insolvency Proceeding). The Guarantor shall make
each payment hereunder, unconditionally in full without set-off, counterclaim or
other defense, or deduction for any Taxes, on the day when due in Dollars and in
same day or immediately available funds, to the Agent at such office of the
Agent and to such account as are specified in the Credit Agreement. All such
payments shall be promptly applied from time to time by the Agent as provided in
the Credit Agreement.
SECTION 10 Representations and Warranties. The Guarantor represents
------------------------------
and warrants to the Agent and each Bank that:
(a) Organization and Powers. The Guarantor is a corporation duly
-----------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would have a Material Adverse Effect and has all requisite
power and authority to own its assets and carry on its business and, with
respect to the Guarantor, to execute, deliver and perform its obligations under
the Guarantor Documents.
(b) Authorization; No Conflict. The execution, delivery and
--------------------------
performance by the Guarantor of this Guaranty and any other Guarantor Documents
have been duly authorized by all necessary corporate action of the Guarantor,
and do not and will not: (i) contravene the terms of the Guarantor's
organization documents or (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
material Contractual Obligation to which the Guarantor is a party or any order,
injunction, writ or decree of any Governmental Authority to which the Guarantor
or its property is subject, or (iii) violate any Requirement of Law.
(c) Binding Obligation. This Guaranty and the other Guarantor
------------------
Documents constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(d) Governmental Consents. No authorization, consent, approval,
---------------------
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other Person, is required for the due
execution, delivery or performance by, or enforcement against, the Guarantor of
the Guarantor Documents.
(e) No Prior Assignment. The Guarantor has not previously assigned
-------------------
any interest in the Subordinated Debt or any collateral relating thereto, no
Person other than the Guarantor owns an interest in the Subordinated Debt or any
such collateral (whether as joint holders of the Subordinated Debt, participants
or otherwise), and the entire Subordinated Debt is owing only to the Guarantor.
(f) Solvency. Immediately prior to and after and giving effect to the
--------
incurrence of the Guarantor's obligations under this Guaranty the Guarantor will
be Solvent.
FORM OF GUARANTY
E-10.
(g) Consideration. The Guarantor has received at least "reasonably
-------------
equivalent value" (as such phrase is used in (S)548 of the Bankruptcy Code, in
(S)3439.04 of the California Uniform Fraudulent Transfer Act and in comparable
provisions of other applicable law) and more than sufficient consideration to
support its obligations hereunder in respect of the Guaranteed Obligations and
under any of the Collateral Documents to which it is a party.
(h) Independent Investigation. The Guarantor hereby acknowledges that
-------------------------
it has undertaken its own independent investigation of the financial condition
of the Company and all other matters pertaining to this Guaranty and further
acknowledges that it is not relying in any manner upon any representation or
statement of the Agent or any Bank with respect thereto. The Guarantor
represents and warrants that it has received and reviewed copies of the Loan
Documents and that it is in a position to obtain, and it hereby assumes full
responsibility for obtaining, any additional information concerning the
financial condition of the Company and any other matters pertinent hereto that
the Guarantor may desire. The Guarantor is not relying upon or expecting the
Agent or any Bank to furnish to the Guarantor any information now or hereafter
in the Agent's or any such Bank's possession concerning the financial condition
of the Company or any other matter.
SECTION 11 Reporting Covenant. So long as any Guaranteed Obligations
------------------
shall remain unsatisfied or any Bank shall have any Commitment, the Guarantor
agrees that it shall furnish to the Agent such information respecting the
operations, properties, business or condition (financial or otherwise) of the
Guarantor or its Subsidiaries as the Agent, at the request of any Bank, may from
time to time reasonably request.
SECTION 12 Additional Covenants. So long as any Guaranteed
--------------------
Obligations shall remain unsatisfied or any Bank shall have any Commitment, the
Guarantor agrees that:
(a) Preservation of Existence, Etc. The Guarantor shall, and shall
------------------------------
cause each of its Subsidiaries to, maintain and preserve (i) its legal existence
and (ii) its rights to transact business and all other rights, franchises and
privileges necessary or desirable in the normal course of its business and
operations and the ownership of its properties, except in the case of this
clause (ii) where the non-preservation could not reasonably be expected to have
a Material Adverse Effect.
(b) Further Assurances and Additional Acts. The Guarantor shall
--------------------------------------
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and assurances
and perform such acts as the Agent or the Majority Banks shall deem reasonably
necessary or appropriate to effectuate the purposes of this Guaranty and the
other Guarantor Documents, and promptly provide the Agent with evidence of the
foregoing satisfactory in form and substance to the Agent and the Majority
Banks.
SECTION 13 Notices. All notices, requests or other communications
-------
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement. Notices to the Guarantor shall be sent or delivered to the
address set forth therein for the Company. All such notices, requested and
communications shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or transmitted in
legible form
FORM OF GUARANTY
E-11.
by facsimile machine, respectively, or if mailed, upon receipt by the addressee,
or if delivered, upon delivery.
SECTION 14 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
the Agent or any Bank to exercise, and no delay in exercising on the part of the
Agent or any Bank, any right, remedy, power or privilege hereunder or under any
other Guarantor Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
SECTION 15 Costs and Expenses; Indemnification.
-----------------------------------
(a) Costs and Expenses. The Guarantor shall:
------------------
(i) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent for all costs and expenses incurred by
it in connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Guaranty, any other Guaranty Document
and any other documents prepared in connection herewith or therewith and the
consummation of the transactions contemplated hereby and thereby; and
(ii) pay or reimburse the Agent, the Lead Arranger and each Bank for
all costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Guaranty or any other Guaranty Document during the existence
of an Event of Default or after acceleration of the Loans (including in
connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding).
(b) Indemnification. The Company shall indemnify, defend and hold the
---------------
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
-------------------
obligations, losses, damages, penalties, actions, judgments, suites, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or relating to the Collateral, whether or not any Indemnified Person
is a "Indemnified Liabilities"); provided that the Company shall have no
----------------------- --------
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting from the gross negligence or willful misconduct of such
Indemnified Person.
FORM OF GUARANTY
E-12.
(c) Defense. At the election of any Indemnified Person, the Guarantor
-------
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Guarantor.
(d) Interest. Any amounts payable to the Agent or any Bank under this
--------
Section 15 if not paid upon demand shall bear interest from the date of such
demand until paid in full, at the rate of interest set forth in Section 2.08 of
the Credit Agreement.
(e) Survival. The agreements in this Section shall survive payment of
--------
all other Secured Obligations.
SECTION 16 Right of Set-Off. In addition to any rights and remedies
----------------
of the Banks provided by law, if an Event of Default exists or the Loans have
been accelerated, each Bank is hereby authorized at any time and from time to
time, upon obtaining the prior written consent of the Agent, and without notice
to the Guarantor (any such notice being expressly waived by the Guarantor), to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Guarantor against any
and all of the obligations of the Guarantor now or hereafter existing under this
Guaranty, irrespective of whether or not such Bank shall have made any demand
upon the Company or the Guarantor under the Loan Documents and although such
obligations may be contingent and unmatured. Each Bank shall promptly notify
the Guarantor (through the Agent) after any such set-off and application made by
it; provided, however, that the failure to give such notice shall not affect the
-------- -------
validity of such setoff and application. The rights of the Banks under this
Section 16 are in addition to other rights and remedies (including other rights
of set-off) which the Banks may have.
SECTION 17 Marshalling; Payments Set Aside. Neither the Agent nor
-------------------------------
the Banks shall be under any obligation to marshal any assets in favor of the
Guarantor or any other Person or against or in payment of any or all of the
Guaranteed Obligations. To the extent that the Guarantor makes a payment to the
Agent or the Banks, or the Agent or the Banks exercise their right of set-off,
and such payment or the proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Agent or
such Bank in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any Insolvency Proceeding or otherwise, then (a) to
the extent of such recovery the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such set-off had not occurred, and (b) each
Bank severally agrees to pay to the Agent upon demand its pro rata share of any
amount so recovered from or repaid by the Agent.
SECTION 18 Benefits of Guaranty. This Guaranty is entered into for
--------------------
the sole protection and benefit of the Agent and each Bank and its successors
and assigns, and no other Person (other than any Indemnified Person specified
herein) shall be a direct or indirect beneficiary of, or shall have any direct
or indirect cause of action or claim in connection with, this Guaranty. The
Agent and the Banks, by their acceptance of this Guaranty, shall not have any
obligations under this Guaranty to any Person other than the Guarantor, and such
obligations shall be limited to those expressly stated herein.
FORM OF GUARANTY
E-13.
SECTION 19 Binding Effect; Assignment.
--------------------------
(a) Successors and Assigns. The provisions of this Guaranty shall be
----------------------
binding upon and insure to the benefit of the parties hereto and their
respective successors and assigns.
(b) Assignment. The Guarantor shall not have the right to assign or
----------
transfer its rights and obligations hereunder or under any other Guarantor
Documents without the prior written consent of the Majority Banks. Each Bank
may, without notice to or consent by the Guarantor, sell, assign, transfer or
grant participations in all or any portion of such Bank's rights and obligations
hereunder and under the other Guarantor Documents in connection with any sale,
assignment, transfer or grant of a participation by such Bank in accordance with
Section 10.08 of the Credit Agreement of or in its rights and obligations
thereunder and under the other Loan Documents. The Guarantor agrees that in
connection with any such sale, assignment, transfer or grant by any Bank, such
Bank may deliver to the prospective participant or assignee financial statements
and other relevant information relating to the Guarantor and its Subsidiaries.
SECTION 20 Governing Law and Jurisdiction.
------------------------------
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE BANKS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER GUARANTOR DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND
THE GUARANTOR HEREBY CONSENTS, AND BY ACCEPTANCE OF THIS GUARANTY, EACH OF THE
AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE COMPANY IRREVOCABLY WAIVES, AND
EACH OF THE AGENT AND THE BANKS BY ITS ACCEPTANCE HEREOF IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
GUARANTY OR ANY GUARANTOR DOCUMENT. THE COMPANY WAIVES, AND EACH OF THE AGENT
AND THE BANKS BY ITS ACCEPTANCE HEREOF WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
CALIFORNIA LAW.
SECTION 21 Waiver of Jury Trial. THE GUARANTOR HEREBY AGREES TO
--------------------
WAIVE, AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE HEREOF HEREBY AGREE TO
WAIVE, THEIR RESPECTIVE RIGHTS TO A TRAIL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, THE OTHER
GUARANTOR DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
FORM OF GUARANTY
E-14.
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE GUARANTOR HEREBY AGREES, AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE
HEREOF HEREBY AGREE, THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT IN ANY WAY LIMITING THE FOREGOING, THE
GUARANTOR FURTHER AGREES, AND THE AGENT AND THE BANKS BY THEIR ACCEPTANCE HEREOF
FURTHER AGREE, THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS GUARANTY OR THE OTHER GUARANTOR DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY AND THE OTHER GUARANTOR DOCUMENTS.
SECTION 22 Entire Agreement; Amendments. This Guaranty, together
----------------------------
with the other Guaranty Documents, embodies the entire agreement of the
Guarantor with respect to the matters set forth herein, and supersedes all prior
or contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof and shall not be
amended except by written agreement of the Guarantor, the Agent and the Majority
Banks.
SECTION 23 Severability. The illegality or unenforceability of any
------------
provision of this Guaranty or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Guaranty or any instrument or agreement required
hereunder.
SECTION 24 Amendment and Restatement of Existing Guaranty. From and
----------------------------------------------
after the Closing Date, this Guaranty amends and restates the existing Guaranty
of the Guarantor dated as of June 16, 1998.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty, as of
the date first above written.
MICRON SEMICONDUCTOR
PRODUCTS, INC.
By: __________________________
Title:
FORM OF GUARANTY
E-15.
EXHIBIT F
---------
FORM OF COMPANY SECURITY AGREEMENT
----------------------------------
THIS SECURITY AGREEMENT (this "Agreement"), dated as of September 1,
---------
1998, is made between Micron Technology, Inc., a Delaware corporation (the
"Company"), and Bank of America National Trust and Savings Association, as agent
--------
for itself and the Banks referred to below (in such capacity, the "Agent").
-----
RECITALS
--------
WHEREAS, the Company, certain financial institutions as lenders (the
"Banks") and the Agent are parties to a Second Amended and Restated Revolving
------
Credit Agreement dated as of September 1, 1998 among the Company, the Banks and
the Agent (as amended, modified, renewed or extended from time to time, the
"Credit Agreement"); and
-----------------
WHEREAS, it is a condition precedent to the occurrence of the Closing
Date under the Credit Agreement that the Company enter into this Agreement and
grant to the Agent, for itself and for the ratable benefit of the Banks, the
security interests hereinafter provided to secure the obligations of the Company
described below.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
---------------------------
(a) Terms Defined in Credit Agreement. All capitalized terms used in
---------------------------------
this Agreement and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the following
---------------------
terms shall have the following meanings:
"Accounts" means any and all accounts receivable owed to the Company,
--------
whether now existing or hereafter acquired or arising, arising out of or in
connection with the sale or lease of merchandise, goods or commodities or the
rendering of services or arising from any other transaction, however evidenced,
and whether or not earned by performance, all guaranties, indemnities and
security with respect to the foregoing, and all letters of credit relating
thereto, in each case whether now existing or hereafter acquired or arising.
"Books" means all books, records and other written, electronic or
-----
other documentation in whatever form maintained now or hereafter by or for the
Company in connection with the ownership of the Collateral or evidencing or
containing information relating to the Collateral, including: (i) ledgers; (ii)
records indicating, summarizing, or evidencing the Collateral), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and
output of
FORM OF COMPANY SECURITY AGREEMENT
F-1.
whatever kind; (vi) any other computer prepared or electronically stored,
collected or reported information and equipment of any kind; and (vii) any and
all other rights now or hereafter arising out of any contract or agreement
between the Company and any service bureau, computer or data processing company
or other Person charged with preparing or maintaining any of the Company's books
or records or with credit reporting, including with regard to the Company's
Accounts.
"Collateral" has the meaning set forth in Section 2.
----------
"Company Intellectual Property" means any Intellectual Property owned
-----------------------------
or held by the Company or in which the Company otherwise has any interest that
allows for transfer or sublicense to third parties, now existing or hereafter
acquired or arising, whether or not relating to or arising out of or existing in
connection with the Equipment.
"Documents" means any and all documents of title, bills of lading,
---------
dock warrants, dock receipts, warehouse receipts and other documents of the
Company relating to Collateral, whether or not negotiable, and includes all
other documents which purport to be issued by a bailee or agent and purport to
cover goods in any bailee's or agent's possession which are either identified or
are fungible portions of an identified mass, including such documents of title
made available to the Company for the purpose of ultimate sale or exchange of
goods or for the purpose of loading, unloading, storing, shipping,
transshipping, manufacturing, processing or otherwise dealing with goods in a
manner preliminary to their sale or exchange, in each case whether now existing
or hereafter acquired or arising.
"Equipment" means all now existing or hereafter acquired equipment of
---------
the Company in all of its forms, located at the Idaho Facility and the Utah
Facility, and including any and all machinery, furniture, equipment, furnishings
and fixtures in which the Company now or hereafter acquires any right, and all
other goods and tangible personal property (other than Inventory), including
tools, parts and supplies, automobiles, trucks, tractors and other vehicles,
computer and other electronic data processing equipment and other office
equipment, Vendor Intellectual Property, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.
"Excluded Collateral" means the Collateral set forth on Schedule 1.
------------------- ----------
"Financing Statements" has the meaning set forth in Section 3.
--------------------
"General Intangibles" means all general intangibles of the Company in
-------------------
any way relating to or arising out of or existing in connection with the
Accounts, Inventory and Equipment constituting Collateral, now existing or
hereafter acquired or arising and shall include Vendor Intellectual Property and
exclude Company Intellectual Property.
"Intellectual Property" means the following properties and assets:
---------------------
(i) all patents and patent applications, domestic or foreign and all reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, all licenses relating to any of the foregoing and all income and
royalties with respect to any licenses, all rights arising therefrom and
pertaining thereto (collectively, "Patents"); (ii) all copyrights and
-------
applications for copyright, domestic or
FORM OF COMPANY SECURITY AGREEMENT
F-2.
foreign, together with the underlying works of authorship (including titles),
and all rights of renewal and extension of copyright; (iii) all state (including
common law), federal and foreign trademarks, service marks and trade names, and
applications for registration of such trademarks, service marks and trade names,
all licenses relating to any of the foregoing and all income and royalties with
respect to any licenses, whether registered or unregistered and wherever
registered, and all rights arising therefrom and pertaining thereto and all
reissues, extensions and renewals thereof; (iv) all trade secrets, trade dress,
trade styles, logos, other source of business identifiers, mask-works, mask-work
registrations, mask-work applications, software, confidential information,
customer lists, license rights, advertising materials, operating manuals,
methods, processes, know-how, algorithms, formulae, databases, quality control
procedures, product, service and technical specifications, operating, production
and quality control manuals, sales literature, drawings, specifications, blue
prints, descriptions, inventions, name plates and catalogs; and (v) the entire
goodwill of or associated with the businesses now or hereafter conducted by the
Company connected with and symbolized by any of the aforementioned properties
and assets.
"Inventory" means any and all of the Company's inventory in all of its
---------
forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in the Company's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies and other materials used or usable in connection
with the manufacture, production, packing, shipping, advertising, selling or
furnishing of such goods; and all other items hereafter acquired by the Company
by way of substitution, replacement, return, repossession or otherwise, and all
additions and accessions thereto, and any Document representing or relating to
any of the foregoing at any time.
"Proceeds" means whatever is receivable or received from or upon the
--------
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of the Company,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of the
Company from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to the Company from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of governmental authority), any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral or for or on account of any damage or injury to or
conversion of any Collateral by any Person, any and all other tangible or
intangible property received upon the sale or disposition of Collateral, and all
proceeds of proceeds.
"Rights to Payment" means all Accounts and any and all rights and
-----------------
claims to the payment or receipt of money or other forms of consideration of any
kind in, to and under all Documents, General Intangibles and Proceeds.
FORM OF COMPANY SECURITY AGREEMENT
F-3.
"Secured Obligations" means the indebtedness, liabilities and other
-------------------
obligations of the Company to the Agent and the Banks under or in connection
with the Credit Agreement and the Notes, including all unpaid principal of the
Loans, all interest accrued thereon, all fees due under the Credit Agreement and
all other amounts payable by the Company to the Agent and the Banks thereunder
or in connection therewith, whether now existing or hereafter arising, and
whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined.
"UCC" means the Uniform Commercial Code as the same may, from time to
---
time, be in effect in the State of California; provided, however, in the event
-------- -------
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of California, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
related to such provisions.
"Vendor Intellectual Property" means any Intellectual Property owned
----------------------------
by or originating with a vendor from whom Company purchased Equipment, where
such Intellectual Property (i) accompanied the sale of such Equipment to
Company, (ii) which Company utilized or accessed in the operation of such
Equipment, (iii) to which Company was licensed, either expressly or by
implication, and (iv) as to which Vendor placed no restrictions on transfer in
connection with the resale of Equipment.
(c) Terms Defined in UCC. Where applicable and except as otherwise
--------------------
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
(d) Interpretation. The rules of interpretation set forth in Section
--------------
1.03 of the Credit Agreement shall be applicable to this Agreement and are
incorporated herein by this reference.
SECTION 2 Security Interest.
-----------------
(a) Grant of Security Interest. As security for the payment and
--------------------------
performance of the Secured Obligations, the Company hereby pledges, assigns,
transfers, hypothecates and sets over to the Agent, for itself and on behalf of
and for the ratable benefit of the Banks, and hereby grants to the Agent, for
itself and on behalf of and for the ratable benefit of the Banks, a security
interest in all of the Company's right, title and interest in, to and under the
following property, wherever located and whether now existing or owned or
hereafter acquired or arising but excluding the Company's right, title and
interest in, to and under the Excluded Collateral (collectively, the
"Collateral"): (i) all Accounts; (ii) all Documents; (iii) all Equipment; (iv)
----------
all General Intangibles; (v) all Inventory; (vi) all Books; and (vii) all
products and Proceeds of any and all of the foregoing.
FORM OF COMPANY SECURITY AGREEMENT
F-4.
(b) Continuing Security Interest. The Company agrees that this
----------------------------
Agreement shall create a continuing security interest in the Collateral which
shall remain in effect until terminated in accordance with Section 22.
(c) Excluded General Intangibles. Notwithstanding the foregoing
----------------------------
provisions of this Section 2, the grant of a security interest as provided
herein shall not extend to, and the term "Collateral" shall not include, any
General Intangibles of the Company (whether owned or held as licensee or lessee,
or otherwise), to the extent that (i) such General Intangibles are not
assignable or capable of being encumbered as a matter of law or under the terms
of the license, lease or other agreement applicable thereto (but solely to the
extent that any such restriction shall be enforceable under applicable law),
without the consent of the licensor or lessor thereof or other applicable party
thereto and (ii) such consent has not been obtained; provided, however, that the
-------- -------
foregoing grant of security interest shall extend to, and the term "Collateral"
shall include, (A) any General Intangible which is an Account or a proceed of,
or otherwise related to the enforcement or collection of, any Account, or goods
which are the subject of any Account, (B) any and all proceeds of any General
Intangibles which are otherwise excluded to the extent that the assignment or
encumbrance of such proceeds is not so restricted, and (C) upon obtaining the
consent of any such licensor, lessor or other applicable party's consent with
respect to any such otherwise excluded General Intangibles, such General
Intangibles as well as any and all proceeds thereof that might have theretofore
have been excluded from such grant of a security interest and the term
"Collateral".
SECTION 3 Perfection Procedures. The Company shall execute and
---------------------
deliver at any time and from time to time after execution of this Agreement all
other or additional financing statements, continuation financing statements,
termination statements, security agreements, chattel mortgages, assignments,
patent, copyright and trademark collateral assignments, fixture filings,
warehouse receipts, documents of title, affidavits, reports, notices, schedules
of account, letters of authority and all other documents and instruments, in
form satisfactory to the Agent (the "Financing Statements"), and take all other
--------------------
action, as the Agent may request, to perfect and continue perfected, maintain
the priority of or provide notice of the Agent's security interest in the
Collateral and to accomplish the purposes of this Agreement. Without limiting
the generality of the foregoing, (i) on or prior to the Closing Date the Company
shall execute and deliver Financing Statements for filing in the Filing Offices,
and (ii) after the Closing Date the Company shall execute and deliver Financing
Statements for filing in the appropriate filing office or offices in any state
identified by the Company in a notice delivered to the Agent pursuant to Section
5(e).
SECTION 4 Representations and Warranties. In addition to the
------------------------------
representations and warranties of the Company set forth in the Credit Agreement,
which are incorporated herein by this reference, the Company represents and
warrants to each Bank and the Agent that:
(a) Location of Chief Executive Office and Collateral. The Company's
-------------------------------------------------
chief executive office and principal place of business is located at the address
set forth in Part 1 of Schedule 1.
----------
(b) Locations of Books. All locations where Books pertaining to the
------------------
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names
FORM OF COMPANY SECURITY AGREEMENT
F-5.
and addresses of all service bureaus, computer or data processing companies and
other Persons keeping any Books or collecting Rights to Payment for the Company,
are set forth in Part 2 of Schedule 1.
----------
(c) Trade Names and Trade Styles. All trade names and trade styles
----------------------------
under which the Company presently conducts its business operations are set forth
in Part 3 of Schedule 1.
----------
(d) Ownership of Collateral. The Company is, and, except as permitted
-----------------------
by Section 5(i), will continue to be, the sole and complete owner of the
Collateral (or, in the case of after-acquired Collateral, at the time the
Company acquires rights in such Collateral, will be the sole and complete owner
thereof), free from any Lien other than Permitted Liens.
(e) Enforceability; Priority of Security Interest. (i) This Agreement
---------------------------------------------
creates a security interest which is enforceable against the Collateral in which
the Company now has rights and will create a security interest which is
enforceable against the Collateral in which the Company hereafter acquires
rights at the time the Company acquires any such rights; and (ii) the Agent has
a perfected and first priority security interest in the Collateral covered by
the Financing Statements filed in the Filing Offices and any other Financing
Statements required hereunder, and will have a perfected security interest in
the Collateral, subject only to Permitted Liens, referred to in the Financing
Statements filed in the Filing Offices, and any other Financing Statements filed
hereunder, in which the Company hereafter acquires rights at the time the
Company acquires any such rights, in each case securing the payment and
performance of the Secured Obligations, and free from any Lien other than
Permitted Liens.
(f) Rights to Payment.
-----------------
(i) The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto, and are and
will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the extent
reflected by the Company's reserves for uncollectible Rights to Payment or to
the extent, if any, that such account debtors or other Persons may be entitled
to normal and ordinary course trade discounts, returns, adjustments and
allowances in accordance with Section 5(k) or otherwise occurring in the
ordinary course of business;
(ii) all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;
(iii) the Company has not assigned any of its rights under the Rights
to Payment except as provided in this Agreement or as set forth in the other
Loan Documents; and
(iv) all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment are true and correct in all material respects and in all material
respects what they purport to be.
FORM OF COMPANY SECURITY AGREEMENT
F-6.
SECTION 5 Covenants. In addition to the covenants of the Company set
---------
forth in the Credit Agreement, which are incorporated herein by this reference,
so long as any of the Secured Obligations remain unsatisfied or any Bank shall
have any Commitment, the Company agrees that:
(a) Defense of Collateral. The Company will appear in and defend any
---------------------
action, suit or proceeding which may affect to a material extent its title to,
or right or interest in, or the Agent's right or interest in, any material
portion of Collateral.
(b) Preservation of Collateral. The Company will do and perform all
--------------------------
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect any material Collateral.
(c) Compliance with Laws, Etc. The Company will comply with all laws,
-------------------------
regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral, except where the failure to do so could not reasonably be expected
to have a material adverse effect on the Collateral position of the Agent and
the Banks.
(d) Location of Books and Chief Executive Office. The Company will
--------------------------------------------
give at least 30 days' prior written notice to the Agent of (A) any changes in
any such location where Books pertaining to the Rights to Payment are kept,
including any change of name or address of any service bureau, computer or data
processing company or other Person preparing or maintaining Books or collecting
material Rights to Payment for the Company or (B) any change in the location of
the Company's chief executive office or principal place of business.
(e) Location of Collateral. If any Inventory of the Company shall be
----------------------
relocated to, or otherwise be located in, a state of the United States in which
a Financing Statement has not already been filed with respect to such Inventory,
and the aggregate value of such Inventory equals or exceeds $5,000,000 (as
determined by the Company using net book values as determined in accordance with
GAAP), the Company will give the Agent prompt notice thereof (and in any event
not later than one Business Day after becoming aware thereof).
(f) Change in Name, Identity or Structure. The Company will give at
-------------------------------------
least 30 days' prior written notice to the Agent of (i) any change in its name
and (ii) any changes in its identity or structure in any manner which might make
any Financing Statement filed hereunder incorrect or misleading.
(g) Maintenance of Records. The Company will keep Books with respect
----------------------
to the Collateral which are accurate in all material respects.
(h) Invoicing of Sales. The Company will invoice all of its sales and
------------------
maintain proof of delivery and customer acceptance of goods in accordance with
past practices.
(i) Liens. The Company will keep the Collateral free of all Liens
-----
except Permitted Liens.
FORM OF COMPANY SECURITY AGREEMENT
F-7.
(j) Expenses. The Company will pay all expenses of protecting,
--------
storing, warehousing, insuring, handling and shipping the Collateral.
(k) Rights to Payment. The Company will:
-----------------
(i) with such frequency as the Agent may require upon the occurrence
and during the continuance of an Event of Default or after any acceleration of
the Secured Obligations (but in no event more than once during any calendar
month), furnish to the Agent full and complete reports, in form and substance
reasonably satisfactory to the Agent, with respect to the Accounts, including
information as to concentration, aging, identity of account debtors, letters of
credit securing Accounts, disputed Accounts and other matters, as the Agent
shall reasonably request;
(ii) give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the ordinary course of business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment, and during the existence of an Event of Default, take all such
action to such end as may from time to time be reasonably requested by the
Agent, except that the Company may grant any extension of the time for payment
or enter into any agreement to make a rebate or otherwise to reduce the amount
owing on or with respect to, or compromise or settle for less than the full
amount thereof, any Account or other Right to Payment, in the ordinary course of
business, according to normal trade practices;
(iii) if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of the Company, any dispute, setoff, claim, counterclaim
or defense exists with respect to an Account or other Right to Payment, disclose
such fact in the Books relating to such Account or other Right to Payment;
(iv) to the extent required in accordance with its sound business
judgment perform and comply in all material respects with its obligations in
respect of the Accounts and other Rights to Payment;
(v) upon the request of the Agent at any time that Loans are
outstanding (A) upon the occurrence and during the continuance of an Event of
Default, notify all or any designated portion of the account debtors and other
obligors on the Rights to Payment of the security interest hereunder, and (B)
upon the occurrence and during the continuance of an Event of Default, notify
the account debtors and other obligors on the Rights to Payment or any
designated portion thereof that payment shall be made directly to the Agent or
to such other Person or location as the Agent shall specify; and
(vi) upon the occurrence and during the continuance of any Event of
Default, upon the request of Agent, at any time that Loans are outstanding,
establish such lockbox or similar arrangements for the payment of the Accounts
and other Rights to Payment as the Agent shall require.
(l) Instruments, Etc. Upon the request of the Agent, the Company will
----------------
(i) immediately deliver to the Agent, or an agent designated by it,
appropriately endorsed or accompanied by appropriate instruments of transfer or
assignment, Documents, all letters of credit relating to the Collateral, and all
Rights to Payment at any time evidenced by promissory
FORM OF COMPANY SECURITY AGREEMENT
F-8.
notes, trade acceptances or other instruments, (ii) xxxx all Documents with such
legends as the Agent shall reasonably specify, and (iii) obtain consents from
any letter of credit issuers with respect to the assignment to the Agent of any
Letter of Credit Proceeds.
(m) Inventory. The Company will:
---------
(i) at such times as the Agent shall request, prepare and deliver to
the Agent a report of all Inventory, in form and substance reasonably
satisfactory to the Agent; and
(ii) upon the reasonable request of the Agent, take a physical
listing of the Inventory (including specification of all locations thereof) and
promptly deliver a copy of such physical listing to the Agent.
(n) Notices, Reports and Information. The Company will (i) notify the
--------------------------------
Agent of any other modifications of or additions to the information contained in
Schedule 1; (ii) notify the Agent of any material claim made or asserted against
----------
the Collateral by any Person or other event other than market changes which
could materially adversely affect the value of the Collateral or the Agent's
Lien thereon; (iii) furnish to the Agent such statements and schedules further
identifying and describing the Collateral and such other reports and other
information in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail; and (iv) upon the reasonable request of the
Agent make such demands and requests for information and reports as the Company
is entitled to make in respect of the Collateral.
(o) [reserved]
(p) Insurance. All insurance maintained by the Company, as required
---------
under Section 6.06 of the Credit Agreement, with respect to Collateral as well
as all "Property" referred to in the Deeds of Trust shall name the Agent as loss
payee/mortgagee and/or as additional insured, for the benefit of the Banks, as
their interests may appear. Upon request of the Agent or any Bank, the Company
shall furnish the Agent, with sufficient copies for each Bank, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Company (and, if requested by the Agent, any
insurance broker of the Company) setting forth the nature and extent of all
insurance maintained by the Company and its Subsidiaries in accordance with this
Section or any other Collateral Documents. Additionally, the Company shall also
furnish to the Agent at least once in each calendar year a certificate of the
Company's insurance broker or other insurance specialist stating that all
premiums then due on the policies relating to such insurance required hereunder
and under the other Collateral Documents have been paid and that such policies
are in full force and effect. All insurance policies required under this
subsection shall provide that they shall not be terminated or cancelled nor
shall any such policy be materially changed without at least 30 days' prior
written notice to the Company and the Agent. Receipt of notice of termination
or cancellation of any such insurance policies or material reduction of
coverages or amounts thereunder shall entitle the Agent to renew any such
policies, cause the coverages and amounts thereof to be maintained at levels
required pursuant to the first sentence of this subsection or otherwise to
obtain similar insurance in place of such policies, in each case at the expense
of the Company.
SECTION 6 Rights to Payment.
-----------------
FORM OF COMPANY SECURITY AGREEMENT
F-9.
(a) Collection of Rights to Payment. Until the Agent exercises its
-------------------------------
rights hereunder to collect Rights to Payment, the Company shall endeavor in the
first instance diligently to collect all amounts due or to become due on or with
respect to the Rights to Payment unless in its reasonable business judgment it
decides not to collect a Right to Payment. At the request of the Agent, upon
and after the occurrence and during the continuance of any Event of Default if
Loans are outstanding, all remittances received by the Company shall be held in
trust for the Agent and, in accordance with the Agent's instructions, remitted
to the Agent or deposited to an account with the Agent in the form received
(with any necessary endorsements or instruments of assignment or transfer).
SECTION 7 Authorization; Agent Appointed Attorney-in-Fact. The Agent
-----------------------------------------------
shall have the right to, in the name of the Company, or in the name of the Agent
or otherwise, without notice to or assent by the Company, and the Company hereby
constitutes and appoints the Agent (and any of the Agent's officers or employees
or agents designated by the Agent) as the Company's true and lawful attorney-in-
fact, with full power and authority to:
(i) if the Company fails to do so promptly, sign any of the Financing
Statements which must be executed or filed to perfect or continue perfected,
maintain the priority of or provide notice of the Agent's security interest in
the Collateral;
(ii) take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;
(iii) sign and endorse any invoice or xxxx of lading relating to any
of the Collateral, warehouse or storage receipts, drafts against customers or
other obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;
(iv) send requests for verification of Rights to Payment to the
customers or other obligors of the Company;
(v) contact, or direct the Company to contact, all account debtors
and other obligors on the Rights to Payment and instruct such account debtors
and other obligors to make all payments directly to the Agent;
(vi) assert, adjust, xxx for, compromise or release any claims under
any policies of insurance;
(vii) notify each Person maintaining lockbox or similar arrangements
for the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Agent;
(viii) ask, demand, collect, receive and give acquittances and
receipts for any and all Rights to Payment, enforce payment or any other rights
in respect of the Rights to Payment and other Collateral, grant consents, agree
to any amendments, modifications or waivers of the agreements and documents
governing the Rights to Payment and other Collateral, and otherwise file any
claims, take any action or institute, defend, settle or adjust any actions,
suits or proceedings with respect to the Collateral, as the Agent may deem
necessary or desirable to
FORM OF COMPANY SECURITY AGREEMENT
F-10.
maintain, preserve and protect the Collateral, to collect the Collateral or to
enforce the rights of the Agent with respect to the Collateral;
(ix) execute any and all applications, documents, papers and
instruments necessary for the Agent to use the Intellectual Property and grant
or issue any exclusive or non-exclusive license or sublicense with respect to
any Intellectual Property in connection with the exercise of the Agent's rights
and remedies under Section 10;
(x) execute any and all endorsements, assignments or other documents
and instruments necessary to sell, lease, assign, convey or otherwise transfer
title in or dispose of the Collateral; and
(xi) execute any and all such other documents and instruments, and do
any and all acts and things for and on behalf of the Company, which the Agent
may deem necessary or advisable to (A) realize upon the Collateral, and (B)
maintain, protect, and preserve the Collateral and the Agent's security interest
therein and to accomplish the purposes of this Agreement.
The Agent agrees that, except upon and after the occurrence and during the
continuance of an Event of Default and while Loans are outstanding, it shall not
exercise the power of attorney, or any rights granted to the Agent, pursuant to
clauses (ii) through (x) and (xi)(A). The foregoing power of attorney is
coupled with an interest and irrevocable so long as the Banks have any
Commitments or the Secured Obligations have not been paid and performed in full.
The Company hereby ratifies, to the extent permitted by law, all that the Agent
shall lawfully and in good faith do or cause to be done by virtue of and in
compliance with this Section 7.
SECTION 8 Agent Performance of Company Obligations. If the Company
----------------------------------------
fails to do so promptly after notice, the Agent may perform or pay any
obligation which the Company has agreed to perform or pay under or in connection
with this Agreement, and the Company shall reimburse the Agent on demand for any
amounts paid by the Agent pursuant to this Section 8.
SECTION 9 Agent's Duties. Notwithstanding any provision contained in
--------------
this Agreement, the Agent shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to the Company
or any other Person for any failure to do so or delay in doing so. Beyond the
exercise of reasonable care to assure the safe custody of Collateral in the
Agent's possession and the accounting for moneys actually received by the Agent
hereunder, the Agent shall have no duty or liability to exercise or preserve any
rights, privileges or powers pertaining to the Collateral.
SECTION 10 Remedies.
--------
(a) Remedies. Upon the occurrence and during the continuance of an
--------
Event of Default and acceleration of the Secured Obligations under Section 8.02
of the Credit Agreement, the Agent shall have, in addition to all other rights
and remedies granted to it in this Agreement, the Credit Agreement or any other
Loan Document, all rights and remedies of a secured party under the UCC and
other applicable laws. Without limiting the generality of the foregoing, the
Company agrees that upon the occurrence and during the continuance of an Event
of Default and acceleration of the Secured Obligations under Section 8.02 of the
Credit
FORM OF COMPANY SECURITY AGREEMENT
F-11.
Agreement the Agent may exercise the following rights and remedies, in
accordance with the direction or consent of the Majority Banks:
(i) The Agent may peaceably and without notice enter any premises of
the Company, and using reasonable care, take possession of any Collateral,
remove or dispose of all or part of the Collateral on any premises of the
Company or elsewhere, or, in the case of Equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or xxx for all or any part of the Collateral, as the Agent
may determine.
(ii) The Agent may require the Company to assemble all or any part of
the Collateral and make it available to the Agent, at any place and time
designated by the Agent.
(iii) The Agent may secure the appointment of a receiver of the
Collateral or any part thereof (to the extent and in the manner provided by
applicable law).
(iv) The Agent may sell, resell, lease, use, assign, transfer or
otherwise dispose of any or all of the Collateral in its then condition or
following any commercially reasonable preparation or processing (utilizing in
connection therewith any of the Company's assets, without charge or liability to
the Agent therefor, except that Company Intellectual Property may only be used
as provided in Subsection (b)) at public or private sale, by one or more
contracts, in one or more parcels, at the same or different times, for cash or
credit or for future delivery without assumption of any credit risk, all as the
Agent deems advisable; provided, however, that the Company shall be credited
-------- -------
with the net proceeds of sale only when such proceeds are finally collected by
the Agent. The Agent and each of the Banks shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption, which right or equity of redemption the Company hereby
releases, to the extent permitted by law. The Company hereby agrees that the
sending of notice by ordinary mail, postage prepaid, to the address of the
Company set forth in the Credit Agreement, of the place and time of any public
sale or of the time after which any private sale or other intended disposition
is to be made, shall be deemed reasonable notice thereof if such notice is sent
ten days prior to the date of such sale or other disposition or the date on or
after which such sale or other disposition may occur, provided that the Agent
--------
may provide the Company shorter notice or no notice, to the extent permitted by
the UCC or other applicable law.
(b) License. Solely for the purpose of enabling the Agent to exercise
-------
its rights and remedies under this Section 10 or otherwise in connection with
the disposition of Inventory in accordance with this Agreement, the Company
hereby grants to the Agent an irrevocable, non-exclusive and assignable license
(exercisable without payment or royalty or other compensation to the Company) of
the Intellectual Property necessary to sell or otherwise dispose of Inventory,
provided that such license to use such Intellectual Property does not include
the right to manufacture Inventory.
(c) Application of Proceeds. The cash proceeds actually received from
-----------------------
the sale or other disposition or collection of Collateral, and any other amounts
received in respect of the Collateral the application of which is not otherwise
provided for herein, shall be applied as
FORM OF COMPANY SECURITY AGREEMENT
F-12.
provided in the Credit Agreement. Any surplus thereof which exists after payment
and performance in full of the Secured Obligations shall be promptly paid over
to the Company or otherwise disposed of in accordance with the UCC or other
applicable law. The Company shall remain liable to the Agent and the Banks for
any deficiency which exists after any sale or other disposition or collection of
Collateral.
SECTION 11 Certain Waivers. The Company waives, to the fullest
---------------
extent permitted by law, (i) any right of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Collateral or other collateral or security for the Secured
Obligations; (ii) any right to require the Agent or the Banks (A) to proceed
against any Person, (B) to exhaust any other collateral or security for any of
the Secured Obligations, (C) to pursue any remedy in the Agent's or any of the
Banks' power, or (D) to make or give any presentments, demands for performance,
notices of nonperformance, protests, notices of protests or notices of dishonor
in connection with any of the Collateral; and (iii) all claims, damages, and
demands against the Agent or the Banks arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Collateral,
other than any resulting from the gross negligence or willful misconduct of such
Person.
SECTION 12 Notices. All notices, requests or other communications
-------
hereunder shall be given in the manner and to the addresses specified in the
Credit Agreement. All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon receipt by the addressee, or if
delivered, upon delivery.
SECTION 13 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
SECTION 14 Costs and Expenses; Indemnification; Other Charges.
--------------------------------------------------
(a) Costs and Expenses. The Company shall:
------------------
(i) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent for all reasonable costs and expenses
incurred by it in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby; and
(ii) pay or reimburse the Agent, the Lead Arranger and each Bank for
all costs and expenses (including Attorney Costs) incurred by them in connection
FORM OF COMPANY SECURITY AGREEMENT
F-13.
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement during the existence of an Event of Default or
after acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
(b) Indemnification. The Company shall indemnify, defend and hold the
---------------
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
-------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or relating to the Collateral, whether or not any Indemnified Person
is a party thereto (all of the foregoing, collectively, the "Indemnified
-----------
Liabilities"); provided, that the Company shall have no obligation hereunder to
----------- --------
any Indemnified Person with respect to Indemnified Liabilities resulting from
the gross negligence or willful misconduct of such Indemnified Person.
(c) Other Charges. The Company agrees to indemnify the Agent and each
-------------
of the Banks against and hold each of them harmless from any and all present and
future stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.
(d) Interest. Any amounts payable to the Agent or any Bank under this
--------
Section 14 or otherwise under this Agreement if not paid upon demand shall bear
interest from the date of such demand until paid in full, at the rate of
interest set forth in Section 2.08(c) of the Credit Agreement.
(e) Survival. The agreements in this Section shall survive payment of
--------
all other Secured Obligations.
SECTION 15 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank.
SECTION 16 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR
PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN
RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN
CALIFORNIA.
SECTION 17 Entire Agreement; Amendment. This Agreement, together
---------------------------
with the other Loan Documents, embodies the entire agreement and understanding
among the
FORM OF COMPANY SECURITY AGREEMENT
F-14.
Company, the Banks and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof and shall not be amended except by the
written agreement of the parties as provided in the Credit Agreement.
SECTION 18 Severability. The illegality or unenforceability of any
------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
SECTION 19 Counterparts. This Agreement may be executed in any
------------
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Agent of a facsimile transmitted document
purportedly bearing the signature of a Bank of or the Company shall bind such
Bank or the Company, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Agent to receive the hard
copy executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Agent.
SECTION 20 Incorporation of Provisions of the Credit Agreement. To
---------------------------------------------------
the extent the Credit Agreement contains provisions of general applicability to
the Loan Documents, including any such provisions contained in Article X
thereof, such provisions are incorporated herein by this reference.
SECTION 21 No Inconsistent Requirements. The Company acknowledges
----------------------------
that this Agreement and the other Loan Documents may contain covenants and other
terms and provisions variously stated regarding the same or similar matters, and
agrees that all such covenants, terms and provisions are cumulative and all
shall be performed and satisfied in accordance with their respective terms.
SECTION 22 Termination. Upon the termination of the Commitments of
-----------
the Banks and payment and performance in full of all Secured Obligations, this
Agreement shall terminate and the Agent shall promptly execute and deliver to
the Company such documents and instruments reasonably requested by the Company
as shall be necessary to evidence termination of all security interests given by
the Company to the Agent hereunder; provided, however, that the obligations of
-------- -------
the Company under Section 14 shall survive such termination.
SECTION 23 Amendment and Restatement of Existing Security Agreement.
--------------------------------------------------------
From and after the Closing Date, this Agreement amends and restates the existing
Security Agreement dated as of June 16, 1998 between the Agent and the Company.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
FORM OF COMPANY SECURITY AGREEMENT
F-15.
THE COMPANY
-----------
MICRON TECHNOLOGY, INC.
By __________________________
Title:
THE AGENT
---------
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By __________________________
Title:
FORM OF COMPANY SECURITY AGREEMENT
F-16.
SCHEDULE 1
to the Security Agreement
1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
---------------------------------------------------------------------
COLLATERAL
----------
Chief Executive Office and Principal Place of Business:
0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000
2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT
--------------------------------------------------
0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000
3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES;
-------------------------------------------------------------------------
ETC.
---
FORM OF COMPANY SECURITY AGREEMENT
F-17.
EXHIBIT G
---------
FORM OF GUARANTOR SECURITY AGREEMENT
------------------------------------
THIS SECURITY AGREEMENT (this "Agreement"), dated as of September 1,
---------
1998, is made between Micron Semiconductor Products, Inc., an Idaho corporation
(the "Guarantor"), and Bank of America National Trust and Savings Association,
---------
as agent for itself and the Banks referred to below (in such capacity, the
"Agent").
------
RECITALS
--------
WHEREAS, Micron Technology, Inc. (the "Company"), certain financial
-------
institutions as lenders (the "Banks") and the Agent are parties to a Second
-----
Amended and Restated Revolving Credit Agreement dated as of September 1, 1998
among the Company, the Banks and the Agent (as amended, modified, renewed or
extended from time to time, the "Credit Agreement");
----------------
WHEREAS, to guarantee the indebtedness and other obligations of the
Company under the Credit Agreement, the Guarantor has made a Guaranty dated as
of the date hereof (as amended, modified, renewed or extended from time to time,
the "Guaranty") in favor of the Agent; and
--------
WHEREAS, it is a condition precedent to the occurrence of the Closing
Date under the Credit Agreement that the Guarantor enter into this Agreement and
grant to the Agent, for itself and for the ratable benefit of the Banks, the
security interests hereinafter provided to secure the obligations of the
Guarantor under the Guaranty described below.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
---------------------------
(a) Terms Defined in Credit Agreement. All capitalized terms used in
---------------------------------
this Agreement and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
(b) Certain Defined Terms. As used in this Agreement, the following
---------------------
terms shall have the following meanings:
"Accounts" means any and all accounts receivable owed to the
--------
Guarantor, whether now existing or hereafter acquired or arising, arising out of
or in connection with the sale or lease of merchandise, goods or commodities or
the rendering of services or arising from any other transaction, however
evidenced, and whether or not earned by performance, all guaranties, indemnities
and security with respect to the foregoing, and all letters of credit relating
thereto, in each case whether now existing or hereafter acquired or arising.
FORM OF GUARANTOR SECURITY AGREEMENT
G-1.
"Books" means all books, records and other written, electronic or
-----
other documentation in whatever form maintained now or hereafter by or for the
Guarantor in connection with the ownership of the Collateral or evidencing or
containing information relating to the Collateral, including: (i) ledgers; (ii)
records indicating, summarizing, or evidencing the Collateral), business
operations or financial condition; (iii) computer programs and software; (iv)
computer discs, tapes, files, manuals, spreadsheets; (v) computer printouts and
output of whatever kind; (vi) any other computer prepared or electronically
stored, collected or reported information and equipment of any kind; and (vii)
any and all other rights now or hereafter arising out of any contract or
agreement between the Guarantor and any service bureau, computer or data
processing company or other Person charged with preparing or maintaining any of
the Guarantor's books or records or with credit reporting, including with regard
to the Guarantor's Accounts.
"Collateral" has the meaning set forth in Section 2.
----------
"Documents" means any and all documents of title, bills of lading,
---------
dock warrants, dock receipts, warehouse receipts and other documents of the
Guarantor relating to Collateral, whether or not negotiable, and includes all
other documents which purport to be issued by a bailee or agent and purport to
cover goods in any bailee's or agent's possession which are either identified or
are fungible portions of an identified mass, including such documents of title
made available to the Guarantor for the purpose of ultimate sale or exchange of
goods or for the purpose of loading, unloading, storing, shipping,
transshipping, manufacturing, processing or otherwise dealing with goods in a
manner preliminary to their sale or exchange, in each case whether now existing
or hereafter acquired or arising.
"Equipment" means all now existing or hereafter acquired equipment of
---------
the Guarantor in all of its forms, located at the Idaho Facility and the Utah
Facility, and including any and all machinery, furniture, equipment, furnishings
and fixtures in which the Guarantor now or hereafter acquires any right, and all
other goods and tangible personal property (other than Inventory), including
tools, parts and supplies, automobiles, trucks, tractors and other vehicles,
computer and other electronic data processing equipment and other office
equipment, Vendor Intellectual Property, and all additions, substitutions,
replacements, parts, accessories, and accessions to and for the foregoing, now
owned or hereafter acquired, and including any of the foregoing which are or are
to become fixtures on real property.
"Excluded Collateral" means the Collateral set forth on Schedule 1.
------------------- ----------
"Financing Statements" has the meaning set forth in Section 3.
--------------------
"General Intangibles" means all general intangibles of the Guarantor
-------------------
in any way relating to or arising out of or existing in connection with the
Accounts, Inventory and Equipment constituting Collateral, now existing or
hereafter acquired or arising and shall include Vendor Intellectual Property and
exclude Guarantor Intellectual Property.
"Guarantor Documents" has the meaning set forth in the Guaranty.
-------------------
FORM OF GUARANTOR SECURITY AGREEMENT
G-2.
"Guarantor Intellectual Property" means any Intellectual Property
-------------------------------
owned or held by the Guarantor or in which the Guarantor otherwise has any
interest that allows for transfer or sublicense to third parties, now existing
or hereafter acquired or arising, whether or not relating to or arising out of
or existing in connection with the Equipment.
"Intellectual Property" means the following properties and assets:
---------------------
(i) all patents and patent applications, domestic or foreign, and all reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, all licenses relating to any of the foregoing and all income and
royalties with respect to any licenses, all rights arising therefrom and
pertaining thereto (collectively, "Patents"); (ii) all copyrights and
-------
applications for copyright, domestic or foreign, together with the underlying
works of authorship (including titles), and all rights of renewal and extension
of copyright; (iii) all state (including common law), federal and foreign
trademarks, service marks and trade names, and applications for registration of
such trademarks, service marks and trade names, all licenses relating to any of
the foregoing and all income and royalties with respect to any licenses, whether
registered or unregistered and wherever registered, and all rights arising
therefrom and pertaining thereto and all reissues, extensions and renewals
thereof; (iv) all trade secrets, trade dress, trade styles, logos, other source
of business identifiers, mask-works, mask-work registrations, mask-work
applications, software, confidential information, customer lists, license
rights, advertising materials, operating manuals, methods, processes, know-how,
algorithms, formulae, databases, quality control procedures, product, service
and technical specifications, operating, production and quality control manuals,
sales literature, drawings, specifications, blue prints, descriptions,
inventions, name plates and catalogs; and (v) the entire goodwill of or
associated with the businesses now or hereafter conducted by the Guarantor
connected with and symbolized by any of the aforementioned properties and
assets.
"Inventory" means any and all of the Guarantor's inventory in all of
---------
its forms, wherever located, whether now owned or hereafter acquired, and in any
event includes all goods (including goods in transit) which are held for sale,
lease or other disposition, including those held for display or demonstration or
out on lease or consignment or to be furnished under a contract of service, or
which are raw materials, work in process, finished goods or materials used or
consumed in the Guarantor's business, and the resulting product or mass, and all
repossessed, returned, rejected, reclaimed and replevied goods, together with
all parts, components, supplies and other materials used or usable in connection
with the manufacture, production, packing, shipping, advertising, selling or
furnishing of such goods; and all other items hereafter acquired by the
Guarantor by way of substitution, replacement, return, repossession or
otherwise, and all additions and accessions thereto, and any Document
representing or relating to any of the foregoing at any time.
"Proceeds" means whatever is receivable or received from or upon the
--------
sale, lease, license, collection, use, exchange or other disposition, whether
voluntary or involuntary, of any Collateral or other assets of the Guarantor,
including "proceeds" as defined at UCC Section 9306, any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to or for the account of the
Guarantor from time to time with respect to any of the Collateral, any and all
payments (in any form whatsoever) made or due and payable to the Guarantor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any
FORM OF GUARANTOR SECURITY AGREEMENT
G-3.
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral or for or on
account of any damage or injury to or conversion of any Collateral by any
Person, any and all other tangible or intangible property received upon the sale
or disposition of Collateral, and all proceeds of proceeds.
"Rights to Payment" means all Accounts and any and all rights and
-----------------
claims to the payment or receipt of money or other forms of consideration of any
kind in, to and under all Documents, General Intangibles and Proceeds.
"Secured Obligations" means the "Guaranteed Obligations" of the
-------------------
Guarantor as defined in the Guaranty.
"UCC" means the Uniform Commercial Code as the same may, from time to
---
time, be in effect in the State of California; provided, however, in the event
-------- -------
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of California, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
related to such provisions.
"Vendor Intellectual Property" means any Intellectual Property owned
----------------------------
by or originating with a vendor from whom Guarantor purchased Equipment, where
such Intellectual Property (i) accompanied the sale of such Equipment to
Guarantor, (ii) which Guarantor utilized or accessed in the operation of such
Equipment, (iii) to which Guarantor was licensed, either expressly or by
implication, and (iv) as to which Vendor placed no restrictions on transfer in
connection with the resale of Equipment.
(c) Terms Defined in UCC. Where applicable and except as otherwise
--------------------
defined herein, terms used in this Agreement shall have the meanings assigned to
them in the UCC.
(d) Interpretation. The rules of interpretation set forth in Section
--------------
1.03 of the Credit Agreement shall be applicable to this Agreement and are
incorporated herein by this reference.
SECTION 2 Security Interest.
-----------------
(a) Grant of Security Interest. As security for the payment and
--------------------------
performance of the Secured Obligations, the Guarantor hereby pledges, assigns,
transfers, hypothecates and sets over to the Agent, for itself and on behalf of
and for the ratable benefit of the Banks, and hereby grants to the Agent, for
itself and on behalf of and for the ratable benefit of the Banks, a security
interest in all of the Guarantor's right, title and interest in, to and under
the following property, wherever located and whether now existing or owned or
hereafter acquired or arising but excluding the Guarantor's right, title and
interest in, to and under the Excluded Collateral (collectively, the
"Collateral"): (i) all Accounts; (ii) all Documents; (iii) all Equipment; (iv)
----------
all
FORM OF GUARANTOR SECURITY AGREEMENT
G-4.
General Intangibles; (v) all Inventory; (vi) all Books; and (vii) all products
and Proceeds of any and all of the foregoing.
(b) Continuing Security Interest. The Guarantor agrees that this
----------------------------
Agreement shall create a continuing security interest in the Collateral which
shall remain in effect until terminated in accordance with Section 22.
(c) Excluded General Intangibles. Notwithstanding the foregoing
----------------------------
provisions of this Section 2, the grant of a security interest as provided
herein shall not extend to, and the term "Collateral" shall not include, any
General Intangibles of the Guarantor (whether owned or held as licensee or
lessee, or otherwise), to the extent that (i) such General Intangibles are not
assignable or capable of being encumbered as a matter of law or under the terms
of the license, lease or other agreement applicable thereto (but solely to the
extent that any such restriction shall be enforceable under applicable law),
without the consent of the licensor or lessor thereof or other applicable party
thereto and (ii) such consent has not been obtained; provided, however, that the
-------- -------
foregoing grant of security interest shall extend to, and the term "Collateral"
shall include, (A) any General Intangible which is an Account or a proceed of,
or otherwise related to the enforcement or collection of, any Account, or goods
which are the subject of any Account, (B) any and all proceeds of any General
Intangibles which are otherwise excluded to the extent that the assignment or
encumbrance of such proceeds is not so restricted, and (C) upon obtaining the
consent of any such licensor, lessor or other applicable party's consent with
respect to any such otherwise excluded General Intangibles, such General
Intangibles as well as any and all proceeds thereof that might have theretofore
have been excluded from such grant of a security interest and the term
"Collateral".
SECTION 3 Perfection Procedures. The Guarantor shall execute and
---------------------
deliver to the Agent at any time and from time to time after execution of this
Agreement all other or additional financing statements, continuation financing
statements, termination statements, security agreements, chattel mortgages,
assignments, patent, copyright and trademark collateral assignments, fixture
filings, warehouse receipts, documents of title, affidavits, reports, notices,
schedules of account, letters of authority and all other documents and
instruments, in form satisfactory to the Agent (the "Financing Statements"), and
--------------------
take all other action, as the Agent may request, to perfect and continue
perfected, maintain the priority of or provide notice of the Agent's security
interest in the Collateral and to accomplish the purposes of this Agreement.
Without limiting the generality of the foregoing, (i) on or prior to the Closing
Date the Guarantor shall execute and deliver Financing Statements for filing in
the Filing Offices, and (ii) after the Closing Date the Guarantor shall execute
and deliver Financing Statements for filing in the appropriate filing office or
offices in any state identified by the Guarantor in a notice delivered to the
Agent pursuant to Section 5(e).
SECTION 4 Representations and Warranties. In addition to the
------------------------------
representations and warranties of the Guarantor set forth in the Guaranty, which
are incorporated herein by this reference, the Guarantor represents and warrants
to each Bank and the Agent that:
FORM OF GUARANTOR SECURITY AGREEMENT
G-5.
(a) Location of Chief Executive Office and Collateral. The
-------------------------------------------------
Guarantor's chief executive office and principal place of business is located at
the address set forth in Part 1 of Schedule 1.
----------
(b) Locations of Books. All locations where Books pertaining to the
------------------
Rights to Payment are kept, including all equipment necessary for accessing such
Books and the names and addresses of all service bureaus, computer or data
processing companies and other Persons keeping any Books or collecting Rights to
Payment for the Guarantor, are set forth in Part 2 of Schedule 1.
----------
(c) Trade Names and Trade Styles. All trade names and trade styles
----------------------------
under which the Guarantor presently conducts its business operations are set
forth in Part 3 of Schedule 1.
----------
(d) Ownership of Collateral. The Guarantor is, and, except as
-----------------------
permitted by Section 5(i), will continue to be, the sole and complete owner of
the Collateral (or, in the case of after-acquired Collateral, at the time the
Guarantor acquires rights in such Collateral, will be the sole and complete
owner thereof), free from any Lien other than Permitted Liens.
(e) Enforceability; Priority of Security Interest. (i) This Agreement
---------------------------------------------
creates a security interest which is enforceable against the Collateral in which
the Guarantor now has rights and will create a security interest which is
enforceable against the Collateral in which the Guarantor hereafter acquires
rights at the time the Guarantor acquires any such rights; and (ii) the Agent
has a perfected and first priority security interest in the Collateral covered
by the Financing Statements filed in the Filing Offices and any other Financing
Statements required hereunder, and will have a perfected security interest in
the Collateral, subject only to Permitted Liens, referred to in the Financing
Statements filed in the Filing Offices, and any other Financing Statements
required hereunder, in which the Guarantor hereafter acquires rights at the time
the Guarantor acquires any such rights, in each case securing the payment and
performance of the Secured Obligations, and free from any Lien other than
Permitted Liens.
(f) Rights to Payment.
-----------------
(i) The Rights to Payment represent valid, binding and enforceable
obligations of the account debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto, and are and
will be genuine, free from Liens, and not subject to any adverse claims,
counterclaims, setoffs, defaults, disputes, defenses, discounts, retainages,
holdbacks or conditions precedent of any kind of character, except to the extent
reflected by the Guarantor's reserves for uncollectible Rights to Payment or to
the extent, if any, that such account debtors or other Persons may be entitled
to normal and ordinary course trade discounts, returns, adjustments and
allowances in accordance with Section 5(k) or otherwise occurring in the
ordinary course of business;
FORM OF GUARANTOR SECURITY AGREEMENT
G-6.
(ii) all Rights to Payment comply in all material respects with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable any federal or state consumer credit laws;
(iii) the Guarantor has not assigned any of its rights under the
Rights to Payment except as provided in this Agreement or as set forth in the
other Loan Documents; and
(iv) all statements made, all unpaid balances and all other
information in the Books and other documentation relating to the Rights to
Payment are true and correct in all material respects and in all material
respects what they purport to be.
SECTION 5 Covenants. In addition to the covenants of the Guarantor
---------
set forth in the Guaranty, which are incorporated herein by this reference, so
long as any of the Secured Obligations remain unsatisfied or any Bank shall have
any Commitment, the Guarantor agrees that:
(a) Defense of Collateral. The Guarantor will appear in and defend
---------------------
any action, suit or proceeding which may affect to a material extent its title
to, or right or interest in, or the Agent's right or interest in, any material
portion of Collateral.
(b) Preservation of Collateral. The Guarantor will do and perform all
--------------------------
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect any material Collateral.
(c) Compliance with Laws, Etc. The Guarantor will comply with all
-------------------------
laws, regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral, except where the failure to do so could not reasonably be expected
to have a material adverse effect on the Collateral position of the Agents and
the Banks.
(d) Location of Books and Chief Executive Office. The Guarantor will
--------------------------------------------
give at least 30 days' prior written notice to the Agent of (A) any changes in
any such location where Books pertaining to the Rights to Payment are kept,
including any change of name or address of any service bureau, computer or data
processing company or other Person preparing or maintaining Books or collecting
material Rights to Payment for the Guarantor or (B) any change in the location
of the Guarantor's chief executive office or principal place of business.
(e) Location of Collateral. If any Inventory of the Guarantor shall
----------------------
be relocated to, or otherwise be located in, a state of the United States in
which a Financing Statement has not already been filed with respect to such
Inventory, and the aggregate value of such Inventory equals or exceeds
$5,000,000 (as determined by the Guarantor using net book values as determined
in accordance with GAAP), the Company will give the Agent prompt notice thereof
(and in any event not later than one Business Day after becoming aware thereof).
(f) Change in Name, Identity or Structure. The Guarantor will give at
-------------------------------------
least 30 days' prior written notice to the Agent of (i) any change in its name
and (ii) any changes in its
FORM OF GUARANTOR SECURITY AGREEMENT
G-7.
identity or structure in any manner which might make any Financing Statement
filed hereunder incorrect or misleading.
(g) Maintenance of Records. The Guarantor will keep Books with
----------------------
respect to the Collateral which are accurate in all material respects.
(h) Invoicing of Sales. The Guarantor will invoice all of its sales
------------------
and maintain proof of delivery and customer acceptance of goods in accordance
with past practices.
(i) Liens. The Guarantor will keep the Collateral free of all Liens
-----
except Permitted Liens.
(j) Expenses. The Guarantor will pay all expenses of protecting,
--------
storing, warehousing, insuring, handling and shipping the Collateral.
(k) Rights to Payment. The Guarantor will:
-----------------
(i) with such frequency as the Agent may require upon the occurrence
and during the continuance of an Event of Default or after any acceleration of
the Secured Obligations (but in no event more than once during any calendar
month), furnish to the Agent full and complete reports, in form and substance
reasonably satisfactory to the Agent, with respect to the Accounts, including
information as to concentration, aging, identity of account debtors, letters of
credit securing Accounts, disputed Accounts and other matters, as the Agent
shall reasonably request;
(ii) give only normal discounts, allowances and credits as to
Accounts and other Rights to Payment, in the ordinary course of business,
according to normal trade practices, and enforce all Accounts and other Rights
to Payment, and during the existence of an Event of Default, take all such
action to such end as may from time to time be reasonably requested by the
Agent, except that the Guarantor may grant any extension of the time for payment
or enter into any agreement to make a rebate or otherwise to reduce the amount
owing on or with respect to, or compromise or settle for less than the full
amount thereof, any Account or other Right to Payment, in the ordinary course of
business, according to normal trade practices;
(iii) if any discount, allowance, credit, extension of time for
payment, agreement to make a rebate or otherwise to reduce the amount owing on,
or compromise or settle, an Account or other Right to Payment exists or occurs,
or if, to the knowledge of the Guarantor, any dispute, setoff, claim,
counterclaim or defense exists with respect to an Account or other Right to
Payment, disclose such fact in the Books relating to such Account or other Right
to Payment;
(iv) to the extent required in accordance with its sound business
judgment perform and comply in all material respects with its obligations in
respect of the Accounts and other Rights to Payment;
(v) upon the request of the Agent at any time that Loans are
outstanding (A) upon the occurrence and during the continuance of an Event of
Default, notify all or any designated portion of the account debtors and other
obligors on the Rights to Payment of the security interest hereunder, and (B)
upon the occurrence and during the continuance of an Event of
FORM OF GUARANTOR SECURITY AGREEMENT
G-8.
Default, notify the account debtors and other obligors on the Rights to Payment
or any designated portion thereof that payment shall be made directly to the
Agent or to such other Person or location as the Agent shall specify; and
(vi) upon the occurrence and during the continuance of any Event of
Default, upon the request of Agent, at any time that Loans are outstanding,
establish such lockbox or similar arrangements for the payment of the Accounts
and other Rights to Payment as the Agent shall require.
(l) Instruments, Etc. Upon the request of the Agent, the Guarantor
----------------
will (i) immediately deliver to the Agent, or an agent designated by it,
appropriately endorsed or accompanied by appropriate instruments of transfer or
assignment, Documents, all letters of credit relating to the Collateral, and all
Rights to Payment at any time evidenced by promissory notes, trade acceptances
or other instruments, (ii) xxxx all Documents with such legends as the Agent
shall reasonably specify, and (iii) obtain consents from any letter of credit
issuers with respect to the assignment to the Agent of any Letter of Credit
Proceeds.
(m) Inventory. The Guarantor will:
---------
(i) at such times as the Agent shall request, prepare and deliver to
the Agent a report of all Inventory, in form and substance reasonably
satisfactory to the Agent; and
(ii) upon the reasonable request of the Agent, take a physical
listing of the Inventory (including specification of all locations thereof) and
promptly deliver a copy of such physical listing to the Agent.
(n) Notices, Reports and Information. The Guarantor will (i) notify
--------------------------------
the Agent of any other modifications of or additions to the information
contained in Schedule 1; (ii) notify the Agent of any material claim made or
----------
asserted against the Collateral by any Person or other event other than market
changes which could materially adversely affect the value of the Collateral or
the Agent's Lien thereon; (iii) furnish to the Agent such statements and
schedules further identifying and describing the Collateral and such other
reports and other information in connection with the Collateral as the Agent may
reasonably request, all in reasonable detail; and (iv) upon the reasonable
request of the Agent make such demands and requests for information and reports
as the Guarantor is entitled to make in respect of the Collateral.
(o) [reserved]
----------
(p) Insurance. All insurance maintained by the Guarantor, as required
---------
under Section 6.06 of the Credit Agreement, with respect to Collateral shall
name the Agent as loss payee/mortgagee and/or as additional insured, for the
benefit of the Banks, as their interests may appear. Upon request of the Agent
or any Bank, the Guarantor shall furnish the Agent, with sufficient copies for
each Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of a Responsible Officer of the Guarantor (and, if requested by the
Agent, any insurance broker of the Guarantor) setting forth the nature and
extent of all insurance maintained by the Guarantor and its Subsidiaries in
accordance with this Section or any Collateral Documents.
FORM OF GUARANTOR SECURITY AGREEMENT
G-9.
SECTION 6 Rights to Payment.
-----------------
(a) Collection of Rights to Payment. Until the Agent exercises its
-------------------------------
rights hereunder to collect Rights to Payment, the Guarantor shall endeavor in
the first instance diligently to collect all amounts due or to become due on or
with respect to the Rights to Payment unless in its reasonable business judgment
it decides not to collect a Right to Payment. At the request of the Agent, upon
and after the occurrence and during the continuance of any Event of Default, if
Loans are outstanding, all remittances received by the Guarantor shall be held
in trust for the Agent and, in accordance with the Agent's instructions,
remitted to the Agent or deposited to an account with the Agent in the form
received (with any necessary endorsements or instruments of assignment or
transfer).
SECTION 7 Authorization; Agent Appointed Attorney-in-Fact. The Agent
-----------------------------------------------
shall have the right to, in the name of the Guarantor, or in the name of the
Agent or otherwise, without notice to or assent by the Guarantor, and the
Guarantor hereby constitutes and appoints the Agent (and any of the Agent's
officers or employees or agents designated by the Agent) as the Guarantor's true
and lawful attorney-in-fact, with full power and authority to:
(i) if the Guarantor fails to do so promptly, sign any of the
Financing Statements which must be executed or filed to perfect or continue
perfected, maintain the priority of or provide notice of the Agent's security
interest in the Collateral;
(ii) take possession of and endorse any notes, acceptances, checks,
drafts, money orders or other forms of payment or security and collect any
Proceeds of any Collateral;
(iii) sign and endorse any invoice or xxxx of lading relating to any of
the Collateral, warehouse or storage receipts, drafts against customers or other
obligors, assignments, notices of assignment, verifications and notices to
customers or other obligors;
(iv) send requests for verification of Rights to Payment to the
customers or other obligors of the Guarantor;
(v) contact, or direct the Guarantor to contact, all account debtors
and other obligors on the Rights to Payment and instruct such account debtors
and other obligors to make all payments directly to the Agent;
(vi) assert, adjust, xxx for, compromise or release any claims under
any policies of insurance;
(vii) notify each Person maintaining lockbox or similar arrangements for
the payment of the Rights to Payment to remit all amounts representing
collections on the Rights to Payment directly to the Agent;
(viii) ask, demand, collect, receive and give acquittances and receipts
for any and all Rights to Payment, enforce payment or any other rights in
respect of the Rights to Payment and other Collateral, grant consents, agree to
any amendments, modifications or waivers of the agreements and documents
governing the Rights to Payment and other Collateral, and otherwise
FORM OF GUARANTOR SECURITY AGREEMENT
G-10.
file any claims, take any action or institute, defend, settle or adjust any
actions, suits or proceedings with respect to the Collateral, as the Agent may
deem necessary or desirable to maintain, preserve and protect the Collateral, to
collect the Collateral or to enforce the rights of the Agent with respect to the
Collateral;
(ix) execute any and all applications, documents, papers and
instruments necessary for the Agent to use the Intellectual Property and grant
or issue any exclusive or non-exclusive license or sublicense with respect to
any Intellectual Property in connection with the exercise of the Agent's rights
and remedies under Section 10;
(x) execute any and all endorsements, assignments or other documents
and instruments necessary to sell, lease, assign, convey or otherwise transfer
title in or dispose of the Collateral; and
(xi) execute any and all such other documents and instruments, and do
any and all acts and things for and on behalf of the Guarantor, which the Agent
may deem necessary or advisable to (A) realize upon the Collateral, and (B)
maintain, protect, and preserve the Collateral and the Agent's security interest
therein and to accomplish the purposes of this Agreement.
The Agent agrees that, except upon and after the occurrence and during the
continuance of an Event of Default and while Loans are outstanding, it shall not
exercise the power of attorney, or any rights granted to the Agent, pursuant to
clauses (ii) through (x) and (xi)(A). The foregoing power of attorney is
coupled with an interest and irrevocable so long as the Banks have any
Commitments or the Secured Obligations have not been paid and performed in full.
The Guarantor hereby ratifies, to the extent permitted by law, all that the
Agent shall lawfully and in good faith do or cause to be done by virtue of and
in compliance with this Section 7.
SECTION 8 Agent Performance of Guarantor Obligations. If the
------------------------------------------
Guarantor fails to do so promptly after notice, the Agent may perform or pay any
obligation which the Guarantor has agreed to perform or pay under or in
connection with this Agreement, and the Guarantor shall reimburse the Agent on
demand for any amounts paid by the Agent pursuant to this Section 8.
SECTION 9 Agent's Duties. Notwithstanding any provision contained in
--------------
this Agreement, the Agent shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to the
Guarantor or any other Person for any failure to do so or delay in doing so.
Beyond the exercise of reasonable care to assure the safe custody of Collateral
in the Agent's possession and the accounting for moneys actually received by the
Agent hereunder, the Agent shall have no duty or liability to exercise or
preserve any rights, privileges or powers pertaining to the Collateral.
SECTION 10 Remedies.
--------
(a) Remedies. Upon the occurrence and during the continuance of an
--------
Event of Default and acceleration of the Secured Obligations under Section 8.02
of the Credit Agreement, the Agent shall have, in addition to all other rights
and remedies granted to it in this
FORM OF GUARANTOR SECURITY AGREEMENT
G-11.
Agreement, the Credit Agreement or any other Loan Document, all rights and
remedies of a secured party under the UCC and other applicable laws. Without
limiting the generality of the foregoing, the Guarantor agrees that upon the
occurrence and during the continuance of an Event of Default and acceleration of
the Secured Obligations under Section 8.02 of the Credit Agreement the Agent may
exercise the following rights and remedies, in accordance with the direction or
consent of the Majority Banks:
(i) The Agent may peaceably and without notice enter any premises of
the Guarantor, and using reasonable care, take possession of any Collateral,
remove or dispose of all or part of the Collateral on any premises of the
Guarantor or elsewhere, or, in the case of Equipment, render it nonfunctional,
and otherwise collect, receive, appropriate and realize upon all or any part of
the Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or xxx for all or any part of the Collateral, as the Agent
may determine.
(ii) The Agent may require the Guarantor to assemble all or any part of
the Collateral and make it available to the Agent, at any place and time
designated by the Agent.
(iii) The Agent may secure the appointment of a receiver of the
Collateral or any part thereof (to the extent and in the manner provided by
applicable law).
(iv) The Agent may sell, resell, lease, use, assign, transfer or
otherwise dispose of any or all of the Collateral in its then condition or
following any commercially reasonable preparation or processing (utilizing in
connection therewith any of the Guarantor's assets, without charge or liability
to the Agent therefor, except that Guarantor Intellectual Property may only be
used as provided in Subsection (b)) at public or private sale, by one or more
contracts, in one or more parcels, at the same or different times, for cash or
credit or for future delivery without assumption of any credit risk, all as the
Agent deems advisable; provided, however, that the Guarantor shall be credited
-------- -------
with the net proceeds of sale only when such proceeds are finally collected by
the Agent. The Agent and each of the Banks shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption, which right or equity of redemption the Guarantor hereby
releases, to the extent permitted by law. The Guarantor hereby agrees that the
sending of notice by ordinary mail, postage prepaid, to the address of the
Guarantor set forth in the Guaranty, of the place and time of any public sale or
of the time after which any private sale or other intended disposition is to be
made, shall be deemed reasonable notice thereof if such notice is sent ten days
prior to the date of such sale or other disposition or the date on or after
which such sale or other disposition may occur, provided that the Agent may
--------
provide the Guarantor shorter notice or no notice, to the extent permitted by
the UCC or other applicable law.
(b) License. Solely for the purpose of enabling the Agent to exercise
-------
its rights and remedies under this Section 10 or otherwise in connection with
the disposition of Inventory in accordance with this Agreement, the Guarantor
hereby grants to the Agent an irrevocable, non-exclusive and assignable license
(exercisable without payment or royalty or other compensation to the Guarantor)
of the Intellectual Property necessary to sell or otherwise dispose
FORM OF GUARANTOR SECURITY AGREEMENT
G-12.
of Inventory, provided that such license to use such Intellectual Property does
not include the right to manufacture Inventory.
(c) Application of Proceeds. The cash proceeds actually received from
-----------------------
the sale or other disposition or collection of Collateral, and any other amounts
received in respect of the Collateral the application of which is not otherwise
provided for herein, shall be applied as provided in the Credit Agreement. Any
surplus thereof which exists after payment and performance in full of the
Secured Obligations shall be promptly paid over to the Guarantor or otherwise
disposed of in accordance with the UCC or other applicable law. The Guarantor
shall remain liable to the Agent and the Banks for any deficiency which exists
after any sale or other disposition or collection of Collateral.
SECTION 11 Certain Waivers. The Guarantor waives, to the fullest
---------------
extent permitted by law, (i) any right of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshalling of the Collateral or other collateral or security for the Secured
Obligations; (ii) any right to require the Agent or the Banks (A) to proceed
against any Person, (B) to exhaust any other collateral or security for any of
the Secured Obligations, (C) to pursue any remedy in the Agent's or any of the
Banks' power, or (D) to make or give any presentments, demands for performance,
notices of nonperformance, protests, notices of protests or notices of dishonor
in connection with any of the Collateral; and (iii) all claims, damages, and
demands against the Agent or the Banks arising out of the repossession,
retention, sale or application of the proceeds of any sale of the Collateral,
other than any resulting from the gross negligence or willful misconduct of such
Person.
SECTION 12 Notices. All notices, requests or other communications
-------
hereunder shall be given in the manner and to the addresses specified in the
Guaranty. All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon receipt by the addressee, or if delivered, upon
delivery.
SECTION 13 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Agent or any Bank, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
SECTION 14 Costs and Expenses; Indemnification; Other Charges.
--------------------------------------------------
(a) Costs and Expenses. The Guarantor shall:
------------------
(i) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent for all reasonable costs and expenses
incurred by it in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated),
FORM OF GUARANTOR SECURITY AGREEMENT
G-13.
this Agreement and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby; and
(ii) pay or reimburse the Agent, the Lead Arranger and each Bank for
all costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement during the existence of an Event of Default or
after acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
(b) Indemnification. The Guarantor shall indemnify, defend and hold
---------------
the Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
-------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Person in favor of any third-party in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or relating to the Collateral, whether or not any Indemnified Person
is a party thereto (all of the foregoing, collectively, the "Indemnified
-----------
Liabilities"); provided, that the Guarantor shall have no obligation hereunder
----------- --------
to any Indemnified Person with respect to Indemnified Liabilities resulting from
the gross negligence or willful misconduct of such Indemnified Person.
(c) Other Charges. The Guarantor agrees to indemnify the Agent and
-------------
each of the Banks against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of this Agreement.
(d) Interest. Any amounts payable to the Agent or any Bank under this
--------
Section 14 or otherwise under this Agreement if not paid upon demand shall bear
interest from the date of such demand until paid in full, at the rate of
interest set forth in Section 2.08(c) of the Credit Agreement.
(e) Survival. The agreements in this Section shall survive payment of
--------
all other Secured Obligations.
SECTION 15 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Guarantor may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and the Majority Banks.
FORM OF GUARANTOR SECURITY AGREEMENT
G-14.
SECTION 16 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR
PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN
RESPECT OF ANY COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN
CALIFORNIA.
SECTION 17 Entire Agreement; Amendment. This Agreement, together
---------------------------
with the other Loan Documents, embodies the entire agreement and understanding
among the Guarantor, the Banks and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof and shall not be
amended except by the written agreement of the parties as provided in the Credit
Agreement.
SECTION 18 Severability. The illegality or unenforceability of any
------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
SECTION 19 Counterparts. This Agreement may be executed in any
------------
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument. Each of the parties hereto
understands and agrees that this Agreement may be delivered by any party hereto
or thereto either in the form of an executed original or an executed original
sent by facsimile transmission to be followed promptly by mailing of a hard copy
original, and that receipt by the Agent of a facsimile transmitted document
purportedly bearing the signature of a Bank of or the Guarantor shall bind such
Bank or the Guarantor, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Agent to receive the hard
copy executed original of such document shall not diminish the binding effect of
receipt of the facsimile transmitted executed original of such document of the
party whose hard copy page was not received by the Agent.
SECTION 20 Incorporation of Provisions of the Guaranty. To the
-------------------------------------------
extent the Guaranty contains provisions of general applicability to the
Guarantor Documents, such provisions are incorporated herein by this reference.
SECTION 21 No Inconsistent Requirements. The Guarantor acknowledges
----------------------------
that this Agreement and the other Guarantor Documents may contain covenants and
other terms and provisions variously stated regarding the same or similar
matters, and agrees that all such covenants, terms and provisions are cumulative
and all shall be performed and satisfied in accordance with their respective
terms.
SECTION 22 Termination. Upon the termination of the Commitments of
-----------
the Banks and payment and performance in full of all Secured Obligations, this
Agreement shall terminate and the Agent shall promptly execute and deliver to
the Guarantor such documents and instruments reasonably requested by the
Guarantor as shall be necessary to evidence termination
FORM OF GUARANTOR SECURITY AGREEMENT
G-15.
of all security interests given by the Guarantor to the Agent hereunder;
provided, however, that the obligations of the Guarantor under Section 14 shall
-------- -------
survive such termination.
SECTION 23 Amendment and Restatement of Existing Security Agreement.
--------------------------------------------------------
From and after the Closing Date, this Agreement amends and restates the existing
Security Agreement dated as of June 16, 1998 between the Agent and the
Guarantor.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE GUARANTOR
-------------
MICRON SEMICONDUCTOR
PRODUCTS, INC.
By __________________________
Title:
THE AGENT
---------
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By __________________________
Title:
FORM OF GUARANTOR SECURITY AGREEMENT
G-16.
SCHEDULE 1
to the Security Agreement
1. LOCATIONS OF CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS, INCLUDING OF
---------------------------------------------------------------------
COLLATERAL
----------
Chief Executive Office and Principal Place of Business:
0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000
2. LOCATIONS OF BOOKS PERTAINING TO RIGHTS TO PAYMENT
--------------------------------------------------
0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000
3. TRADE NAMES AND TRADE STYLES; OTHER CORPORATE, TRADE OR FICTITIOUS NAMES;
-------------------------------------------------------------------------
ETC.
---
FORM OF GUARANTOR SECURITY AGREEMENT
G-17.
EXHIBIT H
---------
FORM OF IDAHO DEED OF TRUST
---------------------------
SEE ATTACHMENT HERETO
FORM OF IDAHO DEED OF TRUST
H-1.
EXHIBIT I
---------
FORM OF UTAH DEED OF TRUST
--------------------------
SEE ATTACHMENT HERETO
FORM OF UTAH DEED OF TRUST
I-1.
EXHIBIT J
---------
FORM OF OPINION OF COMPANY'S ASSISTANT GENERAL COUNSEL
------------------------------------------------------
SEE ATTACHMENT HERETO.
FORM OF OPINION OF COMPANY'S ASSISTANT GENERAL COUNSEL
J-1.
EXHIBIT K
---------
FORM OF OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX, PC
-------------------------------------------------------
SEE ATTACHMENT HERETO.
OPINION OF WILSON, SONSINI, XXXXXXXX & XXXXXX
K-1.
EXHIBIT L
---------
FORM OF OPINION OF HAWLEY, TROXELL, XXXXX & XXXXXX LLP
------------------------------------------------------
SEE ATTACHMENT HERETO.
OPINION OF HAWLEY, TROXELL, XXXXX & XXXXXX
L-1.
EXHIBIT M
---------
FORM OF OPINION OF XXXXXXX XXXXX & XXXXXXX
------------------------------------------
SEE ATTACHMENT HERETO.
OPINION OF XXXXXXX XXXXX & XXXXXXX
M-1.
EXHIBIT N
---------
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
-------------------------------------------
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
--------------
Acceptance") dated as of ____________, is made between __________________ (the
----------
"Assignor") and ________________ (the "Assignee").
--------- --------
RECITALS
--------
WHEREAS, the Assignor is party to that certain Second Amended and
Restated Revolving Credit Agreement dated as of September 1, 1998 (as amended,
amended and restated, modified, supplemented or renewed, the "Credit Agreement")
----------------
among Micron Technology, Inc. (the "Company"), the several financial
-------
institutions from time to time party thereto (including the Assignor, the
"Banks"), and Bank of America National Trust and Savings Association, as agent
-----
for the Banks (the "Agent"). Any terms defined in the Credit Agreement and not
-----
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "Loans") to the Company in an aggregate amount
-----
not to exceed $__________ (the "Commitment");
----------
WHEREAS, [the Assignor has made Loans in the aggregate principal
amount of $__________ to the Company] [no Loans are outstanding under the Credit
Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, [together with a corresponding portion of each of its
outstanding Loans], in an amount equal to $__________ (the "Assigned Amount"),
---------------
on the terms and subject to the conditions set forth herein and the Assignee
wishes to accept assignment of such rights and to assume such obligations from
the Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
-------------------------
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) ___% (the "Assignee's Percentage
---------------------
Share") of (A) the Commitment [and the Loans] of the Assignor and (B) all
-----
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-1.
be obligated to perform all of the obligations of a Bank under the Credit
Agreement, including the requirements concerning confidentiality and the payment
of indemnification, with a Commitment in an amount equal to the Assigned Amount.
The Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank. It is the intent of the parties hereto that the
Commitment of the Assignor shall, as of the Effective Date, be reduced by an
amount equal to the Assigned Amount and the Assignor shall relinquish its rights
and be released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee; provided, however, that the
Assignor shall not relinquish its rights under Sections 10.04 and 10.05 of the
Credit Agreement to the extent such rights relate to the time prior to the
Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
--------
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 10.08 of the Credit Agreement.
3. Reallocation of Payments. Any interest, fees and other payments
------------------------
accrued to the Effective Date with respect to the Commitment [and Loans] shall
be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the Assigned Amount
shall be for the account of the Assignee. Each of the Assignor and the Assignee
agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt. From and after the Effective Date, the Agent
shall make all payments with respect to the Commitment [and the Loans]
(including payments of interest, principal, fees and other amounts) to the
Assignee.
4. Independent Credit Decision. The Assignee (a) acknowledges that it
---------------------------
has received a copy of the Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 6.01 of the Credit Agreement, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time,
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-2.
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. Effective Date; Notices.
-----------------------
(a) As between the Assignor and the Assignee, the effective date
for this Assignment and Acceptance shall be _____________ (the "Effective
---------
Date"); provided that the following conditions precedent have been satisfied on
----
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the
Assignee under Section 10.08 of the Credit Agreement shall have been
duly obtained and shall be in full force and effect as of the
Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with Section 10.08 of the
Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and
in Section 10.08 of the Credit Agreement shall have been paid to the
Agent; and
(vi) the Assignor shall have assigned and the Assignee shall
have assumed a percentage equal to the Assignee's Percentage Share of
the rights and obligations of the Assignor under the Credit Agreement
(if such agreement exists).
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the Agent for
acknowledgement by the Agent, a Notice of Assignment substantially in the form
attached hereto as Schedule 1.
----------
6. Agent. The Assignee hereby appoints and authorizes the Assignor to
-----
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement. [The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as Agent under the Credit
Agreement.] [INCLUDE ONLY IF ASSIGNOR IS AGENT]
7. Withholding Tax. The Assignee (a) represents and warrants to the
---------------
Bank, the Agent and the Company that under applicable law and treaties no tax
will be required to be withheld by the Bank with respect to any payments to be
made to the Assignee hereunder, (b) agrees to furnish (if it is organized under
the laws of any jurisdiction other than the United States or any State thereof)
to the Agent and the Company prior to the time that the Agent or Company is
required to make any payment of principal, interest or fees hereunder, duplicate
executed originals of either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-3.
Form 1001 (wherein the Assignee claims entitlement to the benefits of a tax
treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. Representations and Warranties.
------------------------------
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-4.
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances. The Assignor and the Assignee each hereby
------------------
agree to execute and deliver such other instruments, and take such other action,
as either party may reasonably request in connection with the transactions
contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to the Company or the Agent, which may
be required in connection with the assignment and assumption contemplated
hereby.
10. Miscellaneous.
-------------
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation, preparation,
execution and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-5.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By: _____________________________
Title:
[ASSIGNEE]
By: _____________________________
Title:
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
N-6.
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
_______________
Bank of America National Trust
and Savings Association, as Agent
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Agency Management Services #5596
Micron Technology, Inc.
Mail Stop 157
0000 Xxxxx Xxxxxxx Xxx
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
Treasurer
Ladies and Gentlemen:
We refer to the Second Amended and Restated Revolving Credit Agreement
dated as of September 1, 1998 (as amended, amended and restated, modified,
supplemented or renewed from time to time the "Credit Agreement") among Micron
----------------
Technology, Inc. (the "Company"), the several financial institutions from time
-------
to time party thereto (including the Assignor, the "Banks"), and Bank of America
-----
National Trust and Savings Association, as agent for the Banks (the "Agent").
-----
Terms defined in the Credit Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
--------
"Assignee") of _____% of the right, title and interest of the Assignor in and to
--------
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor [and all
outstanding Loans made by the Assignor]) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
-------------------------
giving effect to such assignment the Assignor's Commitment is $ ___________ and
the aggregate amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent
and, if applicable, the Company to such assignment, the Assignee will be bound
by the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Bank originally holding such interest in the Credit Agreement.
NOTICE OF ASSIGNMENT AND ACCEPTANCE
1.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: _____________________________________________
Address: ___________________________________________________
___________________________________________________
___________________________________________________
Attention: _________________________________________________
Telephone: (___) __________________________________________
Facsimile: (___) __________________________________________
(B) Payment Instructions:
Account No.: _______________________________________________
At: _____________________________________________________
_____________________________________________________
_____________________________________________________
Reference: _________________________________________________
Attention: _________________________________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By: _________________________________________
Title:
[NAME OF ASSIGNEE]
By: _________________________________________
Title:
NOTICE OF ASSIGNMENT AND ACCEPTANCE
2.
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
MICRON TECHNOLOGY, INC.
By: ______________________________________
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: _______________________________________
Vice President
NOTICE OF ASSIGNMENT AND ACCEPTANCE
3.
