EXHIBIT 10.5
INTERCOMPANY CREDIT AGREEMENT
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This INTERCOMPANY CREDIT AGREEMENT (the "Agreement") by and between EDS
FINANCE PLC ("EDSF"), a public limited company organized under the laws of
England, and UNIGRAPHICS SOLUTIONS __________ ("US"), a company organized under
the laws of ___________, is dated to be effective as of January 1, 1998.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
(a) "Advance" means an advance by EDSF or US, as applicable, pursuant to
Section 2.01 or 2.02, which shall include, without limitation,
advances by EDSF to US or on behalf of US and amounts owed by US for
fees, costs and expenses under the Management Services Agreement.
(b) "EDSF Balance" means, with respect to an Interest Period, the net
daily balance of funds owed by EDSF to US as set forth in the
intercompany account maintained by EDSF pursuant to Section 2.06
hereof.
(c) "Interest Period" means each monthly period ending after the date of
this Agreement and prior to the termination of this Agreement and
any portion of a monthly period during which this Agreement
terminates.
(d) "Interest Rate" has the meaning ascribed to it in Section 2.04.
(e) "Eurodeposit Bid Rate" means the rate bid for one-month deposits in
the London interbank market as reported on Reuters on the last day
of each Interest Period, or if a rate is not available on Reuters, a
rate for similar deposits of similar maturity in the London or
another market as determined by EDSF, which rate shall be applicable
for the next succeeding Interest Period.
(f) "Eurodeposit Offer Rate" means the rate offered for one-month
deposits in the London interbank market as reported on Reuters on
the last day of each Interest Period, or if a rate is not available
on Reuters, a rate for similar deposits of similar maturity in the
London or another market as determined by EDSF, which rate shall be
applicable for the next succeeding Interest Period.
(g) "Management Services Agreement" means the Management Services
Agreement effective as of January 1, 1998, between Electronic Data
Systems Corporation ("EDS") and Unigraphics Solutions, Inc. ("USI"),
as it may be
amended from time to time. If the Management Services Agreement is
terminated prior to the termination of this Agreement, any
references to the Management Services Agreement after the
termination of the Management Services Agreement shall mean the
version of the Management Services Agreement in effect immediately
prior to the termination of the Management Services Agreement .
(h) "US Balance" means, with respect to an Interest Period, the net
daily balance of funds owed by US to EDSF as set forth in the
intercompany account maintained by EDSF pursuant to Section 2.06
hereof.
ARTICLE II
ADVANCES
SECTION 2.01. Advances from US to EDSF. Any funds of US that are not
required to meet the daily cash requirements of US will be transferred to EDSF
as an Advance hereunder and/or applied to decrease the outstanding balance of
Advances from EDSF pursuant to Section 2.02, as applicable. Any funds
transferred from US to EDSF will be deemed as either an Advance to EDSF, if
there are no outstanding Advances from EDSF to US, OR a decrease of Advances
from EDSF to US, if such Advances exist. Any interest payable by EDSF on an
Advance from US (other than interest payable upon or after termination of this
Agreement) shall be settled by an Advance from US without movement of funds,
unless physical settlement is required by law or regulation. If interest
payable is required to be settled by movement of funds, EDSF will make the
necessary payment pursuant to Section 2.04(a) herein and US will immediately
repay the funds to EDSF as an Advance from US to the extent they are not
required to meet its daily cash requirements.
SECTION 2.02. Advances from EDSF to US. Any funds needed by US in order to
meet its daily cash requirements will be advanced by EDSF; provided that the
outstanding balance of all Advances from EDS and EDSF to USI and all of its
subsidiaries (including its non-U.S. subsidiaries) shall never exceed (i)
$177,000,000 in the aggregate at any time prior to an initial public offering of
stock of USI and the repayment of Advances made to USI for the Solid Edge
Transaction, or (ii) $70,000,000 in the aggregate at any time thereafter. Any
funds transferred from EDSF to US will be deemed as either an Advance to US, if
there are no outstanding Advances from US to EDSF, OR a decrease of the Advances
from US, if such Advances to EDSF exist. Any interest payable by US on an
Advance from EDSF (other than interest payable upon or after termination of this
Agreement) shall be settled by an Advance from EDSF without movement of funds,
unless physical settlement is required by law or regulation. If interest
payable is required to be settled by movement of funds, EDSF will provide the
necessary funds by an Advance which US will immediately pay to EDSF pursuant to
Section 2.04(a) herein. Interest that accrues after the maximum borrowing
amount has been reached shall be considered an Advance notwithstanding the
limits set forth in this Section.
SECTION 2.03. Currency. The currency of all Advances will be ____________.
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SECTION 2.04. Interest.
(a) Subject to the other provisions of this Section 2.04, interest shall
accrue at the applicable interest rates set forth in Sections
2.04(c) and 2.04(d) below (each an "Interest Rate"). Interest shall
be calculated on the basis of a 365 day year for the actual number
of days elapsed. Prior to the termination of this Agreement,
interest payments shall be made pursuant to Sections 2.01 and 2.02
herein, as applicable, on the last business day of the last Interest
Period in each calendar quarter for each of the Interest Periods
ending during that quarter, except if interest payable is required
to be settled by movement of funds, interest payments shall be made
no later than the fifth business day of the following Interest
Period. Notwithstanding the foregoing, interest will first become
payable after the Interest Period ending in June 1998 for all
Interest Periods since the commencement of this Agreement. On the
termination of this Agreement, all unpaid interest for current and
prior Interest Periods, including interest to the date of payment,
shall become due and payable not later than the 15th day following
the termination of this Agreement. Outstanding Advances and
interest payments for Interest Periods not repaid when they become
due and payable upon the termination of this Agreement as provided
in Section 3.03 shall bear interest from and after the required date
of payment to the date of payment at an annual rate of Eurodeposit
Offer Rate plus 5% (or, if lower, the highest lawful rate).
(b) The interest payable by EDSF under this Agreement shall be
calculated by multiplying the Interest Rate specified in Section
2.04(c) hereof by the EDSF Balance for the applicable days in the
Interest Period. The interest payable by US under this Agreement
shall be calculated by multiplying the Interest Rate specified in
Section 2.04(d) hereof by the US Balance for the applicable days in
the Interest Period. The Interest Payment required to be made by
each party is independent of the Interest Payment required to be
paid by the other party, and interest may be paid by both EDSF and
US for any given Interest Period. EDSF shall calculate the amount
of interest payable by both EDSF and US for each Interest Period and
shall provide notice thereof to US, together with supporting
calculations.
(c) The Interest Rate per annum applicable to Advances from US to EDSF
outstanding during an Interest Period shall equal Eurodeposit Bid
Rate, minus 0.50%.
(d) The Interest Rate per annum applicable to Advances from EDSF to US
outstanding during an Interest Period shall equal Eurodeposit Offer
Rate, plus 0.50%.
(e) All calculations shall be performed by EDSF and shall be subject
to the dispute resolution mechanisms set forth in Section 3.01.
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SECTION 2.05. Repayment. During the term of this Agreement, all Advances
received by either party under this Agreement shall be offset against and shall
be treated as repaid to the extent of any Advances made by such party to the
other party. Repayments can be made at any time by either party with interest
payable up to the date of repayment. No prepayment penalty may be levied. Upon
termination of this Agreement, any Advances that have not theretofore been
repaid, together with accrued interest, will be payable in full not later than
the 15th day following termination of this Agreement.
SECTION 2.06 Intercompany Account. EDSF shall maintain a ledger in which
all EDSF Advances and US Advances and all repayments of such Advances shall be
recorded. EDSF shall give US access, during normal business hours, to such
ledger and the other records relating to Advances and payments made with respect
thereto. EDSF shall send to US at the end of each Interest Period a statement
indicating Advances between EDSF and US during the Interest Period, outstanding
Advances, interest payable or receivable for the Interest Period, and, at the
end of each calendar quarter, a debit or credit advice for any interest paid or
received during the Interest Period (or to be paid or received following the
Interest Period, as appropriate).
SECTION 2.07 Requests for Advances. A request for an Advance hereunder to
meet the daily cash requirements of US will be made pursuant to a form and
instructions provided separately by EDSF. Advances will be made according to a
schedule to be agreed between the parties, but no more frequently than once per
week.
SECTION 2.08 Transfers of Funds. All transfers of funds between EDSF and
US will be initiated by EDSF or as otherwise agreed by the parties.
SECTION 2.09 Taxes. If US or EDSF shall be required by law to deduct any
tax from or in respect of any sum payable hereunder to the other party:
(a) as soon as such party is aware that any such deduction, withholding
or payment of a tax is required, or of any change in any such
requirement, it shall notify the other party;
(b) such party shall make such deductions, or pay such tax, before any
interest or penalty becomes payable;
(c) such party shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law; and
(d) within thirty (30) days after paying such tax, such party shall
deliver to the other party satisfactory evidence of that deduction,
withholding or payment and (where remittance is required) of the
remittance thereof to the relevant taxing or other authority.
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SECTION 2.10. Requirement to Borrow. US shall not borrow any funds from
any person other than EDSF in order to satisfy its financial requirements unless
such borrowing is either consented to by EDSF in writing or EDSF has not
provided the funds under this Agreement.
SECTION 2.11. Usury. All agreements between the parties, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of demand for payment or acceleration
of the maturity hereof or otherwise, shall the interest contracted for, charged
or received by either party exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, interest would otherwise
be payable to either party in excess of the maximum lawful amount, the interest
payable to such party shall be reduced to the maximum amount permitted under
applicable law; and if from any circumstance either party shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal hereof and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal hereof such excess
shall be refunded to the party deemed to have made such payment. All interest
paid or agreed to be paid to either party shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full period until payment in full of the principal (including the period of any
renewal or extension hereof) so that the interest hereon for such full period
shall not exceed the maximum amount permitted by applicable law. This paragraph
shall control all agreements between the parties.
ARTICLE III
ADMINISTRATION
SECTION 3.01. Disputes. All disputes under this Agreement shall be handled
in the manner provided for in Article 16 of the Management Services Agreement.
SECTION 3.02. Limitations on Liability. Neither party shall have any
liability under this Agreement (including any liability for its own negligence)
for damages, losses or expenses (including expenses or higher interest rates
incurred in order to obtain alternative financing sources) suffered by the other
party or its subsidiaries as a result of the performance or non-performance of
such party's obligations hereunder, unless such damages, losses or expenses are
caused by or arise out of the willful misconduct or gross negligence of such
party or a breach by such party. In no event shall either party have any
liability to the other party for indirect, incidental or consequential damages
that such other party or its subsidiaries or any third party may incur or
experience on account of the performance or non-performance of such party's
obligations hereunder. The provisions of this Section 3.02 shall survive any
termination of this Agreement.
SECTION 3.03. Term of the Agreement. This Agreement commences on the
effective date of this Agreement as set forth above and will continue in effect
until 11:59 p.m., United States Central Time, on December 31, 2002.
Notwithstanding the foregoing, this Agreement may be sooner terminated, without
liability to the terminating party:
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(a) by either party, upon 30 days' notice to the other party, if EDS
ceases to own, directly or indirectly, 51% or more of the stock of
USI.
(b) by either party, immediately upon notice to the other party, if
(i) that other party makes a general assignment of all or
substantially all of its assets for the benefit of its
creditors;
(ii) that other party applies for, consents to or acquiesces in the
appointment of a receiver, trustee, custodian or liquidator
for its business or all or substantially all of its assets;
(iii) that other party files, or consents to or acquiesces in a
petition seeking relief or reorganization under any bankruptcy
or insolvency laws; or
(iv) a petition seeking relief or reorganization under any
bankruptcy or insolvency laws is filed against that other
party and is not dismissed within 90 days after it was filed.
(c) by either party, immediately upon notice to the other party, if that
other party's material breach of this Agreement continues uncured or
uncorrected for 30 days after both the nature of that breach and the
necessary cure or correction has been agreed upon by the parties or
otherwise determined by the dispute resolution procedure described
in Section 3.01; provided that if the parties agree or it is
determined by the dispute resolution procedure that the material
breach is not capable of being cured or corrected, the termination
shall be effective immediately upon notice.
(d) by either party, immediately upon notice to the other party, if the
Intercompany Credit Agreement between EDS and USI dated January 1,
1998 has been terminated.
(e) by either party, immediately upon notice to the other party, if it
determines that performance of its rights or obligations under this
Agreement is or becomes illegal.
(f) by either party, immediately upon notice to the other party, if
payments made by the other party are subject to any deduction or
withholding for or on account of any tax, unless the other party
agrees to increase its payments such that, after all required
deductions have been made, the party receives a net amount equal to
the sum it would have received had no such deductions been made.
(g) by either party, immediately upon notice to the other party, if it
determines that its compliance with any law or regulation or any
guideline or request from any central bank or governmental or
regulatory authority would create a cost or
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increase the cost of providing credit under this Agreement, unless
the other party agrees to pay amounts sufficient to indemnify for
such cost or increase in cost.
(h) by either party, immediately upon notice to the other party, if the
Management Services Agreement has been terminated.
SECTION 3.04. Renewal. The parties may consent to successive one-year
renewal terms by following this procedure: If US wishes to renew the term of
this Agreement, it shall provide notice to EDSF of that intention by September
30, 2002 and the same date of each subsequent year. If EDSF wishes to concur
with that renewal, it shall provide notice to US of that concurrence by October
31 of that year. If no notice of intent to renew or no concurrence is given,
this Agreement will terminate when the then current term expires.
SECTION 3.05. Confidentiality. Confidentiality of matters will be
maintained in the manner set forth in Article 10 of the Management Services
Agreement.
SECTION 3.06. Successors and Assigns. EDSF may assign its rights and
obligations under this Agreement to EDS. Any other matters regarding succession
and assignment shall be determined in the manner set forth in the Management
Services Agreement.
SECTION 3.07. No Third-Party Beneficiaries. Nothing expressed or implied
in this Agreement shall be construed to give any person or entity other than the
parties hereto any legal or equitable rights hereunder.
SECTION 3.08. Entire Agreement. This Agreement constitutes the entire
agreement of the parties on this subject, except that any administrative matters
not addressed herein shall be addressed in the manner set forth in the
Management Services Agreement. This Agreement replaces and supersedes any prior
agreement or understanding of the parties, whether written or oral, on this
subject not expressed or referred to in this Agreement.
SECTION 3.09. Amendment. This Agreement may not be amended except by a
written instrument signed by the parties hereto.
SECTION 3.10. Waivers. Either party hereto may (a) extend the time for
performance of any of the obligations or other act of the other party or (b)
waive compliance with any of the agreements contained herein. No waiver of any
term shall be construed as a waiver of the same term in any other situation or a
waiver of any other term of this Agreement. The failure of any party to assert
any of its rights hereunder will not constitute a waiver of any such rights.
SECTION 3.11. Severability. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, such
provision shall be deemed severable and all other provisions of this Agreement
shall nevertheless remain in full force and effect.
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SECTION 3.12. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
SECTION 3.13. Notices. All notices required hereunder shall be given in
the manner set forth in Article 18 of the Management Services Agreement.
SECTION 3.14. Governing Law. This Agreement shall be governed by and
construed in accordance with English law.
SECTION 3.15. Counterparts. This Agreement may be signed in any number of
counterparts, with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together to constitute one, and
the same, document.
IN WITNESS WHEREOF, EDSF and US have caused this Agreement to be executed as
of the date first above written.
EDS FINANCE PLC
By:
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Name:
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Title:
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UNIGRAPHICS SOLUTIONS
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By:
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Name:
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Title:
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