Intercompany Revolving Loan Agreement - Networks Associates Inc. and McAfee Corp.
INTERCOMPANY
REVOLVING LOAN AGREEMENT
This INTERCOMPANY REVOLVING LOAN AGREEMENT ("Loan Agreement"), dated as
of January 1, 1999, is entered into by and between:
(1) Networks Associates, Inc. ("Lender"); and
(2) McAfee.com Corporation ("Borrower").
In consideration of the covenants, conditions and agreements set forth herein,
the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Advance" shall have the meaning given in Section 2.1 of the
Loan Agreement.
1.2 "Business Day" shall mean any day on which commercial banks
are not authorized or required to close in the United States.
1.3 "Commitment" shall mean an amount equal to Thirty Million
Dollars ($30,000,000.00).
1.4 "Default" shall mean any event or circumstance not yet
constituting an Event of Default but which, with the giving of any notice or the
lapse of any period of time or both, would become an Event of Default.
1.5 "Event of Default" shall have the meaning given to that term
in Section 5.01.
1.6 "GAAP" shall mean generally accepted accounting principles and
practices as promulgated by the Financial Accounting Standards Board and as in
effect in the United States from time to time, consistently applied. Unless
otherwise indicated in this Loan Agreement, all accounting terms used in this
Loan Agreement shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP.
1.7 "Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof, any
department, agency, authority or bureau of any of the foregoing, or any other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
1.8 "Indebtedness" of any Person shall mean and include the
aggregate amount of, without duplication (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person to pay the deferred purchase price of property or services (other than
accounts payable incurred in the ordinary course of business determined in
accordance with generally accepted accounting principles), (d) all obligations
under capital leases of such Person, (e) all obligations or liabilities of
others secured by a lien on any asset of such Person, whether or not such
obligation or liability is assumed, (f) all guaranties of such Person of the
obligations of another Person; (g) all
9
<PAGE> 2
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement upon an
event of default are limited to repossession or sale of such property), (h) net
exposure under any interest rate swap, currency swap, forward, cap, floor or
other similar contract that is not entered to in connection with a bona fide
hedging operation that provides offsetting benefits to such Person, which
agreements shall be marked to market on a current basis, (i) all reimbursement
and other payment obligations, contingent or otherwise, in respect of letters of
credit.
1.9 "LIBOR Rate" shall mean the rate per annum, calculated to the
nearest .01%, at which U.S. dollar deposits are offered in the London interbank
market for one month periods as quoted in the "Money Rates" column of The Wall
Street Journal on the first Business Day of each calendar month. All
computations of such interest shall be based on a year of 360 days and actual
days elapsed. Such LIBOR Rate shall remain in effect until it is adjusted on the
first Business Day of the following calendar month.
1.10 "Loan Agreement" shall have the meaning set forth in the
opening paragraph of this document.
1.11 "Loan Documents" shall mean and include this Loan Agreement
and any other documents, instruments and agreements delivered to Lender in
connection with this Loan Agreement.
1.12 "Obligations" shall mean and include all Advances, debts,
liabilities, and financial obligations, howsoever arising, owed by Borrower to
Lender of every kind and description (whether or not evidenced by any note or
instrument), direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising pursuant to the terms of any of the Loan
Documents, including, without limitation, all interest, fees, charges, expenses,
reasonable attorneys' fees (and expenses) and accountants' fees (and expenses)
chargeable to Borrower or payable by Borrower hereunder or thereunder.
1.13 "Person" shall mean and include an individual, a partnership,
a corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a Governmental Authority.
1.14 "Termination Date" shall mean the second anniversary of the
date of this Loan Agreement.
ARTICLE 2
ADVANCES
2.1 Terms. Subject to the terms and conditions of this Loan
Agreement, Lender agrees to advance to Borrower from time to time and until the
Termination Date, such sums as Borrower may request (the "Advances") but which
shall not exceed, in the aggregate principal amount at any one time outstanding,
the Commitment. Advances shall be made in lawful currency of the United States
of America and shall be made in same day or immediately available funds. Each
Advance shall be in an amount equal to at least $10,000 or any integral multiple
of $5,000 in excess thereof and shall be made three Business Days after written
request (or telephonic request confirmed in writing). Subject to the terms and
conditions hereof, Borrower may borrow pursuant to this Section 2.1, prepay the
Advances and reborrow pursuant to this Section 2.1.
2.2 Payment of Outstanding Amounts.
-2-
<PAGE> 3
(a) If not paid earlier, the outstanding principal and
interest balance of all Advances shall be due and payable to the Lender on the
Termination Date.
(b) At the Lender's sole option, the Lender may require
the Borrower to pay the principal and interest balance of all Advances then
outstanding at any time on or after the date that is thirty (30) calendar days
following the closing of an initial public offering of the capital stock of the
Borrower pursuant to the Securities Act of 1933, as amended.
2.3 Interest Payments. Interest on the outstanding principal
balance under the Advances shall accrue at the LIBOR Rate in effect. All
computations of such interest shall be based on a year of 360 days and actual
days elapsed for each day on which any principal balance is outstanding under
the terms of the Loan Agreement.
2.4 Interest Payments. All accrued and unpaid interest shall be
due on the first Business Day of each month. If not paid earlier, all
outstanding accrued interest hereunder shall be due and payable to the Lender on
the Termination Date.
2.5 Other Payment Terms.
(a) Manner. Borrower shall make all payments due to
Lender hereunder in lawful money of the United States and in same day or
immediately available funds.
(b) Date. Whenever any payment due hereunder shall fall
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.
(c) Default Rate. From and after the occurrence of an
Event of Default and during the continuance thereof, Borrower shall pay interest
on all Obligations not paid when due, from the date due thereof until such
amounts are paid in full at a per annum rate equal to the three (3) percentage
points in excess of the rate otherwise applicable to Advances. All computations
of such interest shall be based on a year of 360 days and actual days elapsed.
2.6 Loan Account. The Obligations of Borrower to Lender
hereunder shall be evidenced by one or more accounts or records maintained by
Lender in the ordinary course of business. The accounts or records maintained by
Lender shall be presumptive evidence of the amount of such Obligations, and the
interest and principal payments thereon. Any failure so to record or any error
in so doing shall not, however, limit, increase or otherwise affect the
obligation of Borrower hereunder to pay any amount owning hereunder. Upon
Lender's request, Borrower shall execute a promissory note in favor of Lender.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BORROWER
To induce Lender to enter into this Loan Agreement and to make Advances
hereunder, Borrower represents and warrants to Lender as follows:
-3-
<PAGE> 4
3.1 Due Incorporation, etc. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation.
3.2 Authority. The execution, delivery and performance by Borrower
of each Loan Document to be executed by Borrower and the consummation of the
transactions contemplated thereby (i) are within the power of Borrower and (ii)
have been duly authorized by all necessary actions on the part of Borrower.
3.3 Enforceability. Each Loan Document executed, or to be
executed, by Borrower has been, or will be, duly executed and delivered by
Borrower and constitutes, or will constitute, a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.
ARTICLE 4
CONDITIONS TO MAKING ADVANCES
Lender's obligation to make the initial Advance and each subsequent
Advance is subject to the prior satisfaction or waiver of all the conditions set
forth in this Article 4.
4.1 Principal Loan Documents. Borrower shall have duly executed
and delivered to Lender: (a) the Loan Agreement; and (b) such other documents,
instruments and agreements as Lender may reasonably request.
4.2 Representations and Warranties Correct. The representations
and warranties made by Borrower in Article 3 hereof shall be true and correct as
of the date on which each Advance is made and after giving effect to the making
of the Advance. The submission by Borrower to Lender of a request for an Advance
shall be deemed to be a certification by the Borrower that as of the date of
borrowing, the representations and warranties made by Borrower in Article 3
hereof are true and correct.
4.3 No Event of Default or Default. No Event of Default or Default
has occurred or is continuing.
4.4 Total Outstanding Advances. The total aggregate principal
amount of outstanding Advances does not exceed the Commitment.
ARTICLE 5
EVENTS OF DEFAULT
5.1 Events of Default. The occurrence of any of the following
shall constitute an "Event of Default" under this Loan Agreement and the Note:
(a) Failure to Pay. Borrower shall fail to pay (i) the
principal amount of all outstanding Advances on the Termination Date hereunder;
(ii) any interest, Obligation or other payment required under the terms of this
Loan Agreement or any other Loan Document on the date due and such failure shall
continue for five (5) Business Days after Borrower's receipt of Lender's written
notice thereof to Borrower; or (iii) any
-4-
<PAGE> 5
Indebtedness (excluding Obligations) owed by Borrower to Lender on the date due
and such failure shall continue for five (5) Business Days after Borrower's
receipt of Lender's written notice thereof to Borrower.
(b) Breaches of Covenants. Borrower shall fail to observe
or perform any other covenant, obligation, condition or agreement contained in
this Loan Agreement or any other Loan Document and (i) such failure shall
continue for ten (10) Business Days, or (ii) if such failure is not curable
within such ten (10) Business Day period, but is reasonably capable of cure
within thirty (30) Business Days, either (A) such failure shall continue for
thirty (30) Business Days or (B) Borrower shall not have commenced a cure in a
manner reasonably satisfactory to Lender within the initial ten (10) Business
Day period; or
(c) Representations and Warranties. Any representation,
warranty, certificate, or other statement (financial or otherwise) made or
furnished by or on behalf of Borrower to Lender in writing in connection with
any of the Loan Documents, or as an inducement to Lender to enter into this Loan
Agreement, shall be false, incorrect, incomplete or misleading in any material
respect when made or furnished; or
(d) Voluntary Bankruptcy or Insolvency Proceedings.
Borrower shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidation or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, (v) become insolvent (as such term is defined in 11 U.S.C. '101 (32), as
amended from time to time), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it, or (vii) take any action for the purpose of
effecting any of the foregoing; or
(e) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Borrower or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Borrower or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) calendar days of commencement.
5.2 Rights of Lender upon Default.
(a) Acceleration. Upon the occurrence or existence of any
Event of Default described in Sections 5.1(d) and 5.1(e), automatically and
without notice or, at the option of Lender, upon the occurrence of any other
Event of Default, all outstanding Obligations payable by Borrower hereunder
shall become immediately due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the other Loan Documents to the contrary
notwithstanding.
(b) Cumulative Rights, etc. The rights, powers and
remedies of Lender under this Loan Agreement shall be in addition to all rights,
powers and remedies given to Lender by virtue of any applicable law, rule or
regulation of any Governmental Authority, any transaction contemplated thereby
or any other agreement, all of which rights, powers, and remedies shall be
cumulative and may be exercised successively or concurrently without impairing
Lender's rights hereunder.
-5-
<PAGE> 6
ARTICLE 6
MISCELLANEOUS
6.1 Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lender or Borrower under this Agreement or the other Loan Documents shall be in
writing and telecopied, mailed or delivered to each party at its telecopier
number or address set forth below (or to such other telecopier number or address
for any party as indicated in any notice given by that party to the other
party). All such notices and communications shall be effective (a) when sent by
Federal Express or other overnight service of recognized standing, on the
Business Day following the deposit with such service; (b) when mailed by
registered or certified mail, first class postage prepaid and addressed as
aforesaid through the United States Postal Service, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when telecopied, upon confirmation of
receipt; provided, however, that any notice delivered to Lender under Article 2
shall not be effective until received by Lender.
LENDER: Networks Associates Inc.
3965 Freedom Circle
Santa Clara, California 95054
Attention: Prabat Goyal
BORROWER: McAfee.com Corporation
2805 Bowers Avenue
Santa Clara, California 95051
Attention: Evan Collins
6.2 Waivers; Amendments. Any term, covenant, agreement or
condition of this Loan Agreement or any other Loan Document may be amended or
waived if such amendment or waiver is in writing and is signed by Borrower and
Lender. No failure or delay by Lender in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. A waiver or consent given hereunder shall be effective
only if in writing and in the specific instance and for the specific purpose for
which given.
6.3 Successors and Assigns. This Loan Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of Borrower, Lender and
their respective successors and permitted assigns, except that Borrower may not
assign or transfer (and any such attempted assignment or transfer shall be void)
any of its rights or obligations under any Loan Document without the prior
written consent of Lender.
6.4 Set-off. In addition to any rights and remedies of Lender
provided by law, Lender shall have the right, without prior notice to Borrower,
any such notice being expressly waived by Borrower to the extent permitted by
applicable law, upon the occurrence and during the continuance of a Default or
an Event of Default, to set-off and apply against any Indebtedness, whether
matured or unmatured, of Borrower to Lender (including, without limitation, the
Obligations), any amount owing from Lender to Borrower. The aforesaid right of
set-off may be exercised by Lender against Borrower or against any trustee in
bankruptcy, debtor-in-possession,
-6-
<PAGE> 7
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of Borrower or against anyone else claiming through or
against Borrower or such trustee in bankruptcy, debtor-in- possession, assignee
for the benefit of creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not have
been exercised by Lender prior to the occurrence of a Default or an Event of
Default. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender, provided that the failure to give such notice shall
not affect the validity of such set-off and application.
6.5 No Third Party Rights. Nothing expressed in or to be implied
from this Agreement or any other Loan Document is intended to give, or shall be
construed to give, any Person, other than the parties hereto and thereto and
their permitted successors and assigns, any benefit or legal or equitable right,
remedy or claim under or by virtue of this Agreement or any other Loan Document.
6.6 Partial Invalidity. If at any time any provision of this Loan
Agreement or any of the Loan Documents is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of the Loan
Agreement or such other Loan Documents, nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction, shall
in any way be affected or impaired thereby.
6.7 Governing Law. This Loan Agreement and each of the other Loan
Documents shall be governed by and construed in accordance with the laws of the
State of California without reference to conflicts of law rules.
6.8 Construction. Each of this Loan Agreement and the other Loan
Documents is the result of negotiations among, and has been reviewed by,
Borrower, Lender and their respective counsel. Accordingly, this Loan Agreement
and the other Loan Documents shall be deemed to be the product of all parties
hereto, and no ambiguity shall be construed in favor of or against Borrower or
Lender.
6.9 Entire Agreement. This Loan Agreement and the other Loan
Documents, taken together, constitute and contain the entire agreement of
Borrower and Lender with respect to the subject matter hereby and supersede any
and all prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of
the date first set forth above.
BORROWER:
McAFEE.COM CORPORATION
By: /S/ SRIVATS SAMPATH
-----------------------------------
Name:
Title:
LENDER:
NETWORKS ASSOCIATES, INC.
By: /S/ PRABHAT GOYAL
-----------------------------------
Name:
Title:
-8-