Credit Agreement - Sun Microsystems Inc. and Citicorp USA Inc.
U.S. $150,000,000
CREDIT AGREEMENT
Dated as of June 1, 1994, among
SUN MICROSYSTEMS, INC.
as Borrower
and
THE LENDERS NAMED HEREIN
as Lenders
and
CITICORP USA, INC.
as Agent
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Table of Contents
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . 1
SECTION 1.02. Computation of Time Periods . . . . . . . . . . 11
SECTION 1.03. Accounting Terms . . . . . . . . . . . . . . . 11
ARTICLE II
AMOUNTS AND TERMS OF ADVANCES
SECTION 2.01. The A Advances . . . . . . . . . . . . . . . . 11
SECTION 2.02. Making the A Advances . . . . . . . . . . . . . 12
SECTION 2.03. The B Advances . . . . . . . . . . . . . . . . 13
SECTION 2.04. Fees . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Reduction of the Commitments . . . . . . . . . 17
SECTION 2.06. Repayment of A Advances . . . . . . . . . . . . 17
SECTION 2.07. Interest on A Advances . . . . . . . . . . . . 17
SECTION 2.08. Notes . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.09. Interest Rate Determination . . . . . . . . . . 18
SECTION 2.10. Sharing of Payments, Etc . . . . . . . . . . . 19
SECTION 2.11. Prepayments of A Advances . . . . . . . . . . . 19
SECTION 2.12. Increased Costs . . . . . . . . . . . . . . . . 20
SECTION 2.13. Illegality . . . . . . . . . . . . . . . . . . 21
SECTION 2.14. Payments and Computations . . . . . . . . . . . 21
SECTION 2.15. Taxes . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances . . . . 24
SECTION 3.02. Conditions Precedent to Each A
Borrowing . . . . . . . . . . .. . . . . . . . 25
SECTION 3.03. Conditions Precedent to Each B
Borrowing . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . . 26
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . . . 30
SECTION 5.02. Negative Covenants . . . . . . . . . . . . . . 36
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Page
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . 42
SECTION 6.02. Mandatory Prepayment; Event of Early
Termination . . . . . . . . . . . . . . . . . . 44
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action . . . . . . . . . . . 45
SECTION 7.02. Agent's Reliance, Etc . . . . . . . . . . . . . 45
SECTION 7.03. CUSA and Affiliates . . . . . . . . . . . . . . 46
SECTION 7.04. Lender Credit Decision . . . . . . . . . . . . 46
SECTION 7.05. Indemnification . . . . . . . . . . . . . . . . 46
SECTION 7.06. Successor Agent . . . . . . . . . . . . . . . . 47
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. . . . . . . . . . . . . . . . 47
SECTION 8.02. Notices, Payments, Etc. . . . . . . . . . . . . 48
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . . . . 48
SECTION 8.04. Costs and Expenses . . . . . . . . . . . . . . 49
SECTION 8.05. Right of Set-off . . . . . . . . . . . . . . . 50
SECTION 8.06. Binding Effect . . . . . . . . . . . . . . . . 51
SECTION 8.07. Assignments and Participations . . . . . . . . 51
SECTION 8.08. Governing Law . . . . . . . . . . . . . . . . . 54
SECTION 8.09. Headings . . . . . . . . . . . . . . . . . . . 54
SECTION 8.10. Execution in Counterparts . . . . . . . . . . . 54
SECTION 8.11. Confidentiality . . . . . . . . . . . . . . . . 54
SECTION 8.12. Termination . . . . . . . . . . . . . . . . . . 55
SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . . . . . 58
EXHIBITS
EXHIBIT A-l FORM OF A NOTE
EXHIBIT A-2 FORM OF B NOTE
EXHIBIT B-1 NOTICE OF A BORROWING
EXHIBIT B-2 NOTICE OF B BORROWING
EXHIBIT C ASSIGNMENT AND ACCEPTANCE
EXHIBIT D OPINION OF WILSON, SONSINI, GOODRICH & ROSATI
EXHIBIT E COVENANT COMPLIANCE CERTIFICATE
EXHIBIT F LIENS
EXHIBIT G SUBSIDIARIES
EXHIBIT H RESPONSIBLE OFFICERS
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CREDIT AGREEMENT
Dated as of June 1, 1994
SUN MICROSYSTEMS, INC., a Delaware corporation (the "Borrower"), the Lenders
listed on the signature pages hereof, and CITICORP USA, INC., a Delaware
corporation ("CUSA"), as agent (the "Agent") for the Lenders hereunder, agree
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of an A
Borrowing and refers to an Alternate Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances of the
same Type made by each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the A
Advances made by such Lender.
"Adjusted EBIT" means, for any accounting period, net income (or net loss)
plus the amounts (if any) which, in the determination of net income (or net
loss) for such period, have been deducted for (a) gross interest expense, (b)
income tax expense and (c) rent expense under leases of real and personal
property (excluding, however, from the determination of such rent expense,
taxes and normal and customary operating expenses passed on to the Borrower for
reimbursement pursuant to the terms of such real property leases whether
denominated under such leases as "rent", "additional rent" or otherwise, but
only to the extent that such operating expenses are actually incurred and
passed through to the Borrower), in each case determined in accordance with
generally accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(e).
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.
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"Alternate Base Rate" means, for any period (including a period consisting
of a single day), a fluctuating interest rate per annum as shall be in effect
from time to time which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New York, New
York, from time to time, as Citibank's base rate; or
(b) 1/2 of one percent per annum above the latest three-week moving
average of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each Monday
(or, if any such date is not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous Friday by the Agent on
the basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by the Agent from three New York certificate of deposit dealers of
recognized standing selected by the Agent, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to
the next higher 1/4 of one percent; or
(c) for any day, 1/2 of one percent per annum above the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
"Alternate Base Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(a).
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of an Alternate Base Rate Advance,
and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a B Advance, the office of such Lender notified by
such Lender to the Agent as its Applicable Lending Office with respect to such
B Advance.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee reasonably acceptable to the Agent and reasonably
consented to by the Borrower, in substantially the form of Exhibit C hereto.
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"B Advance" means an advance by a Lender to the Borrower as part of a B
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B Borrowing" means a borrowing consisting of B Advances made at or about
the same time by each of the Lenders whose offer to make one or more B Advances
as part of such borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of Exhibit A-2 hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from a B Advance made by
such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Borrowing" means an A Borrowing or a B Borrowing.
"Business Day" means a day of the year other than a Saturday, Sunday or
other day on which banks are not required or authorized to close in New York
City or San Francisco, California and, if the applicable Business Day relates
to any Eurodollar Rate Advances, on which dealings are carried on in the
London, England interbank market.
"Change of Control Event" means the occurrence of the following: (i) any
corporation or Person, or a group of related corporations or Persons, shall
acquire (a) beneficial ownership in excess of 50% of the outstanding Voting
Stock of the Borrower or (b) all or substantially all of the assets of the
Borrower, or (ii) a majority of the Board of Directors of the Borrower is, at
any time, composed of persons other than (a) persons who were members of such
Board on the date of this Agreement, (b) successors to such persons elected or
nominated in the ordinary course of business, and (c) any person who has served
as a member of such Board for at least the prior 12 months.
"Citibank" means Citibank, N.A., a national banking association.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
"Commitment" has the meaning specified in Section 2.01.
"consolidated" refers to the consolidation of the accounts of the Borrower
and its Subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistent with those
applied in the preparation of the consolidated financial statements referred to
in Section 4.01(e).
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"Consolidated Tangible Net Worth" means the excess of consolidated total
assets over consolidated total liabilities, consolidated total assets and
consolidated total liabilities each to be determined on a consolidated basis
for the Borrower in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e), excluding, however, from the determination of
consolidated total assets (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar
intangibles, (ii) all unamortized debt discount and expense, (iii) asset,
liability, contingency and other appropriate reserves, including reserves for
depreciation and for deferred income taxes, (iv) treasury stock, (v) any
write-up in the book value of any asset resulting from a revaluation thereof
subsequent to June 30, 1993, (vi) the book value of investments in Persons that
are not Subsidiaries (unless the same are readily marketable), and (vii) any
items not included in clauses (i) through (vi) above which are treated as
intangibles in conformity with generally accepted accounting principles.
"Debt" of any Person means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services
(excluding ordinary trade payables incurred in the ordinary course of
business), (iv) obligations as lessee under leases which shall have been or
should be, in accordance with generally accepted accounting principles,
recorded as capital leases, (v) all obligations of such Person to purchase
securities (or other property) which arise out of or in connection with the
sale of the same or substantially similar securities or property, (vi) any
reimbursement obligations of such Person to the issuer of a letter of credit or
similar instrument, (vii) all indebtedness or obligations of others secured by
a lien on any asset of such Person, whether or not such indebtedness or
obligations are assumed by such Person (to the extent of the value of the
asset), (viii) any reimbursement obligation of such Person or other arrangement
of whatever nature having the effect of assuring or holding harmless any other
Person against loss with respect to any real property owned by such other
Person, including, without limitation, assuring or guaranteeing that such other
Person shall receive a specified amount in connection with the conveyance of
such real property, (ix) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (viii) above, and (x) liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA. Notwithstanding any
provision herein to the contrary, no obligations of any Person (whether such
obligations be direct or indirect, contingent or otherwise) under the
Receivables Purchase Agreement or any similar agreement or arrangement shall be
"Debt"
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for purposes of this Agreement; provided that the foregoing exclusion shall not
apply to obligations of any such Person pursuant to the indemnity or
reimbursement provisions contained in the Receivables Purchase Agreement
(including, without limitation, indemnities for breaches of representations and
warranties, and those set forth in Article VIII, Section 9.03(b) and Section
10.06 thereof) or any similar agreement or arrangement and to fees and expenses
payable pursuant to the Receivables Purchase Agreement or any similar agreement
or arrangement to the extent that any such obligations are required to be
recorded as liabilities on such Person's balance sheet under generally accepted
accounting principles.
"Default" means any event which, with the passage of time or the giving of
notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment, or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is
a member of the Borrower's controlled group, or under common control with the
Borrower, within the meaning of Section 414 of the Code, and the regulations
promulgated and rulings issued thereunder.
"ERISA Termination Event" means (i) a Reportable Event described in Section
4043 of ERISA and the regulations promulgated thereunder (other than a
Reportable Event not subject to the provision for thirty (30) day notice to the
Pension Benefit Guaranty Corporation under such regulations), or (ii) the
withdrawal of the Borrower or any Subsidiary from a Plan during a
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plan year in which it was a "substantial employer" as defined in Section
4001(a) (2) of ERISA, or (iii) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041
of ERISA or (iv) the institution of proceedings to terminate a Plan by the
Pension Benefit Guaranty Corporation under Section 4042 of ERISA, or (v) any
other event or condition which would constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Eurodollar Margin" means, on any day, with respect to any Eurodollar Rate
Advance made or outstanding on such day, an interest rate per annum equal at
all times to (i) .25% for each day during a Level I Period; (ii) .25% for each
day during a Level II Period; (iii) .275% for each day during a Level III
Period; (iv) .30 for each day during a Level IV Period; and (v) .50 for each
day during a Level V Period.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same A Borrowing, an interest rate per annum
determined by the Agent to be (a) the arithmetic mean (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such arithmetic mean is not
such a multiple) of the rates notified to the Agent at which deposits in U.S.
dollars are offered by the principal office of each of the Eurodollar Reference
Banks in London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the respective Eurodollar Reference
Bank's (or its Affiliate's) Eurodollar Rate Advance comprising part of such A
Borrowing and for a period equal to such Interest Period, divided by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage (as
defined below) for such Interest Period. The "Eurodollar Rate Reserve
Percentage" for the Interest Period for each Eurodollar Rate Advance comprising
part of the same A Borrowing means the reserve percentage applicable two
Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New
York City with deposits exceeding
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One Billion Dollars with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(b).
"Eurodollar Reference Banks" means the principal London offices of Citibank,
Bank of America National Trust and Savings Association and ABN AMRO Bank N.V.
and each such other bank as may be approved pursuant to Section 8.07(i).
"Events of Default" has the meaning specified in Section 6.01.
"Excess Interest in Receivables" means the extent to which (i) any ownership
interest, security interest or other interest of any third party in the
accounts receivable of the Borrower and its Subsidiaries, exceeds (ii) the
aggregate amount advanced by such third party in respect of the purchase of
such interest (net of amounts received by such third party from the collection
of such accounts receivable).
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fixed Charges" means, for any accounting period, the sum, without
duplication, of (i) gross interest expense during such period, plus (ii)
scheduled amortization of principal in respect of all Debt during such period
(but excluding any required principal payment in respect of any obligation that
is a "bullet" payment, i.e., the entire amount thereof is due in full at
maturity without any amortizing payments prior to said maturity), plus (iii)
amortization of debt discount (but excluding from this clause (iii) and clause
(i) above noncash amortization of debt discount if the maturity of the
obligation so discounted is no earlier than December 31, 1998 pursuant to the
terms and conditions of the instruments and agreements creating such debt
discount), plus (iv) rent expense under leases of real and personal property
during such period (excluding, however, from the determination of such rent
expense, taxes and normal and customary operating expenses passed on to the
Borrower for reimbursement pursuant to the terms of such real property
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leases whether denominated under such leases as "rent", "additional rent" or
otherwise, but only to the extent that such operating expenses are actually
incurred and passed through to the Borrower).
"Interest Period" means, for each A Advance comprising part of the same A
Borrowing, the period commencing on the date of such A Advance and ending on
the last day of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be (a) 30, 60, 90 or
180 days in the case of an Alternate Base Rate Advance, and (b) 1, 2, 3 or 6
months in the case of a Eurodollar Rate Advance, in each case as the Borrower
may, upon notice received by the Agent in accordance with Section 2.02, select;
provided, however, that:
(i) the Borrower may not select any Interest Period which ends after the
then existing Termination Date;
(ii) Interest Periods commencing on the same date for A Advances comprising
part of the same A Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, in the case of
any Interest Period for a Eurodollar Rate Advance, that if such extension would
cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day.
"Lenders" means the lenders listed on the signature pages hereof and each
assignee that shall become a party hereto pursuant to Sections 8.07(a) or (b).
"Level I Period" means a period of time, which may consist of a single day,
during which the long-term senior unsecured debt of the Borrower is rated: (i)
A- or better by S&P or (ii) A3 or better by Moody's.
"Level II Period" means a period of time other than a Level I Period, which
may consist of a single day, during which the long-term senior unsecured debt
of the Borrower is rated: (i) BBB+ by S&P or (ii) Baa1 by Moody's.
"Level III Period" means a period of time other than a Level I Period or a
Level II Period, which may consist of a single day, during which the long-term
senior unsecured debt of the Borrower is rated: (i) BBB by S&P or (ii) Baa2 by
Moody's.
"Level IV Period" means a period of time other than a Level I Period, a
Level II Period or a Level III Period, which may consist of a single day,
during which the long-term senior unsecured debt of the Borrower is rated: (i)
BBB- by S&P, or (ii) Baa3 by Moody's.
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"Level V Period" means a period of time other than a Level I Period, a Level
II Period, a Level III Period or a Level IV Period, which may consist of a
single day, during which the long-term senior unsecured debt of the Borrower is
(i) rated lower than BBB- by S&P and rated lower than Baa3 by Moody's (or rated
lower than the level indicated for either S&P or Moody's if unrated by the
other), or (ii) unrated by both S&P and Moody's for whatever reason.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction). Customary bankers' rights of
set-off arising by operation of law or by contract in connection with working
capital facilities, lines of credit, term loans and letter of credit facilities
and other contractual arrangements entered into with banks in the ordinary
course of business are not "Liens" for the purposes of this Agreement.
"Majority Lenders" means at any time Lenders holding at least 51% of the
then aggregate unpaid principal amount of the A Advances then outstanding or,
if no such principal amount is then outstanding, then either (i) if the
Commitments have not been terminated or there are no B Advances outstanding,
Lenders having at least 51% of the Commitments, or (ii) if the Commitments have
been terminated and there are B Advances outstanding, Lenders holding at least
51% of the then aggregate unpaid principal amount of the B Advances then
outstanding.
"Moody's" means Moody's Investors Service, Inc., or its successors.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(a).
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means at any time an employee pension benefit plan which is covered
under Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or any
Subsidiary for employees of the Borrower or any Subsidiary or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Borrower or
any Subsidiary is then
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making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Receivables Purchase Agreement" means that certain Receivables Purchase
Agreement dated as of June 27, 1991, as amended by that certain Amendment to
Receivables Purchase Agreement dated May 29, 1992, among the Borrower, the
Subsidiary Sellers as identified and defined therein, the Purchasers as
identified and defined therein and J.P. Morgan Delaware, as agent, as in effect
on the date hereof (a copy of which has been furnished to each Lender listed on
the signature pages hereof pursuant to Section 3.01), without giving effect to
any subsequent amendments or waivers (other than any such amendments or waivers
which add new Subsidiary Sellers as parties to such agreement or which remove
any Subsidiary Seller as a party), unless such amendment or waiver has been
consented to by the Majority Lenders.
"Register" has the meaning specified in Section 8.07(c).
"Responsible Financial Officer" means the chief financial officer, the
controller, the treasurer or any assistant treasurer of the Borrower.
"Responsible Officer" means the individuals occupying the executive offices
of the Borrower described in Exhibit H hereto and any successors to the offices
held by the individuals identified therein, and the individuals occupying any
other executive offices of the Borrower which at any time have the authority,
functions and responsibilities as the offices described in Exhibit H.
"Restricted Subsidiary" means, at any point in time, any Subsidiary having
total assets of $100,000 or more as of the end of its most recent fiscal year
or annual gross revenues of $1,000,000 or more during its most recent fiscal
year.
"S&P" means Standard and Poor's Ratings Group, or its successors.
"Subsidiary" means any corporation of which the Borrower and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Termination Date" means June 1, 1997 or the earlier date of termination in
whole of the Commitments pursuant to Section 2.05 or 6.01.
"Transfer" means, with respect to any asset, to sell, lease, transfer or
otherwise dispose of such asset.
"Voting Stock" of any Person means any shares of stock of such Person whose
holders are entitled under ordinary
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circumstances to vote for the election of directors of such Person
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"wholly owned Subsidiary" means any Subsidiary all of the outstanding
capital stock (other than directors' qualifying shares and shares issued to
satisfy local ownership requirements) of which is owned, directly or
indirectly, by the Borrower.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make A Advances to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Termination Date in an aggregate amount not to exceed at any time the
amount set forth opposite such Lender's name on the signature pages hereof or,
if such Lender has entered into any Assignment and Acceptance, set forth for
such Lender in the Register maintained by the Agent pursuant to Section
8.07(c), as such amount may be reduced pursuant to Section 2.05 (such Lender's
"Commitment"), provided that the aggregate amount of the Commitments of the
Lenders shall be deemed used from time to time to the extent of the aggregate
amount of the B Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be applied to the Lenders ratably according to
their respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "B Reduction"). Each A Borrowing shall be in an aggregate
amount not less than $15,000,000 or an integral multiple of $1,000,000 in
excess thereof (or, with respect to an A Borrowing comprised of Alternate Base
Rate Advances, such lesser amount as shall equal the then unborrowed amount of
the aggregate Commitments), and shall consist of A Advances of the same Type
made on the same day by the Lenders ratably according to their respective
Commitments. Within the limits of each Lender's Commitment, the Borrower may
from time to time borrow, prepay pursuant to Section 2.11(b) and reborrow under
this Section 2.01.
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SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be made on
notice, given not later than 11:00 A.M. (New York City time) on (x) the date of
a proposed A Borrowing comprised of Alternate Base Rate Advances, and (y) the
third Business Day prior to the date of a proposed A Borrowing comprised of
Eurodollar Rate Advances, by the Borrower to the Agent, which shall give to
each Lender prompt notice thereof (and in any event not later than the same
day) by telecopier, telex or cable. Each such notice of an A Borrowing (a
"Notice of A Borrowing") shall be by telecopier, telex or cable, confirmed
immediately in writing, in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such A Borrowing, (ii) Type of A
Advances comprising such A Borrowing, (iii) aggregate amount of such A
Borrowing, and (iv) Interest Period for each such A Advance. Each Lender
shall, before 12:00 Noon (New York City time) on the date of such A Borrowing,
make available for the account of its Applicable Lending Office to the Agent at
its address referred to in Section 8.02(b), in same day funds, such Lender's
ratable portion of such A Borrowing. After the Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's aforesaid
address.
(b) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower. In the case of any A Borrowing which the related Notice of A
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of A Borrowing for such A Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the A Advance to be made by such Lender as part of such A
Borrowing when such A Advance, as a result of such failure, is not made on such
date.
(c) Unless the Agent shall have received notice from a Lender prior to the
date of any A Borrowing that such Lender will not make available to the Agent
such Lender's ratable portion of such A Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of such A
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to A Advances comprising such A Borrowing and (ii) in
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the case of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute
such Lender's A Advance as part of such A Borrowing for purposes of this
Agreement, and the interest payable thereon shall be allocated such that the
Agent shall receive (from a combination of the sum, if any, paid to the Agent
by such Lender pursuant to clause (ii) of the preceding sentence and any
interest payment made by the Borrower) an amount equal to interest on such A
Advance at the interest rate applicable thereto from the date the corresponding
amount was made available by the Agent to the Borrower as contemplated by this
Section 2.02(c) to and including the date such amount is repaid to the Agent by
such Lender, and such Lender shall receive the balance of the interest payments
made by the Borrower with respect to such Advance in accordance with the
provisions of this Agreement.
(d) The failure of any Lender to make the A Advance to be made by it as
part of any A Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that the
Borrower may make B Borrowings under this Section 2.03 from time to time on any
Business Day during the period from the date hereof until the date occurring 30
days prior to the Termination Date in the manner set forth below; provided
that, following the making of each B Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed the aggregate amount of the
Commitments of the Lenders (computed without regard to any B Reduction).
(i) The Borrower may request a B Borrowing under this Section 2.03 by
delivering to the Agent, by telecopier, telex or cable, confirmed immediately
in writing, a notice of a B Borrowing (a "Notice of B Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying the date and aggregate
amount of the proposed B Borrowing, the maturity date for repayment of each B
Advance to be made as part of such B Borrowing (which maturity date (x) may not
be earlier than the date occurring 7 days after the date of such B Borrowing or
later than 180 days after the date of such B Borrowing or the Termination Date,
whichever occurs first, if the Borrower shall specify in the Notice of B
Borrowing that the rates of interest to be offered by the Lenders shall be
fixed rates per annum, or (y) shall be 1, 2, 3, 4, 5 or 6 months after the date
of such B Borrowing (but in no event later than the Termination Date) if the
Borrower shall instead specify in the Notice of B Borrowing the basis to be
used by the Lenders in determining the rates of interest to be offered by
them), the interest payment date or dates relating thereto, whether the
proposed B Borrowing shall bear interest at a fixed or fluctuating rate per
annum and, if a fluctuating rate is so specified, the basis to be used by the
Lenders in determining the
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rate of interest to be offered by them, and any other terms to be applicable to
such B Borrowing, not later than 11:00 A.M. (New York City time) (A) at least
one Business Day prior to the date of the proposed B Borrowing, if the Borrower
shall specify in the Notice of B Borrowing that the rates of interest to be
offered by the Lenders shall be fixed rates per annum and (B) at least four
Business Days prior to the date of the proposed B Borrowing, if the Borrower
shall instead specify in the Notice of B Borrowing the basis to be used by the
Lenders in determining the rates of interest to be offered by them. The Agent
shall in turn promptly notify each Lender of each request for a B Borrowing
received by it from the Borrower by sending such Lender a copy of the related
Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower as part of
such proposed B Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Agent (which shall give prompt
notice thereof to the Borrower) before 10:00 A.M. (New York City time) (A) on
the date of such proposed B Borrowing, in the case of a Notice of B Borrowing
delivered pursuant to clause (A) of paragraph (i) above and (B) three Business
Days before the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (B) of paragraph (i) above, of the
minimum amount and maximum amount of each B Advance which such Lender would be
willing to make as part of such proposed B Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section 2.03(a), exceed
such Lender's Commitment), the rate or rates of interest therefor and such
Lender's Applicable Lending Office with respect to such B Advance; provided
that if the Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Borrower of such offer before
9:00 A.M. (New York City time) on the date on which notice of such election is
to be given to the Agent by the other Lenders. If any Lender shall elect not
to make such an offer, such Lender shall so notify the Agent, before 10:00 A.M.
(New York City time) on the date on which notice of such election is to be
given to the Agent by the other Lenders, and such Lender shall not be obligated
to, and shall not, make any B Advance as part of such B Borrowing; provided
that the failure by any Lender to give such notice shall not cause such Lender
to be obligated to make any B Advance as part of such proposed B Borrowing.
(iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New York City time)
on the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B)
before 12:00 Noon (New York City time) three Business Days before the date of
such proposed B Borrowing, in the case of a Notice of B Borrowing delivered
pursuant to clause (B) of paragraph (i) above, either
(x) cancel such B Borrowing by giving the Agent notice to that effect, or
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<PAGE> 18
(y) accept one or more of the offers made by any Lender or Lenders
pursuant to paragraph (ii) above, in its sole discretion, by giving notice to
the Agent of the amount of each B Advance (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the maximum amount,
notified to the Borrower by the Agent on behalf of such Lender for such B
Advance pursuant to paragraph (ii) above) to be made by each Lender as part of
such B Borrowing, and reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Agent notice to that effect; provided that
acceptance of offers may only be made on the basis of ascending interest rates
specified by the Lenders pursuant to paragraph (ii) above.
(iv) If the Borrower notifies the Agent that such B Borrowing is cancelled
pursuant to paragraph (iii)(x) above, the Agent shall give prompt notice
thereof to the Lenders and such B Borrowing shall not be made.
(v) If offers are made by two or more Lenders with the same specified rate of
interest for a greater aggregate principal amount than the amount in respect of
which offers are accepted for any B Borrowing, the principal amount of B
Advances in respect of which such offers are accepted shall be allocated by the
Agent among such Lenders as nearly as possible (in such multiples of $1,000,000
as the Agent may deem appropriate) in proportion to the aggregate principal
amount of such offers. Determinations by the Agent of the amounts of B
Advances shall be conclusive in the absence of manifest error.
(vi) If the Borrower accepts one or more of the offers made by any Lender or
Lenders pursuant to paragraph (iii)(y) above, the Agent shall in turn promptly
notify (A) each Lender that has made an offer as described in paragraph (ii)
above, of the date and aggregate amount of such B Borrowing and whether or not
any offer or offers made by such Lender pursuant to paragraph (ii) above have
been accepted by the Borrower, and (B) each Lender that is to make a B Advance
as part of such B Borrowing, of the amount of each B Advance to be made by such
Lender as part of such B Borrowing. Each Lender that is to make a B Advance as
part of such B Borrowing shall, before 12:00 noon (New York City time) on the
date of such B Borrowing specified in the notice received from the Agent
pursuant to clause (A) of the preceding sentence, make available for the
account of its Applicable Lending Office to the Agent at its address referred
to in Section 8.02(b) such Lender's portion of such B Borrowing, in same day
funds. Upon satisfaction of the applicable conditions set forth in Article III
and after receipt by the Agent of such funds, the Agent will make such funds
available to the Borrower at the Agent's aforesaid address. Promptly after
each B Borrowing the Agent will notify each Lender of the amount of the B
Borrowing, the consequent B Reduction and the dates upon which such B Reduction
commenced and will terminate.
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(b) Each B Borrowing shall be in an aggregate amount not less than
$15,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of
subsection (a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, the Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03, provided that a B Borrowing shall not be made within two Business Days of
the date of any other B Borrowing.
(d) The Borrower shall repay to the Agent for the account of each Lender
which has made a B Advance, or each other holder of a B Note, on the maturity
date of each B Advance (such maturity date being that specified by the Borrower
for repayment of such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above), the then unpaid principal amount of such
B Advance. The Borrower shall have no right to prepay any principal amount of
any B Advance unless, and then only on the terms, specified by the Borrower for
such B Advance in the related Notice of B Borrowing delivered pursuant to
subsection (a)(i) above, and provided that the Borrower shall be obligated to
reimburse each Lender whose B Advance has been prepaid by the Borrower in
respect thereof pursuant to Section 8.04(b).
(e) The Borrower shall pay interest on the unpaid principal amount of each
B Advance from the date of such B Advance to the date the principal amount of
such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect
thereto delivered pursuant to subsection (a)(ii) above, payable on the maturity
date specified by the Borrower for such B Advance and on each other interest
payment date or dates specified by the Borrower for such B Advance in the
related Notice of B Borrowing delivered pursuant to subsection (a)(i) above;
provided, however, that if the maturity date of the B Advances comprising a B
Borrowing is more than 90 days after the date of such B Borrowing, then
interest shall be payable on each day which occurs at intervals of 90 days
after the date of such B Borrowing; provided, further, that any amount of
principal which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times (i) from such due date to the applicable maturity
date, to 2% per annum above the interest rate otherwise payable with respect to
such B Advance hereunder, and (ii) from and after the applicable maturity date,
to 2% per annum above the Alternate Base Rate in effect from time to time.
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SECTION 2.04. Fees.
(a) Facility Fee. The Borrower agrees to pay to the Agent, for the account
of each Lender, a facility fee on the daily average amount of such Lender's
Commitment (including both the portion thereof that is used and the portion
thereof that is unused) from the date hereof in the case of each Lender listed
on the signature pages hereof and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date, payable in arrears on the last
day of each March, June, September and December during the term of such
Lender's Commitment, commencing June 30, 1994, and on the Termination Date, at
the rate of (i) .125% per annum during each Level I Period, (ii) .15% per annum
during each Level II Period, (iii) .175% per annum during each Level III
Period, (iv) .20% per annum during each Level IV Period and (v) .25% per annum
during each Level V Period.
(b) Agent's Fees. The Borrower agrees to pay to the Agent certain fees for
its role hereunder and in connection with the execution and delivery hereof in
the amounts and at the times described in one or more letter agreements between
the Borrower and the Agent dated on or about the date hereof, as the same may
be amended, modified, supplemented or replaced from time to time by the mutual
agreement of the Borrower and the Agent. In addition to the foregoing fees, the
Borrower shall pay to the Agent an auction fee of $2,500 in respect of and at
the time each Notice of B Borrowing is delivered to the Agent. All such fees
shall be for the sole account and benefit of the Agent.
SECTION 2.05. Reduction of the Commitments. The Borrower shall have the
right, upon at least three Business Days' notice to the Agent, to terminate in
whole or reduce ratably in part the unused portions of the respective
Commitments of the Lenders, provided that the aggregate amount of the
Commitments of the Lenders shall not be reduced to an amount which is less than
the aggregate principal amount of the B Advances then outstanding and provided,
further, that each partial reduction shall be in the aggregate amount of
$25,000,000 or an integral multiple of $1,000,000 in excess thereof.
SECTION 2.06. Repayment of A Advances. The Borrower shall repay the
principal amount of each A Advance made by each Lender on the last day of the
Interest Period for such A Advance.
SECTION 2.07. Interest on A Advances. The Borrower shall pay interest on
the unpaid principal amount of each A Advance made by each Lender from the date
of such A Advance until such principal amount shall be paid in full, at the
following rates per annum and at the following times:
(a) Alternate Base Rate Advances. If such A Advance is an Alternate Base
Rate Advance, a rate per annum equal at all times to the Alternate Base Rate in
effect from time to time,
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payable quarterly on the last day of each March, June, September, and December
and on the date such Alternate Base Rate Advance shall be paid in full;
provided that any amount of principal or interest which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear interest,
from the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to 2% per annum above
the Alternate Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such A Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for
such A Advance to the sum of the Eurodollar Rate for such Interest Period plus
the applicable Eurodollar Margin, payable on the last day of such Interest
Period and, if such Interest Period is longer than three (3) months, at
intervals of three (3) months after the first day thereof; provided that any
amount of principal or interest which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest, from the date on
which such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times (i) from such due date to the last day
of the applicable Interest Period, to 2% per annum above the interest rate
otherwise payable with respect to such A Advance hereunder, and (ii) from and
after the last day of the applicable Interest Period, to 2% per annum above the
Alternate Base Rate in effect from time to time.
SECTION 2.08. Notes. The obligation of the Borrower to repay the A
Advances made to the Borrower by each Lender hereunder shall be further
evidenced by an A Note in favor of such Lender in the form and substance of
Exhibit A-1 attached hereto. The obligation of the Borrower to repay the B
Advances made to the Borrower by any Lender shall be evidenced by a B Note in
favor of such Lender in the form and substance of Exhibit A-2 attached hereto.
SECTION 2.09. Interest Rate Determination. (a) The Agent shall give prompt
notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.07(a) or (b).
(b) If the Majority Lenders shall, at least one Business Day before the date
of any requested A Borrowing comprised of Eurodollar Rate Advances, notify the
Agent that the Eurodollar Rate for Eurodollar Rate Advances comprising such A
Borrowing will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such A Borrowing, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon the right of the Borrower to select Eurodollar Rate Advances
for such A Borrowing or any subsequent A Borrowing shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and each A Advance
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comprising such A Borrowing shall be an Alternate Base Rate Advance.
SECTION 2.10. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the A Advances made by it (other than
pursuant to Section 2.12 or 2.15) in excess of its ratable share of payments on
account of the A Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the A Advances
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section 2.10
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.11. Prepayments of A Advances. (a) The Borrower shall have no
right to prepay any principal amount of any A Advances other than as provided
in subsection (b) below.
(b) The Borrower may, upon at least two Business Days' notice, or in the
case of A Borrowings comprised of Alternate Base Rate Advances notice given not
later than 11:00 A.M. (New York City time) one Business Day prior to the
proposed date of prepayment, to the Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amounts of the A Advances
comprising part of the same A Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (y) in the case of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(b).
(c) Except as provided in Section 2.03(d), the Borrower shall have no right
to prepay any principal amount of any B Advance.
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SECTION 2.12. Increased Costs. (a) If, after the date hereof, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements, in the case of Eurodollar Rate
Advances, included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
written demand by such Lender (with a copy of such demand to the Agent), which
demand must be made no later than the date that is one year after the date on
which the Commitments have been terminated and all sums owing hereunder have
been paid in full, pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Agent by such Lender, shall be conclusive and binding for all purposes,
absent manifest error. It shall be assumed, for the purpose of computing
amounts to be paid by the Borrower to CUSA pursuant to this Section 2.12(a),
that the making, funding or maintaining by CUSA of any Advance hereunder has
been by Citibank.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects the amount of capital to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of this type, then,
upon written demand by such Lender (with a copy of such demand to the Agent),
which demand must be made no later than the date that is one year after the
date on which the Commitments have been terminated and all sums owing hereunder
have been paid in full, the Borrower shall immediately pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital is allocable to the existence of such
Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error. It shall be assumed, for the
purpose of computing amounts to be paid by the Borrower to CUSA pursuant to
this Section 2.12(b), that the making, funding or maintaining by CUSA of any
Advance hereunder has been by Citibank.
(c) Each Lender agrees that if the Borrower is required to make any
payments to such Lender upon demand therefor pursuant to Sections 2.12(a) or
(b) such Lender shall use reasonable efforts to select an alternative
Applicable Lending
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Office which would avoid the need thereafter for making such demand; provided,
however, that no Lender shall be obligated to select an alternative Applicable
Lending Office if such Lender determines in its reasonable discretion that (i)
as a result of such selection such Lender would be in violation of any
applicable law, regulation, treaty or directive of any central bank or other
governmental authority, or (ii) such selection would be otherwise
disadvantageous to such Lender.
SECTION 2.13. Illegality. (a) Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Lenders to make
Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist and (ii) the Borrower shall forthwith prepay in full all
Eurodollar Rate Advances of all Lenders then outstanding, together with
interest accrued thereon.
(b) Each Lender agrees that if it determines, or if a central bank or other
governmental authority asserts, that it is unlawful for such Lender to make,
fund or maintain Eurodollar Rate Advances hereunder, such Lender shall use
reasonable efforts to select an alternative Eurodollar Lending Office to
perform its obligations hereunder to make, fund or maintain Eurodollar Rate
Advances; provided, however, that no Lender shall be obligated to select an
alternative Eurodollar Lending Office if such Lender determines in its
reasonable discretion that (i) as a result of such selection such Lender would
be in violation of any applicable law, regulation, treaty or directive of any
central bank or other governmental authority, or (ii) such selection would be
otherwise disadvantageous to such Lender.
SECTION 2.14. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due in U.S. dollars to the Agent at its address referred
to in Section 8.02(b) in same day funds. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or facility fees ratably (other than amounts payable pursuant to
Section 2.03, 2.12 or 2.15) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording
of the information contained therein in the Register pursuant to Section
8.07(d), from and after the effective date specified in such Assignment and
Acceptance, the Agent shall make all payments hereunder and
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under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under any Note
held by such Lender, to charge from time to time against (i) any or all of the
Borrower's accounts with such Lender or (ii) in the event any such payment is
not made to CUSA when due, any or all of the Borrower's accounts with Citibank
or any other Affiliate of CUSA (and the Borrower hereby authorizes Citibank and
each such Affiliate to permit such charge), any amount so due.
(c) All computations of interest based on the Alternate Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate or the
Federal Funds Rate and of interest on B Advances prior to the maturity date
applicable thereto and of facility fees shall be made by the Agent on the basis
of a year of 360 days, in each case for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such interest or fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder and under the Notes shall be stated to
be 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 in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, if such extension would cause payment of interest on
or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Agent, at the Federal Funds Rate.
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SECTION 2.15. Taxes. (a) All payments by the Borrower hereunder shall be
made without set-off or counterclaim and free and clear of and without
deduction on account of restrictions or conditions of any nature now or
hereafter imposed or levied by the United States or any political subdivision
thereof, except as specifically provided to the contrary in Section 2.15(b),
unless the Borrower is required by law to make such deductions. If any such
obligation is imposed upon the Borrower with respect to any amount payable by
it hereunder, it will pay to each affected Lender, on the date on which such
amount becomes due and payable hereunder, such additional amount as shall be
necessary to enable such Lender to receive the same net amount which it would
have received on such due date had no such obligation been imposed upon the
Borrower.
(b) Each payment to be made by the Borrower hereunder to any Lender shall
be made free and clear of and without deduction or withholding for or on
account of any tax imposed by any governmental or taxing authority of or in the
United States unless the Borrower is required to make such a payment subject to
the deduction or withholding of such tax, in which case the Borrower will pay
to each affected Lender, on the date on which such amount becomes due and
payable hereunder, such additional amount as shall be necessary to enable such
Lender to receive the same net amount which it would have received on such due
date had no such obligation been imposed upon the Borrower; provided, however,
that the Borrower shall not be required to pay any additional amount on account
of any tax of, or imposed by, the United States, pursuant to this Section
2.15(b), to any Lender and shall be entitled to deduct and withhold such tax if
such Lender (i) shall have failed to submit a valid United States Internal
Revenue Service Form 1001 or any successor form thereto ("Form 1001") relating
to such Lender and entitling it to a complete exemption from deduction or
withholding on all amounts to be received by such Lender, including fees,
pursuant to this Agreement, or a valid United States Internal Revenue Service
Form 4224 or any successor form thereto ("Form 4224") relating to such Lender
and entitling it to receive all amounts, including fees, pursuant to this
Agreement, without deduction or withholding, or a statement conforming to the
requirements of United States Treasury Regulation 1.1441-5(b), or (ii) shall
have failed to submit such form or other statement which it is required to
deliver pursuant to Section 2.15(c) hereof.
(c) Prior to the date of the initial Borrowing in the case of each Lender
listed on the signature pages hereof, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other
Lender, each Lender agrees that it will deliver to the Borrower either (i) a
statement, in duplicate, conforming to the requirements of United States
Treasury Regulation Section 1.1441-5(b), or (ii) if it is not incorporated
under the laws of the United States or a state thereof, two duly completed
copies of Form 1001 or 4224, or successor applicable forms, as the case may be,
certifying that such Lender is entitled to receive payments under this
Agreement
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without deduction or withholding of any United States federal income taxes.
Subject to any change in applicable laws or regulations, each Lender which
delivers to the Borrower a Form 1001 or 4224, or successor applicable forms,
pursuant to the provisions of this Section 2.15(c), further undertakes to
deliver to the Borrower, upon request by the Borrower, two further copies of
said Form 1001 or 4224, or successor applicable forms, on or before the date
that any such form expires or becomes obsolete certifying that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the termination of this Agreement, the
termination of the Commitments and the payment in full of the Notes.
(e) Each Lender agrees that if the Borrower is required to increase any
amounts payable to such Lender under Sections 2.15(a) or 2.15(b), such Lender
shall use reasonable efforts to select an alternative Applicable Lending Office
which would not result in such increased payment by the Borrower to such
Lender; provided, however, that no Lender shall be obligated to select an
alternative Applicable Lending Office if such Lender determines in its
reasonable discretion that (i) as a result of such selection such Lender would
be in violation of any applicable law, regulation, treaty or directive of any
central bank or other governmental authority, or (ii) such selection would be
otherwise disadvantageous to such Lender.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances. The effectiveness
of the Commitment of each Lender is subject to the condition precedent that the
Agent shall have received the following, in form and substance satisfactory to
the Agent and (except for the Notes) in sufficient copies for each Lender:
(a) The Notes payable to the order of the Lenders, respectively.
(b) This Agreement executed by the Borrower, the Agent and each of the
Lenders.
(c) Certified copies of the resolutions of the Board of Directors of the
Borrower approving this Agreement and the Notes and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes.
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(d) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder.
(e) A favorable opinion of Wilson, Sonsini, Goodrich & Rosati, special
counsel for the Borrower, substantially in the form attached hereto as Exhibit
D, , and covering such other matters as any Lender through the Agent may
reasonably request.
(f) Evidence that the obligations of the lenders and agent (including
commitments to make advances thereunder) under that certain Credit Agreement
dated as of October 9, 1992 among the Borrower, the lenders thereunder and
CUSA, as agent for the lenders thereunder, as amended, have been terminated and
all unpaid principal and interest thereunder and all other amounts then payable
by the Borrower thereunder have been paid in full (or will be paid in full by
application of the proceeds of the initial Borrowing hereunder).
(g) A copy of the Receivables Purchase Agreement as in effect on June 27,
1991, and that certain Amendment to Receivables Purchase Agreement dated May
29, 1992, together with a certificate of the Secretary or an Assistant
Secretary of the Borrower which shall include a statement that the Receivables
Purchase Agreement has not been further amended, modified or supplemented in
any respect.
(h) A favorable opinion of Steefel, Levitt & Weiss, counsel for the Agent.
SECTION 3.02. Conditions Precedent to Each A Borrowing. The obligation of
each Lender to make an A Advance on the occasion of each A Borrowing (including
the initial A Borrowing) shall be subject to the further conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of A
Borrowing with respect thereto and (ii) on the date of such A Borrowing (a) the
following statements shall be true (and each of the giving of the applicable
Notice of A Borrowing and the acceptance by the Borrower of the proceeds of
such A Borrowing shall constitute a representation and warranty by the Borrower
that on the date of such A Borrowing such statements are true):
(1) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing, before and after giving
effect to such A Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date (except to the extent such
representations or warranties specifically relate to an earlier date, in
which case they shall be true and correct as of such date),
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(2) No Default or Event of Default has occurred and is continuing, or
would result from such A Borrowing or from the application of the proceeds
therefrom, and
(3) The aggregate amount of such A Borrowing and all other Borrowings to
be made on the same day hereunder is within the aggregate amount of the
unused Commitments of the Lenders, and
(b) if the Agent or any Lender has any reason to believe that any of the
conditions set forth in this Section 3.02 shall not be satisfied on the date of
such A Borrowing, then the Agent shall have received such other approvals,
opinions or documents as the Agent or such Lender through the Agent may
reasonably request.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The obligation of
each Lender which is to make a B Advance on the occasion of a B Borrowing
(including the initial B Borrowing) to make such B Advance as part of such B
Borrowing shall be subject to the further conditions precedent that (i) the
Agent shall have received the written confirmatory Notice of B Borrowing with
respect thereto, and (ii) on the date of such B Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of B
Borrowing and the acceptance by the Borrower of the proceeds of such B
Borrowing shall constitute a representation and warranty by the Borrower that
on the date of such B Borrowing such statements are true):
(a) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such B Borrowing, before and after giving
effect to such B Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date (except to the extent such representations
or warranties specifically relate to an earlier date, in which case they shall
be true and correct as of such date),
(b) No Default or Event of Default has occurred and is continuing, or
would result from such B Borrowing or from the application of the proceeds
therefrom, and
(c) The aggregate amount of such B Borrowing and all other Borrowings to
be made on the same day hereunder is within the aggregate amount of the unused
Commitments of the Lenders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the
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jurisdiction indicated at the beginning of this Agreement. Each Subsidiary is
duly organized and validly existing under the laws of the jurisdiction in which
it is incorporated and is in good standing under the laws of such jurisdiction
except where the failure to so be in good standing (i) in the case of
Restricted Subsidiaries, is remedied within a reasonable time period after a
Responsible Officer has knowledge of any such failure, and (ii) such failure
will not have a material adverse effect on the business, financial condition,
assets, properties or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole. The Borrower and each Restricted Subsidiary has
the corporate power to own its respective property and to carry on its
respective business as now being conducted.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene (i)
the Borrower's charter or by-laws or (ii) any law or contractual restriction
binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Agreement or
the Notes.
(d) This Agreement is, and the Notes when delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally.
(e) The audited consolidated balance sheet of the Borrower as at June 30,
1993, and the related consolidated audited statements of income and
stockholders' equity of the Borrower for the fiscal year then ended, copies of
which have been furnished to each Lender, fairly present in all material
respects the consolidated financial condition of the Borrower as at such date
and the consolidated results of the operations of the Borrower for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied except as noted therein, and since June 30,
1993, there has been no material adverse change in the business, financial
condition, assets, properties or operations of the Borrower or the Borrower and
its Subsidiaries taken as a whole.
(f) Except as disclosed to the Agent and the Lenders in that certain
letter dated May 27, 1994 from the Borrower to the Agent, there is no pending
or, to the knowledge of any Responsible Officer of the Borrower, threatened
action or proceeding affecting the Borrower or any of its Subsidiaries before
any court, governmental agency or arbitrator, which (i) is reasonably likely to
be adversely determined and such adverse
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determination would likely have a material adverse effect on the business,
financial condition, assets, properties or operations of the Borrower or the
Borrower and its Subsidiaries taken as a whole, or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note.
(g) The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of any Advance will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
(h) The Borrower and each of its Restricted Subsidiaries has met its
minimum funding requirements under ERISA with respect to all of its Plans and
has not incurred any material liability to the Pension Benefit Guaranty
Corporation under ERISA in connection with any such Plan. No ERISA Termination
Event has occurred and is continuing with respect to any Plan.
(i) The Borrower is not an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
(j) Except as disclosed to the Agent and the Lenders in that certain
letter dated May 27, 1994 from the Borrower to the Agent, the Borrower and its
Restricted Subsidiaries, to the best knowledge of the Responsible Officers,
have obtained the right to use all patents, trademarks, service-marks, trade
names, copyrights, licenses and other rights, free from burdensome
restrictions, or could obtain the same on terms and conditions not materially
adverse to the Borrower and its Restricted Subsidiaries and their operations
taken as a whole, that are necessary for the operation of their respective
businesses as presently conducted and for the operation of businesses described
to the Lenders in writing as proposed to be conducted.
(k) The Borrower has and each of its Subsidiaries has good and
indefeasible title to all material properties, assets and rights of every type
and nature now purported to be owned by it (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by Section 5.02(a). All leases material to the conduct
of the respective businesses of the Borrower and its Subsidiaries as currently
conducted are valid and subsisting and are in full force and effect.
(l) The Borrower has and each of its Restricted Subsidiaries has filed all
Federal, State and other tax returns which, to the best knowledge of the
Borrower, are required to be filed, and each has paid all taxes as shown on
such returns and on all assessments received by it to the extent that such
taxes have become due, except such taxes as are being contested in good
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faith by appropriate proceedings and for which adequate reserves have been
established in accordance with generally accepted accounting principles and
except where (i) nonpayment thereof will not have a material adverse effect on
the business, financial condition, assets, properties or operations of the
Borrower or of the Borrower and its Subsidiaries taken as a whole, and (ii)
either (A) the aggregate unpaid amount thereof is less than $1,000,000, or (B)
the unpaid amount thereof shall be paid in full promptly upon the Borrower or
the Restricted Subsidiary owing the same obtaining knowledge of the delinquency
thereof, together with any penalties payable as a result of such delinquency.
(m) Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement or subject to any charter or other corporate restriction
which materially and adversely affects the business, financial condition,
assets, properties or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole. Neither the execution nor delivery of this
Agreement or the Notes, nor fulfillment of nor compliance with the terms and
provisions hereof or thereof will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Borrower or any of its Restricted Subsidiaries
pursuant to, the charter or by-laws of the Borrower or any of its Restricted
Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Borrower or any of its Restricted
Subsidiaries is subject.
(n) The documents, certificates and written statements furnished by any
Responsible Officer to the Agent or any Lender pursuant to any provision of
this Agreement or any other agreement, document or instrument delivered to the
Agent or any Lender pursuant hereto or in connection herewith, taken together
with all such other documents, certificates and written statements, do not
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements made therein, taken together, in light of the
circumstances under which they were made, not misleading. It is recognized by
the Agent and the Lenders that projections and forecasts provided by or on
behalf of the Borrower, although reflecting the Borrower's good faith
projections or forecasts based on methods and data which the Borrower believes
to be reasonable and accurate, are not to be viewed as facts and that actual
results during the period or periods covered by any such projections and
forecasts may (and are likely to) differ from the projected or forecasted
results.
(o) Listed on Exhibit G attached hereto are all of the Subsidiaries of the
Borrower as of the date of this Agreement, identifying which of the
Subsidiaries constitute Restricted Subsidiaries as of the date of this
Agreement. All of the issued
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and outstanding shares (other than shares of any foreign Subsidiary required by
applicable local law to be issued to directors of such foreign Subsidiary or
shares of foreign Subsidiaries issued to Persons to satisfy local ownership
requirements imposed by applicable local law) of the capital stock of each
Subsidiary owned by the Borrower or any Subsidiary are duly issued and
outstanding, fully paid and non-assessable and are free and clear of any Lien.
(p) In the ordinary course of its business, the Borrower conducts an
ongoing review of the effect of Environmental Laws on the business, operations
and properties of the Borrower and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and costs (including, without
limitation, any capital or operating expenditures required for clean-up or
closure of its properties, any capital or operating expenditures required to
achieve or maintain compliance with environmental protection standards imposed
by law or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature
of operations conducted thereat and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On
the basis of this review, the Borrower has reasonably concluded that
Environmental Laws are not likely to have a material adverse effect on the
business, financial condition, assets, properties or operations of the Borrower
or the Borrower and its Subsidiaries taken as a whole.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any amount payable
hereunder or under any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Majority Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects with all applicable laws, rules,
regulations and orders of any governmental authority, the noncompliance with
which would materially adversely affect the business, financial condition,
assets, properties or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole.
(b) Payment of Taxes and Claims. Pay, and cause each of its Restricted
Subsidiaries to pay, all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
franchises, business, income or profits before any penalty accrues thereon or
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immediately upon any determination that any interest is due thereon, and all
claims (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and payable and which by law have
or may become a Lien upon any of its properties or assets; provided that no
such tax, assessment, charge or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted and if such accrual or other appropriate provision, if any, as shall
be required by generally accepted accounting principles shall have been made
therefor; provided, further, that the Borrower shall not be deemed to have
breached this Section 5.01(b) on account of the failure to pay any such tax,
assessment, charge or claim if (i) nonpayment thereof will not have a material
adverse effect on the business, financial condition, assets, properties or
operations of the Borrower or the Borrower and its Restricted Subsidiaries
taken as a whole, and (ii) either (A) the aggregate unpaid amount thereof is
less than $1,000,000, or (B) the unpaid amount thereof shall be paid in full
promptly upon the Borrower or the Restricted Subsidiary owing the same
obtaining knowledge of the delinquency thereof, together with any penalties
payable as a result of such delinquency.
(c) Maintenance of Properties; Insurance; Books and Records. Maintain or
cause to be maintained, and cause each of its Restricted Subsidiaries to
maintain or cause to be maintained: (i) to the extent consistent with good
business practices, in good repair, working order and condition all properties
material to the continued conduct of the business of the Borrower and its
Subsidiaries taken as a whole, and from time to time will make or cause to be
made all necessary repairs, renewals and replacements thereof; (ii) with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and business of its Restricted
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar business
and similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations ("Industry
Standards"), provided that the Borrower and its Restricted Subsidiaries may
self insure to the extent, and only to the extent, consistent with Industry
Standards; and (iii) proper books of record and account in accordance with
generally accepted accounting principles consistently applied.
(d) Corporate Existence, etc. At all times preserve and keep in full
force and effect its corporate existence, and corporate rights and franchises
material to its business, and those of each of its Restricted Subsidiaries,
except as otherwise specifically permitted by Sections 5.02(b), 5.02(d)or
5.02(e), and will qualify, and cause each of its Restricted Subsidiaries to
qualify, to do business in any jurisdiction where the failure to do so (i) is
remedied within a reasonable time period after a Responsible Officer has
knowledge of any such failure, and (ii) will not have a material adverse effect
on the business,
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financial condition, assets, properties or operations of the Borrower or the
Borrower and its Subsidiaries taken as a whole, provided that the corporate
existence of any Subsidiary may be terminated if, in the good faith judgment of
the Board of Directors of the Borrower, such termination is in the best
interests of the Borrower and is not disadvantageous to the Lenders.
(e) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower as of the end
of such quarter and consolidated unaudited statements of income, stockholders'
equity and cash flow of the Borrower for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
comparative form figures for the corresponding period in the preceding fiscal
year, in the case of such statements of income, stockholders' equity and cash
flow, and figures at the end of the preceding fiscal year in the case of such
balance sheet, all in reasonable detail, in accordance with generally accepted
accounting principles consistently applied (except as noted therein and subject
to normal year-end adjustments), and certified in a manner reasonably acceptable
to the Majority Lenders by a Responsible Financial Officer of the Borrower;
(ii) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower as of the end of such fiscal year and consolidated statements of
income, stockholders' equity and cash flow of the Borrower for the period
commencing at the end of the previous fiscal year and ending with the end of
such fiscal year, setting forth in comparative form figures for the preceding
fiscal year, all in reasonable detail, in accordance with generally accepted
accounting principles consistently applied (except as noted therein), and
certified in a manner reasonably acceptable to the Majority Lenders by
independent public accountants of recognized national standing reasonably
acceptable to the Majority Lenders;
(iii) together with the financial statements furnished in accordance
with subdivisions (i) and (ii) of this Section 5.01(e) except as noted with
respect to clause (d) hereof, a certificate of a Responsible Financial Officer
of the Borrower in the form of Exhibit E attached hereto (a) representing and
warranting that no Event of Default or Default has occurred and is continuing
(or, if such an Event of Default or Default has occurred, stating the nature
thereof and the action which the Borrower proposes to take with respect
thereto), (b) setting forth a schedule containing the information and
calculations with respect to
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the Borrower's compliance with Sections 5.01(h), 5.01(i) and 5.02(h), (c)
stating that the representations and warranties contained in Section 4.01 are
true and correct on and as of the date of such certificate as though made on
and as of such date (except to the extent such representations or warranties
specifically relate to an earlier date, in which case they shall be true and
correct as of such date), and (d) only as to the financial statements
furnished in accordance with subdivision (ii) of this Section 5.01(e),
setting forth all changes, if any, to Exhibit G since the date of the
previous certificate furnished to the Lenders hereunder; provided that the
Borrower may, if no Advance is outstanding and no other amount payable
hereunder or under the Notes is then unpaid, elect not to submit the
statement otherwise required pursuant to the foregoing clause (c) so long as
such statement is made at least once each calendar year;
(iv) as soon as possible and in any event within five days after a
Responsible Officer or a Responsible Financial Officer knows or has reason to
know of the occurrence of any Default that is not an Event of Default
(provided, with respect to any such Default, at the time of such Default any
Advance is outstanding or any other amount payable hereunder or under the Notes
shall remain unpaid) and any Event of Default, a statement of a Responsible
Financial Officer of the Borrower setting forth details of such Event of
Default or Default and the action which the Borrower has taken and proposes to
take with respect thereto;
(v) promptly after the same are sent, copies of all financial
statements and reports which the Borrower sends to its shareholders generally;
and promptly after the same are filed, copies of all final registration
statements on Form S-1, S-2, S-3 or S-4 (without exhibits unless specifically
requested) or their successor forms relating to offerings of debt or equity by
the Borrower and copies of all reports on Form 10-K, Form 10-Q and Form 8-K or
their successor forms (without exhibits unless specifically requested) which the
Borrower may make to, or file with, the Securities and Exchange Commission or
any successor or similar governmental entity;
(vi) as soon as practicable and in any event (a) within 30 days after
any Responsible Officer or any Responsible Financial Officer knows or has reason
to know that any ERISA Termination Event described in clause (i) of the
definition of ERISA Termination Event with respect to any Plan has occurred and
(b) within 10 days after any Responsible Officer or any Responsible Financial
Officer knows or has reason to know that any other ERISA Termination Event with
respect to any Plan has occurred, a statement of a Responsible Financial Officer
of the Borrower describing such ERISA Termination Event and the action, if any,
which
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the Borrower or such ERISA Affiliate proposes to take with respect thereto;
(vii) promptly upon receipt thereof, a copy of each other summary
report in its final form submitted to the Borrower or any Restricted Subsidiary
for delivery to, or which is actually delivered to, the Board of Directors of
the Borrower by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Borrower or any Restricted
Subsidiary;
(viii) promptly after a Responsible Officer or a Responsible Financial
Officer knows or has reason to know thereof, notice of all actions, suits and
proceedings before any court or governmental authority or instrumentality
affecting the Borrower or any of its Subsidiaries of the type described in
Section 4.01(f), and promptly after any material adverse development or change
in the status of any such continuing action, suit or proceeding, notice of such
development or change;
(ix) promptly after a Responsible Officer or a Responsible Financial
Officer knows or has reason to know thereof, notice of any violation of any
Environmental Law that is reported or reportable by the Borrower or any of its
Subsidiaries to any federal, state or local environmental agency that could be
reasonably expected to have a material adverse effect on the business,
financial condition, assets, properties or operations of the Borrower or the
Borrower and its Subsidiaries taken as a whole;
(x) (a) promptly after any termination of the Commitment (as such term
is defined in the Receivables Purchase Agreement) pursuant to Section 6.01 of
the Receivables Purchase Agreement as a result of a Termination Event (as such
term is defined in the Receivables Purchase Agreement), notice of such
termination; (b) promptly after any change in the Collection Agent pursuant to
Sections 9.01 and 9.04 of the Receivables Purchase Agreement (other than
designation of a Collection Agent affiliated with the Borrower), notice of such
change; (c) at least three (3) Business Days prior to the effectiveness of any
consent by the Borrower to any sale by a Purchaser (as such term is defined in
the Receivables Purchase Agreement) of any of the Purchaser's rights or
obligations under the Receivables Purchase Agreement pursuant to Section
10.08(c) of the Receivables Purchase Agreement, notice of such proposed sale or
assignment; (d) promptly after the execution and delivery thereof, copies of
all amendments to the Receivables Purchase Agreement, whether or not the
consent thereto of the Lenders is required hereunder; and (e) notice of events
comparable to those described in the immediately preceding clauses (a), (b),
(c) and (d) under any other agreement or
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arrangement similar to the Receivables Purchase Agreement or the transactions
provided for therein; and
(xi) such other information respecting the condition or operations,
financial or otherwise (including, without limitation, information pertaining
to any change in accounting principles adopted by the Borrower or any of its
domestic Subsidiaries (or any of its foreign Subsidiaries if such change in
accounting principles would have a material effect on the financial condition,
operating performance or cash flow of the Borrower and its Subsidiaries taken
as a whole) during any fiscal year of the Borrower and the effect thereof on
the financial condition, operating performance or cash flow of the Borrower and
its Subsidiaries taken as a whole), of the Borrower or any of its Subsidiaries
as any Lender through the Agent may from time to time reasonably request.
(f) Inspection of Property. Permit any employee of, or independent
financial, legal, environmental or other professional consultant or advisor
(other than a Person that is or is affiliated with a direct competitor of the
Borrower) retained by, the Agent or any of the Lenders or any agents or
representatives thereof, at the Agent's or such Lender's expense, to visit and
inspect any of the properties of the Borrower and its Subsidiaries, to examine
the corporate books and financial records of the Borrower and its Subsidiaries
and make copies thereof or extracts therefrom (except that the Borrower, as to
any information certified by the Borrower as constituting trade secrets or
other proprietary information of a non-financial nature, in a certificate
delivered to the Agent or Lender who has requested copies or extracts of such
information, may in its discretion refuse to allow such copies or extracts to
be made) and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Borrower or its independent
public accountants (and by this provision the Borrower authorizes such
accountants to discuss with any Person so designated the affairs, finances and
accounts of the Borrower and its Subsidiaries, whether or not the Borrower is
present), all at such reasonable times and as often as the Agent or any Lender
may reasonably request, in each case as to matters reasonably related to this
Agreement or the transactions contemplated hereby or the interests of the Agent
or the Lenders hereunder.
(g) Use of Proceeds. The proceeds of all Advances shall be used for
general corporate purposes, including, without limitation, the retirement of
Debt. Notwithstanding any other term or provision set forth in this Agreement,
no portion of any Advance may be used to initiate or participate in the
acquisition of a controlling interest in the Voting Stock or assets of any
corporation unless such acquisition is made with the consent of such
corporation and does not otherwise violate the terms and provisions of this
Agreement.
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(h) Debt to Consolidated Tangible Net Worth Ratio. Maintain a ratio of
(A) consolidated Debt of the Borrower, to (B) Consolidated Tangible Net Worth
of not more than .45 to 1.00.
(i) Fixed Charge Ratio. Maintain (i) as of the last day of the first
fiscal quarter of each fiscal year of the Borrower a ratio of (A) Adjusted EBIT
of the Borrower determined on a consolidated basis for the twelve (12) month
period ending on such date, to (B) consolidated Fixed Charges of the Borrower
for the twelve (12) month period ending on such date, of not less than 1.25 to
1.00; and (ii) as of the last day of the second, third and fourth fiscal
quarters of each fiscal year of the Borrower a ratio of (A) Adjusted EBIT of
the Borrower for the twelve (12) month period ending on such date, to (B)
consolidated Fixed Charges of the Borrower for the twelve (12) month period
ending on such date, of not less than 1.50 to 1.00, in each case determined on
a consolidated basis.
SECTION 5.02. Negative Covenants. So long as any amount payable hereunder
or under any Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will not, without the written consent of the Majority
Lenders:
(a) Liens, Excess Interest in Receivables, Etc. (i) Create, assume or
suffer to exist, or permit any Subsidiary to create, assume or suffer to exist,
any Lien upon any of its property or assets, whether now owned or hereafter
acquired , or any Excess Interest in Receivables, except
(A) Liens for taxes not yet due or which are being actively contested in
good faith by appropriate proceedings,
(B) other Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in connection
with the borrowing of money or the obtaining of advances of credit, and
which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use of such property or assets
in the operation of its business,
(C) Liens existing on the property or assets of the Borrower or any
Subsidiary on the date of this Agreement and set forth on Exhibit F,
(D) Liens on property or assets of a Subsidiary to secure obligations of
such Subsidiary to the Borrower or a wholly owned Subsidiary,
(E) any Lien created to secure the purchase price or cost of
construction, or to secure Debt incurred to pay the purchase price or cost
of construction, of any property acquired by the Borrower or any Subsidiary
after the date hereof or any improvements to real
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property constructed by or for the account of the Borrower or any Subsidiary
after the date hereof, provided that (x) any such Lien shall be confined
solely to the item or items of property so acquired or constructed (and any
theretofore unimproved real property on which such improvements are located),
and (y) any such Lien shall be created concurrently with or within twelve
months following the acquisition of such property or the completion of
construction of improvements thereon,
(F) Liens (other than Liens on any Excess Interest in Receivables)
created in Pool Accounts (as defined in the Receivables Purchase Agreement)
pursuant to and in accordance with the terms of the Receivables Purchase
Agreement or in other accounts receivable of the Borrower under any similar
agreement or arrangement permitted hereunder,
(G) Liens existing on property including the proceeds thereof and
accessions thereto acquired by the Borrower or any Subsidiary (including
Liens on assets of any corporation at the time it becomes a Subsidiary,
unless such Lien was created in contemplation of such corporation becoming a
Subsidiary),
(H) Liens which constitute rights of set-off of a customary nature or
bankers' Liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with arrangements entered
into with banks in the ordinary course of business, including rights of
set-off created pursuant to or by virtue of this Agreement and the Notes,
(I) leases or subleases and license and sublicenses granted to others in
the ordinary course of the Borrower's or any Subsidiary's business not
interfering in any material respect with the business of the Borrower and
its Subsidiaries taken as a whole, and any interest or title of a lessor or
licensor under any lease or license,
(J) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 6.01(i), and Liens to
secure appeal bonds, supersedeas bonds and other similar Liens arising in
connection with court proceedings (including, without limitation, surety
bonds and letters of credit) or any other instrument serving a similar
purpose; provided, however, that the total amount secured by Liens described
in this subsection (J) may not exceed at any time 5% of Consolidated
Tangible Net Worth (plus Liens so described that are permitted in accordance
with Section 5.02(a)(ii) below),
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(K) easements, reservations, rights-of-way, restrictions, minor defects
or irregularities in title and other similar charges or encumbrances
affecting real property not interfering in any material respect with the
ordinary conduct of the business of the Borrower and its Subsidiaries taken
as a whole,
(L) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the
importation of goods, and
(M) any Lien renewing, extending, or refunding any Lien permitted under
clauses (A) through (L), inclusive, of this Section 5.02(a), provided that
the principal amount secured is not increased and that such Lien is not
extended to other property (other than pursuant to its original terms).
(ii) Notwithstanding the provisions contained in subdivision (i) of this
Section 5.02(a), in addition to the permitted Liens described above, the
Borrower and its Subsidiaries, or any of them, may create, assume or suffer
to exist other Liens and Excess Interest in Receivables if, after giving
effect thereto and to the retirement of any Debt which is concurrently being
retired, the aggregate of (A) the total amount of Debt then secured by such
Liens, and (B) the total amount of Excess Interest in Receivables then
existing, does not exceed 10% of Consolidated Tangible Net Worth; provided,
however, if the aggregate of (A) the total amount of Debt then secured by
such Liens, and (B) the total amount of Excess Interest in Receivables then
existing, exceeds 10% of Consolidated Tangible Net Worth, no Event of
Default shall occur hereunder provided the Borrower simultaneously therewith
makes or causes to be made effective provision whereby the indebtedness
evidenced by this Agreement and the Notes will be secured by such Liens
(pursuant to documentation in form and substance reasonably satisfactory to
the Agent and the Majority Lenders) equally and ratably with any and all
other Debt thereby secured so long as such other Debt shall be so secured.
(b) Merger and Consolidation. Merge into or consolidate with or into a
corporation, or permit any Subsidiary to do so, except that (i) any Subsidiary
may merge or consolidate with any other Subsidiary and any Subsidiary may merge
into the Borrower, (ii) the Borrower may merge or consolidate with any other
corporation provided that (A) either (1) the Borrower shall be the continuing
or surviving corporation, or (2) the successor corporation shall be a solvent
corporation organized under the laws of any State of the United States of
America with a financial condition at least equal to that of the Borrower at
the time of such merger or consolidation, and such corporation shall
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expressly assume in writing all of the obligations of the Borrower under this
Agreement and under the Notes, including all covenants herein and therein
contained which assumption shall not otherwise violate any term, condition or
provision of this Agreement or the Notes, and such successor shall be
substituted for the Borrower with the same effect as if it had been named
herein as a party hereto, and (B) immediately after giving effect to such
merger or consolidation, no Default or Event of Default shall have occurred,
(iii) a Subsidiary may merge into or consolidate with a corporation in
connection with such corporation becoming a Subsidiary or being combined with
any existing Subsidiary, and (iv) provided that the disposition of such
Subsidiary is not otherwise prohibited under the terms of this Agreement
(including pursuant to Section 5.02(d)(ii) below), any Subsidiary may merge
into or consolidate with a corporation, if after giving effect to such merger
or consolidation, neither such Subsidiary nor such corporation is a Subsidiary.
(c) Change in Nature of Business. Make, or permit any Subsidiary to make,
any material change in the nature of its business as carried on at the date
hereof; provided, however, that the Borrower and its Subsidiaries may enter
into businesses which are appropriate extensions of or are reasonably related
or incidental to the current businesses of the Borrower and its Subsidiaries.
(d) Maintenance of Ownership of Subsidiaries. Sell or otherwise dispose
of any shares of capital stock of any Subsidiary or permit any Subsidiary to
issue, sell or otherwise dispose of any shares of its capital stock or the
capital stock of any other Subsidiary, except
(i) to the Borrower or another Subsidiary;
(ii) that all shares of stock of any Subsidiary at the time owned by the
Borrower or any Subsidiary may be sold as an entirety for a consideration
which represents the fair value (as determined in good faith by the Board of
Directors of the Borrower) at the time of sale of the shares of stock so
sold, provided that after giving effect to the sale thereof the sum of (A)
the total assets of all Subsidiaries whose stock is so sold pursuant to this
clause (ii) after the date of this Agreement, plus (B) the total assets of
all Subsidiaries that have been merged into or consolidated with a
corporation pursuant to clause (iv) of Section 5.02(b) after the date of this
Agreement, does not exceed 15% of the consolidated total assets of the
Borrower;
(iii) shares of stock of any Subsidiary may be sold if, after giving effect
to such sale, such Subsidiary shall continue to be a Subsidiary; and
(iv) shares of stock of any foreign Subsidiary may be issued to directors of
such foreign Subsidiary to satisfy director ownership requirements imposed by
applicable local
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law and shares of stock of foreign Subsidiaries may be issued to Persons to
the extent necessary to satisfy local ownership requirements imposed by
applicable local law.
(e) Sales, Etc. of Assets. Transfer, or permit any Subsidiary to
Transfer any assets, if after giving effect to such Transfer the sum of (1) the
total assets as to which there has been a Transfer not permitted by clauses (i)
or (ii) of this Section 5.02(e) after the date of this Agreement, plus (2) the
total assets of all Subsidiaries whose stock is sold pursuant to clause (ii) of
Section 5.02(d) after the date of this Agreement, plus (3) the total assets of
all Subsidiaries that have been merged into or consolidated with a corporation
pursuant to clause (iv) of Section 5.02(b) after the date of this Agreement,
would exceed 20% of the consolidated total assets of the Borrower, except that:
(i) any Subsidiary may Transfer any of its assets to the Borrower or to
another Subsidiary and the Borrower may Transfer assets to a wholly-owned
Subsidiary that had been transferred to the Borrower from a Subsidiary after
the date of this Agreement; and
(ii) the provisions of this Section 5.02(e) shall not apply to (A) any
Transfer made in the ordinary course of business, (B) any Transfer of
obsolete assets, (C) any Transfer by the Borrower or any Subsidiary of assets
(but not of all or substantially all of its assets) if such Transfer is made
pursuant to a plan to replace the assets subject to such Transfer and such
replacement occurs no later than six (6) months after the Transfer (or, if
replacement is not reasonable by such date, binding commitments to construct
and/or acquire replacement assets shall have been entered into no later than
six (6) months after the Transfer and such replacement shall occur within a
reasonable period of time, which shall in no event exceed eighteen (18)
months), or (D) the sale of notes, leases and accounts receivable pursuant to
and in accordance with the terms of the Receivables Purchase Agreement or any
similar agreement or arrangement permitted under Section 5.02(f) by Sun
Microsystems Federal, Inc., Sun Microsystems Finance, Inc., SunSoft, Inc.,
Sun Technology Enterprises, Inc., SunExpress, Inc. or any other Subsidiary
which is or becomes a party to the Receivables Purchase Agreement or any such
other agreement or arrangement.
(f) Sale of Receivables. Sell with recourse, or discount or otherwise
sell for less than the face value thereof, or sell with or without recourse for
consideration other than cash, or permit any Subsidiary to sell with recourse,
or discount or otherwise sell for less than the face value thereof, or sell
with or without recourse for consideration other than cash, any of its notes or
accounts receivable; provided, that the foregoing restrictions shall not apply
to (i) any license or sale of products or services in the ordinary course of
business where
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payment for such transactions is made by credit card, provided that the fees
and discounts incurred by the Borrower or the Subsidiary in connection
therewith shall not exceed the normal and customary fees and discounts incurred
for general credit card transactions through major credit card issuers, (ii)
the delivery and endorsement to banks in the ordinary course of business by the
Borrower or any of its Subsidiaries of promissory notes received in payment of
trade receivables, where delivery and endorsement are made prior to the date of
maturity of such promissory notes, and the retention by said banks of normal
and customary fees and discounts therefor, provided such practice is usual and
customary in the country where such activity occurs, and (iii) any sale of
notes or accounts receivable (or interests therein) so long as (A) the Borrower
or the Subsidiary selling such notes or accounts receives, at the time of the
sale, cash consideration of at least (x) with respect to sales under the
Receivables Purchase Agreement, the amount determined in accordance with the
provisions thereof, and (y) with respect to all other sales, 90% of the
aggregate face amount of the notes or accounts receivable (or portions thereof)
so sold, and (B) after giving effect to such sale, the outstanding face amount
which remains owing from the respective trade debtors under all such notes or
accounts receivable sold does not exceed at any time an amount equal to the
greater of (1) $250,000,000 or (2) 15% of Consolidated Tangible Net Worth.
(g) Amendment of Receivables Purchase Agreement. Agree to (i) any amendment
to the Receivables Purchase Agreement that amends Section 5.09 of the
Receivables Purchase Agreement or the definition of "Permitted Subordinated
Interest" (as such term is defined in the Receivables Purchase Agreement) in a
manner which would impair the ability of the Borrower and its Subsidiaries
pursuant to such Section (as written without giving effect to such amendment)
to sell, assign or otherwise dispose of, or create or suffer to exist, any
Permitted Subordinated Interest with respect to their interests in any Pool
Assets (as such term is defined in the Receivables Purchase Agreement) and the
proceeds thereof; provided, however, that the foregoing shall in no way limit
the application of the definition of "Receivables Purchase Agreement" as set
forth in Section 1.01, or (ii) enter into any other agreement pertaining to the
sale of accounts receivable of the Borrower unless such other agreement permits
the Borrower to grant to the Lenders a security interest in the Borrower's
accounts receivable on terms no less favorable to the Lenders than those
contained in the Receivables Purchase Agreement.
(h) Subsidiary Debt. Permit any Subsidiary organized under the laws of
any State of the United States of America to create, incur, assume or suffer to
exist any Debt if, after giving effect thereto and to the concurrent repayment
of any other Debt, the aggregate Debt of all such Subsidiaries will exceed
$120,000,000.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay (i) any principal of any Advance when
the same becomes due and payable; or (ii) any interest on any Advance or any
fees payable hereunder within five (5) Business Days after the same becomes
due; or (iii) any other amounts payable hereunder within thirty (30) days of
the date of invoice or written demand therefor; or
(b) any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant or
agreement contained in Sections 5.01(h),5.01(i), 5.02(b), 5.02(c), 5.02(d),
5.02(e), 5.02(g) or 5.02(h); or
(d) the Borrower shall fail to perform or observe any term, covenant or
agreement contained in this Agreement (other than those covered by the other
clauses of this Section 6.01) on its part to be performed or observed if the
failure to perform or observe such other term, covenant or agreement shall
remain unremedied for 30 days after written notice thereof shall have been
given to the Borrower by the Agent at the request of any Lender; or
(e) (i) the Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt which is outstanding in a
principal amount of at least $10,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of the Borrower or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument; but only if the effect of such failure to pay, event
or condition is to accelerate the maturity of such Debt; or any such Debt shall
be declared by the creditor to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased
or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall
be required to be made, in each case prior to the stated maturity thereof; or
(ii) any event shall occur or condition shall exist under any
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agreement or instrument relating to any Debt of the Borrower or any of its
Subsidiaries outstanding in a principal amount in excess of $50,000,000 in the
aggregate and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to permit the acceleration by the creditor of, the maturity of
such Debt; or
(f) the Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of thirty (30) consecutive days, or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property) shall
occur; or the Borrower or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection (f);
or
(g) any order, judgment or decree is entered in any proceedings against
the Borrower or any Restricted Subsidiary decreeing the dissolution of the
Borrower or such Restricted Subsidiary and such order, judgment or decree
remains unstayed and in effect for more than sixty (60) consecutive days; or
(h) any order, judgment or decree is entered in any proceedings against
the Borrower or any Restricted Subsidiary decreeing a split-up of the Borrower
or such Restricted Subsidiary which requires the divestiture of assets
representing a substantial part, or the divestiture of the stock of a
Restricted Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Borrower (determined in accordance with generally
accepted accounting principles) or which requires the divestiture of assets, or
stock of a Restricted Subsidiary, which shall have contributed a substantial
part of the consolidated net income of the Borrower (determined in accordance
with generally accepted accounting principles) for any of the three fiscal
years then most recently ended, and such order, judgment or decree remains
unstayed and in effect for more than sixty (60) consecutive days; or
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(i) a final judgment or order for the payment of money in an amount (not
covered by insurance) which exceeds $10,000,000 shall be rendered against the
Borrower or any of its Subsidiaries and, prior to the payment in full of the
amount thereof, either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be any period of
thirty (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
(j) any ERISA Termination Event that the Lenders determine in good faith
might constitute grounds for the termination of any Plan or for the appointment
by the appropriate United States district court of a trustee to administer any
Plan shall have occurred and be continuing for thirty (30) days after written
notice shall have been given to the Borrower by the Agent, or any Plan shall be
terminated, or a trustee shall be appointed by an appropriate United States
district court to administer any Plan, or the Pension Benefit Guaranty
Corporation shall institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan;
then, and in any such event, the Agent (i) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however, that if
an Event of Default specified in Section 6.01(f) shall occur or in the event of
an actual or deemed entry of an order for relief with respect to the Borrower
or any of its subsidiaries under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated
and (B) the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 6.02. Mandatory Prepayment; Event of Early Termination.
Notwithstanding anything to the contrary contained herein, in the event that a
Change of Control Event shall occur with respect to the Borrower, the Agent (i)
shall at the request, or may with the consent, of the Majority Lenders, by
notice to the Borrower, declare the obligation of each Lender to make Advances
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare the Advances, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable,
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whereupon the Advances, all such interest and all such amounts shall become and
be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the amounts payable hereunder and
under the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however, that the Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or applicable law. The Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may
treat the payee of any Note as the holder thereof until the Agent receives and
accepts an Assignment and Acceptance entered into by the Lender which is the
payee of such Note, as assignor, and an assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of this Agreement by acting
upon
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any notice, consent, certificate or other instrument or writing (which may be
by telecopier, telegram, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 7.03. CUSA and Affiliates. With respect to its Commitment and the
Advances made by it and the Notes issued to it, CUSA shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same
as though it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include CUSA in its individual capacity.
CUSA and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or
own securities of the Borrower or any such Subsidiary, all as if CUSA were not
the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts outstanding under the A Notes then held by each of
them (or if no A Advances are at the time outstanding or if any A Notes are
held by Persons which are not Lenders, ratably according to the respective
amounts of their Commitments), from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Agent under this Agreement, provided that no Lender shall be liable for any
portion of such claims, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including counsel fees, court
costs and all other reasonable litigation expenses, including, but not limited
to, expert witness fees, document copying expenses, exhibit preparation,
courier expenses, postage, and communication expenses) incurred by the Agent in
connection with the
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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,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent, which successor Agent shall (if no Event of Default then exists) be
subject to the approval of the Borrower not to be unreasonably withheld. If no
successor Agent shall have been so appointed by the Majority Lenders, and shall
have accepted such appointment, within twenty (20) days after the retiring
Agent's giving of notice of resignation, then the Borrower may appoint a
successor Agent, which successor Agent shall be subject to the approval of the
Majority Lenders not to be unreasonably withheld. If no successor Agent shall
have been so appointed by the Borrower, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $300,000,000 or an Affiliate thereof.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders and the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, 3.02 or
3.03, (b) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of
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principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or the number of
Lenders which shall be required for the Lenders or any of them to take any
action hereunder, or (f) amend this Section 8.01; and provided, further, that
no amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Lenders required above to take such action, affect the
rights or duties of the Agent under this Agreement.
SECTION 8.02. Notices, Payments, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at its address
at 2550 Garcia Avenue PAL 1-211, Mountain View, California 94043, Attention:
Treasurer, with a copy to the attention of General Counsel at the same address
(but with the following mail stop substituted: PAL 1-521); if to any Lender
specified on Schedule I, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; and if to the Agent, at its address c/o Citicorp North America, Inc. at
Citicorp Center, One Sansome Street, Suite 2710, San Francisco, California
94104, Attention: J. Kevin Nater; or, as to the Borrower or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent.
All such notices and communications shall, (i) when telecopied, telegraphed,
telexed or cabled, be effective when telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, (ii) when sent by an overnight (next day) courier service, be
effective on the Business Day after the date when delivered to such service,
and (iii) when mailed, be effective on the fifth Business Day after the date
deposited in the mails, except that notices and communications to the Agent
pursuant to Article II or VII shall not be effective until received by the
Agent, and any notice of default which is given to the Borrower only by means
of telecopier shall not be effective until such telecopy is received by the
Borrower.
(b) All payments made or funds delivered to the Agent hereunder shall be
made or delivered to the Agent at its Domestic Lending Office or at such other
address as the Agent may designate from time to time in a written notice to the
other parties.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or
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the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
written demand all reasonable costs and expenses incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment and syndication of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under this Agreement. The Borrower further agrees to pay on
written demand all reasonable costs and expenses, if any (including, without
limitation, reasonable counsel fees, court costs, and all other reasonable
litigation expenses, including, but not limited to, expert witness fees,
document copying expenses, exhibit preparation, courier expenses, postage,
communication expenses and other expenses, specifically including reasonable
allocated costs of in-house counsel), incurred by the Agent and the Lenders in
connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, reasonable counsel
fees and expenses in connection with the enforcement of rights under this
Section 8.04(a). In addition, the Borrower shall pay any and all stamp and
other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, the Notes and the other documents to
be delivered hereunder, and agrees to save the Agent and each Lender harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
(b) If any payment of principal of any Eurodollar Rate Advance or B
Advance is made other than on the last day of the Interest Period for such A
Advance or the applicable maturity date for such B Advance, as the case may be,
as a result of a payment pursuant to Section 2.13 or acceleration of the
maturity of the Advances pursuant to Section 6.01 or for any other reason, the
Borrower shall, upon written demand by any Lender (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender to fund or maintain such Advance. Upon the
Borrower's written request, any Lender demanding compensation under this
Section 8.04(b) shall furnish to the Borrower a summary statement as to the
method of calculation of any such losses, costs or expenses.
(c) The Borrower agrees to indemnify, protect, defend and hold harmless
the Agent and each Lender and each of their
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Affiliates and their respective officers, directors, employees, agents,
advisors and representatives (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, obligations, penalties,
actions, judgments, suits, costs, disbursements and expenses (including,
without limitation, reasonable fees and expenses of counsel, including but not
limited to court costs and all other reasonable litigation expenses including,
but not limited to, expert witness fees, document copying expenses, exhibit
preparation, courier expenses, postage, and communication expenses) that may be
incurred by or asserted against any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with the preparation
for a defense of, any investigation, litigation, proceeding or settlement
arising out of, related to or in connection with (i) this Agreement or the
transactions contemplated by this Agreement or the use of any proceeds of the
Advances, (ii) the Advances, the Borrowings or the Commitments, (iii) the
failure of the Borrower or any of its Subsidiaries to comply fully with any and
all Environmental Laws applicable to it, or (iv) any acquisition or proposed
acquisition by the Borrower or any of its Subsidiaries of all or any portion of
the stock or substantially all of the assets of any Person (including, without
limitation, the Borrower), whether or not an Indemnified Party is a party
thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claims, damages, losses, liabilities,
obligations, penalties, actions, judgments, suits, costs, disbursements and
expenses are found in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of such Indemnified Party. If an Indemnified Party settles, compromises or
accepts a default judgment on any claim, demand or cause of action for which it
is otherwise entitled to indemnification by the Borrower hereunder without the
Borrower's prior written consent, which consent shall not be unreasonably
withheld or delayed, the Borrower shall be relieved of the obligation hereunder
to indemnify and hold harmless such Indemnified Party with respect to such
settlement, compromise or default judgment. If an Indemnified Party appeals
any judgment or award for which it is otherwise entitled to indemnification by
the Borrower without the Borrower's prior written consent, which consent shall
not be unreasonably withheld or delayed, Borrower shall be relieved of the
obligation hereunder to indemnify and hold harmless such Indemnified Party with
respect to any incremental claim, damage, loss, liability, obligation, penalty,
action, judgment, suit, cost, disbursement or expense arising out of such
appeal.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the termination of this Agreement, the
termination of the Commitments and the payment in full of the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and
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(ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Agent to declare the Advances and all other
amounts payable under this Agreement to be forthwith due and payable pursuant
to the provisions of Section 6.01, each Lender is hereby authorized at any time
and from time to time, 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 and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
any Note held by such Lender, whether or not such Lender shall have made any
demand under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 8.05 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which
such Lender may have. The Borrower hereby authorizes CUSA, in accordance with
the provisions of this Section 8.05, to so set-off and apply any and all such
deposits held and other indebtedness owing by Citibank or any other Affiliate
of CUSA to or for the credit or the account of the Borrower and hereby
authorizes Citibank and each such Affiliate to permit such set-off and
application by CUSA.
SECTION 8.06. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Agent and when the Agent
shall have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may assign
to one or more banks or other financial institutions all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the A Advances owing to it and the A Note or
Notes held by it); provided, however, that (i) each such assignment shall be of
a constant, and not a varying, percentage of all rights and obligations under
this Agreement (other than any B Advances or B Notes), (ii) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and shall
be an integral multiple of $1,000,000, (iii) each such assignment shall be to
an assignee reasonably acceptable to the Agent and consented to by the
Borrower, which consent shall not be unreasonably withheld; provided, however,
that the consent of the Borrower shall not be
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required with respect to any such assignment by CUSA to Citibank or any other
Affiliate of CUSA of any Advance made by CUSA or any such assignment by any
other Lender to an Affiliate of such Lender of any Advance made by such Lender,
and (iv) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any A Note or Notes subject to such assignment and a
processing and recordation fee of $2,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) 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, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
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(c) The Agent shall maintain at its address referred to in Section 8.02(a)
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the A Advances owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee acceptable to the Agent and reasonably
consented to by the Borrower together with any A Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may assign to one or more banks or other entities any B
Note or Notes held by it.
(f) A Lender may at any time grant participations to one or more banks or
other entities in or to all or any part of its rights and obligations under
this Agreement or any Borrowings hereunder without the consent of the Borrower
or the Agent; provided, however, that (i) the Borrower and the Agent shall be
entitled to continue to deal solely with the granting Lender regarding notices,
payments, payment instructions and any other matters arising pursuant to this
Agreement; (ii) the granting Lender's obligations under this Agreement shall
remain unchanged and the granting Lender shall remain solely responsible for
the performance thereof, and (iii) the granting Lender shall remain the holder
of its Note(s) for all purposes under this Agreement. Any agreement pursuant
to which any Lender may grant such a participating interest shall provide that
such Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder, including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such
Lender will not agree, without the consent of the participant, to any
modification, amendment or waiver of any provision of this Agreement described
in clauses (b), (c) or (d) of Section 8.01, or to the release of any Lien that
may at any time be created to secure any obligations owing to the Agent and/or
the Lenders hereunder or under the Note.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant
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to this Section 8.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree, pursuant to Section 8.11, to preserve the confidentiality of any
confidential information relating to the Borrower received by it from such
Lender.
(h) Notwithstanding anything else contained herein, each Lender may
assign, as collateral or otherwise, any of its rights (including, without
limitation, rights to payments of principal or interest) under this Agreement
to any Federal Reserve Bank without notice to or the consent of the Borrower or
the Agent and without any requirement that the assignee assume any obligations
of such Lender hereunder.
(i) If any Eurodollar Reference Bank or its Lender Affiliate assigns its
Notes to an unaffiliated institution, the Agent shall, in consultation with the
Borrower and with the consent of the Majority Lenders, appoint another bank to
act as a Eurodollar Reference Bank hereunder, and pending such appointment, the
Eurodollar Rate shall be determined on the basis of the remaining Eurodollar
Reference Bank(s).
SECTION 8.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
SECTION 8.09. Headings. Article and 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 8.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 8.11. Confidentiality. In accordance with normal procedures
regarding proprietary information supplied by customers, each of the Lenders
agrees to keep confidential and to cause its employees, agents and
representatives to keep confidential information relating to the Borrower or
any Subsidiary received pursuant to or in connection with this Credit Agreement
and the transactions contemplated hereby, provided that nothing herein shall be
construed to prevent the Agent or any Lender from disclosing such information
(i) upon the order of any court or administrative agency, (ii) upon the request
or demand of any regulatory agency or authority having jurisdiction over the
Agent or such Lender, (iii) which has been publicly disclosed, (iv) which has
been lawfully obtained by any of the Lenders from a Person other than the
Borrower or any Subsidiary, the Agent or any other Lender, or (v) to any
participant in or
54
<PAGE> 58
assignee of, or prospective participant in or assignee of, all or any part of
the rights and obligations of such Agent or such Lender under this Agreement or
any Advances hereunder (provided that such participant or assignee, or
prospective participant or assignee, agrees to comply with the confidentiality
requirements set forth in this Section 8.11).
SECTION 8.12. Termination. Except as otherwise provided in this Agreement
and the Notes and the other agreements and instruments executed pursuant
hereto, all rights and obligations hereunder and thereunder shall terminate
when all amounts payable under this Agreement, the Notes and such other
agreements shall have been paid in full and no Lender shall have any Commitment
hereunder; provided, however, that notwithstanding the foregoing the Borrower
shall remain liable for all of its obligations hereunder and thereunder to
indemnify or reimburse the Agent and the Lenders, including, without
limitation, pursuant to the provisions of Sections 2.12, 2.15 and 8.04 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SUN MICROSYSTEMS, INC.
By: ______________________________
Name: ________________________
Title: _______________________
CITICORP USA, INC., as Agent
By: ______________________________
Vice President
Commitment Lenders
$15,000,000 CITICORP USA, INC.
By: _______________________________
Title: Vice President
55
<PAGE> 59
$11,250,000 BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
By: _________________________________
Title: __________________________
$11,250,000 ABN AMRO BANK N.V
SAN FRANCISCO INTERNATIONA BRANCH
By: _________________________________
Title: __________________________
By: _________________________________
Title: __________________________
$11,250,000 THE FIRST NATIONAL BANK OF BOSTON
By: _________________________________
Title: __________________________
By: _________________________________
Title: __________________________
$11,250,000 BARCLAYS BANK PLC
By: _________________________________
Title: __________________________
$11,250,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: _________________________________
Title: ___________________________
$11,250,000 THE FUJI BANK, LIMITED,
SAN FRANCISCO AGENCY
By: _________________________________
Title: __________________________
$11,250,000 THE BANK OF CALIFORNIA, N.A.
By: _________________________________
Title: __________________________
56
<PAGE> 60
$11,250,000 THE SAKURA BANK, LIMITED,
SAN FRANCISCO AGENCY
By: _________________________________
Title: __________________________
$11,250,000 BANQUE NATIONALE DE PARIS
By: _________________________________
Title: __________________________
$11,250,000 BAYERISCHE VEREINSBANK AG,
LOS ANGELES AGENCY
By: _________________________________
Title: __________________________
By: _________________________________
Title: __________________________
$11,250,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, SAN FRANCISCO AGENCY
By: _________________________________
Title: __________________________
$11,250,000 SWISS BANK CORPORATION
By: _________________________________
Title: __________________________
____________
$150,000,000 Total of the Commitments
[2394.AGRE]E19883
57
<PAGE> 61
EXHIBIT A-l
FORM OF A NOTE
U.S.$___________ Dated: _______, 19__
FOR VALUE RECEIVED, the undersigned, SUN MICROSYSTEMS, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_______________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of each A Advance (as defined in the Credit Agreement) made by
the Lender to the Borrower pursuant to the Credit Agreement on the last day of
the Interest Period (as defined in the Credit Agreement) for such A Advance and
otherwise in accordance with the provisions of the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of each A Advance from the date of such A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citicorp USA, Inc., as Agent, at its account with
Citibank, N.A., 399 Park Avenue, New York, New York 10043, in same day funds,
or at such other address or account as the Agent may designate from time to
time in a written notice to the Borrower. Each A Advance made by the Lender to
the Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This Promissory Note is one of the A Notes referred to in, and
is entitled to the benefits of, the Credit Agreement dated as of June 1, 1994
(the "Credit Agreement"), among the Borrower, the Lender and certain other
lenders parties thereto, and Citicorp USA, Inc., as Agent for the Lender and
such other lenders. The Credit Agreement, among other things, (i) provides for
the making of the A Advances by the Lender to the Borrower from time to time in
an aggregate amount not to exceed at any time outstanding the U.S. dollar
amount first above mentioned, the indebtedness of the Borrower resulting from
each such A Advance being further evidenced by this Promissory Note, and (ii)
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
A-1-1
<PAGE> 62
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California.
SUN MICROSYSTEMS, INC., a Delaware corporation
By:___________________________________________
Name:_________________________________________
Title:________________________________________
A-1-2
<PAGE> 63
A NOTE GRID
A-1-3
<PAGE> 64
EXHIBIT A-2
FORM OF B NOTE
Dated: _________, 19__
FOR VALUE RECEIVED, the undersigned, SUN MICROSYSTEMS, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_______________ (the "Lender") for the account of its Applicable Lending Office
(as defined in the Credit Agreement referred to below), the principal amount of
each B Advance (as defined in the Credit Agreement) made by the Lender to the
Borrower pursuant to the Credit Agreement on the maturity date of such B
Advance as is specified in the related Notice of B Borrowing (as defined in the
Credit Agreement) delivered by the Borrower pursuant to Section 2.03(a)(i) of
the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of each B Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates and payable at such times as are
specified pursuant to the provisions of Section 2.03 thereof.
Both principal and interest are payable in lawful money of the
United States of America to Citicorp USA, Inc., as Agent, at its account with
Citibank, N.A., as Agent, at 399 Park Avenue, New York, New York 10043, in same
day funds, or at such other address or account as the Agent may designate from
time to time in a written notice to the Borrower. Each B Advance made by the
Lender to the Borrower pursuant to the Credit Agreement, and all payments made
on account of the principal hereof shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto which is part of
this Promissory Note; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This Promissory Note is one of the B Notes referred to in, and
is entitled to the benefits of, the Credit Agreement dated as of June 1, 1994
(the "Credit Agreement"), among the Borrower, the Lender and certain other
lenders parties thereto, and Citicorp USA, Inc., as Agent for the Lender and
such other lenders. The Credit Agreement, among other things, (i) provides for
the making of B Advances by the Lender, in its sole discretion, to the Borrower
from time to time pursuant to the provisions of the Credit Agreement, the
indebtedness of the Borrower resulting from each such B Advance being further
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events. The Borrower shall have no right to
A-2-1
<PAGE> 65
prepay any principal amount hereof except upon the terms and conditions
specified pursuant to the Credit Agreement.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of California.
SUN MICROSYSTEMS, INC., a Delaware corporation
By:___________________________________________
Name:_________________________________________
Title:________________________________________
A-2-2
<PAGE> 66
B NOTE GRID
A-2-3
<PAGE> 67
EXHIBIT B-1
NOTICE OF A BORROWING
Citicorp USA, Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Citicorp Center
One Sansome Street, Suite 2710 [Date]
San Francisco, California 94104
Attention: _____________________
Gentlemen:
The undersigned, Sun Microsystems, Inc., refers to the Credit
Agreement, dated as of June 1, 1994 (the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, certain
Lenders parties thereto and Citicorp USA, Inc., as Agent for said Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests an A Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such A Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is __________,
19__.
(ii) The Type of A Advances comprising the Proposed A Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$_______________.
(iv) The Interest Period for each A Advance made as part of the
Proposed A Borrowing is [____ days] [____ month[s]].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed A
Borrowing:
(A) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed A Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date (except to the extent such representations or warranties specifically
relate to
B-1-1
<PAGE> 68
an earlier date, in which case they shall be true and correct as of such date);
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed A Borrowing or from the application of the
proceeds therefrom; and
(C) the aggregate amount of the Proposed A Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement is within the
aggregate amount of the unused Commitments of the Lenders.
Very truly yours,
SUN MICROSYSTEMS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
B-1-2
<PAGE> 69
EXHIBIT B-2
NOTICE OF B BORROWING
Citicorp USA, Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Citicorp Center
One Sansome Street, Suite 2710 [Date]
San Francisco, California 94104
Attention: _______________________
Gentlemen:
The undersigned, Sun Microsystems, Inc., refers to the Credit
Agreement, dated June 1, 1994 (the "Credit Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, certain
Lenders parties thereto and Citicorp USA, Inc., as Agent for said Lenders, and
hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that
the undersigned hereby requests a B Borrowing under the Credit Agreement, and
in that connection sets forth the terms on which such B Borrowing (the
"Proposed B Borrowing") is requested to be made:
(A) Date of B Borrowing _________________________
(B) Amount of B Borrowing _________________________
(C) Maturity Date _________________________
(D) Interest Rate Basis _________________________
(E) Interest Payment Date(s) _________________________
(F) _______________________ _________________________
(G) _______________________ _________________________
(H) _______________________ _________________________
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed B Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date (except to the extent such representations or warranties specifically
relate to an earlier date, in which case they shall be true and correct as of
such date);
B-2-1
<PAGE> 70
(b) no Default or Event of Default has occurred and is continuing,
or would result from the Proposed B Borrowing or from the application of the
proceeds therefrom; and
(c) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement is within the
aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed B Borrowing
is to be made available to it in accordance with Section 2.03(a)(vi) of the
Credit Agreement.
Very truly yours,
SUN MICROSYSTEMS, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
B-2-2
<PAGE> 71
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated __________ ___, 19__
Reference is made to the Credit Agreement dated as of June 1,
1994 (the "Credit Agreement") among Sun Microsystems, Inc., a Delaware
corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement)
and Citicorp USA, Inc., as Agent for the Lenders (the "Agent"). Terms defined
in the Credit Agreement are used herein with the same meaning.
_______________ (the "Assignor") and _______________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the date hereof (other than in respect of B Advances)
which represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of B Advances), including, without limitation, such interest in the
Assignor's Commitment and the A Advances owing to the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the A Advances owing to the Assignee will be as set forth in Section 2 of
Schedule 1.
2. The Assignor (i) represents and warrants as of the
Effective Date (as defined below) that 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 liens or encumbrances; (ii) 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; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant
thereto; and (iv) except as stated in clause (i) of this Paragraph 2, makes no
representation or warranty of any kind relating to the Borrower or the Credit
Agreement.
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will,
C-1
<PAGE> 72
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) appoints and authorizes the Agent 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 terms thereof, together
with such powers as are reasonably incidental thereto; (iv) 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 Lender;
and (v) specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof. [Note: the following sentence is included only if the
Assignee is organized under the laws of a jurisdiction outside the United
States: The Assignee attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
or such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty] [Note:
the following sentence is included if the Assignee is organized under the laws
of a jurisdiction within the United States: The Assignee attaches a statement
conforming to the requirements of United States Treasury Regulation
1.1441-5(b)].
4. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, it will be delivered to the Agent
for acceptance and recording by the Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the Agent,
unless otherwise specified on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from
and after the Effective Date the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment and other fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement for periods
prior to the Effective Date directly between themselves.
C-2
<PAGE> 73
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.
C-3
<PAGE> 74
EXHIBIT C
Schedule 1
to
Assignment and Acceptance
Dated _______, 19__
Section 1.
Percentage Interest: _________%
Section 2.
Assignee's Commitment: $_________
Aggregate Outstanding Principal
Amount of A Advances owing to the
Assignee: $_________
Assignor's Retained Commitment: $_________
Section 3.
Effective Date: _____, 19__
[NAME OF ASSIGNOR]
By:______________________________
Title:___________________________
[NAME OF ASSIGNEE]
By: _____________________________
Title:
Domestic Lending Office (and address
for notices):
[Address]
Eurodollar Lending Office
[Address]
Consented to this ___ day
of ________________, 19__
C-4
<PAGE> 75
SUN MICROSYSTEMS, INC.,
By: __________________________
Name: ________________________
Title: _______________________
Accepted this _______ day
of ________________, 19__
CITICORP USA, INC.
By:____________________________
Vice President
C-5
<PAGE> 76
EXHIBIT E
COVENANT COMPLIANCE CERTIFICATE
Citicorp USA, Inc. as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Citicorp Center
One Sansome Street, Suite 2710
San Francisco, California 94111
Attention: _______________________
Gentlemen:
I, the undersigned, the _________________________ of Sun
Microsystems, Inc., do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to Section 5.01(e)(iii)
of that certain Credit Agreement dated as of June 1, 1994 (the "Credit
Agreement", the terms defined therein being used herein as therein defined)
among Sun Microsystems, Inc. (the "Borrower"), certain Lenders parties thereto
and Citicorp USA, Inc., as Agent for such Lenders.
2. Schedule 1 attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Credit Agreement, all of which data and computations are complete, true and
correct.
3. No Default or Event of Default under the Credit Agreement has
occurred and is continuing.
4. The representations and warranties set forth in Section 4.01
of the Credit Agreement are true and correct as of the date hereof as though
made on and as of the date hereof (except to the extent such representations or
warranties specifically relate to an earlier date, in which case they shall be
true and correct as of such date).
5. Schedule 2 attached hereto describes all changes in Exhibit G
to the Credit Agreement that have not been reflected on previous certificates
furnished pursuant to Section 5.01(e)(iii) of the Credit Agreement. [This
Paragraph 5 is given only annually, with year-end financial statements.]
E-1
<PAGE> 77
Executed this ____ day of _____________, 19__.
____________________________________
Name:_______________________________
Title:______________________________
E-2
<PAGE> 78
Schedule 1
To
Compliance Certificate
For the _________ Ended ____________, 19_
I. SECTION 5.01(h): Debt to Consolidated Tangible Net Worth
A. Total Debt: $___________
B. Consolidated total assets: $___________
C. Consolidated total liabilities: $___________
D. Intangibles and other exclusions
(if any):
$___________
E. Consolidated Tangible Net Worth
(B - C - D):
$___________
F. Ratio of A to E: ____ to 1.00
G. Maximum ratio: .45 to 1.00
II. SECTION 5.01(i): Fixed Charge Ratio
A. Adjusted EBIT for previous 12 months: $___________
B. Fixed Charges for previous 12 months: $___________
C. Ratio of A to B: ___ to 1.00
D. Minimum ratio: 1.25 to 1.00*
.50 to 1.00**
III. SECTION 5.02(h): Subsidiary Debt
A. U.S. Subsidiary Debt: $___________
B. Maximum U.S. Subsidiary Debt: $120,000,000
* applicable to the twelve month period ending on the last day of the
first fiscal quarter of any fiscal year of the Borrower
** applicable to the twelve month periods ending on the last day of
the second, third or fourth fiscal quarters of any fiscal year of the
Borrower
E-3
<PAGE> 79
Schedule 2
Set forth below are all changes in the information contained in
Exhibit G to the Credit Agreement that have not been reflected on a previous
Schedule 2:
[List all changes; if there are none, so indicate]
E-4
<PAGE> 80
EXHIBIT F
LIENS
1. The First Deed of Trust, Assignment of Leases, Rents and Other Income and
Security Agreement dated as of May 11, 1989 in the amount of $40,000,000
covering the real property located at San Antonio Road, Palo Alto, California (
the "Palo Alto Property") among Sun Microsystems Properties, Inc. ("Grantor"),
Chicago Title Insurance Company ("Trustee"), and The Toyo Trust and Banking
Company, Limited, New York Branch ("Beneficiary").
2. UCC-1 Financing Statement dated May 11, 1989 under which Grantor grants to
Beneficiary a security interest in all personal property which is owned by
Grantor and located at the Palo Alto Property.
2
<PAGE> 81
EXHIBIT G
SUN MICROSYSTEMS, INC.
SUBSIDIARIES
DATE PLACE OF
NAME INCORPORATED INCORPORATION
------------------------------------------------------------- --------------- ------------
Sun Microsystems of California, Inc. April 1982 California
Solaris Corporation April 1983 California *
Sun Microsystems Ltd December 1984 U.K.
Sun Microsystems Europe, Inc. March 1984 California
Sun Microsystems GmbH April 1984 Germany
Sun Microsystems France, S.A. September 1984 France
Sun Microsystems Federal, Inc. October 1984 California
Sun Microsystems (Barbados), Ltd. December 1984 Barbados
Sun Microsystems of Canada, Inc. February 1985 Canada
Nihon Sun Microsystems K.K. March 1986 Japan
Sun Microsystems Nederland B.V. June 1986 netherlands
Sun Microsystems Oy October 1990 Finland
Sun Microsystems Australia Pty. Ltd. July 1986 Australia
Sun Microsystems (Schweiz) A.G. June 1987 Switzerland
Sun Microsystems of California, (Hong Kong) Ltd. June 1987 Hong Kong
Sun Microsystems Italia S. p.A. July 1987 Italy
Sun Microsystems of California (Services), Ltd. July 1987 Hong Kong
Sun Microsystems AB September 1987 Sweden
Sitka Corporation March 1988 California
Sun Microsystems (NZ) Ltd. December 1988 New Zealand
Sun Microsystems Holdings Ltd November 1988 Wales
Sun Microsystems Iberica S.A. January 1989 Spain
Sun Microsystems Ireland, Ltd. March 1993 Ireland *
Sun Microsystems Scotland Ltd January 1989 U.K.
Sun Microsystems Benelux B.V. February 1989 Netherlands
Unisol Corporation February 1989 Japan
Sun Microsystems Properties, Inc. March 1989 California
sun Microsystems Europe Properties, Ltd. June 1992 California
Sun Microsystems Technology Pty. Ltd. May 1989 Australia
Sun Microsystems Finance, Inc. August 1989 California
Sun Acquisitions, Inc. September 1990 California
Sun Microsystems Laboratories, Inc. February 1991 California
Sun Technology Enterprises, Inc. February 1991 California
SunExpress, Inc. March 1991 California
SunExpress International, Inc. August 1992 California
SunSoft, Inc. March 1991 California
SunSoft International, Inc. June 1993 California
SunSoft Subsidiary, Inc. July 1987 Delaware
Sun Microsystems Computer Corporation March 1991 California
Sun Microsystems Intercontinental Operations April 1992 California
Sun Microsystems Management Services April 1992 California
Sun Microsystems do Brasil Industria e Comercio Ltda. February 1991 Brazil
Sun Microsystems de Mexico, S.A. de C.V. January 1992 Mexico
Sun Microsystems de Venezuela, S.A. May 1992 Venezuela
Sun Microsystems Belgium January 1991 Belgium
Sun Microsystems International B.V. June 1991 Netherlands
Sun Microsystems Scotland B.V. June 1991 Scotland
Sun Microsystems Korea Ltd. December 1990 Korea
Sutherland, Sproull & Associates, Inc. March 1991 California *
First Person, Inc. July 1992 California
Sun Microsystems Distributions International Inc. December 1991 California
* non -- Restricted Subsidiary
<PAGE> 82
EXHIBIT H
RESPONSIBLE OFFICERS
NAME OF PERSON OCCUPYING
EXECUTIVE OFFICE OFFICE AT CLOSING
------------------------------------------------- ------------------------------
President-CEO Scott McNealy
V.P., Chief Financial Officer Michael Lehman
V.P., Chief Technical Officer Bill Joy
V.P., General Counsel & Secretary Michael H. Morris
V.P., Treasurer Richard Barker
V.P. Corporate Planning & Development William Raduchel
3