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CREDIT AGREEMENT
DATED AS OF APRIL 9, 1997
AMONG
STORAGE TECHNOLOGY CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
SWINGLINE BANK,
AND
LETTER OF CREDIT ISSUING BANK
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BANCAMERICA SECURITIES, INC.
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TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I DEFINITIONS ..................................... 1
1.1 Certain Defined Terms ........................... 1
1.2 Other Interpretive Provisions ................... 19
1.3 Accounting Principles ........................... 20
ARTICLE II THE CREDITS ..................................... 20
2.1 Amounts and Terms of Commitment ................. 20
2.2 Loan Accounts ................................... 21
2.3 Procedure for Borrowing ......................... 21
2.4 Conversion and Continuation Elections ........... 22
2.5 Voluntary Termination or Reduction of Commitments 24
(a) Termination or Reduction of Commitments ..... 24
(b) Automatic Reduction of Swingline Commitment . 24
2.6 Optional Prepayments ............................ 24
2.7 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions ........................... 25
2.8 Repayment ....................................... 25
2.9 Interest ........................................ 25
2.10 Swingline Loans ................................. 26
2.11 Fees ............................................ 28
(a) Commitment Fees ............................ 28
(b) Arrangement Fee ............................. 29
2.12 Computation of Fees and Interest ................ 29
2.13 Payments by the Borrower ........................ 29
2.14 Payments by the Banks to the Agent .............. 30
2.15 Sharing of Payments, Etc. ....................... 31
ARTICLE III THE LETTERS OF CREDIT ........................... 31
3.1 The Letter of Credit Subfacility ................ 31
3.2 Issuance, Amendment and Renewal of Letters of
Credit .......................................... 32
3.3 Existing BofA Letters of Credit; Risk
Participations, Drawings and Reimbursements ..... 34
3.4 Repayment of Participations ..................... 36
3.5 Role of the Issuing Bank ........................ 37
3.6 Obligations Absolute ............................ 38
3.7 Cash Collateral Pledge .......................... 39
3.8 Letter of Credit Fees ........................... 39
3.9 Uniform Customs and Practice .................... 40
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY .......... 40
4.1 Taxes ........................................... 40
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Section Page
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4.2 Illegality ...................................... 42
4.3 Increased Costs and Reduction of Return ......... 42
4.4 Funding Losses .................................. 43
4.5 Inability to Determine Rates .................... 43
4.6 Survival ........................................ 44
4.7 Notice of Claims ................................ 44
ARTICLE V CONDITIONS PRECEDENT ............................ 44
5.1 Conditions of Initial Credit Extensions ......... 44
(a) Credit Agreement and Notes .................. 44
(b) Resolutions; Incumbency ..................... 44
(c) Organization Documents; Good Standing ....... 45
(d) Legal Opinions .............................. 45
(e) Payment of Fees ............................. 45
(f) Certificate ................................. 45
(g) Prior Loan Documents ........................ 45
(h) Other Documents ............................. 45
5.2 Conditions to All Credit Extensions ............. 45
(a) Notice, Application ......................... 46
(b) Continuation of Representations and
Warranties .................................. 46
(c) No Existing Default ......................... 46
(d) Cash Collateral ............................. 46
ARTICLE VI REPRESENTATIONS AND WARRANTIES .................. 46
6.1 Corporate Existence and Power ................... 46
6.2 Corporate Authorization; No Contravention ....... 47
6.3 Governmental Authorization ...................... 47
6.4 Binding Effect .................................. 47
6.5 Litigation ...................................... 48
6.6 No Default ...................................... 48
6.7 ERISA Compliance ................................ 48
6.8 Use of Proceeds; Margin Regulations ............. 49
6.9 Title to Properties; Liens ...................... 49
6.10 Taxes ........................................... 49
6.11 Financial Condition ............................. 49
6.12 Environmental Matters ........................... 50
6.13 Regulated Entities .............................. 50
6.14 Copyrights, Patents, Trademarks and
Licenses, Etc. .................................. 50
6.15 Subsidiaries .................................... 50
6.16 Insurance ....................................... 51
6.17 Full Disclosure ................................. 51
6.18 Projections ..................................... 51
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Section Page
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ARTICLE VII AFFIRMATIVE COVENANTS ........................... 51
7.1 Financial Statements ............................ 51
7.2 Certificates; Other Information ................. 52
7.3 Notices ......................................... 52
7.4 Preservation of Corporate Existence, Etc. ....... 53
7.5 Maintenance of Property ......................... 53
7.6 Insurance ....................................... 53
7.7 Payment of Obligations .......................... 53
7.8 Compliance with Laws ............................ 54
7.9 Compliance with ERISA ........................... 54
7.10 Inspection of Property and Books and Records .... 54
7.11 Use of Proceeds ................................. 54
7.12 Disclosure; Further Assurances .................. 54
7.13 Financial Covenants ............................. 55
(a) Maintenance of Consolidated Tangible
Net Worth ................................... 55
(b) Consolidated Net Income ..................... 55
(c) Consolidated Total Leverage Ratio ........... 55
7.14 Patents and Permits ............................. 55
ARTICLE VIII NEGATIVE COVENANTS .............................. 56
8.1 Limitation on Liens ............................. 56
8.2 Disposition of Assets ........................... 58
8.3 Consolidations and Mergers ...................... 58
8.4 Loans and Investments ........................... 59
8.5 Transactions with Affiliates .................... 60
8.6 Use of Proceeds ................................. 60
8.7 Contingent Obligations .......................... 61
8.8 Restricted Payments ............................. 61
8.9 ERISA ........................................... 62
8.10 Change in Business .............................. 62
8.11 Accounting Changes .............................. 62
ARTICLE IX EVENTS OF DEFAULT ............................... 62
9.1 Event of Default ................................ 62
(a) Non-Payment ................................. 62
(b) Representation or Warranty .................. 62
(c) Specific Defaults ........................... 63
(d) Other Defaults .............................. 63
(e) Cross-Default ............................... 63
(f) Insolvency; Voluntary Proceedings ........... 63
(g) Involuntary Proceedings ..................... 63
(h) ERISA ....................................... 64
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Section Page
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(i) Monetary Judgments .......................... 64
(j) Non-Monetary Judgments ...................... 64
(k) Change of Control ........................... 64
(l) Adverse Change .............................. 64
9.2 Remedies ........................................ 64
9.3 Certain Financial Covenant Defaults ............. 65
ARTICLE X THE AGENT ....................................... 65
10.1 Appointment and Authorization; "Agent" .......... 65
10.2 Delegation of Duties ............................ 66
10.3 Liability of Agent .............................. 66
10.4 Reliance by Agent ............................... 66
10.5 Notice of Default ............................... 67
10.6 Credit Decision ................................. 67
10.7 Indemnification of Agent ........................ 68
10.8 Agent in Individual Capacity .................... 68
10.9 Successor Agent ................................. 68
10.10 Withholding Tax ................................. 69
ARTICLE XI MISCELLANEOUS ................................... 71
11.1 Amendments and Waivers .......................... 71
11.2 Notices ......................................... 71
11.3 No Waiver; Cumulative Remedies .................. 72
11.4 Costs and Expenses .............................. 72
11.5 Borrower's Indemnification ...................... 73
11.6 Payments Set Aside .............................. 74
11.7 Successors and Assigns .......................... 74
11.8 Assignments, Participations, Etc. ............... 74
11.9 Confidentiality ................................. 76
11.10 Set-off ......................................... 76
11.11 Automatic Debits of Fees ........................ 76
11.12 Notification of Addresses, Lending Offices, Etc. 77
11.13 Counterparts .................................... 77
11.14 Severability .................................... 77
11.15 No Third Parties Benefited ...................... 77
11.16 Governing Law and Jurisdiction .................. 77
11.17 Waiver of Jury Trial ............................ 78
11.18 Entire Agreement ................................ 78
11.19 Certain Closing Date Transitional Matters ....... 78
11.20 Termination of Prior Loan Documents ............. 79
iv
SCHEDULES
Schedule 2.1 Commitments and Pro Rata Shares
Schedule 2.9(e) Applicable Margin
Schedule 2.11(a) Commitment Fees
Schedule 3.3(a) Existing BofA Letters of Credit
Schedule 6.5 Litigation
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.15 Subsidiaries and Minority Interests
Schedule 6.16 Insurance Matters
Schedule 8.1(i) Permitted Liens
Schedule 8.2 Permitted Dispositions
Schedule 8.4(f) Permitted Investments
Schedule 8.7(e) Contingent Obligations
Schedule 11.2 Addresses for Notices; Lending Offices
Schedule 11.19 Closing Date Transitional Matters
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Shearman & Sterling
Exhibit D-2 Form of Legal Opinion of Internal Borrower's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
v
CREDIT AGREEMENT
----------------
This CREDIT AGREEMENT is entered into as of April 9, 1997, among
Storage Technology Corporation, a Delaware corporation ("the Borrower"), the
several financial institutions from time to time party to this Credit
Agreement (individually, a "Bank"; collectively, the "Banks"), and Bank of
America National Trust and Savings Association, as swingline bank, letter of
credit issuing bank and as agent for the Banks.
WHEREAS, the Borrower, Storage Technology de Puerto Rico, Inc., the
Agent and certain financial institutions (the "Original Banks") were parties
to that certain Second Amended and Restated Credit Agreement dated as of
March 28, 1996 (as modified, the "Prior Credit Agreement") and certain other
documents executed in connection therewith (together with the Prior Credit
Agreement, referred to at times as the "Prior Loan Documents);
WHEREAS, the Borrower has requested that the Agent and the Original
Banks terminate the Prior Credit Agreement and the other Prior Loan Documents
in order to enter into this Credit Agreement and the Loan Documents with the
parties hereto;
WHEREAS, the Banks are willing to extend certain credit facilities to
the Borrower on the basis of this Credit Agreement and the Loan Documents and
to facilitate the termination of the Prior Credit Agreement and the other
Prior Loan Documents as provided in this Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in
(a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Borrower or its Subsidiary is the
surviving entity.
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"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of the other Person, whether through the ownership of
voting securities, membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 10.9.
"Agent-Related Persons" means BofA and any successor agent
arising under Section 10.9 and any successor letter of credit issuing
bank hereunder, together with their respective Affiliates (including, in
the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth
on Schedule 11.2 or such other address as the Agent may from time to
time specify.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to the commitment fee
payable hereunder, the amount set forth opposite the indicated level
below the heading "Commitment Fee" in the pricing grid set forth on
Schedule 2.11(a) in accordance with the parameters for calculations of
such amount also set forth in Section 2.11(a).
"Applicable Margin" means the amount set forth opposite the
indicated level below the heading "Base Rate Spread" or "Offshore Rate
Spread," as appropriate, in the pricing grid set forth in Schedule
2.9(e) in accordance with the parameters for calculations of such amount
also set forth in Section 2.9(e).
"Arranger" means BancAmerica Securities, Inc., a Delaware
corporation.
"Assignee" has the meaning specified in subsection 11.8(a).
"Attorney Costs" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal
legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include BofA, including in its
capacity as Issuing Bank and Swingline Bank; for purposes of
clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Banks due to its status as
Issuing Bank and Swingline Bank, its status as such will be specifically
referenced.
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"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978
(11 U.S.C. Section101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
in San Francisco, California, as its "reference rate." (The "reference
rate" is a rate set by BofA based upon various factors including BofA's
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Revolving Loan, a Swingline Loan or an
L/C Advance, that bears interest based on the Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrower" has the meaning specified in the introductory clause
of this Agreement.
"Borrowing" means a borrowing hereunder consisting of Revolving
Loans of the same Type made to the Borrower on the same day by the Banks
under Article II, or Swingline Loans of the same Type made to the
Borrower on the same day by the Swingline Bank under Article II and, in
each case, other than for Base Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on
which dealings are carried on in the applicable offshore Dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Lease" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would,
at the time a
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determination is made, be required to be recorded as a capital lease in
respect of which such Person is liable as lessee.
"Cash Collateralize" means, as provided in Section 3.7 hereof, to
pledge and deposit with or deliver to the Agent, for the benefit of the
Agent, the Issuing Bank, the Swingline Bank and the Banks, as collateral
for the Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Agent, the
Swingline Bank and the Issuing Bank (which documents are hereby
consented to by the Banks). Derivatives of such term shall have
corresponding meanings.
"Change of Control" means the occurrence, after the date of this
Agreement, of any of the following: (a) any Person or two or more
Persons acting in concert acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Exchange Act), directly or
indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing 30% or more of the
combined voting power of all securities of the Borrower entitled to vote
in the election of directors; or (b) during any period of up to 12
consecutive months, commencing after the Closing Date, individuals who
at the beginning of such 12-month period were directors of the Borrower
ceasing for any reason to constitute a majority of the Board of
Directors of the Borrower unless the Persons replacing such individuals
were nominated by the Board of Directors of the Borrower; or (c) any
Person or two or more Persons acting in concert acquiring by contract or
otherwise, or entering into a contract or arrangement which upon
consummation will result in its or their acquisition of, or control
over, securities of the Borrower (or other securities convertible into
such securities) representing 30% or more of the combined voting power
of all securities of the Borrower entitled to vote in the election of
directors.
"Closing Date" means the date on which all conditions precedent
set forth in Section 5.1 are satisfied or waived by all Banks (or, in
the case of subsection 5.1(e), waived by the Person entitled to receive
such payment).
"Closing Date Percentage" has the meaning specified in Section
11.19.
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in
Section 2.1.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C.
"Consolidated" and any derivative thereof each means, with
reference to the accounts or
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financial reports of any Person, the consolidated accounts or financial
reports of such Person and each Subsidiary of such Person determined in
accordance with GAAP.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or provide funds
for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or otherwise to assure or hold harmless the holder of any
such primary obligation against loss in respect thereof; (b) with
respect to primary obligations of a primary obligor in connection with
any synthetic lease or similar off balance sheet lease transaction or
securitization transaction (each of (a) and (b) a "Guaranty
Obligation"), (c) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings or payments; (d) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the primary purpose of the contract or other
related document or obligation requires that payment for such materials,
supplies or other property, or for such services, shall be made
regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed
or tendered, or (e) in respect of any Swap Contract. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be
deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof, and in the case of other Contingent
Obligations, shall be equal to the maximum reasonably anticipated
liability in respect thereof. Notwithstanding anything to the contrary
herein, Contingent Obligations shall not include sales of Permitted
Receivables (and books, chattel paper, records, and software relating to
the Permitted Receivables) sold pursuant to the Permitted Receivables
Purchase Facility and recourse or repurchase obligations thereunder.
"Contractual Obligation" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or
any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, the Borrower (a) converts Loans of one Type to another
Type, or
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(b) continues as Loans of the same Type, but with a new Interest Period,
Loans having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any
Revolving Loans or Swingline Loans hereunder, and (b) the Issuance of
any Letters of Credit hereunder (including the Existing BofA Letters of
Credit).
"Default" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Dollars," "dollars" and "$" each mean lawful money of the United
States.
"EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the Net Income (or Net Loss) for such period plus
(b) all amounts treated as expenses for depreciation, interest and the
amortization of intangibles of any kind to the extent included in the
determination of such Net Income (or Net Loss), plus (c) all accrued
taxes on or measured by income to the extent included in the
determination of such Net Income (or Net Loss).
"Effective Amount" means (a) with respect to any Revolving Loans
or Swingline Loans, as the case may be, on any date, the aggregate
outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Revolving Loans or Swingline
Loans occurring on such date; and (b) with respect to any outstanding
L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any Issuances of Letters of Credit occurring
on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements
of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date.
"Eligible Assignee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $200,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $200,000,000, provided that such bank is
acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
6
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate."
"Event of Default" means any of the events or circumstances
specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934.
"Existing BofA Letters of Credit" means the letters of credit
described in Schedule 3.3(a).
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"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York with
respect to the preceding Business Day opposite the caption "Federal
Funds (Effective)"; or, if for any relevant day such rate is not so
published with respect to any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Agent of the
rates for the last transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the
Agent.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession),
which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Guaranty Obligation" has the meaning specified in the definition
of "Contingent Obligation."
"Honor Date" means each date that any amount is paid by the
Issuing Bank under any Letter of Credit.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services (other
than trade payables entered into in the ordinary course of business on
ordinary terms); (c) all reimbursement or payment obligations
(contingent or otherwise) with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred
8
as financing, in either case with respect to property acquired by the
Person (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to Capital
Leases; (g) all indebtedness referred to in clauses (a) through (f)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including accounts and contracts rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (h) all Guaranty Obligations in
respect of indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above.
Notwithstanding anything to the contrary herein, Indebtedness shall not
include sales of Permitted Receivables (and books, chattel paper,
records and software relating to the Permitted Receivables) sold
pursuant to the Permitted Receivables Purchase Facility and recourse or
repurchase obligations thereunder. For all purposes of this Agreement,
the Indebtedness of any Person shall include all recourse Indebtedness
of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member.
"Indemnified Liabilities" has the meaning specified in
Section 11.5.
"Indemnified Person" has the meaning specified in Section 11.5.
"Independent Auditor" has the meaning specified in subsection
7.1(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in either case undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such
Loan, (b) as to any Base Rate Loan other than a Swingline Loan, the last
Business Day of each calendar quarter and each date such Loan is
converted into another Type, and (c) as to any Base Rate Loans which are
Swingline Loans, the Business Day agreed upon by the Borrower and the
Swingline Bank which shall not be later than the seventh Business Day
following the Borrowing Date thereof; provided, however, that if any
Interest Period for an Offshore Rate Loan exceeds three months, the date
that falls three months after the beginning of such Interest
9
Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Borrower in its Notice
of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall
be extended to the following Business Day unless the result
of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period for any Loan shall extend
beyond the Revolving Termination Date.
"Investments" has the meaning specified in Section 8.4.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.1(a).
"Issue" means, with respect to any Letter of Credit, to
incorporate the Existing BofA Letters of Credit into this Agreement, or
to issue or to extend the expiry of, or to renew or increase the amount
of, such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuing Bank" means BofA in its capacity as issuer of one or
more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under subsection 10.1(b) or Section 10.9.
"Joint Venture" means a single-purpose corporation, partnership,
limited liability company, joint venture or other similar legal
arrangement (whether
10
created by contract or conducted through a separate legal entity) now or
hereafter formed by the Borrower or any of its Subsidiaries with another
Person in order to conduct a common venture or enterprise with such
Person.
"L/C Advance" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application for amendment of
outstanding standby or commercial documentary letters of credit, in the
form as shall at any time be in use at the Issuing Bank, as the Issuing
Bank shall reasonably request.
"L/C Application" means an application for issuances of standby
or commercial documentary letters of credit, in the form as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall reasonably
request.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under subsection 3.3(c).
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit (including the Existing BofA Letters of Credit) from
time to time Issued or outstanding under Article III, in an aggregate
amount not to exceed on any date the amount of $75,000,000, as the same
shall be reduced as a result of a reduction in the L/C Commitment
pursuant to Section 2.5; provided that the L/C Commitment is a part of
the combined Commitments, rather than a separate, independent
commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit,
including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of
such Bank specified as its "Lending Office" on Schedule 11.2, or such
other office or offices as such Bank may from time to time notify the
Borrower and the Agent.
11
"Letters of Credit" means the Existing BofA Letters of Credit and
any letters of credit (whether standby letters of credit or commercial
documentary letters of credit) Issued by the Issuing Bank pursuant to
Article III.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Bank or the Swingline
Bank to the Borrower under Article II or Article III in the form of a
Revolving Loan, Swingline Loan or L/C Advance.
"Loan Documents" means this Agreement, any Notes, the L/C-Related
Documents, and all other documents delivered to the Agent or any Bank in
connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability
of the Borrower to perform under any Loan Document and to avoid any
Event of Default; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower of any
Loan Document.
"Material Subsidiary" means any Subsidiary that at any time
either (a) owns or holds title to 5% or more of the Consolidated assets
of the Borrower and its Consolidated Subsidiaries or (b) accounts for 5%
or more of the Consolidated revenue of the Borrower and its Consolidated
Subsidiaries, in each case as determined in accordance with GAAP.
"Multicurrency Note Purchase Facility" means the facility
pursuant to the Contingent Multicurrency Note Purchase Commitment
Agreement dated as of December 12, 1996 (as amended, restated, modified
or supplemented from time to time) between Borrower and BofA, whereby
BofA has agreed to purchase
12
certain notes of the Borrower subject, in certain cases, to
collateralization in cash and other investments.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Borrower or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"Net Income" means, with respect to any Person for any period,
net income of such Person, as determined by such Person in accordance
with GAAP.
"Net Loss" means, with respect to any Person for any period,
negative Net Income of such Person, as determined by such Person in
accordance with GAAP.
"Note" means a promissory note executed by the Borrower in favor
of a Bank pursuant to subsection 2.2(b), in substantially the form of
Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Borrower to any Bank, the Issuing Bank, the Swingline Bank, the
Agent, or any Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become
due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined
by the Agent as follows:
Offshore Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100 of 1%) in effect on
such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve
13
requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by
the Agent to be the arithmetic mean (rounded upward to the next
1/16 of 1%) of the rates of interest per annum notified to the
Agent by BofA as the rate of interest at which Dollar deposits in
the approximate amount of the amount of the Loan to be made or
continued as, or converted into, an Offshore Rate Loan by BofA
and having a maturity comparable to such Interest Period would be
offered to major banks in the London interbank market at their
request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Operating Lease" means, for any Person, any lease of any
property of any kind by that Person as lessee which is not a Capital
Lease.
"Operating Loss" of any Person means, as of the date of
determination, operating losses as calculated in accordance with GAAP.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"Original Bank" has the meaning specified in the recitals hereto.
"Original Percentage" has the meaning specified in Section 11.19.
"Participant" has the meaning specified in subsection 11.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case
14
of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five
(5) plan years.
"Permitted Liens" has the meaning specified in Section 8.1.
"Permitted Receivable" shall mean at any time a Receivable which
constitutes an "account," "chattel paper" or a "general intangible" and
any "proceeds" thereof (each as defined in the UCC) and collections
thereon, which has been sold by the Borrower to BofA or any of its
Affiliates pursuant to the Permitted Receivables Purchase Facility with
or without recourse.
"Permitted Receivables Purchase Facility" shall mean that certain
Multicurrency Receivables Transfer Agreement dated January 29, 1996, as
amended, between the Borrower and BofA pursuant to which Permitted
Receivables may be sold or otherwise transferred by the Borrower to BofA
or any Affiliate of BofA, provided, that the aggregate purchase price
paid therefor shall not exceed $40,000,000 (with the aggregate face
value thereof not to exceed at any time outstanding $50,000,000).
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Borrower or any Subsidiary existing or arising under
Swap Contracts, provided that such obligations are (or were) entered
into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any
other entity of whatever nature.
"Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA) which the Borrower sponsors or maintains or to which the
Borrower makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Prior Credit Agreement" has the meaning specified in the
recitals hereto.
"Prior Loan Documents" has the meaning specified in the recitals
hereto.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks (or, if all Commitments have been
terminated, the aggregate principal amount of such Bank's Loans divided
by the aggregate principal amount of the Loans then held by all Banks).
The initial Pro Rata Share of each Bank is set
15
forth opposite such Bank's name in Schedule 2.1 under the heading Pro
Rata Share.
"Receivable" means any right to payment from an account
receivable obligor, arising from the sale of goods or services or the
licensing of intellectual property rights by the Borrower in the
ordinary course of its business.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"Required Banks" means at any time Banks then holding at least
66-2/3% of the aggregate amount of the Commitments or, if no Commitments
are outstanding, Banks then having at least 66-2/3% of the then
aggregate unpaid principal amount of the Loans (including the Swingline
Loans).
"Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of
its property is subject.
"Responsible Officer" means, with respect to the Borrower, the
chief executive officer, the president, any vice president, the
treasurer, chief operating officer or chief financial officer, assistant
treasurer, or the secretary of the Borrower, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer,
assistant treasurer or the treasurer of the Borrower, or any other
officer having substantially the same authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.1, and
may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type" of
Revolving Loan).
"Revolving Termination Date" means the earlier to occur of:
(a) May 31, 2000; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Subordinated Indebtedness" means Indebtedness which is expressly
subordinated to the Obligations on terms consented to in writing by the
Required Banks.
16
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture, trust or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Borrower.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or bill option, interest rate option,
forward foreign exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swaption, currency option or
any other, similar transaction (including any option to enter into any
of the foregoing) or any combination of the foregoing, and, unless the
context otherwise clearly requires, any master agreement relating to or
governing any or all of the foregoing.
"Swingline Bank" means BofA.
"Swingline Commitment" has the meaning specified in
Section 2.10(a).
"Swingline Loan" has the meaning specified in Section 2.10(a).
"Tangible Net Worth" means, with respect to any Person as of any
date of determination, Total Assets of such Person as of such date minus
Total Liabilities of such Person as of such date and minus the carrying
value of (a) goodwill, organizational expenses, patents, patent
applications, trademarks, trademark applications, trade names, service
marks, service mark applications, copyrights, designs and other
intellectual property and licenses therefor and rights therein, and
other similar intangibles, (b) all amortizing debt issuance expenses
carried as an asset, (c) all reserves carried and not deducted from
assets or not reflected as a liability, and (d) cash held in a sinking
or other analogous fund established for the purpose of redemption,
retirement or prepayment of any capital stock or any Indebtedness or
Contingent Obligation, if no offsetting liability exists with respect to
such Indebtedness or Contingent Obligation on the balance sheet of such
Person.
"Taxes" means any and all present or future taxes (including any
taxes on any additional amounts required to be paid to the Agent or the
Banks), levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges, and all liabilities with respect
thereto, excluding, in the case of each Bank and the
17
Agent, respectively, (a) taxes imposed on its income by the United
States and taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank or the Agent
(as the case may be) is organized or any political subdivision thereof,
and (b) taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Bank's Lending Office, or any political
subdivision thereof.
"Total Assets" of any Person means all property, whether real,
personal, tangible, intangible or otherwise, which, in accordance with
GAAP, should be included in determining total assets as shown on the
assets portion of a balance sheet of such Person.
"Total Capital" of any Person means the sum of the Consolidated
Tangible Net Worth of such Person and Subordinated Indebtedness of such
Person. Notwithstanding anything to the contrary herein, Subordinated
Indebtedness may only be included in Total Capital to the extent such
Subordinated Indebtedness remains subordinated to the Obligations in the
manner consented to by the Agent and the Required Banks.
"Total Leverage Ratio" means, with respect to any Person, the
ratio that (i) Total Liabilities less Subordinated Indebtedness of such
Person bears to (ii) Total Capital of such Person. Notwithstanding
anything to the contrary herein, Subordinated Indebtedness may only be
subtracted from Total Liabilities in clause (i) to the extent such
Subordinated Indebtedness remains subordinated to the Obligations, in
the manner consented to by the Agent and the Required Banks.
"Total Liabilities" of any Person means all obligations,
including, without limitation, all Indebtedness (other than Guaranty
Obligations) of such Person, which, in accordance with GAAP, should be
included in determining total liabilities as shown on the liabilities
portion of a balance sheet of such Person.
"Type" has the meaning specified in the definition of "Revolving
Loan."
"UCC" means the Uniform Commercial Code as in effect in the State
of California.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
"Wholly Owned Subsidiary" means any corporation in which 100% of
the capital stock of each class having ordinary voting power, and 100%
of the capital
18
stock of every other class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of record, by
the Borrower, or by one or more of the other Wholly Owned Subsidiaries,
or both; provided that, as to foreign Subsidiaries this definition means
any corporation in which at least 99% of the capital stock of each class
having ordinary voting power and at least 99% of the capital stock of
every other class, at the time as of which any determination is made, in
each case is owned beneficially and of record by the Borrower or one or
more of the other Wholly Owned Subsidiaries or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(a) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(b) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(iv) The term "property" includes any kind of property or
asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in
19
accordance with their terms. Unless otherwise expressly provided, any
reference to any action of the Agent, the Issuing Bank, the Swingline Bank or
the Banks by way of consent, approval or waiver shall be deemed modified by
the phrase "in its/their sole discretion."
(g) This Agreement and the other Loan Documents are the result
of negotiations among the Agent, the Issuing Bank, the Swingline Bank, the
Borrower and the other parties, have been reviewed by counsel to the Agent,
the Borrower and such other parties, and are the product of all parties.
Accordingly, they shall not be construed against the Banks, the Issuing Bank,
the Swingline Bank or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Borrower.
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms of Commitment. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Borrower
(each such loan, a "Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in
an aggregate amount not to exceed at any time outstanding the amount set
forth on Schedule 2.1 under the heading "Commitment" (such amount, inclusive
of such Bank's L/C Commitment and, in the case of BofA, its Swingline
Commitment, as the same may be reduced under Section 2.5 and Section 2.7 or
reduced or increased as a result of one or more assignments under
Section 11.8, the Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing of Revolving Loans, (i) the Effective Amount of all
outstanding Revolving Loans, the Effective Amount of all Swingline Loans and
the Effective Amount of all L/C Obligations, shall not at any time exceed the
combined Commitments; and (ii) the Effective Amount of the Revolving Loans of
any Bank and the Effective Amount of all Swingline Loans of any Bank plus the
participation of such Bank in the Effective Amount of all L/C Obligations
shall not at any time exceed such Bank's Commitment (except for BofA, but
solely with respect to its Swingline Commitment). Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.1, prepay under Section 2.6 and
reborrow under this Section 2.1.
20
2.2 Loan Accounts. (a) The Loans made by each Bank (including the
Swingline Bank) and the Letters of Credit Issued by the Issuing Bank shall be
evidenced by one or more accounts or records maintained by such Bank or
Issuing Bank, as the case may be, in the ordinary course of business. The
accounts or records maintained by the Agent, the Issuing Bank and each Bank
(including the Swingline Bank) shall be conclusive absent manifest error of
the amount of the Loans made by the Banks (including the Swingline Bank) to
the Borrower and the Letters of Credit Issued for the account of the
Borrower, and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to
the Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or
in addition to loan accounts. Each such Bank shall endorse on the schedules
annexed to its Notes the date, amount and maturity of each Loan made by it
and the amount of each payment of principal made by the Borrower with respect
thereto. Each such Bank is irrevocably authorized by the Borrower to endorse
its Notes and each Bank's record shall be conclusive absent manifest error;
provided, however, that the failure of a Bank to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any such Note to
such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing of Revolving Loans
shall be made upon the Borrower's irrevocable written notice delivered to the
Agent in the form of a Notice of Borrowing (which notice must be received by
the Agent prior to 9:00 a.m. San Francisco time) (i) three Business Days
prior to the requested Borrowing Date, in the case of Offshore Rate Loans;
and (ii) on the Business Day which is the requested Borrowing Date, in the
case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $10,000,000 or any integral multiple
of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any
Borrowing comprised of Offshore Rate Loans, such Interest Period
shall be one month.
provided, however, that with respect to the Borrowing to be made on the
Closing Date, the Notice of Borrowing shall be delivered to the Agent not
later than 9:00 a.m. (San
21
Francisco time) one Business Day before the Closing Date and such Borrowing
will consist of Base Rate Loans only.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of
that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Borrower at the
Agent's Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing
Date requested by the Borrower in funds immediately available to the Agent.
The proceeds of all such Loans will then be made available to the Borrower by
the Agent by (i) wire transfer of immediately available funds to the Borrower
at, Harris Trust, ABA No. 071 000 288, Account No. 4191706, for credit to
Storage Technology Corporation or such other account as the Borrower shall
specify to the Agent or (ii) at the option of the Borrower, by crediting the
account of the Borrower on the books of BofA with the aggregate of the
amounts made available to the Agent by the Banks and, in each case, in like
funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than five different Interest Periods
in effect.
(e) Any Notice of Borrowing received after the time noted in
subsection 2.3(a) but prior to 5:00 p.m. (San Francisco time) on any Business
Day, shall be deemed to have been received prior to 9:00 a.m. (San Francisco
time) on the next Business Day.
2.4 Conversion and Continuation Elections. (a) The Borrower may with
respect to its Loans, upon irrevocable written notice to the Agent in
accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base
Rate Loans, or as of the last day of the applicable Interest Period, in
the case of any other Type of Revolving Loans, to convert any such
Revolving Loans (or any part thereof in an amount not less than
$10,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Revolving Loans of any other Type; or
(ii) elect as of the last day of the applicable Interest
Period, to continue any Revolving Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $10,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans shall
automatically convert into Base
22
Rate Loans, and on and after such date the right of the Borrower to continue
such Revolving Loans as, and convert such Loans into, Offshore Rate Loans
shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 9:00 a.m.
(San Francisco time) with respect to its Revolving Loans at least (i) three
Business Days in advance of the Conversion/Continuation Date, if the
Revolving Loans of the Borrower are to be converted into or continued as
Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the
Revolving Loans of the Borrower are to be converted into Base Rate Loans,
specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Revolving Loans to be
converted or continued;
(C) the Type of Revolving Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans of the Borrower, the Borrower has failed to select timely
a new Interest Period to be applicable to such Offshore Rate Loans or if any
Default or Event of Default then exists, the Borrower shall be deemed to have
elected to convert such Offshore Rate Loans into Base Rate Loans effective as
of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Revolving Loans with respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
existence of a Default or Event of Default, the Borrower may not elect to
have Loans converted into or continued as an Offshore Rate Loans.
(f) After giving effect to any conversion or continuation of
Revolving Loans, unless the Agent shall otherwise consent, there may not be
more than five different Interest Periods for all Loans in effect.
23
2.5 Voluntary Termination or Reduction of Commitments.
(a) Termination or Reduction of Commitments. The Borrower may,
upon not less than five Business Days' prior notice to the Agent, terminate
the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $10,000,000 or any integral multiple of $1,000,000 in
excess thereof; unless, after giving effect thereto and to any prepayments of
any Loans made on the effective date thereof, (a) the Effective Amount of all
Revolving Loans, Swingline Loans and L/C Obligations together would exceed
the amount of the combined Commitments then in effect, or (b) the Effective
Amount of all L/C Obligations then outstanding would exceed the L/C
Commitment. Once reduced in accordance with this Section, the Commitments
may not be increased or reinstated. Any reduction of the Commitments shall
be applied to each Bank's Commitment according to its Pro Rata Share. If and
to the extent specified by the Borrower in the notice to the Agent, some or
all of the reduction in the combined Commitments shall be applied to reduce
the L/C Commitment. All accrued commitment and letter of credit fees to, but
not including, the effective date of any termination of Commitments shall be
paid on the effective date of such termination.
(b) Automatic Reduction of Swingline Commitment. At no time
shall the Swingline Commitment exceed the combined amount of all Commitments,
and any reduction of the combined amount of all Commitments which reduces the
combined amount of all Commitments below the then current amount of the
Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the combined Commitments, as so
reduced, without any action on the part of the Swingline Bank.
2.6 Optional Prepayments. Subject to Section 4.4, the Borrower may,
at any time or from time to time, upon delivery of an irrevocable Notice of
Prepayment to the Agent prior to 9:00 a.m. (San Francisco time) (a) not less
than three Business Days prior to the date of prepayment in the case of
Offshore Rate Loans, and (b) the same day as the date of prepayment in the
case of Base Rate Loans,
(i) ratably prepay Revolving Loans in whole or in part,
in minimum amounts of $10,000,000 or any integral multiple of $1,000,000
in excess thereof, and
(ii) prepay in whole or in part Swingline Loans, in
amounts of $1,000,000 or any integral multiple of $100,000 in excess
thereof, or in other amounts with the consent of the Swingline Bank.
Any notice of prepayment received after 9:00 a.m. (San Francisco
time) on a Business Day but prior to 5:00 p.m. (San Francisco time) on such
Business Day shall be deemed to have been given prior to 9:00 a.m. (San
Francisco time) on the next Business Day. Any such notice of prepayment
shall specify the date and amount of such prepayment and the Type(s) of Loans
to be prepaid.
24
The Agent will promptly notify each Bank of its receipt of any
such notice, and of such Bank's Pro Rata Share of such prepayment other than
for prepayments of Swingline Loans. If any such notice is given the Borrower
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to Section 4.4.
2.7 Mandatory Prepayments of Loans; Mandatory Commitment Reductions.
If on any date on or prior to the Revolving Termination Date the Effective
Amount of L/C Obligations exceeds the L/C Commitment, the Borrower shall Cash
Collateralize on such date the outstanding Letters of Credit in an amount
equal to the excess of the maximum amount then available to be drawn under
the Letters of Credit over the aggregate L/C Commitment. Subject to
Section 4.4, if on any date after giving effect to any Cash Collateralization
made on such date pursuant to the preceding sentence, the Effective Amount of
all Revolving Loans and Swingline Loans then outstanding plus the Effective
Amount of all L/C Obligations exceeds the combined Commitments, the Borrower
shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans, L/C Advances and Swingline Loans (as
necessary) by an amount equal to the applicable excess. Additionally, to the
extent the Borrower receives any payments with respect to purchases of
Permitted Receivables under the Permitted Receivables Purchase Facility from
BofA or any Affiliate, such payments shall be immediately used, without
demand or notice from any Person, by the Borrower to prepay the amount of
Revolving Loans, L/C Advances and Swingline Loans (as necessary) by the
amounts of any such payments.
2.8 Repayment. The Borrower agrees to repay to the Banks on the
Revolving Termination Date the aggregate principal amount of its Loans
(together with accrued interest and fees thereon) outstanding on such date.
Additionally, with respect to Swingline Loans, the Borrower agrees to repay
to the Swingline Bank the principal amount of each Swingline Loan (together
with accrued interest and fees thereon) no later than the seventh Business
Day after the date each such Swingline Loan was made.
2.9 Interest. (a) Each Revolving Loan and Swingline Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base
Rate as the case may be (provided that with respect to Swingline Loans
interest shall only be at the Base Rate unless and until the Swingline Bank
agrees to a different basis pursuant to Section 2.10(a)) and subject also to
the Borrower's right to convert to other Types of Revolving Loans under
Section 2.4), plus the Applicable Margin.
(b) Interest on each Revolving Loan and Swingline Loan of the
Borrower shall be paid by the Borrower in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans
under Section 2.6 or 2.7 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of
any Event of Default, interest shall be paid on demand of the Agent at the
request or with the consent of the Required Banks.
25
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, the Borrower shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all outstanding Obligations, at
a rate per annum which is determined by adding 2% per annum to the Applicable
Margin then in effect for such Loans and, in the case of Obligations not
subject to an Applicable Margin, at a fluctuating rate per annum equal to the
Base Rate plus 2%; provided, however, that, on and after the expiration of
any Interest Period applicable to any Offshore Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of Default
or after acceleration, bear interest at a fluctuating rate per annum equal to
the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrower to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary
to the provisions of any law applicable to such Bank limiting the highest
rate of interest that may be lawfully contracted for, charged or received by
such Bank, and in such event the Borrower shall pay such Bank interest at the
highest rate permitted by applicable law.
(e) Subject to the effect of subsection 2.9(a), the Applicable
Margin will be determined by the Agent from time to time in accordance with
the pricing grid set forth in Schedule 2.9(e) based on the most recent
Compliance Certificate delivered by the Borrower pursuant hereto. Such
determination shall be based on the calculations of the Borrower's EBITDA (on
a rolling four-quarter basis) and Consolidated Total Liabilities to
Consolidated Tangible Net Worth set forth in such Compliance Certificate and
shall apply from the first Business Day after the Agent receives such
Compliance Certificate until and through the Business Day when the Agent
receives the applicable Compliance Certificate for the next fiscal quarter.
The initial Applicable Margin, applicable from the Closing Date
to the date of delivery of the first Compliance Certificate hereunder, shall
be as set forth in the Note to Schedule 2.9(e).
2.10 Swingline Loans.
(a) Subject to the terms and conditions hereof, the Swingline
Bank severally agrees to make a portion of the combined Commitments available
to the Borrower by making swingline loans (individually, a "Swingline Loan";
collectively, the "Swingline Loans") to the Borrower on any Business Day
during the period from the Closing Date to the Revolving Termination Date in
accordance with the procedures set forth in this Section in an aggregate
principal amount at any one time outstanding not to exceed $10,000,000
notwithstanding the fact that such Swingline Loans, when aggregated with the
Swingline Bank's outstanding Revolving Loans, may exceed the Swingline Bank's
Commitment (the amount of such commitment of the Swingline Bank to make
Swingline
26
Loans to the Borrower pursuant to this subsection 2.10(a), as the same shall
be reduced pursuant to subsection 2.5(b) and Section 2.7 or as a result of
any assignment pursuant to Section 11.8, the Swingline Bank's "Swingline
Commitment"); provided, that at no time shall (i) the sum of the Effective
Amount of all Swingline Loans plus the Effective Amount of all Revolving
Loans plus the Effective Amount of all L/C Obligations exceed the total of
all Commitments, or (ii) the Effective Amount of all Swingline Loans exceed
the Swingline Commitment. Additionally, no more than an aggregate of three
Swingline Loans may be outstanding at any one time, and all Swingline Loans
shall at all times be Base Rate Loans unless otherwise agreed to by the
Swingline Bank in its sole discretion. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow
under this subsection 2.10(a), prepay pursuant to Section 2.6 and reborrow
pursuant to this subsection 2.10(a).
(b) Each borrowing of a Swingline Loan shall be made upon the
Borrower's irrevocable written notice to the Agent (with a copy to the
Swingline Bank) in the form of a Notice of Borrowing of any Swingline Loan
requested hereunder specifying (i) the amount to be borrowed, and (ii) the
requested Borrowing date, which must be a Business Day (which notice must be
received by the Swingline Bank and the Agent prior to 9:00 a.m. (San
Francisco time) on the requested Borrowing date; any notice received by the
Swingline Bank after 9:00 a.m. (San Francisco time) on a Business Day but
before 5:00 p.m. (San Francisco time) on such Business Day shall be deemed to
be received by 9:00 a.m. (San Francisco time) on the next Business Day).
Upon receipt of the Notice of Borrowing, the Swingline Bank will
immediately confirm with the Agent (by telephone or in writing) that the
Agent has received a copy of the Notice of Borrowing from the Borrower and,
if not, the Swingline Bank will provide the Agent with a copy thereof.
Unless the Swingline Bank has received notice prior to 11:30 a.m.
on such Borrowing date from the Agent or any Bank (A) directing the Swingline
Bank not to make the requested Swingline Loan as a result of the limitations
set forth in the proviso set forth in the first sentence of
subsection 2.10(a); or (B) that one or more conditions specified in Article V
are not then satisfied; then, subject to the terms and conditions hereof, the
Swingline Bank will, not later than 12:30 p.m. (San Francisco time) on the
Borrowing date specified in such Notice, make the amount of its Swingline
Loan available to the Agent for the account of the Borrower at the Agent's
Payment Office in funds immediately available to the Agent. The proceeds of
such Swingline Loan will then be made available to the Borrower by (i) wire
transfer of immediately available funds to the Borrower at, Harris Trust, ABA
No. 071 000 288, Account No. 4191706, for credit to Storage Technology
Corporation or such other account as the Borrower shall specify to the Agent
or (ii) at the option of the Borrower by the Agent crediting the account of
the Borrower on the books of BofA with the aggregate of the amounts made
available to the Agent by the Swingline Bank and in like funds as received by
the Agent. Each Borrowing pursuant to this Section shall be in an aggregate
principal amount equal to $1,000,000 or an integral multiple of $100,000 in
excess thereof, unless otherwise agreed by the Swingline Bank.
27
(c) The Borrower agrees to repay any Swingline Loan to the
Swingline Bank when required by Section 2.8.
(d) If any Swingline Loans shall remain outstanding during the
existence of a Default or Event of Default and the Swingline Bank shall in
its sole discretion notify the Agent that the Swingline Bank desires that
such Swingline Loans be converted into Revolving Loans, then the Agent shall
be deemed to have received a Notice of Borrowing from the Borrower pursuant
to Section 2.3 requesting that Base Rate Loans be made pursuant to
Section 2.1 on the first Business Day subsequent to the date of such notice
from the Swingline Bank in an amount equal to the aggregate amount of such
Swingline Loans, and the procedures set forth in subsections 2.3(b) and
2.3(c) shall be followed in making such Base Rate Loans; provided, that such
Base Rate Loans shall be made notwithstanding the Borrower's failure to
comply with subsections 5.2(b) and 5.2(c); and provided, further, that if a
Borrowing of Revolving Loans becomes legally impracticable and if so required
by the Swingline Bank at the time such Revolving Loans are required to be
made by the Banks in accordance with this subsection 2.10(d), each Bank
agrees that in lieu of making Revolving Loans as described in this
subsection 2.10(d), such Bank shall purchase a participation from the
Swingline Bank in the applicable Swingline Loans in an amount equal to such
Bank's Pro Rata Share of such Swingline Loans, and the procedures set forth
in subsections 2.3(b) and 2.3(c) shall be followed in connection with the
purchases of such participations. Upon such purchases of participations the
prepayment requirements of subsection 2.10(d) shall be deemed waived with
respect to such Swingline Loans. The proceeds of such Base Rate Loans, or
participations purchased, shall be applied to repay such Swingline Loans.
A copy of each notice given by the Agent to the Banks pursuant to
this subsection 2.10(d) with respect to the making of Revolving Loans, or the
purchases of participations, shall be promptly delivered by the Agent to the
Borrower. Each Bank's obligation in accordance with this Agreement to make
the Revolving Loans, or purchase the participations, as contemplated by this
subsection 2.10(d), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Swingline Bank, the Borrower or any other Person for any reason whatsoever;
(2) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (3) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.11 Fees. (a) Commitment Fees. In addition to certain fees
described in Section 3.8, the Borrower agrees to pay to the Agent for the
ratable account of each Bank a commitment fee on the average daily unused
portion of such Bank's Commitment, computed on a quarterly basis in arrears
on the last Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Agent, equal to the amount
set forth in the next paragraph. For purposes of calculation of such unused
portion of a Bank's Commitment, (i) the making of any Swingline Loans shall
not be considered a use of a portion of the Swingline Bank's Commitment, and
28
(ii) each Bank's Commitment shall be considered used on any date to the
extent of its participation on such date in any Letter of Credit and any L/C
Advance made by it (exclusive of any Swingline Loans).
Such commitment fee shall accrue from the Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in arrears
on (A) the last Business Day of the period ending on June 30, 1997, (B) on
the last Business Day of each calendar quarter commencing after June 30, 1997
and (C) on the Revolving Termination Date; provided that, in connection with
any reduction or termination of Commitments under Section 2.5 or Section 2.7,
the accrued commitment fee calculated for the period ending on such date
shall also be paid on the date of such reduction or termination. The
commitment fees provided in this subsection shall accrue at all times after
the above-mentioned commencement date, including at any time during which one
or more conditions in Article V are not met.
For the period from the Closing Date through the Business Day
when the Agent receives the Borrower's Compliance Certificate for the fiscal
period ending March 28, 1997, the Applicable Fee Amount will be 0.200%.
Thereafter, the Applicable Fee Amount will be determined by the Agent from
time to time in accordance with the pricing grid set forth in Schedule
2.11(a) based on the most recent Compliance Certificate of the Borrower
delivered by the Borrower pursuant hereto. Such determination shall be based
on the calculations of the Borrower's EBITDA (on a rolling four-quarter
basis) and Consolidated Total Liabilities to Consolidated Tangible Net Worth
set forth in such Compliance Certificate of the Borrower and shall apply from
the first Business Day after the Agent receives such Compliance Certificate
until and through the Business Day when the Agent receives the applicable
Compliance Certificate for the next fiscal quarter as provided herein.
(b) Arrangement Fee. The Borrower will pay the Agent and
Arranger such other fees as are set forth in that certain fee letter dated
March 7, 1997.
2.12 Computation of Fees and Interest. (a) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof to the
last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Banks in the absence of
manifest error.
2.13 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except
as otherwise expressly provided herein, all payments by the Borrower shall be
made to the
29
Agent for the account of the Banks at the Agent's Payment Office, and shall
be made in Dollars and in immediately available funds, no later than
10:30 a.m. (San Francisco time) on the date specified herein. The Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable
share as expressly provided herein) of such payment in like funds as
received. Any payment received by the Agent later than 10:30 a.m. (San
Francisco time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to
the date on which any payment is due to the Banks that the Borrower will not
make such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the
Borrower has not made such payment in full to the Agent, each Bank shall
repay to the Agent on demand such amount distributed to such Bank, together
with interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Bank until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent
receives notice from a Bank on or prior to the Closing Date or, with respect
to any Borrowing after the Closing Date, at least one Business Day prior to
the date of such Borrowing, that such Bank will not make available as and
when required hereunder to the Agent for the account of the Borrower the
amount of that Bank's Pro Rata Share of the Borrowing, the Agent may assume
that each Bank has made such amount available to the Agent in immediately
available funds on the Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent any Bank shall not
have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the Borrower
such amount, that Bank shall on the Business Day following such Borrowing
Date make such amount available to the Agent, together with interest at the
Federal Funds Rate for each day during such period. A notice of the Agent
submitted to any Bank with respect to amounts owing under this subsection (a)
shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not
made available to the Agent on the Business Day following the Borrowing Date,
the Agent will notify the Borrower of such failure to fund and, upon demand
by the Agent, the Borrower shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the interest rate applicable
at the time to the Loans comprising such Borrowing.
30
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Loan on such Borrowing Date, but no Bank shall be responsible for the failure
of any other Bank to make the Loan to be made by such other Bank on any
Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other
share contemplated hereunder), such Bank shall immediately (a) notify the
Agent of such fact, and (b) purchase from the other Banks such participations
in the Loans made by them as shall be necessary to cause such purchasing Bank
to share the excess payment pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered
from the purchasing Bank, such purchase shall to that extent be rescinded and
each other Bank shall repay to the purchasing Bank the purchase price paid
therefor, together with an amount equal to such paying Bank's ratable share
(according to the proportion of (i) the amount of such paying Bank's required
repayment to (ii) the total amount so recovered from the purchasing Bank) of
any interest or other amount paid or payable by the purchasing Bank in
respect of the total amount so recovered. The Borrower agrees that any Bank
so purchasing a participation from another Bank may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 11.10) with respect to such participation as
fully as if such Bank were the direct creditor of each the Borrower in the
amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
3.1 The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein (i) the Issuing Bank agrees, (A) from time to
time on any Business Day during the period from the Closing Date to the
Revolving Termination Date to issue Letters of Credit for the account of the
Borrower, and to amend or renew Letters of Credit previously issued by it, in
accordance with subsections 3.2(c) and 3.2(d), and (B) to honor drafts under
the Letters of Credit; and (ii) the Banks severally agree to participate in
Letters of Credit Issued for the account of the Borrower; provided, that the
Issuing Bank shall not Issue, and no Bank shall be obligated to participate
in, any Letter of Credit if as of the date of Issuance of such Letter of
Credit (the "Issuance Date") (1) the Effective Amount of all L/C Obligations
plus the Effective Amount of all Revolving Loans plus the Effective Amount of
all Swingline Loans exceeds the combined Commitments, (2) the participation
of any Bank in the Effective Amount of all L/C Obligations plus the Effective
Amount of the Revolving Loans plus the Effective Amount of all Swingline
Loans of such Bank exceeds such Bank's Commitment, or (3)the
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Effective Amount of L/C Obligations exceeds the L/C Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been
drawn upon and reimbursed.
(b) The Issuing Bank shall not Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from Issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or request that
the Issuing Bank refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon
the Issuing Bank with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or
shall otherwise impose upon the Issuing Bank any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which the
Issuing Bank in good faith deems material to it;
(ii) the Issuing Bank has received written notice from any
Bank (and the Required Banks concur with the determination of such Bank)
or the Agent, on or prior to the Business Day prior to the requested
date of Issuance of such Letter of Credit, that no further Letters of
Credit are to be issued due to a continuing failure to meet one or more
of the applicable conditions contained in Article V and such notice has
not expired or been withdrawn by the applicable Bank and/or the Agent;
(iii) the expiry date of any requested Letter of Credit is
more than 360 days after the Revolving Termination Date, unless all of
the Banks have approved such expiry date in writing;
(iv) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance reasonably acceptable
to the Issuing Bank, or the Issuance of a Letter of Credit shall violate
any applicable policies of the Issuing Bank for extensions of credit; or
(v) such Letter of Credit is in a face amount less than
$50,000 or to be denominated in a currency other than Dollars.
3.2 Issuance, Amendment and Renewal of Letters of Credit. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of the
Borrower received by the Issuing Bank (with a copy sent by the Borrower to
the Agent) at least three Business Days (or such shorter time as the Issuing
Bank may agree in a particular
32
instance in its sole discretion) prior to the proposed date of issuance.
Each such request for issuance of a Letter of Credit shall be by facsimile,
confirmed immediately by an original writing in the mail, in the form of an
L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit
(which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof (which beneficiary may be a Bank or an
Affiliate of a Bank); (v) the documents to be presented by the beneficiary of
the Letter of Credit in case of any drawing thereunder; (vi) the full text of
any certificate to be presented by the beneficiary in case of any drawing
thereunder; (vii) if such Letter of Credit will be a standby or commercial
documentary Letter of Credit; and (viii) such other matters as the Issuing
Bank may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit, the Issuing Bank will confirm with the Agent (by telephone
or in writing) that the Agent has received a copy of the L/C Application or
L/C Amendment Application from the Borrower and, if not, the Issuing Bank
will provide the Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date
the Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under subsection 3.1(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or subsection
3.1(b)(ii); or (B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, the Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account
of the Borrower in accordance with the Issuing Bank's usual and customary
business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Termination Date, the Issuing Bank will, upon the
written request of the Borrower received by the Issuing Bank (with a copy
sent by the Borrower to the Agent) at least two Business Days (or such
shorter time as the Issuing Bank may agree in a particular instance in its
sole discretion) prior to the proposed date of amendment, amend any Letter of
Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing,
made in the form of an L/C Amendment Application and shall specify in form
and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and
(iv) such other matters as the Issuing Bank may require. The Issuing Bank
shall not amend any Letter of Credit if: (A) the Issuing Bank would have no
obligation at such time to issue such Letter of Credit in its amended form
under the terms of this Agreement; or (B) the beneficiary of any such Letter
of Credit does not accept the proposed amendment to the Letter of Credit.
The Agent will promptly notify the Banks of the receipt by it of any L/C
Application or L/C Amendment Application.
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(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the
option and upon the written request of the Borrower received by the Issuing
Bank (with a copy sent by the Borrower to the Agent) at least two Business
Days (or such shorter time as the Issuing Bank may agree in a particular
instance in its sole discretion) prior to the proposed date of notification
of renewal, the Issuing Bank shall be entitled to authorize the automatic
renewal of any Letter of Credit issued by it. Each such request for renewal
of a Letter of Credit shall be made by facsimile, confirmed immediately in an
original writing, in the form of an L/C Amendment Application, and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the Letter
of Credit to be renewed; (ii) the proposed date of notification of renewal of
the Letter of Credit (which shall be a Business Day); (iii) the revised
expiry date of the Letter of Credit; and (iv) such other matters as the
Issuing Bank may require. The Issuing Bank shall not renew any Letter of
Credit if: (A) the Issuing Bank would have no obligation at such time to
issue or amend such Letter of Credit in its renewed form under the terms of
this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed renewal of the Letter of Credit.
If any outstanding Letter of Credit for the account of the
Borrower shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the automatic renewal of such Letter of Credit
in accordance with this subsection 3.2(d) upon the request of the Borrower
but the Issuing Bank shall not have received any L/C Amendment Application
from the Borrower with respect to such renewal or other written direction by
the Borrower with respect thereto, the Issuing Bank shall nonetheless be
permitted to allow such Letter of Credit to renew, and, notwithstanding
anything in this Agreement to the contrary, the Borrower and the Banks hereby
authorize such renewal and, accordingly, the Issuing Bank shall be deemed to
have received an L/C Amendment Application from the Borrower requesting such
renewal; provided, however, that the aggregate principal amount of all such
automatically renewable Letters of Credit shall not exceed $3,000,000, which
amount shall be a sublimit within the L/C Commitment.
(e) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(f) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
3.3 Existing BofA Letters of Credit; Risk Participations, Drawings
and Reimbursements. (a) On and after the Closing Date, the Existing BofA
Letters of Credit shall be deemed for all purposes, including for purposes of
the fees to be collected pursuant to subsections 3.8(a) and 3.8(b), and
reimbursement of costs and
34
expenses to the extent provided herein, Letters of Credit outstanding under
this Agreement and entitled to the benefits of this Agreement and the other
Loan Documents, and shall be governed by the applications and agreements
pertaining thereto and by this Agreement. Each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing
Bank on the Closing Date a participation in each such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) such Bank's
Pro Rata Share times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes
of Section 2.1 and subsection 2.11(a), the Existing BofA Letters of Credit
shall be deemed to utilize pro rata the Commitment of each Bank.
(b) Immediately upon the Issuance of each Letter of Credit in
addition to those described in subsection 3.3(a), each Bank shall be deemed
to, and hereby irrevocably and unconditionally agrees to, purchase from the
Issuing Bank a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Pro Rata Share of
such Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes
of Section 2.1, each Issuance of a Letter of Credit shall be deemed to
utilize the Commitment of each Bank by an amount equal to the amount of such
participation.
(c) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the Borrower. The Borrower shall reimburse the Issuing Bank
in Dollars in same day funds (i) by no later than 3:30 p.m. (San Francisco
time) on each Honor Date if the Issuing Bank notifies the Borrower of a
request for a drawing prior to 11:00 a.m. (San Francisco time) on such Honor
Date and (ii) by no later than 11:00 a.m. (San Francisco time) on the day
immediately following each Honor Date if the Issuing Bank notifies the
Borrower of a request for drawing after 11:00 a.m. (San Francisco time) on
such Honor Date, in an amount equal to the amount so paid by the Issuing
Bank.
In the event that the Issuing Bank notifies the Borrower before
11:00 a.m. (San Francisco time) on the Honor Date and the Borrower fails to
reimburse the Issuing Bank for the full amount of any drawing under any
Letter of Credit by 3:30 p.m. (San Francisco time) on the Honor Date, the
Issuing Bank will promptly notify the Agent, and the Borrower shall be deemed
to have requested that Base Rate Loans be made by the Banks to be disbursed
on the Honor Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions
set forth in Section 5.2. In the event that the Borrower receives notice
from the Issuing Bank after 11:00 a.m. (San Francisco time) and does not
reimburse by 11:00 a.m. (San Francisco time) the day immediately following,
the Issuing Bank will promptly notify the Agent, and the Borrower shall be
deemed to have requested that Base Rate Loans be made by the Banks as of the
Honor Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions
set forth in Section 5.2. The Agent shall
35
promptly notify the Banks of the occurrence of such a Base Rate Loan and the
Banks shall thereupon advance their Pro Rata Shares of such Base Rate Loan.
Any notice given by the Issuing Bank or the Agent pursuant to
this subsection 3.3(c) may be oral if immediately confirmed in writing
(including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(d) Each Bank shall upon any notice pursuant to subsection
3.3(c) make available to the Agent for the account of the relevant Issuing
Bank an amount in Dollars and in immediately available funds equal to its Pro
Rata Share of the amount of the drawing, and the participating Banks shall
(subject to subsection 3.3(e)) each be deemed to have made a Revolving Loan
consisting of a Base Rate Loan to the Borrower in that amount. Interest
shall accrue on each Bank's obligation to participate in any Base Rate Loan
deemed disbursed pursuant to Section 3.3(c) from the Honor Date to the date
such Bank makes payment pursuant to this Section 3.3(d), at a rate per annum
equal to the Federal Funds Rate in effect from time to time during such
period. For the avoidance of doubt, any Base Rate Loan deemed disbursed
under Section 3.3(c) shall for all purposes, including the obligation of the
Banks to participate in such Base Rate Loan, be deemed made as of the Honor
date and not the date of notice of the Agent.
(e) With respect to any unreimbursed drawing that is not
converted into Revolving Loans consisting of Base Rate Loans to the Borrower
in whole or in part, because of the Borrower's failure to satisfy the
conditions set forth in Section 5.2 or for any other reason, the Borrower
shall be deemed to have incurred from the Issuing Bank an L/C Borrowing in
the amount of such drawing, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at a rate per annum
equal to the Base Rate plus 2% per annum, and each Bank's payment to the
Issuing Bank pursuant to subsection 3.3(d) shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Bank in satisfaction of its participation obligation under
this Section 3.3.
(f) Each Bank's obligation in accordance with this Agreement to
make the Revolving Loans or L/C Advances, as contemplated by this
Section 3.3, as a result of a drawing under a Letter of Credit, shall be
absolute and unconditional and without recourse to the Issuing Bank and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Issuing Bank, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default, an Event of Default or a
Material Adverse Effect; or (iii) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided,
however, that each Bank's obligation to make Revolving Loans under this
Section 3.3 is subject to the conditions set forth in Section 5.2.
3.4 Repayment of Participations. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of immediately available funds
from the
36
Borrower (i) in reimbursement of any payment made by the Issuing Bank under
the Letter of Credit with respect to which any Bank has paid the Agent for
the account of the Issuing Bank for such Bank's participation in the Letter
of Credit pursuant to Section 3.3 or (ii) in payment of interest thereon, the
Agent will pay to each Bank, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such Bank's Pro Rata Share
of such funds, and the Issuing Bank shall receive the amount of the Pro Rata
Share of such funds of any Bank that did not so pay the Agent for the account
of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
return to the Borrower, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made
by the Borrower to the Agent for the account of the Issuing Bank pursuant to
subsection 3.4(a) in reimbursement of a payment made under the Letter of
Credit or interest or fee thereon, each Bank shall, on demand of the Agent,
forthwith return to the Agent or the Issuing Bank the amount of its Pro Rata
Share of any amounts so returned by the Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts
are returned by such Bank to the Agent or the Issuing Bank, at a rate per
annum equal to the Federal Funds Rate in effect from time to time.
3.5 Role of the Issuing Bank. (a) Each Bank and the Borrower agrees
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall
not have any responsibility to obtain any document (other than any sight
draft, certificates or other documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable
to any Bank for: (i) any action taken or omitted in connection herewith at
the request or with the approval of the Banks (including the Required Banks,
as applicable); (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.
(c) The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the Issuing Bank, shall be
liable or responsible for any of the matters described in clauses (i) through
(vii) of Section 3.6; provided, however, anything in such clauses to the
contrary notwithstanding, that the Borrower may have a claim against the
Issuing Bank, and the Issuing Bank may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Issuing Bank's willful misconduct or gross negligence or the
37
Issuing Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason.
3.6 Obligations Absolute. The obligations of the Borrower under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under
all circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the
Borrower in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the L/C-Related
Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Person for whom any such