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EXHIBIT 10.14
BANK OF AMERICA
BUSINESS LOAN AGREEMENT
This Agreement dated as of December 27, 1999, is between Bank of America, N.A.
(the "Bank") and Next Level Communications, Inc. (the "Borrower").
1. LINE OF CREDIT AMOUNT AND TERMS
1.1 LINE OF CREDIT AMOUNT.
(a) During the availability period described below, the Bank will
provide a line of credit to the Borrower. The amount of the line
of credit (the "Commitment") is the lesser of:
(i) Fifty Million Dollars ($50,000,000) or
(ii) the loan value of marketable securities pledged to the
Bank. The loan value of a marketable securities will be a
percentage of its fair market value. The fair market value
will be determined by the Bank from time to time in its
sole discretion. The percentage applied to a particular
marketable security will be set by the Bank at the time it
is pledged by the Bank. The percentage can be changed by
the Bank at any time for reasonable cause. The Bank's
records of the applicable percentage will be controlling.
If at any time the total amount of principal outstanding under the
line of credit exceeds this limit, the Borrower will immediately
either increase the loan value of marketable securities or other
acceptable collateral pledged to the Bank, or reduce the total
amount outstanding in order to comply with this limit. If any of
the pledged assets are margin stock, the Borrower will provide the
Bank a Form U-1 Purpose Statement, and the Bank and the Borrower
will comply with the restrictions imposed by Regulation U of the
Federal Reserve, which may require a reduction in the loan value
of the margin stock pledged to the Bank.
For regulatory reasons, the Bank will not accept as collateral
Ineligible Securities while they are being underwritten by Banc of
America Securities LLC, or for thirty days thereafter. Banc of
America Securities LLC is a wholly-owned subsidiary of Bank of
America Corporation, and is a registered broker-dealer which is
permitted to underwrite and deal in certain Ineligible Securities.
"Ineligible Securities" means securities which may not be
underwritten or dealt in by member banks of the Federal Reserve
System under Section 16 of the Banking Act of 1933 (12 U.S.C.
Section 24, Seventh), as amended.
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In addition, pursuant to regulations of the Comptroller of the
Currency, the Bank will not accept as collateral any investments
made in variable amount demand notes, commonly known as "master
notes."
(b) This is a revolving line of credit providing for cash advances and
letters of credit. During the availability period, the Borrower
may repay principal amounts and reborrow them.
(c) The Borrower agrees not to permit the outstanding principal
balance of advances under the line of credit plus the outstanding
amounts of any letters of credit, including amounts drawn on
letters of credit and not yet reimbursed, to exceed the
Commitment.
1.2 AVAILABILITY PERIOD. The line of credit is available between the date of
this Agreement and October 1, 2001, or such earlier date as the
availability may terminate as provided in this Agreement (the "Expiration
Date").
1.3 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as described
below, the interest rate is the Bank's Prime Rate.
(b) The Prime Rate is the rate of interest publicly announced from
time to time by the Bank as its Prime Rate. The Prime Rate is set
by the Bank based on various factors, including the Bank's costs
and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans. The Bank
may price loans to its customers at, above, or below the Prime
Rate. Any change in the Prime Rate shall take effect at the
opening of business on the day specified in the public
announcement of a change in the Bank's Prime Rate.
1.4 REPAYMENT TERMS.
(a) The Borrower will pay interest on January 1, 2000, and then
monthly thereafter until payment in full of any principal
outstanding under this line of credit.
(b) The Borrower will repay in full all principal and any unpaid
interest or other charges outstanding under this line of credit no
later than the Expiration Date.
1.5 OPTIONAL INTEREST RATES. Instead of the interest rate based on the Bank's
Prime Rate, the Borrower may elect the optional interest rates listed
below during interest periods agreed to by the Bank and the Borrower. The
optional interest rates shall be subject to the terms and conditions
described later in this Agreement, Any principal amount bearing interest
at an optional rate under this Agreement is referred to as a "Portion."
The following optional interest rates are available:
(a) the IBOR Rate plus 0.7 percentage point.
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1.6 LETTERS OF CREDIT.
(a) This line of credit may be used for financing:
(i) standby letters of credit with a maximum maturity of 365
days but not to extend beyond the Expiration Date. The
standby letters of credit may include a provision providing
that the maturity date will be automatically extended each
year for an additional year unless the Bank gives written
notice to the contrary.
(b) The Borrower agrees:
(i) any sum drawn under a letter of credit may, at the option
of the Bank, be added to the principal amount outstanding
under this Agreement. The amount will bear interest and be
due as described elsewhere in this Agreement.
(ii) If there is a default under this Agreement, to immediately
prepay and make the Bank whole for any outstanding letters
of credit.
(iii) the issuance of any letter of credit and any amendment to a
letter of credit is subject to the Bank's written approval
and must be in form and content satisfactory to the Bank
and in favor of a beneficiary acceptable to the Bank,
(iv) to sign the Bank's form Application and Agreement for
Standby Letter of Credit.
(v) to pay the issuance fee of 0.50% per year and to pay any
other fees that the Bank notifies the Borrower will be
charged for issuing and processing letters of credit for
the Borrower.
(vi) to allow the Bank to automatically charge its checking
account for applicable fees, discounts, and other charges.
2. OPTIONAL INTEREST RATES
2.1 OPTIONAL RATES. Each optional interest rate is a rate per year. Interest
will be paid on the last day of each interest period, and on the first
day of each month during the interest period. At the end of any interest
period, the interest rate will revert to the rate based on the Prime
Rate, unless the Borrower has designated another optional interest rate
for the Portion. No Portion will be converted to a different interest
rate during the applicable interest period. Upon the occurrence of an
event of default under this Agreement, the Bank may terminate the
availability of optional interest rates for interest periods commencing
after the default occurs.
2.2 IBOR RATE. The election of IBOR Rates shall be subject to the following
terms and requirements:
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(a) The interest period during which the IBOR Rate will be in effect
will be no shorter than 30 days and no longer than 90 days. The
last day of the interest period will be determined by the Bank
using the practices of the offshore dollar inter-bank market.
(b) Each IBOR Rate Portion will be for an amount not less than One
Million Dollars ($1,000,000).
(c) The Borrower may not elect an IBOR Rate with respect to any
principal amount which is scheduled to be repaid before the last
day of the applicable interest period.
(d) The "IBOR Rate" means the interest rate determined by the
following formula, rounded upward to the nearest 1/100 of one
percent. (All amounts in the calculation will be determined by the
Bank as of the first day of the interest period.)
IBOR Base Rate
IBOR Rate = ---------------------------
(1.00 - Reserve Percentage)
Where,
(i) "IBOR Base Rate" means the interest rate at which the
Bank's Grand Cayman Branch, Grand Cayman, British West
Indies, would offer U.S. dollar deposits for the applicable
interest period to other major banks in the offshore dollar
inter-bank market.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained
by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve
Board Regulation D, rounded upward to the nearest 1/100 of
one percent. The percentage will be expressed as a decimal,
and will include, but not be limited to, marginal,
emergency, supplemental, special, and other reserve
percentages.
(e) Each prepayment of an IBOR Rate Portion, whether voluntary, by
reason of acceleration or otherwise, will be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment
fee as described below. A "prepayment" is a payment of an amount
on a date earlier than the scheduled payment date for such amount
as required by this Agreement.
(f) The prepayment fee shall be in an amount sufficient to compensate
the Bank for any loss, cost or expense incurred by it as a result
of the prepayment, including any loss of anticipated profits and
any loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain such Portion or from fees
payable to terminate the deposits from which such funds were
obtained. The Borrower shall also pay any customary administrative
fees charged by the Bank in connection with the foregoing. For
purposes of this paragraph, the Bank shall be
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deemed to have funded each Portion by a matching deposit or other
borrowing in the applicable interbank market, whether or not such
Portion was in fact so funded.
(g) The Bank will have no obligation to accept an election for an IBOR
Rate Portion if any of the following described events has occurred
and is continuing:
(i) Dollar deposits in the principal amount, and for periods
equal to the interest period, of an IBOR Rate Portion are
not available in the offshore dollar inter-bank market; or
(ii) the IBOR Rate does not accurately reflect the cost of an
IBOR Rate Portion.
3. FEES AND EXPENSES
3.1 FEES.
(a) UNUSED COMMITMENT FEE. The Borrower agrees to pay a fee on any
difference between the Commitment and the amount of credit it
actually uses, determined by the weighted average credit
outstanding during the specified period. The fee will be
calculated at 0.125% per year. The calculation of credit
outstanding shall include the undrawn amount of letters of credit.
This fee is due on March 31, 2000, and quarterly thereafter until
the expiration of the availability period.
3.2 EXPENSES. The Borrower agrees to immediately repay the Bank for expenses
that include, but are not limited to, filing, recording and search fees,
appraisal fees, title report fees and documentation fees.
4. COLLATERAL
4.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or
will own in the future as listed below. The collateral is further defined
in security agreement(s) executed by the Borrower.
(a) Cash, stock and other securities held in the collateral account
maintained by the Bank's Investment Management Services Group. No
collateral is required at any time that there is no credit
(including any letters of credit) outstanding under this
Agreement.
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1 REQUESTS FOR CREDIT. Each request for an extension of credit will be made
in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
5.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each
payment by the Borrower will be:
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(a) made at the Bank's branch (or other location) selected by the Bank
from time to time;
(b) made for the account of the Bank's branch selected by the Bank
from time to time;
(c) made in immediately available funds, or such other type of funds
selected by the Bank;
(d) evidenced by records kept by the Bank. In addition, the Bank may,
at its discretion, require the Borrower to sign one or more
promissory notes.
5.3 TELEPHONE AND TELEFAX AUTHORIZATION.
(a) The Bank may honor telephone or telefax instructions for advances
or repayments and telefax requests for the issuance of letters of
credit given, or purported to be given, by any one of the
individuals authorized to sign loan agreements on behalf of the
Borrower, or any other individual designated by any one of such
authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn
from the Borrower's account number 14993-05249, or such other of
the Borrower's accounts with the Bank as designated in writing by
the Borrower.
(c) The Borrower will indemnify and hold the Bank harmless from all
liability, loss, and costs in connection with any act resulting
from telephone or telefax instructions the Bank reasonably
believes are made by any individual authorized by the Borrower to
give such instructions. This paragraph will survive this
Agreement's termination, and will benefit the Bank and its
officers, employees, and agents.
5.4 DIRECT DEBIT (PRE-BILLING).
(a) The Borrower agrees that the Bank will debit the Borrower's
deposit account number 14995-05249, or such other of the
Borrower's accounts with the Bank as designated in writing by the
Borrower (the "Designated Account") on the date each payment of
interest and any fees from the Borrower becomes due (the "Due
Date"). If the Due Date is not a banking day, the Designated
Account will be debited on the next banking day.
(b) Approximately 10 days prior to each Due Date, the Bank will mail
to the Borrower a statement of the amounts that will be due on
that Due Date (the "Billed Amount"). The calculation will be made
on the assumption that no new extensions of credit or payments
will be made between the date of the billing statement and the Due
Date, and that there will be no changes in the applicable interest
rate.
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(c) The Bank will debit the Designated Account for the Billed Amount,
regardless of the actual amount due on that date (the "Accrued
Amount"). If the Billed Amount debited to the Designated Account
differs from the Accrued Amount, the discrepancy will be treated
as follows:
(i) If the Billed Amount is less than the Accrued Amount, the
Billed Amount for the following Due Date will be increased
by the amount of the discrepancy. The Borrower will not be
in default by reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount, the
Billed Amount for the following Due Date will be decreased
by the amount of the discrepancy.
Regardless of any such discrepancy, interest will continue
to accrue based on the actual amount of principal
outstanding without compounding. The Bank will not pay the
Borrower Interest on any overpayment.
(d) The Borrower will maintain sufficient funds in the Designated
Account to cover each debit. If there are insufficient funds in
the Designated Account on the date the Bank enters any debit
authorized by this Agreement, the debit will be reversed.
5.5 BANKING DAYS. Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday or a Sunday on which the Bank is open for
business in California. All payments and disbursements which would be due
on a day which is not a banking day will be due on the next banking day.
All payments received on a day which is not a banking day will be applied
to the credit on the next banking day.
5.6 TAXES. If any payments to the Bank under this Agreement are made from
outside the United States, the Borrower will not deduct any foreign taxes
from any payments it makes to the Bank. If any such taxes are imposed on
any payments made by the Borrower (including payments under this
paragraph), the Borrower will pay the taxes. and will also pay to the
Bank, at the time interest is paid, any additional amount which the Bank
specifies as necessary to preserve the after-tax yield the Bank would
have received if such taxes had not been imposed. The Borrower will
confirm that it has paid the taxes by giving the Bank official tax
receipts (or notarized copies) within 30 days after the due date.
5.7 ADDITIONAL COSTS. The Borrower will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any
request or requirement of a regulatory agency which is applicable to all
national banks or a class of all national banks. The costs and losses
will be allocated to the loan in a manner determined by the Bank, using
any reasonable method. The costs include the following
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and
commitments for credit.
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5.8 INTEREST CALCULATION. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day
year and the actual number of days elapsed. This results in more interest
or a higher fee than if a 365-day year is used. Installments of principal
which are not paid when due under this Agreement shall continue to bear
interest until paid.
5.9 DEFAULT RATE. Upon the occurrence of any default under this Agreement,
principal amounts outstanding under this Agreement will at the option of
the Bank bear interest at a rate which is 2 percentage point(s) higher
than the rate of interest otherwise provided under this Agreement. This
will not constitute a waiver of any default.
6. CONDITIONS
The Bank must receive the following items, in form and content acceptable to the
Bank, before it is required to extend any credit to the Borrower under this
Agreement:
6.1 AUTHORIZATIONS. Evidence that the execution, delivery and performance by
the Borrower of this Agreement and any instrument or agreement required
under this Agreement have been duly authorized.
6.2 GOVERNING DOCUMENTS. A copy of the Borrower's articles of incorporation.
6.3 SECURITY AGREEMENTS. Signed original security agreements, assignments,
financing statements and fixture filings (together with collateral in
which the Bank requires a possessory security interest), which the Bank
requires.
6.4 EVIDENCE OF PRIORITY. Evidence that security interests and liens in favor
of the Bank are valid, enforceable, and prior to all others' rights and
interests, except those the Bank consents to in writing.
6.5 INSURANCE. Evidence of insurance coverage, as required in the "Covenants"
section of this Agreement.
6.6 OTHER ITEMS. Any other items that the Bank reasonably requires.
7. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewed representation:
7.1 ORGANIZATION OF BORROWER. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.
7.2 AUTHORIZATION. This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized,
and do not conflict with any of its organizational papers.
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7.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance
with its terms, and any instrument or agreement required hereunder, when
executed and delivered, will be similarly legal, valid, binding and
enforceable.
7.4 GOOD STANDING. In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance
with fictitious name statutes.
7.5 NO CONFLICTS. This Agreement does not conflict with any law, agreement,
or obligation by which the Borrower is bound.
7.6 FINANCIAL INFORMATION. All financial and other information that has been
or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate knowledge of the
Borrower's (and any guarantor's) financial condition, including
all material contingent liabilities.
(b) in compliance with all government regulations that apply.
7.7 LAWSUITS. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the
Borrower's financial condition or ability to repay the loan, except as
have been disclosed in writing to the Bank.
7.8 COLLATERAL. All collateral required in this Agreement is owned by the
grantor of the security interest free of any title defects or any liens
or interests of others.
7.9 PERMITS, FRANCHISES. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights,
trade name rights, patent rights and fictitious name rights necessary to
enable it to conduct the business in which it is now engaged.
7.10 OTHER OBLIGATIONS. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material
lease, commitment, contract, instrument or obligation.
7.11 INCOME TAX MATTERS. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year.
7.12 NO EVENT OF DEFAULT. There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.
7.13 INSURANCE. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.
7.14 LOCATION OF BORROWER. The Borrower's place of business (or, if the
Borrower has more than one place of business, its chief executive office)
is located at the address listed under the Borrower's signature on this
Agreement.
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7.15 YEAR 2000 COMPLIANCE. The Borrower has conducted a comprehensive review
and assessment of the Borrower's systems and equipment applications with
respect to the "year 2000 problem" (that is, the inability of computers,
as well as embedded microchips in non-computing devices, to properly
perform date-sensitive functions with respect to certain dates prior to
and after December 31, 1999). Based on that review, the Borrower does not
believe the year 2000 problem, including costs of remediation, will
result in a material adverse change in the Borrower's business condition
(financial or otherwise), operations, properties or prospects, or ability
to repay the credit. The Borrower has developed adequate contingency
plans to ensure uninterrupted and unimpaired business operation in the
event of a failure of its own or a third party's systems or equipment due
to the year 2000 problem, including those of vendors, customers, and
suppliers, as well as a general failure of or interruption in its
communications and delivery infrastructure.
8. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
8.1 USE OF PROCEEDS. To use the proceeds of the credit only for general
corporate purposes (excluding investments in marketable securities), and
at the option of the Bank, to finance drafts drawn under any letter of
credit issued hereunder.
8.2 FINANCIAL INFORMATION. To provide the following financial information and
statements in form and content acceptable to the Bank, and such
additional information as requested by the Bank from time to time:
(a) Within 120 days of the Borrower's fiscal year end, the Borrower's
annual financial statements. These financial statements must be
audited by a Certified Public Accountant ("CPA") acceptable to the
Bank. The statements shall be prepared on a consolidated basis.
(b) Within 10 days of month end or upon the Bank's request, copies of
monthly statements from depository institutions or other, evidence
acceptable to the Bank of the Borrower's securities account(s)
pledged to the Bank.
8.3 NOTICES TO BANK. To promptly notify the Bank in writing of:
(a) any lawsuit over One Hundred Thousand Dollars ($100,000) against
the Borrower (or any guarantor).
(b) any substantial dispute between the Borrower (or any guarantor)
and any government authority.
(c) any failure to comply with this Agreement.
(d) any material adverse change in the Borrower's (or any guarantor's)
business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit.
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(e) any change in the Borrower's name, legal structure, place of
business, or chief executive office if the Borrower has more than
one place of business.
(f) any actual contingent liabilities of the Borrower (or any
guarantor), and any such contingent liabilities which are
reasonably foreseeable.
8.4 BOOKS AND RECORDS. To maintain adequate books and records.
8.5 AUDITS. To allow the Bank and its agents to inspect the Borrowers
properties and examine, audit, and make copies of books and records at
any reasonable time. If any of the Borrowers properties, books or records
are in the possession of a third party, the Borrower authorizes that
third party to permit the Bank or its agents to have access to perform
inspections or audits and to respond to the Bank's requests for
information concerning such properties, books and records.
8.6 COMPLIANCE WITH LAWS. To comply with the laws (including any fictitious
name statute), regulations, and orders of any government body with
authority over the Borrower's business.
8.7 PRESERVATION OF RIGHTS. To maintain and preserve all rights, privileges,
and franchises the Borrower now has.
8.8 MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or replacements
to keep the Borrower's properties in good working condition.
8.9 PERFECTION OF LIENS. To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to
protect its security interests and liens.
8.10 COOPERATION. To take any action reasonably requested by the Bank to carry
out the intent of this Agreement.
8.11 GENERAL BUSINESS INSURANCE. To maintain insurance as is usual for the
business it is in.
8.12 LIQUIDATION. Not to, without the Bank's written consent, liquidate or
dissolve the Borrower's business.
9. DEFAULT
If any of the following events occurs, the Bank may do one or more of the
following: declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice. If an event of default occurs under the
paragraph entitled "Bankruptcy," below, with respect to the Borrower, then the
entire debt outstanding under this Agreement will automatically be due
immediately.
9.1 FAILURE TO PAY. The Borrower fails to make a payment under this Agreement
when due.
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9.2 LIEN PRIORITY. The Bank fails to have an enforceable first lien (except
for any prior liens to which the Bank has consented in writing) on or
security interest in any property given as security for this Agreement
(or any guaranty).
9.3 FALSE INFORMATION. The Borrower (or any guarantor) has given the Bank
false or misleading information or representations.
9.4 BANKRUPTCY. The Borrower (or any guarantor) files a bankruptcy petition,
a bankruptcy petition is filed against the Borrower (or any guarantor) or
the Borrower (or any guarantor) makes a general assignment for the
benefit of creditors.
9.5 RECEIVERS. A receiver or similar official is appointed for the Borrower's
(or any guarantor's) business, or the business is terminated.
9.6 GOVERNMENT ACTION. Any government authority takes action that the Bank
believes materially adversely affects the Borrowers (or any guarantor's)
financial condition or ability to repay.
9.7 MATERIAL ADVERSE CHANGE. A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's (or any guarantors)
business condition (financial or otherwise), operations, properties or
prospects, or ability to repay the credit.
9.8 CROSS-DEFAULT. Any default occurs under any agreement in connection with
any credit the Borrower (or any guarantor) has obtained from anyone else
or which the Borrower (or any guarantor) has guaranteed.
9.9 DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this
Agreement is violated or no longer in effect.
9.10 OTHER BANK AGREEMENTS. The Borrower (or any guarantor) fails to meet the
conditions of, or fails to perform any obligation under any other
agreement the Borrower (or any guarantor) has with the Bank or any
affiliate of the Bank.
9.11 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the conditions
of, or fails to perform any obligation under, any term of this Agreement
not specifically referred to in this Article. This includes any failure
or anticipated failure by the Borrower to comply with any financial
covenants set forth in this Agreement, whether such failure is evidenced
by financial statements delivered to the Bank or is otherwise known to
the Borrower or the Bank.
10. ENFORCING THIS AGREEMENT; MISCELLANEOUS
10.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made
under generally accepted accounting principles, consistently applied.
10.2 CALIFORNIA LAW. This Agreement is governed by California law.
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10.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial
information about the Borrower with actual or potential participants or
assignees; provided that such actual or potential participants or
assignees shall agree to treat all financial information exchanged as
confidential. If a participation is sold or the loan is assigned, the
purchaser will have the right of set-off against the Borrower.
10.4 ARBITRATION.
(a) This paragraph concerns the resolution of any controversies or
claims between the Borrower and the Bank, whether arising in
contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this
Agreement (including any renewals, extensions or modifications);
or (ii) any document related to this Agreement (collectively a
"Claim").
(b) At the request of the Borrower or the Bank, any Claim shall be
resolved by arbitration in accordance with the Federal Arbitration
Act (Title 9, U. S. Code) (the "Act"). The Act will apply even
though this Agreement provides that it is governed by the law of a
specified state.
(c) Arbitration proceedings will be determined in accordance with the
Act, the rules and procedures for the arbitration of financial
services disputes of J.A.M.S./Endispute or any successor thereof
("J.A.M.S."), and the terms of this paragraph. In the event of any
inconsistency, the terms of this paragraph shall control.
(d) The arbitration shall be administered by J.A.M.S. and conducted in
any U.S. state where real or tangible personal property collateral
for this credit is located or if there is no such collateral, in.
All Claims shall be determined by one arbitrator; however, if
Claims exceed Five Million Dollars ($5,000,000), upon the request
of any party, the Claims shall be decided by three arbitrators.
All arbitration hearings shall commence within ninety (90) days of
the demand for arbitration and close within ninety (90) days of
commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the
commencement of the hearing for up to an additional sixty (60)
days. The arbitrator(s) shall provide a concise written statement
of reasons for the award. The arbitration award may be submitted
to any court having jurisdiction to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any
Claim is barred by the statute of limitations and, if so, to
dismiss the arbitration on that basis. For purposes of the
application of the statute of limitations, the service on J.A.M.S.
under applicable J.A.M.S. rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this
arbitration provision or whether a Claim
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is arbitrable shall be determined by the arbitrator(s). The
arbitrator(s) shall have the power to award legal fees pursuant to
the terms of this Agreement.
(f) This paragraph does not limit the right of the Borrower or the
Bank to: (i) exercise self-help remedies, such as but not limited
to, setoff; (ii) initiate judicial or nonjudicial foreclosure
against any real or personal property collateral; (iii) exercise
any judicial or power of sale rights, or (iv) act in a court of
law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies.
(g) The filing of a court action is not intended to constitute a
waiver of the right of the Borrower or the Bank, including the
suing party, thereafter to require submittal of the Claim to
arbitration.
10.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights,
even if it makes a loan after default. If the Bank waives a default, it
may enforce a later default. Any consent or waiver under this Agreement
must be in writing.
10.6 ADMINISTRATION COSTS. The Borrower shall pay the Bank for all reasonable
costs incurred by the Bank in connection with administering this
Agreement.
10.7 ATTORNEYS' FEES. The Borrower shall reimburse the Bank for any reasonable
costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this
Agreement and any other documents executed in connection with this
Agreement, and in connection with any amendment, waiver, "workout" or
restructuring under this Agreement. In the event of a lawsuit or
arbitration proceeding, the prevailing party is entitled to recover costs
and reasonable attorneys' fees incurred in connection with the lawsuit or
arbitration proceeding, as determined by the court or arbitrator. In the
event that any case is commenced by or against the Borrower under the
Bankruptcy Code (Title 11, United States Code) or any similar or
successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation,
protection, or enforcement of any rights of the Bank in such a case. As
used in this paragraph, "attorneys' fees" includes the allocated costs of
the Bank's in-house counsel.
10.8 ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the
Bank and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the Bank and
the Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete
and exclusive statement of the terms agreed to by them.
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In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
10.9 INDEMNIFICATION. The Borrower will indemnify and hold the Bank harmless
from any loss, liability, damages, judgments, and costs of any kind
relating to or arising directly or indirectly out of (a) this Agreement
or any document required hereunder, (b) any credit extended or committed
by the Bank to the Borrower hereunder, and (c) any litigation or
proceeding related to or arising out of this Agreement, any such
document, or any such credit. This indemnity includes but is not limited
to attorneys' fees (including the allocated cost of in-house counsel).
This indemnity extends to the Bank, its parent, subsidiaries and all of
their directors, officers, employees, agents, successors, attorneys, and
assigns, This indemnity will survive repayment of the Borrower's
obligations to the Bank. All sums due to the Bank hereunder shall be
obligations of the Borrower, due and payable immediately without demand.
10.10 NOTICES. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight
courier, to the addresses on the signature page of this Agreement, or
sent by facsimile to the fax numbers listed on the signature page, or to
such other addresses as the Bank and the Borrower may specify from time
to time in writing. Notices sent by first class mail shall be deemed
delivered on the earlier of actual receipt or on the fourth business day
after deposit in the U.S. mail.
10.11 HEADINGS. Article and paragraph headings are for reference only and shall
not affect the interpretation or meaning of any provisions of this
Agreement.
10.12 COUNTERPARTS. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original
but all such counterparts shall constitute but one and the same
agreement.
This Agreement is executed as of the date stated at the top of the first page.
<TABLE>
<CAPTION>
BANK OF AMERICA, N.A. NEXTLEVEL COMMUNICATIONS, INC.
<S> <C>
/s/ Ginger P. Trimble /s/ Next Level Communications
--------------------------------------------- ------------------------------------------
By: Ginger P. Trimble, Vice-President By:
Address where notices to the Bank are to be sent:
------------------------------------------
By:
San Francisco Commercial Banking
Office #01499
345 Montgomery Street Address for Notices:
San Francisco, CA 94104
6085 State Farm Drive
Rohnert Park, CA 94928
</TABLE>
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