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EXHIBIT 10.3.4
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LOAN AND PLEDGE AGREEMENT
This LOAN AND PLEDGE AGREEMENT is dated [Term1] (the "Agreement"), and is made
by and among Deutsche Bank AG, London branch ("DBL"), with Deutsche Bank
Securities, Inc., as agent ("DBSI", and, together with DBL, "Deutsche Bank").
Pursuant to this Agreement, DBL agrees, subject to the terms and conditions
contained herein, to extend to [Term2] (the "Borrower") a loan ("Loan") in an
aggregate principal amount that shall not, at any time, exceed the Commitment
(as defined below) outstanding at such time. The "Commitment" shall, initially,
be $[Term3] and may, in the sole discretion of Deutsche Bank, be increased from
time to time to such amount as Deutsche Bank's credit department may approve
from time to time. Information for each of the bracketed items is provided on
the signature pages hereto.
Preliminary
WHEREAS the Borrower has purchased from Deutsche Bank a cash-settled, European
style over-the-counter put option (the "Put") on shares of the common stock (the
"Common Stock") of [Term4] (the "Company") and sold to Deutsche Bank a
cash-settled, European style over-the-counter call option (the "Call" and,
together with the Put, the "Collar") on shares of the common stock of the
Company; the Collar is evidenced and governed by a confirmation (Deal Reference
# [Term5]) that incorporates by reference the form of ISDA Master Agreement
(Multicurrency--Cross-Border) (the "ISDA Form") and, upon execution of an ISDA
Master Agreement (Multicurrency--Cross Border), by and between DBL and the
Borrower, with DBSI as agent (as well as a Schedule, Credit Support Annex
("CSA"), Annexes, Exhibits and Confirmations relating to the Collar
(collectively, the "Master Agreement") which are incorporated therein by
reference), shall be governed by such Master Agreement; the Collateral (as
defined in paragraph B.1 below), other than the Collar, has also been pledged by
the Borrower to Deutsche Bank pursuant to the CSA to secure the Borrower's
obligations under the Collar.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
A. Borrower hereby represents and warrants to Deutsche Bank as follows (In each
of A.1. and A.2. below, please check the appropriate paragraph):
1. ___ The Loan is being made for "purpose" use (as such term is used in
the context of Regulation U and Regulation X (the "Margin
Regulations") promulgated by the Board of Governors of the Federal
Reserve System (12 CFR 220).
_X_ The Loan is being made for "non-purpose" use (as such term is used in
the context of the Margin Regulations). The Borrower represents and
warrants to Deutsche Bank that the proceeds of the Loan will not be
used to trade in or carry securities and that it will sign a Board of
Governors of the Federal Reserve System Statement of Purpose for an
Extension of Credit by a Creditor ("Form U-1") to that effect.
2. ___ The Borrower is an "affiliate" of the Company as defined in Rule 144
("Rule 144") under the Securities Act of 1933, as amended (the "Act").
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_X_ The Borrower is not an "affiliate" of the Company as defined in
Rule 144.
3. The Borrower owns the Collateral (as defined below) free and clear of any
liens, pledges or encumbrances, other than the security interests granted
hereunder and (if applicable) the security interest created pursuant to the
CSA to secure the Borrower's obligations under the Collar (collectively,
the "Security Interests"). The Collateral is subject to no options to
purchase or similar rights of any person other than the rights created
hereunder and the rights under the Collar and under the CSA. The Borrower
is not and will not become a party to or otherwise be or become bound by
any agreement (other than this Agreement, the Master Agreement and the CSA)
that restricts in any manner the rights of any present or future holder of
any of the Collateral with respect thereto. The Borrower further represents
that (a) it shall not subject the Collateral to other liens, pledges or
encumbrances during the term of the Loan, except for the Security
Interests, (b) Deutsche Bank shall have a continuing security interest in
the Collateral during the term of the Loan and the Put and (c) Deutsche
Bank's interest therein shall be first priority, and provided that Deutsche
Bank retains the Collateral in its possession, fully perfected.
4. (a) The Pledged Shares (as defined in paragraph B.2 below) are subject to
the restrictions of Rule 145 and (b) the Borrower acquired the Pledged
Shares on [Term6] and, as of that time, made full payment of the full
purchase price.
5. There are no lock-up agreements or other arrangements in place restricting
the transfer of the Pledged Shares.
6. The Borrower does not know or have any reason to believe that the Company
has not complied with the reporting requirements contained in Rule
144(c)(1) of the Act;
7. (a) The individual(s) executing and delivering this Agreement and any other
documentation relating to this Agreement to which it is a party or that it
is required to deliver are duly empowered and authorized to do so, and it
has duly executed and delivered this Agreement; (b) it is not relying upon
any representations (whether written or oral) of Deutsche Bank other than
representations expressly set forth herein or in the Master Agreement; (c)
it is entering into this Agreement with a full understanding of all of the
terms and risks hereof (economic and otherwise), and it is capable of
assuming (financially and otherwise) those risks; (d) it has made its
investment and trading decisions (including decisions regarding the
suitability of the Loan and the Collar) based upon its own judgment and it
has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors as it has deemed necessary, and not in
reliance upon any view expressed by Deutsche Bank or Deutsche Bank's
counsel; (e) Deutsche Bank is not acting as a fiduciary or an advisor for
it, and all of its decisions have been the result of arms' length
negotiations between the Borrower and Deutsche Bank; (f) Deutsche Bank has
not given the Borrower any assurance or guarantee as to the expected
performance or result of the Loan or the Collar; and (g) there exists no
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prohibition against it entering into this Agreement, pledging the
Collateral to secure the Loan, or Deutsche Bank's ability (if applicable,
subject to Rule 145) to freely liquidate the Collateral in accordance with
the terms of this Agreement, and that by entering into this Agreement the
Borrower will not violate any law or the terms or conditions of any
agreement to which the Borrower or its assets may be subject.
8. The place that the Borrower is "deemed located" within the meaning of
Section 9-103(3) of the UCC (the Borrower's "Location") is the address set
forth for the Borrower on the signature pages hereof.
9. The Borrower has not performed and will not perform any acts that might
prevent Deutsche Bank from enforcing any of the terms of this Agreement or
that might limit Deutsche Bank in any such enforcement.
10. Other than financing statements or other similar or equivalent documents or
instruments with respect to the Security Interests, no financing statement,
security agreement or similar or equivalent document or instrument covering
all or any part of the Collateral is on file or of record in any
jurisdiction in which such filing or recording would be effective to
perfect a lien, security interest or other encumbrance of any kind on such
Collateral.
11. All Collateral consisting of securities and all financial assets underlying
Collateral consisting of security entitlements (each as defined in Section
8-102 of the UCC) at any time pledged hereunder is and will be issued by an
issuer organized under the laws of the United States, any State thereof or
the District of Columbia and (i) certificated (and the certificate or
certificates in respect of such securities or financial assets are and will
be located in the United States) and registered in the name of the Borrower
or held through a securities intermediary whose securities intermediary's
jurisdiction (within the meaning of Section 8-110(e) of the UCC) is located
in the United States or (ii) uncertificated and either registered in the
name of the Borrower or held through a securities intermediary whose
securities intermediary's jurisdiction (within the meaning of Section
8-110(e) of the UCC) is located in the United States.
12. If this Agreement allows for multiple drawdowns of the Loan amount, all
representations and warranties of the Borrower under this Agreement shall
be deemed repeated as of the date of each drawdown.
B. The parties agree as follows:
1. The obligation of Deutsche Bank to make any advance included in the Loan
pursuant to the Commitment is conditioned upon the satisfaction of each of
the following conditions:
(a) Each of the representations and warranties of the Borrower set
forth herein and in the Master Agreement shall be true and
correct on and as of the date of
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the making of such advance, both before and after the making of
such advances;
(b) No Default shall have occurred and be continuing on the date of
such advance, either before or after the making of such advance;
(c) The aggregate principal amount of the Loan after giving effect to
the advance to be made, shall not exceed the Commitment at such
time;
(d) Deutsche Bank shall have received (i) a written request for such
advance, duly executed by the Borrower and setting forth the
principal amount of the advance requested and the date upon which
such advance is to be made, at least 5 business days prior to the
date upon which such advance is thereby request to be made and
(ii) a promissory note (the "Note"), substantially in the form of
Exhibit A hereto, duly completed in the amount of the advance
requested and executed by the Borrower; and
(e) Either
(i) The Borrower shall have certified to Deutsche Bank in writing
that the proceeds of such advance will not be used to pay
dividends or distributions in respect of, or redeem or make any
other payment in respect of, any equity securities of or other
equity interests in the Borrower (the terms "equity securities"
and "other equity interests" as used herein shall not include any
securities convertible into equity securities or any debentures);
or
(ii) either (x) the Borrower shall have provided evidence
satisfactory to Deutsche Bank that, following the making of the
advance and the Borrower's use of the proceeds thereof, the ratio
of its total liabilities (including contingent or other
liabilities) to the sum of (i) its cash and cash equivalents,
(ii) the put strike notional amount of the Common Stock, (iii)
50% of its accounts receivable, and (iv) 20% of its inventory, is
less than 1.0 or (y) the Borrower shall have provided evidence
satisfactory to Deutsche Bank that following the making of the
advance and the Borrower's use of the proceeds thereof, the
Borrower will be solvent.
Any request by the Borrower for any advance to be included in the Loan, and
the acceptance by the Borrower of the proceeds of any advance, shall be
deemed to be a representation by the Borrower on the date of such request
and the date of such advance, of the satisfaction of each of the conditions
set forth in (a), (b) and (c) above. Upon satisfaction of the conditions
above, Deutsche Bank shall issue the amount of any advance to Borrower per
Borrower's instructions within 5 business days of the written request.
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2. As collateral for the Loan, the Borrower hereby pledges to Deutsche Bank
(i) [Term7] shares of the common stock of the Company (the "Pledged
Shares"), which have been credited to a securities account maintained at
DBSI, as securities intermediary, numbered [Term8] and titled "[Term9] as
Pledgor; Deutsche Bank as Pledgee" (the "Account"), (ii) all securities
entitlements in respect thereof, (iii) the Collar, (iv) all income and
profits on any of the foregoing, (v) all interest, dividends and other
payments and distributions with respect to any of the foregoing and (vi)
all proceeds of any of the foregoing (collectively, the "Collateral"). The
Borrower agrees that, so long as the Loan or the Collar or any obligation
of the Borrower in respect of any of them is outstanding, it will maintain
the Collateral (other than the Collar) in the Account.
3. If the Borrower is entitled to receive in respect of the Collateral any
stock dividends, any dividends payable in securities or other property
(including ordinary cash dividends), any dividends or distributions on
dissolution or total or partial liquidation or in connection with a
reduction of capital, capital surplus or paid-in surplus, or any other
securities or any rights to purchase any securities (whether through
conversion, stock-split, spin-off, split-off, reclassification, merger,
consolidation, sale of assets, combination of shares or otherwise), any
such entitlements or rights, and any cash, securities or other property
paid or distributed in respect thereof, shall constitute part of the
Collateral and (except in the case of ordinary cash dividends) shall be
delivered to Deutsche Bank and held in the Account as part of the
Collateral and, if delivered to the Borrower, the Borrower shall accept the
same in trust for the benefit of Deutsche Bank, as pledgee, and shall
deliver the same promptly to Deutsche Bank as Collateral in the same form
as received and in suitable form for transfer by delivery or exercise, or
accompanied by duly executed instruments of transfer, exercise, or
assignment in blank, with signatures appropriately guaranteed, and
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to Deutsche Bank. Unless a Default (as defined in paragraph
B.11 below) shall have occurred and be continuing, the Borrower shall be
entitled to receive, and Deutsche Bank shall, upon the request of the
Borrower, to the extent Deutsche Bank shall have received the same, deliver
to the Borrower, all ordinary cash dividends and interest paid upon or with
respect to the Collateral. In the event of a Default (as defined in
paragraph B.11 below), all dividends and interest received by Deutsche Bank
shall be retained by Deutsche Bank and all such dividends and interest
which are received by the Borrower shall be received in trust for the
benefit of Deutsche Bank, as pledgee, and, if Deutsche Bank so directs
during the continuance of a Default (as defined in paragraph B.11 below),
shall be segregated from other funds of the Borrower and shall, forthwith
upon demand by Deutsche Bank, be paid over or delivered to Deutsche Bank as
Collateral in the same form as received (with any necessary endorsement).
4. The Borrower hereby authorizes DBL to lend on commercially reasonable
terms, to any of its affiliates or to others, any securities held by
Deutsche Bank as Collateral in the Account or any other securities held by
DBL on margin in Deutsche Bank's possession or control, together with all
attendant rights of ownership (including the right to vote such
securities).
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5. Upon the request of Deutsche Bank, the Borrower shall, at the expense of
the Borrower and in such manner and form as Deutsche Bank may require,
give, execute, deliver, file and record any financing statement, notice,
instrument, document, agreement or other paper that may be necessary or
desirable in order to (i) create, preserve, perfect, substantiate or
validate any Security Interest, (ii) create or maintain control (within the
meaning of Section 8-106 of the UCC) with respect to any such Security
Interests in any investment property (as defined in Section 9-115 of the
UCC) or (iii) enable Deutsche Bank to exercise and enforce its rights
hereunder with respect to such Security Interest. To the extent permitted
by applicable law, the Borrower hereby authorizes Deutsche Bank to execute
and file, in the name of the Borrower or otherwise, UCC financing or
continuation statements (which may be carbon, photographic, photostatic or
other reproductions of this Agreement or of a financing statement relating
to this Agreement) that Deutsche Bank in its sole discretion may deem
necessary or appropriate to further perfect, or maintain the perfection of,
the Security Interests.
6. The Borrower shall warrant and defend the Borrower's title to the
Collateral, subject to the rights of Deutsche Bank, against the claims and
demands of all persons. Deutsche Bank may elect, but without an obligation
to do so, to discharge any lien of any third party on any of the
Collateral.
7. The Borrower agrees that the Borrower shall not change (i) the Borrower's
name, identity or corporate structure in any manner or (ii) the Borrower's
Location, unless in either case (A) the Borrower shall have given Deutsche
Bank not less than 30 days' prior notice thereof and (B) such change shall
not cause any of the Security Interests to become unperfected, cause
Deutsche Bank to cease to have control (within the meaning of Section 8-106
of the UCC) in respect of any of the Security Interests in any Collateral
consisting of investment property (as defined in Section 9-115 of the UCC)
or subject any Collateral to any other Lien.
8. The Borrower agrees that the Borrower shall not (i) create or permit to
exist any lien (other than the Security Interests) upon or with respect to
the Collateral, (ii) sell or otherwise dispose of, or grant any options
(except with regard to transactions entered into with Deutsche Bank) with
respect to, any of the Collateral or (iii) enter into or consent to any
agreement pursuant to which any person other than the Borrower, Deutsche
Bank and any securities intermediary through whom any of the Collateral is
held (but in the case of any such securities intermediary only in respect
of Collateral held through it) has or will have control (within the meaning
of Section 8-106 of the UCC) in respect of any Collateral.
9. The Loan shall mature, and any and all unpaid principal and interest on,
the Loan shall be due and payable on the Settlement Date (as defined in the
Master Agreement). The Borrower agrees that the unpaid principal amount of
each Note (which aggregate to the amount of the Loan) shall bear interest
as described in such Note. Accrued interest on
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each Note shall be added to the outstanding principal amount of such Note
on the last day of each month while the Note is outstanding (and if any
such day is not a business day, on the next succeeding business day).
Interest shall be calculated on the basis of a 360 day year for the actual
days elapsed.
10. The Borrower agrees for the duration of the Loan to notify Deutsche Bank
prior to acquiring beneficial ownership directly or indirectly, of more
than five (5) percent of any equity security of the Company (including any
equity security included in the Collateral), such that it would be required
to file statements under Securities and Exchange Commission Rule 13d-1
under the Securities Exchange Act of 1934, as amended. Deutsche Bank shall
have the right upon such notice to demand immediate repayment of the Loan
in its entirety. If the Borrower refuses to repay the Loan upon such demand
by Deutsche Bank, Deutsche Bank shall have the right to liquidate the
Collateral, and any resulting deficit shall be for the Borrower's account
and risk.
11. Upon any breach, repudiation, misrepresentation or default (howsoever
characterized) by the Borrower hereunder or under the Master Agreement (a
"Default"), or upon a Regulatory Event (as defined below), Deutsche Bank
may, by notice to the Borrower, (i) declare the Loan, together with accrued
interest thereon, to be, and it shall thereupon become, immediately due and
payable, without presentment, demand, protest or other notice to the
Borrower, each of which is hereby waived by the Borrower and (ii) terminate
the Commitment; provided that upon the occurrence of a Default of the type
specified in clause (d) below, without notice to the Borrower or any other
act by Deutsche Bank, the Commitment shall thereupon immediately terminate
and the Loan shall become immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
In addition, upon the occurrence of any Default or Regulatory Event (as
defined below), and for the purpose of satisfying any and all of the
Borrower's obligations hereunder, Deutsche Bank shall have the right to:
(a) cancel any of the Borrower's outstanding orders for the purchase or
sale of any securities, commodities or other property; (b) sell any or all
of the securities (including the Collateral) and commodities or other
property of the Borrower in the Account; (c) buy in any securities,
commodities or other property of which the account or accounts (including
the Account) of the Borrower may be short; or (d) exercise all of the
rights of a secured party under the New York Uniform Commercial Code
(whether or not in effect in the jurisdiction where such rights are
exercised) with respect to the Collateral. Such foreclosure, sale, purchase
or cancellation may be made on the exchange or other market where such
business is then usually transacted, or at public auction or at private
sale, without advertising and without any notice (other than as may be
required under applicable law) of the time or place of sale to the Borrower
or to the personal representatives of the Borrower, all of which are
expressly waived by Borrower, and Deutsche Bank may purchase the whole or
any part thereof free from any right of redemption, which rights the
Borrower hereby expressly waives to the fullest extent permitted under
applicable law, and the Borrower shall remain liable for any
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deficiency; it being understood that a prior tender, demand or call of any
kind from Deutsche Bank, or prior notice from Deutsche Bank, of the time
and place of such sale or purchase shall not be considered a waiver of its
right to sell or buy any securities (including the Collateral) and/or
commodities and/or other property held by Deutsche Bank, or which the
Borrower may owe to Deutsche Bank. The Borrower hereby agrees to execute
and deliver such documents and take such actions as Deutsche Bank deems
necessary or advisable in order that any such foreclosure, sale, purchase
or cancellation be made in compliance with applicable law. Without limiting
the generality of the foregoing, a Default of this Agreement shall be
deemed to have occurred in the event that:
(a) the Borrower fails to pay any amount when due under this Agreement
or the Collar;
(b) the Borrower fails to fulfill or discharge any other obligations
or agreements under or relating to this Agreement, the Collar, the CSA or
the Master Agreement or under any other agreement it may have with Deutsche
Bank or its affiliates;
(c) any representation made or repeated or deemed to have been made or
repeated by the Borrower hereunder or under or in respect of this
Agreement, the Collar, the CSA or the Master Agreement proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(d) any of the following occurs with respect to the Borrower: (i) the
filing or commencement of any case, petition or proceeding by or against
the Borrower under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law; (ii) the filing or commencement of any case,
petition or proceeding by or against the Borrower for the appointment of a
receiver, trustee, custodian or similar official for the Borrower or any
substantial portion of its property or assets; (iii) the levy of an
attachment against any property or accounts of the Borrower (including the
Account); (iv) the making by the Borrower of a general assignment for the
benefit of creditors; or (v) the admission by the Borrower of its inability
to pay its debts as they come due; or
(e) the Put is sold, assigned or otherwise transferred by the
Borrower, or otherwise terminates or expires prior to the Expiration Date
(as defined in the Master Agreement), or the terms of the Put are adjusted
in a manner that is materially adverse to Deutsche Bank with regard to the
Loan (as determined by Deutsche Bank in its reasonable discretion);
(f) the Security Interest shall at any time fail to be a valid,
perfected, first-priority security interest (except to the extent such
failure is caused by Deutsche Bank's failure to retain the Collateral in
its possession) in all of the Collateral securing the Loan and all of the
Borrower's obligations under this Agreement, the Collar, the CSA and the
Master Agreement, or, in the case of any Collateral consisting of
investment property (as
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defined in Section 9-115 of the New York Uniform Commercial Code) Deutsche
Bank shall fail to have control (within the meaning of Section 8-106 of the
UCC) thereof.
A "Regulatory Event" shall mean any time Deutsche Bank is required
(and only to the extent required) to take any action in respect of the
Loan, the Collateral, or the Collar in order to comply with any applicable
laws of, or the rules and regulations of, any applicable United Kingdom or
United States federal, state or other regulatory authorities, including but
not limited to the Securities and Exchange Commission, the Securities and
Investments Board, The Securities and Futures Authority, all relevant
securities and commodity exchanges, the Municipal Securities Rulemaking
Board, the National Association of Securities Dealers, the Board of
Governors of the Federal Reserve System and the constitution, rules and
customs of any relevant exchange or market (and its clearinghouse, if any).
12. Any amount payable by the Borrower to Deutsche Bank or its affiliates in
circumstances where a Default by the Borrower under this Agreement, the
Collar, the CSA or the Master Agreement has occurred, may, at the option of
Deutsche Bank (and without prior notice to the Borrower), be reduced by its
set-off against any amount payable (whether at such time or in the future
or upon the occurrence of a contingency) by Deutsche Bank to the Borrower
under the Collar or otherwise (and such amount will be discharged promptly
and in all respects to the extent it is so set-off). Deutsche Bank will
give notice to the Borrower of any set-off effected hereunder. Deutsche
Bank may in good faith estimate the amount payable under the Collar and
set-off in respect of such estimate. A Default by the Borrower under this
Agreement shall constitute a Cross-Default under the Collar and the Master
Agreement, and if Deutsche Bank exercises its rights upon Default under
this Agreement by disposing of Collateral, it shall terminate the Collar
pursuant to the terms of the Master Agreement. Nothing contained in this
paragraph shall impair Deutsche Bank's right to liquidate Collateral
pursuant to this Agreement.
13. The Borrower agrees that the Borrower shall forthwith upon demand pay to
Deutsche Bank:
(i) the amount of any taxes that Deutsche Bank may have been
required to pay by reason of the Security Interests or to free any of
the Collateral from any lien (other than the Security Interests)
thereon, and
(ii) the amount of any and all costs and expenses, including the
fees and disbursements of counsel and of any other experts, that
Deutsche Bank may incur in connection with (A) the enforcement of this
Agreement, including such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection, rank and value
of the Security Interests, (B) the collection sale or other
disposition of any of the Collateral or (C) the exercise by Deutsche
Bank of any of the rights conferred upon it hereunder.
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Any such amount not paid on demand shall bear interest (computed on the
basis of a year of 360 days and payable for the actual number of days
elapsed) at a rate per annum equal to 3% plus the prime rate as published
from time to time in The Wall Street Journal, Eastern Edition.
14. This Agreement and its enforcement shall be governed by the laws of the
State of New York, except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the laws of such
jurisdiction.
15. ANY DISPUTE THE BORROWER MAY HAVE WITH DEUTSCHE BANK ARISING OUT OF,
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, THE COLLAR, THE CSA OR
THE MASTER AGREEMENT SHALL BE DETERMINED BY ARBITRATION OR LITIGATION IN
COURT AT THE ELECTION OF THE BORROWER. REGARDLESS OF WHETHER THE BORROWER
CHOOSES TO PROCEED BY ARBITRATION OR LITIGATION, THE BORROWER AND DEUTSCHE
BANK AGREE TO FOLLOW THE PROCEDURES AND ABIDE BY THE REQUIREMENTS LISTED
BELOW:
FOR ARBITRATION:
- ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT,
INCLUDING THE RIGHT TO JURY TRIAL.
- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT
FROM COURT PROCEEDINGS.
- THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR
LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
ANY ARBITRATION SHALL BE CONDUCTED ONLY BEFORE THE NEW YORK STOCK EXCHANGE,
INC., THE AMERICAN STOCK EXCHANGE, INC., THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. OR ANY OTHER SELF-REGULATORY ORGANIZATION OF WHICH
DBSI IS A MEMBER. THE BORROWER HAS THE RIGHT TO ELECT ARBITRATION BEFORE
ONE OF THE FOREGOING ORGANIZATIONS, BUT IF THE
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BORROWER FAILS TO MAKE SUCH ELECTION BY CERTIFIED LETTER ADDRESSED TO
DEUTSCHE BANK BEFORE THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF A WRITTEN
REQUEST FROM DEUTSCHE BANK TO MAKE SUCH ELECTION, THEN DEUTSCHE BANK MAY
MAKE SUCH ELECTION. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS CONSENT
BY DEUTSCHE BANK TO AN AWARD OF PUNITIVE DAMAGES. THE AWARD OF THE
ARBITRATORS, OR THE MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT UPON THE
AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING
JURISDICTION.
NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION,
NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY
PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO IS A
MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT
TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL:
(i) THE CLASS CERTIFICATION IS DENIED;
(ii) THE CLASS IS DECERTIFIED; OR
(iii) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT.
SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE
A WAIVER OF ANY RIGHTS UNDER THIS LOAN AND PLEDGE AGREEMENT EXCEPT TO THE
EXTENT STATED HEREIN.
FOR LITIGATION IN COURT:
(A) UNLESS THE PARTIES OTHERWISE AGREE IN WRITING WHEN ANY DISPUTE ARISES,
ANY LITIGATION MUST BE INSTITUTED IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW
YORK FOR THE COUNTY OF NEW YORK.
(B) ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION IS
HEREBY WAIVED BY ALL PARTIES TO THIS AGREEMENT.
11
<PAGE> 12
Specific Information for Bracketed Terms
Term1 (Date of Agreement) As of March 15, 2000
Term2 (Borrower Name) Telxon Systems Services, Inc.
Term3 (Commitment Amount) $236,000,000.00
Term4 (Issuer Name) Cisco Systems, Inc. (CSCO)
Term5 (Deal Reference #) #23824 & #23825
Term6 (Date of Acquisition of March 15, 2000
Collared Shares)
Term7 (# of Pledged Shares) 2,080,000
Term8 (Account#) DBSI Account #:145-00204
Term9 (Borrower Name) Telxon Systems Services, Inc.
12
<PAGE> 13
WHEREFORE, the parties have made and entered into this Agreement as of
the dated stated above.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE IN PARAGRAPH B.15.
TELXON SYSTEMS SERVICES, INC., as Borrower
------------------------------
By: /s/ Woody M. McGee
----------------------------------------------
Name: Woody M. McGee
Title: Vice President, Chief Financial Officer
Address: c/o Telxon Corporation
1000 Summit Drive
Cincinnati, OH 45150
Clermont County, OH
DEUTSCHE BANK SECURITIES, INC., as agent
By: /s/ James S. Rowen
---------------------------------------------
Name: James S. Rowen
Title: MD
By: /s/ Jill H. Rathjen
---------------------------------------------
Name: Jill H. Rathjen
Title: Director
DEUTSCHE BANK AG, LONDON BRANCH
By: /s/ James S. Rowen
--------------------------------------------
Name: James S. Rowen
Title: A-I-F
By: /s/ Jill H. Rathjen
--------------------------------------------
Name: Jill H. Rathjen
Title: A-I-F
13
<PAGE> 14
EXHIBIT A
PROMISSORY NOTE
Date:
-----------------
For value received, the undersigned ("BORROWER") hereby unconditionally
promises to pay to the order of Deutsche Bank AG, London Branch ("LENDER"), in
accordance with the instructions of Lender, in lawful money of the United States
of America, as follows:
DATE OF LOAN & PLEDGE AGREEMENT ___________________
DATE OF MASTER AGREEMENT ____________________
PRINCIPAL AMOUNT OF NOTE $___________________
NOTE MATURITY DATE the Settlement Date, as
defined in the Master Agreement
INTEREST RATE [Floating at [LIBOR] plus __% ]
[Fixed at __%]
INTEREST PAYMENT DATES/RESET DATES (check one):
[ ] on the Note Maturity Date.
[ ] commencing on _______________________, 20__ and on the __ day
of each ________________________, ___________________________,
____________________, and ____________________ thereafter, and on
the Note Maturity Date.
This Note is subject to the terms and conditions of the Loan and Pledge
Agreement referenced above between Lender and Borrower, and is being entered
into in connection with the Option Transaction referenced above. This Note is
one in a series of notes which aggregate into the Loan amount, as defined under
the Loan and Pledge Agreement. Terms used herein which are defined in the Loan
and Pledge Agreement shall have their defined meanings when used herein. The
Loan and Pledge Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events. This Note is secured pursuant to the Loan and Pledge Agreement, to which
reference is hereby made for a description of the rights of Borrower and Lender
in respect of such collateral.
Borrower hereby waives presentment, demand, protest or notice of any kind
in connection with this Note. Borrower certifies that the proceeds paid under
this Note will not be used to pay dividends or distributions in respect of, or
redeem or make any other payment in respect of, any equity securities of or
other equity interests (the terms "equity securities" and "other equity
interests" as used herein shall not include any securities convertible into
equity securities or any debentures) in the Borrower.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE). BORROWER
AND THE LENDER EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.
14
<PAGE> 15
Agreed and accepted as of the __ date of ________, ____
, as Borrower
--------------------------------------------
By:
-----------------------------------------
Name:
Title:
15
<PAGE> 16
Deutsche Bank Alex. Brown [DEUTSCHE BANK LOGO]
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, NY 10019
Tel: 212 469 5000
Mr. Michael D. Griffith
Telxon Corporation
3330 West Market Street
P.O. Box 5582
Akron, OH 44334-0582
June 19th, 2000
Dear Mike:
This letter confirms that subject to the terms of the Loan and Pledge Agreement
entered into between Deutsche Bank AG ("Deutsche Bank") and Telxon Systems
Services Inc. ("Telxon") dated March 15, 2000, Telxon may draw down loan amounts
up to the maximum aggregate amount specified in the Agreement. The interest rate
on such loans will be based on the London Interbank Offered Rate ("Libor") for
U.S. Dollars for the reset term agreed to by Telxon and Deutsche Bank plus a
spread of 30 basis points.
For example, for a loan of one month, the interest rate might be based on the
one-month Libor rate on the drawdown date plus 30 basis points, with the
interest paid at maturity. For a three-month loan, the interest rate might be
based on the three-month Libor rate on the drawdown date plus 30 basis points,
with the interest paid at maturity. For a 12-month loan, the initial interest
rate might be based on the three-month Libor rate on the drawdown date plus 30
basis points; subsequently, the Libor rate would be reset quarterly. Interest
would be paid quarterly. Alternatively the interest rate might be based on
12-month Libor on the drawdown date plus 30 basis points, with the interest paid
only at maturity.
Yours sincerely,
/s/ Ken Shoji
Ken Shoji
Director
Deutsche Bank Securities Inc.
