EMC 2006 Annual Report Download - page 92

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Line of Credit
We have available for use a credit line of $50.0 million in the United States. As of December 31, 2006, we had no borrowings outstanding on the line of
credit. The credit line bears interest at the bank's base rate and requires us, upon utilization of the credit line, to meet certain financial covenants with respect
to limitations on losses. In the event the covenants are not met, the lender may require us to provide collateral to secure the outstanding balance. At
December 31, 2006, we were in compliance with the covenants.
Guarantees and Indemnification Obligations
EMC's subsidiaries have entered into arrangements with financial institutions for such institutions to provide guarantees for rent, taxes, insurance,
leases, performance bonds, bid bonds and customs duties aggregating $57.7 million as of December 31, 2006. The guarantees vary in length of time. In
connection with these arrangements, we have agreed to guarantee substantially all of the guarantees provided by these financial institutions.
We enter into agreements in the ordinary course of business with, among others, customers, resellers, OEMs, systems integrators and distributors. Most
of these agreements require us to indemnify the other party against third-party claims alleging that an EMC product infringes a patent and/or copyright. Most
of these agreements in which we license our trademarks to another party require us to indemnify the other party against third-party claims alleging that an
EMC product infringes a trademark. Certain of these agreements require us to indemnify the other party against certain claims relating to property damage,
personal injury or the acts or omissions of EMC, its employees, agents or representatives. In addition, from time to time we have made certain guarantees
regarding the performance of our systems to our customers.
We have agreements with certain vendors, financial institutions, lessors and service providers pursuant to which we have agreed to indemnify the other
party for specified matters, such as acts and omissions of EMC, its employees, agents or representatives.
We have procurement or license agreements with respect to technology that is used in our products and agreements in which we obtain rights to a
product from an OEM. Under some of these agreements, we have agreed to indemnify the supplier for certain claims that may be brought against such party
with respect to our acts or omissions relating to the supplied products or technologies.
We have agreed to indemnify the directors and executive officers of EMC and our subsidiaries, to the extent legally permissible, against all liabilities
reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or
executive officer.
In connection with certain acquisitions, we have agreed to indemnify the current and former directors, officers and employees of the acquired company
in accordance with the acquired company's by-laws and charter in effect immediately prior to the acquisition or in accordance with indemnification or similar
agreements entered into by the acquired company and such persons. In a substantial majority of instances, we have maintained the acquired company's
directors' and officers' insurance, which should enable us to recover a portion of any future amounts paid. These indemnities vary in length of time.
Based upon our historical experience and information known as of December 31, 2006, we believe our liability on the above guarantees and
indemnities at December 31, 2006 is immaterial.
Litigation
We are a party to various litigation matters which we consider routine and incidental to our business. Management does not expect the results of any of
these actions to have a material adverse effect on our business, results of operations or financial condition.
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