EXHIBIT 10.68
CREDIT AGREEMENT BETWEEN BANK OF AMERICA NT & SA AND THE COMPANY DATED APRIL
30, 1994
________________________________________________________________________________
________________________________________________________________________________
CREDIT AGREEMENT
DATED AS OF APRIL 30, 1994
BETWEEN
KLA INSTRUMENTS CORPORATION
AND
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
________________________________________________________________________________
________________________________________________________________________________
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions and Financial Requirements. . . . . . . . . . . . . . . 1
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1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Financial Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
The Credit Facilities . . . . . . . . . . . . . . . . . . . 5
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2.01 The Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Advances Under the Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.03 Commercial Letters of Credit under the Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.04 Standby Letters of Credit Under the Revolving Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.05 Local Currency Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.06 Mandatory Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.07 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.08 Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.09 Early Termination of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.10 Prior Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
Extensions of Credit, Payments and Interest Calculations . . . . . . . . . . . 9
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3.01 Requests for Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.02 Disbursements and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.03 Branch Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.04 Evidence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.05 Interest Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.06 Late Payments; Compounding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.07 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.08 Taxes and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.09 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Certificate of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Debits to Borrower's Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
Conditions to Availability of Credit . . . . . . . . . . . . . . . 12
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4.01 Conditions to First Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.02 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Section Page
ARTICLE V
Representations and Warranties . . . . . . . . . . . . . . . . 13
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5.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.03 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.04 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.05 Permits, Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.07 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.08 Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.09 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.10 Information Submitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.11 No Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
Affirmative Covenants . . . . . . . . . . . . . . . . . . . 15
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6.01 Notices of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.02 Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.03 Books, Records, Audits and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.04 Use of Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.05 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.06 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.07 Change in Name, Structure or Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.08 Existence and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.09 Additional Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
Negative Covenants . . . . . . . . . . . . . . . . . . . 16
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7.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.02 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.03 Quick Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.04 Total Liabilities to Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.05 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.06 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.07 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.08 Liquidations and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.09 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.10 Consecutive Quarterly Losses; Losses in One Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.11 Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12 Regulations G, T, U, and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
Events of Default . . . . . . . . . . . . . . . . . . . . 18
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8.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Section Page
(a) Failure to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Breach of Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Specific Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Trade Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Failure to Pay Debts; Voluntary Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(h) Involuntary Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) Default of Other Financial Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Default under other Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(k) Default of Other Bank Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(n) Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 20
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9.01 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.02 Consents and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.03 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.04 Costs and Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.05 Integration; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.06 Borrower's Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.07 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.08 General Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.09 Arbitration; Reference Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.11 Headings; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of
April 30, 1994, between KLA INSTRUMENTS CORPORATION (the "Borrower"), and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank").
In consideration of the mutual covenants and agreements contained
herein, the Borrower and the Bank agree as follows:
ARTICLE I
DEFINITIONS AND FINANCIAL REQUIREMENTS.
1.01 Definitions. The following terms (including plural and singular
versions thereof) have the meanings indicated:
"Acceptable Subsidiary": a Subsidiary of the Borrower acceptable to
the Bank in its sole discretion that (a) is specified as a "Borrower" on a
continuing guaranty executed by the Borrower in form and substance satisfactory
to the Bank, and (b) has executed such credit and related documentation with
and in favor of the Bank as the Bank may request.
"Advance": an advance hereunder.
"Availability Period": the period commencing on the date of this
Agreement and ending on the date that is the earlier to occur of (a) 12/31/94,
and (b) the date on which the Bank's commitment to extend credit hereunder
terminates.
"Business Day": any day other than a Saturday, a Sunday, or other day
on which commercial banks in San Francisco, California, are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Advance, means such a day on which dealings are carried on in the
applicable offshore interbank market.
"CD Rate": for any CD Rate Interest Period, the rate of interest
(rounded upward to the next 1/100th of 1%) determined pursuant to the following
formula:
CD Rate =Certificate of Deposit Rate + Assessment
1.00 - Reserve Percentage Rate
Where:
"Assessment Rate" means, for any day of such CD Rate Interest
Period, the rate determined by the Bank as equal to the annual
assessment rate in effect on the first day of such CD Rate
Interest Period that is payable to the Federal Deposit Insurance
Corporation ("FDIC") by a member of the Bank Insurance Fund that
is classified as adequately capitalized and within supervisory
subgroup "A" (or a comparable successor assessment risk
classification within the meaning of 12 C.F.R. Section 327.3(d))
for insuring time deposits at offices of such member in the
United States, or, in the event that the
1
FDIC shall at any time hereafter cease to assess time deposits
based upon such classifications or successor classifications,
equal to the maximum annual assessment rate in effect on such
day that is payable to the FDIC by commercial banks (whether or
not applicable to the Bank) for insuring time deposits at
offices of such banks in the United States.
"Certificate of Deposit Rate" means, for any CD Rate Interest
Period, the rate of interest per annum determined by the Bank to
be the arithmetic mean (rounded upward to the nearest 1/100th of
1%) of the rates notified to the Bank as the rates of interest
bid by two or more certificate of deposit dealers of recognized
standing selected by the Bank for the purchase at face value of
dollar certificates of deposit issued by major United States
banks, for a maturity comparable to the CD Rate Interest Period
and in the approximate amount of the CD Rate Advance to be made,
at the time selected by the Bank on the first day of such CD
Rate Interest Period.
"Reserve Percentage" means, for any CD Rate Interest Period the
maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%), as determined by the Bank,
in effect on the first day of such interest period (including
any ordinary, marginal, emergency, supplemental, special and
other reserve percentages) prescribed by the FRB for determining
the maximum reserves to be maintained by member banks of the
Federal Reserve System with deposits exceeding $1,000,000,000
for new non-personal time deposits for a period comparable to
the CD Rate Interest Period and in an amount of $100,000 or
more.
"CD Rate Advance": an Advance that bears interest based on the CD Rate.
"CD Rate Interest Period": for each CD Rate Advance, the period
commencing on the date the CD Rate Advance begins to bear interest at a rate
based on the CD Rate and ending 30, 60, 90, or 180 days thereafter, as
requested by the Borrower; provided, however, that no such CD Rate Interest
Period shall extend beyond the Final Maturity Date.
"Closing Date": the date on which all conditions to the initial
extension of credit hereunder are satisfied.
"Code": the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder as from time to time in effect.
"Credit Documents": collectively, this Agreement and each other
agreement, documents and instrument now or hereafter delivered to the Bank
(including any Offshore Credit Provider) in connection with the credits
established herein and the transactions contemplated hereby.
"Credit Limit": the amount $10,000,000 or the Equivalent Amount thereof.
"Default": any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Dollars", "dollars" and "$": each, lawful money of the United States.
"Dollar Advances": specified in subsection 2.01(b).
"Environmental Laws": any foreign, federal, state, local, or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any governmental authority, any and
2
all requirements of law and any and all common law requirements, rules, and
bases of liability regulating, relating to, or imposing liability or standards
of conduct concerning pollution or protection of human health or the
environment, as now or may at any time hereafter may be in effect.
"Equivalent Amount": (a) whenever this Agreement requires or permits a
determination on any date of the equivalent in dollars of an amount expressed
in a currency other than dollars, the equivalent amount in dollars of any
amount expressed in a currency other than dollars as determined by the Bank on
such date on the basis of the Spot Rate for the purchase of dollars with such
other currency on the relevant date; or (b) whenever this Agreement requires or
permits a determination on any date of the equivalent in a currency other than
dollars of an amount expressed in dollars, the equivalent amount in a currency
other than dollars of an amount expressed in dollars as determined by the Bank
on such date on the basis of the Spot Rate for the purchase of such other
currency with dollars on the relevant date.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder as from time to
time in effect.
"ERISA Event": (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower 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) 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 subject to Title IV of ERISA; (d) a failure by the
Borrower to make required contributions to a Pension Plan or other Plan subject
to Section 412 of the Code; (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; (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 (g)
an application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Pension Plan.
"Event of Default": any event listed in Article VIII of this Agreement.
"FDIC": the Federal Deposit Insurance Corporation, or any entity
succeeding to any of its principal functions.
"Final Maturity Date": (a) in respect of any Advances, June 30, 1995;
(b) in respect of any commercial letters of credit, June 30, 1995; (c) in
respect of any standby letters of credit, December 31, 1995.
"Floating Rate": specified in subsection 2.02(a).
"FRB": the Board of Governors of the Federal Reserve System, or any
entity succeeding to any of its principal functions.
"Hazardous Substance": any hazardous or toxic substance, material, or
waste, defined, listed, classified, or regulated as such in or under any
Environmental Laws, including asbestos, petroleum, or petroleum products
(including gasoline, crude oil, or any fraction thereof), polychlorinated
biphenyls, and urea-formaldehyde insulation.
"IRS": the Internal Revenue Service or any entity succeeding to any of
its principal functions under the Code.
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"L/C Outstanding Amount": at any time, the undrawn amount at such time
of any letter of credit issued hereunder, plus the amount of all drafts or
drawings paid or accepted by the Bank which have not yet been reimbursed to the
Bank, plus any other obligation or liability of the Borrower or any Acceptable
Subsidiary to the Bank with respect to any letter of credit issued under this
Agreement.
"Local Currency": specified in subsection 2.01(b).
"Local Currency Advance": specified in subsection 2.01(b).
"Material Adverse Effect": (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 or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Borrower or any Acceptable Subsidiary to perform under any Credit Document; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability of any Credit Document.
"Offshore Credit Provider": a foreign office, foreign branch or foreign
affiliate of the Bank, acceptable to the Bank.
"Offshore Currency": specified in subsection 2.01(b).
"Offshore Currency Advance": specified in subsection 2.01(b).
"Offshore Rate": for each Offshore Rate Interest Period, the rate of
interest (rounded upward to the next 1/16th of 1%) determined pursuant to the
following formula:
Offshore Rate = Offered Rate
1.00 - Eurodollar Reserve Percentage
Where:
"Offered Rate" means the rate of interest at which
deposits in the applicable currency in the approximate amount of
the Offshore Rate Advance to be made and having a maturity
comparable to such Offshore Rate Interest Period would be
offered by the Bank's London Branch (or such other office as may
be designated for such purpose by the Bank) to major banks in
the London interbank market upon request of such banks at
approximately 11:00 a.m. (London, England time) two Business
Days prior to the first day of such Offshore Rate Interest
Period.
"Eurodollar Reserve Percentage" means, for any Offshore
Rate Interest Period, the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on the first day of such Offshore Rate Interest Period
(whether or not applicable to the 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 requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Offshore Rate Interest Period.
"Offshore Rate Advance": an Advance for which interest is based on the
Offshore Rate.
"Offshore Rate Interest Period": for each Offshore Rate Advance the
period commencing on the date the Offshore Rate Advance begins to bear interest
at a rate based on the Offshore Rate and ending one, two, three, or six months
thereafter, as requested by the Borrower; provided, however, that
4
the last day of each Offshore Rate Interest Period shall be determined in
accordance with the practices of the applicable offshore interbank markets as
from time to time in effect, and provided further that no such interest period
shall extend beyond the Final Maturity Date.
"PBGC": the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Pension Plan": 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 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.
"Plan": 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.
"Reference Rate": for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Bank in San Francisco,
California, as its "reference rate." It is a rate set by the Bank based upon
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, which may be priced at, above, or below such announced rate. Any change
in the reference rate announced by the Bank shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Reference Rate Advance": an Advance that bears interest based on the
Reference Rate.
"Reportable Event": any of the events set forth in Section 4043(b) 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.
"Revolving Facility": the line of credit described in Section 2.01.
"Spot Rate": for a currency, the rate quoted by the Bank as the spot
rate for the purchase by the Bank of such currency with another currency
through its Foreign Exchange Trading Center #5193, San Francisco, California,
or such other of the Bank's offices as it may designate from time to time, at
approximately 8:00 a.m. (San Francisco time) on the date two Business Days
prior to the date as of which the foreign exchange computation is made.
"Subsidiary": of the Borrower, any corporation, association,
partnership, joint venture, or other business entity of which more than 50% of
the voting stock or other equity interests (in the case of entities other than
corporations), is owned or controlled directly or indirectly by the Borrower or
one or more Subsidiaries of the Borrower or a combination thereof.
"Unfunded Pension Liability": 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.
1.02 Financial Requirements. Unless otherwise specified in this
Agreement, all accounting terms used in this Agreement shall be interpreted,
all financial computations required under this Agreement shall be made, and all
financial information required under this Agreement shall be prepared, in
accordance with generally accepted accounting principles in effect from time to
time in the United States, consistently applied.
5
ARTICLE II
THE CREDIT FACILITIES
2.01 The Revolving Facility. (a) From time to time during the
Availability Period, subject to the terms and provisions hereof, the Bank, on a
revolving basis, will (i) make Advances to the Borrower or an Acceptable
Subsidiary , (ii) create and issue commercial and standby letters of credit for
the Borrower's or an Acceptable Subsidiary's account.
(b) Advances hereunder may be made in (i) dollars ("Dollar
Advances"), (ii) in a lawful currency other than dollars which is freely
transferable and convertible into dollars and is traded in the offshore
interbank currency markets at the time of the Advance (an "Offshore Currency")
("Offshore Currency Advances"), or (iii) in a lawful currency other than
dollars which is available at a branch or affiliate of the Bank located in a
country other than the United States and is the legal tender of that country
where the branch or affiliate is located (a "Local Currency") ("Local Currency
Advances").
(c) The aggregate of (i) all Dollar Advances , (ii) the
Equivalent Amount of all Offshore Currency Advances and Local Currency
Advances, and (iii) the L/C Outstanding Amount of all letters of credit, may
not exceed at any one time the Credit Limit.
2.02 Advances Under the Revolving Facility. (a) Subject to the other
provisions of this Section, Dollar Advances under the Revolving Facility shall
bear interest at a rate per annum equal to the Reference Rate plus 0.00
percentage points per annum (the Reference Rate plus 0.00 percentage points per
annum is referred to herein as the "Floating Rate"). The Borrower shall pay or
cause the applicable Acceptable Subsidiary to pay interest monthly, on the 1st
day of each month until the Final Maturity Date, on which date all accrued and
unpaid interest shall be due and payable. The Borrower shall repay or cause
the applicable Acceptable Subsidiary to repay the principal amount of each
Reference Rate Advance on the date such advance is converted into an Offshore
Rate Advance or a CD Rate Advance under subsections (b) or (c) below, and on
the Final Maturity Date.
(b) In lieu of the interest rate described above, the Borrower
or the applicable Acceptable Subsidiary may elect during the Availability
Period to have all or portions of Advances under the Revolving Facility be in
dollars or an Offshore Currency and bear interest at the Offshore Rate plus
0.875% per annum during an Offshore Rate Interest Period, subject to the
following requirements:
(i) Each Offshore Rate Advance shall be for an amount not less
than $500,000 or the Equivalent Amount thereof if the related Offshore
Rate Interest Period is 30 days or longer, and, if the related Offshore
Rate Interest Period is less than 30 days, shall be in an amount not
less than an amount which, when multiplied by the number of days in the
related Offshore Rate Interest Period, is not less than $15,000,000, or
the Equivalent Amount thereof.
(ii) The Borrower shall pay or shall cause the applicable
Acceptable Subsidiary to pay interest on each Offshore Rate Advance on
the last day of the Offshore Rate Interest Period for such Advance;
provided, however, that if any Interest Period for a Offshore Rate
Advance exceeds three months, interest shall also be payable on the date
which falls three months after the beginning of such Interest Period and
on each date which falls three months after any such interest payment
date. The Borrower shall repay or shall cause the applicable Acceptable
Subsidiary to repay the principal balance of each Offshore Rate Advance
on the last day of the Offshore Rate Interest Period for such Advance,
and (if sooner occurring) on the Final Maturity Date.
6
(iii) Any payment of an Offshore Rate Advance prior to the last
day of the Offshore Rate Interest Period for such Advance, whether voluntary,
by reason of acceleration or otherwise, including any mandatory payments
required under this Agreement and applied by the Bank to an Offshore Rate
Advance, shall be accompanied by the amount of accrued interest on the amount
repaid and by the amount (if any) required by Section 3.11.
(c) In lieu of the interest rates described above in this
Section, the Borrower or the applicable Acceptable Subsidiary may elect during
the Availability Period to have all or portions of Advances under the Revolving
Facility be in dollars and bear interest at the CD Rate plus 0.875% per annum
during a CD Rate Interest Period, subject to the following requirements:
(i) Each CD Rate Advance shall be in an amount not less than a
minimum amount satisfactory to the Bank.
(ii) The Borrower shall pay or shall cause the applicable
Acceptable Subsidiary to pay interest on each CD Rate Advance on the
last day of the CD Rate Interest Period for such Advance; provided,
however, that if any Interest Period for a CD Rate Advance exceeds 90
days, interest shall also be payable on the date which falls 90 days
after the beginning of such Interest Period and on each date which falls
90 days after any such interest payment date. The Borrower shall repay
or shall cause the applicable Acceptable Subsidiary to repay the
principal balance of each CD Rate Advance on the last day of the CD Rate
Interest Period for such Advance, and (if sooner occurring) on the Final
Maturity Date.
(iii) Any payment of a CD Rate Advance prior to the last day of
the CD Rate Interest Period for such Advance, whether voluntary, by
reason of acceleration or otherwise, including mandatory payments
required under this Agreement and applied by the Bank to a CD Rate
Advance, shall be accompanied by the amount of accrued interest on the
amount repaid and by the amount (if any) required by Section 3.11.
(d) For purposes of determining the Borrower's and any
applicable Acceptable Subsidiary's compliance with subsection 2.01(c), the
Equivalent Amount of Offshore Currency Advances shall be determined, and
redetermined by the Bank as of the applicable borrowing date in respect of such
Advance (including the date such Advance was converted into an Offshore
Currency Advance under subsection 2.02(b)), and on the last Business Day of
each month.
2.03 Commercial Letters of Credit under the Revolving Facility. (a)
Each commercial letter of credit shall be denominated in dollars and issued
pursuant to the terms and conditions hereof and of a Bank standard form
Application and Security Agreement for Commercial Letter of Credit (or such
other form as the Bank may require) executed by the Borrower or an Acceptable
Subsidiary.
(b) Each commercial letter of credit shall:
(i) expire on or before 180 days after the date such letter
of credit is issued, but in no event later than the Final Maturity Date;
(ii) require drafts payable in dollars at sight or up to 180 days after
sight; and
(iii) be otherwise in form and substance and in favor of
beneficiaries and for purposes satisfactory to the Bank.
7
(c) The Borrower shall pay or cause the applicable Acceptable
Subsidiary to pay to the Bank issuance fees, negotiation fees, and other fees
at the times and in the amounts the Bank advises the Borrower from time to time
as being applicable to the Borrower's or the Acceptable Subsidiary's commercial
letters of credit.
(d) Each draft paid by the Bank under a commercial letter of
credit issued hereunder shall be reimbursed by the Borrower or the applicable
Acceptable Subsidiary to the Bank on the date such draft is paid by the Bank.
Any sum owed to the Bank with respect to a commercial letter of credit issued
for the Borrower's or any Acceptable Subsidiary's account which is not paid
when due shall, at the option of the Bank in each instance, be deemed to be an
Advance to the Borrower outstanding under the Revolving Facility and shall
thereafter bear interest at the Floating Rate.
(e) At the expiration of the Availability Period, the Bank may
require the Borrower to provide cash collateral in the amount of the L/C
Outstanding Amount of any commercial letters of credit outstanding under this
Agreement, and, in addition to any other rights or remedies which the Bank may
have under this Agreement or otherwise, upon the occurrence of an Event of
Default, the Bank may require the Borrower to provide cash collateral in the
amount of the L/C Outstanding Amount of any commercial letters of credit
outstanding under this Agreement.
2.04 Standby Letters of Credit Under the Revolving Facility. (a) Each
standby letter of credit shall be denominated in dollars and issued pursuant to
the terms and conditions hereof and of a Bank standard form Application and
Agreement for Standby Letter of Credit (or such other form as the Bank may
require) executed by the Borrower or an Acceptable Subsidiary.
(b) Each standby letter of credit shall: (i) expire on or
before 360 days after the date such letter of credit is issued, but in no event
later than the Final Maturity Date; and (ii) be otherwise in form and substance
and in favor of beneficiaries and for purposes satisfactory to the Bank.
(c) The Borrower shall pay to the Bank a non-refundable fee
equal to 0.875% per annum of the outstanding undrawn amount of each financial
standby letter of credit and .0625% per annum of the outstanding undrawn amount
of each performance standby letter of credit, payable quarterly in advance, and
calculated on the basis of the face amount outstanding on the day the fee is
calculated. The decision as to whether the standby letter of credit is defined
as financial or performance will be the solely determined by the Bank.
However, if an Event of Default exists, at the option of the Bank, the amount
of the fee shall be increased to 2.00% per annum, commencing on the day the
Bank provides notice of the increase to the Borrower. The Borrower shall also
pay such other fees and commissions at the times and in the amounts the Bank
advises the Borrower from time to time as being applicable to the Borrower's
standby letters of credit.
(d) Each draft paid by the Bank under a standby letter of
credit issued hereunder shall be reimbursed by the Borrower or the Acceptable
Subsidiary to the Bank on the date such draft is paid by the Bank. Any sum
owed to the Bank with respect to a standby letter of credit issued for the
Borrower's account which is not paid when due shall, at the option of the Bank
in each instance, be deemed to be an Advance outstanding under the Revolving
Facility and shall thereafter bear interest at the Floating Rate.
(e) In addition to any other rights or remedies which the Bank
may have under this Agreement or otherwise, upon the occurrence of an Event of
Default, the Bank may require the Borrower to provide cash collateral in the
amount of the L/C Outstanding Amount of any standby letters of credit
outstanding under this Agreement.
8
2.05 Local Currency Advances. (a) From time to time during the
Availability Period, the Bank or any Offshore Credit Provider may, in its sole
discretion, make Local Currency Advances to the Borrower and to Acceptable
Subsidiaries.
(b) Neither the Bank nor any Offshore Credit Provider shall
have any obligation to make any Local Currency Advance unless the following
conditions are satisfied:
(i) The Bank and the Borrower or the relevant
Acceptable Subsidiary agree, at the time of Borrower's or such Acceptable
Subsidiary's request for a Local Currency Advance, on the currency, the amount,
the principal payment date(s), the interest rate and payment date(s), the
prepayment and overdue payment terms, and the reserve, tax and other material
provisions for such Advance; and
(ii) The Borrower or such Acceptable Subsidiary shall
execute such additional documentation as the Bank or such Offshore Credit
Provider may require relating to each Local Currency Advance.
2.06 Mandatory Payment. If at any time and for any reason the total
amount of credit outstanding under this Agreement exceeds the limitations set
forth herein, the Borrower shall pay to the Bank, upon demand, the amount of
the excess. Payments under this Section may be applied to the obligations of
the Borrower to the Bank in the order and manner as the Bank in its discretion
may determine. Payments to be applied to outstanding letters of credit and
drafts accepted under letters of credit may, at the Bank's option, be used to
prepay, or held as cash collateral to secure, the Borrower's or any Acceptable
Subsidiary's obligations to the Bank with respect thereto.
2.07 Facility Fee. The Borrower shall pay to the Bank a facility fee
at the rate of .25% per annum on the total amount of the facility. The
facility fee shall be computed on a calendar quarter basis, except for the
first period which shall commence on the closing date, and end on March 31,
1994, and the last period which shall end on December 31, 1994. The facility
fee shall be payable in arrears on March 31, 1994, on the last day of each
successive calendar quarter thereafter, and on the last day of the
Availability Period.
2.08 Default Rate. Upon the occurrence and during the continuation of
any Event of Default, and without constituting a waiver of any such Event of
Default, Advances under the Revolving Facility shall at the option of the Bank
bear interest at a rate per annum which is 2.00% per annum higher than the rate
of interest otherwise provided under this Agreement.
2.09 Early Termination of Commitment. The Borrower may at any time
terminate the Bank's (including any Offshore Credit Provider's) commitment to
extend credit hereunder by paying in full the entire amount of credit
outstanding hereunder (including the L/C Outstanding Amount, together with any
sums due under Section 3.11). Payments to be applied to outstanding letters of
credit and drafts accepted under letters of credit, may, at the Bank's option,
be used to prepay, or held as cash collateral to secure, the Borrower's and
Acceptable Subsidiaries' obligations to the Bank with respect thereto.
2.10 Prior Credit Agreement. The Bank and the Borrower entered into
a Credit Agreement, dated as of November 15, 1991, as amended by a Waiver and
First Amendment, dated as of July 29, 1992, by a Second Amendment to Credit
Agreement, dated as of October 28, 1992, by a Third Amendment to Credit
Agreement, dated as of December 31, 1992, by a Fourth Amendment to Credit
Agreement, dated as of February 28, 1993, by a Fifth Amendment to Credit
Agreement, dated as of March 31, 1993, by a Sixth Amendment to Credit
Agreement, dated as of June 1, 1993, and by a Seventh Amendment to Credit
Agreement, dated as of December 31, 1993 ( as so amended the "Prior
9
Credit Agreement"). The Bank and the Borrower agree that from and after the
Closing Date, the Bank's commitment to make extensions of credit and to
continue to extend credit under the Prior Credit Agreement to the Borrower and
to the Borrower's Subsidiaries shall terminate without necessity of further act
by either the Bank or the Borrower. All credit extended under the Prior Credit
Agreement to the Borrower and/or to its Subsidiaries shall be deemed to be
credit extended under this Agreement and amounts available for borrowing under
this Agreement shall be reduced by the amount of the credit extended and
outstanding under the Prior Credit Agreement.
ARTICLE III
EXTENSIONS OF CREDIT, PAYMENTS AND INTEREST CALCULATIONS
3.01 Requests for Credit. Each request for an extension of credit
shall be made in writing on a form acceptable to the Bank or in any other
manner acceptable to the Bank.
3.02 Disbursements and Payments. Each disbursement by the Bank and
each payment by the Borrower under this Agreement shall be made in the funds
and at such branch of the Bank as the Bank may from time to time select.
3.03 Branch Accounts. Each extension of credit under this Agreement
shall be made for the account of such branch, office, or affiliate of the Bank
as the Bank may from time to time select.
3.04 Evidence of Indebtedness. Principal, interest, and all other
sums due to the Bank (or any Offshore Credit Provider) under this Agreement
shall be evidenced by entries in records maintained by the Bank (or such
Offshore Credit Provider), and, if required by the Bank, by a promissory note
or notes. Each payment on and any other credits with respect to principal,
interest, and all other sums due under this Agreement shall be evidenced by
entries to records maintained by the Bank or such Offshore Credit Provider.
The loan accounts or records maintained by the Bank or any Offshore Credit
Provider shall be conclusive absent manifest error of the amount of the credit
extended hereunder and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower or any Acceptable Subsidiary hereunder to pay
any amount owing.
3.05 Interest Calculation. Interest based on the Reference Rate shall
be computed on the basis of a 365/366-day year, actual days elapsed. All other
interest and fees payable under this Agreement shall be computed on the basis
of a 360 day year and actual days elapsed, which results in more interest or a
larger fee than if a 365-366 day year were used.
3.06 Late Payments; Compounding. Any sum payable by the Borrower
hereunder (including unpaid interest) if not paid when due shall bear interest
(payable on demand) from its due date until payment in full at a rate per annum
equal to the Reference Rate plus 2.00% per annum. At the option of the Bank,
in each instance, any sum payable hereunder which is not paid when due
(including unpaid interest) may be added to principal of the Revolving Facility
and shall thereafter bear interest at the rate applicable to principal.
3.07 Business Day. Any sum payable by the Borrower hereunder which
becomes due on a day which is not a Business Day shall be due on the next
Business Day after such due date, unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Offshore Rate
Interest Period into another calendar month, in which event such Offshore Rate
Interest Period shall end on the immediately preceding Business Day. Any
payments received by the Bank on a day which
10
is not a Business Day shall be deemed to be received on the next Business Day
after such date of receipt.
3.08 Taxes and Other Charges. (a) (i) If any taxes (other than taxes
on net income (A) imposed by the country or any subdivision of the country in
which the Bank's principal office or actual lending office is located and (B)
measured by the United States taxable income the Bank would have received if
all payments under or in respect of this Agreement and any instrument or
agreement required hereunder were exempt from taxes levied by the Borrower's
country) are at any time imposed on any payments under or in respect of this
Agreement or any instrument or agreement required hereunder including, but not
limited to, payments made pursuant to this Section, the Borrower shall pay all
such taxes and shall also pay to the Bank, at the time interest is paid, all
additional amounts which the Bank specifies as necessary to preserve the after-
tax yield the Bank would have received if such taxes had not been imposed.
(ii) The additional amounts necessary to
preserve the after-tax yield the Bank would have received if such taxes had not
been imposed shall be calculated pursuant to the formula:
(w)(t)(i)
y = -----------
1-w-t
where the terms are defined as follows:
y = additional payment to be made to the Bank
w = withholding tax rate levied by foreign
government
t = the Bank's combined Federal and state tax rate
i = amount of interest to be paid on Credit
(computed by using the base rate plus quoted
spread)
1 = one
(b) The Borrower will provide the Bank with original tax
receipts, notarized copies of tax receipts, or such other documentation as will
prove payment of tax in a court of law applying the United States Federal Rules
of Evidence, for all taxes paid by the Borrower pursuant to subsection (a)
above. The Borrower will deliver receipts to the Bank within 30 days after the
due date for the related tax.
3.09 Illegality. (a) If the Bank determines that (i) the
introduction of any law, rule, regulation, treaty, or determination of an
arbitrator or court or other governmental authority or any change in or in the
interpretation or administration thereof has made it unlawful, or that any
central bank or other governmental authority has asserted that it is unlawful,
for the Bank (directly or through any Offshore Credit Provider) to make or
extend any Advance or other credit under this Agreement, or (ii) any order,
judgment, or decree of any governmental authority or arbitrator purports by its
terms to enjoin or restrain the Bank (or any Offshore Credit Provider) from
making or extending any Advance or other credit hereunder, then, on notice
thereof by the Bank to the Borrower, the obligation of the Bank to make or
extend such Advance or other credit (directly or through any Offshore Credit
Provider) shall be
11
suspended until the Bank shall have notified the Borrower that
the circumstances giving rise to such determination no longer exist.
(b) If the Bank determines that it is unlawful for it or any
applicable Offshore Credit Provider to maintain any Offshore Rate Advance or
Local Currency Advance hereunder, the Borrower shall prepay in full all
Offshore Rate Advances or Local Currency Advances, as the case may be then
outstanding, together with interest accrued thereon, either on the last day of
the applicable Offshore Rate Interest Period or the interest period applicable
to the Local Currency Advance if the Bank or such Offshore Credit Provider may
lawfully continue to maintain such Advances to such day and such loans have an
interest period, or immediately, if the Bank may not lawfully continue to
maintain such Advances or such loans have no interest period, together with any
amounts required to be paid in connection therewith pursuant to Section 3.11.
3.10 Increased Costs. The Borrower shall pay to the Bank, on demand,
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 this facility 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.
3.11 Funding Losses. The Borrower shall reimburse the Bank and hold
the Bank harmless from any loss or expense which the Bank may sustain or incur
as a consequence of the failure of the Borrower (or any Acceptable Subsidiary)
to make any payment or prepayment of principal of any Advance hereunder made at
a rate of interest related to the Offshore Rate or the CD Rate (including
payments made after any acceleration thereof), or to borrow at such a rate, or
the prepayment of an Advance which bears interest at such a rate on a day which
is not the last day of the interest period with respect thereto (including
payments made after any acceleration thereof or because the total amount of
credit exceeds the limitations set forth herein), or the redenomination and
conversion, upon the occurrence of any Event of Default, of an Advance which
bears interest at such a rate; including any such loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain its
Advances made at a rate related to the Offshore Rate or the CD Rate hereunder
or from fees payable to terminate any deposits from which such funds were
obtained or deemed obtained.
3.12 Inability to Determine Rates. The Bank has no obligation to
accept an election for an Offshore Rate Advance or a CD Rate Advance if (a)
Dollar deposits in the principal amount, and for the period equal to the
interest period, for such Advance are not available in the applicable funding
market; or (b) the Offshore Rate or CD Rate does not accurately reflect the
cost of such Advance. Nothing contained herein shall, however, obligate the
Bank to obtain the funds for any Advance in any particular manner.
3.13 Certificate of the Bank. If the Bank claims any reimbursement or
compensation pursuant to Section 3.10 or Section 3.11 hereof, then the Bank
shall deliver to the Borrower a certificate setting forth in reasonable detail
the amount payable to the Bank thereunder and such certificate shall be
conclusive and binding on the Borrower in the absence of manifest error.
3.14 Debits to Borrower's Account. The Borrower hereby authorizes the
Bank to debit the Borrower's deposit account number 14831-00220 at the Palo
Alto High Technology office of the Bank in the amount of principal, interest,
fees, or any other amount due under this Agreement or under any instrument or
agreement required under this Agreement. The Bank may, at its option, debit
the account
12
on the date such amounts become due, or, if such due date is not a Business
Day, on the next Business Day after such due date. If there are insufficient
funds in the account to cover the amount debited to the accounts in accordance
with this Section, such debit may be reversed in whole or in part, at the
option of the Bank in its sole discretion, and the amount not debited shall be
deemed to remain unpaid.
3.15 Survival. The agreements and obligations of the Borrower under
Sections 3.08 through 3.11 hereof shall survive the payment of all other
obligations of the Borrower hereunder.
ARTICLE IV
CONDITIONS TO AVAILABILITY OF CREDIT.
The Bank's obligation to extend credit under this Agreement is subject
to the Bank's receipt of the following, each in form and substance satisfactory
to the Bank:
4.01 Conditions to First Extension of Credit. Before the first
extension of credit:
(a) This Agreement, executed by the Borrower;
(b) Satisfactory evidence of due authorization of the
execution, delivery, and performance by the Borrower and all Acceptable
Subsidiary of this Agreement and any other Credit Documents, including
certified resolutions, incumbency certificate, articles of incorporation and
bylaws;
(c) If requested by the Bank, an opinion of counsel for the
Borrower (which counsel must be satisfactory to the Bank) with respect to such
legal matters relating hereto as the Bank may request;
(d) Certificates of state officials showing that the Borrower
and any Acceptable Subsidiary is in good standing or qualified to conduct
business under the laws of the state of its organization and, if requested by
the Bank, in any other state in which the Borrower and any Acceptable
Subsidiary is required to be so qualified;
(e) A certificate of an appropriate officer of the Borrower
as to the matters set forth in Section 4.02(a) and (b);
(f) Payment of any fee or expense required hereunder prior to
the first extension of credit;
(g) A continuing guaranty in favor of the Bank, executed by
the Borrower, guaranteeing all debts and obligations (whether contingent or
otherwise) of any and all Acceptable Subsidiaries arising under or in
connection with this Agreement.
4.02 Conditions to Each Extension of Credit. Before each extension or
renewal of credit (including pursuant to any election under Section 2.02(b)and
Section 2.02(c), including the first:
(a) The representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of each
extension of credit;
13
(b) Immediately prior to and immediately after giving effect
to such extension of credit, no Default or Event of Default shall exist;
(c) Executed originals of all Credit Documents required under
Article II shall have been delivered to the Bank.
Each request for an extension of credit hereunder shall constitute a
representation and warranty by the Borrower, as of the date of each such
request and as of the date of each extension of credit, that the conditions in
this Section are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
5.01 Corporate Existence and Power. The Borrower, and each Acceptable
Subsidiary: (a) is a corporation duly organized and existing under the laws of
the state of its organization; (b) has the power and authority and all
governmental licenses, authorizations, consents, and approvals to own its
assets, carry on its business, and to execute, deliver, and perform its
obligations under, the Credit Documents; and (c) is duly qualified and properly
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease, or operation of property or the conduct of its business
requires such license or qualification.
5.02 Authorization. The execution, delivery, and performance by the
Borrower and each Acceptable Subsidiary of this Agreement and any other Credit
Document to which any of them is a party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any organizational or charter
documents;
(b) conflict with or result in any breach or contravention
of, or the creation of any lien, security interest, or charge under, any
agreement, contract, indenture, document, or instrument to which the Borrower
or any Acceptable Subsidiary is a party or by which any property is bound, or
any order, injunction, writ, or decree of any governmental authority to which
the Borrower or any Acceptable Subsidiary or any property is subject; or
(c) violate any law, rule, regulation, or determination of an
arbitrator or of a court or other governmental authority, in each case
applicable to or binding upon the Borrower or any Acceptable Subsidiary or any
property.
5.03 Enforceability. This Agreement is a legal, valid, and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and the other Credit Documents and any other instrument or agreement
required under this Agreement, when executed and delivered, will be legal,
valid, binding, and enforceable in accordance with its terms against the
Borrower or the Acceptable Subsidiary, as applicable.
5.04 Compliance with Laws. The Borrower and the Acceptable
Subsidiaries are in compliance with all foreign, federal, state and local laws,
rules, regulations and determinations of arbitrators, courts and other
governmental authorities materially affecting the business, operations or
property of the Borrower and the Acceptable Subsidiaries (including
Environmental Laws).
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5.05 Permits, Franchises. The Borrower or its Subsidiaries possess
all permits, memberships, franchises, contracts, and licenses required and all
trademark rights, trade name rights, patent rights, and fictitious name rights
necessary to enable the Borrower and its Subsidiaries to conduct the businesses
in which they are now engaged.
5.06 Litigation. There is no litigation, tax claim, proceeding,
governmental or administrative action, arbitration proceeding or dispute
pending, or, to the knowledge of the Borrower, threatened, against or affecting
the Borrower or any of its Subsidiaries or any of their properties, the adverse
determination of which would result in a Material Adverse Effect.
5.07 No Event of Default. There exists no Default or Event of Default.
5.08 Other Obligations. As of the Closing Date, the Borrower is not
in default under any other agreement involving the borrowing of money, the
extension of credit, or the lease of real or personal property, to which the
Borrower is a party as borrower, guarantor, installment purchaser, or lessee,
except as disclosed in writing to the Bank prior to the Closing Date.
5.09 Tax Returns. The Borrower has no knowledge of any material
pending assessments or adjustments with respect to its income tax liabilities
for any year, except as disclosed in writing to the Bank prior to the Closing
Date.
5.10 Information Submitted. All financial and other information that
has been submitted by the Borrower or an Acceptable Subsidiary to the Bank,
including the Borrower's financial statement delivered to the Bank most
recently prior to the Closing Date: (a) in the case of financial statements,
is prepared in accordance with generally accepted accounting principles
consistently applied; and (b) is true and correct in all material respects and
is complete insofar as may be necessary to give the Bank true and accurate
knowledge of the subject matter thereof.
5.11 No Material Adverse Effect. Since September 30, 1993, there has
been no Material Adverse Effect.
5.12 ERISA Compliance. Except as specifically disclosed to the Bank
in writing prior to the Closing Date: (a) each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) there are no pending, or to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any governmental
authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect; (c) there has been no
prohibited transaction or other violation of the fiduciary responsibility rule
with respect to any Plan which could reasonably result in a Material Adverse
Effect; (d) no ERISA Event has occurred or is reasonably expected to occur with
respect to any Pension Plan; (e) no Pension Plan has any Unfunded Pension
Liability; (f) the Borrower has not incurred, nor does it reasonably expect to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (g)
no trade or business (whether or not incorporated under common control with the
Borrower within the meaning of Section 414(b), (c), (m) or (o) of the Code)
maintains or contributes to any Pension Plan or other Plan subject to Section
412 of the Code; and (h) neither the Borrower or entity under common control
with the Borrower in the preceding sentence has ever contributed to any
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA.
5.13 Environmental Matters. (a) (i) The properties of the Borrower
and its Subsidiaries do not contain and have not previously contained (at,
under, or about any such property) any Hazardous Substances or other
contamination (A) in amounts or concentrations that constitute or constituted a
violation of, or could give rise to liability under, any Environmental Laws,
(B) which could interfere with
15
the continued operation of such property, or (C) which could impair the fair
market value thereof; and (ii) there has been no transportation or disposal of
Hazardous Substances from, nor any release or threatened release of Hazardous
Substances at or from, any property of the Borrower or any of its Subsidiaries
in violation of or in any manner which could give rise to liability under any
Environmental Laws.
(b) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any material claim or notice of material violation,
alleged material violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to the properties or operations of the Borrower or any of its
Subsidiaries, nor does the Borrower have knowledge or reason to believe that
any such action is being contemplated, considered, or threatened.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as credit is available under this Agreement and until full and
final payment of all of the Borrower's and any Acceptable Subsidiaries'
obligations under this Agreement and any other Credit Document:
6.01 Notices of Certain Events. The Borrower shall promptly give
written notice to the Bank of:
(a) all litigation, proceedings or actions affecting the
Borrower or its Subsidiaries where the amount claimed is $ 5,000,000 or more;
(b) any substantial dispute which may exist between the
Borrower or its Subsidiaries and any governmental regulatory body or law
enforcement authority;
(c) any Default or Event of Default;
(d) any of the representations and warranties in Article V
ceases to be true and correct; and
(e) any other matter which has resulted or could reasonably
be expected to result in a Material Adverse Effect.
6.02 Financial and Other Information. The Borrower shall deliver to
the Bank in form and detail satisfactory to the Bank, and in such number of
copies as the Bank may request:
(a) Within 90 days after the end of each fiscal year, the
Borrower's consolidated financial statements for such year audited by a
certified public accountant together with an unqualified opinion of such
certified public accountant;
(b) Within 45 days after the end of each quarterly accounting
period, the Borrower's consolidated financial statements for such period
prepared by the Borrower;
(c) Within 10 days after the date of filing with the
Securities and Exchange Commission, copies of any of the Borrower's Form 10-K
Annual Reports, Form 10-Q Quarterly Reports and Form 8-K Current Reports;
(d) Promptly upon request, such other materials and
information relating to the Borrower or its Subsidiaries as the Bank may
request.
16
6.03 Books, Records, Audits and Inspections. The Borrower shall, and
shall cause its Subsidiaries to, maintain adequate books, accounts and records,
and prepare all financial statements required hereunder in accordance with
generally accepted accounting principles consistently applied, and in
compliance with the regulations of any governmental regulatory body having
jurisdiction over the Borrower or its Subsidiaries, or the Borrower's or its
Subsidiaries' businesses, and upon prior notice from the Bank permit employees
or agents of the Bank at any reasonable time to inspect the Borrower's and its
Subsidiaries' properties, and to examine or audit the Borrower's and its
Subsidiaries' books, accounts, and records and make copies and memoranda
thereof; provided, however, that during any period in which Default or an Event
of Default has occurred and is continuing, the Bank need not give prior notice
of inspection, examination, or auditing.
6.04 Use of Facility. The Borrower shall use the credit facility
provided herein solely for working capital and other general corporate purposes
not in contravention of any requirement of law.
6.05 Insurance. The Borrower shall maintain and keep in force
insurance of the types and in amounts customarily carried in lines of
businesses similar to those of the Borrower, including fire, extended coverage,
public liability (including coverage for contractual liability), property
damage (including use and occupance), business interruption, and workers'
compensation, all carried by insurers and in amounts satisfactory to the Bank,
with loss payable endorsements on such types of insurance as the Bank may
request, and deliver to the Bank from time to time, at the Bank's request, a
copy of each insurance policy, or if permitted by the Bank, a certificate of
insurance setting forth all insurance then in effect.
6.06 Compliance with Laws. The Borrower shall at all times comply
with, and cause its Subsidiaries to comply with, all laws, statutes (including
any fictitious name statute), rules, regulations, orders, and directions of any
governmental authority having jurisdiction over the Borrower or any of its
Subsidiaries or the business of the Borrower or any of its Subsidiaries
(including all Environmental Laws).
6.07 Change in Name, Structure or Location. The Borrower shall notify
the Bank in writing prior to any change in (a) the Borrower's name or the name
of any Acceptable Subsidiary, (b) the Borrower's or any Acceptable Subsidiary's
business or legal structure, or (c) the Borrower's or any Acceptable
Subsidiary's place of business or chief executive office if the Borrower has
more than one place of business.
6.08 Existence and Properties. The Borrower and each of its
Subsidiaries shall maintain and preserve its existence and all rights,
privileges, and franchises now enjoyed, conduct its business in an orderly,
efficient, and customary manner, keep all its properties in good working order
and condition, and from time to time make all needed repairs, renewals, or
replacements thereto and thereof so that the efficiency of such property shall
be fully maintained and preserved.
6.09 Additional Acts. The Borrower shall perform, on request of the
Bank, such acts as may be necessary or advisable to perfect any lien or
security interest contemplated hereby or otherwise to carry out the intent of
this Agreement.
ARTICLE VII
NEGATIVE COVENANTS
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So long as credit is available under this Agreement and until full and
final payment of all of the Borrower's and any Acceptable Subsidiary's
obligations under this Agreement and any other Credit Document:
7.01 Liens. The Borrower shall not, and shall not suffer or permit
any of its Subsidiaries to, create, assume, or suffer to exist any security
interest, deed of trust, mortgage, lien (including the lien of an attachment,
judgment, or execution), or encumbrance, securing a charge or obligation, on or
of any of its or their property, real or personal, whether now owned or
hereafter acquired, except: (a) security interests and deeds of trust in favor
of the Bank; (b) liens, security interests, and encumbrances in existence as of
the date of this Agreement and disclosed to the Bank in writing prior to the
Closing Date; (c) liens for current taxes, assessments, or other governmental
charges which are not delinquent or remain payable without any penalty; (d)
liens in connection with workers' compensation, unemployment insurance, or
other social security obligations; (e) mechanics', worker's, materialmen's,
landlords', carriers', or other like liens arising in the ordinary and normal
course of business with respect to obligations which are not due; (f) purchase
money security interests in personal property hereafter acquired when the
security interest does not extend beyond the property purchased and (g)
additional security interests or liens on fixed assets which secure liabilities
(other than liabilities for borrowed money) in an aggregate principal amount
not exceeding, at any one time, $10,000,000 .
7.02 Tangible Net Worth. The Borrower shall not permit as of the last
day of any fiscal quarter on a consolidated basis its Tangible Net Worth to be
less than $145,000,000 ; where:
"Tangible Net Worth" means the gross book value of the assets
of the Borrower and its Subsidiaries on a consolidated basis
(exclusive of goodwill, patents, trademarks, trade names, organization
expense, treasury stock, unamortized debt discount and expense,
deferred charges, and other like intangibles) less (a) reserves
applicable thereto, and (b) all liabilities (including accrued and
deferred income taxes).
7.03 Quick Ratio. The Borrower shall not permit as of the last day of
any fiscal quarter on a consolidated basis, "A" to be less than 1.25 times "B";
provided, however, that as of the last day of each successive fiscal quarter
commencing with the last day of the fiscal quarter in which the aggregate
cumulative consideration for acquisitions and purchases permitted under Section
7.05 paid by the Borrower and its Subsidiaries exceeds $40,000,000, "A" shall
not be less than 1.50 times "B", on a consolidated basis.
For purposes of this Section:
"A" means the sum of cash, short-term cash investments, marketable securities
not classified as long-term investments and accounts receivable; and
"B" equals current liabilities.
7.04 Total Liabilities to Tangible Net Worth. The Borrower shall not
permit as of the last day of any fiscal quarter on a consolidated basis the
Borrower's total liabilities to exceed its Tangible Net Worth.
7.05 Acquisitions. The Borrower and its Subsidiaries shall not
acquire or purchase control of, or the assets or business of, any other person,
firm, or corporation for an aggregate consideration, including assumption of
existing obligations, cumulatively, in excess of $60,000,000.
7.06 Dividends. Neither the Borrower nor any of its Subsidiaries that
is not wholly-owned by the Borrower shall declare or pay any dividends or
distributions on any of its shares now or hereafter
18
existing, or purchase, redeem or otherwise acquire for value any of its shares,
or create any sinking fund in relation thereto, except: (a) dividends payable
solely in its capital stock; (b) up to 25% of earnings available therefor and
earned during the immediately preceding fiscal year.
7.07 Loans. Neither the Borrower nor any of its Subsidiaries shall
make any loans, advances, or other extensions of credit to any of the
Borrower's or such Subsidiary's executives, officers, or directors or
shareholders (or any relatives of any of the foregoing) other than in the
ordinary course of business , or make loans, advances or other extensions of
credit to or invest in any other person, firm, corporation, or other entity,
other than (a) investments in cash equivalents; (b) extensions of credit in the
nature of accounts receivable or notes receivable arising from the sale or
lease of goods or services in the ordinary course of business; (c) extensions
of credit by the Borrower to any of its Subsidiaries or by any of its
Subsidiaries to another of its Subsidiaries; and (d) other investments not to
exceed $10,000,000 over the life of the Credit Agreement.
7.08 Liquidations and Mergers. The Borrower shall not liquidate or
dissolve.
7.09 Sale of Assets. Neither the Borrower nor any of its Subsidiaries
shall (a) sell, lease, or otherwise dispose of its business or of assets
exceeding $1,000,000 except for full, fair and reasonable consideration; or (b)
sell or otherwise dispose of any of its accounts receivable except in
connection with the collection of same in the ordinary course of business.
7.10 Consecutive Quarterly Losses; Losses in One Quarter. The
Borrower on a consolidated basis shall not incur, (a) any quarterly net or
operating loss in any two (2) consecutive fiscal quarters or (b) any quarterly
net or operating loss in excess of 5.00% of Tangible Net Worth.
7.11 Business Activities. The Borrower shall not engage in any
business activities or operations substantially different from or unrelated to
present business activities and operations.
7.12 Regulations G, T, U, and X. The Borrower shall not, and shall
not permit any of its Subsidiaries to, use any portion of the proceeds of any
Advances or extensions of credit hereunder, directly or indirectly, (i) to
purchase or carry margin stock (within the meanings of Regulations G, T, U, and
X of the FRB), (ii) to repay or otherwise refinance indebtedness of the
Borrower or others incurred to purchase or carry any such margin stock, (iii)
to extend credit for the purpose of purchasing or carrying any such margin
stock, or (iv) to acquire any security in any transaction that is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement:
(a) Failure to Pay. The Borrower or any Acceptable
Subsidiary fails to pay, when due, any installment of principal, or within 7
days after the date when due any interest, fee or any other sum due under this
Agreement or any other Credit Document in accordance with the terms hereof or
thereof.
(b) Breach of Representation or Warranty. Any representation
or warranty herein or in any other Credit Document proves to have been false or
misleading in any material respect when made.
19
(c) Specific Defaults. The Borrower fails to perform or
observe any term, covenant or agreement contained in Section 6.01, 6.02 or 6.03
or Article VII hereof.
(d) Other Defaults. The Borrower fails to perform or observe
any other term or covenant contained in this Agreement or any Credit Document.
(e) Trade Suits. One or more suits are filed against the
Borrower or any of its Subsidiaries by a trade creditor or trade creditors of
the Borrower or any of its Subsidiaries in the aggregate amount of
$15,000,000 or more.
(f) Judgments. One or more judgments or arbitration awards
are entered against the Borrower or any of its Subsidiaries or any guarantor of
any of the Borrower's obligations to the Bank, or the Borrower or any of its
Subsidiaries or any such guarantor enters into any settlement agreement with
respect to any litigation or arbitration, in the aggregate amount of $5,000,000
or more on a claim or claims not covered by insurance.
(g) Failure to Pay Debts; Voluntary Bankruptcy. The Borrower
or any Subsidiary or any guarantor of any of the Borrower's or any Acceptable
Subsidiary's obligations to the Bank (i) fails to pay the Borrower's or such
Subsidiary's or such guarantor's debts generally as they come due, or (ii)
files any petition, proceeding, case, or action for relief under any
bankruptcy, reorganization, insolvency, or moratorium law, or any other law or
laws for the relief of, or relating to, debtors.
(h) Involuntary Bankruptcy. An involuntary petition is filed
under any bankruptcy or similar statute against the Borrower or any Subsidiary
or any guarantor of any of the Borrower's or any Acceptable Subsidiary's
obligations to the Bank, or a receiver, trustee, liquidator, assignee,
custodian, sequestrator, or other similar official is appointed to take
possession of the properties of the Borrower or any Subsidiary or such
guarantor; provided, however, that such Event of Default shall be deemed cured
if such petition or appointment is set aside or withdrawn or ceases to be in
effect within 60 days from the date of said filing or appointment.
(i) Default of Other Financial Obligations. Any default
occurs under any other agreement involving the borrowing of money or the
extension of credit to which the Borrower or any Subsidiary or any guarantor of
any of the Borrower's or an Acceptable Subsidiary's obligations to the Bank may
be a party as borrower, guarantor, or installment purchaser, if such default
consists of the failure to pay any obligation when due or if such default gives
to the holder of the obligation concerned the right to accelerate the
obligation.
(j) Default under other Credit Documents. Any Credit
Document (other than this Agreement), guaranty, subordination agreement, or
other agreement or instrument required hereunder or executed in connection
herewith is breached or becomes ineffective or any default occurs under any
such agreement or instrument.
(k) Default of Other Bank Obligations. Any default occurs
under any other obligation of the Borrower or any Subsidiary/Acceptable
Subsidiary to the Bank or to any subsidiary or affiliate of the Bank.
(l) Material Adverse Effect. There occurs a Material Adverse
Effect.
(m) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan which has resulted or could reasonably be expected to result in
liability of the Borrower under Title IV of ERISA to the Pension Plan or PBGC
in an aggregate amount in excess of $5,000,000; (ii) the commencement or
20
increase of contributions to, or the adoption of or the amendment of a Pension
Plan by the Borrower which has resulted or could reasonably be expected to
result in an increase in Unfunded Pension Liability among all Pension Plans in
an aggregate amount in excess of $5,000,000; or (iii) any of the
representations and warranties contained in Section V shall cease to be true
and correct which, individually or in combination, has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(n) Change of Control. (i) any person or two or more persons
acting in concert shall acquire beneficial ownership, 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
(ii) 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 shall cease 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 (iii)
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.
8.02 Remedies. If any Event of Default occurs,
(a) any indebtedness of the Borrower or of any Acceptable
Subsidiary under any of the Credit Documents, any term thereof to the contrary
notwithstanding, shall at the Bank's option (but automatically upon the
occurrence of an Event of Default described in subsection 8.01(g)(ii) or
subsection 8.01(h)) and without notice become immediately due and payable
without presentment, demand, protest, or notice of dishonor, or any other
notice, all of which are hereby expressly waived by the Borrower to the full
extent permitted by law , and the Bank may declare an amount equal to the
maximum aggregate amount that is or at any time thereafter may become available
for drawing under any then- outstanding letters of credit, (whether or not any
beneficiary shall have presented, or be entitled at such time to present, the
drafts or other documents required to draw under such letters of credit) to be
immediately due and payable;
(b) the obligation, if any, of the Bank (including through any
Offshore Credit Provider) to make further loans or extensions of credit
hereunder shall immediately cease and terminate, and
(c) the Bank and each Offshore Credit Provider shall have all
rights, powers, and remedies available under each of the Credit Documents, or
accorded by law, including the right to resort to any or all security for any
credit accommodation described herein, and to exercise any or all of the rights
of a beneficiary or secured party pursuant to applicable law.
All rights, powers, and remedies of the Bank and each Offshore Credit Provider
may be exercised at any time by the Bank or such Offshore Credit Provider and
from time to time after the occurrence of an Event of Default. All rights,
powers, and remedies of the Bank and any Offshore Credit Provider in connection
with each of the Credit Documents are cumulative and not exclusive and shall be
in addition to any other rights, powers, or remedies provided by law or equity.
ARTICLE IX
MISCELLANEOUS
21
9.01 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Borrower shall not assign this Agreement or any
other Credit Document or any of the rights, duties or obligations of the
Borrower hereunder without the prior written consent of the Bank.
9.02 Consents and Waivers. No failure to exercise and no delay in
exercising, on the part of the Bank or any Offshore Credit Provider, any right,
remedy, power, or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power, or privilege. No consent or waiver under this
Agreement shall be effective unless in writing. No waiver of any breach or
default shall be deemed a waiver of any breach or default thereafter occurring.
9.03 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California.
9.04 Costs and Attorneys' Fees. The Borrower shall, whether or not
the transactions contemplated hereby shall be consummated, pay or reimburse the
Bank on demand for all costs and expenses incurred by the Bank in connection
with the development, preparation, delivery, administration, and execution of,
and any amendment, supplement, waiver or modification to, this Agreement and
any other Credit Document and the consummation of the transactions contemplated
hereby and thereby, including reasonable attorney fees and disbursements and
the allocated cost of internal counsel and disbursements, incurred by the Bank
with respect thereto; and in connection with the enforcement, attempted
enforcement or preservation of any rights or remedies hereunder or under any
Credit Document, including any "workout" or restructuring under this Agreement,
including attorney fees and disbursements and the allocated cost of internal
counsel and disbursements.
9.05 Integration; Amendment. This Agreement, together with the other
Credit Documents, embodies the entire agreement and understanding between the
Borrower and the Bank. This Agreement may be amended or modified only in
writing, signed by the Borrower and the Bank.
9.06 Borrower's Documents. The Bank shall be under no obligation to
return any schedules, invoices, statements, budgets, forecasts, reports or
other papers delivered by the Borrower and shall destroy or otherwise dispose
of same at such time as the Bank, in its discretion, deems appropriate.
9.07 Participations. The Bank may at any time sell, assign, grant
participations in, or otherwise transfer to any other person, firm, corporation
or other entity (a "Participant") all or part of the obligations of the
Borrower and any Acceptable Subsidiary under this Agreement and any other
Credit Document; provided, however, that the Borrower and /or the Acceptable
Subsidiary shall continue to deal solely and directly with the Bank in
connection with this Agreement and the other Credit Documents. The Borrower
authorizes the Bank and each Participant, upon the occurrence of an Event of
Default, to proceed directly by right of setoff, banker's lien, or otherwise,
against any assets of the Borrower and any Acceptable Subsidiary which may be
in the hands of the Bank or such Participant, respectively. The Borrower
authorizes the Bank to disclose to any prospective Participant and any
Participant any and all information in the Bank's possession concerning the
Borrower and its Subsidiaries, this Agreement or any other Credit Document;
provided, however, that any such prospective Participant or Participant shall
agree to keep any such information confidential.
9.08 General Indemnification. The Borrower shall pay and indemnify
the Bank, the Offshore Credit Providers, the Bank's parent company, and each of
their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs,
22
charges, expenses, or disbursements (including attorneys' fees and
disbursements and the allocated costs of internal counsel) of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance, and administration of this Agreement and any other Credit
Documents, or the transactions contemplated hereby and thereby, and with
respect to any investigation, litigation, or proceeding related to this
Agreement, any violation of any Environmental Law by the Borrower or its
Subsidiaries, any release of a Hazardous Substance at or from any property of
the Borrower or any of its Subsidiaries, or the loans and other extensions of
credit hereunder or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of
all other obligations of the Borrower or any Acceptable Subsidiary hereunder or
under the other Credit Documents.
9.09 Arbitration; Reference Proceeding. (a) Any controversy or claim
between or among the parties, including but not limited to those arising out of
or relating to this Agreement or any other Credit Document or other agreements
or instruments relating hereto or delivered in connection herewith and any
claim based on or arising from an alleged tort, shall at the request of any
party be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and under the
Commercial Rules of the American Arbitration Association ("AAA"). The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of
an action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(b) Notwithstanding the provisions of subsection (a) of this
Section, no controversy or claim shall be submitted to arbitration without the
consent of all parties if, at the time of the proposed submission, such
controversy or claim arises from or relates to an obligation to the Bank which
is secured by real property collateral located in California. If all parties
do not consent to submission of such a controversy or claim to arbitration, the
controversy or claim shall be determined as provided in subsection (c) of this
Section.
(c) A controversy or claim which is not submitted to
arbitration as provided and limited in subsections (a) and (b) of this Section
shall, at the request of any party, be determined by a reference in accordance
with California Code of Civil Procedure Sections 638 et seq. If such an
election is made, the parties shall designate to the court a referee or
referees selected under the auspices of the AAA in the same manner as
arbitrators are selected in AAA-sponsored proceedings. The presiding referee
of the panel, or the referee if there is a single referee, shall be an active
attorney or retired judge. Judgment upon the award rendered by such referee or
referees shall be entered in the court in which such proceeding was commenced
in accordance with California Code of Civil Procedure Sections 644 and 645.
(d) No provision of this paragraph shall limit the right of
any party to this Agreement to exercise self-help remedies such as setoff, to
foreclose against or sell any real or personal property collateral or security,
or to obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party
to resort to arbitration or reference. At the Bank's option, foreclosure under
a deed of trust or mortgage may be accomplished either by exercise of power of
sale under the deed of trust or mortgage or by judicial foreclosure.
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9.10 Notices. (a) All notices, requests and other communications
provided for hereunder shall be in writing and mailed or delivered to a party
at its address specified on the signature pages hereof, or to such other
address as shall be designated by such party in a written notice to the other
parties.
(b) All such notices and communications shall, when
transmitted by overnight delivery, be effective when delivered for overnight
delivery, or if personally delivered, upon such personal delivery, except that
notices pursuant to Article II shall not be effective until actually received
by the Bank.
(c) The Borrower acknowledges and agrees that any agreement
of the Bank pursuant to Article II hereof to receive notices by telephone or
facsimile is solely for the convenience and at the request of the Borrower.
Telephone requests may be made by any individual identified in writing to the
Bank on a form acceptable to the Bank as being authorized to make such
requests. The Bank shall be entitled to rely upon any written or telephone
request from persons it reasonably believes to be authorized by the Borrower to
make such requests without making independent inquiry. The Borrower assumes
the full risk of, and the Bank shall not be responsible for, any delays or
errors in transmission, and the obligation of the Borrower to repay the loans
and other extensions of credit hereunder shall not be affected in any way or to
any extent by any failure by the Bank to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Bank of a confirmation
which is at variance with the terms understood by the Bank to be contained in
the telephonic or facsimile notice.
9.11 Headings; Interpretation. Article, section, and paragraph
headings are for reference only and shall not affect the interpretation or
meaning of any provisions of this Agreement. The meaning of defined terms
shall be equally applicable to the singular and plural forms of the defined
terms. The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall 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. The
term "including" is not limiting and means "including without limitation." 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."
9.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
9.13 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
KLA Instruments Corporation
By: ___________________________________________
Typed Name: ___________________________________
Title: ________________________________________
By: ___________________________________________
Typed Name: ___________________________________
Title: ________________________________________
Address where notices to
Borrower are to be sent:
_______________________________________________
_______________________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: ___________________________________________
Typed Name: STEPHEN L. PARRY
Title: VICE PRESIDENT
Address where notices to
Bank are to be sent:
530 LYTTON AVENUE 2ND FLOOR
PALO ALTO, CA. 94301
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