CREDIT AGREEMENT
THIS AGREEMENT is entered into as of February 28, 1997, by and between
CERPROBE CORPORATION, a Delaware corporation ("Borrower"), and ▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION ("Bank").
RECITAL
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Borrower has requested from Bank the credit accommodation described
below, and Bank has agreed to provide said credit accommodation to Borrower on
the terms and conditions contained herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree as follows:
ARTICLE I
THE CREDIT
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SECTION 1. LINE OF CREDIT.
(a) Line of Credit. Subject to the terms and conditions of
this Agreement, Bank hereby agrees to make advances to Borrower from time to
time up to and including August 15, 1998, not to exceed at any time the
aggregate principal amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00)
("Line of Credit"), the proceeds of which shall be used for general corporate
purposes and acquisitions and to pay off certain indebtedness of Borrower and/or
its subsidiaries. Borrower's obligation to repay advances under the Line of
Credit shall be evidenced by a promissory note substantially in the form of
Exhibit C attached hereto ("Line of Credit Note"), all terms of which are
incorporated herein by this reference.
(b) Limitation on Borrowings. Outstanding borrowings under the
Line of Credit shall not at any time exceed an aggregate principal amount of
$10,000,000.00.
(c) Borrowing and Repayment. Borrower may from time to time
during the term of the Line of Credit borrow, partially or wholly repay its
outstanding borrowings, and reborrow, subject to all of the limitations, terms
and conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.
SECTION 2. INTEREST/FEES.
(a) Interest. The outstanding principal balance of the Line of
Credit shall bear
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interest at the rate of interest set forth in the Line of Credit Note.
(b) Computation and Payment. Interest shall be computed on the
basis of a 360-day year, actual days elapsed. Interest shall be payable at the
times and place set forth in the Line of Credit Note.
(c) Unused Commitment Fee. Borrower shall pay to Bank a fee
equal to (i) .125 percent (_%) per annum (computed on the basis of a 360-day
year, actual days elapsed) on the average daily unused amount of the Line of
Credit if the average daily used amount ("Outstanding Borrowing") is at least
equal to or exceeds $3,000,000.00 or (ii) .250 percent (1/4%) per annum
(computed on the basis of a 360-day year, actual days elapsed) on the average
daily unused amount of the Line of Credit if the average daily Outstanding
Borrowing is less than $3,000,000.00, which fee shall be calculated on a
quarterly basis by Bank and shall be due and payable by Borrower in arrears
within three (3) business days after each billing is sent by Bank.
SECTION 3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all principal, interest and fees due under the Line of Credit by charging
Borrower's demand deposit account number 4159-506641 with Bank, or any other
demand deposit account maintained by Borrower with Bank, for the full amount
thereof. Should there be insufficient funds in any such demand deposit account
to pay all such sums when due, the full amount of such deficiency shall be
immediately due and payable by Borrower.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to Bank
subject to this Agreement.
SECTION 1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the state of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required and in which the failure to so qualify or to be so
licensed could have a material adverse effect on Borrower and its subsidiaries
taken as a whole.
SECTION 2. AUTHORIZATION AND VALIDITY. This Agreement, the Line of
Credit Note, and each other document, contract and instrument required hereby or
at any time hereafter delivered to Bank in connection herewith (collectively,
the "Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms, except as such
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other similar laws relating to or
affecting the rights of creditors
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generally.
SECTION 3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any material breach of or material default
under any material contract, material obligation, material indenture or other
material instrument to which Borrower is a party or by which Borrower may be
bound.
SECTION 4. LITIGATION. There are no pending, or to Borrower's knowledge
threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
would, if adversely determined, have a material adverse effect on the financial
condition or operation of Borrower and its subsidiaries taken as a whole other
than those disclosed by Borrower to Bank in writing prior to the date hereof.
SECTION 5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement
of Borrower dated September 30, 1996, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower in all material respects,
(b) discloses all liabilities of Borrower that are required to be reflected or
reserved against under generally accepted accounting principles, whether
liquidated or unliquidated, fixed or contingent, and (c) has been prepared in
accordance with generally accepted accounting principles consistently applied.
Since the date of such financial statement there has been no material adverse
change in the financial condition of Borrower and its subsidiaries taken as a
whole, nor has Borrower mortgaged, pledged, granted a security interest in or
otherwise encumbered any of its assets or properties except for Permitted Liens
(as hereinafter defined). Bank is aware that, since the date of the September
30, 1996 financial statements of Borrower, Borrower has entered into: (a) the
Agreement of Merger and Plan of Reorganization, dated October 25, 1996, pursuant
to which CROUTE, Inc., a Texas corporation, was merged with and into C-Route
Acquisition, Inc., a Delaware corporation (a wholly owned subsidiary of
Borrower), which changed its name to CompuRoute, Inc. in connection with the
merger; and (b) the Agreement of Merger and Plan of Reorganization, dated
January 15, 1997, pursuant to which Silicon Valley Test & Repair, Inc., a
California corporation, was merged with and into EMI Acquisition, Inc., a
Delaware corporation (a wholly owned subsidiary of Borrower), which changed its
name to Silicon Valley Test & Repair, Inc. in connection with the merger. For
purposes of this Agreement, the phrase "Permitted Liens" shall mean: (a) liens,
security interest, claims or other encumbrances (collectively, "Liens") in favor
of Bank; (b) Liens existing on the date hereof and disclosed in writing to Bank
(including, without limitation, the Liens described on the attached Exhibit A);
(c) Liens on equipment or inventory to secure the purchase price thereof; (d)
Liens arising pursuant to operating or capital leases to secure the payments due
under such lease; (e) Liens for taxes, assessments or governmental charges or
levies not yet due and payable (or as to which the period of grace, if any,
related thereto has not yet expired) or which are being contested in good faith;
(f) Liens of materialmen, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business; (g) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment of,
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obligations under workers compensation, unemployment insurance or similar
legislation and utility deposits; (h) Liens securing the performance of bids,
tenders, statutory obligations, surety and appeal bonds and other obligations of
like nature, incurred in the ordinary course of business; (i) Liens constituting
encumbrances in the nature of zoning restrictions, easements and rights of
restriction of record on the use of real property, which in the aggregate do not
materially detract from the value of such property; (j) Liens consented to by
Bank in writing; or (k) Liens to secure indebtedness permitted under Section 5.2
hereof.
SECTION 6. INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.
SECTION 7. NO SUBORDINATION. There is no agreement, indenture, contract
or instrument to which Borrower is a party that requires the subordination in
right of payment of any of Borrower's obligations subject to this Agreement to
any other obligation of Borrower.
SECTION 8. PERMITS, FRANCHISES. Borrower possesses all permits,
consents, approvals, franchises and licenses required and rights to all
trademarks, trade names, patents, and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance with
applicable law and the failure of which to so possess would have a material
adverse effect on the financial condition of Borrower and its subsidiaries taken
as a whole.
SECTION 9. ERISA. To Borrower's knowledge, Borrower is in compliance in
all material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended or recodified from time to time
("ERISA"); to Borrower's knowledge, Borrower has not materially violated any
provision of any defined employee pension benefit plan (as defined in ERISA)
maintained or contributed to by Borrower (each, a "Plan"); to Borrower's
knowledge, no Reportable Event as defined in ERISA has occurred and is
continuing with respect to any Plan initiated by Borrower; to Borrower's
knowledge, Borrower has met its minimum funding requirements under ERISA with
respect to each Plan; and to Borrower's knowledge, each Plan will be able to
fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.
SECTION 10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money or any purchase money obligation (where such
material default would allow the creditor of Borrower to accelerate the payment
of the loan or obligation) or any other material lease or contract.
SECTION 11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, to Borrower's knowledge, Borrower is
in compliance in all material respects with all applicable federal or state
environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any of Borrower's
operations and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976,
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and the Federal Toxic Substances Control Act. None of the operations of Borrower
is the subject of any federal or state investigation evaluating whether any
remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment. To
Borrower's knowledge, Borrower has no material contingent liability in
connection with any release of any toxic or hazardous waste or substance into
the environment.
ARTICLE III
CONDITIONS
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SECTION 1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental to
the extension of credit by Bank shall be satisfactory to Bank's counsel.
(b) Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and the Line of Credit Note.
(ii) Such other documents as Bank may require
under any other Section of this Agreement.
(c) Financial Condition. There shall have been no material
adverse change, as reasonably determined by Bank, in the financial condition of
Borrower and its subsidiaries taken as a whole or any annual financial
projections provided to Bank by Borrower, nor any material decline, as
reasonably determined by Bank, in the market value of a substantial or material
portion of the assets of Borrower and its subsidiaries taken as a whole.
(d) Insurance. Borrower shall have delivered to Bank evidence
of insurance coverage on all Borrower's property, in types and amounts
customarily covered in lines of business similar to that of Borrower and issued
by companies reasonably satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank.
SECTION 2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:
(a) Compliance. The representations and warranties contained
herein and in each of the other Loan Documents shall be true in all material
respects on and as of the date of the signing of this Agreement and on the date
of each extension of credit by Bank pursuant hereto, with the same effect as
though such representations and warranties had been made on and as of each such
date, and on each such date, and no Event of Default as defined herein shall
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be continuing or shall exist.
(b) Documentation. Bank shall have received all additional
documents which may be required in connection with such extension of credit.
ARTICLE IV
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:
SECTION 1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.
SECTION 2. ACCOUNTING RECORDS. Maintain books and records in accordance
with generally accepted accounting principles consistently applied, and, after
48 hours prior written notice, permit any representative of Bank, at any
reasonable time during the regular business hours of Borrower, to: (a) inspect,
audit and examine such books and records and make copies of the same; and (b)
inspect the properties of Borrower.
SECTION 3. FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail reasonably satisfactory to Bank:
(a) not later than ninety (90) days after and as of the end of
each fiscal year, a financial statement of Borrower, certified by an independent
certified public accountant, to include a balance sheet, statement of income and
expenses and statement of cash flows, which financial statement requirement may
be satisfied by delivery to Bank of a copy of the Borrower's Form 10-K filed
with the U.S. Securities and Exchange Commission ("SEC"), and within ten (10)
business days after filing, copies of Borrower's filed federal income tax
returns for such year;
(b) not later than forty-five (45) days after and as of the
end of each fiscal quarter, a financial statement of Borrower, prepared by
Borrower, to include a balance sheet, statement of income and expenses and
statement of cash flows which financial statement requirement may be satisfied
by delivery to Bank of a copy of the Borrower's Form 10-Q filed with the SEC;
(c) contemporaneously with each annual and quarterly financial
statement of Borrower required hereby, a certificate for the benefit of the Bank
as to the financial statements in the form of the Borrower's certification of
the Forms 10-K and 10-Q delivered to the SEC together with a certificate of the
president or chief financial officer of Borrower that there exists
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no Event of Default and indicating compliance with each financial covenant
described in Section 4.9 hereof;
(d) from time to time such other information as Bank may
reasonably request.
SECTION 4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business the failure of which to preserve or maintain would have
a material adverse effect on Borrower or its subsidiaries taken as a whole; and
comply with the provisions of all documents pursuant to which Borrower is
organized and/or which govern Borrower's continued existence and with the
material requirements of all laws, rules, regulations and orders of any
governmental authority applicable to Borrower and/or its business, unless the
failure to so materially comply would not have a material adverse effect on
Borrower and its subsidiaries taken as a whole.
SECTION 5. INSURANCE. Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts reasonably satisfactory to Bank,
and deliver to Bank from time to time at Bank's reasonable request schedules
setting forth all insurance then in effect.
SECTION 6. FACILITIES. Keep all properties owned by Borrower and
material to Borrower's business in good repair and condition, and from time to
time make repairs, renewals and replacements thereto consistent with past
practices.
SECTION 7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and for which Borrower has
made provision, to Bank's reasonable satisfaction, for eventual payment thereof
in the event Borrower is obligated to make such payment, or (b) where the
failure to pay or discharge would not have a material adverse effect on Borrower
and its subsidiaries taken as a whole.
SECTION 8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$500,000.00.
SECTION 9. FINANCIAL CONDITION. Maintain, as of the end of each fiscal
quarter, unless otherwise indicated, the financial condition of Borrower and its
subsidiaries taken as a whole as follows using generally accepted accounting
principles consistently applied and used consistently with prior practices
(except to the extent modified by the definitions herein):
(a) Current Ratio not at any time less than 1.2 to 1.0, with
"Current Ratio" defined as total current assets divided by total current
liabilities.
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(b) Tangible Net Worth not at any time less than
$15,000,000.00 as of December 31, 1996 increased thereafter by the sum of (i)
fifty percent (50%) of any future net income after taxes (but not reduced by any
net loss) and (ii) ninety percent (90%) of any future increases in stockholder
equity, including without limitation preferred stock, due to any new equity
offering, with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt less any intangible assets.
(c) Total Liabilities divided by Tangible Net Worth not at any
time greater than 1.0 to 1.0, with "Total Liabilities" defined as the aggregate
of current liabilities and non-current liabilities less subordinated debt, and
with "Tangible Net Worth" as defined above.
(d) Net income after taxes not less than $0 on an annual
basis, determined as of each fiscal year end with no quarterly losses for more
than two consecutive fiscal quarters, excluding from the calculation of net
income any losses incurred as a result of any non-recurring write-offs of any
research and development assets purchased as part of a business acquisition.
(e) EBITDA Coverage Ratio not less than 1.5 to 1.0 as of each
fiscal year end, with "EBITDA" defined as net profit before tax plus interest
expense (net of capitalized interest expense), depreciation expense and
amortization expense, and with "EBITDA Coverage Ratio" defined as EBITDA divided
by the aggregate of total interest expense plus the prior period current
maturity of long-term debt and the prior period current maturity of subordinated
debt.
SECTION 10. NOTICE TO BANK. Promptly (but in no event more than five
(5) business days after Borrower obtains knowledge of each such event or matter)
give written notice to Bank in reasonable detail of: (a) the occurrence of any
Event of Default; (b) any change in the name or the organizational structure of
Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited
Transaction, each as defined in ERISA, or any funding deficiency with respect to
any Plan; or (d) any termination or cancellation of any insurance policy which
Borrower is required to maintain, or any uninsured or partially uninsured loss
through liability or property damage, or through fire, theft or any other cause
affecting Borrower's property in excess of an aggregate of $500,000.00.
ARTICLE V
NEGATIVE COVENANTS
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Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:
SECTION 1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.
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SECTION 2. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank; (b) any other
liabilities of Borrower existing as of, and disclosed to Bank prior to, the date
hereof (including, without limitation, the liability to Zions Credit Corporation
evidenced by the Security Agreement and Promissory Note, dated December 27,
1995, and any other documents executed in connection therewith, and the
liability to Security Bank, N.A. - Garland, evidenced by the Promissory Note
(Secured by Deed of Trust), dated October 16, 1995, and any other documents
executed in connection therewith, which liability was assumed by Borrower
pursuant to the Consent and Release, dated December 27, 1996); (c) indebtedness
or obligations to any of the subsidiaries or affiliates of Borrower; (d) trade
accounts created, or prepaid expenses accrued, in the ordinary course of
business; (e) operating or capital leases entered into in the ordinary course of
business; and (f) other indebtedness or obligations in an aggregate amount at
any time outstanding not to exceed $1,000,000.00.
SECTION 3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity, unless Borrower is the surviving entity; make
any substantial change in the general nature of Borrower's business as conducted
as of the date hereof; nor sell, lease, transfer or otherwise dispose of all or
a substantial or material portion of Borrower's assets except in the ordinary
course of its business, and except for the purposed sale and leaseback
transaction related to Borrower's Dallas, Texas facility.
SECTION 4. GUARANTIES. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate (other than Permitted Liens) any assets
of Borrower as security for, any liabilities or obligations of any other person
or entity, except any of the foregoing: (a) in favor of Bank; (b) existing on
the date hereof (including, without limitation, the Absolute, Unconditional and
Continuing Guaranty, dated January 15, 1997, executed by Borrower in favor of
▇▇▇▇▇▇▇ ▇▇▇▇▇); or (c) in connection with any acquisition permitted hereunder so
long as the maximum liability thereunder does not exceed $1,000,000.00.
SECTION 5. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to
or investments in any person or entity, except: (a) loans or advances to, or
investments in, any person or entity existing as of the date hereof and
disclosed in writing to Bank (including, without limitation, the investments
described on the attached Exhibit B); (b) loans or advances to, or investments
in, any of the subsidiaries or affiliates of Borrower existing on the date
hereof (which include CompuRoute, Inc., Silicon Valley Test & Repair, Inc.,
Cerprobe Asia Holdings PTE. LTD. and Cerprobe Europe, Limited) or any subsidiary
of Borrower formed or acquired after the date hereof; (c) loans or advances to
or investments in, the limited liability company arising pursuant to the
Operating Agreement of Upsys - Cerprobe, L.L.C., dated February 12, 1997,
executed (but not yet effective) by Borrower and Upsys, a French corporation,
each as a member; (d) loans or advances to the employees of Borrower or its
subsidiaries or affiliates for reasonable travel and business expenses in the
ordinary course of business; (e) deposits for utilities, security deposits,
leases and similar prepaid expenses accrued in the ordinary course
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of business; and (f) other loans or advances to, or investments in, any person
or entity not to exceed $500,000.00 in the aggregate after the date hereof.
SECTION 6. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower's stock now
or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire
any shares of any class of Borrower's stock now or hereafter outstanding;
provided, however, that the foregoing shall not restrict the right of Borrower
to redeem shares of the Series A Preferred Stock of Borrower in accordance with
Section 6 of the Certificate of Designation of Series A Preferred Stock, which
is included in the Certificate of Incorporation of Borrower.
SECTION 7. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist
a security interest in, or lien upon, all or any portion of Borrower's assets
now owned or hereafter acquired, including without limitation its accounts
receivable, inventory, unpledged equipment and real estate, except Permitted
Liens.
ARTICLE VI
EVENTS OF DEFAULT
-----------------
SECTION 1. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" under this Agreement:
(a) Borrower shall fail to pay within five (5) business days
of when due any principal or interest payable under any of the Loan Documents.
(b) Borrower shall fail to pay within five (5) business days
after written notice from Bank any fees or other amounts payable under the Loan
Documents (other than those referred to in subsection (a) above).
(c) Any financial statement or certificate furnished to Bank
in connection with, or any representation or warranty made by Borrower or any
other party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.
(d) Any default in the compliance with any covenant contained
in Section 4.9 hereof and such default shall continue for a period of twenty
(20) days from its occurrence.
(e) Any default in the performance of or compliance with any
obligation, agreement or other provision contained herein or in any other Loan
Document (other than those referred to in subsections (a), (b), (c) and (d)
above), and with respect to any such default which by its nature can be cured,
such default shall continue for a period of thirty (30) days from written notice
thereof to Borrower, or, if such default by it nature cannot reasonably be cured
within such thirty (30) day period, within sixty (60) days of written notice
thereof so long as Borrower is diligently and in good faith attempting to cure
such default.
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(f) Any default in the payment or performance of any
obligation, or any defined event of default, under the terms of any contract or
instrument (other than any of the Loan Documents) pursuant to which Borrower has
incurred any debt or other liability to any person or entity, including Bank, if
the amount of such debt or liability is in excess of $500,000 and such default
provides the other person or entity the right to accelerate the debt or
liability and any applicable period of grace or right to cure has expired.
(g) The service of a notice of levy and/or of a writ of
attachment or execution, or other like process, against the assets of Borrower
which exceeds $500,000 in value and such notice of levy and/or writ of
attachment or execution or other like process shall continue undischarged or
unstayed for a period of thirty (30) days; or the entry of a judgment against
Borrower for the payment of money which exceeds $500,000 (which is not covered
by insurance) and such judgment shall continue undischarged, unstayed or
unbonded for a period of thirty (30) days.
(h) Borrower shall become insolvent, or shall suffer or
consent to or apply for the appointment of a receiver, trustee, custodian or
liquidator of itself or any material portion of its property, or shall admit in
writing that it is unable to pay its debts as they become due, or shall make a
general assignment for the benefit of creditors; Borrower shall file a voluntary
petition in bankruptcy, or seeking reorganization, in order to effect a plan or
other arrangement with creditors or any other relief under the Bankruptcy Reform
Act, Title 11 of the United States Code, as amended or recodified from time to
time ("Bankruptcy Code"), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower and such petition or proceeding is not
dismissed within ninety (90) days of the filing or commencement thereof, or
Borrower shall file an answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition; or Borrower shall be
adjudicated a bankrupt, or an order for relief shall be entered against Borrower
by any court of competent jurisdiction under the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors and such order for relief shall continue unstayed for a
period of ninety (90) days.
(i) The dissolution or liquidation of Borrower; or Borrower or
any of its directors, stockholders or members, shall take action seeking to
effect the dissolution or liquidation of Borrower.
SECTION 2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit accommodation from Bank subject hereto and to
exercise any or all of the rights of a beneficiary
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or secured party pursuant to applicable law. All rights, powers and remedies of
Bank may be exercised at any time by Bank and from time to time after the
occurrence of an Event of Default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.
SECTION 2. NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:
BORROWER: CERPROBE CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANK: ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
100 West Washington, MAC #4101-250
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Banking, ▇▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.
-12-
SECTION 3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all reasonable payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of Bank's in-house
counsel), expended or incurred by Bank in connection with (a) the negotiation
and preparation of this Agreement and the other Loan Documents, Bank's continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.
SECTION 4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit extended by Bank to Borrower, Borrower or its
business.
SECTION 5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to any extension of credit by Bank subject hereto and supersede all
prior negotiations, communications, discussions and correspondence concerning
the subject matter hereof. This Agreement may be amended or modified only in
writing signed by each party hereto.
SECTION 6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.
SECTION 7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.
SECTION 8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.
SECTION 9. COUNTERPARTS. This Agreement may be executed in any number
of
-13-
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.
SECTION 10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona.
SECTION 11. SUPERSEDED DOCUMENTS. This Agreement and the Line of Credit
Note are executed to replace the Business Loan Agreement, dated April 27, 1996,
executed by Borrower and First Interstate Bank of Arizona (the predecessor of
Bank) ("FIB"), the Promissory Note, dated April 27, 1996, in the maximum
principal amount of $3,000,000, executed by Borrower in favor of FIB and all
other documents executed in connection therewith (collectively, the "Superseded
Documents"). Upon the execution and delivery of this Agreement and the Line of
Credit Note by Borrower, Bank shall deliver the Superseded Documents to Borrower
marked "Paid" or "Cancelled."
SECTION 12. ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any party may
by summary proceedings bring an action in court to compel arbitration of a
Dispute. Any party who fails or refuses to submit to arbitration following a
lawful demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in accordance with the
AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be
resolved in accordance with the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in any of
the Loan Documents. The arbitration shall be conducted at a location in Arizona
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and
Foreclosure. No provision hereof shall limit the right of any party to exercise
self-help remedies such as setoff,
-14-
foreclosure against or sale of any real or personal property collateral or
security, or to obtain provisional or ancillary remedies, including without
limitation injunctive relief, sequestration, attachment, garnishment or the
appointment of a receiver, from a court of competent jurisdiction before, after
or during the pendency of any arbitration or other proceeding. The exercise of
any such remedy shall not waive the right of any party to compel arbitration
hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators
must be active members of the Arizona State Bar or retired judges of the state
or federal judiciary of Arizona with expertise in the substantive law applicable
to the subject matter of the Dispute and possessing general commercial business
experience. Arbitrators are empowered to resolve Disputes by summary rulings in
response to motions filed prior to the final arbitration hearing. Arbitrators
(i) shall resolve all Disputes in accordance with the substantive law of the
state of Arizona, (ii) may grant any remedy or relief that a court of the state
of Arizona could order or grant within the scope hereof and such ancillary
relief as is necessary to make effective any award, and (iii) shall have the
power to award recovery of all costs and fees, to impose sanctions and to take
such other actions as they deem necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the Arizona Rules of Civil
Procedure or other applicable law. Any Dispute in which the amount in
controversy is $5,000,000 or less shall be decided by a single arbitrator who
shall not render an award of greater than $5,000,000 (including damages, costs,
fees and expenses). By submission to a single arbitrator, each party expressly
waives any right or claim to recover more than $5,000,000. Any Dispute in which
the amount in controversy exceeds $5,000,000 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators
must actively participate in all hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported by
substantial evidence or which is based on legal error, (ii) an award shall not
be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of Arizona, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for vacating,
modifying or correcting an award the right to judicial review of (A) whether the
findings of fact rendered by the arbitrators are supported by substantial
evidence, and (B) whether the conclusions of law are erroneous under the
substantive law of the state of Arizona. Judgment confirming an award in such a
proceeding may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of Arizona.
(f) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
CERPROBE CORPORATION, a Delaware
corporation
By:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION
By:
Title:
-16-
EXHIBIT "A"
LIENS
-----
Financing Statements
filed with the
Office of the Arizona Secretary of State
File Date File Number Secured Party
--------- ----------- -------------
FEB 12, 1991 653382 XEROX CORPORATION
JUL 14, 1992 711515 CITICORP NORTH AMERICA
JUL 14, 1992 711516 ▇▇▇▇▇ FINANCIAL CORPORATION
JUN 25, 1993 748553 NORWEST EQUIPMENT FINANCE, INC.
SEP 30, 1993 760012 NORWEST EQUIPMENT FINANCE, INC.
MAR 27, 1995 825185 FIRST INTERSTATE BANK OF ARIZONA
AUG 15, 1995 842809 FIRST INTERSTATE BANK OF ARIZONA
JAN 3, 1996 861015 ZIONS CREDIT CORPORATION
Other Liens
Liens in favor of Security Bank, N.A. - Garland
-17-
EXHIBIT "B"
INVESTMENTS
-----------
1. Cerprobe Asia Holdings PTE. LTD., a wholly owned subsidiary of
Borrower, together with Asian investors, formed a joint venture named Cerprobe
Asia PTE. LTD. Cerprobe Asia Holdings PTE. LTD. owns 70% of Cerprobe Asia PTE.
LTD. Cerprobe Asia PTE. LTD. has two wholly owned subsidiaries, Cerprobe
Singapore PTE. LTD. and Cerprobe Taiwan Co. LTD.
2. Borrower owns 36% of CRPB Investors, L.L.C., which owns the facility
and land for the corporate headquarters of Borrower.
3. Borrower has invested approximately $122,000 in Upsys - Cerprobe,
L.L.C., pursuant to that Operating Agreement dated February 12, 1997 executed
(but not yet effective) by Upsys, a French corporation, and Borrower, each as a
member, with Cobra Venture Management, Inc., a Delaware corporation, as manager.
-18-
EXHIBIT "C"
NOTE
----
-19-