Exhibit 10.1
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CREDIT AGREEMENT
by and between
CYMER, INC., A NEVADA CORPORATION
and
▇▇▇▇▇ FARGO HSBC TRADE BANK, N.A.
Dated as of
June 28, 2001
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Exhibit A - Addendum to Credit Agreement
Exhibit B - Revolving Credit Facility Supplement
Exhibit C - Collateral/Credit Support Document
▇▇▇▇▇ FARGO HSBC TRADE BANK CREDIT AGREEMENT
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CYMER, INC., A NEVADA CORPORATION("Borrower"), organized under the laws of the
State of Nevada whose chief executive office is located at the address specified
after its signature to this Agreement ("Borrower's Address") and ▇▇▇▇▇ FARGO
HSBC TRADE BANK, N.A. ("Trade Bank"), whose address is specified after its
signature to this Agreement, have entered into this CREDIT AGREEMENT as of June
28, 2001 ("Effective Date"). All references to this "Agreement" include those
covenants included in the Addendum to Agreement ("Addendum") attached as Exhibit
A hereto.
I. CREDIT FACILITY
1.1 THE FACILITY. Subject to the terms and conditions of this
Agreement, Trade Bank will make available to Borrower a Revolving Credit
Facility ("Facility") for which a Facility Supplement ("Supplement") is attached
as Exhibit B hereto. Additional terms for the Facility (and each subfacility
thereof ("Subfacility")) are set forth in the Supplement. The Facility will be
available from the Closing Date up to and until JUNE 15, 2002 ("Facility
Termination Date"). Definitions for those capitalized terms not otherwise
defined are contained in Article 8 below.
1.2 CREDIT EXTENSION LIMIT. The aggregate outstanding amount of
all Credit Extensions may at no time exceed TEN MILLION DOLLARS ($10,000,000)
("Overall Credit Limit"). The aggregate outstanding amount of all Credit
Extensions outstanding at any time under Revolving Credit Facility may not
exceed that amount specified as the "Credit Limit" in the Supplement for the
Facility, and the aggregate outstanding amount of all Credit Extensions
outstanding at any time under each Subfacility (or any subcategory thereof) may
not exceed that amount specified as the "Credit Sublimit" in the Supplement for
the Facility. An amount equal to 100% of each unfunded Credit Extension shall be
used in calculating the outstanding amount of Credit Extensions under this
Agreement.
1.3 OVERADVANCE. All Credit Extensions made hereunder shall be
added to and deemed part of the Obligations when made. If, at any time and for
any reason, the aggregate outstanding amount of all Credit Extensions made
pursuant to this Agreement exceeds the dollar limitation in Section 1.2, then
Borrower shall immediately pay to Trade Bank on demand, in cash, the amount of
such excess.
1.4 REPAYMENT; INTEREST AND FEES. Each funded Credit Extension
shall be repaid by Borrower, and shall bear interest from the date of
disbursement at those per annum rates and such interest shall be paid, at the
times specified in the Supplement, Note or Facility Document. Borrower agrees to
pay to Trade Bank with respect to (a) the Revolving Credit Facility, interest at
a per annum rate equal to (i) the Prime Rate in effect from day to day as
specified in the Note, or (ii) ▇▇▇▇▇ Fargo's LIBOR Rate plus 1.75% as specified
in the Note, and (b) the Subfacilities, the fees specified in the Supplement as
well as those fees specified in the relevant Facility Document(s). Interest and
fees will be calculated on the basis of a 360 day year, actual days elapsed. Any
overdue payments of principal (and interest to the extent permitted by law)
shall bear interest at a per annum floating rate equal to the Prime Rate plus
2.0%.
1.5 PREPAYMENTS. Credit Extensions under any Facility may only be
prepaid in accordance with the terms of the Supplement. At the time of any
prepayment (including, but not limited to, any prepayment which is a result of
the occurrence of an Event of Default and an acceleration of the Obligations)
Borrower will pay to Trade Bank all interest accrued on the amount so prepaid to
the date of such prepayment and all costs, expenses and fees specified in the
Loan Documents.
II. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Trade Bank that the following
representations and warranties are true and correct:
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2.1 LEGAL STATUS. Borrower is duly organized and existing and in
good standing under the laws of the jurisdiction indicated in this Agreement,
and is qualified or licensed to do business in all jurisdictions in which such
qualification or licensing is required and in which the failure to so qualify or
to be so licensed would reasonably be expected to have a Material Adverse
Effect.
2.2 AUTHORIZATION AND VALIDITY. The execution, delivery and
performance of this Agreement, and all other Loan Documents to which Borrower is
a party, have been duly and validly authorized, executed and delivered by
Borrower and constitute legal, valid and binding agreements of Borrower, and are
enforceable against Borrower in accordance with their respective terms, except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyances or other similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
2.3 BORROWER'S NAME. The name of Borrower set forth at the end of
this Agreement is its correct name. If Borrower is conducting business under a
fictitious business name, Borrower is in compliance in all material respects
with all laws relating to the conduct of such business under such name.
2.4 FINANCIAL CONDITION AND STATEMENTS. All financial statements
of Borrower delivered to Trade Bank have been prepared in conformity with GAAP,
and completely and accurately reflect the financial condition of Borrower (and
any consolidated Subsidiaries) at the times and for the periods stated in such
financial statements. Neither Borrower nor any Subsidiary has any material
contingent liability not reflected in the aforesaid financial statement. Since
the date of the financial statements delivered to Trade Bank for the last fiscal
period of Borrower to end before the Effective Date, there has been no material
adverse change in the financial condition, business or prospects of Borrower.
Borrower is solvent.
2.5 LITIGATION. Except as disclosed in writing to Trade Bank prior
to the Effective Date, there is no action, claim, suit, litigation, proceeding
or investigation pending or (to best of Borrower's knowledge) threatened by or
against or affecting Borrower or any Subsidiary in any court or before any
governmental authority, administrator or agency which would reasonably be
expected to have a Material Adverse Effect.
2.6 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 binding upon Borrower, or contravene any provision of the Articles
of Incorporation or By-Laws of Borrower, or result in a breach of or constitute
a default under any material contract, obligation, indenture, or other material
instrument to which Borrower is a party or by which Borrower may be bound.
2.7 INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.
2.8 NO SUBORDINATION. There is no agreement, indenture, contract,
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.
2.9 ERISA. 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"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan") which would
reasonably be expected to have a Material Adverse Effect; to Borrower's
knowledge no Reportable Event, as defined in ERISA, has occurred and is
continuing with respect to any Plan initiated by Borrower; Borrower has met its
minimum funding requirements under ERISA with respect to each Plan; and each
Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under GAAP.
2.10 OTHER OBLIGATIONS. Except as disclosed in writing to Trade
Bank prior to the Effective Date, neither Borrower nor any Subsidiary to
Borrower's knowledge after reasonable investigation by Borrower are in default
of any obligation for borrowed money, any purchase money obligation or any
material lease, commitment, contract, instrument or obligation.
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2.11 NO DEFAULTS. To Borrower's knowledge after reasonable
investigation by Borrower no Event of Default, and event which with the giving
of notice or the passage of time or both would constitute an Event of Default,
has occurred and is continuing.
2.12 INFORMATION PROVIDED TO TRADE BANK. The material facts in the
information provided to the Trade Bank concerning Borrower's business are true
and correct in all material respects, in light of the circumstances under which
such information was provided.
2.13 ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Trade Bank in writing prior to the Effective Date, Borrower (as well as any
Subsidiary) is each 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
Borrower's or any Subsidiary'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, the Federal Toxic
Substances Control Act and the California Health and Safety Code, as any of the
same may be amended, modified or supplemented from time to time. To Borrower's
knowledge, none of the operations of Borrower or of any Subsidiary 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.
III. CONDITIONS TO EXTENDING FACILITIES
3.1 CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation of
Trade Bank to make the first Credit Extension is subject to the fulfillment to
Trade Bank's satisfaction of the following conditions:
(a) APPROVAL OF TRADE BANK COUNSEL. All legal matters
relating to making the Facility available to Borrower
must be reasonably satisfactory to counsel for Trade
Bank.
(b) DOCUMENTATION. Trade Bank must have received, in form
and substance reasonably satisfactory to Trade Bank,
the following documents and instruments duly executed
and in full force and effect:
(1) a corporate borrowing resolution and
incumbency certificate if Borrower is a
corporation, a partnership or joint venture
borrowing certificate if Borrower is a
partnership or joint venture, and a limited
liability company borrowing certificate if
Borrower is a limited liability company;
(2) the Facility Documents for the Facility,
including, but not limited to, note(s)
("Notes") for the Revolving Credit Facility,
Trade Bank's standard Continuing Commercial
Letter of Credit Agreement or Continuing
Standby Letter of Credit Agreement for any
letter of credit Facility;
(3) those guarantees, security agreements, deeds
of trust, subordination agreements,
intercreditor agreements, factoring
agreements, tax service contracts, and other
Collateral Documents required by Trade Bank
to evidence the collateral/credit support
specified in the Supplement;
(4) if an audit or inspection of any books,
records or property is specified in the
Supplement for the Facility, an audit or
inspection report from ▇▇▇▇▇ Fargo or
another auditor or inspector acceptable to
Trade Bank reflecting values and property
conditions satisfactory to Trade Bank; and
(5) if insurance is required in the Addendum,
the insurance policies specified in the
Addendum (or other satisfactory proof
thereof) from insurers acceptable to Trade
Bank.
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3.2 CONDITIONS TO MAKING EACH CREDIT EXTENSION. The obligation of
Trade Bank to make each Credit Extension is subject to the fulfillment to Trade
Bank's satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in this Agreement, the
Facility Documents and the Collateral Documents will
be true and correct on and as of the date of the
Credit Extension with the same effect as though such
representations and warranties had been made on and
as of such date;
(b) DOCUMENTATION. Trade Bank must have received, in form
and substance reasonably satisfactory to Trade Bank,
the following documents and instruments duly executed
and in full force and effect:
(1) if the Credit Extension is the issuance of a
Commercial Letter of Credit, Trade Bank's
standard Application For Commercial Letter
of Credit or standard Application and
Agreement For Commercial Letter of Credit;
(2) if the Credit Extension is the issuance of a
Standby Letter of Credit, Trade Bank's
standard Application For Standby Letter of
Credit or standard Application and Agreement
For Standby Letter of Credit;
(3) if a Borrowing Base Certificate is required
for the Credit Extension, a Borrowing Base
Certificate demonstrating compliance with
the requirements for such Credit Extension.
(c) FEES. Trade Bank must have received any fees required
by the Loan Documents to be paid at the time such
Credit Extension is made.
IV. AFFIRMATIVE COVENANTS
Borrower covenants that so long as Trade Bank remains committed to make
Credit Extensions to Borrower, and until payment of all Obligations and Credit
Extensions, Borrower will comply with each of the following covenants: (For
purposes of this Article IV, and Article V below, reference to "Borrower" may
also extend to Borrower's subsidiaries, if so specified in the Addendum.)
4.1 PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees and other Obligations due under this Agreement or under any Loan Document
at the time and place and in the manner specified herein or therein.
4.2 NOTIFICATION TO TRADE BANK. Promptly, but in no event more
than 5 calendar days after the occurrence of each such event, provide written
notice in reasonable detail of each of the following:
(a) OCCURRENCE OF A DEFAULT. The occurrence of any Event
of Default or any event which with the giving of
notice or the passage of time or both would
constitute an Event of Default;
(b) BORROWER'S TRADE NAMES; PLACE OF BUSINESS. Any change
of Borrower's (or any Subsidiary's) name, trade name
or place of business, or chief executive officer;
(c) LITIGATION. Any action, claim, proceeding, litigation
or investigation to Borrower's knowledge threatened
or instituted by or against or affecting Borrower (or
any Subsidiary) in any court or before any government
authority, administrator or agency which would
reasonably be expected to have a Material Adverse
Effect;
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(d) UNINSURED OR PARTIALLY UNINSURED LOSS. Any uninsured
or partially uninsured loss through liability or
property damage or through fire, theft or any other
cause affecting Borrower's (or any Subsidiary's)
property in excess of the aggregate amount required
hereunder;
(e) REPORTS MADE TO INSURANCE COMPANIES. Copies of all
material reports made to insurance companies; and
(f) ERISA. 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.
4.3 BOOKS AND RECORDS. Maintain at Borrower's address books and
records in accordance with GAAP, and permit any representative of Trade Bank, at
any reasonable time during normal business hours upon 24 hours prior written
notice, to inspect, audit and examine such books and records, to make copies of
them, and to inspect the properties of Borrower.
4.4 TAX RETURNS AND PAYMENTS. Timely file all tax returns and
reports required by foreign, federal, state and local law, and timely pay all
foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower. Borrower may, however, defer payment of any contested taxes,
provided that Borrower (i) in good faith contests Borrower's obligation to pay
the taxes by appropriate proceedings promptly instituted and diligently
conducted, (ii) notifies Trade Bank in writing of the commencement of, and any
material development in, the proceedings, (iii) posts bonds or takes any other
steps required to keep the contested taxes from becoming a lien upon any of the
Collateral, and (iv) makes provision, to Trade Bank's reasonable satisfaction,
for eventual payment of such taxes in the event Borrower is obligated to make
such payment.
4.5 COMPLIANCE WITH LAWS. Comply in all material respects with the
provisions of all foreign, federal, state and local laws and regulations
applicable to Borrower, including, but not limited to, those relating to
Borrower's ownership of real or personal property, the conduct and licensing of
Borrower's business, and health and environmental matters.
4.6 TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real and
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except (a) such as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower has made provision, to Trade Bank's reasonable satisfaction, for
eventual payment thereof in the event that Borrower is obligated to make such
payment.
4.7 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 to be in amounts satisfactory to Trade Bank and to be carried with
companies approved by Trade Bank before such companies are retained, and deliver
to Trade Bank from time to time at Trade Bank's request schedules setting forth
all insurance then in effect. All insurance policies shall name Trade Bank as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Trade Bank. (Upon receipt of the proceeds of any
such insurance, Trade Bank shall apply such proceeds in reduction of the
outstanding funded Credit Extensions and shall hold any remaining proceeds as
collateral for the outstanding unfunded Credit Extensions, as Trade Bank shall
determine in its sole discretion, except that, provided no Event of Default has
occurred, Trade Bank shall release to Borrower insurance proceeds with respect
to equipment totaling less than $100,000, which shall be utilized by Borrower
for the replacement of the equipment with respect to which the insurance
proceeds were paid, if Trade Bank receives reasonable assurance that the
insurance proceeds so released will be so used.) If Borrower fails to provide or
pay for any insurance, Trade Bank may, but is not obligated to, obtain the
insurance at Borrower's expense.
4.8 FURTHER ASSURANCES. At Trade Bank's request and in form and
substance reasonably satisfactory to Trade Bank, execute all documents and take
all such actions at Borrower's expense as Trade Bank may deem reasonably
necessary in order to fully consummate all of the transactions contemplated by
the Loan Documents.
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V. NEGATIVE COVENANTS
Borrower covenants that so long as Trade Bank remains committed to make
any Credit Extensions to Borrower and until all Obligations and Credit
Extensions have been paid, Borrower will not:
5.1 MERGE OR CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity, except Borrower may merge or consolidate with
any other entity so long as the surviving, continuing or resulting entity (a) is
a solvent corporation, (b) is in any similar line of business as Borrower (c)
expressly and unconditionally assumes the due and punctual performance of all
obligations under this Agreement, and (d) there exists no Event of Default and
after reasonable investigation by Borrower no Event of Default will be created
as a result of such merger or consolidation; make any substantial change in the
nature of Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity except in the ordinary
course of business and (i) Borrower may acquire all or substantially all of the
assets or capital stock of any entity so long as Borrower is the surviving or
continuing entity or (ii) Borrower may acquire all or substantially all of the
capital stock or property of an entity in connection with a transaction in which
the consideration consists of capital stock of Borrower or any of Borrower's
Subsidiaries or, to the extent any consideration consists of cash or other
property (other than capital stock) such transaction would be permitted as a
Permitted Investment, and (ii) there exists no event of default; 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 sales, transfers or other dispositions of (i) worn-out or obsolete property
or equipment, (ii) transfers from Borrower to any subsidiary not greater than
15% of Borrower's Tangible Net Worth in any calendar year, (iii) assets acquired
in an acquisition subsequent to the Effective Date to the extent such assets are
sold or otherwise disposed of for cash or any other consideration which
represents the fair market value thereof, (iv) assets for fair market value to
the extent that the net after tax proceeds of such transaction are applied
within 365 days from the date of such transaction to the purchase, acquisition
or construction of assets which are to be used in the business of Borrower or
any Subsidiary, (v) assets which are substantially concurrently received in
exchange for assets which are to be used in the business of Borrower or any
Subsidiary, (vi) license agreements in the ordinary course of business for the
use of any intellectual property or other intangible assets of Borrower or any
Subsidiary or the disposition of such intellectual property which is determined
by Borrower to be no longer in its best interests to retain, and (vii) sales of
accounts receivable for cash so long as the accounts receivable are sold to
Trade Bank.
5.2 USE OF PROCEEDS. Borrower will not use the proceeds of any
Credit Extension except for the purposes, if any, specified for such Credit
Extension in the Supplement covering the Facility under which such Credit
Extension is made.
5.3 LIENS. 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, except any of the foregoing in favor of Trade Bank or which
is existing as of, and disclosed to Trade Bank in writing prior to, the date
hereof, and except for Permitted Liens.
5.4 LOANS AND INVESTMENTS. Borrower will not make any loans or
advances to, or investments in, any person or entity except for accounts
receivable or notes receivable created in the ordinary course of Borrower's
business, and except for Permitted Investments.
5.5 INDEBTEDNESS FOR BORROWED MONEY. Borrower will not incur any
indebtedness for borrowed money, except to Trade Bank and except for
Subordinated Debt, and Permitted Indebtedness.
5.6 GUARANTEES. Borrower will not guarantee or otherwise become
liable with respect to the obligations of any other person or entity, except for
endorsement of instruments for deposit into Borrower's account in the ordinary
course of Borrower's business and unsecured guaranties of Borrower and its
Subsidiaries with respect to obligations of any of its respective Subsidiaries,
unsecured guaranties relating to the financing of accounts receivable, unsecured
guaranties existing as of the Effective Date, unsecured guaranties under surety
instruments, unsecured guaranties of the obligations of vendors and supplier of
Borrower or its Subsidiaries in respect of transactions entered into in the
ordinary course of business and other unsecured guaranties in an aggregate
principal amount not to exceed $1,000,000.
5.7 DIVIDENDS AND DISTRIBUTIONS OF CAPITAL OF C CORPORATION. If
Borrower is a corporation, Borrower will not pay or declare any dividends or
make any distribution of capital on Borrower's stock (except for dividends
payable solely
Page 6
in stock of Borrower), nor redeem, retire, purchase or otherwise acquire,
directly or indirectly, any shares of any class of Borrower's stock now or
hereafter outstanding except (i) Borrower may repurchase stock from former
employees of Borrower in accordance with the terms of repurchase or similar
agreements between Borrower and such employees; (ii) Borrower may pay any
dividend or distribution payable in Borrower's or a Subsidiary's equity
securities; (ii) Borrower may make any redemption of securities with the
proceeds received from the substantially concurrent issue of new shares of
capital stock; (iv) Borrower may distribute and redeem rights under any
stockholder rights plan; (v) Borrower may repurchase up to an aggregrate
principal amount of $75 million of its capital stock in any fiscal year and (vi)
Borrower may make other distributions of capital stock not to exceed 25% of
Borrower's aggregate net income for fiscal quarters ending after the date
hereof; provided no distribution of capital stock that also constitutes a
Permitted Investment shall be prohibited by the application of this Section and
further provided there exists no Event of Default and after reasonable
investigation by Borrower no Event of Default will be created as a result of
such distribution. This Section is not intended to apply to and shall not apply
to payments of interest on, prepayments, redemptions or defeasances of, sinking
fund payments with respect to deliveries of securities, cash or other property
upon conversion of convertible Subordinated Debt.
5.8 INVESTMENTS IN, OR ACQUISITIONS OF, SUBSIDIARIES. Borrower
will not make any investments in, or form or acquire, any subsidiaries other
than Permitted Investments.
VI. EVENTS OF DEFAULT AND REMEDIES
6.1 EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default":
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower's failure
to pay (i) principal or interest within 5 days after
the same shall be due or (ii) fees or amounts within
10 days after the same shall be due under any Loan
Document.
(b) FAILURE TO PERFORM OBLIGATIONS. Any failure by
Borrower to comply with any covenant or obligation in
this Agreement or in any Loan Document (other than
those referred to in subsection (a)above), and such
default shall continue for a period of thirty (30)
calendar days from the earlier of (i) Borrower's
failure to notify Trade Bank of such Event of Default
pursuant to Section 4.2(a) above, or (ii) Trade
Bank's notice to Borrower of such Event of Default.
(c) UNTRUE OR MISLEADING WARRANTY OR STATEMENT. Any
warranty, representation, financial statement, report
or certificate made or delivered by Borrower under
any Loan Document is untrue or misleading in any
material respect as of the date when made or
delivered.
(d) DEFAULTS UNDER OTHER LOAN DOCUMENTS. Any "Event of
Default" occurs under any other Loan Document; or any
breach of the provisions of any Subordination
Agreement or Intercreditor Agreement by any party
other than the Trade Bank, and such default shall
continue after any applicable grace periods and for a
period of 30 days after written notice thereof to
Borrower.
(e) DEFAULTS UNDER OTHER AGREEMENTS OR INSTRUMENTS. Any
default in the payment or performance of any
obligation, or the occurrence of any event of
default, under the terms of any other agreement or
instrument pursuant to which Borrower, any Subsidiary
or any Guarantor or general partner of Borrower has
incurred any debt or other material liability to any
person or entity aggregating in excess of $1,000,000,
such default resulting in a right by a third party to
accelerate such debt or material liability.
(f) CONCEALING OR TRANSFERRING PROPERTY. Borrower
conceals, removes or transfers any part of its
property with intent to hinder, delay or defraud its
creditors, or makes or suffers any transfer of any of
its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law.
Page 7
(g) JUDGMENTS AND LEVIES AGAINST BORROWER. The filing of
a notice of judgment lien against a substantial part
of the property of Borrower, or the recording of any
abstract of judgment against a substantial part of
the property of Borrower, in any county in which
Borrower has an interest in real property, or the
service of a notice of levy and/or of a writ of
attachment or execution, or other like process,
against a substantial part of the assets of Borrower,
or the entry of a judgment against Borrower and such
writ, judgement, judgement lien, levy warrant of
attachment, execution or similar process shall not be
released, vacated or fully bonded within 45 days
after commencement, filing, recording, service or
levy.
(h) EVENT OR CONDITION IMPAIRING PAYMENT OR PERFORMANCE.
Any event occurs or condition arises which materially
impairs the prospect of payment or performance by
Borrower of the Obligations, including, but not
limited to any material adverse change in Borrower's
financial condition, business or prospects.
(i) VOLUNTARY INSOLVENCY. Borrower, any Subsidiary or any
Guarantor (i) becomes insolvent, (ii) suffers or
consents to or applies for the appointment of a
receiver, trustee, custodian or liquidator of itself
or any of its property, (iii) generally fails to pay
its debts as they become due, (iv) makes a general
assignment for the benefit of creditors, or (v) files
a voluntary petition in bankruptcy, or seeks
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.
(j) INVOLUNTARY INSOLVENCY. 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, any
Subsidiary or an order for relief is entered against
it 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 petition,
proceeding, order or relief for debtors is not
vacated within 45 days after commencement, filing or
entering.
(k) CHANGE IN CONTROL. A CHANGE IN CONTROL SHALL HAVE
OCCURRED. FOR PURPOSES HEREOF, A "CHANGE IN CONTROL"
MEANS THAT INDIVIDUALS WHO, AT THE BEGINNING OF ANY
PERIOD OF [12] CONSECUTIVE MONTHS, CONSTITUTE THE
BORROWER'S BOARD OF DIRECTORS [(TOGETHER WITH ANY NEW
DIRECTOR WHOSE ELECTION BY THE BORROWER'S BOARD OF
DIRECTORS OR WHOSE NOMINATION FOR ELECTION BY THE
BORROWER'S STOCKHOLDERS WAS APPROVED BY A VOTE OF AT
LEAST [TWO-THIRDS] OF THE DIRECTORS THEN STILL IN
OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF
SUCH PERIOD OR WHOSE ELECTION OR NOMINATION FOR
ELECTION WAS PREVIOUSLY SO APPROVED)] CEASE FOR ANY
REASON (OTHER THAN DEATH OR DISABILITY) TO CONSTITUTE
AT LEAST SEVENTY-FIVE PERCENT (75%) OF THE BORROWER'S
BOARD OF DIRECTORS THEN IN OFFICE.
6.2 REMEDIES. Upon the occurrence of any Event of Default, or at
any time thereafter, Trade Bank, at its option, and without notice or demand of
any kind (all of which are hereby expressly waived by Borrower), may do any one
or more of the following: (a) terminate Trade Bank's obligation to make Credit
Extensions or to make available to Borrower the Facility or other financial
accommodations; (b) accelerate and declare all or any part of the Obligations to
be immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Credit Extension; and/or (c) exercise all its rights, powers and remedies
available under the Loan Documents, or accorded by law, . Notwithstanding the
provisions in the foregoing sentence, if any Event of Default set out in
subsections (i) and (j) of Section 6.1 above shall occur, then all the remedies
specified in the preceding sentence shall automatically take effect without
notice or demand of any kind (all of which are hereby expressly waived by
Borrower) with respect to any and all Obligations. All rights, powers and
remedies of Trade Bank may be
Page 8
exercised at any time by Trade 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.
VII. GENERAL PROVISIONS
7.1 NOTICES. All notices to be given under this Agreement shall be
in writing and shall be given personally or by regular first-class mail, by
certified mail return receipt requested, by a private delivery service which
obtains a signed receipt, or by facsimile transmission addressed to Trade Bank
or Borrower at the address indicated after their signature to this Agreement, or
at any other address designated in writing by one party to the other party.
Trade Bank is hereby authorized by Borrower to act on such instructions or
notices sent by facsimile transmission or telecommunications device which Trade
Bank believes come from Borrower. All notices shall be deemed to have been given
upon delivery, in the case of notices personally delivered or delivered by
private delivery service, upon the expiration of 3 calendar days following the
deposit of the notices in the United States mail, in the case of notices
deposited in the United States mail with postage prepaid, or upon receipt, in
the case of notices sent by facsimile transmission.
7.2 WAIVERS. No delay or failure of Trade 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, consent or approval by Trade Bank under any of the Loan
Documents must be in writing and shall be effective only to the extent set out
in such writing.
7.3 BENEFIT OF AGREEMENT. The provisions of the Loan Documents
shall be binding upon and inure to the benefit of the respective successors,
assigns, heirs, executors, administrators, beneficiaries and legal
representatives of Borrower and Trade Bank; provided, however, that Borrower may
not assign or transfer any of its rights under any Loan Document without the
prior written consent of Trade Bank which consent shall not be unreasonably
withheld, and any prohibited assignment shall be void. No consent by Trade Bank
to any assignment shall release Borrower from its liability for the Obligations
unless such release is specifically given by Trade Bank to Borrower in writing.
Trade Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Trade Bank's rights
and benefits under each of the Loan Documents to any Affiliate of Trade Bank.
(For purposes of this Agreement, "Affiliate" of any Person means any other
Person directly or indirectly, controlling, controlled by, or under common
control with, such Person and "Person" shall mean an individual, corporation,
limited liability company, joint venture, general or limited partnership, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.) With the prior written consent of Borrower, which consent
shall not be unreasonably withheld, Trade Bank reserves the right to sell,
assign, transfer, negotiate or grant participations in all or any part of, or
any interest in, Trade Bank's rights and benefits under each of the Loan
Documents to any Person which is not an Affiliate of Trade Bank; provided,
however, that Borrower may continue to deal solely and directly with Trade Bank
or its Affiliates in connection with the interest so assigned until written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the assignee, shall have been given to
Borrower by Trade Bank and the assignee. In connection therewith, Trade Bank may
disclose any information relating to the Facility, Borrower or its business, or
any Guarantor or its business.
7.4 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than
one person or entity, the liability of each of them shall be joint and several,
and the compromise of any claim with, or the release of, any one such Borrower
shall not constitute a compromise with, or a release of, any other such
Borrower.
7.5 NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of Borrower and Trade Bank 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, any of the Loan Documents to which it is not
a party.
7.6 GOVERNING LAW AND JURISDICTION. This Agreement shall, unless
provided differently in any Loan Document, be governed by, and be construed in
accordance with, the internal laws of the State of California, except to the
extent Trade Bank has greater rights or remedies under federal law whether as a
national bank or otherwise. Borrower and
Page 9
Trade Bank (a) agree that all actions and proceedings relating directly or
indirectly to this Agreement shall be litigated in courts located within
California; (b) consent to the jurisdiction of any such court and consent to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (c) waive any and all rights Borrower may
have to object to the jurisdiction of any such court or to transfer or change
the venue of any such action or proceeding.
7.7 MUTUAL WAIVER OF JURY TRIAL. Borrower and Trade Bank each
hereby waive the right to trial by jury in any action or proceeding based upon,
arising out of, or in any way relating to, (a) any Loan Document, (b) any other
present or future agreement, instrument or document between Trade Bank and
Borrower, or (c) any conduct, act or omission of Trade Bank or Borrower or any
of their directors, officers, employees, agents, attorneys or any other persons
or entities affiliated with Trade Bank or Borrower, which waiver will apply in
all of the mentioned cases whether the case is a contract or tort case or any
other case. Borrower represents and warrants that no officer, representative or
agent of Trade Bank has represented, expressly or otherwise, that Trade Bank
would not seek to enforce this waiver of jury trial.
7.8 SEVERABILITY. Should any provision of any Loan Document be
prohibited by, or invalid under applicable law, or held by any court of
competent jurisdiction to be void or unenforceable, such defect shall not
affect, the validity of the other provisions of the Loan Documents.
7.9 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
Loan Documents are the final, entire and complete agreement between Borrower and
Trade Bank concerning the Credit Extensions and the Facility; supersede all
prior and contemporaneous negotiations and oral representations and agreements.
There are no oral understandings, representations or agreements between the
parties concerning the Credit Extensions or the Facility which are not set forth
in the Loan Documents. This Agreement and the Supplement may not be waived,
amended or superseded except in a writing executed by Borrower and Trade Bank.
7.10 COLLECTION OF PAYMENTS. Unless otherwise specified in any Loan
Document, other than this Agreement or any Note, all principal, interest and any
fees due to Trade Bank by Borrower under this Agreement, the Addendum, any
Supplement, any Facility Document, any Collateral Document or any Note, will be
paid by Trade Bank having ▇▇▇▇▇ Fargo debit any of Borrower's accounts with
▇▇▇▇▇ Fargo after 5 days written notice to Borrower and forwarding such amount
debited to Trade Bank, without presentment, protest, demand for reimbursement or
payment, notice of dishonor or any other notice whatsoever, all of which are
hereby expressly waived by Borrower. Such debit will be made at the time
principal, interest or any fee is due to Trade Bank pursuant to this Agreement,
the Addendum, any Supplement, any Facility Document, any Collateral Document or
any Note.
7.11 COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower will reimburse
Trade Bank for all reasonable costs and expenses, including, but not limited to,
reasonable attorneys' fees and expenses (which counsel may be Trade Bank or
▇▇▇▇▇ Fargo employees), expended or incurred by Trade Bank in amending this
Agreement, the Collateral Documents, the Notes, the Addendum, or the Facility
Documents, in the protection, perfection, preservation and enforcement of any
and all rights of Trade Bank in connection with this Agreement, the Notes, any
of the Collateral Documents, the Supplement, any of the Addendum, or any of the
Facility Documents, including, without limitation, the reasonable fees and costs
incurred in any out-of-court work out or a bankruptcy or reorganization
proceeding.
VIII. DEFINITIONS
8.1 "AGREEMENT" means this Agreement and the Addendum attached
hereto, as corrected or modified from time to time by Trade Bank and Borrower.
8.2 "BANKING DAY" means each day except Saturday, Sunday and a day
specified as a holiday by federal or California statute.
8.3 "CLOSING DATE" means the date on which the first Credit
Extension is made.
Page 10
8.4 "COLLATERAL DOCUMENTS" means those security agreement(s),
deed(s) of trust, guarantee(s), subordination agreement(s), intercreditor
agreement(s), and other credit support documents and instruments required by the
Trade Bank to effect the collateral and credit support requirements set forth in
the Supplement, if any, with respect to the Facility.
8.5 "CREDIT EXTENSION" means each extension of credit under the
Facility (whether funded or unfunded), including, but not limited to, (a) the
issuance of sight or usance commercial letters of credit or commercial letters
of credit supported by back-up letters of credit, (b) the issuance of standby
letters of credit, (c) the issuance of shipping guarantees, (d) the making of
revolving credit working capital loans, (e) the making of loans against imports
for letters of credit, (f) the making of clean import loans outside letters of
credit, (g) the making of advances against export orders, (h) the making of
advances against export letters of credit, (i) the making of advances against
outgoing collections, (j) the making of term loans, and (k) the entry into
foreign exchange contracts.
8.6 "CREDIT LIMIT" means, with respect to the any Facility, the
amount specified under the column labeled "Credit Limit" in the Supplement for
that related Facility.
8.7 "CREDIT SUBLIMIT" means, with respect to any Subfacility, the
amount specified after the name of that Subfacility under the column labeled
"Credit Sublimit" in the Supplement for the related Facility.
8.8 "DOLLARS" and "$" means United States dollars.
8.9 "FACILITY DOCUMENTS" means, with respect to the Facility,
those documents specified in the Supplement for the Facility, and any other
documents customarily required by Trade Bank for said Facility.
8.10 "GAAP" means generally accepted accounting principles, which
are applicable to the circumstances, as of the date of determination, set out in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession.
8.11 "LOAN DOCUMENTS" means this Agreement, the Addendum, the
Supplement, and the Facility Documents.
8.12 "MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business operations or financial condition of Borrower and its Subsidiaries
taken as a whole.
8.13 "NOTE" has the meaning specified in Section 3.1(b)(2) above.
8.14 "OBLIGATIONS" means (a) the obligation of Borrower to pay
principal, interest and fees on all funded Credit Extensions and fees on all
unfunded Credit Extensions, and (b) the obligation of Borrower to pay and
perform when due all other indebtedness, liabilities, obligations and covenants
required under the Loan Documents.
8.15 "PERMITTED INDEBTEDNESS" means:
(a) indebtedness existing on the Effective Date;
(b) indebtedness of Borrower to any Subsidiary;
(c) obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so
evidenced incurred in connection with the acquisition
of property, assets or businesses;
(d) indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred
as financing, in either case with respect to property
acquired by the person;
(e) obligations with respect to capital leases;
Page 11
(f) indebtedness relating to the financing of accounts
receivable of Borrower or any of its Subsidiaries;
(g) indebtedness not otherwise permitted by Section 5.5,
provided that the sum of such indebtedness for
borrowed money plus the aggregate sum of all other
indebtedness shall not exceed in any event 20% of the
Tangible Net Worth of Borrower at any time;
(h) unsecured indebtedness of Borrower incurred in
connection with interest rate, currency or commodity
swap agreement, interest rate cap agreement, interest
rate collar agreement, or other agreement or
arrangement designated to protect against fluctuation
in interest rates, currency exchange rates, commodity
prices or securities issued by Borrower in connection
with a securities repurchase program, in each case
entered into for the purpose of directly mitigating
market risk and not for speculation; and
(i) extensions, refinancings, modifications, amendments
and restatements of any items of Permitted
Indebtedness and other indebtedness permitted by
Section 5.5.
8.16 "PERMITTED INVESTMENTS" means:
(a) investments existing on the Closing Date;
(b) cash equivalents and marketable securities;
(c) investments consisting of the endorsement of
negotiable instruments for deposit or collection or
similar transactions in the ordinary course of
business;
(d) advances to customers or suppliers in the ordinary
course of business:
(e) investments consisting of (i) compensation of
employees, officers and directors of Borrower or its
Subsidiaries so long as the Board of Directors of
Borrower determines that such compensation is in the
best interests of Borrower, (ii) travel advances,
employee relocation loans and other employee loans
and advances in the ordinary course of business,
(iii) loans to employees, officers or directors
relating to the purchase of equity securities of
Borrower or its subsidiaries pursuant to employee
stock purchase plans approved by Borrower's Board of
Directors, and (iv) other loans to officers and
employees approved by the Board of Directors;
(f) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of
delinquent obligations of, and other disputes with,
customers or suppliers arising in the ordinary course
of business;
(g) investments pursuant to contracts of the type
described in clause (h) of the definition of
Permitted Indebtedness;
(h) investments consisting of prepaid royalties and other
credit extensions to, customers and suppliers who are
not affiliates, in the ordinary course of business;
(i) investments constituting acquisitions permitted under
Section 5.1, if any;
(j) deposit accounts of Borrower and any Subsidiaries
thereof maintained in the ordinary course of
business;
(k) investments accepted in connection with transfers
permitted by Section 5.1;
Page 12
(l) investments (whether consisting of the purchase of
securities, loans, capital contributions or
otherwise) of Borrower in or to Subsidiaries and
investments by Borrower in or to companies which
simultaneously with such investments become
Subsidiaries; provided, that accounts payable of
Subsidiaries owing to Borrower incurred in the
ordinary course of business consistent with the
general past business practices of Borrower and
Subsidiaries are not subject to the foregoing
limitations;
(m) investments (whether consisting of the purchase of
securities, loans, capital contributions, or
otherwise) of Subsidiaries in or to other
Subsidiaries or in or to Borrower;
(n) investments by Borrower consisting of the purchase of
securities of Borrower in an aggregate amount not in
excess of 20% of the Tangible Net Worth of Borrower
on a consolidated basis; and
(o) other investments aggregating not in excess of 10% of
the Tangible Net Worth of Borrower on a consolidated
basis.
8.17 "PERMITTED LIENS" means:
(a) liens disclosed on Schedule 5.3 attached hereto and
made a part hereof;
(b) liens for taxes, fees, assessments or other
governmental charges or levies which are not
delinquent or being contested in good faith by
appropriate proceedings;
(c) liens (a) upon or in any real property acquired or
held by Borrower or any of its Subsidiaries to secure
the purchase price of such property or indebtedness
incurred solely for the purpose of financing the
acquisitions of such property or (b) existing on such
property at the time of its acquisition, provided
that the lien is confined solely to the property so
acquired and improvements thereon, and the proceeds
of such property;
(d) suppliers', carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's, or other
similar liens arising in the ordinary course of
business which are not delinquent for a period of
more than thirty days or remain payable without
penalty or which are being contested in good faith
and by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale
of the property subject thereto;
(e) liens (other than any lien imposed ERISA) consisting
of pledges or deposits required in the ordinary
course of business in connection with workers'
compensation, unemployment insurance and other social
security legislation;
(f) liens securing obligations in respect of capital
leases on assets subject to such leases;
(g) leases or subleases and non-exclusive licenses and
sublicenses to others in the ordinary course of
Borrower's business not interfering in any material
respect with the business of Borrower and its
Subsidiaries taken as a whole, and any interest or
title of a lessor, licensor or under any lease or
license;
(h) liens arising from judgments, decrees or attachments
in circumstances not constituting an Event of
Default;
(i) easements, reservations, rights-of-way, restrictions,
encroachments, minor defects or irregularities in
title or survey defects and other similar charges or
encumbrances affecting real property not constituting
a Material Adverse Effect;
Page 13
(j) liens which constitute rights of set-off of a
customary nature or bankers' liens with respect to
amounts on deposit, whether arising by operation of
law or by contract, in connection with arrangements
entered into with banks in the ordinary course of
business;
(k) liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of
customs duties in connection with the importation of
goods;
(l) liens on insurance proceeds in favor of insurance
companies granted solely as security for financed
premiums;
(m) liens in favor of a trustee under any indenture
relating to Subordinated Debt securing only amounts
due to such trustee thereunder; and
(n) liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by
liens of the type described in clauses (a) through
(m) above, provided that any extension, renewal, or
replacement lien shall be limited to the property
encumbered by the existing lien and the principal
amount of the indebtedness.
8.18 "PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
8.19 "PRIME RATE" means the rate most recently announced by ▇▇▇▇▇
Fargo at its principal office in San Francisco, California as its "Prime Rate",
with the understanding that the Prime Rate is one of ▇▇▇▇▇ Fargo's base rates
and serves as the basis upon which effective rates of interest are calculated
for those loans making reference thereto, and is evidenced by the recording
thereof after its announcement in such internal publication or publications as
▇▇▇▇▇ Fargo may designate. Any change in an interest rate resulting from a
change in the Prime Rate shall become effective as of 12:01 a.m. of the Banking
Day on which each change in the Prime Rate is announced by ▇▇▇▇▇ Fargo.
8.20 "SUBORDINATED DEBT" means Borrower's 3-1/2%/ 7-1/4% Step-Up
Convertible Notes Due 2004 as amended, supplemented, extended, restated, renewed
or otherwise modified from time to time ("Convertible Notes"), and any other
indebtedness of Borrower subordinated to the Obligations by an instrument or
agreement in form reasonably acceptable to Trade Bank or by subordination
language reasonably acceptable to Trade Bank in the instrument evidencing such
indebtedness.
8.21 "SUBSIDIARY" means (i) any corporation at least the majority
of whose securities having ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) are at the time owned by Borrower and/or one or more Subsidiaries,
and (ii) any joint venture or partnership in which Borrower and/or one or more
Subsidiaries has a majority interest.
8.22 "▇▇▇▇▇ FARGO" means ▇▇▇▇▇ Fargo Bank, N.A.
IX. ARBITRATION
9.1 ARBITRATION. The parties hereto agree, upon demand by any
party, to submit to binding arbitration all claims, disputes and controversies
between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise arising out
of or relating to in any way (i) the loan and related loan and security
documents which are the subject of this Agreement and its negotiation,
execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination; or (ii) requests for additional credit.
9.2 GOVERNING RULES. Any arbitration proceeding will (i) proceed
in a location in California selected by the American Arbitration Association
("AAA"); (ii) be governed by the Federal Arbitration Act (Title 9 of the United
States
Page 14
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all
reasonable costs and expenses incurred by such other party in compelling
arbitration of any dispute. 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. Section 91 or any similar applicable state law.
9.3 NO WAIVER OF PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE.
The arbitration requirement does not limit the right of any party to (i)
foreclose against real or personal property collateral; (ii) exercise self-help
remedies relating to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional or ancillary remedies such as
replevin, injunctive relief, attachment or the appointment of a receiver, before
during or after the pendency of any arbitration proceeding. This exclusion does
not constitute a waiver of the right or obligation of any party to submit any
dispute to arbitration or reference hereunder, including those arising from the
exercise of the actions detailed in sections (i), (ii) and (iii) of this
paragraph.
9.4 ARBITRATOR QUALIFICATIONS AND POWERS. Any arbitration
proceeding in which the amount in controversy is $5,000,000.00 or less will be
decided by a single arbitrator selected according to the Rules, and who shall
not render an award of greater than $5,000,000.00. Any dispute in which the
amount in controversy exceeds $5,000,000.00 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. The arbitrator will be a
neutral attorney licensed in the State of California or a neutral retired judge
of the state or federal judiciary of California, in either case with a minimum
of ten years experience in the substantive law applicable to the subject matter
of the dispute to be arbitrated. The arbitrator will determine whether or not an
issue is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator 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.
9.5 DISCOVERY. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly limited
to matters directly relevant to the dispute being arbitrated and must be
completed no later than 20 days before the hearing date and within 180 days of
the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.
9.6 CLASS PROCEEDINGS AND CONSOLIDATIONS. The resolution of any
dispute arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.
9.7 PAYMENT OF ARBITRATION COSTS AND FEES. The arbitrator shall
award all costs and expenses of the arbitration proceeding.
Page 15
9.8 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 or by applicable law or
regulation. 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 documents between the parties or the subject matter of the
dispute shall control. This Agreement may be amended or modified only in writing
signed by each party hereto. If any provision of this Agreement shall be held to
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. This arbitration provision shall survive termination, amendment or
expiration of any of the documents or any relationship between the parties.
Borrower and Trade Bank have caused this Agreement to be executed by
their duly authorized officers or representatives on the date first written
above.
"BORROWER"
CYMER, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Argus, III
---------------------------------
Title: Sr. Vice President and CFO
---------------------------------
Borrower's Address:
------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
"LENDER"
▇▇▇▇▇ FARGO HSBC TRADE BANK,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
Lender's Address:
----------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Page 16
EXHIBIT A
▇▇▇▇▇ FARGO HSBC TRADE BANK ADDENDUM TO CREDIT AGREEMENT
--------------------------------------------------------------------------------
THIS ADDENDUM IS ATTACHED TO THE CREDIT AGREEMENT ("CREDIT AGREEMENT") BETWEEN
▇▇▇▇▇ FARGO HSBC TRADE BANK AND THE FOLLOWING BORROWER:
NAME OF BORROWER: CYMER, INC.
ADDITIONAL AFFIRMATIVE COVENANTS
The following covenants are part of Article IV of the Credit Agreement:
REPORTS. Borrower will furnish the following information or deliver the
following reports to Trade Bank at the times indicated below:
- ANNUAL FINANCIAL STATEMENTS AND 10K SEC FILING. Not later than NINETY (90)
calendar days after and as of the end of each of Borrower's fiscal years,
an annual unqualified audited consolidated financial statement of Borrower
prepared by KPMG or a certified public accountant reasonably acceptable to
Trade Bank and prepared in accordance with GAAP, to include balance sheet,
income statement, statement of cash flow, and a copy of Borrower's 10K
Statement filed with the Securities and Exchange Commission ("SEC").
- QUARTERLY 10Q SEC FILING. Not later than FORTY-FIVE (45) calendar days
after and as of the end of each of Borrower's fiscal quarters, a copy of
Borrower's 10Q Statements filed with the SEC.
- ADDITIONAL FINANCIAL INFORMATION. Such financial information as Trade Bank
may reasonably request from time to time.
FINANCIAL COVENANTS. Borrower will maintain the following (if Borrower has any
Subsidiaries which must be consolidated under GAAP, the following applies to
borrower and the consolidated Subsidiaries):
- TANGIBLE NET WORTH. On a quarterly basis (determined as of each calendar
quarter-end) not less than $300,000,000, PLUS FIFTY PERCENT (50%) OF NET
INCOME (AFTER TAXES) (WITHOUT DEDUCTIONS FOR LOSSES) EARNED EACH QUARTER
COMMENCING WITH QUARTER ENDING DECEMBER 31, 2000. ("TANGIBLE NET WORTH"
means the aggregate of total consolidated assets determined in accordance
with GAAP PLUS Subordinated Debt LESS, without duplication (i) all assets
which would be classified as intangible assets under GAAP, including, but
not limited to, goodwill, patents, trademarks, trade names, copyrights,
capitalized software, research and development expenses except prepaid
expenses and all reserves not already deducted from assets and (ii) Total
Liabilities)
- TOTAL LIABILITIES DIVIDED BY TANGIBLE NET WORTH. On a quarterly basis
(determined as of each calendar quarter-end) not greater than 1.0 TO 1.0.
("Tangible Net Worth" has the meaning given to it above, and "Total
Liabilities" means at any date as of which the amount thereof shall be
determined, all obligations that should, in accordance with GAAP be
classified as liabilities on the consolidated balance sheet of Borrower,
excluding Subordinated Debt.)
- QUICK ASSET RATIO. On a quarterly basis (determined as of each calendar
quarter-end) not less than 1.75 TO 1.0. ["QUICK ASSET RATIO" means "Quick
Assets" divided by total current liabilities, (not including deferred
revenues and Subordinated Debt) including, but not limited to, current
liabilities due to Trade Bank under this Facility, and "QUICK ASSETS" means
cash on hand or on deposit in banks, cash equivalents, long-term marketable
securities, certificates of deposit and banker's acceptances, and accounts
receivable).]
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- NET INCOME AFTER TAXES. Not less than $1 on a quarterly basis (determined
as of each fiscal quarter-end) based on the sum of the results of four
consecutive quarters consisting of the present quarter and the three
preceding quarters.
- MINIMUM LIQUIDITY. Not at any time less than $60,000,000. ("MINIMUM
LIQUIDITY" means cash on hand or on deposits in banks and cash
equivalents.)
BY SIGNING HERE BORROWER AGREES TO THE DESIGNATED PROVISIONS IN THIS ADDENDUM:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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(SIGNATURE)
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EXHIBIT B
▇▇▇▇▇ FARGO HSBC TRADE BANK REVOLVING CREDIT FACILITY SUPPLEMENT
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THIS SUPPLEMENT IS AN INTEGRAL PART OF THE CREDIT AGREEMENT BETWEEN ▇▇▇▇▇ FARGO
HSBC TRADE BANK AND THE FOLLOWING BORROWER:
NAME OF BORROWER: CYMER, INC.
CREDIT LIMIT FOR THIS REVOLVING CREDIT LOAN FACILITY AND SUBLIMITS: Credit
Limit: $10,000,000 (subject to dollar limitations in Section 1.2 of Agreement)
FACILITY DESCRIPTION: Trade Bank will make the Revolving Credit Facility
available to Borrower for general working capital purposes and other general
corporate requirements. Revolving Credit Loans cannot be used to repay
outstanding Revolving Credit Loans or Term Loans that have matured or to repay
amounts due under any other Facilities provided to Borrower.
FACILITY DOCUMENTS:
- REVOLVING CREDIT LOANS NOTE: The term and prepayment conditions of the
Loans under Revolving Credit Facility are set forth in Revolving Credit
Loans Note.
TERMS:
- LOANS UNDER REVOLVING CREDIT CLEAN-UP PROVISION: The unpaid principal
balance of all Loans under Revolving Credit Facility must be kept at zero
for at least THIRTY (30) consecutive calendar days during each of
Borrower's fiscal years.
- MATURITY: All Revolving Credit Loans will mature on JUNE 15, 2002.
- PREPAYMENTS: Prepayments of outstanding Revolving Credit Loans are
permitted only as set forth in the Revolving Credit Loans Note.
INTEREST RATES:
- LOANS UNDER REVOLVING CREDIT FACILITY: All outstanding Loans under
Revolving Credit Facility will bear interest at the following rate:
PRIME RATE: A rate per annum equal to the Prime Rate in effect from day
to day, or at Borrower's option, OTHER RATE: A rate per annum equal to
LIBOR plus 1.75%.
INTEREST PAYMENT DATES: Interest on all outstanding Loans under
Revolving Credit Facility will be paid at least once each month on the
first day of the month.
BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS SUPPLEMENT: /s/ WA
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EXHIBIT C
▇▇▇▇▇ FARGO HSBC TRADE BANK COLLATERAL/CREDIT SUPPORT DOCUMENT
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NONE
BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS EXHIBIT: /s/ WA
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