Exhibit 10 (a)
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of March 26, 1998
between
KULICKE AND SOFFA INDUSTRIES, INC.
and
PNC BANK, NATIONAL ASSOCIATION
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION 1
SECTION 1.01 Definitions 1
SECTION 1.02 Interpretation of Financial Measurements;
Financial Statements 9
SECTION 2. THE REVOLVING LOAN 9
SECTION 2.01 Revolving Loan 9
SECTION 2.02 The Note 10
SECTION 2.03 Use Of Revolving Loan Proceeds 11
SECTION 2.04 Interest Rates and Calculation of
Interest 11
SECTION 2.05 Payments to Bank 17
SECTION 2.06 Exchange Rate Indemnification 18
SECTION 2.07 Special Provisions Regarding Alternate
Currencies 20
SECTION 2.08 European Monetary Union 21
SECTION 2.09 Right of Setoff 22
SECTION 2.10 Due Date Extension 22
SECTION 2.11 Mandatory Prepayment; Optional Prepayment;
Application of Payments;
Repayment Premium 22
SECTION 2.12 Fees 23
SECTION 2.13 Participations 23
SECTION 2.14 Extensions of Revolving Loan
Termination Date 24
SECTION 3. CONDITIONS 24
SECTION 3.01 Documents Required for the Closing 24
SECTION 3.02 Certain Events 26
SECTION 4. [Intentionally omitted] 27
SECTION 5. REPRESENTATIONS, WARRANTIES AND SURVIVAL 27
SECTION 5.01 Representations and Warranties 27
SECTION 5.02 Survival 30
SECTION 5.03 No Default 31
SECTION 6. COVENANTS 31
SECTION 6.01 Affirmative Covenants 31
SECTION 6.02 Negative Covenants 33
SECTION 7. DEFAULT 36
SECTION 7.01 Events of Default 36
SECTION 7.02 Remedies 38
SECTION 8. MISCELLANEOUS 38
SECTION 8.01 Construction 38
SECTION 8.02 Further Assurance 39
SECTION 8.03 Enforcement and Waiver by Bank 39
SECTION 8.04 Expenses of Bank 39
SECTION 8.05 Notices 39
SECTION 8.06 Waiver and Release by Borrower 40
SECTION 8.07 Applicable Law 41
SECTION 8.08 Binding Effect; Assignment and Entire
Agreement 41
SECTION 8.09 Severability 41
SECTION 8.10 Counterparts 41
SECTION 8.11 Headings 41
SECTION 8.12 Modification 41
SECTION 8.13 Third Parties 41
SECTION 8.14 Seal 41
SECTION 8.15 Waiver of Jury Trial 41
SECTION 8.16 Jurisdiction 42
SECTION 8.17 Indemnity 42
SECTION 8.18 Most Favored Lender 42
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of March
26, 1998 (herein called the "Agreement"), is entered into between
KULICKE AND SOFFA INDUSTRIES, INC., a Pennsylvania corporation
(the "Borrower") and PNC BANK, NATIONAL ASSOCIATION, a national
banking association, successor by merger to Midlantic Bank, N.A.
(the "Bank").
WITNESSETH:
A. Borrower desires to establish certain financing
arrangements with and borrow funds from Bank and Bank is willing
to establish such arrangements for and make loans and advances to
Borrower under the terms and provisions hereinafter set forth.
B. The parties desire to define the terms and conditions of
their relationship and to reduce their agreements to writing.
C. It is intended hereby to restate the terms of all prior
agreements between the parties relative to the credit facilities
included herein, including the terms of (i) that certain Loan
Agreement dated November 27, 1991 by and between Borrower and
Bank, as amended to date, (ii) that certain Restated Loan
Agreement dated September 14, 1995 by and between Borrower and
Bank, as amended to date and (iii) that certain Restated Loan
Agreement dated April 10, 1996 by and between Borrower and Bank,
as amended to date.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, covenant and agree as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
SECTION 1.01 Definitions.
"Alternate Currency" shall mean, in each case subject to
availability, any of the following currencies: Australian
Dollars, British Pounds Sterling, Canadian Dollars, Deutsche
Mark, French Francs, Italian Lira, Spanish Pesetas, Swiss Francs
and Japanese Yen, together with such other freely convertible
foreign currencies as may be requested by Borrower and are
acceptable to Bank in its sole discretion.
"Annual Financial Statements" shall mean the annual
financial statements of Borrower and its Subsidiaries, including
all notes thereto, which statements shall include a balance sheet
as of the end of a fiscal year and an income statement and a
statement of cash flows for such year, all setting forth in
comparative form the corresponding figures from the previous
year, all prepared in conformity with Generally Accepted
Accounting Principles and accompanied by a financial audit of
independent certified public accountants who are reasonably
satisfactory to Bank which shall state that such accountants have
audited such financial statements and that such financial
statements are in conformity with Generally Accepted Accounting
Principles.
"Applicable Percentage" shall mean, for purposes of
calculating the Unused Commitment Fee payable under Section
2.12(A) hereof:
(1) .15% for any Quarterly Period next following a fiscal
quarter in which Borrower's Leverage Ratio equals or is less than
fifteen percent (15%), as reflected in Borrower's Compliance
Certificate for such fiscal quarter;
(2) .175% for any Quarterly Period next following a fiscal
quarter in which Borrower's Leverage Ratio is greater than
fifteen percent (15%) and equal to or less than thirty percent
(30%), as reflected in Borrower's Compliance Certificate for such
fiscal quarter;
(3) .20% for any Quarterly Period next following a fiscal
quarter in which Borrower's Leverage Ratio is greater than thirty
percent (30%), as reflected in Borrower's Compliance Certificate
for such fiscal quarter.
"Bank Indemnitees" shall mean Bank, any pledgee, assignee or
subsequent holder or owner of the Note or any interest in the
Note, including each Participant, any affiliate, successor,
assign or subsidiary of Bank or any Participant, and each of
their respective shareholders, members, directors, officers,
employees, counsel, agents and contractors, as well as their
respective heirs, beneficiaries, administrators, executors,
personal representatives, trustees, receivers, successors and
assigns.
"Business Day" shall mean a day, other than a Saturday or
Sunday, on which Bank is open for business.
"Closing Date" shall mean the date of this Agreement.
"Collateral Documents" shall mean all of the documents and
instruments to be executed and delivered to Bank by either
Borrower or any Subsidiary in connection with the transactions
described in or contemplated by this Agreement.
"Dollar Equivalent" shall mean, as of any date of
determination, the amount determined by Bank in accordance with
its usual procedures as the amount of U.S. Dollars when converted
from the Alternate Currency at Bank's spot selling rate for such
Alternate Currency.
"Domestic Subsidiary" shall mean any corporation or other
legal entity organized under the laws of any jurisdiction in the
United States of America of which Borrower either directly or
indirectly owns more than seventy-five percent (75%) of any class
or classes of securities or other similar units of ownership or
control.
"EBITA" shall mean net income plus the sum of interest
expense, taxes and amortization during the period for which net
income was calculated, provided that there shall not be included
in net income (a) any gains resulting from the write-up of
assets; (b) any proceeds of any life insurance policy; or (c) any
gain or loss which is classified as "extraordinary" in accordance
with Generally Accepted Accounting Principles. (Net income can be
less than zero for all purposes of this Agreement.)
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"Event of Default" shall mean an event specified in Section
7 hereof.
"Financial Statements" means any Annual Financial
Statements.
"Foreign Subsidiary" shall mean any corporation or other
legal entity organized under the laws of any jurisdiction other
than those which comprise any part of the United States of
America of which Borrower either directly or indirectly owns more
than seventy-five percent (75%) of any class or classes of
securities or other similar units of ownership or control.
"Generally Accepted Accounting Principles" or "GAAP" shall
mean, with respect to any Person, such accounting practice as, in
the opinion of the independent accountants retained by such
Person and who are reasonably acceptable to Bank, conforms at the
time to generally accepted accounting principles, consistently
applied. Generally accepted accounting principles means those
principles and practices which are (a) recognized as such by the
Financial Accounting Standards Board, (b) applied for all periods
after the date hereof in a manner consistent with the manner in
which such principles and practices were applied to the most
recent financial statements of the relevant Person furnished to
Bank, and (c) consistently applied for all periods after the date
hereof so as to reflect properly the financial condition, and
results of operations and cash flows, of such Person. If any
change in any accounting principle or practice is required by the
Financial Accounting Standards Board in order for such principle
or practice to continue as a generally accepted accounting
principle or practice, all reports and financial statements
required hereunder shall be prepared in accordance with such
change. Solely for purposes of this Agreement, if any such
material change is made, then either (i) the financial covenants
shall be appropriately modified by agreement between the parties
to reflect such change or (ii) if no such agreement is reached,
the financial covenant compliance computations shall be computed
without regard to such change.
"Guaranty" shall mean each Guaranty and Suretyship Agreement
which is now or hereafter executed by any of the then-current
Domestic Subsidiaries and delivered to Bank in accordance with
the provisions of Sections 3.01(G) or 6.02 of this Agreement.
"Indebtedness" shall mean all items of indebtedness,
obligation or liability, due or to become due, liquidated or
unliquidated, direct or contingent, joint or several, of any
nature whatsoever and out of whatever transaction arising,
including, without limitation:
(A) All indebtedness guaranteed, directly or indirectly, in
any manner, or endorsed (other than for collection or deposit in
the ordinary course of business) or discounted with recourse;
(B) All indebtedness in effect guaranteed, directly or
indirectly, through agreements, contingent or otherwise to (l)
purchase such indebtedness, (2) purchase, sell or lease (as
lessee or lessor) property, products, materials or supplies, or
to purchase or sell services, primarily for the purpose of
enabling any debtor to make payment of such indebtedness or to
assure the owner of the indebtedness against loss, or (3) supply
funds to or in any other manner invest in any debtor;
(C) All indebtedness secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance upon property
owned or acquired subject to such mortgage, deed of trust,
pledge, lien, security interest, charge or encumbrance, whether
or not the liabilities secured thereby have been assumed; and
(D) All indebtedness incurred as the lessee of goods or
services under leases that, in accordance with GAAP, consistently
applied, should be reflected on the lessee's balance sheet.
"Interest Coverage Ratio" shall mean, as of any date, the
ratio of (a) EBITA for the 12 months then ended, to (b) interest
expenses for such period.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended.
"Investment" shall mean for purposes of Section 6.02(A)
hereof any loan or advance to or equity investment in any Person
by Borrower or any Subsidiary.
"Laws" shall mean all ordinances, statutes, rules,
regulations, orders, injunctions, writs or decrees of any
government or political subdivision or agency thereof or any
court or similar entity established by any thereof.
"Leverage Ratio" means, as of any date, the ratio of (a)
Senior Indebtedness as of such date to (b) the sum of Senior
Indebtedness and Net Worth on such date.
"Liquidity Ratio" shall mean, as of any date, the sum of
cash, cash investments which constitute Permitted Investments
(valued at then-current market prices) and accounts receivable as
of such date, divided by the sum of current liabilities and the
outstanding principal balance of all Senior Indebtedness as of
such date.
"Material Adverse Effect" shall mean any specified event,
condition or occurrence as to Borrower which individually or in
the aggregate with any other such event, condition or occurrence
and whether through the effect on Borrower's business, property,
prospects, profits or condition (financial or otherwise) or
otherwise could reasonably be expected to (a) result in, to the
extent not fully covered by insurance, any liability, loss,
forfeiture, penalty, costs, fine, expense, payment or other
monetary obligation or loss of property of Borrower in excess of
5% of Borrower's consolidated shareholder's equity, determined in
accordance with GAAP, as reflected in Borrower's then most
recently prepared annual or quarterly financial statements,
and/or (b) materially impair the ability of Borrower to meet all
of its Obligations to Bank.
"Material Subsidiary" shall mean any Subsidiary in which
either (i) the aggregate revenue generated by such Subsidiary
equals or exceeds an amount equal to ten percent (10%) of the
consolidated aggregate revenues generated by Borrower and its
Subsidiaries on any rolling four (4) quarter basis, or (ii) the
aggregate book value of the assets of such Subsidiary equals or
exceeds ten percent (10%) of the then-current book value of all
the assets of Borrower and its Subsidiaries.
"Net Worth" shall mean the excess of assets over liabilities
as would be shown on a balance sheet of Borrower, prepared in
accordance with GAAP, consistently applied, plus Subordinated
Indebtedness.
"Note" shall mean the promissory note evidencing Borrower's
promise to repay the Revolving Loan.
"Obligations" shall mean the obligations of Borrower to pay
the principal of and interest on the Note and to satisfy and
perform all of its other existing and future obligations,
liabilities and indebtedness to Bank under this Agreement and the
Note, whether matured or unmatured, direct or contingent, joint
or several, including, without limitation, any extensions,
modifications, renewals thereof and substitutions therefor.
"Participants" shall mean each Person to which Bank may
pursuant to Section 2.13 hereof sell participations in all or any
portion of the Revolving Loan.
"Permitted Investments" shall mean (a) direct obligations
of, or obligations fully and unconditionally guaranteed by, the
United States of America, (b) deposit accounts in, or
certificates of deposit issued by, any commercial bank in the
United States of America having total capital and surplus in
excess of Seventy-Five Million Dollars ($75,000,000) or
certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation, (c) investment grade (rated in one
of the four highest rating categories) commercial paper, bankers'
acceptances or similar financial instruments, (d) investment
grade bonds (rated in one of the four highest rating categories),
(e) mutual funds having at least eighty percent (80%) of their
assets in cash and/or investments included in (a), (b), (c) or
(d) above, (f) time deposits in commercial banks at subsidiary
locations, (g) money market mutual funds, (h) floating rate notes
resetting every 30 days or less (and rated in one of the four
highest rating categories), (i) taxable or tax-exempt auction
rate preferred stock resetting every 7, 28, 35 or 49 days (and
rated in one of the four highest rating categories), (j)
repurchase agreements, the collateral for which is a Permitted
Investment, (k) corporate bonds and medium term notes of U.S.
corporations with a maturity date not to exceed 3 years from date
of investment by Borrower and a credit rating of not less than A
from Standard & Poor's or Moody's, and/or (l) asset backed
securities having a credit rating by Standard & Poors or Moody's
of not less than A.
"Permitted Liens" shall mean:
(A) Liens for taxes, assessments or similar charges
incurred in the ordinary course of business which are not yet due
and payable;
(B) Pledges or deposits made in the ordinary course of
business to secure repayment of workers' compensation, or to
participate in any fund in connection with compensation,
insurance, old-age pensions or other social security programs, as
well as any underlying lien, if any, being replaced by such
pledge or deposit;
(C) Liens of mechanics, materialmen, warehousemen,
carriers, or other like lienors, securing obligations incurred in
the ordinary course of business that are not yet due and payable;
(D) Good faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or
leases, not in excess of ten percent (10%) of the aggregate
amount due thereunder unless the amount due thereunder is less
than $1,000,000, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in
the ordinary course of business, as well as any underlying lien,
if any, being replaced by such pledge, deposit or bond;
(E) Liens in favor of Bank;
(F) Purchase money security interests covering real estate
or equipment in favor of the vendor or financier thereof,
provided that the principal amount secured by each such security
interest does not exceed the unpaid purchase price for such real
estate or equipment;
(G) Liens and encumbrances granted by (i) the Further
Debenture dated October 2, 1995 between American Fine Wire
Limited ("AFWL") and Rothschild Australia LTD ("RAL"), (ii) the
Security Agreement dated December 31, 1992 between American Fine
Wire Corporation ("AFW") and RAL and (iii) those certain Guaranty
and Indemnity Agreements dated December 31, 1992 among RAL and
each of AFWL, AFW & Dr. Mueller Feindraht AG, as such agreements
are in effect on the date hereof (the "RAL Agreements").
(H) Liens existing on any asset of any Person at the time
such Person is acquired by Borrower and/or becomes a Subsidiary
of Borrower and not created in contemplation of such event; and
-acquired in connection with an acquisition permitted by
this Agreement and securing Indebtedness incurred to complete the
acquisition, so long as the ratio of the principal amount of such
Indebtedness to the value of the assets secured by such Liens
does not exceed fifty percent (50%), and such Indebtedness is not
secured by any assets other than the newly-acquired assets.
"Person" shall mean any individual, corporation,
participation, association, joint-stock company, trust,
unincorporated organization, joint venture, court or government
division or agency thereof.
"Pledge Agreement" shall mean each Pledge Agreement which is
now or hereafter executed by Borrower and delivered to Bank in
accordance with the provisions of Sections 3.01(H), 3.01 (K),
6.01(N) or 6.02 of this Agreement.
"Quarterly Period" shall have the meaning given thereto in
Section 2.04(A) hereof.
"Rates" shall mean the respective rates of interest
specified in Section 2 of this Agreement.
"Revolving Loan" shall mean the revolving loan facility
established pursuant to Section 2.01 of this Agreement.
"Revolving Loan Limit" shall mean $60,000,000.
"Revolving Loan Termination Date" shall mean March 26, 2003
or such other later date to which Bank and Borrower may (without
obligation to do so) hereafter agree in writing in connection
with any renewal or extension of the Revolving Loan.
"Senior Indebtedness" means, as of any date, all
Indebtedness for borrowed money, including cash advances under
the Revolving Loan and capital lease obligations, and including
further, without limitation, all Indebtedness for borrowed money
guaranteed by Borrower and the face amount of letters of credit
for which Borrower has any reimbursement obligation other than
Subordinated Indebtedness.
"Subordinated Indebtedness" shall mean Indebtedness the
repayment of which is subordinated to the Revolving Loan and all
other Obligations in form and manner satisfactory to Bank and its
counsel prior to the date actually incurred by Borrower.
"Subsidiary" shall mean either a Foreign Subsidiary or a
Domestic Subsidiary.
"Unused Commitment" shall mean on any day and for purposes
of Section 2.12(A) hereof, the Revolving Loan Limit minus the sum
of the principal amount of cash advances and the face amount of
letters of credit outstanding under Revolving Loan.
SECTION 1.02 Interpretation of Financial Measurements;
Financial Statements.
Except where specifically otherwise provided herein, all
financial measurements shall be computed for Borrower and its
Subsidiaries on a consolidated basis, and all references herein
to financial statements of Borrower shall be references to such
consolidated financial statements.
SECTION 2. THE REVOLVING LOAN.
SECTION 2.01 Revolving Loan. Under and subject to the
terms and conditions of this Agreement and within the Revolving
Loan Limit and as requested by an authorized officer of Borrower
from time to time through but not including the Revolving Loan
Termination Date, Bank hereby establishes a revolving loan
facility (the "Revolving Loan") pursuant to which Bank will from
time to time make cash advances to Borrower in either U.S.
Dollars or in any Alternate Currency and issue letters of credit
for the account of Borrower in U.S. Dollars. Notwithstanding the
foregoing, the aggregate face amount of all then-currently issued
and outstanding letters of credit issued in connection with the
Revolving Loan shall not exceed an amount equal to $5,000,000.
In no event shall the sum of (i) the aggregate unpaid principal
amount of advances made in connection with the Revolving Loan in
U.S. Dollars (individually, a "Domestic Advance" and
collectively, the "Domestic Advances"), (ii) the aggregate face
amount of all then-currently issued and outstanding letters of
credit issued in connection with the Revolving Loan and (iii) the
Dollar Equivalent of all unpaid principal amount of advances made
in connection with the revolving Loan in an Alternate Currency
(individually, an "Alternate Currency Advance" and collectively,
the "Alternate Currency Advances") exceed the Revolving Loan
Limit. Unless sooner terminated pursuant to any other provision
of this Agreement, the Revolving Loan will terminate and the
entire principal balance of the Revolving Loan, together with all
unpaid accrued interest thereon, shall be repaid on the Revolving
Loan Termination Date, without notice or demand. This shall
include, as to letters of credit outstanding on the Revolving
Loan Termination Date, payment by Borrower to Bank on the
Revolving Loan Termination Date of cash or cash equivalents
acceptable to Bank in an amount equal to the face amount of all
outstanding letters of credit. Cash advance made in connection
with the Revolving Loan must be requested and made in multiples
of $50,000. Each request for an advance under the Revolving Loan
must be received by Bank by 12:00 noon, Eastern time, at least
three (3) Business Days prior to the date of proposed
disbursement, must specify the date of borrowing and the amount
thereof and may be made by telephone, confirmed in writing as
Bank may require. Borrower authorizes Bank to accept telephonic
requests for advances, and Bank shall be entitled to rely upon
the authority of any person providing such instructions. Borrower
hereby indemnifies and holds Bank harmless from and against any
and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which may
arise or be created by the acceptance of such telephone requests
or making such advances, except to the extent caused by Bank's
gross negligence or willful misconduct. Bank will enter on its
books and records, which entry when made will be rebuttably
presumed correct, the date, the amount and the currency of each
advance, the interest rate and Rate Period applicable thereto, as
well as the date, amount and currency of each payment made by
Borrower. Upon the fulfillment of all applicable conditions to
such advance set forth herein, Bank will make such funds
available to Borrower by depositing same in Borrower's deposit
account with Bank or by issuing a letter of credit in accordance
with Borrower's then-current written instructions. The
outstanding principal balance under the Revolving Loan may
fluctuate from time to time, to be reduced by repayments made by
Borrower, to be increased by future loans, advances and
extensions of credit which may be made by Bank, to or for the
benefit of Borrower.
SECTION 2.02 The Note. Contemporaneously herewith,
Borrower will execute and deliver to Bank the Note to evidence
Borrower's obligation to repay Bank for all amounts due or which
may become due in connection with the Revolving Loan, with
interest, all as more fully described in the Note, the terms of
which are incorporated herein by reference.
SECTION 2.03 Use Of Revolving Loan Proceeds. Advances
under the Revolving Loan shall be used by Borrower exclusively
for general corporate purposes including, without limitation,
acquisitions of, and investments in, other entities as permitted
under this Agreement.
SECTION 2.04 Interest Rates and Calculation of Interest.
(A) As used in this Section 2.04, the following terms shall
have the following meanings:
(i) "Applicable Margin" means, with respect to
principal of the Revolving Loan for which a LIBOR Rate election
is being made:
(1) .40 percentage points for any Quarterly Period next
following a fiscal quarter in which Borrower's Leverage Ratio
equals or is less than fifteen percent (15%), as reflected in
Borrower's Compliance Certificate for such fiscal quarter;
(2) .60 percentage points for any Quarterly Period next
following a fiscal quarter in which Borrower's Leverage Ratio is
greater than fifteen percent (15%) and equal to or less than
thirty percent (30%), as reflected in Borrower's Compliance
Certificate for such fiscal quarter;
(3) .80 percentage points for any Quarterly Period next
following a fiscal quarter in which Borrower's Leverage Ratio is
greater than thirty percent (30%), as reflected in Borrower's
Compliance Certificate for such fiscal quarter.
With respect to principal of the Revolving Loan for which a LIBOR
Rate election is made, the Applicable Margin will remain fixed
for the applicable Rate Period regardless of any change in
Borrower's Leverage Ratio during such Rate Period.
(ii) "Base Rate" means the higher of (1) the Prime
Rate minus one-fourth of one percentage point (.25%) or (2) the
Fed Funds Rate plus one-half of one percentage point (.50%).
(iii) "Fed Funds Rate" means as of any date the
federal funds "offered" rate as most recently published in the
Money Rate section of the Wall Street Journal, provided that if
such rate ceases to be published, the Fed Funds Rate may be based
on such other index as Bank reasonably determines to be
comparable to such published rate.
(iv) "Good Business Day" means any day when both Bank
and banks in London, England are open for business.
(v) "LIBOR RATE" means, with respect to principal
of the Revolving Loan, for any day during each Rate Period, (a)
the per annum rate of interest determined by Bank by dividing
(the resulting quotient, rounded upwards, if necessary to the
nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Bank in accordance with its usual procedures
(which determination shall be conclusive, absent manifest error)
to be the "offered" rate for deposits of dollars (or in the case
of Alternate Currency Advances, the offered rate for deposits of
such Alternate Currency), as quoted by Exco-Noonan Incorporated
(or appropriate successor or, if Exco-Noonan or its successor
ceases to provide such quotes, a comparable replacement as
determined by the Bank) as evidenced on Dow Jones Markets Service
(formerly known as Telerate) display page 4756 or, in the case of
Alternate Currency Advances, the appropriate display page for
such Alternate Currency (or such other display page on the Dow
Jones Markets Service system as may replace display page) two (2)
Good Business Days prior to the first day of such Rate Period for
an amount comparable to such Revolving Loan and having a
borrowing date and a maturity comparable to such Rate Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage, plus (b) the Applicable Margin. The LIBOR rate may
also be expressed by the following formula:
Dow Jones Markets Service offered rate for such currency,
LIBOR Rate = as quoted by Exco-Noonan or appropriate successor
+ the Applicable Margin
1.00 - Euro-Rate Reserve Percentage
(vi) "Euro-Rate Reserve Percentage" means the maximum
effective percentage in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including,
without limitation, supplemental marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently
referred to as "eurocurrency liabilities").
(vii) "Maximum Tranches" means as of any date five (5)
(including Revolving Loans representing Domestic Advances and
Alternate Currency Advances) minus, if on such date there is
principal outstanding on the Revolving Loan earning interest at
the Base Rate, one (1).
(viii) "Notification" means, with respect to all
periods in which the LIBOR Rate is in effect, telephonic notice
(which shall be irrevocable) by an authorized officer of a
Borrower to Bank, which notice shall be given no later than 10:00
a.m. Philadelphia time, on the day which is at least four (4)
Business Days prior to the Business Day on which such rate is to
become effective, which notice shall specify (a) that a LIBOR
Rate is being selected for a portion of outstanding principal of
the Revolving Loan, (b) the principal amount of the Revolving
Loan to be subject to such rate; (c) the Rate Period(s) selected;
and (d) the date on which such request is to become effective
(which date shall be a date selected in accordance with Section
2.04(B) hereof).
(ix) "Prime Rate" means the rate publicly announced
by Bank from time to time as its prime rate. The Prime Rate is
determined from time to time by Bank as a means of pricing some
loans to its borrowers. The Prime Rate is not tied to any
external rate of interest or index, and does not necessarily
reflect the lowest rate of interest actually charged by Bank to
any particular class or category of customers.
(x) "Quarterly Period" means the period of
approximately three (3) calendar months commencing on the date
that Borrower in fact provides Bank with a Compliance Certificate
pursuant to Section 6.01(A)(3) of this Agreement and continuing
until the earlier of the date that Borrower either actually
provides or is next required to provide Bank with a Compliance
Certificate pursuant to Section 6.01(A)(3) of this Agreement.
(xi) "Rate Period" means, with respect to all periods
in which to the LIBOR Rate is in effect, the period of time for
which a particular LIBOR Rate shall apply to a portion of the
principal of the Revolving Loan. Rate Periods for principal
earning interest at the LIBOR Rate shall be for periods of 30,
60, 90 or 180 days, and for no other length of time, provided
that no Rate Period may end on other than a Business Day, or
after the Revolving Loan Termination Date.
(B)(1) Domestic Advances. The outstanding principal
balance of Domestic Advances of the Revolving Loan shall accrue
interest at the Base Rate such that, if and when either the Prime
Rate or the Fed Funds rate changes, and if such change causes the
Base Rate to change, the rate of interest with respect to any
advance to which the Base Rate applies shall change automatically
without notice to Borrower, effective on the date of any such
change. Notwithstanding the foregoing, by giving Notification,
Borrower may request to have all or a portion of the outstanding
principal of Domestic Advances of the Revolving Loan accrue
interest instead at the LIBOR Rate as follows: (i) with respect
to such principal amount of such Revolving Loan, from the date of
such Domestic Advance until the end of the Rate Period specified
in the Notification; and/or (ii) with respect to the principal
amount of such Revolving Loan outstanding and earning interest at
the LIBOR Rate at the time of the Notification related to such
principal amount, from the expiration of the then-current Rate
Period related to such principal amount until the end of the Rate
Period specified in the Notification; and/or (iii) with respect
to all or any portion of the principal amount of such Revolving
Loan outstanding and earning interest at the Base Rate at the
time of Notification, from the date set forth in the Notification
until the end of the Rate Period specified in the Notification.
(2) Alternate Currency Advances. The outstanding principal
balance of Alternate Currency Advances of the Revolving Loan
shall accrue interest at the LIBOR Rate as follows: (i) with
respect to such principal amount of such Revolving Loan, from the
date of such Alternate Currency Advance until the end of the Rate
Period specified in the Notification; and/or (ii) with respect to
the principal amount of such Revolving Loan outstanding and
earning interest at the LIBOR Rate at the time of the
Notification related to such principal amount, from the
expiration of the then-current Rate Period related to such
principal amount until the end of the Rate Period specified in
the Notification. In the event Borrower fails to provide a timely
Notification, such Revolving Loan shall accrue interest at the
LIBOR Rate for a one month Rate Period. Borrower shall repay all
principal and interest then-currently due and owing in connection
with each Alternate Currency Advance in the Alternate Currency in
which the underlying advance in question was made.
(3) Borrower understands and agrees: (i) that the LIBOR
Rate applicable to any portion of outstanding principal of the
Revolving Loan may be different from the LIBOR Rate applicable to
any other portion of outstanding principal of the Revolving Loan,
(ii) that no more than the Maximum Tranches of principal of the
Revolving Loan bearing interest at the LIBOR Rate may be
outstanding at any one time, (iii) that the minimum amount of
principal to which any LIBOR Rate shall apply shall be
$1,000,000, and (iv) that Bank shall have the right to terminate
any Rate Period, and the interest rate applicable thereto, prior
to maturity of such Rate Period, if Bank determines in good faith
(which determination shall be conclusive) that continuance of
such interest rate has been made unlawful by any Law to which
Bank or any Participant may be subject, in which event the
principal to which such terminated Rate Period relates thereafter
shall earn interest at the Base Rate.
(4) Borrower shall indemnify Bank and any Participant
against any and all loss or expense (excluding loss of margin)
which Bank or such Participant has sustained or incurred as a
consequence of: (a) any payment of any principal amount earning
interest at the LIBOR Rate on a day other than the last day of
the corresponding Rate Period (whether or not any such payment is
made pursuant to acceleration upon or after an Event of Default,
by reason of optional or mandatory prepayment, or for any other
reason, and whether or not any such payment is consented to by
Bank, unless Bank shall have expressly waived such indemnity in
writing), other than in connection with a prepayment made under
the circumstances set forth in Sections 2.04 (B)(5) or 2.04(B)(6)
hereof; (b) any attempt by Borrower to revoke in whole or part
any Notification given pursuant to this Agreement; or (c) any
attempt by Borrower to convert or renew any principal amount
earning interest at the LIBOR Rate on a day other than the last
day of the corresponding Rate Period (whether or not such
conversion or renewal is consented to by Bank, unless Bank shall
have expressly waived such indemnity in writing).
(5) In the event that, as a result of any changes in
applicable Law or the interpretation thereof, it becomes unlawful
for Bank or any Participant to maintain Eurodollar liabilities
sufficient to fund any LIBOR Rate loan, then Bank's obligations
to convert to or maintain a LIBOR Rate shall be suspended until
such time as Bank or such Participant may again cause the LIBOR
Rate to be applicable to its share of the Revolving Loan and such
principal earning interest at the LIBOR Rate shall accrue
interest instead at the Base Rate.
(6) The LIBOR Rate may, upon five (5) days' prior notice to
Borrower, be adjusted by Bank on a prospective basis to take into
account the additional or increased cost of maintaining any
necessary reserves for Eurodollar deposits (but without
duplication for any adjustment made on account of Eurocurrency
Reserve Requirements in determining the LIBOR Rate) or increased
costs due to changes in applicable law or regulation or the
interpretation thereof occurring subsequent to the commencement
of the then applicable Rate Period, including but not limited to
changes in tax laws (except changes of general applicability in
corporate income tax laws as they affect financial institutions)
and changes in the reserve requirements imposed by the Board of
Governors of the Federal Reserve System (or any successor) that
increase the cost to Bank or any Participant of funding the LIBOR
Rate. Bank shall promptly give Borrower notice of such a
determination and proposed adjustment, which determination shall
be conclusive as to the correctness of the fact and the amount of
such proposed adjustment. Borrower may, by written notice to Bank
provided within two (2) Business Days after the date of Bank's
notice to Borrower of such proposed adjustment, (a) request Bank
to furnish to Borrower a statement setting forth the basis for
adjusting such LIBOR Rate and the method for determining the
amount of such adjustment, and/or (b) prepay that portion of
principal of the Revolving Loan accruing interest at the LIBOR
Rate with respect to which such adjustment is made, and/or (c)
elect to have that portion of principal of the Revolving Loan
accruing interest at the LIBOR Rate accrue interest, effective on
the first Business Day after Bank's receipt of such written
notice, at the Base Rate for the balance of the applicable Rate
Period.
(7) In the event that Borrower shall have requested the
LIBOR Rate in accordance herewith and Bank shall have reasonably
determined that Eurodollar deposits equal to the amount of the
principal to earn interest at the LIBOR Rate and for the Rate
Period specified are unavailable, impractical or unlawful with
respect to Bank or any Participant, or that the rate based on the
LIBOR Rate will not adequately and fairly reflect the cost to
Bank or any Participant of the LIBOR Rate applicable to the
specified Rate Period, of making or maintaining the principal
amount of the Revolving Loan at the LIBOR Rate specified by
Borrower during the Rate Period specified, or that by reason of
circumstances affecting Eurodollar markets, adequate and
reasonable means do not exist for ascertaining the rate based on
the LIBOR Rate applicable to the specified Rate Period, Bank
shall promptly give notice of such determination to Borrower that
the LIBOR Rate is not available. A determination by Bank
hereunder shall be conclusive evidence of the correctness of the
fact and amount of such additional costs or unavailability. Upon
such a determination, (i) the right of Borrower to select,
convert to, or maintain a LIBOR Rate shall be suspended until
Bank shall have notified Borrower that such conditions shall have
ceased to exist, and (ii) that portion of the Revolving Loan
subject to the requested LIBOR Rate shall accrue interest instead
at the Base Rate.
(C) Interest accruing at the LIBOR Rate (other than in the
case of advances in British Pounds Sterling) shall be computed on
the basis of a 360 day year but charged for the actual number of
days elapsed, while interest accruing at the Base Rate or
advances in British Pounds Sterling shall be computed on the
basis of a 365 or 366 day year, as the case may be.
Notwithstanding the foregoing, interest on advances made in any
additional Alternate Currency that may subsequently be permitted
by Bank, in its discretion, after the date of this Agreement,
will be calculated on the then-current normal basis for similar
advances made by commercial lenders in such subsequently
permitted Alternate Currency advance.
(D) If, at any time, any of the Rates shall be finally
determined by any court of competent jurisdiction, governmental
agency or tribunal to exceed the maximum rate of interest
permitted by any applicable Laws, then, for such time as such
Rate would be deemed excessive, application thereof shall be
suspended and there shall be charged in lieu thereof the maximum
rate of interest permissible under such Laws.
(E) Should there occur an Event of Default under this
Agreement which is not cured within fifteen (15) days after the
occurrence thereof, then, during the continuance of such Event of
Default (i) interest on Domestic Advances shall automatically and
without notice or demand increase to a rate per annum which is
two (2) percentage points above the Base Rate, but in no event
with respect to any portion of principal less than interest on
such portion at the rate accruing prior to such Event of Default
and (ii) interest on any Alternate Currency Advance or other
amount due and payable in an Alternate Currency shall
automatically and without notice or demand increase to a rate per
annum which is equal to the sum of two hundred (200) basis points
(2%) in excess of the interest rate per annum at which one (1)
day deposits (or if such amount remains unpaid for more than
three (3) business days, then for such other period of time as
Bank may elect) in the relevant Alternate Currency in the amount
of such overdue payment are offered by major banks in the
appropriate market. If at any time such deposits are not offered,
then Borrower shall pay interest on such amount at the rate per
annum reasonably determined by Bank in its discretion.
(Collectively, such rates are referred to herein as the "Default
Rate"). Interest at the Default Rate shall continue to accrue
notwithstanding the entry of any judgment hereon or on the Note,
and all such judgments shall bear interest at the Default Rate
provided for herein.
(F) Interest on the Revolving Loan shall be payable
quarterly on the first day of each calendar quarter or, as to
interest accruing at the LIBOR Rate, on the last day of the Rate
Period or on the 90th day of the Rate Period if the Rate Period
exceeds 90 days.
SECTION 2.05 Payments to Bank. All payments of interest on
and principal of the Revolving Loan, all fees and all other sums
payable to Bank hereunder shall be paid directly to Bank in
immediately available funds at such address as Bank shall
designate from time to time in writing to Borrower, in such
currency of the United States of America as is, at the time of
payment, legal tender for the payment of public and private
debts, except that in the case of Alternate Currency Advances,
Borrower shall make each payment of interest and shall repay
principal in the Alternate Currency in which the Alternate
Currency Advance in question was originally made. To the extent
Bank sends Borrower statements of any amounts due or outstanding
hereunder for interest or principal, such statements shall be
considered correct and conclusively binding on Borrower unless
Borrower notifies Bank in writing to the contrary within ten (10)
days of the date any statement which it deems to be incorrect is
received by Borrower, specifying the reason for its position.
Bank is hereby irrevocably authorized to charge Borrower's
deposit accounts with Bank, and/or charge the Revolving Loan, for
any and all principal, interest and any other amounts due from
Borrower to Bank hereunder and under any of the Collateral
Documents.
SECTION 2.06 Exchange Rate Indemnification. (a) The
specification herein that payment be made in U.S. Dollars or a
specific Alternate Currency, as the case may be, at such office
or offices of Bank as Bank shall from time to time designate is
of the essence for purposes of the transactions described in this
Agreement. Thus, if payment is not made in the currency due
hereunder (the "Contractual Currency") or if any court or
tribunal shall render a judgment or order for the payment of
amounts due hereunder and such judgment is expressed in a
currency other than the Contractual Currency, Borrower shall
indemnify and hold Bank harmless against any deficiency in terms
of the amount received by Bank arising or resulting from any
variation as between (i) the rate of exchange at which the
Contractual Currency is converted into the currency actually
received or the currency in which the judgment is expressed (the
"Received Currency") and (ii) the rate of exchange at which Bank
would, in accordance with normal banking procedures, be able to
purchase the Contractual Currency with the Received Currency by
Bank on the Business Day following receipt of the Received
Currency. If the court or tribunal has fixed the date on which
the rate of exchange is determined for the conversion of the
judgment currency into the Contractual Currency (the "Conversion
Date") and if there is a change in the rate of exchange
prevailing between the Conversion Date and the date of receipt by
Bank, then Borrower will, notwithstanding such judgment or order,
pay such additional amount as may be necessary to ensure that the
amount paid in the Received Currency when converted at the rate
of exchange prevailing on the date of receipt will produce the
amount then due to Bank from Borrower hereunder in the
Contractual Currency. In the event that, as a result of the
exchange rate variations set forth in this Section 2.06(a), funds
received by Bank in the Received Currency exceed the
corresponding amounts due in the Contractual Currency (including
but not limited to principal, accrued interest and associated
costs and expenses, if any), such excess amount shall be promptly
remitted to Borrower.
(b) If Borrower shall wind up, liquidate, dissolve or
become bankrupt while there remains outstanding (i) any amounts
owing to Bank in connection with the Revolving Loan, (ii) any
damages owing to Bank in respect of a breach of any of the terms
hereof or (iii) any judgment or order rendered in respect of such
amounts or damages, Borrower shall indemnify and hold Bank
harmless against any deficiency in terms of the Contractual
Currency in the amounts received by Bank arising or resulting
from any variation as between (i) the rate of exchange at which
the Contractual Currency is converted into another currency (the
"Liquidation Currency") for purposes of such winding-up,
liquidation, dissolution or bankruptcy with regard to the amount
in the Contractual Currency due or contingently due hereunder or
under any judgment or order into which the relevant obligations
hereunder shall have been merged and (ii) the rate of exchange at
which Bank could, in accordance with normal banking procedures be
able to purchase the Contractual Currency with the Liquidation
Currency at the earlier of (A) the date of payment of such
amounts or damages and (B) the final date or dates for the filing
of proofs of a claim in a winding-up, liquidation, dissolution or
bankruptcy. As used in the preceding sentence, the "final date or
dates for the filing of proofs of a claim in a winding-up,
liquidation, dissolution or bankruptcy" shall be the date fixed
by the liquidator or other appropriate person or otherwise
applicable under the applicable law as being the last practicable
date as of which the liabilities of Borrower may be ascertained
for such winding-up, liquidation, dissolution or bankruptcy
before payment by the liquidator or other appropriate person in
respect thereof.
(c) Borrower agrees to indemnify Bank against any loss or
expense (excluding loss of margin) which Bank may sustain or
incur in liquidating or employing deposits from third parties
acquired to effect, fund or maintain any Alternative Currency
Advance or any part thereof as a consequence of (i) Borrower's
failure to make a payment on the due date thereof, (ii)
Borrowers' failure to borrow under, convert to or renew under the
applicable interest rate on the proposed effective date of such
borrowing, conversion or renewal, or (iii) Borrower's payment,
prepayment or conversion of any Alternative Currency Advance on a
day other than the last day of the applicable Rate Period, other
than a prepayment under the circumstances set forth in Section
2.07. Bank's determination of an amount payable under this
paragraph (c) shall, in the absence of manifest error, be
conclusive and shall be payable on demand.
(d) If any withholding or other tax required to be paid by
Borrower hereunder is not paid and is imposed on and paid by
Bank, Borrower shall indemnify Bank and reimburse Bank for the
amount of such payment, together with any interest, penalties and
expenses in connection therewith, whether or not such tax shall
have been correctly or legally imposed.
(e) The indemnities provided by this Section 2.06 shall
constitute obligations of Borrower separate and independent from
its other obligations hereunder, shall give rise to separate and
independent causes of action against Borrower, shall apply
irrespective of any indulgence granted by Bank from time to time
and shall continue in full force and effect notwithstanding any
judgment or order or the filing of any proofs of claim in the
winding-up, liquidation, dissolution or bankruptcy of Borrower
for a liquidated sum in respect of other amounts due hereunder or
any damages owing to Bank in respect of any breach of the terms
hereof or of any other Loan Document or any judgment rendered in
respect of such amounts or damages.
SECTION 2.07 Special Provisions Regarding Alternate
Currencies. If Bank determines that (a) by reason of
circumstances affecting the market generally, adequate means do
not exist for ascertaining a rate of interest for the applicable
Alternate Currency, or (b) it has become unlawful, impractical or
commercially unreasonable for Bank to make or maintain an advance
at a particular Alternate Currency, then Bank shall give notice
thereof to Borrower. Thereafter, (x) Borrower shall repay the
applicable advance in the Alternate Currency at the expiration of
the then current Rate Period and convert such advance to an
available Alternate Currency or domestic currency on such
expiration date, (y) Borrower's option to permit advances in such
Alternate Currency shall be suspended, and (z) the interest rate
shall be converted at the expiration of the then current term, at
Borrower's election, to a rate in an available Alternate
Currency, or to either the Base Rate or the LIBOR Rate. In
addition, if, after the Closing Date, any enactment, promulgation
or adoption of or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration
thereof by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by Bank with any guideline, request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or
impossible for Bank to make or maintain or fund loans at the
applicable rate in the Alternate Currency, Bank shall notify
Borrower. Upon receipt of such notice, (a) the applicable portion
shall be repaid and converted to an available Alternate Currency
or domestic currency, and (b) the interest rate shall be
converted, at Borrower's election, to a rate quoted by Bank in an
available Alternate Currency, or to either the LIBOR Rate or the
Base Rate, in both cases on either (i) the last day of the then
current Rate Period, if Bank may lawfully continue to maintain
loans at such rate and Alternate Currency to such day, or (ii)
immediately if Bank may not lawfully continue to so maintain such
loans.
SECTION 2.08 European Monetary Union. (a) If, as a result
of the implementation of the European monetary union (i) any
Alternate Currency ceases to be lawful currency of the nation
issuing the same and is replaced by a European common currency
(the "Euro") or (ii) any Alternate Currency and the Euro are at
the same time recognized by any governmental authority of the
nation issuing such currency as lawful currency of such nation
and Bank shall so request in a notice delivered to Borrower, then
any amount payable hereunder by any party hereto in such
Alternate Currency shall instead by payable in the Euro and the
amount so payable shall be determined by translating the amount
payable in such Alternate Currency to the Euro at the exchange
rate recognized by the European Central Bank for the purpose of
implementing the European monetary union. Prior to the occurrence
of the event or events described in clause (i) or (ii) of the
preceding sentence, each amount payable hereunder in any
Alternate Currency will, except as otherwise provided herein,
continue to be payable only in such Alternate Currency.
(b) Borrower agrees, at the request of Bank, to compensate
Bank for any loss, cost, expense or reduction in return that Bank
shall reasonably determine to be incurred or sustained by Bank as
a result of the implementation of the European monetary union and
that would not have been incurred or sustained but for the
transactions described in this Agreement. A certificate of Bank
setting forth Bank's determination of the amount or amounts
necessary to so compensate Bank shall be delivered to Borrower
and shall be conclusive absent manifest error so long as such
determination is made on a reasonable basis. Borrower shall pay
Bank the amount shown as due on any such certificate within ten
(10) days after receipt thereof.
(c) Borrower and Bank agree, at the time of or at any time
following the implementation of the European monetary union, to
use reasonable efforts to enter into an agreement amending this
Agreement in order to (i) reflect the implementation of such
monetary union on the transactions described in this Agreement,
(ii) permit, if feasible, the Euro to qualify as an Alternate
Currency under the terms and conditions of the definition of such
term in this Agreement and (iii) place Borrower and Bank in the
position with respect to the settlement of payments of the Euro
as they would have been with respect to the settlement of the
Alternate Currencies it replaced.
SECTION 2.09 Right of Setoff. In addition to all liens
upon and rights of setoff against the money, securities or other
property of Borrower given to Bank by law, Bank shall have, with
respect to Borrower's obligations to Bank under this Agreement
and to the extent permitted by law, a contractual possessory
security interest in and a contractual right of setoff against,
and Borrower hereby assigns, conveys, delivers, pledges and
transfers to Bank all of Borrower's right, title and interest in
and to, all deposits, moneys, securities and other property of
Borrower now or hereafter in the possession of or on deposit
with, or in transit to, Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or
whether held for safekeeping or otherwise, excluding, however,
all IRA, Keogh, and trust accounts. Every such security interest
and right of setoff may be exercised upon or after the occurrence
of an Event of Default and during the continuance thereof without
demand upon or notice to Borrower. Every such right of setoff
shall be deemed to have been exercised immediately upon the
occurrence of an Event of Default hereunder without any action of
Bank, although Bank may enter such setoff on its books and
records at a later time.
SECTION 2.10 Due Date Extension. If any payment of
principal of, or interest on any of the Revolving Loan or any
payment of any fee provided for herein or any other amount due
hereunder shall fall due on a day which is not a Business Day of
Bank, then such due date shall be extended to the next succeeding
Business Day and additional interest and fees shall accrue and be
payable for the period of such extension.
SECTION 2.11 Mandatory Prepayment; Optional Prepayment;
Application of Payments; Repayment Premium.
(a) In the event the aggregate principal amount of the
Revolving Loan (including the face amount of all outstanding
letters of credit and all related reimbursement obligations)
shall at the time of any determination of the Revolving Loan
Limit be in excess of the Revolving Loan Limit at such time,
Borrower will forthwith without notice or demand, repay and
reduce the principal balance of the Revolving Loan in an
aggregate amount equal to such excess.
(b) Borrower may at its option but subject to the terms of
subpart (d) below and Section 2.04(B)(4) and Section 2.06, prepay
the principal of any Domestic Advance or Alternate Currency
Advance. Notwithstanding the foregoing, if Borrower prepays all
or any part of any Domestic Advance or any Alternate Currency
Advance which is accruing interest at the then-current LIBOR Rate
on any day other than the last day of the applicable Rate Period,
Borrower also shall pay to Bank, on demand therefor, the Cost of
Prepayment. For the purposes hereof, the term "Cost of
Prepayment" means such additional amount, if any (in each case as
specified by Bank in a certificate setting forth the basis of
such computation), as is necessary to compensate Bank for any
loss or costs (excluding loss of margin) incurred by it for the
remainder, if any, of the then current Rate Period as a
consequence of such prepayment. The Cost of Prepayment shall also
apply to any payments in respect of advances bearing interest at
the LIBOR Rate made after acceleration of the maturity of the
Revolving Loan.
(c) For purposes of subparts (a) and (b), Borrower will at
the time of prepayment designate the portion(s) of principal
earning interest at a particular Rate(s) to which such prepayment
is to be applied.
(d) Notwithstanding anything in subparts (a) (b) to the
contrary, upon acceleration by Bank of the Obligations after the
occurrence of an Event of Default, Bank may apply any and all
payments to any portion of the Revolving Loan in any order as it
shall in its discretion determine.
SECTION 2.12 Fees.
Borrower agrees to pay Bank the following fees:
(A) Unused Commitment Fee. Borrower shall pay Bank an
unused commitment fee equal to the Applicable Percentage of the
daily average Unused Commitment, calculated and payable quarterly
in arrears.
(B) Letter of Credit Fees. Borrower shall pay to Bank in
connection with letters of credit 1% per annum (calculated on the
basis of a 360 day year) on the face amount thereof, payable upon
issuance and on each anniversary thereof.
(C) Modification Fee. Borrower shall pay Bank a loan
modification fee in the amount of Fifteen Thousand Dollars
($15,000) on the Closing Date.
SECTION 2.13 Participations. Borrower acknowledges that
Bank may from time to time sell participations in all or any
portion of the Revolving Loan to one or more financial
institutions (each a "Participant") as participant of Bank in the
Revolving Loan. In this regard, Borrower agrees that Bank may,
subject to the following sentence, from time to time provide
financial and other information concerning Borrower to each
Participant as well as to any or prospective participant. Bank
agrees to exercise all reasonable efforts to keep any information
delivered or made available by Borrower confidential from anyone
other than persons employed or retained by Bank who are or are
expected to become engaged in evaluating, approving, structuring
or administering the Revolving Loan, provided that nothing herein
shall prevent Bank from disclosing such information (i) to any
affiliate of Bank, (ii) upon the order of any court or
administrative agency, (iii) upon the request or demand of any
regulatory agency or authority having jurisdiction over Bank,
(iv) which has been publicly disclosed, (v) in connection with
any litigation relating to the Revolving Loan, this Agreement or
any transaction contemplated hereby to which Bank or Borrower may
be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to Bank's legal
counsel and independent auditors, and (viii) to any actual or
proposed Participant or assignee of all or any part of the
Revolving Loan hereunder, if such other Person, prior to such
disclosure, agrees for the benefit of Borrower to comply with the
provisions of this Section 2.13.
SECTION 2.14 Extensions of Revolving Loan Termination
Date. At any time after the first anniversary of the Closing
Date, Borrower shall be permitted to seek annual one (1) year
extensions of the Revolving Loan Termination Date upon the
delivery of written notice thereof to Bank. (Borrower shall not
be permitted to deliver such written notices to Bank more
frequently than once in any twelve (12) month period.) Within a
reasonable period of time following the receipt of such notice by
Bank, Borrower shall provide Bank with such information
concerning its financial condition and business operations as
Bank shall reasonably request in connection with the formulation
of its decision to either approve or deny the request in
question. Within a reasonable period of time following the
receipt of such information from Borrower, Bank shall notify
Borrower in writing of its decision to either approve or deny the
request in question. (Notwithstanding any expressed or implied
provision in this Agreement to the contrary, Bank shall be
permitted to approve or deny each such extension request in its
sole and absolute discretion.)
SECTION 3. CONDITIONS.
The making of the Revolving Loan hereunder is subject to the
following conditions precedent (all documents to be in form and
substance satisfactory to Bank and its counsel):
SECTION 3.01 Documents Required for the Closing. Borrower
shall have duly delivered to Bank the following on the Closing
Date:
(A) The Note, duly executed on behalf of Borrower;
(B) A certified (as of the date of the Closing hereof) copy
of resolutions of board of directors of Borrower authorizing the
execution, delivery and performance of this Agreement, the Note,
the Collateral Documents and each other document and instrument
to be delivered pursuant hereto and any other instrument,
agreement or document referred to herein;
(C) A certified (as of the date of the Closing) copy of
Borrower's by laws;
(D) A certificate (dated the date of the Closing) of
Borrower's corporate secretary or assistant secretary as to the
incumbency and specimen signatures of the officers of Borrower
executing this Agreement, the Note, the Collateral Documents and
each other document to be delivered pursuant hereto or thereto;
(E) A copy, certified as of the most recent date
practicable by the appropriate Secretary of State, of Borrower's
articles of incorporation, together with a certificate (dated the
date of the Closing) of Borrower's corporate secretary or
assistant secretary to the effect that such certificate of
incorporation has not been amended since the date of the
aforesaid certification;
(F) Certificates, as of the most recent dates practicable,
of the aforesaid Secretaries of State, the Secretary of State of
each state in which Borrower is qualified as a foreign
corporation, and the department of revenue or taxation of each of
the foregoing states, as to the subsistence and good standing of
Borrower;
(G) A valid, binding and enforceable Guaranty and
Suretyship Agreement from each Domestic Subsidiary (other than
Kulicke and Soffa Investments, Inc., a Delaware corporation) in
favor of Bank, each in form and content identical to that which
is attached hereto as Exhibit 6.02(B) to this Agreement and which
require each Domestic Subsidiary to be jointly and severally
liable to Bank for the payment and performance by Borrower of the
Obligations;
(H) A valid, binding and enforceable Pledge Agreement from
Borrower in favor of Bank in form and content identical to that
which is attached hereto as Exhibit 6.01(N) to this Agreement
which encumbers sixty-five percent (65%) of the Borrower's
ownership interest in each Foreign Subsidiary for which either
(i) the aggregate revenue generated by such Foreign Subsidiary
equals or exceeds an amount equal to ten percent (10%) of the
consolidated aggregate revenues generated by Borrower and its
Subsidiaries on the Closing Date, or (ii) the aggregate book
value of the assets of a such Foreign Subsidiary equals or
exceeds ten percent (10%) of the then-current aggregate book
value of all of the assets of Borrower and its Subsidiaries as of
the Closing Date, together with the original stock certificates
which evidence sixty-five percent (65%) of the Borrower's
ownership interest therein in accordance with and subject to the
terms and provisions set forth therein.
(I) A written opinion of counsel to Borrower, dated the
date of the Closing Date and addressed to Bank, in form and
substance satisfactory to Bank and its counsel;
(J) A certificate, dated the date of the Closing Date,
signed by the president or a vice president of Borrower to the
effect that:
(1) The representations and warranties set forth in
Section 5 of this Agreement are true, complete and correct as of
the date of the Closing;
(2) No Event of Default hereunder, and no event which,
with the giving of notice or the passage of time, or both, could
become such an Event of Default, has occurred as of the date of
the Closing;
(3) No material adverse change has occurred in
Borrower's financial condition since that reflected in the most
recent Financial Statements delivered to Bank; and
(4) All conditions to Closing set forth in this
Agreement have been fulfilled.
(K) A valid, binding and enforceable Pledge Agreement from
Borrower in favor of Bank in form and content identical to that
which is attached hereto as Exhibit 6.01(N) to this Agreement and
which encumbers one hundred percent (100%) of the Borrower's
ownership interest in Kulicke and Soffa Investments, Inc., a
Delaware corporation, together with the original stock
certificates which evidence such ownership interest of Borrower
therein, in accordance with and subject to the terms and
provisions set forth in such Pledge Agreement.
SECTION 3.02 Certain Events. At the time of the Closing
and each request for an advance or letter of credit under the
Revolving Loan, no Event of Default shall have occurred and be
continuing, and no event shall have occurred and be continuing
which, with the giving of notice or the passage of time, or both,
could constitute an Event of Default.
SECTION 4. [Intentionally omitted]
SECTION 5. REPRESENTATIONS, WARRANTIES AND SURVIVAL.
SECTION 5.01 Representations and Warranties. To induce
Bank to enter into this Agreement, Borrower represents and
warrants to Bank that:
(A) Borrower is a corporation duly organized, validly
existing and in good standing under the Laws of its state of
incorporation as shown on Exhibit 5.01(A) to this Agreement;
Borrower has the lawful power to own its property and to engage
in the business it conducts, and is duly qualified and in good
standing in each of the jurisdictions where the nature of its
business makes such qualification necessary and where the failure
to so qualify would have a Material Adverse Effect; the states in
which Borrower is qualified to do business, and the addresses and
counties of all places of business of Borrower, are as set forth
in Exhibit 5.01(A) to this Agreement;
(B) Borrower is not in default with respect to any of its
existing Indebtedness where such default would have a Material
Adverse Effect, and the making and performance of this Agreement,
the Note and the Collateral Documents will not (immediately, with
the passage of time, or with the giving of notice and the passage
of time):
(1) Violate the charter, minutes or by-law provisions
of Borrower or violate any Laws or result in a default under any
contract, agreement or instrument to which Borrower is a party or
by which Borrower or its property is or may be bound, where the
same would have a Material Adverse Effect, or
(2) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the
assets of Borrower, except such as are in favor of Bank;
(C) Borrower has the power and authority to enter into and
perform this Agreement, the Note and the Collateral Documents and
to incur the Obligations herein and therein provided for, and has
taken all proper and necessary action, corporate or otherwise, to
authorize the execution, delivery and performance of this
Agreement, the Note and the Collateral Documents;
(D) This Agreement is and the Collateral Documents and the
Note when executed and delivered will be, valid, binding and
enforceable against Borrower in accordance with their respective
terms, except to the extent that the enforceability thereof is
limited by bankruptcy and similar laws and equitable principles
affecting the rights of creditors generally;
(E) Except as disclosed in Exhibit 5.01(E) to this
Agreement, there are no judgments or judicial or administrative
orders or proceedings or other litigation pending, or threatened,
against or affecting Borrower in any court or before any
governmental authority or arbitration board or tribunal, and
Borrower is not in violation of any order of any court,
governmental authority, arbitration board or tribunal or
administrative agency, or any applicable statute, regulation or
ordinance of the United States of America, or of any state, city,
town, municipality, county or of any other jurisdiction, or of
any agency thereof (including without limitation, environmental
laws and regulations), which would have a Material Adverse
Effect;
(F) As of the date of the most recent Financial Statements,
Borrower has not had any Indebtedness which is required by GAAP
to be disclosed therein including, without limitation,
liabilities for taxes and any interest or penalties relating
thereto, except to the extent reflected (in a footnote or
otherwise) and reserved against in the Financial Statements or as
disclosed in or permitted by this Agreement. Borrower does not
know of any basis for the assertion against it of any liability
required by GAAP to be disclosed in the Financial Statements not
fully reflected and reserved against therein;
(G) Borrower has filed all federal, state and local tax
returns and other reports as required by Law to be filed by it
prior to the date hereof, has paid or caused to be paid all
taxes, assessments and other governmental charges that are due
and payable prior to the date hereof, and has made adequate
provision for the payment of such taxes, assessments or other
charges accruing but not yet payable, where the failure to do any
of the foregoing would have a Material Adverse Effect, except to
the extent that Borrower is contesting the same in good faith and
by appropriate proceeding and an adequate reserve has been made
therefor. Borrower has no knowledge of any deficiency or
additional assessment against it in connection with any taxes,
assessments or charges not provided for on its books the failure
to pay any of which would have a Material Adverse Effect;
(H) Except as otherwise disclosed in Exhibit 5.01(H) to
this Agreement, Borrower has complied with all applicable Laws
the noncompliance with which would have a Material Adverse Effect
with respect to (1) restrictions, specifications or other
requirements pertaining to products that it manufactures and
sells or to the services it performs, or that it intends to
manufacture, sell or perform, (2) the conduct or planned conduct
of its business operations, and (3) the use, maintenance and
operation or planned use, maintenance and operation of the real
and personal property owned or leased by it in the operation or
planned operation of its business. Exhibit 5.01(H) to this
Agreement discloses any and all such noncompliance by Borrower
with all such applicable Laws as of the date hereof;
(I) All necessary consents, approvals or authorizations of,
or filing, registration or qualification with, any Person
required to be obtained by Borrower in connection with the
execution and delivery of this Agreement, the Note and the
Collateral Documents or the undertaking or performance of any
Obligation hereunder or thereunder has been obtained;
(J) Any employee benefit plan including those subject to
ERISA maintained by Borrower or to which Borrower contributed or
contributes meets the minimum funding standards established in
Section 302 of ERISA and complies in all material respects with
all applicable requirements of ERISA and of the Internal Revenue
Code and with all applicable rulings and regulations issued under
the provisions of ERISA and the Internal Revenue Code, and no
Prohibited Transaction or Reportable Event, within the meaning of
Section 4043 of ERISA, has occurred and is outstanding with
respect to any employee benefit plan of Borrower. Furthermore, no
employee benefit plan, including pension plan, has asserted or
threatened to assert a claim or demand for withdrawal liability
under ERISA as a result of any withdrawal from any said plan by
Borrower or any member of its Controlled Group which has occurred
on or before the date hereof;
(K) Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of the
Revolving Loan will be used, directly or indirectly, to purchase
or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock;
(L) Borrower has obtained all licenses, permits, franchises
or other governmental authorizations necessary to the ownership
of its property and assets and to the conduct of its business,
the failure to obtain which would have a Material Adverse Effect;
(M) Borrower is not a guarantor or surety of, or otherwise
responsible in any manner with respect to, any undertaking of any
other Person except as set forth in the Financial Statements and
except for guaranties in favor of suppliers of Subsidiaries the
indebtedness guarantied by which does not exceed $1,000,000 at
any time outstanding in the aggregate;
(N) Except as disclosed in Exhibit 5.01(E) to this
Agreement, Borrower has no knowledge of any violations which
would have a Material Adverse Effect of any state or federal
statutes, regulations, laws or orders pertaining to environmental
matters, including, without limitation the federal Comprehensive
Environmental Response Compensation and Liability Act,
Environmental Cleanup Responsibility Act and the Federal Resource
Conservation and Recovery Act relating to the operations and
properties of Borrower;
(O) Except as disclosed in Exhibit 5.01(E) to this
Agreement, Borrower has not received a summons, citation, notice,
directive, letter or other communication, written or oral, from
any state or federal agency concerning any intentional or
unintentional action or omission by Borrower resulting in any
material releasing, spilling, leaking, pumping, pouring,
emitting, emptying, dumping or otherwise disposing of Hazardous
Waste (as defined in 12 U.S.C. Section 6903(5)) or Hazardous
Substance (as defined in 42 U.S.C. Section 9609(14));
(P) Borrower has no corporate affiliates other than as set
forth in Exhibit 5.01(P) to this Agreement; and
(Q) There are no liens, security interests or other
encumbrances on or affecting any of Borrower's personal or real
property, other than Permitted Liens.
SECTION 5.02 Survival. By completing the Closing, Bank
does not thereby waive any breach of warranty or
misrepresentation made by Borrower hereunder, or under any other
document or agreement delivered to Bank at Closing or otherwise
referred to herein, and all of Bank's claims and rights resulting
from any breach or misrepresentation by Borrower is expressly
reserved by Bank. All of the foregoing representations and
warranties set forth in this Section 5 shall survive until all
Obligations hereunder are paid and satisfied in full.
SECTION 5.03 No Default. Each request by a Borrower that
Bank make an advance or issue a letter of credit under the
Revolving Loan shall, as of the date of such request, constitute
a representation and warranty by Borrower to Bank that no Event
of Default or event which with the passage of time or the giving
of notice or both would constitute an Event of Default exists
hereunder.
SECTION 6. COVENANTS.
SECTION 6.01 Affirmative Covenants. Borrower covenants and
agrees with Bank that, so long as any of the Obligations
hereunder remain unsatisfied or Bank has any commitment in
connection therewith, it will comply with the following
covenants:
(A) Borrower will furnish to Bank:
(1) Within one hundred five (105) days after each
fiscal year of Borrower, a copy of Borrower's Annual Financial
Statements;
(2) Within sixty (60) days of the close of each of the
first three fiscal quarters, and within one hundred twenty (120)
days of the close of its fiscal year, a copy of Borrower's Form
10Q for such fiscal quarter and with its Form 10K for such fiscal
year, as filed with the Securities and Exchange Commission;
(3) Concurrently with the foregoing, a certificate
(the "Compliance Certificate") of Borrower, certified by its
chief financial officer, reflecting compliance or non-compliance
with the financial covenants set forth in Exhibit 6.01(L) to this
Agreement.
(B) Borrower will maintain its properties and the
properties of its Material Subsidiaries in good condition and
repair (normal wear and tear excepted), and will pay and
discharge or cause to be paid and discharged when due, the cost
of repairs to or maintenance of the same, and will pay or cause
to be paid all rental payments due.
(C) Borrower will carry insurance and cause each of its
Material Subsidiaries to carry insurance with reputable insurers
in form and amount and against fire (with extended coverage),
liability and such other risks as are customary with companies in
the same or similar business in the same area as Borrower or the
Material Subsidiary in question.
(D) Borrower will pay or cause to be paid when due, and
cause each of its Material Subsidiaries to pay or cause to be
paid when due, all taxes, assessments and charges or levies
imposed upon Borrower or the Material Subsidiary in question or
on any of its property or which it is required to withhold and
pay over, except where contested in good faith by appropriate
proceedings with adequate reserves therefor (as determined by
Borrower's certified public accountants) having been set aside on
its books.
(E) Borrower and its Material Subsidiaries will maintain
complete and accurate books and records and will permit access by
Bank during business hours to such books and records and will
permit Bank to inspect their respective properties and
operations. Bank may at any time and from time to time on
reasonable notice to Borrower, audit and conduct examinations of
Borrower's and any of its Subsidiaries books and records and
accounts receivable and make abstracts and copies thereof.
(F) Borrower will take all necessary steps to preserve and
qualify its existence and franchises and comply with all present
and future Laws applicable to it in the operation of its
business, where the failure to do so would have a Material
Adverse Effect, and cause each of its Subsidiaries to do the
same.
(G) Borrower will give immediate notice to Bank of (1) any
litigation to which it or any of its Subsidiaries is a party if
an adverse decision therein would have a Material Adverse Effect,
and (2) the institution of any other suit or any administrative
proceeding involving Borrower or any of its Subsidiaries that
would have a Material Adverse Effect.
(H) Borrower will notify Bank immediately upon becoming
aware of the occurrence of any Event of Default or of any fact,
condition or event that, with the giving of notice or passage of
time, or both, could become an Event of Default, or of the
failure of Borrower to observe any of its undertakings hereunder.
(I) [Intentionally omitted]
(J) Borrower will (1) fund all its employee benefit plans
in accordance with no less than the minimum funding standards of
Section 302 of ERISA, (2) promptly advise Bank of the occurrence
of any Reportable Event or Prohibited transaction with respect to
any such Employee Benefit Plan(s) and the action which Borrower
propose to take with respect thereto, (3) promptly advise Bank of
any claim for withdrawal liability made against it or a member of
its Controlled Group and (4) cause each of its Material
Subsidiaries do the same.
(K) All Financial Statements to be furnished by Borrower to
Bank shall be correct and complete, and fairly and fully present
in accordance with Generally Accepted Accounting Principles the
financial condition of Borrower and its Subsidiaries as of the
date(s) thereof and the results of the operations for the periods
covered thereby.
(L) Borrower will comply with the financial covenants set
forth in Exhibit 6.01(L) to this Agreement.
(M) Borrower will maintain its major and primary deposit
accounts with Bank.
(N) Immediately after the time that either (i) the
aggregate revenue generated by a particular Foreign Subsidiary
equals or exceeds an amount equal to ten percent (10%) of the
consolidated aggregate revenues generated by Borrower and its
Subsidiaries in that same fiscal year, or (ii) the aggregate book
value of the assets of a particular Foreign Subsidiary equals or
exceeds ten percent (10%) of the then-current aggregate book
value of all of the assets of Borrower and its Subsidiaries,
Borrower shall execute and deliver to Bank a Pledge Agreement in
form and detail identical to that which is attached hereto as
Exhibit 6.01(N) to this Agreement that covers sixty-five percent
(65%) of the ownership interest of Borrower in such Foreign
Subsidiary and shall also deliver the original stock certificates
which evidence sixty-five percent (65%) of the ownership interest
of Borrower therein to Bank in accordance with and subject to the
terms and provisions set forth therein; provided that the
foregoing pledge obligation shall not apply to AFW for so long as
it is prohibited from executing Pledge Agreements in favor of
Bank pursuant to the RAL Agreements.
SECTION 6.02 Negative Covenants. Borrower hereby covenants
and agrees that so long as any of the Obligations remain
unsatisfied, without the prior written consent of Bank:
(A) Borrower and its Subsidiaries will not hereafter (i)
enter into any merger, consolidation or reorganization with any
other Person, (ii) acquire any stock in any other Person, (iii)
acquire all or substantially all of the assets of any other
Person, (iv) acquire any partnership or joint venture interest in
any other Person or (v) make any Investment in any other Person
(other than a Permitted Investment and further Investments in
Subsidiaries that either have previously provided Bank with an
enforceable Guaranty or whose stock has been pledged to Bank
pursuant to a Pledge Agreement in the manner contemplated by
Section 6.01(N) of this Agreement), except (x) as otherwise
described in Exhibit 6.02(A) to this Agreement, (y) for mergers
with existing Subsidiaries where either Borrower or a wholly-
owned subsidiary of Borrower is the surviving entity and (z) for
mergers and acquisitions of any other Person or Investments in
any other Person which satisfy all of the following conditions:
(a) Borrower is the surviving entity with respect to
any such merger;
(b) Such merger, acquisition or Investment shall not
cause the aggregate book value of all such mergers, acquisitions
and Investments by Borrower and its Subsidiaries that took place
during the fiscal year of Borrower in question (i) in new
Subsidiaries and (ii) in existing Subsidiaries that either have
not previously provided Bank with an enforceable Guaranty or
whose stock was not pledged to Bank pursuant to a Pledge
Agreement in the manner contemplated by Section 6.01(N) of this
Agreement to exceed an amount equal to $50,000,000;
(c) if the Subsidiary being acquired is a Domestic
Subsidiary, then such Subsidiary shall simultaneously execute and
deliver to Bank a Guaranty and Suretyship Agreement in the form
of Exhibit 6.02(B) to this Agreement; and
(d) if the Subsidiary being acquired is a Foreign
Subsidiary, and either (i) the aggregate revenue generated by
such Foreign Subsidiary equals or exceeds an amount equal to ten
percent (10%) of the consolidated aggregate revenues generated by
Borrower and its Subsidiaries on the date such acquisition takes
place, or (ii) the aggregate book value of the assets of a such
Foreign Subsidiary equals or exceeds ten percent (10%) of the
then-current aggregate book value of all of the assets of
Borrower and its Subsidiaries as of the date such acquisition
takes place, then Borrower shall immediately execute and deliver
to Bank a valid, binding and enforceable Pledge Agreement from
Borrower in favor of Bank in form and content identical to that
which is attached hereto as Exhibit 6.01(N) to this Agreement
which encumbers sixty-five percent (65%) of the Borrower's
ownership interest in such Foreign Subsidiary, together with the
original stock certificates which evidence sixty-five percent
(65%) of the Borrower's ownership interest therein in accordance
with and subject to the terms and provisions set forth therein.
(B) Borrower and its Subsidiaries will not sell, transfer,
lease or otherwise dispose of all or any part of their respective
assets except for, in the aggregate (i) the sale of Inventory in
the ordinary course of its business, either directly to end
customers or to other Subsidiaries for the ultimate sale to end
customers, (ii) the disposition of Equipment for obsolescence or
which is in Borrower's reasonable judgment no longer necessary in
the operation of its business in the ordinary course thereof,
(iii) the transfer of assets between Subsidiaries that either
have provided Bank with an enforceable Guaranty or whose stock
has been pledged to Bank pursuant to a Pledge Agreement in the
manner contemplated by Section 6.01(N) of this Agreement and (iv)
any other disposition which does not exceed $1,000,000 per
disposition and $10,000,000 in the aggregate for all dispositions
made in any single fiscal year of Borrower. Notwithstanding the
foregoing, but only to the extent necessary to complete a pending
sale, transfer, lease or other disposal of one hundred percent
(100%) of Borrower's then-current ownership interest in any of
its then-current Subsidiaries in a manner that otherwise complies
in all respects with the applicable provisions of this Agreement,
upon the prior written request of Borrower received by Bank at
any time other than during the continuance of an Event of
Default, Bank agrees to execute all documentation reasonably
necessary to release its claims under either (i) the Guaranty, if
any, that such Subsidiary had previously executed and delivered
to Bank or (ii) the Pledge Agreement, if any, that Borrower
executed in connection with the pledge of the ownership interest
of Borrower in the Subsidiary in question.
(C) Borrower and its Subsidiaries will not mortgage,
pledge, grant or permit to exist a security interest in or lien
on any of its assets of any kind, real or personal, tangible or
intangible, now owned or hereafter acquired, except for Permitted
Liens.
(D) Borrower and its Subsidiaries will not directly or
indirectly apply any part of the proceeds of the Revolving Loan
to the purchasing or carrying of any "margin stock" within the
meaning of Regulation U of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations or rulings
thereunder.
(E) Except as set forth in Exhibit 6.02(E) to this
Agreement, Borrower will not suffer or permit any Subsidiary to
be subject to any agreement or restriction which prohibits such
Subsidiary from repaying or making cash dividends on or
reductions of any Investment in such Subsidiary.
SECTION 7. DEFAULT.
SECTION 7.01 Events of Default. Each of the following
events shall constitute an Event of Default and upon the
occurrence thereof Bank shall thereupon have the option (which is
not intended to diminish, alter or limit any other of Bank's
rights described in this Agreement, the Collateral Documents or
any related agreements and documents) (A) to declare Borrower in
default under this Agreement, the Collateral Documents, the Note,
and all other agreements with Bank, (B) to terminate any
undertaking of Bank in connection with the Revolving Loan, and
(C) require that Borrower provide Bank, and Borrower agree to
provide to Bank, cash or cash equivalents acceptable to Bank in
an amount equal to the face amount of all outstanding letters of
credit, and/or (D) to declare all Obligations immediately due and
payable, including, but not limited to, interest, principal,
expenses, advances to protect Bank's position and reasonable
attorneys' fees to enforce this Agreement, the Collateral
Documents, and all related agreements and documents, and all of
Bank's rights hereunder and thereunder, all without demand,
notice, presentment or protest, or further action of any kind:
(A) Borrower fails to pay to Bank within ten (10) days when
due any installment of principal, interest, fee or other charge
payable hereunder or under the Note or the Collateral Documents.
(B) Borrower or any of its Subsidiaries fail to observe or
perform any other Obligation to be observed or performed by it
hereunder, under the Note, the Guaranty or under any of the
Collateral Documents, or under any other existing or future
agreement between Borrower and/or any of its Subsidiaries and
Bank, which failure, to the extent reasonably susceptible of
cure, is not cured within thirty (30) days of the earlier of (i)
the date on which Borrower or the Subsidiary in question has
actual knowledge thereof and (ii) Bank's giving Borrower and/or
the Subsidiary in question written notice of the occurrence
thereof.
(C) Any Financial Statement or any representation made
herein or provided to Bank pursuant to any requirement hereof is
materially false, incorrect, or incomplete when made.
(D) Borrower or any of its Material Subsidiaries becomes
insolvent or generally fails to pay, or admits its inability to
pay, debts as they become due or makes a general assignment for
the benefit of any of its creditors.
(E) Borrower or any of its Material Subsidiaries applies
for, consents to, or acquiesces in the appointment of, a trustee,
receiver or other custodian for Borrower or any of its Material
Subsidiaries or any of the property of Borrower or any of its
Material Subsidiaries or, in the absence of such application,
consent or acquiescence, a trustee, receiver or other custodian
is appointed for Borrower or any of its Material Subsidiaries or
for a substantial part of its property and is not discharged
within sixty (60) days.
(F) Any bankruptcy, reorganization, liquidation,
dissolution or other case and proceeding under any bankruptcy or
insolvency law is commenced in respect of Borrower or any of its
Material Subsidiaries and if such case or proceeding is not
commenced by Borrower or the Material Subsidiary in question, it
is consented to or acquiesced in by Borrower or the Material
Subsidiary in question or remains undismissed for sixty (60)
days.
(G) Borrower or any of its Material Subsidiaries
discontinues its business operations or materially changes the
nature of its business.
(H) Borrower or any of its Subsidiaries shall suffer final
judgment(s) for the payment of money in an aggregate amount of
$500,000 or more not covered by insurance or reserves
satisfactory to Bank and shall not discharge, satisfy or stay the
same within a period of thirty (30) days.
(I) One or more judgment creditors of Borrower or its
Subsidiaries shall obtain actual or constructive possession of
any of Borrower's properties (or the respective properties of any
of its Subsidiaries) having an aggregate book value of $500,000
or more by any means, including, but without limitation, levy,
distraint, replevin or self-help.
(J) (l) Any Reportable Event which Bank reasonably
determines to constitute grounds for the termination of any
employee benefit plan by the PBGC or for the appointment by any
United States District Court of a trustee to administer or
liquidate any Employee Benefit Plan; (2) the termination of any
employee benefit plan, or any Defined Benefit Plan described in
Section 414(j) or Section 414(k) of the Internal Revenue Code,
the present value of whose benefits that may be guaranteeable
under Title IV of ERISA exceeds the amount of plan assets
allocable to such benefits; (3) the appointment by any United
States District Court of a trustee to administer any Employee
Benefit Plan; (4) the institution by the PBGC of proceedings to
terminate any Employee Benefit Plan; (5) the failure by Borrower
or any member of any Controlled Group to meet the minimum funding
standards established in Section 302 of ERISA; or (6) the
assertion of any claim of, or demand for, withdrawal liability
under ERISA by any multi-employer pension plan to which Borrower
or any member of its Controlled Group heretofore contributed or
currently contributes; but only if any of the events described in
clauses (1) - (6), individually or in the aggregate, would have a
Material Adverse Effect.
(K) (a) Failure by Borrower or any of its Material
Subsidiaries to perform or observe any term, condition or
covenant of any bond, note, debenture, loan agreement, indenture,
guaranty, trust agreement, mortgage or similar instrument to
which Borrower is a party or by which it is bound, or by which
any of its properties or assets may be affected (a "Debt
Instrument"), and, as a result thereof (assuming the giving of
appropriate notice thereof, if required), Indebtedness which is
included therein or secured or covered thereby shall have been
declared due and payable prior to the date on which such
Indebtedness would otherwise become due and payable; or
(b) Any event or condition referred to in any Debt
Instrument shall have occurred or failed to occur, and, as a
result thereof, Indebtedness which is included therein or secured
or covered thereby shall have been declared due and payable prior
to the date on which such Indebtedness would otherwise become due
and payable; or
(c) Failure of Borrower or any of its Material
Subsidiaries to pay any Indebtedness for borrowed money due at
final maturity or pursuant to demand under any Debt Instrument;
and in any of said events set forth in (a), (b) and (c) the same
has a Material Adverse Effect.
SECTION 7.02 Remedies. After any acceleration of the
Obligations, Bank shall have in addition to the rights and
remedies given it by this Agreement, the Note and the Collateral
Documents, all those allowed by all applicable Laws.
SECTION 8. MISCELLANEOUS.
SECTION 8.01 Construction. The provisions of this
Agreement shall be in addition to those of the Note and
Collateral Documents all of which shall be construed as
integrated and complementary to each other. Nothing herein
contained shall prevent Bank from enforcing any or all of the
Note and Collateral Documents, in accordance with their
respective terms.
SECTION 8.02 Further Assurance. From time to time,
Borrower will execute and deliver to Bank such additional
documents and will provide such additional information as Bank
may reasonably require to carry out the terms of this Agreement
and be informed of each Borrower's status and affairs.
SECTION 8.03 Enforcement and Waiver by Bank. Bank shall
have the right at all times to enforce the provisions of this
Agreement and the Collateral Documents in strict accordance with
the terms hereof and thereof, notwithstanding any conduct or
custom on the part of Bank in refraining from so doing at any
time or times. The failure of Bank at any time or times to
enforce its rights under such provisions, strictly in accordance
with such provisions, shall not be construed as having created a
custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or
waived this Agreement. All rights and remedies of Bank are
cumulative and concurrent and the exercise of one right or remedy
shall not be deemed a waiver or release of any other right or
remedy.
SECTION 8.04 Expenses of Bank. Borrower agrees to pay all
costs and expenses, including reasonable attorneys' fees and
expenses, and filing, search, environmental audit, consultant,
appraisal and other out-of-pocket expenditures, incurred by Bank
in connection with the preparation, negotiation, administration,
amendment, extension, replacement, modification, enforcement or
termination of this Agreement, the Note, the Revolving Loan and
the Collateral Documents and the collection or attempted
collection of the Note or any other Obligations, and the
protection, preservation or defense of Bank's rights and
interests.
SECTION 8.05 Notices. Any notices or consents required or
permitted by this Agreement shall be in writing and shall be
deemed delivered if delivered in person, or by commercial courier
against receipt or if sent by certified mail, postage prepaid,
return receipt requested, or by telecopy, as follows, unless such
address or telecopy number it changed by written notice
hereunder:
(A) If to Borrower:
Kulicke & Soffa Industries, Inc.
2101 Blair Mill Road
Willow Grove, PA 19090
Attention: Clifford G. Sprague, Senior Vice
President and Chief Financial Officer
Telecopy No. (215) 784-6258
(B) If to Bank:
PNC Bank, National Association
1000 Westlakes Drive, Suite 200
Berwyn, PA 19312
Attention: Charlene C. Massih
Vice President
Telecopy No. (610) 725-5799
SECTION 8.06 Waiver and Release by Borrower. To the
maximum extent permitted by applicable Laws, Borrower:
(A) Waives (1) protest of all commercial paper at any time
held by Bank on which Borrower is any way liable; and (2) except
as otherwise set forth herein or in the Collateral Documents,
notice and opportunity to be heard, after acceleration in the
manner provided in Section 7.01 hereof, before exercise by Bank
of the remedies of self-help, set-off, or of other summary
procedures permitted by any applicable Laws or by any agreement
with Borrower and, except where required hereby or by any
applicable Laws, notice of any other action taken by Bank; and
(B) Releases Bank and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or
omission on the part of any of them except willful misconduct or
gross negligence.
SECTION 8.07 Applicable Law. The substantive Laws of the
Commonwealth of Pennsylvania shall govern the construction of
this Agreement and the rights and remedies of the parties hereto.
SECTION 8.08 Binding Effect; Assignment and Entire
Agreement. This Agreement shall inure to the benefit of, and
shall be binding upon, the respective successors and permitted
assigns of the parties hereto. Borrower has no right to assign
any of its respective rights or Obligations hereunder without the
prior written consent of Bank. Bank may assign its rights
hereunder to other financial institutions, but agrees not to
delegate its duty to make loans and other credit extensions
hereunder. This Agreement, and the documents executed and
delivered pursuant hereto, constitute the entire agreement among
the parties relating to the subject matter thereof.
SECTION 8.09 Severability. If any provision of this
Agreement is held invalid under any applicable Laws, such
invalidity will not affect any other provision of this Agreement
that can be given effect without the invalid provision, and, to
this end, the provisions hereof are severable.
SECTION 8.10 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute but
one and the same instrument.
SECTION 8.11 Headings. The headings of any paragraph or
section of this Agreement are for convenience only and shall not
be used to interpret any provision of this Agreement.
SECTION 8.12 Modification. No modification or amendment
hereof or of any agreement referred to herein shall be binding or
enforceable unless in writing and signed on behalf of the party
against whom enforcement is sought.
SECTION 8.13 Third Parties. No rights are intended to be
created hereunder, or under the Collateral Documents or related
agreements and documents for the benefit of any third party
donee, creditor or incidental beneficiary of Borrower.
SECTION 8.14 Seal. This Agreement is intended to take
effect as an instrument under seal.
SECTION 8.15 WAIVER OF JURY TRIAL. BORROWER AND BANK
IRREVOCABLY WAIVE TRIAL BY JURY AND THE RIGHT THERETO IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR
ARISING OUT OF, THIS AGREEMENT, THE NOTE, COLLATERAL DOCUMENTS,
OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS
AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT THEREOF.
SECTION 8.16 Jurisdiction. Borrower and Bank hereby
irrevocably consent to the jurisdiction of the Court of Common
Pleas of Philadelphia, Pennsylvania and of the United States
District Court for the Eastern District of Pennsylvania in any
and all actions and proceedings in connection with this
Agreement, the Note or the Collateral Documents and irrevocably
consent, in addition to any methods of service of process
permissible under applicable law, to service of process by
certified mail, return receipt requested to the address of
Borrower and Bank as set forth herein. Borrower and Bank agrees
that in any action or proceeding brought by it in connection with
this Agreement or the transactions contemplated hereby, exclusive
jurisdiction shall be in the Court of Common Pleas of
Philadelphia, Pennsylvania, and the United States District Court
for the Eastern District of Pennsylvania.
SECTION 8.17 Indemnity. Borrower agrees to indemnify,
defend and hold Bank Indemnitees harmless from and against any
and all loss, liability, obligation, damage, penalty, judgment,
claim, deficiency and expense (including interest, penalties,
reasonable attorneys' fees and amounts paid in settlement) to
which any Bank Indemnitee may become subject arising out of or
based upon this Agreement, the Collateral Documents, the Note or
the Revolving Loan through the alleged negligence of such Bank
Indemnitee or otherwise, except and to the extent that Borrower
proves that such loss, liability, etc. was caused by the gross
negligence or willful misconduct or manifest bad faith of the
Person otherwise so indemnified.
SECTION 8.18 Most Favored Lender. Borrower agrees to
promptly notify Bank in writing if any agreement for borrowed
money to which Borrower or any Material Subsidiary is or
hereafter becomes a party, contains or is amended to contain,
financial or performance covenants more restrictive than those
contained herein and upon Bank's request, Borrower agrees to
amend this Agreement accordingly so that covenants contained
herein are substantially the same as those contained in such
other agreements for borrowed money.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their duly authorized officers as
of the day and year first above written.
KULICKE AND SOFFA INDUSTRIES, INC.,
a Pennsylvania corporation
By:________________________________
Clifford G. Sprague
Senior Vice President and
Chief Financial Officer
PNC BANK, NATIONAL ASSOCIATION,
a national banking association
By:_____________________________________
Charlene C. Massih
Vice President
EXHIBIT 6.01(L)
Financial Covenants
(a) At all times, Borrower's Leverage Ratio shall not
exceed 0.40 to 1.0.
(b) As of the end of each fiscal quarter of Borrower,
either (i) Borrower's Interest Coverage Ratio shall not be less
than 2.0 to 1.0 or (ii) Borrower's Liquidity Ratio shall not be
less than 1.0 to 1.0.