[ARTICLE] 5
[MULTIPLIER] 1
AMENDED AND RESTATED CREDIT AGREEMENT
between
CIRRUS LOGIC, INC.
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
January 31, 1995
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Financial Requirements . . . . . . . . 1
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Financial Requirements. . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
The Credit . . . . . . . . . . . . . . . 7
2.01 Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.02 Reference Rate, Fixed Rate, Offshore Rate, and
Offshore Currency Advances. . . . . . . . . . . . . . . . . . . 8
(a) Requests for Advances . . . . . . . . . . . . . . . . . . . 8
(b) Reference Rate Advances . . . . . . . . . . . . . . . . . . 9
(c) Fixed Rate Advances . . . . . . . . . . . . . . . . . . . . 9
(d) Offshore Rate Advances. . . . . . . . . . . . . . . . . . . 9
(e) Offshore Currency Advances. . . . . . . . . . . . . . . . . 10
(f) Prepayment of the Advances. . . . . . . . . . . . . . . . . 10
2.03 Local Currency Advances . . . . . . . . . . . . . . . . . . . . . 11
2.04 The Letter of Credit Facility . . . . . . . . . . . . . . . . . . 11
(a) Terms of Letters of Credit. . . . . . . . . . . . . . . . . 11
(b) Requests for Letters of Credit. . . . . . . . . . . . . . . 11
(c) Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.05 Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.06 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE III
Disbursements, Payments, and Calculations . . . . . . . 13
3.01 Lending Branches. . . . . . . . . . . . . . . . . . . . . . . . . 13
3.02 Loan Account. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.03 Immediately Available Funds . . . . . . . . . . . . . . . . . . . 13
3.04 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.05 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.06 Failure to Borrow . . . . . . . . . . . . . . . . . . . . . . . . 14
3.07 Default Interest. . . . . . . . . . . . . . . . . . . . . . . . . 14
3.08 Calculation of Interest and Fees. . . . . . . . . . . . . . . . . 15
ARTICLE IV
Taxes, Costs, Capital Adequacy, Etc.. . . . . . . . . 15
4.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.02 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . . . 16
4.04 Breaking Deposits . . . . . . . . . . . . . . . . . . . . . . . . 16
4.05 Availability. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.06 Statement of the Bank . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
Conditions to the Availability of Credit. . . . . . . . 17
5.01 Conditions to the First Extension of Credit . . . . . . . . . . . 17
(a) Opinion of Borrowers' Counsel . . . . . . . . . . . . . . . 17
(b) Borrowers' Corporate Resolutions. . . . . . . . . . . . . . 18
(c) Incumbency Certificates . . . . . . . . . . . . . . . . . . 18
(d) Borrowers' Compliance Certificate . . . . . . . . . . . . . 18
(e) Approvals and Consents. . . . . . . . . . . . . . . . . . . 18
(f) Cirrus International Agreement and Guaranty . . . . . . . . 18
(g) Other Evidence and Documents. . . . . . . . . . . . . . . . 18
5.02 Conditions Precedent to Each Extension of Credit. . . . . . . . . 18
(a) Borrowing Certificate . . . . . . . . . . . . . . . . . . . 19
(b) Application for the Issuance or Amendment of a
Letter of Credit. . . . . . . . . . . . . . . . . . . . . . 19
(c) Other Evidence and Documents. . . . . . . . . . . . . . . . 19
5.03 Conditions Precedent to Extensions of Credit to Borrowing
Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Credit Documentation. . . . . . . . . . . . . . . . . . . . 19
(b) Guaranties, Etc.. . . . . . . . . . . . . . . . . . . . . . 19
(c) Compliance with Conditions Precedent. . . . . . . . . . . . 20
(d) Other Evidence. . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
Representations and Warranties . . . . . . . . . . 20
6.01 Organization of Borrower. . . . . . . . . . . . . . . . . . . . . 20
6.02 Organization of Subsidiaries. . . . . . . . . . . . . . . . . . . 20
6.03 Authorization of Agreement. . . . . . . . . . . . . . . . . . . . 20
6.04 Government Approvals. . . . . . . . . . . . . . . . . . . . . . . 20
6.05 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 21
6.06 Enforceability of Agreement . . . . . . . . . . . . . . . . . . . 21
6.07 Investment Company Act. . . . . . . . . . . . . . . . . . . . . . 21
6.08 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . 21
6.09 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Regulation U. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Financial Information . . . . . . . . . . . . . . . . . . . . . . 22
6.15 Renewal of Representations and Warranties . . . . . . . . . . . . 23
6.16 Permits, Franchises.. . . . . . . . . . . . . . . . . . . . . . . 23
6.17 Income Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . 23
6.18 ERISA Plan Compliance.. . . . . . . . . . . . . . . . . . . . . . 23
6.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.20 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . 24
ARTICLE VII
Affirmative Covenants . . . . . . . . . . . . 24
7.01 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.02 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.03 Quick Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.04 Tangible Net Worth. . . . . . . . . . . . . . . . . . . . . . . . 24
7.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.06 Financial Statements, Reports, Etc. . . . . . . . . . . . . . . . 25
7.07 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.08 Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.09 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . 26
7.10 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 26
7.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.12 Books and Records, Inspection Rights. . . . . . . . . . . . . . . 27
7.13 Company Liquid Assets.. . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII
Negative Covenants . . . . . . . . . . . . . 27
8.01 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.02 Profitability . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.03 Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 27
8.04 Other Security Interests. . . . . . . . . . . . . . . . . . . . . 28
8.05 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.06 Liquidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . 30
8.07 Sale of Property for Fair Consideration . . . . . . . . . . . . . 30
8.08 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.09 Change in Business. . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IX
Events of Default . . . . . . . . . . . . . 30
9.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Nonpayment. . . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Misrepresentation . . . . . . . . . . . . . . . . . . . . . 30
(c) Failure of Security Interest. . . . . . . . . . . . . . . . 31
(d) Involuntary Liens . . . . . . . . . . . . . . . . . . . . . 31
(e) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . 31
(f) Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 31
(g) Involuntary Bankruptcy. . . . . . . . . . . . . . . . . . . 31
(h) Condemnation. . . . . . . . . . . . . . . . . . . . . . . . 31
(i) Regulatory Authority. . . . . . . . . . . . . . . . . . . . 32
(j) Approvals, Consents etc.. . . . . . . . . . . . . . . . . . 32
(k) Cross Default . . . . . . . . . . . . . . . . . . . . . . . 32
(l) Breach of Certain Covenants . . . . . . . . . . . . . . . . 32
(m) Breach of Other Agreements. . . . . . . . . . . . . . . . . 32
(n) Breach of Other Obligations . . . . . . . . . . . . . . . . 32
(o) ERISA Termination . . . . . . . . . . . . . . . . . . . . . 32
(p) IBM Joint Venture Guaranty. . . . . . . . . . . . . . . . . 33
(q) Material Adverse Change . . . . . . . . . . . . . . . . . . 33
9.02 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.03 Rights Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE X
Miscellaneous . . . . . . . . . . . . . . 34
10.01 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.02 Application of Amounts Received. . . . . . . . . . . . . . . . . 34
10.03 Cash Collateral for Letters of Credit. . . . . . . . . . . . . . 35
10.04 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 35
10.05 Participations; Novations. . . . . . . . . . . . . . . . . . . . 35
10.06 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.07 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 36
10.08 Waivers; Writing Required. . . . . . . . . . . . . . . . . . . . 36
10.09 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.10 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . 37
10.11 Indemnification for Hazardous Substances . . . . . . . . . . . . 37
10.12 Indemnification for Judgment Currency. . . . . . . . . . . . . . 37
10.13 English Language . . . . . . . . . . . . . . . . . . . . . . . . 38
10.14 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . 38
10.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.17 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.18 Nature of Liabilities. . . . . . . . . . . . . . . . . . . . . . 38
10.19 Obligations of Foreign Subsidiaries. . . . . . . . . . . . . . . 38
SCHEDULES
Schedule 6.10 Litigation and Other Proceedings
Schedule 6.13 List of Subsidiaries
EXHIBITS
Exhibit A Form of Borrowing Certificate
Exhibit B Form of Compliance Certificate
Exhibit C Form of Guaranty
Exhibit D Form of Cirrus International Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into
as of January 31, 1995, between CIRRUS LOGIC, INC., a California
corporation (the "Company"), and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association (the
"Bank"), with respect to the following:
Recitals.
A. The Company and the Bank have entered into a Credit
Agreement dated as of November 9, 1992, as amended by a First
Amendment to Credit Agreement dated as of April 15, 1993, a
Second Amendment to Credit Agreement dated as of June 8, 1993, a
Third Amendment to Credit Agreement dated as of August 9, 1993, a
Fourth Amendment to Credit Agreement dated as of October 1, 1993,
a Fifth Amendment to Credit Agreement dated as of August 30,
1994, a Sixth Amendment to Credit Agreement dated as of August
31, 1994, a Seventh Amendment to Credit Agreement dated as of
October 17, 1994 and an Eighth Amendment to Credit Agreement
dated as of November 30, 1994 (as so amended, the "Original
Credit Agreement"), pursuant to which the Bank has agreed, on the
terms and conditions contained therein, to extend credit to the
Company, to Cirrus Logic International, Ltd., a Bermuda
corporation ("Cirrus International"; the Company and Cirrus
International are collectively referred to herein as the
"Borrowers"), and to certain other Subsidiaries (each such other
Subsidiary is referred to herein as a "Borrowing Entity").
B. The parties hereto desire to amend and restate in its
entirety the Original Credit Agreement upon the terms and
conditions set forth in this Agreement.
Accordingly, the Company and the Bank agree as follows:
ARTICLE I
Definitions and Financial Requirements.
1.01 Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms have the
meanings indicated for purposes of this Agreement:
"Advance" means a borrowing under Section 2.01, 2.02,
or 2.03, whether such borrowing is made by a Borrower or a
Borrowing Entity.
"Affiliate" means any Person (other than a Subsidiary)
that, directly or indirectly, controls, is controlled by, or is
under common control with, the Company.
"Agreement" means this Credit Agreement, as amended,
modified, or supplemented from time to time.
"Availability Period" means the period commencing on
the date of this Agreement and ending on December 31, 1995.
"Banking Day" means a day other than a Saturday,
Sunday, or other day on which commercial banks in San Francisco,
California, or New York, New York, are authorized or required by
law to close.
"Borrowing Certificate" means a certificate in the form
of Exhibit A.
"Borrowing Entity" has the meaning specified in Section
2.01(c).
"Borrowing Entity L/C Obligations" means the undrawn
amount of all outstanding letters of credit issued for the
account of Borrowing Entities, the amount of all unreimbursed
drawings under letters of credit issued for the account of
Borrowing Entities, the amount of all outstanding drafts accepted
under letters of credit issued for the account of Borrowing
Entities, and the amount of all unreimbursed payments of drafts
accepted under letters of credit issued for the account of
Borrowing Entities.
"Cirrus International Agreement" has the meaning
specified in Section 5.01(f).
"Closing Date" means the date of this Agreement.
"Code" has the meaning specified in Section 6.18.
"Commitment Amount" means $25,000,000.
"Compliance Certificate" means the certificate in the
form of Exhibit B.
"Consolidated Tangible Net Worth" means, on a
consolidated basis for the Company and its Subsidiaries, the
gross book value of the assets of the Company and its
Subsidiaries (exclusive of goodwill, patents, trademarks, trade
names, organization expense, treasury stock, unamortized debt
discount and expense, deferred charges and other like
intangibles) less (a) reserves applicable thereto and (b) all
liabilities (including accrued and deferred income taxes and
subordinated liabilities).
"Credit Document" means this Agreement, the Cirrus
International Agreement, the International Guaranty, any Letter
of Credit, any Letter of Credit Application, any guaranty of the
obligations of any Borrower or any Borrowing Entity under this
Agreement or under any instrument, document, or agreement
executed in connection herewith, or any other document,
instrument, or agreement executed by any Borrower or any
Borrowing Entity or other Person in connection with this
Agreement, the Credit Facilities, and the other transactions
contemplated by this Agreement.
"Credit Facilities" means the facilities for Advances,
the Letters of Credit, and the other credit extensions to the
Borrowers and the Borrowing Entities provided for in this
Agreement and any instrument and agreement required under this
agreement.
"Default" means any event or condition which, with
notice or the passage of time, would become an Event of Default.
"Dollars" and "$" mean United States dollars.
"Equivalent Amount" means the equivalent in Dollars of
a Local Currency or an Offshore Currency, calculated at the spot
rate for the purchase of such Local Currency or Offshore Currency
with Dollars quoted by Bank's Grand Cayman Branch, Grand Cayman,
British West Indies, at approximately 10:00 a.m. San Francisco,
California, time two Banking Days prior to the relevant date.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Event of Default" means any event listed in Article
IX.
"Fixed Rate" means, for a Fixed Rate Advance, the rate
of interest quoted by the Bank and accepted by the appropriate
Borrower as being applicable to such Fixed Rate Advance.
"Fixed Rate Advance" means an Advance made pursuant to
and in accordance with the provisions of Section 2.02(c).
"Fixed Rate Interest Period" means, for a Fixed Rate
Advance, the period commencing on the date of such Fixed Rate
Advance and ending not more than six months thereafter, as
requested by a Borrower in accordance with the provisions of
Section 2.02, but in any case not later than the last day of the
Availability Period.
"International Guaranty" has the meaning specified in
Section 2.06.
"Interest Period" means a Fixed Rate Interest Period,
an Offshore Rate Interest Period, or an Offshore Currency Period,
as appropriate.
"Lending Branch" means the branches or offices of Bank
at 530 Lytton Avenue, Palo Alto, California, or such other of its
branches or offices as the Bank may from time to time designate.
"Letter of Credit" means a commercial or standby letter
of credit issued under the Letter of Credit Facility.
"Letter of Credit Application" means the Bank's
standard form application and agreement for the issuance or
amendment of commercial or standby letters of credit as such
forms are from time to time in effect.
"Letter of Credit Facility" means the facility for
letters of credit described in Section 2.04.
"Letter of Credit Obligations" means the sum of (a) the
undrawn amount of all outstanding Letters of Credit, (b) the
amount of all unreimbursed drawings under Letters of Credit,
(c) the amount of all outstanding drafts accepted under Letters
of Credit, and (d) the amount of all unreimbursed payments of
drafts accepted under Letters of Credit.
"Local Currency" means a lawful currency other than
United States dollars which is available at a branch of the Bank
located in a country other than the United States and is the
legal tender of that country where such branch is located.
"Local Currency Advance" means an Advance in a Local
Currency made pursuant to and in accordance with the provisions
of Section 2.03.
"Material Adverse Effect" means (i) a material adverse
change in, or a material adverse effect upon, any of (a) the
operations, business, properties, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken
as a whole; (b) the ability of the Company to perform under any
Credit Document; or (c) the legality, validity, binding effect,
or enforceability of any Credit Document; or (ii) a material
adverse change in, or a material adverse effect upon, any of (a)
the operations, business, properties, condition (financial or
otherwise) or prospects of Cirrus International; (b) the ability
of Cirrus International to perform under any Credit Document; or
(c) the legality, validity, binding effect, or enforceability of
any Credit Document.
"Offshore Currency" means any lawful currency which is
freely transferable and convertible into Dollars.
"Offshore Currency Advance" means an Advance in an
Offshore Currency made pursuant to and in accordance with the
provisions of Section 2.02(e).
"Offshore Currency Interest Period" means, for each
Offshore Currency Advance, the period commencing on the date such
Advance is disbursed and ending one, two, three, or six months
thereafter, as requested by a Borrower under Section 2.02, but
not later than the last day of the Availability Period; provided,
however, that the last day of such Offshore Currency Interest
Period shall be determined in accordance with the practices of
the offshore currency inter-bank market as from time to time in
effect.
"Offshore Currency Rate" means, for an Offshore
Currency Advance and the related Offshore Currency Interest
Period, the rate of interest quoted by the Bank and accepted by
the appropriate Borrower as being applicable to such Offshore
Currency Advance and Offshore Currency Interest Period.
"Offshore Rate" means, for each Offshore Rate Interest
Period, the rate of interest (rounded upward to the next 1/16th
of 1%) determined pursuant to the following formula:
Offshore Rate = Offered Rate
1.00 - Eurodollar Reserve Percentage
Where:
"Offered Rate" means the rate of interest at
which deposits in the applicable currency in the
approximate amount of the Offshore Rate Advance to be
made and having a maturity comparable to such Offshore
Rate Interest Period would be offered by the Bank's
Grand Cayman Branch, Grand Cayman, British West Indies
(or such other office as may be designated for such
purpose by the Bank), to major banks in the offshore
interbank market upon request of such banks at
approximately 8:00 a.m. San Francisco time two Business
Days prior to the first day of such Offshore Rate
Interest Period.
"Eurodollar Reserve Percentage" means, for
any Offshore Rate Interest Period, the maximum reserve
percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on the first day of
such Offshore Rate Interest Period (whether or not
applicable to the Bank) under regulations issued from
time to time by the FRB for determining the maximum
reserve requirement (including any emergency,
supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities") having a
term comparable to such Offshore Rate Interest Period.
"Offshore Rate Advance" means an Advance made pursuant
to and in accordance with the provisions of Section 2.02(d).
"Offshore Rate Interest Period" means, for each
Offshore Rate Advance, the period commencing on the date the
Offshore Rate Advance begins to bear interest at a rate based on
the Offshore Rate and ending one, two, three, or six months
thereafter, as requested by a Borrower under Section 2.02;
provided, however, that the last day of each Offshore Rate
Interest Period shall be determined in accordance with the
practices of the applicable offshore interbank markets as from
time to time in effect, and provided further that no such
interest period shall extend beyond the last day of the
Availability Period.
"Participant" has the meaning specified in Section
10.5.
"Person" means any individual, association, joint
venture, partnership, joint stock company, corporation, trust,
business trust, government, governmental authority, regulatory
authority, or other entity.
"Plan" means any employee pension benefit plan
maintained or contributed to by the Company, any Subsidiary of
the Company, any Affiliate of the Company, or by any trade or
business (whether or not incorporated) under common control (as
defined in Section 4001(b) of ERISA) with the Company, any
Subsidiary, or any Affiliate and insured by the Pension Benefit
Guaranty Corporation under Title IV of ERISA.
"Reference Rate" means the rate of interest publicly
announced from time to time by the Bank in San Francisco,
California, as its Reference Rate. The Reference Rate is a rate
set by the Bank based upon various factors including the Bank's
costs and desired return, general economic conditions, and other
factors, and is used as a reference point for pricing some
loans. The Bank may price loans at, above or below the
Reference Rate. Any change in the Reference Rate shall take
effect on the day specified in the public announcement of such
change.
"Reference Rate Advance" means an Advance made pursuant
to and in accordance with the provisions of Section 2.02(b).
"Subsidiary" means any corporation, association, or
other business entity of which the Company owns, directly or
indirectly, more than 50% of the voting securities thereof or
which the Company otherwise controls.
"Swap Contract" means any agreement (including any
master agreement and any agreement, whether or not in writing,
relating to any single transaction) that is an interest rate
swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap or option,
bond option, interest rate option, forward foreign exchange
agreement, rate cap, collar or floor agreement, currency swap
agreement, cross-currency rate swap agreement, swaption,
currency option or any other, similar agreement (including any
option to enter into any of the foregoing).
1.02 Financial Requirements. Unless otherwise specified in
this Agreement, all accounting terms used in this Agreement
shall be interpreted, all financial information required under
this Agreement shall be prepared, and all financial computations
required under this Agreement shall be made, in accordance with
generally accepted accounting principles consistently applied.
ARTICLE II
The Credit.
2.01 Commitment.
(a) (1) From and after the Closing Date, all advances
made, letters of credit issued, and other credit extended under
the Original Credit Agreement shall be subject to the terms of
this Agreement, the letter of credit applications relating to
such letters of credit, and the instruments and agreements
entered into between the Bank and the Borrowing Entities
relating to outstanding credit extended to such Borrowing
Entities. All such advances, undrawn amounts of letters of
credit, reimbursement obligations relating to letters of credit,
and other credit shall be included in computing credit
availability and the credit outstanding under this Agreement.
(2) All guaranties issued by the Company with
respect to credit extended by the Bank to its Subsidiaries shall
remain in full force and effect.
(b) From time to time during the Availability Period,
and subject to the provisions of this Agreement, (x) the Bank
will extend credit to the Borrowers consisting of Advances and
Letters of Credit and, (y) upon request of the Company, and if
agreed to by the Bank in its sole discretion, the Bank will make
credit extensions, consisting of advances and letters of credit,
to Borrowing Entities under the terms and conditions for each
such credit extension.
(c) From time to time during the Availability Period,
the Company may request, in writing, that the Bank extend
credit, in the form of Advances or letters of credit, in a
specified amount to such of the Subsidiaries of the Company
(other than Cirrus International) as the Company may name in
such request. Nothing in this Agreement shall be deemed a
commitment by the Bank to grant any such request. If the Bank
agrees to extend the requested credit to a Subsidiary, such
Subsidiary shall be referred to as a "Borrowing Entity"
hereunder. The credit granted to a Borrowing Entity may, as
requested by the Borrowing Entity, be denominated in Dollars or
in the Equivalent Amount in a Local Currency or an Offshore
Currency of such requested amount.
(d) The total amount of (i) the Letter of Credit
Obligations and Borrowing Entity L/C Obligations, (ii) Advances,
and (iii) credit extensions to Borrowing Entities, shall not
exceed at any time the Commitment Amount; provided, that such
total amount may exceed the Commitment Amount by an amount not
in excess of $100,000 if such excess is solely due to a change
in applicable rates of exchange between Dollars and Offshore
Currencies or Local Currencies, as the case may be. In
determining compliance with this Section 2.01(d), Advances,
Letter of Credit Obligations, and credit extensions to Borrowing
Entities denominated in Local Currencies or Offshore Currencies
shall be converted to their Equivalent Amounts in Dollars as of
the date the Bank decided to grant the credit extension.
(e) Subject of the provisions of this Agreement, the
Advances are available to the Borrowers and the Borrowing
Entities on a revolving basis, and during the Availability
Period, Advances which have been repaid or prepaid may be
reborrowed.
2.02 Reference Rate, Fixed Rate, Offshore Rate, and
Offshore Currency Advances.
(a) Requests for Advances. Each Reference Rate
Advance shall be made upon the irrevocable written or telephone
request of a Borrower received by the Bank not later than 10:00
a.m. San Francisco time on the date of such Reference Rate
Advance, and each Fixed Rate Advance, Offshore Rate Advance, and
Offshore Currency Advance shall be made upon the irrevocable
written telephone request of a Borrower received by the Bank not
later than 10:00 a.m. on the Banking Day prior to the date such
Fixed Rate Advance, Offshore Rate Advance, or Offshore Currency
Advance is to be made, specifying:
(i) the date such Advance is to be made, which
shall be a Banking Day;
(ii) the amount of such Advance;
(iii) whether such Advance is to be a Reference
Rate Advance, a Fixed Rate Advance, an Offshore Rate Advance, or
an Offshore Currency Advance; and
(iv) if the Advance is to be a Fixed Rate
Advance, an Offshore Rate Advance, or an Offshore Currency
Advance, the Interest Period for such Advance.
Each written request for a Reference Rate Advance, a Fixed Rate
Advance, an Offshore Rate Advance, or an Offshore Currency
Advance and each confirmation of a telephone request for such an
Advance shall be in the form of a Borrowing Certificate executed
by a Borrower.
(b) Reference Rate Advances. The outstanding
principal balance of each Reference Rate Advance shall bear
interest until principal is due (computed daily on the basis of
a 360 day year and actual days elapsed), at a rate per annum
equal to the Reference Rate. Each Borrower shall pay interest
on each Reference Rate Advance to such Borrower on the last day
of each month, commencing on the first such day after the date
of such Advance, and upon payment in full of the principal of
such Advance. Each Borrower shall pay the entire outstanding
principal amount of each Reference Rate Advance to such Borrower
on the last day of the Availability Period.
(c) Fixed Rate Advances. Each Fixed Rate Interest
Period shall be a period not longer than six months, and shall
end not later than the last day of the Availability Period.
Each Fixed Rate Advance shall be in an amount not less than
$250,000 and shall be in an amount such that the number of days
in the Fixed Rate Interest Period for such Advance times the
Dollar amount of such Advance is not less than 15,000,000
Dollar-days. The outstanding principal balance of each Fixed
Rate Advance shall bear interest until principal is due
(computed daily on the basis of a 360 day year and actual days
elapsed) at a rate per annum equal to the Fixed Rate for such
Fixed Rate Advance. Interest on each Fixed Rate Advance shall
be due and payable on the last day of each month and on the last
day of the related Fixed Rate Interest Period. The entire
outstanding principal amount of each Fixed Rate Advance shall be
due and payable on the last day of the Fixed Rate Interest
Period for such Fixed Rate Advance.
(d) Offshore Rate Advances. Each Offshore Rate
Interest Period shall be a period of one, two, three, or six
months, with the last day of such Interest Period determined in
accordance with the practices of the offshore currency inter-
bank market as from time to time in effect, provided that each
Offshore Rate Interest Period shall end not later than the last
of the Availability Period. Each Offshore Rate Advance shall be
in an amount not less than $250,000. The outstanding principal
balance of each Offshore Rate Advance shall bear interest until
principal is due (computed daily on the basis of a 360 day year
and actual days elapsed) at a rate per annum equal to the
Offshore Rate for such Offshore Rate Advance plus 0.75% per
annum. Interest on each Offshore Rate Advance shall be due and
payable on the last day of the Offshore Rate Interest Period for
such Advance and on the last day of each month. The entire
outstanding principal amount of each Offshore Rate Advance shall
be due and payable on the last day of the Offshore Rate Interest
Period for such Offshore Rate Advance.
(e) Offshore Currency Advances. Each Offshore
Currency Interest Period shall be a period of one, two, three,
or six months, with the last day of such Interest Period
determined in accordance with the practices of the offshore
currency inter-bank market as from time to time in effect,
provided that each Offshore Currency Interest Period shall end
not later than the last day of the Availability Period. Each
Offshore Currency Advance shall be in an Offshore Currency and
in an amount of such Offshore Currency which has an Equivalent
Amount not less than $250,000. The outstanding principal
balance of each Offshore Currency Advance shall bear interest
until principal is due (computed daily on the basis of a 360 day
year and actual days elapsed) at a rate per annum equal to the
Offshore Currency Rate for such Offshore Currency Advance.
Interest on each Offshore Currency Advance shall be due and
payable on the last day of the Offshore Currency Interest Period
for such Advance and on the last day of each month. The entire
outstanding principal amount of each Offshore Currency Advance
shall be due and payable on the last day of the Offshore
Currency Interest Period for such Offshore Currency Advance.
(f) Prepayment of the Advances. (i) A Borrower may
at any time prepay any Reference Rate Advance, any Fixed Rate
Advance, any Offshore Rate Advance, or Offshore Currency
Advance, in full or in part. Each partial prepayment shall be
in an amount not less than $250,000 or, in the case of an
Offshore Currency Advance, an amount with Equivalent Amount not
less than $250,000.
(ii) Each prepayment shall be made upon the
irrevocable written or telephone notice of a Borrower received
by the Bank not later than 10:00 a.m. San Francisco time on the
date of the prepayment of a Reference Rate Advance and not less
than two Banking Days prior to the date of the prepayment of a
Fixed Rate Advance, an Offshore Rate Advance, or Offshore
Currency Advance. The notice of prepayment shall specify the
date of the prepayment, the amount of the prepayment, and the
Advance or Advances to be prepaid.
(iii) Each prepayment of a Fixed Rate Advance,
Offshore Rate Advance, or Offshore Currency Advance shall be
accompanied by the payment of accrued interest on the amount
prepaid and any amount required by Section 4.04.
2.03 Local Currency Advances.
(a) From time to time during the Availability Period,
the Bank will make Local Currency Advances to a Borrower and, if
agreed to by the Bank in each case (in the Bank's sole
discretion), to other Borrowing Entities located outside of the
United States. The Bank shall have no obligation to make any
Local Currency Advance unless the Bank and the appropriate
Borrower or Borrowing Entity agree, at the time of the request
for a Local Currency Advance, on the date such Advance is to be
made, on the Local Currency in which such Advance is to be made,
and on the amount, principal payment dates, interest rate and
payment dates, prepayment and overdue payment terms, and the
reserve and tax provisions for such Advance. Each Local
Currency Advance shall be due and payable no later than the last
day of the Availability Period. Each request for a Local
Currency Advance and each confirmation of a telephone request
for a Local Currency Advance shall be in the form of a Borrowing
Certificate executed by the Company or, in the case of a Local
Currency Advance to Cirrus International, Cirrus International.
(b) A Borrower or Borrowing Entity obtaining a Local
Currency Advance shall execute such additional documents as the
Bank may require relating to such Local Currency Advance.
2.04 The Letter of Credit Facility. From time to time,
during the Availability Period, the Bank shall issue letters of
credit for the account of a Borrower. A Letter of Credit may be
denominated in Dollars or in an Offshore Currency. The Letter
of Credit Facility is a revolving facility.
(a) Terms of Letters of Credit. Each Letter of Credit
shall:
(i) if a commercial Letter of Credit, expire on
or before 180 days after the date thereof, but not later
than May 30, 1996; and if a standby Letter of Credit, expire
on or before one year after the date thereof, but not later
than November 30, 1996;
(ii) if a commercial Letter of Credit, require
drafts payable at sight or up to 180 days after sight, but
not later than May 30, 1996; and if a standby Letter of
Credit, require drafts payable at sight;
(iii) be otherwise in form and substance and in
favor of beneficiaries satisfactory to the Bank.
(b) Requests for Letters of Credit. Each Letter of
Credit shall be issued pursuant to a Letter of Credit
Application received by the Bank not less than two Banking Days
prior to the date of the issuance of the Letter of Credit. Each
such Letter of Credit Application shall be completed in a manner
satisfactory to the Bank.
(c) Fees. The Company will pay, or will cause Cirrus
International to pay, the following fees and commissions with
respect to Letters of Credit:
(i) with respect to commercial Letters of Credit,
upon issuance, an issuance fee equal to 0.125% of the face
amount of such commercial Letter of Credit, and upon
negotiation, a negotiation fee equal to 0.10% of the amount
negotiated under such commercial Letter of Credit,
(ii) with respect to each standby Letter of
Credit, upon issuance, a commission equal to 0.50% per annum
on the face amount of such standby Letter of Credit if the
Bank determines that such Letter of Credit is a performance
letter of credit under applicable federal regulations, and a
commission equal to .75% per annum on the face amount of
such standby Letter of Credit if the Bank determines that
such Letter of Credit is a financial letter of credit under
applicable federal regulations, and
(iii) the Bank's other standard Letter of Credit
and draft fees, including but not limited to other amendment
fees, presentation fees, negotiation fees, and cancellation
fees. The amount and payment date of such other fees shall
be those customarily charged by the Bank at the relevant
times.
(d) Expenses. The Company will pay or compensate, or
will cause Cirrus International to pay or compensate, the Bank,
promptly upon demand made from time to time for miscellaneous
expenses for the items and in the amounts customarily charged by
the Bank from time to time with respect to Letters of Credit.
2.05 Commitment Fee. The Company shall pay to the Bank a
commitment fee of 0.20% per annum on the average daily unused
portion of the Credit Facilities provided under this Agreement.
The commitment fee shall be computed on a calendar quarter
basis, except for the first period, which shall commence on the
date hereof and end on March 31, 1995, and the last period which
shall end on the last day of the Availability Period. The
commitment fee shall be payable on the last day of each
successive calendar quarter and on the last day of the
Availability Period.
2.06 Guaranties. The obligations of Cirrus International
under the Cirrus International Agreement and the Letter of
Credit Obligations under Letters of Credit issued for the
account of Cirrus International, and all other obligations of
Cirrus International under any other Credit Document shall be
guaranteed by the Company pursuant to a guaranty in the form and
substance of Exhibit C attached hereto and incorporated herein
(the "International Guaranty"). The credit extensions granted
to the Borrowing Entities pursuant to this Agreement and the
obligations of the Borrowing Entities under any document,
instrument, or agreement entered into in connection therewith
shall be guaranteed by the Company pursuant to guaranty
agreements in form and substance satisfactory to the Bank in its
sole discretion.
ARTICLE III
Disbursements, Payments, and Calculations
3.01 Lending Branches. Each Advance and each Letter of
Credit and each payment to Bank by the Borrowers or any
Borrowing Entity under this Agreement shall be made for the
account of the Bank's Lending Branch.
3.02 Loan Account. Principal, interest, and all other sums
owing by the Borrowers or any Borrowing Entity to the Bank under
this Agreement shall be evidenced by entries in records
maintained by the Bank. Each payment on and any other credits
with respect to principal, interest, and all other sums
outstanding under this Agreement shall be evidenced by entries
in such records.
3.03 Immediately Available Funds. Each disbursement to a
Borrower or a Borrowing Entity and each payment to the Bank
under this Agreement shall be made in Dollars (except, unless
otherwise agreed, disbursements and payments with respect to
each Offshore Currency Advance and each Local Currency Advance
shall be made in the relevant Offshore Currency or Local
Currency, as appropriate, and disbursements and payments with
respect to credit extensions to a Borrowing Entity shall be in
the currency agreed to by such Borrowing Entity and the Bank) in
immediately available funds (or such other funds as the Bank may
require).
3.04 Disbursements. Each disbursement of an Advance by the
Bank to a Borrower shall be by crediting such Borrower's account
at such bank or branch of the Bank as such Borrower and the Bank
may agree upon from time to time in writing.
3.05 Payments. (a) Each payment by a Borrower or a
Borrowing Entity under this Agreement shall be made to the Bank
by payment to such branch of the Bank as the Bank may specify
from time to time.
(b) Each payment by a Borrower or a Borrowing Entity
may be made only on a Banking Day. If the day on which a
payment would fall due is not a Banking Day, the day on which
such payment is due shall be the next succeeding Banking Day and
interest and fees shall accrue on such sums at the applicable
rate or rates for the additional day or days. Each such payment
shall be made without setoff or counterclaim not later than noon
San Francisco, California time on the day such payment is due.
All sums received after such time shall be deemed received on
the next Banking Day and interest and fees shall accrue on such
sums at the applicable rate or rates for the additional day or
days.
(c) With respect to regularly scheduled payments of
principal, interest and fees payable under the Credit Documents
which are payable in Dollars, each Borrower hereby authorizes
the Bank to debit such Borrower's accounts with the Bank in the
amount of principal, interest or fees due from the Borrowers
under this Agreement or under any other Credit Document. The
Bank shall debit the account of such Borrower on the date such
amounts become due, or if such due date is not a Banking Day, on
the next Banking Day after such due date. If there are
insufficient funds in the account to cover the amount debited to
the account in accordance with this Section 3.05(c), such debit
will be reversed (in whole or in part, in the Bank's sole
discretion) and such amount not debited will be deemed to remain
unpaid. No such debit under this Section 3.05(c) shall be
deemed a setoff.
3.06 Failure to Borrow. If a Borrower or a Borrowing
Entity requests a Fixed Rate Advance, an Offshore Rate Advance,
an Offshore Currency Advance, a Local Currency Advance, or other
Advance and for any reason (including the occurrence of an event
which is, or upon the lapse of time or notice or both would
become, an Event of Default) does not borrow such Advance, the
Company shall (or shall cause Cirrus International or the
relevant Borrowing Entity so to do), on demand by the Bank, pay
to the Bank the amount (if any) by which (a) the interest which
would have been payable on the amount which such Borrower or
Borrowing Entity failed to borrow had such amount been borrowed
and outstanding for the Interest Period or other applicable term
(in the case of a Local Currency Advance or extension of credit
to a Borrowing Entity) specified in the request for such Advance
exceeds (b) the interest which would have been recoverable by
the Bank by placing such unborrowed amount on deposit in the
certificate of deposit markets or the offshore Dollar interbank
markets, as the case may be, for the Interest Period or other
applicable term specified in the request for such Advance.
3.07 Default Interest. Any principal, interest, or other
sum payable by a Borrower hereunder if not paid when due shall
bear interest (payable on demand) from its due date until
payment in full (computed daily on the basis of a 360 day year
and actual days elapsed) at a rate per annum equal to the
Reference Rate plus 2.00% per annum.
3.08 Calculation of Interest and Fees. Except as otherwise
specifically provided in this Agreement, all interest, fees, and
other sums due under this Agreement shall be computed on the
basis of actual days elapsed and a year of 360 days, which
results in more interest or a larger fee or other amount payable
than if a year of 365 days were used.
ARTICLE IV
Taxes, Costs, Capital Adequacy, Etc.
4.01 Taxes. (a) (i) If any taxes (other than taxes on
net income imposed on or measured by the Bank's net income by
the jurisdiction under the laws of which the Bank is organized
or maintains a lending office from which extensions of credit
hereunder are made) are at any time imposed on any payments
under or in respect of this Agreement or any instrument or
agreement required hereunder including, but not limited to,
payments made pursuant to this Section 4.01, the Company shall,
or shall cause Cirrus International or the relevant Borrowing
Entity to, pay all such taxes and shall also pay to the Bank, at
the time interest is paid, all additional amounts which the Bank
specifies as necessary to preserve the after-tax yield the Bank
would have received if such taxes had not been imposed (as such
additional amounts are determined in accordance with Section
4.01(a)(ii)).
(ii) The additional amounts necessary to preserve
the after-tax yield the Bank would have received if such taxes
had not been imposed shall be calculated pursuant to the
formula:
(w)(t)(i)
y = -----------
1-w-t
where the terms are defined as follows:
y = additional payment to be made to the Bank
w = withholding tax rate levied by foreign
government
t = the Bank's combined Federal and state tax rate
i = amount of interest to be paid on sum due
(computed by using the base rate
plus quoted spread)
1 = one
(b) The Company will provide (or cause Cirrus
International or the relevant Borrowing Entity to provide) the
Bank with original tax receipts, notarized copies of tax
receipts, or such other documentation as will prove payment of
tax in a court of law applying the United States Federal Rules
of Evidence, for all taxes paid by any Borrower or Borrowing
Entity pursuant to Section 4.01(a) above. The Company will
deliver (or cause Cirrus International or the relevant Borrowing
Entity to deliver) receipts to the Bank within 30 days after the
due date for the related tax.
4.02 Costs. The Company shall (or shall cause Cirrus
International or the relevant Borrowing Entity to) reimburse or
compensate the Bank, upon demand by the Bank from time to time,
for all costs incurred, losses suffered and payments made by the
Bank which are applied or allocated by the Bank to any of the
Credit Facilities (all as determined by Bank in its sole and
absolute discretion) by reason of:
(a) any and all present and future reserve deposit or
similar requirements against (or against any class of or change
in or in the amount of) assets or liabilities of, or commitments
or extensions of credit by, the Bank;
(b) compliance by the Bank with any directive,
requirement or request from any governmental or regulatory
authority, whether or not having the force of law.
4.03 Capital Adequacy. If the Bank determines that any
law, rule, regulation, or guideline regarding capital adequacy
affects or would affect the amount of capital required to be
maintained by the Bank or any corporation controlling the Bank
and the Bank determines (taking into consideration the Bank's
policies with respect to capital adequacy and the Bank's desired
return on capital) that the amount of required capital is
increased as a result of the Bank's obligations under this
Agreement, then, upon demand by the Bank from time to time, the
Company shall (or shall cause Cirrus International or the
relevant Borrowing Entity to) pay the Bank additional amounts
sufficient as specified by the Bank to compensate the Bank for
such increase.
4.04 Breaking Deposits. If for any reason (including
voluntary or mandatory prepayment or acceleration) the Bank
receives all or part of the principal amount of a Fixed Rate
Advance, an Offshore Rate Advance, or an Offshore Currency
Advance prior to the last day of the Interest Period for such
Advance, the Company shall (or shall cause Cirrus International
to), on demand by the Bank, pay the Bank the amount (if any) by
which (a) the additional interest which would have been payable
on the amount so received had it not been received until the
last day of such Interest Period exceeds (b) the interest which
would have been recoverable by the Bank by placing the amount so
received on deposit in the certificate of deposit markets or the
offshore currency interbank markets, as the case may be, for a
period starting on the date on which it was so received and
ending on the last day of such Interest Period.
4.05 Availability. If at any time the Bank, in its sole
and absolute discretion, determines that:
(a) deposits in the amount of the Fixed Rate
Advances and for periods equal to the Fixed Rate Interest
Periods are not available to the Bank in the certificate of
deposit markets, or deposits in the currency or the amount
of the Offshore Rate Advances or Offshore Currency Advances
and for periods equal to the Offshore Rate Interest Periods
or Offshore Currency Interest Periods are not available to
the Bank in the offshore currency interbank markets, as the
case may be; or
(b) the Offshore Rate does not accurately reflect
the cost to the Bank of lending the Offshore Rate Advances
or the Offshore Currency Rate does not accurate reflect the
cost to the Bank of lending the Offshore Currency Advances;
then the Bank shall promptly give notice thereof to the Company,
and upon the giving of such notice, the Bank's obligation to
make Fixed Rate Advances, Offshore Rate Advances, or Offshore
Currency Advances, as the case may be, shall terminate.
4.06 Statement of the Bank. If the Bank claims any
reimbursement or compensation pursuant to this Article IV, the
Bank shall deliver to the Company a statement setting forth in
reasonable detail the amount payable to the Bank hereunder and
such statement shall be conclusive and binding on the Company,
Cirrus International, and the Borrowing Entities, in the absence
of manifest error.
ARTICLE V
Conditions to the Availability of Credit
5.01 Conditions to the First Extension of Credit. This
Agreement shall become effective on the Closing Date subject to
the condition precedent that, on the Closing Date, there shall
have been delivered to the Bank, in form and substance
satisfactory to the Bank:
(a) Opinion of Borrowers' Counsel. A written opinion,
dated the Closing Date, of Wilson, Sonsini, Goodrich & Rosati,
or of other counsel for the Borrowers (which counsel must be
acceptable to the Bank) in form and substance acceptable to the
Bank;
(b) Borrowers' Corporate Resolutions. Copies of the
resolutions passed by the Board of Directors of each of the
Borrowers, certified by the Secretary or an Assistant Secretary
of such Borrower as being in full force and effect on the
Closing Date, authorizing the borrowing provided for herein and
the other transactions contemplated hereby, and the execution,
delivery, and performance of this Agreement, the Cirrus
International Agreement, the International Guaranty, and any
other instrument or agreement required hereunder;
(c) Incumbency Certificates. From each Borrower, a
certificate, signed by the Secretary or an Assistant Secretary
of such Borrower and dated the Closing Date, as to the
incumbency, and containing the specimen signature or signatures,
of the person or persons authorized to execute and deliver this
Agreement, the Cirrus International Agreement, the International
Guaranty, and any other instrument or agreement required
hereunder on behalf of such Borrower;
(d) Borrowers' Compliance Certificate. A completed
Compliance Certificate, signed on behalf of the Company by a
responsible officer of the Company, calculated as of September
30, 1994, and dated the Closing Date;
(e) Approvals and Consents. Certified copies of all
approvals, consents, exemptions, and other actions by, and
notices to and filings with, any governmental or regulatory
authority and any trustee or holder of any indebtedness or
obligation of any Borrower which, in the Bank's opinion, are
required in connection with any transaction contemplated hereby;
(f) Cirrus International Agreement and Guaranty. An
agreement, fully executed, in the form and substance of Exhibit
D attached hereto and incorporated herein (the "Cirrus
International Agreement"), and the fully executed International
Guaranty.
(g) Other Evidence and Documents. Such other evidence
and documents as the Bank may reasonably request to establish or
effect fully the consummation of the transactions contemplated
hereby, the taking of all proceedings in connection herewith,
and compliance with the conditions set forth in this Agreement.
5.02 Conditions Precedent to Each Extension of Credit. The
obligation of the Bank to disburse an Advance, issue a Letter of
Credit, or amend a Letter of Credit, or make any other extension
of credit hereunder, is subject to the conditions precedent
that, on the date of each disbursement, issuance, or amendment
(including the first disbursement, issuance, or amendment), or
other extension of credit, there shall not exist any event which
is, or with the lapse of time or notice or both would be, an
Event of Default and there shall have been delivered to the
Bank, in form and substance satisfactory to the Bank:
(a) Borrowing Certificate. With respect to each
Advance, a Borrowing Certificate, signed on behalf of the
Borrower obtaining such Advance (and, in the case of an
extension of credit to a Borrowing Entity, signed by the Company
and such Borrowing Entity) by a duly authorized officer of such
Borrower (and the Company and such Borrowing Entity, as
appropriate) and dated the date of such Advance;
(b) Application for the Issuance or Amendment of a
Letter of Credit. In the case of the issuance or amendment of a
Letter of Credit, a duly completed Letter of Credit Application
for the issuance or amendment of such Letter of Credit, as
appropriate, executed on behalf of the Borrower obtaining such
Letter of Credit by a duly authorized representative of such
Borrower;
(c) Other Evidence and Documents. Such other evidence
or documents as the Bank may reasonably request to establish or
to effect fully the consummation of the transactions
contemplated hereby, the taking of all proceedings in connection
herewith, and compliance with the conditions set forth in this
Agreement.
5.03 Conditions Precedent to Extensions of Credit to
Borrowing Entities. The Bank shall not be obliged to grant any
credit extension to a Subsidiary requested by the Company unless
and until the Bank has decided, in its sole discretion, to make
such requested credit extension and there shall have been
delivered, in form and substance satisfactory to the Bank with
respect to each such requested credit extension:
(a) Credit Documentation. Credit documentation
relating to the requested credit extension executed by the
relevant Borrowing Entity (such credit documentation shall
contain such terms and provisions (including but not limited to
the amount of the credit extension, interest, fees, conditions
precedent, covenants, and events of default) as the Bank deems
appropriate for such requested credit extension in the Bank's
sole discretion); certified copies of corporate resolutions and
incumbency certificates; upon the first extension of credit to a
Borrowing Entity hereunder, and at such other times as the Bank
may request, opinions of counsel; and such other instruments,
agreements, document, and evidence that the Bank may require;
(b) Guaranties, Etc. A guaranty executed by the
Company guaranteeing the requested credit extension, as required
by Section 2.06; certified copies of corporate resolutions and
incumbency certificates; opinions of counsel; and such other
related documentation that the Bank may require with respect to
the Company as guarantor and such guaranty;
(c) Compliance with Conditions Precedent. Evidence
that all conditions precedent relating to such requested credit
extension have been complied with;
(d) Other Evidence. Such other evidence as the Bank
may reasonably request to establish and effect fully the
consummation of the transactions contemplated thereby, the
taking of all proceedings in connection therewith, and
compliance with the conditions set forth in the agreements
relating to such requested credit extension.
ARTICLE VI
Representations and Warranties
The Company represents and warrants that:
6.01 Organization of Borrowers. The Company is a
corporation duly organized and existing under the laws of the
state of California, and Cirrus International is a corporation
duly organized and existing under the laws of Bermuda; each
Borrower is properly licensed and in good standing in, and where
necessary to maintain such Borrower's rights and privileges, and
each Borrower has complied with the fictitious name statute of
every jurisdiction in which such Borrower is doing business,
except where failure so to be licensed or so to comply would
not, in the aggregate, have a Material Adverse Effect;
6.02 Organization of Subsidiaries. Each Subsidiary is duly
organized and existing under the laws of the jurisdiction of its
formation, and is properly licensed and in good standing in, and
where necessary to maintain its rights and privileges has
complied with the fictitious name statute of, every jurisdiction
in which it is doing business, except where failure so to be
licensed or so to comply would not, in the aggregate, have a
Material Adverse Effect; Cirrus International is a Subsidiary;
6.03 Authorization of Agreement. The execution, delivery,
and performance of this Agreement and any instrument or
agreement required hereunder are within Borrowers' powers, have
been duly authorized, and are not in conflict with the terms of
any charter, bylaw, or other organization papers of any
Borrower, or any instrument or agreement to which any Borrower
or any Subsidiary is a party or by which any Borrower or any
Subsidiary is bound or affected;
6.04 Government Approvals. No approval, consent,
exemption, or other action by, or notice to or filing with, any
governmental authority is necessary in connection with the
execution, delivery, performance, or enforcement of this
Agreement or any instrument or agreement required hereunder,
except as may have been obtained and certified copies of which
have been delivered to the Bank;
6.05 Compliance with Laws. There is no law, rule, or
regulation, nor is there any judgment, decree, or order of any
court or governmental authority binding on any Borrower or any
Subsidiary, which would be contravened by the execution,
delivery, performance, or enforcement of this Agreement or any
instrument or agreement required hereunder;
6.06 Enforceability of Agreement. This Agreement is a
legal, valid, and binding agreement of the Company, enforceable
against the Company in accordance with its terms, and any other
Credit Document or any instrument or agreement required
hereunder, when executed and delivered, will be similarly legal,
valid, binding, and enforceable, in each case except as
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating
to enforceability;
6.07 Investment Company Act. Neither the Company nor any
of its Subsidiaries or Affiliates is an "investment company" or
a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940;
6.08 Title to Property. The Company and its Subsidiaries
have good and marketable title to their respective properties
and assets free and clear of all security interests, liens,
encumbrances or rights of others, except for:
(a) taxes which have resulted in a lien but are not
yet delinquent; and
(b) the rights of the Bank under any agreements
securing credit granted by the Bank to any Borrower or Borrowing
Entity; and
(c) security interests, liens, and encumbrances
permitted under Section 8.04;
and the execution, delivery, or performance of this Agreement or
any other Credit Document or any instrument or agreement
required hereunder will not result in the creation of any such
security interest, lien, encumbrance, or right, other than
rights in favor of the Bank;
6.09 Hazardous Materials. To the best of the Company's
knowledge, the Company and each Subsidiary are in compliance
with all federal, state, and local laws, rules, and regulations
relating to hazardous or toxic materials, substances, or wastes;
6.10 No Litigation. (a) Except as described on Schedule
6.10, there are no suits, proceedings, claims, or disputes
pending or, to the knowledge of either of the Borrowers,
threatened in writing against or affecting any Borrower or any
Subsidiary, or their respective property, the adverse
determination of which could reasonably be expected to
materially affect the Company's consolidated financial condition
or results of operations or impair any Borrower's ability to
perform its obligations hereunder, under any other Credit
Document, or under any instrument or agreement required
hereunder;
(b) Except as described on Schedule 6.10, there are no
actions, proceedings, claims, or disputes pending or, to the
knowledge of either Borrower, threatened against or affecting
any Borrower or any Subsidiary or any of their respective
property alleging violation of any federal, state, or local law,
rule, or regulation relating to hazardous or toxic materials,
substances, or wastes;
6.11 Events of Default. No event has occurred and is
continuing or would result from the incurring of obligations by
any Borrower or any Borrowing Entity under this Agreement or any
other Credit Document which is, or with the lapse of time or
notice or both would be, an Event of Default;
6.12 Regulation U. If used in accordance with this
Agreement, the proceeds of the Credit Facilities would not be
used, directly or indirectly, to purchase or carry any margin
stock (as defined in Regulation U of the Board of Governors of
the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying any margin stock;
6.13 Subsidiaries. All of the Company's Subsidiaries are
listed on Schedule 6.13;
6.14 Financial Information. All financial statements dated
June 30, 1994, and all other information and data furnished by
the Borrowers to the Bank are complete and correct, and such
financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
and fairly present the consolidated financial condition and
results of operations of Company as of such date. Since such
date there has been no change in the Company's consolidated
financial condition or results of operations sufficient to
impair Borrowers' ability to perform their obligations hereunder
or under any Credit Document or other instrument or agreement
required hereunder. Neither the Company nor any Subsidiary has
any contingent obligations, liabilities for taxes, or other
outstanding financial obligations which are material in the
aggregate, except as disclosed in such statements, information,
and data;
6.15 Renewal of Representations and Warranties. The
representations and warranties contained in this Article VI and
in any other Credit Document or other instrument or agreement
executed and delivered in connection herewith shall be deemed to
be made by the Company on and as of the date of each request for
and each disbursement of an Advance or the issuance or amendment
of a Letter of Credit or other extension of credit hereunder;
6.16 Permits, Franchises. Each Borrower possesses all
permits, memberships, franchises, contracts, and licenses
required and all trademark rights, trade name rights, patent
rights, and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged, except where
the lack of possession thereof would not, in the aggregate, have
a Material Adverse Effect;
6.17 Income Tax Returns. No Borrower has any knowledge of
any pending assessments or adjustments with respect to its
income tax liabilities for any year;
6.18 ERISA Plan Compliance.
(a) Each Borrower has fulfilled its obligations, if
any, under the minimum funding standards of ERISA and the
Internal Revenue Code of 1986, as amended from time to time,
(the "Code") with respect to each Plan and is in compliance in
all material respects with the presently applicable provisions
of ERISA and the Code, and has not incurred any liability with
respect to any ERISA Plan under Title IV of ERISA;
(b) No reportable event has occurred under Section
4043(b) of ERISA for which the Pension Benefit Guaranty
Corporation requires 30 day notice;
(c) No action by any Borrower to terminate or withdraw
from any Plan has been taken and no notice of intent to
terminate an ERISA Plan has been filed under Section 4041 of
ERISA;
(d) No proceeding has been commenced with respect to
an ERISA Plan under Section 4042 of ERISA, and no event has
occurred or condition exists which might constitute grounds for
the commencement of such a proceeding;
6.19 Full Disclosure. None of the representations or
warranties made by any Borrower in the Credit Documents as of
the date such representations and warranties are made or deemed
made, and none of the statements contained in each exhibit,
report, statement, or certificate furnished by or on behalf of
any Borrower in connection with the Credit Documents, contains
any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under
which they are made, not misleading.
6.20 No Material Adverse Change. Since June 30, 1994,
there has been no Material Adverse Change in the Company's
consolidated financial condition or results of operations or
ability of the Borrowers to perform their obligations hereunder
or under any of the other Credit Documents. The representation
and warranty of this Section 6.20 shall be deemed to be a
continuing representation and warranty.
ARTICLE VII
Affirmative Covenants
Unless the Bank waives compliance in writing, the Company
covenants and agrees that so long as any credit shall remain
available hereunder, and until the full and final performance of
all obligations incurred hereunder, it will, and with respect to
Sections 7.02 and 7.05 through 7.12, will cause each Subsidiary
to:
7.01 Payment. Pay interest and principal on all sums due
under the Credit Facilities and all other sums outstanding under
or in respect of this Agreement and any instrument or agreement
required hereunder in accordance with the terms hereof and
thereof;
7.02 Use of Proceeds. Use the proceeds of the Credit
Facilities only to meet short term operating cash needs, to
facilitate the import of products, and to support the offshore
needs of the Borrowers and Subsidiaries, and not use any of the
proceeds of the Credit Facilities, directly or indirectly, to
purchase or carry margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System), and not
extend credit to others for the purpose of purchasing or
carrying margin stock;
7.03 Quick Ratio. Maintain at all times, on a consolidated
basis, the sum of (i) cash, (ii) short-term investments, (iii)
long-term United States Treasury obligations with maturities not
in excess of two years from the date of acquisition of such
obligations, and (iv) trade accounts receivable of the Company,
at least equal to 1.00 times current liabilities of the Company;
7.04 Tangible Net Worth. Maintain at all times, on a
consolidated basis, Consolidated Tangible Net Worth of at least
(i) 85% times Consolidated Tangible Net Worth as of December 31,
1994, plus (ii) plus 75% of net income after income taxes
(without subtracting losses) earned in each quarterly accounting
period commencing after December 31, 1994, plus (iii) 100% of
new equity of the Company issued after December 31, 1994;
7.05 Notices. Promptly give written notice to the Bank of:
(a) all litigation affecting any Borrower or any
Subsidiary where the amount claimed is $1,000,000 or more;
(b) any substantial dispute which may exist between
any Borrower or any Subsidiary and any governmental regulatory
body or law enforcement authority;
(c) any labor controversy resulting in or threatening
to result in a strike against any Borrower or any Subsidiary;
(d) any proposal by any public authority to acquire
the assets or business of any Borrower or any Subsidiary or to
compete with any Borrower or any Subsidiary;
(e) any reportable event under Section 4043(b)(5), (6)
or (9) of ERISA with respect to any Plan, any decision to
terminate or withdraw from a Plan affecting 10 or more
employees, any finding made with respect to a Plan under Section
4041(c) or (e) of ERISA, the commencement of any proceeding with
respect to a Plan under Section 4042 of ERISA, or any material
increase in the actuarial present value of unfunded vested
benefits under all Plans over the preceding year;
(f) any Event of Default or any event which, upon a
lapse of time or notice or both, would become an Event of
Default; and
(g) any other matter which has resulted or might
result in a material adverse change in any Borrower's
consolidated financial condition or results of operations;
7.06 Financial Statements, Reports, Etc. Deliver to the
Bank in form and detail satisfactory to the Bank, and in such
number of copies as the Bank may request:
(a) as soon as available but no later than 45 days
after the close of each of the first three quarters of each of
its fiscal years, the Company's consolidated balance sheet as of
the close of such quarter, and Company's consolidated statements
of income, retained earnings, and changes in financial position
for such quarter and that portion of the fiscal year ending with
such quarter, prepared on a consolidated basis and certified by
a responsible officer of the Company as fairly presenting the
Company's financial condition and results of operations;
submission of the Company's Form 10-Q Quarterly Report shall
satisfy the requirements of this subsection if it contains the
information and certification required by this subsection;
(b) as soon as available but no later than 120 days
after the close of each of its fiscal years, a complete copy of
the Company's audited financial statements, which financial
statements shall include at least the Company's consolidated
balance sheet as of the close of such year, and the Company's
consolidated statements of income, retained earnings, and
changes in financial position for such year, prepared on a
consolidated basis, and the unqualified opinion of an
independent certified public accountant selected by the Company
and satisfactory to the Bank stating that Company's financial
statements fairly present the financial condition and results of
operations of the Company and its consolidated Subsidiaries and
were prepared in accordance with generally accepted accounting
principles consistently applied. Such opinion shall not be
qualified or limited because of a restricted or limited
examination by such accountant of any material portion of the
Company's or any Subsidiary's records; submission of the
Company's Form 10-K Annual Report shall satisfy the requirements
of this subsection if it contains the information and opinion
required by this subsection;
(c) within 15 days after the date of filing with the
Securities and Exchange Commission, copies of the Company's Form
10-K Annual Report, Form 10-Q Quarterly Report, and Form 8-K
Current Report;
(d) within 45 days after the end of the first three
quarters of each fiscal year, and 120 days after the end of each
fiscal year, a Compliance Certificate signed by a responsible
officer of the Company stating that such officer is familiar
with this Agreement;
7.07 Cooperation. Perform, on request of the Bank and at
Borrowers' expense, such acts as may be necessary or advisable
to effect fully the transactions contemplated by this Agreement;
7.08 Existence, Etc. Maintain and preserve its existence
and all rights, privileges, and franchises now enjoyed, and keep
all its properties in good working order and condition;
7.09 Payment of Obligations. Pay all obligations,
including tax claims, when due, except such as may be contested
in good faith or as to which a bona fide dispute may exist, and
except for trade obligations, where such failure would not
result, in the aggregate, in a Material Adverse Effect;
7.10 Compliance with Laws. At all times comply with all
laws, rules, regulations, orders, and directions of any
governmental authority having jurisdiction over it or its
business, except to the extent that failure so to comply would
not, in the aggregate, result in a Material Adverse Effect;
7.11 Insurance. Maintain and keep in force in adequate
amounts such insurance as is usual in its business;
7.12 Books and Records, Inspection Rights. Maintain
adequate books, accounts, and records in accordance with
generally accepted accounting principles consistently applied,
and, during the existence and continuance of a Default, permit
employees or agents of the Bank at any reasonable time to
inspect its properties, and to examine or audit its books,
accounts and records and make copies and memoranda thereof.
7.13 Company Liquid Assets. The Company shall maintain, on
an unconsolidated basis, cash, short term investments, and U.S.
treasury instruments in an aggregate amount not less than 60% of
the cash, short term investments, and U.S. instruments of the
Company on a consolidated basis.
ARTICLE VIII
Negative Covenants
Unless the Bank waives compliance in writing, the Company
covenants and agrees that, so long as any of the Credit
Facilities shall remain available, and until full and final
performance of all obligations of the Borrowers and the
Borrowing Entities under this Agreement and the other Credit
Documents and any instrument or agreement required hereunder, it
will not, and with respect to Sections 8.03 through 8.10, will
not permit any Subsidiary to:
8.01 Leverage Ratio. Permit at any time (on a consolidated
basis) total liabilities of the Company and its consolidated
Subsidiaries to exceed Consolidated Tangible Net Worth;
8.02 Profitability. For the Company and its consolidated
Subsidiaries, incur a cumulative net or operating loss over any
period of four consecutive fiscal quarters ending during the
Availability Period;
8.03 Other Liabilities. Create or incur any liabilities
for borrowed money or for the deferred purchase price of
property or services or under leases which in accordance with
generally accepted accounting principles in effect at the time
such leases are entered into should be recorded as capital
leases, or become obligated as a surety, guarantor,
accommodation endorser, or otherwise for or upon the obligation
of any Person, or enter any other arrangement which has the
effect of assuring a creditor of any Person against loss
(including arrangements to purchase or repurchase or market or
remarket property or obligations, pay for property, goods or
services whether or not delivered or rendered, maintain working
capital, equity capital or other financial statement condition
of, or lend or contribute to or invest in, any such Person);
provided, however, that this Section 8.03 shall not be deemed to
prohibit:
(a) liabilities with respect to the Credit Facilities
provided for herein, and any other liabilities or obligations to
or in favor of the Bank;
(b) the acquisition of goods, supplies, or merchandise
on normal trade credit;
(c) the execution of bonds or undertakings in the
ordinary course of its business as presently conducted;
(d) the endorsement for deposit or collection of
negotiable instruments received in the ordinary course of its
business as presently conducted;
(e) purchase money security obligations related to
equipment hereafter acquired when the security interest does not
extend beyond the equipment purchased and the proceeds thereof
and the amount of the obligation does not exceed the value of
the equipment so purchased and the reasonable and necessary
transaction costs association with such purchase;
(f) indebtedness which is subordinate to the
Borrowers' obligations to the Bank on terms satisfactory to the
Bank in its sole discretion;
(g) obligations under capital leases of property to
the extent such obligations do not exceed the value of the
property so leased;
(h) obligations incurred under letters of credit with
First Interstate Bank, not to exceed in an aggregate amount
Seven Million U.S. Dollars (U.S. $7,000,000), on behalf of
Borrower and its Subsidiaries;
(i) contingent obligations, in a aggregate maximum
amount at any one time outstanding not to exceed $250,000,000,
incurred by the Company as guarantor of obligations relating to
the manufacturing joint venture between International Business
Machines Corporation and the Company;
(j) Swap Contracts entered into in the ordinary course
of business as bona fide hedging transactions;
(k) additional contingent obligations in an aggregate
maximum amount at any one time outstanding not to exceed
$25,000,000; and
(l) additional liabilities in an aggregate maximum
amount at any one time outstanding not to exceed $20,000,000.
8.04 Other Security Interests. Create, assume, or suffer
to exist any security interest, lien (including the lien of an
attachment, judgment, or execution) or encumbrance, securing a
charge or obligation, on or of any of its property, real or
personal, whether now owned or hereafter acquired, except:
(a) liens for current taxes, assessments, or other
governmental charges which are not delinquent or remain payable
without any penalty, or the validity of which is contested in
good faith by appropriate proceedings upon stay of execution of
the enforcement thereof;
(b) deposits or pledges to secure:
(i) statutory obligations;
(ii) surety or appeal bonds;
(iii) bonds for release of attachment, stay of
execution or injunction; or
(iv) performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, or
for purposes of like general nature in the ordinary course of
its business as presently conducted;
(c) purchase money security interests in equipment
hereafter acquired when the security interest does not extend
beyond the equipment purchased and the proceeds thereof and the
amount of the obligation does not exceed the value of the
equipment so purchased and the reasonable and necessary
transaction costs association with such purchase;
(d) liens securing obligations in respect of capital
leases on assets subject to such leases, provided that such
capital leases are otherwise permitted hereunder;
(e) liens in connection with workers' compensation,
unemployment insurance or social security obligations, and
mechanics', workmen's, materialmen's, landlords', carriers', or
other like liens arising in the ordinary and normal course of
business with respect to obligations which are not due or which
are being contested in good faith;
(f) liens on insurance policies and the proceeds
thereof, securing the financing of premiums owing by the Company
or any Subsidiary with respect thereto, not to exceed $1,000,000
in aggregate principal amount outstanding at any time;
(g) liens in favor of customs and revenues authorities
arising as a matter of law to secure any payment obligations of
the Company and its Subsidiaries in respect of customs duties in
connection with the importation of goods; and
(h) liens or security interests in favor of the Bank;
8.05 Dividends. Declare or pay any dividends on any of its
shares, except dividends payable in capital stock of such
Borrower or Subsidiary;
8.06 Liquidation, Merger, etc. (a) Liquidate or dissolve;
(b) enter into any consolidation or merger unless such
Subsidiary or the Company is the surviving entity and
immediately after such consolidation or merger there exists no
event which is, or with the lapse of time or notice would be, an
Event of Default;
(c) sell, lease, or dispose of assets with value, in
the aggregate for the Company and its Subsidiaries, greater than
15% of the Company's consolidated total assets as of the date
hereof, or sell, lease, or otherwise sell, lease, or dispose of
its business or assets as a whole or such as in the opinion of
the Bank constitute a substantial portion thereof;
8.07 Sale of Property for Fair Consideration. Dispose of
any of its assets except for full, fair, and reasonable
consideration; provided, that the Company and its Subsidiaries
may transfer assets at cost to one another in the ordinary
course of business;
8.08 Contracts. Enter into any material contracts, leases,
indentures, or other agreements except in the ordinary course of
its business as presently conducted;
8.09 Change in Business. Engage in any business activities
or operations substantially different from or unrelated to
present business activities and operations.
ARTICLE IX
Events of Default
9.01 Events of Default. Any of the following shall
constitute an "Event of Default":
(a) Nonpayment. Any Borrower or any Borrowing Entity
fails to pay any installment of principal when due under this
Agreement or any other Credit Document, or, within three Banking
Days after the same becomes due, interest or any other sum due
under this Agreement or any other Credit Document in accordance
with the terms hereof or thereof;
(b) Misrepresentation. Any representation or warranty
herein or in any Credit Document or in any agreement,
instrument, or certificate executed pursuant hereto or in
connection with any transaction contemplated hereby proves to
have been false or misleading in any material respect when made
or when deemed to have been made;
(c) Failure of Security Interest. The Bank fails to
have a valid and enforceable perfected security interest in or
lien on any collateral obtained by the Bank pursuant to Section
9.02(c) hereof or otherwise required by any Credit Document or
any other credit documentation relating to credit granted to a
Borrower or a Borrowing Entity, having, in the case of
collateral obtained by the Bank pursuant to Section 9.02(c), a
first priority status and, in the case of other collateral, the
priority required by the documentation with respect to such
security interest or lien;
(d) Involuntary Liens. Any involuntary lien or liens
in the aggregate amount of $1,000,000 or more for the Company
and its Subsidiaries, of any kind or character and whether or
not permitted by Section 8.04, attaches to any assets or
property of any Borrower or any Subsidiary, except for taxes due
but not in default, and such liens are not removed and
discharged within 20 days after their incurrence;
(e) Judgments. A judgment or judgments is entered
against any Borrower or any Subsidiary in the aggregate amount
of $1,000,000 or more on a claim or claims not covered by
insurance, and such judgments remain unvacated, unbonded, or
unstayed for a period of 30 days or in any event later than five
days prior to the date of any proposed sale thereunder;
(f) Bankruptcy. Any Borrower or any Subsidiary is
generally not paying its undisputed debts as such debts become
due, or files any petition or action for relief under any
bankruptcy, reorganization, insolvency, or moratorium law or any
other law for the relief of, or relating to, debtors, now or
hereafter in effect, or makes any assignment for the benefit of
creditors, or takes any corporate action in furtherance of any
of the foregoing;
(g) Involuntary Bankruptcy. An involuntary petition
is filed against any Borrower or any Subsidiary under any
bankruptcy statute now or hereafter in effect, or a custodian,
receiver, trustee, assignee for the benefit of creditors (or
other similar official) is appointed to take possession, custody
or control of any property of any Borrower or any Subsidiary
unless such petition or appointment is set aside or withdrawn or
ceases to be in effect within 60 days from the date of said
filing or appointment;
(h) Condemnation. All, or such as in the opinion of
the Bank constitutes substantially all, of the property of any
Borrower or any Subsidiary, or of the Company and its
Subsidiaries as a whole, is condemned, seized, or appropriated;
(i) Regulatory Authority. Any governmental regulatory
authority takes or institutes action which, in the opinion of
the Bank, will materially adversely affect the Company's
consolidated condition, results of operations, or the ability of
any Borrower or Borrowing Entity to perform its obligations
hereunder or under any Credit Document;
(j) Approvals, Consents etc. Any approval, consent,
exemption, or other action of any governmental authority
required under this Agreement is modified, breached, or becomes
ineffective;
(k) Cross Default. Any breach or default occurs under
any other instrument or agreement involving the borrowing of
money or the extension of credit in amounts (including both
commitments and outstandings) exceeding $1,000,000 in the
aggregate, under which any Borrower or any Subsidiary may be
obligated as borrower, installment purchaser, or guarantor, if
such default consists of the failure to pay any indebtedness
when due or if such default causes (or upon a lapse of time or
notice or both would cause) the acceleration of any indebtedness
or the termination of any commitment to lend, or permits or
causes (or upon lapse of time or notice or both would permit or
cause) the acceleration of any indebtedness or the termination
of any commitment to lend and evidence satisfactory to the Bank
of cure of such default shall not have been provided to the Bank
within five days after the date such default first permits such
acceleration or termination;
(l) Breach of Certain Covenants. Any breach of
Section 7.06 occurs and is not cured within ten days after the
Borrower becomes aware thereof or notice from the Bank thereof
(whichever is earlier).
(m) Breach of Other Agreements. Any other breach or
default occurs under any Credit Document, or any breach or
default occurs under any agreement securing any credit granted
by the Bank to any Borrower or any Borrowing Entity or
guarantying such credit, or any such security agreement or
guaranty is revoked or becomes ineffective;
(n) Breach of Other Obligations. Any breach or
default occurs under any other obligation of any Borrower or any
Subsidiary to the Bank or any subsidiary or affiliate of the
Bank;
(o) ERISA Termination. Any Plan termination or any
full or partial withdrawal from a Plan or Plans occurs which
could result in liability of any Borrower, any Subsidiary, or
any Affiliate to the Pension Benefit Guaranty Corporation or to
the Plan or Plans in the aggregate amount of $500,000 or more,
or the actuarial present value of unfunded vested benefits under
all Plans shall exceed 3% of Tangible Net Worth (determined on a
consolidated basis);
(p) IBM Joint Venture Guaranty. Any breach or default
occurs under the Company's guaranty of obligations relating to
the manufacturing joint venture between International Business
Machines Corporation and the Company or under such guaranteed
obligations, if such default consists of the failure to pay any
guaranty obligation, indebtedness or guaranteed amount when due
or if such default permits or causes (or upon a lapse of time or
notice or both would permit or cause) the acceleration of any
guaranty obligation, indebtedness or guaranteed amount or the
termination of any commitment to lend;
(q) Material Adverse Change. Any material adverse
change occurs in the Company's consolidated financial condition
or results of operations or ability of any Borrower or Borrowing
Entity to perform its obligations hereunder or under any Credit
Document.
9.02 Remedies. If any Event of Default occurs, the Bank
may,
(a) terminate any obligation of the Bank to make
Advances, issue or amend Letters of Credit, or make any other
extensions of credit hereunder or under any other Credit
Document;
(b) declare the unpaid principal amount of all
outstanding Advances and Letter of Credit Obligations and
Borrowing Entity L/C Obligations, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder
or under any other Credit Document to be immediately due and
payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived by the
Borrowers and the Borrowing Entities;
(c) with respect to any and all contingent, unmatured,
or unliquidated Letter of Credit Obligations or Borrowing Entity
L/C Obligations, declare and require that cash in an amount
equal to the aggregate amount of such Letter of Credit
Obligations or Borrowing Entity L/C Obligations be paid over and
pledged to the Bank pursuant to a pledge and security agreement
in form and substance satisfactory to the Bank, to be held as
additional cash collateral, in which case such amounts shall be
immediately pledged and delivered to the Bank as demanded by the
Bank; and
(d) exercise all rights and remedies available to the
Bank under the Credit Documents or applicable law;
provided, however, that upon the occurrence of any event
specified in Section 9.01(f) or Section 9.01(g), the obligation
of the Bank to make Advances, issue or amend Letters of Credit,
or make other extensions hereunder or under the other Credit
Documents shall automatically terminate and the unpaid principal
amount of all outstanding Advances and Letter of Credit
Obligations and all interest and other amounts as aforesaid
shall automatically become due and payable without further act
of the Bank.
9.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Credit Documents are cumulative and are
not exclusive of any other rights, powers, privileges, or
remedies provided by law or in equity, or under any other
instrument, document, or agreement now existing or hereafter
arising.
ARTICLE X
Miscellaneous
10.01 Notices. Any communications between the parties
hereto to be given in writing shall be given by mailing the
same, postage prepaid, or by telex, cable, facsimile, or
personal delivery to each party at its address set forth on the
signature pages hereto, or to such other addresses as either
party may in writing hereafter indicate. Any communications
between the parties hereto to be given by telephone shall be
confirmed immediately in writing by the party initiating the
telephone call. The Company acknowledges and agrees that any
agreement of the Bank herein to receive notices by telephone or
facsimile is solely for the convenience and at the request of
the Company. Telephone requests may be made by any individual
identified in writing to the Bank on a form acceptable to the
Bank as being authorized to make such requests. The Bank shall
be entitled to rely upon any written or telephone request from
persons it reasonably believes to be authorized by a Borrower to
make such requests without making independent inquiry. The
Company assumes the full risk of, and the Bank shall not be
responsible for, any delays or errors in transmission, and the
obligation of the Borrowers to repay the loans and other
extensions of credit hereunder shall not be affected in any way
or to any extent by any failure by the Bank to receive written
confirmation of any telephonic or facsimile notice or the
receipt by the Bank of a confirmation which is at variance with
the terms understood by the Bank to be contained in the
telephonic or facsimile notice.
10.02 Application of Amounts Received. The Bank may apply
amounts received by the Bank with respect to the Credit
Facilities after the occurrence of an Event of Default in the
order and in the manner the Bank in its discretion may
determine.
10.03 Cash Collateral for Letters of Credit. Amounts to be
applied under Section 9.02(c) to the portion of the Letter of
Credit Obligations or Borrowing Entity L/C Obligations
consisting of the undrawn amount of outstanding Letters of
Credit or other letters of credit may, at the Bank's option, be
applied to the prepayment of, or be held as cash collateral to
secure, the Letter of Credit Obligations or Borrowing Entity L/C
Obligations. The Company hereby grants, and shall cause Cirrus
International and each Borrowing Entity to grant the Bank a
security interest in all such cash collateral. Cash collateral
shall be placed in an interest-bearing account (which account
shall be acceptable to the Bank) at the Bank.
10.04 Successors and Assigns. This Agreement shall bind
and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that the
Borrowers shall not assign this Agreement or any of the rights
of any Borrower hereunder without the prior written consent of
the Bank.
10.05 Participations; Novations. (a) The Bank may from
time to time, with the prior written consent of the Company at
all times other than during the existence of an Event of
Default, which consent shall not be unreasonably withheld, sell,
assign, grant participations in, or otherwise transfer to any
bank or affiliate of the Bank (each such Person is referred to
as a "Participant") all or part of the obligations of the
Borrowers and the Borrowing Entities to the Bank under this
Agreement or under any of the other Credit Documents.
(b) The Company agrees, and shall cause Cirrus
International and each other Borrowing Entity to agree, that
each transfer of its obligations under this Agreement or any
other Credit Document will give rise to a direct obligation of
such Borrower or Borrowing Entity to the Participant and that
Participant shall have the same rights and benefits under this
Agreement or such Credit Document as it would have if it were
party to this Agreement or such Credit Document.
(c) Except with respect to assignments, the Bank shall
remain liable for the performance of all of its obligations
under this Agreement notwithstanding any transfer by the Bank of
any Borrowers' or Borrowing Entity's obligations under this
Agreement or any Credit Document unless the Bank, the relevant
Borrower or Borrowing Entity, and such Participant agree to the
contrary in writing.
(d) The Company authorizes the Bank to disclose to any
prospective Participant and any Participant any and all
confidential information in the Bank's possession concerning
such Borrower or any Subsidiary, or this Agreement and the other
Credit Documents, subject to such prospective Participant or
Participant agreeing in writing to the Bank to keep such
information confidential to the same extent required of the Bank
hereunder. The Bank shall not be responsible if such
prospective Participant or Participant fails to comply with the
confidentiality agreement.
10.06 Setoff. The Company authorizes, and shall cause
Cirrus International and each other Borrowing Entity to
authorize, the Bank and each Participant, upon the occurrence of
an Event of Default, to proceed directly with respect to amounts
due and payable by right of setoff, banker's lien, or otherwise,
against any property of any Borrower or Borrowing Entity which
may be in the hands of the Bank or such Participant.
10.07 Confidentiality. The Bank agrees to maintain
confidentiality with respect to all information which is
furnished by or on behalf of the Borrowers to the Bank under
this Agreement except to the extent such information:
(a) was or becomes generally available to the public
other than as a result of a disclosure by the Bank;
(b) was or becomes available on a non-confidential
basis from a source other than a Borrower, provided that such
source is not bound by a confidentiality agreement with Borrower
known to the Bank;
(c) is disclosed by the Bank:
(i) to any governmental or regulatory authority
in the course of its duties;
(ii) pursuant to subpoena or other legal process;
(iii) to legal counsel and other advisors
retained by the Bank;
(iv) to any Person and in any proceeding
necessary in the Bank's judgment to protect the Bank's interest
in connection with any claim or dispute involving the Bank; or
(v) to any prospective Participant and any
Participant.
10.08 Waivers; Writing Required. No delay or omission by
the Bank to exercise any right under this Agreement shall impair
any such right, nor shall it be construed to be a waiver
thereof. No waiver of any single breach or default under this
Agreement shall be deemed a waiver of any other breach or
default. Any amendment or waiver of any provision of this
Agreement must be in writing to be effective.
10.09 Remedies. All rights and remedies provided in this
Agreement, any other Credit Document, or any instrument or
agreement required hereunder are cumulative and are not
exclusive of any rights or remedies otherwise provided by law.
Any single or partial exercise of any right or remedy shall not
preclude the further exercise thereof or the exercise of any
other right or remedy.
10.10 Costs and Expenses. The Company agrees to pay, or
cause the relevant Borrower or Borrowing Entity to pay, to the
Bank on demand from time to time all costs, expenses, attorneys'
fees, and allocated costs for in-house legal services incurred
by the Bank in connection with the preparation, administration
(including any waivers and amendments), and enforcement of this
Agreement and the other Credit Documents, and in connection with
any refinancing or restructuring of the Credit Facilities in the
nature of a "work-out".
10.11 Indemnification for Hazardous Substances. The
Company shall indemnify, and cause Cirrus International and each
Borrowing Entity to indemnify, the Bank and its directors,
officers, agents, employees and counsel against and hold the
Bank and each such person harmless from any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature
whatsoever (including attorneys' fees and allocated costs for
in-house legal services) arising out of or attributable to the
use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence on, under or
about any Borrower's or Borrowing Entity's operations or
property or property leased by a Borrower or Borrowing Entity of
any material, substance, or waste which is or becomes designated
as hazardous or toxic under any federal, state, or local law,
rule, or regulation.
10.12 Indemnification for Judgment Currency. If any
judgment or order is given or made for the payment of any amount
due under this Agreement or other Credit Document and such
judgment or order is expressed in a currency other than the
currency required under this Agreement or any instrument or
agreement required hereunder, the Company shall, and shall cause
Cirrus International and each Borrowing Entity to, indemnify the
Bank against and hold the Bank harmless from all loss and damage
incurred by the Bank as a result of any variation in rates of
exchange between the date of such judgment or order and the date
of payment (or, in the case of partial payments, the date of
each partial payment) thereof. This indemnity shall constitute
an obligation separate and independent from the other
obligations contained in this Agreement or any other Credit
Document, shall give rise to a separate and independent cause of
action, shall apply irrespective of any indulgence granted by
the Bank from time to time, and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated
sum in respect of an amount due under this Agreement, any Credit
Document, or any instrument or agreement required hereunder.
10.13 English Language. All writings furnished hereunder
shall be in the English language or accompanied by a certified
translation into the English language.
10.14 Section Headings. Section headings are for reference
only, and shall not affect the interpretation or meaning of any
provision of this Agreement. Unless otherwise provided,
references to Articles, Sections, and Exhibits shall be deemed
reference to Articles, Sections, and Exhibits of this Agreement.
10.15 Severability. The illegality or unenforceability of
any provision of this Agreement or any other Credit Document
shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or
the other Credit Documents.
10.16 Counterparts. This Agreement may be executed in as
many counterparts as may be deemed necessary or convenient, and
by the different parties hereto on separate counterparts each of
which, when so executed, shall be deemed an original but all
such counterparts shall constitute but one and the same
agreement.
10.17 Governing Law. This Agreement, and the other Credit
Documents, except to the extent otherwise specifically provided
therein, shall be governed by and construed under the laws of
the State of California.
10.18 Nature of Liabilities. Each representation and
warranty in each of the Credit Documents shall be deemed to have
been made by the Company.
10.19 Obligations of Foreign Subsidiaries. Except to the
extent that a Subsidiary becomes jointly liable with the Company
and other Subsidiaries for extensions of credit and other
obligations hereunder pursuant to the provisions of Section
7.13, the parties intend that each of Cirrus International and
each other Subsidiary incorporated in a jurisdiction outside of
the United States of America will be liable under this Agreement
only with respect to borrowings by it hereunder, and will not
have any obligation, direct or indirect, with respect to
borrowings by the Company or any other Borrowing Entity. The
entire Agreement, including in particular Section 7.01, shall be
interpreted and enforced accordingly.
In Witness Whereof, the parties hereto have executed
this Agreement by their duly authorized officers as of the day
and year first above written.
CIRRUS LOGIC, INC.
By
Title
By
Title
Address for notices:
3100 West Warren Avenue
Fremont, CA 94538
Attn: Sam S. Srinivasan
Facsimile: (510) 226-2360
Tel: (510) 226-2083
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By
Vice President
Address where notices to
Bank are to be sent:
530 Lytton Avenue, 2nd Floor
Palo Alto, CA 94301
Attn: Stephen L. Parry
Vice President, #3537
Facsimile: (415) 853-4476
Tel: (415) 853-4625
AMENDED AND RESTATED SUPPLEMENTARY AGREEMENT
This AMENDED AND RESTATED SUPPLEMENTARY AGREEMENT (this
"Supplementary Agreement") is entered into as of January 31,
1995, between CIRRUS LOGIC INTERNATIONAL, LTD., a Bermuda
corporation (the "Additional Borrower"), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association (the "Bank"), with respect to the following:
Recitals.
A. Cirrus Logic, Inc., a California corporation (the
"Company") and the Bank are parties to a Credit Agreement, dated
as of November 9, 1992 (as amended from time to time, the "Prior
Parent Agreement"), pursuant to which the Bank has agreed to
make certain extensions of credit to the Company and certain of
its subsidiaries, including the Additional Borrower.
B. In connection with the Prior Parent Agreement, the Bank
and the Additional Borrower entered into the Supplementary
Agreement dated as of November 9, 1992 (the "Prior Supplementary
Agreement").
C. The Bank and the Borrower have agreed to amend and
restate the Prior Parent Agreement in its entirety, on and
subject to the terms and conditions of the Amended and Restated
Credit Agreement dated as of January 31, 1995 (as now in effect
or hereafter extended, renewed or amended, the "Parent
Agreement").
D. The Bank and the Additional Borrower are entering into
this Supplementary Agreement in order to amend and restate in
its entirety the Prior Supplementary Agreement to set forth
certain agreements with respect to extensions of credit to the
Additional Borrower pursuant to the Parent Agreement.
Accordingly, the Additional Borrower and the Bank agree as
follows:
ARTICLE I
Definitions and Financial Requirements.
1.01 Definitions. Capitalized terms used in this
Supplementary Agreement but not otherwise defined herein have
the meanings given to them in the Parent Agreement.
1.02 Financial Requirements. Unless otherwise specified in
this Supplementary Agreement, all accounting terms used in this
Supplementary Agreement shall be interpreted, all financial
information required under this Agreement shall be prepared, and
all financial computations required under this Agreement shall
be made, in accordance with generally accepted accounting
principles consistently applied.
ARTICLE II
The Credit.
2.01 Advances to the Additional Borrower. (a) Each
Advance to the Additional Borrower made under the Parent
Agreement shall be subject to the provisions, terms, and
conditions set forth in the Parent Agreement, whether or not
such provisions, terms, or conditions are also set forth herein
or specifically referred to herein.
(b) Each request by the Additional Borrower for an
Advance to it shall be made in accordance with the provisions of
Sections 2.02 and 2.03 of the Parent Agreement.
(c) The term of each Advance made to the Additional
Borrower shall be in accordance with the provisions of Sections
2.02 and 2.03 of the Parent Agreement.
(d) The Additional Borrower shall pay interest on each
Advance made to it at the rate and at the times set forth for
such Advance in Sections 2.02 and 2.03 of the Parent Agreement.
(e) The Additional Borrower shall pay the principal of
each Advance made to it at the times and in the amounts set
forth in Sections 2.02 and 2.03 of the Parent Agreement.
(f) The Additional Borrower may prepay any advance
made to it in accordance with the provisions of Sections 2.02
and 2.03 of the Parent Agreement.
2.02 Letters of Credit. (a) Each request for a Letter of
Credit to be issued for the account of the Additional Borrower
shall be made in accordance with the provisions of Section 2.04
of the Parent Agreement.
(b) Each Letter of Credit issued for the account of
the Additional Borrower shall have a term in accordance with the
provisions of Section 2.04(a) of the Parent Agreement.
(c) With respect to each Letter of Credit issued for
the account of the Additional Borrower, the Additional Borrower
shall pay the fees and commissions with respect to such Letter
of Credit which are set forth in Sections 2.04(c)(i), (ii), and
(iii) of the Parent Agreement.
(d) With respect to Letters of Credit issued for the
account of the Additional Borrower, the Additional Borrower will
pay or compensate the Bank, promptly upon demand made from time
to time, for miscellaneous expenses for the items and in the
amounts customarily charged by the Bank from time to time with
respect to Letters of Credit.
2.03 Guaranty. The obligations of the Additional Borrower
under this Supplementary Agreement and with respect to the
Letter of Credit Obligations under Letters of Credit issued for
the account of the Additional Borrower, and all other
obligations of the Additional Borrower under any other Credit
Document shall be guaranteed by the Company pursuant to the
International Guaranty.
ARTICLE III
Disbursements, Payments, and Calculations
3.01 Lending Branches. Each Advance and each Letter of
Credit and each payment to the Bank by the Additional Borrower
under this Supplementary Agreement shall be made for the account
of the Bank's Lending Branch.
3.02 Loan Account. Principal, interest, and all other sums
owing by the Additional Borrower to the Bank under this
Supplementary Agreement shall be evidenced by entries in records
maintained by the Bank. Each payment on and any other credits
with respect to principal, interest, and all other sums
outstanding under this Supplementary Agreement shall be
evidenced by entries in such records.
3.03 Immediately Available Funds. Each disbursement to the
Additional Borrower and each payment to the Bank under this
Supplementary Agreement or under any other extension of credit
made to the Additional Borrower under the Parent Agreement shall
be made in Dollars (except, unless otherwise agreed,
disbursements and payments with respect to each Offshore
Currency Advance and each Local Currency Advance shall be made
in the relevant Offshore Currency or Local Currency, as
appropriate, and disbursements and payments with respect to
credit extensions to a Borrowing Entity shall be in the currency
agreed to by such Borrowing Entity and the Bank) in immediately
available funds (or such other funds as the Bank may require).
3.04 Disbursements. Each disbursement of an Advance by the
Bank to the Additional Borrower shall be by crediting the
Additional Borrower's account at such bank or branch of the Bank
as the Additional Borrower and the Bank may agree upon from time
to time in writing.
3.05 Payments. (a) Each payment by the Additional
Borrower under this Supplementary Agreement or any other
extension of credit to the Additional Borrower under the Parent
Agreement shall be made to the Bank by payment to such branch of
the Bank as the Bank may specify from time to time.
(b) Each payment by the Additional Borrower may be
made only on a Banking Day. If the day on which a payment would
fall due is not a Banking Day, the day on which such payment is
due shall be the next succeeding Banking Day and interest and
fees shall accrue on such sums at the applicable rate or rates
for the additional day or days. Each such payment shall be made
without setoff or counterclaim not later than noon San
Francisco, California time on the day such payment is due. All
sums received after such time shall be deemed received on the
next Banking Day and interest and fees shall accrue on such sums
at the applicable rate or rates for the additional day or days.
(c) With respect to regularly scheduled payments of
principal, interest and fees payable under the Credit Documents
which are payable in Dollars, the Additional Borrower hereby
authorizes the Bank to debit the Additional Borrower's accounts
with the Bank in the amount of principal, interest or fees due
from the Additional Borrower under this Supplementary Agreement
or under any other Credit Document. The Bank shall debit the
account of the Additional Borrower on the date such amounts
become due, or if such due date is not a Banking Day, on the
next Banking Day after such due date. If there are insufficient
funds in the account to cover the amount debited to the account
in accordance with this Section 3.05(c), such debit will be
reversed (in whole or in part, in the Bank's sole discretion)
and such amount not debited will be deemed to remain unpaid. No
such debit under this Section 3.05(c) shall be deemed a setoff.
3.06 Failure to Borrow. If the Additional Borrower
requests a Fixed Rate Advance, an Offshore Rate Advance, an
Offshore Currency Advance, a Local Currency Advance, or other
Advance and for any reason (including the occurrence of an event
which is, or upon the lapse of time or notice or both would
become, an Event of Default) does not borrow such Advance, the
Additional Borrower shall, on demand by the Bank, pay to the
Bank the amount (if any) by which (a) the interest which would
have been payable on the amount which the Additional Borrower
failed to borrow had such amount been borrowed and outstanding
for the Interest Period or other applicable term (in the case of
a Local Currency Advance or extension of credit to a Borrowing
Entity) specified in the request for such Advance exceeds (b)
the interest which would have been recoverable by the Bank by
placing such unborrowed amount on deposit in the certificate of
deposit markets or the offshore Dollar interbank markets, as the
case may be, for the Interest Period or other applicable term
specified in the request for such Advance.
3.07 Default Interest. Any principal, interest, or other
sum payable by the Additional Borrower hereunder or under any
Credit Document if not paid when due shall bear interest
(payable on demand) from its due date until payment in full
(computed daily on the basis of a 360 day year and actual days
elapsed) at a rate per annum equal to the Reference Rate plus
2.00% per annum.
3.08 Calculation of Interest and Fees. Except as otherwise
specifically provided in this Supplementary Agreement or in the
Parent Agreement, all interest, fees, and other sums due under
this Supplementary Agreement or the Parent Agreement shall be
computed on the basis of actual days elapsed and a year of 360
days, which results in more interest or a larger fee or other
amount payable than if a year of 365 days were used.
ARTICLE IV
Taxes, Costs, Capital Adequacy, Etc.
4.01 Taxes. (a) If any taxes (other than taxes on net
income imposed on or measured by the Bank's net income by the
jurisdiction under the laws of which the Bank is organized or
maintains a lending office from which extensions of credit
hereunder are made) are at any time imposed on any payments
under or in respect of this Supplementary Agreement or any
instrument or agreement required hereunder including, but not
limited to, payments made pursuant to this Section 4.01, the
Additional Borrower shall pay all such taxes and shall also pay
to the Bank, at the time interest is paid, all additional
amounts which the Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such taxes had
not been imposed (as such additional amounts are determined in
accordance with Section 4.01(a)(ii) of the Parent Agreement).
(b) The Additional Borrower will provide the Bank
with original tax receipts, notarized copies of tax receipts, or
such other documentation as will prove payment of tax in a court
of law applying the United States Federal Rules of Evidence, for
all taxes paid by the Additional Borrower pursuant to Section
4.01(a) above. The Additional Borrower will deliver receipts to
the Bank within 30 days after the due date for the related tax.
4.02 Costs. The Additional Borrower shall reimburse or
compensate the Bank, upon demand by the Bank from time to time,
for all costs incurred, losses suffered and payments made by the
Bank which are applied or allocated by the Bank to any of the
Credit Facilities extended to the Additional Borrower (all as
determined by Bank in its sole and absolute discretion) by
reason of:
(a) any and all present and future reserve deposit or
similar requirements against (or against any class of or change
in or in the amount of) assets or liabilities of, or commitments
or extensions of credit by, the Bank;
(b) compliance by the Bank with any directive,
requirement or request from any governmental or regulatory
authority, whether or not having the force of law.
4.03 Capital Adequacy. If the Bank determines that any
law, rule, regulation, or guideline regarding capital adequacy
affects or would affect the amount of capital required to be
maintained by the Bank or any corporation controlling the Bank
and the Bank determines (taking into consideration the Bank's
policies with respect to capital adequacy and the Bank's desired
return on capital) that the amount of required capital is
increased as a result of the Bank's extensions of credit to the
Additional Borrower under the Parent Agreement, then, upon
demand by the Bank from time to time, the Additional Borrower
shall pay the Bank additional amounts sufficient as specified by
the Bank to compensate the Bank for such increase.
4.04 Breaking Deposits. If for any reason (including
voluntary or mandatory prepayment or acceleration) the Bank
receives all or part of the principal amount of a Fixed Rate
Advance, an Offshore Rate Advance, or an Offshore Currency
Advance made to the Additional Borrower prior to the last day of
the Interest Period for such Advance, the Additional Borrower
shall, on demand by the Bank, pay the Bank the amount (if any)
by which (a) the additional interest which would have been
payable on the amount so received had it not been received until
the last day of such Interest Period exceeds (b) the interest
which would have been recoverable by the Bank by placing the
amount so received on deposit in the certificate of deposit
markets or the offshore currency interbank markets, as the case
may be, for a period starting on the date on which it was so
received and ending on the last day of such Interest Period.
4.05 Statement of the Bank. If the Bank claims any
reimbursement or compensation pursuant to this Article IV, the
Bank shall deliver to the Company a statement setting forth in
reasonable detail the amount payable to the Bank hereunder and
such statement shall be conclusive and binding on the Company
and the Additional Borrower in the absence of manifest error.
ARTICLE V
Conditions to the Availability of Credit
5.01 Conditions to the First Extension of Credit. This
Supplementary Agreement shall become effective on the Closing
Date subject to the condition precedent that, on the Closing
Date, all the conditions of Section 5.01 of the Parent Agreement
shall then have been met to the satisfaction of the Bank.
5.02 Conditions Precedent to Each Extension of Credit. The
obligation of the Bank to disburse an Advance, issue a Letter of
Credit, or amend a Letter of Credit, or make any other extension
of credit hereunder, is subject to the conditions precedent set
forth in Section 5.02 of the Parent Agreement.
ARTICLE VI
Representations and Warranties
The Additional Borrower represents and warrants that:
6.01 Organization of the Additional Borrower. The
Additional Borrower is a corporation duly organized and existing
under the laws of Bermuda; the Additional Borrower is properly
licensed and in good standing in, and where necessary to
maintain the Additional Borrower's rights and privileges, and
the Additional Borrower has complied with the fictitious name
statute of every jurisdiction in which it is doing business,
except where failure so to be licensed or so to comply would
not, in the aggregate, have a Material Adverse Effect;
6.02 Parent Agreement. The Additional Borrower has been
provided with a copy of the Parent Agreement and is familiar
with the contents and provisions thereof;
6.03 Authorization of Agreement. The execution, delivery,
and performance of this Supplementary Agreement and any other
Credit Document to be executed by the Additional Borrower are
within the Additional Borrower's powers, have been duly
authorized, and are not in conflict with the terms of any
charter, bylaw, or other organization papers of the Additional
Borrower, or any instrument or agreement to which the Additional
Borrower is a party or by which the Additional Borrower is bound
or affected;
6.04 Government Approvals. No approval, consent,
exemption, or other action by, or notice to or filing with, any
governmental authority is necessary in connection with the
execution, delivery, performance, or enforcement of this
Supplementary Agreement or any instrument or agreement required
hereunder, except as may have been obtained and certified copies
of which have been delivered to the Bank;
6.05 Compliance with Laws. There is no law, rule, or
regulation, nor is there any judgment, decree, or order of any
court or governmental authority binding on the Additional
Borrower which would be contravened by the execution, delivery,
performance, or enforcement of this Supplementary Agreement or
any instrument or agreement required hereunder;
6.06 Enforceability of Agreement. This Supplementary
Agreement is a legal, valid, and binding agreement of the
Additional Borrower, enforceable against the Additional Borrower
in accordance with its terms, and any other Credit Document or
any instrument or agreement required hereunder to be executed by
the Additional Borrower, when executed and delivered, will be
similarly legal, valid, binding, and enforceable;
6.07 Investment Company Act. The Additional Borrower is
not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940;
6.08 No Litigation. (a) Except as described on Schedule
6.10 of the Parent Agreement, there are no suits, proceedings,
claims, or disputes pending or, to the knowledge of the
Additional Borrower, threatened against or affecting the
Additional Borrower or its property, the adverse determination
of which might affect the Additional Borrower's financial
condition or results of operations or impair the Additional
Borrower's ability to perform its obligations hereunder or under
any instrument or agreement required hereunder;
(b) Except as described on Schedule 6.10 of the
Parent Agreement, there are no actions, proceedings, claims, or
disputes pending or, to the knowledge of the Additional
Borrower, threatened against or affecting the Additional
Borrower or any of its property alleging violation of any
federal, state, or local law, rule, or regulation relating to
hazardous or toxic materials, substances, or wastes;
6.09 Events of Default. No event has occurred and is
continuing or would result from the incurring of obligations by
the Additional Borrower under this Supplementary Agreement or
any other Credit Document which is, or with the lapse of time or
notice or both would be, an Event of Default;
6.10 Regulation U. If used in accordance with this
Supplementary Agreement and the Parent Agreement, the proceeds
of the extensions of credit to the Additional Borrower under the
Parent Agreement would not be used, directly or indirectly, to
purchase or carry any margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or
carrying any margin stock;
6.11 Subsidiary. The Additional Borrower is a Subsidiary;
6.12 Renewal of Representations and Warranties. The
representations and warranties made by the Additional Borrower
in this Article VI and in any other Credit Document or other
instrument or agreement executed and delivered in connection
herewith shall be deemed to be made by the Additional Borrower
on and as of the date of each request for and each disbursement
of an Advance to the Additional Borrower or the issuance or
amendment of a Letter of Credit for the account of the
Additional Borrower;
6.13 Other Representations and Warranties. Each other
representation or warranty made by the Company in the Parent
Agreement which relates to or is made with respect to the
Additional Borrower is true and correct.
ARTICLE VII
Affirmative Covenants
Unless the Bank waives compliance in writing, the Additional
Borrower covenants and agrees that so long as any credit shall
remain available under the Parent Agreement, and until the full
and final performance of all obligations incurred thereunder, it
will:
7.01 Payment. Pay interest and principal on all sums due
under extensions of credit to the Additional Borrower under the
Parent Agreement and all other sums outstanding under or in
respect of this Supplementary Agreement and any instrument or
agreement required hereunder in accordance with the terms hereof
and thereof;
7.02 Use of Proceeds. Use the proceeds of the extensions
of credit made to the Additional Borrower under the Parent
Agreement only to meet short term operating cash needs, to
facilitate the import of products, and to support the offshore
needs of the Additional Borrower, and not use any of the
proceeds of the Credit Facilities, directly or indirectly, to
purchase or carry margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System), and not
extend credit to others for the purpose of purchasing or
carrying margin stock;
7.03 Other Affirmative Covenants. To the extent applicable
or relating to the Additional Borrower, comply with the
provisions of Sections 7.05 through 7.12 of the Parent
Agreement.
ARTICLE VIII
Negative Covenants
Unless the Bank waives compliance in writing, the Additional
Borrower covenants and agrees that, so long as any of the Credit
Facilities shall remain available, and until full and final
performance of all obligations of the Borrowers and the
Borrowing Entities under the Parent Agreement, this
Supplementary Agreement, and the other Credit Documents and any
instrument or agreement required hereunder or thereunder, it
will not take any action which is prohibited by Sections 8.03
through 8.10 of the Parent Agreement.
ARTICLE IX
Events of Default; Remedies
9.01 Remedies. If any Event of Default occurs, the Bank
may,
(a) terminate any obligation of the Bank to make
Advances, issue or amend Letters of Credit, or make any other
extensions of credit hereunder or under any other Credit
Document;
(b) declare the unpaid principal amount of all
outstanding Advances and Letter of Credit Obligations and
Borrowing Entity L/C Obligations, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder
or under any other Credit Document to be immediately due and
payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived by the
Borrowers and the Borrowing Entities;
(c) with respect to any and all contingent, unmatured,
or unliquidated Letter of Credit Obligations or Borrowing Entity
L/C Obligations, declare and require that cash in an amount
equal to the aggregate amount of such Letter of Credit
Obligations or Borrowing Entity L/C Obligations be paid over and
pledged to the Bank pursuant to a pledge and security agreement
in form and substance satisfactory to the Bank, to be held as
additional cash collateral, in which case such amounts shall be
immediately pledged and delivered to the Bank as demanded by the
Bank; and
(d) exercise all rights and remedies available to the
Bank under the Credit Documents or applicable law;
provided, however, that upon the occurrence of any event
specified in Section 9.01(f) of the Parent Agreement or Section
9.01(g) of the Parent Agreement, the obligation of the Bank to
make Advances, issue or amend Letters of Credit, or make other
extensions hereunder or under the other Credit Documents shall
automatically terminate and the unpaid principal amount of all
outstanding Advances and Letter of Credit Obligations and all
interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Bank.
9.02 Rights Not Exclusive. The rights provided for in this
Supplementary Agreement and the other Credit Documents are
cumulative and are not exclusive of any other rights, powers,
privileges, or remedies provided by law or in equity, or under
any other instrument, document, or agreement now existing or
hereafter arising.
ARTICLE X
Miscellaneous
10.01 Notices. Any communications between the parties
hereto to be given in writing shall be given by mailing the
same, postage prepaid, or by telex, cable, facsimile, or
personal delivery to each party at its address set forth on the
signature pages hereto, or to such other addresses as either
party may in writing hereafter indicate. Any communications
between the parties hereto to be given by telephone shall be
confirmed immediately in writing by the party initiating the
telephone call. The Additional Borrower assumes the full risk
of, and the Bank shall not be responsible for, any delays or
errors in transmission, and the obligation of the Additional
Borrower to repay the loans and other extensions of credit the
Parent Agreement shall not be affected in any way or to any
extent by any failure by the Bank to receive written
confirmation of any telephonic or facsimile notice or the
receipt by the Bank of a confirmation which is at variance with
the terms understood by the Bank to be contained in the
telephonic or facsimile notice.
10.02 Application of Amounts Received. The Bank may apply
amounts received by the Bank with respect to the Credit
Facilities after the occurrence of an Event of Default in the
order and in the manner the Bank in its discretion may
determine.
10.03 Cash Collateral for Letters of Credit. Amounts to be
applied under Section 9.01(c) to the portion of the Letter of
Credit Obligations or Borrowing Entity L/C Obligations
consisting of the undrawn amount of outstanding Letters of
Credit or other letters of credit may, at the Bank's option, be
applied to the prepayment of, or be held as cash collateral to
secure, the Letter of Credit Obligations or Borrowing Entity L/C
Obligations. The Additional Borrower hereby grants the Bank a
security interest in all such cash collateral. Cash collateral
shall be placed in an interest-bearing account (which account
shall be acceptable to the Bank) at the Bank.
10.04 Successors and Assigns. This Supplementary Agreement
shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that
the Additional Borrower shall not assign this Supplementary
Agreement or any of the rights of the Additional Borrower
hereunder or with respect to the Credit Facilities without the
prior written consent of the Bank.
10.05 Participations; Novations. (a) The Bank may from
time to time, with the prior written consent of the Company at
all times other than during the existence of an Event of
Default, which consent shall not be unreasonably withheld, sell,
assign, grant participations in, or otherwise transfer to any
bank or affiliate of the Bank all or part of the obligations of
the Borrowers and the Borrowing Entities to the Bank under the
Parent Agreement or under any of the other Credit Documents.
(b) The Additional Borrower agrees that each transfer
of its obligations under the Credit Documents will give rise to
a direct obligation of the Additional Borrower to the
Participant and that Participant shall have the same rights and
benefits under this Supplementary Agreement or such other Credit
Document as it would have if it were party to this Supplementary
Agreement or such Credit Document.
(c) Except with respect to assignments, the Bank shall
remain liable for the performance of all of its obligations
under this Agreement notwithstanding any transfer by the Bank of
the Additional Borrower's obligations under this Supplementary
Agreement or any Credit Document unless the Bank, the Additional
Borrower, and such Participant agree to the contrary in writing.
(d) The Additional Borrower authorizes the Bank to
disclose to any prospective Participant and any Participant any
and all confidential information in the Bank's possession
concerning the Additional Borrower or this Supplementary
Agreement and the other Credit Documents, subject to such
prospective Participant or Participant agreeing in writing to
the Bank to keep such information confidential to the same
extent required of the Bank hereunder. The Bank shall not be
responsible if such prospective Participant or Participant fails
to comply with the confidentiality agreement.
10.06 Setoff. The Additional Borrower authorizes the Bank
and each Participant, upon the occurrence of an Event of
Default, to proceed directly with respect to amounts due and
payable by right of setoff, banker's lien, or otherwise, against
any property of the Additional Borrower which may be in the
hands of the Bank or such Participant.
10.07 Waivers; Writing Required. No delay or omission by
the Bank to exercise any right under this Supplementary
Agreement shall impair any such right, nor shall it be construed
to be a waiver thereof. No waiver of any single breach or
default under this Supplementary Agreement shall be deemed a
waiver of any other breach or default. Any amendment or waiver
of any provision of this Supplementary Agreement must be in
writing to be effective.
10.08 Remedies. All rights and remedies provided in this
Supplementary Agreement, any other Credit Document, or any
instrument or agreement required hereunder are cumulative and
are not exclusive of any rights or remedies otherwise provided
by law. Any single or partial exercise of any right or remedy
shall not preclude the further exercise thereof or the exercise
of any other right or remedy.
10.09 Indemnification for Hazardous Substances. The
Additional Borrower shall indemnify the Bank and its directors,
officers, agents, employees and counsel against and hold the
Bank and each such person harmless from any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature
whatsoever (including attorneys' fees and allocated costs for
in-house legal services) arising out of or attributable to the
use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence on, under or
about the Additional Borrower's operations or property or
property leased by the Additional Borrower of any material,
substance, or waste which is or becomes designated as hazardous
or toxic under any federal, state, or local law, rule, or
regulation.
10.10 Indemnification for Judgment Currency. If any
judgment or order is given or made for the payment of any amount
due under this Supplementary Agreement or other Credit Document
and such judgment or order is expressed in a currency other than
the currency required under this Supplementary Agreement or any
instrument or agreement required hereunder, the Additional
Borrower shall indemnify the Bank against and hold the Bank
harmless from all loss and damage incurred by the Bank as a
result of any variation in rates of exchange between the date of
such judgment or order and the date of payment (or, in the case
of partial payments, the date of each partial payment) thereof.
This indemnity shall constitute an obligation separate and
independent from the other obligations contained in this
Supplementary Agreement or any other Credit Document, shall give
rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Bank from time to
time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under this Supplementary Agreement, any
Credit Document, or any instrument or agreement required hereunder.
10.11 English Language. All writings furnished hereunder
shall be in the English language or accompanied by a certified
translation into the English language.
10.12 Section Headings. Section headings are for reference
only, and shall not affect the interpretation or meaning of any
provision of this Supplementary Agreement. Unless otherwise
provided, references to Articles, Sections, and Exhibits shall
be deemed reference to Articles, Sections, and Exhibits of this
Supplementary Agreement.
10.13 Severability. The illegality or unenforceability of
any provision of this Supplementary Agreement or any other
Credit Document shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Supplementary Agreement or the other Credit Documents.
10.14 Counterparts. This Supplementary Agreement may be
executed in as many counterparts as may be deemed necessary or
convenient, and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and
the same agreement.
10.15 Governing Law. This Supplementary Agreement shall be
governed by and construed under the laws of the State of
California.
10.16 Prior Supplementary Agreement. This Supplementary
Agreement amends and restates in its entirety, but does not
extinguish, the Prior Supplementary Agreement. All obligations
of the Additional Borrower under the Prior Supplementary
Agreement shall be subject to the terms of this Supplementary
Agreement.
In Witness Whereof, the parties hereto have executed
this Agreement by their duly authorized officers as of the day
and year first above written.
CIRRUS LOGIC INTERNATIONAL, LTD.
By
Title
By
Title
Address:
c/o Cirrus Logic, Inc.
3100 West Warren Avenue
Fremont, CA 94538
Attn: Sam S. Srinivasan
Facsimile: (510) 226-2360
Tel: (510) 226-2083
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By
Title: Vice President
Address:
530 Lytton Avenue, 2nd Floor
Palo Alto, CA 94301
Attn: Stephen L. Parry
Vice President, #3537
Facsimile: (415) 853-4476
Tel: (415) 853-4625