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EXHIBIT 10.80
May 2, 1996
Mr. Christopher Stoddart
Mr. Douglas Reed
KLA Corporation
160 Rio Robles
P.O. Box 49055
San Jose, California 95161-9055
Dear Chris and Doug:
We are pleased to confirm our extension of a Three Million Dollar ($3,000,000)
loan facility (the "Facility") to KLA Instruments Corporation ("KLA") to make
second mortgage loans to your eligible present and future employees and other
eligible co-borrowers on the terms and conditions set forth in this commitment
facility letter. The credit extended under this Facility is to be used by
approved eligible employees (the "Borrowers") to assist them in purchasing their
primary residence (the "Mortgage Loan Supplement Program" or the "Program").
1. All Borrowers under the Mortgage Loan Supplement Program will be
eligible KLA employees. Eligibility for participation in the Program
will be determined by KLA.
2. The loans made under the Mortgage Loan Supplement Program (the "Loans")
will be for the purpose of assisting eligible employees in purchasing
their primary residence.
3. The minimum amount of each Loan will be Fifteen Thousand and No/100
Dollars ($15,000.00). The maximum amount of each Loan will be One
Hundred Thousand and No/100 Dollars ($100,000.00), or greater, if
specifically requested in writing by KLA, and approved by Bank of the
West which approval the Bank of the West may withhold in sole and
absolute discretion. In no event shall the amount of any Loan, when
added to all senior indebtedness secured by the property, exceed
ninety-five percent (95%) of the lower the purchase price or the
appraised value of the property.
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4. The interest rate on the Loans will be the published The Wall Street
Journal, Western Edition, prime rate (the "Index Rate") plus one
percent (1%) per annum and will be computed on a 360-day year, twelve
30-day months' basis. The maximum interest rate shall not exceed five
percentage points (5%) above the initial loan rate. The interest rate
will be fixed each month as of the first day of each month ("Change
Date"). If the Change Date occurs on a weekend or holiday and no Index
Rate is published on that day, then the Index Rate published on the
next succeeding business day shall be utilized to determine the
interest applicable to the Change Date.
5. The term of each Loan will be three to seven years from the making of
the Loan, as determined by Bank of the West in consultation with KLA.
Principal will be paid in equal annual installments. Interest will
accrue monthly and be paid annually along with each yearly principal
payment.
6. KLA employees who are residents of California will provide a second
deed of trust on the residence purchased as collateral for Loans
extended under the Program. Loans to employees in other states will be
secured by second mortgages on the residences purchased. The closing of
the Loan will occur simultaneously with the closing of the first deed
of trust/mortgage.
7. KLA will pay all escrow fees, title insurance fees (including
endorsements), appraisal fees (Lender will use senior deed of trust
lender's appraisal if it's current and meets regulatory standards) and
all other similar closing costs and loan costs in connection with the
loans. Bank of the West will not charge any "points" or up front fees
in connection with the Loans.
8. Documentation for these transactions will be a variable rate promissory
note, Bank of the West's second deed of trust or mortgage documentation
in effect from time to time (which will be modified, as appropriate to
accommodate the special features of this Facility), appraisals,
casualty insurance (naming Bank of the West as additional loss payee),
lender title insurance, and other traditional closing documentation.
The currently effective Bank of the West second deed of trust is
attached here to. Second mortgage documentation, if applicable, will be
subject to prior review and approval by KLA.
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9. If a Borrower's employment with KLA is terminated as a result of a lay
off or reduction in force, permanent disability, or death prior to
maturity, the Loan will continue until maturity; if a Borrower's
employment with KLA is terminated by the employee voluntarily or by KLA
other than as a result of a layoff or reduction in force, then the Loan
will mature sixty days thereafter. The Guaranty (as defined below) will
continue until the Loan is paid in full. At maturity or upon earlier
termination as described above, the Borrower will be required to repay
the Loan. Upon default or upon maturity, Bank of the West will have the
right to either (i) foreclose on the deed of trust or (ii) call on the
Guaranty. If KLA pays on the Guaranty, Bank of The West will assign the
Note, Deed of Trust and other loan documents and all of their rights
thereunder to KLA.
10. Bank of the West will provide KLA with a copy of each annual payment
request sent to each Borrower.
11. KLA agrees to:
(a) Provide Bank of the West with a master continuing guaranty
substantially in the form attached (the "Guaranty"), guaranteeing the
Borrowers' obligations and performance on the indebtedness (including
indebtedness arising out of actions taken by Bank of the West to
protect its security under any Loan made pursuant to this Facility).
KLA agrees and acknowledges that because the loan-to-value ratio
permitted under this Facility will be high, Bank of the West is
relying on the Guaranty as its assurance against any loss in
connection with the Loans to be made to the Borrowers,
(b) Provide Bank of the West with a letter (in the form attached
hereto) as part of each loan application by an eligible Borrower(s),
confirming such Borrowers' eligibility to apply under the Program
(the "Eligibility Letter").
(c) Provide Bank of the West with 10-Qs and 10-Ks and such other KLA
financial data as reasonably requested from time to time. Such data
shall include, without limitation, an annual audited balance sheet
and income statement substantially in the form previously submitted
to Banque Nationale de Paris.
(d) Provide Bank of the West with adequate documentation to
substantiate KLA's authorization and authority, to enter into this
transaction, including, without limitation, an opinion of counsel for
KLA regarding the due execution and enforceability of the Guaranty,
certified copy of the Board of Directors Resolution Certificate
approving the transaction and an Incumbency Certificate.
(e) Inform Bank of the West if a Borrower's employment is terminated
for any reason, and whether the termination is the result of a
reduction in force, lay off, permanent disability or death prior to
maturity of the loan.
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(f) Provide Bank of the West a list of persons authorized to execute
Eligibility Letters.
12. Termination of Facility
This Facility may be terminated at any time by either Bank of the West
or KLA by written notice given to the other party. Notwithstanding any
such termination, (i) all Loans outstanding under this Facility at the
time of termination shall remain in effect in accordance with their
terms and (ii) all rights of Bank of the West under loan documentation,
including the Guaranty, shall continue in effect until all outstanding
indebtedness under this Facility has been repaid in full and all
related obligations have been performed.
Dated: May 2, 1996
Bank of the West
James M. Griffith
Vice President and Manager
Accepted:
KLA Instruments Corporation
By: /s/ Chris Stoddart
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Date: May 8, 1996
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UNCONDITIONAL GUARANTY
This Guaranty (the "Guaranty") is made as of May 8, 1996 by KLA
Instruments Corporation ("KLA"), a Delaware corporation (the "Guarantor"), in
favor of Bank of the West, a California corporation (the "Lender").
1. This Guaranty is made in order to induce the Lender to make
loans to certain of Guarantor's employees and their spouses (the "Borrowers")
identified by the Guarantor as eligible to participate in the Mortgage Loan
Supplement Program (as defined in the Mortgage Loan Supplement Program
Commitment dated May 2, 1996 ) (the "Loans"). The Guarantor understands that the
proceeds of each Loan will be used by each of the Borrowers to purchase their,
his, or her primary residence or to pay off existing loans made by KLA to
certain Borrowers. The amount of each Loan shall not be less than Fifteen
Thousand and No/100 Dollars ($15,000.00) nor more than One Hundred Thousand and
No/100 Dollars ($100,000.00), provided, however, the Lender may in its sole and
absolute discretion loan an amount in excess of One Hundred Thousand and No/100
Dollars ($100,000.00) to a Borrower if the Guarantor specifically requests in
writing that such loan be made. The total original, principal amount of all
Loans shall not in the aggregate exceed Three Million and No/100 Dollars
($3,000,000.00). Each Loan will be evidenced by an adjustable rate promissory
note in substantially the form attached to this Guaranty executed by the
respective Borrowers (the "Notes"). All Loans will be secured by a second lien
priority deed of trust or mortgage, depending on the state in which the
purchased residence is located, (the "Deeds of Trust") and certain other
documents evidencing or securing the Loans, each of which shall be in
substantially the form reviewed and approved by Guarantor prior to the execution
thereof. The Borrowers will also execute certain other documents such as, but
not limited to, Truth-in-Lending disclosure statements and Regulation Z forms
and RESPA statements in connection with these Loans. (The Note, Deed of Trust,
and all other documents executed by the Borrowers in connection with the Loan
shall hereinafter be referred to as the "Loan Documents".) Lender will provide
Guarantor with true, correct and complete copies of the Loan Documents promptly
following delivery, execution, and recording (as the case may be) of such
documents.
2. The Guarantor guarantees to the Lender, its successors, and
assigns the full and prompt payment of each of the Notes in accordance with its
terms, when due, by acceleration or otherwise and the full, prompt, and complete
performance of all obligations of the Borrowers set forth in the Loan Documents.
Upon a default by a Borrower in the performance of any of its obligations under
the Loan Documents (excluding performance of its payment obligations), Bank
shall give Guarantor notice of such default and the opportunity to cure such
default for a period of thirty (30) days before exercising any remedies against
the Borrower, including the remedy of accelerating the Loan. If Guarantor does
not, within said time period, cure such default to the satisfaction of Bank,
then Bank shall have the right to exercise any and all of its remedies against
the Borrower under the Loan Documents, including accelerating the Loan.
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3. The liability of the Guarantor on this Guaranty is a guaranty
of payment and performance and not of collectibility, and is not conditional or
contingent on the genuineness, validity, regularity, or enforceability of the
Notes, or the other Loan Documents, or on the pursuit by the Lender of any
remedies that it now has or may hereafter have with respect thereto.
4. The liability of the Guarantor under this Guaranty shall in no
way be affected by:
a. The release or discharge of the Borrowers in any
creditor proceeding, receivership, bankruptcy, or
other proceeding (by operation of law);
b. The impairment, limitation, or modification of the
liability of the Borrowers or the estate of the
Borrowers, or of any remedy for the enforcement of
the Borrowers' liability, resulting from the
operation of any present or future provision of the
Bankruptcy Code (Title 11 of the United States Code,
as amended; 11 USC sections 101-1301) or any
bankruptcy, insolvency, debtor relief statute (state
or federal), or any other statute, or from the
decision of any court;
c. The rejection or disaffirmance of the indebtedness,
or any portion of the indebtedness, in any judicial
or administrative proceeding;
d. The cessation by operation of law of the liability of
the Borrowers to the Lender;
e. Any change in employment status of any of the
Borrowers;
f. Any divorce or marital separation proceedings or
decree with respect to any of the Borrowers.
5. The Guarantor will file all claims against any Borrowers in
any creditor proceeding, receivership, bankruptcy, or other proceeding in which
the filing of claims is required by law on any indebtedness of such Borrowers to
the Guarantor. The Guarantor will assign to the Lender all rights of the
Guarantor on any such indebtedness to the extent that such Borrower's
obligations under its Loan Documents have not been satisfied. If the Guarantor
does not file any such claim, the Lender, as attorney-in-fact for the Guarantor,
is authorized to do so in the name of the Guarantor or, in the Lender's
discretion, to assign the claim and to file a proof of claim in the name of the
Lender's nominee. In all such proceedings, the person or persons authorized to
pay such claim shall pay to the Lender the full amount of any such claim. To the
full extent necessary for that purpose, the Guarantor assigns to the Lender all
of the Guarantor's rights to any such payments or distributions to which the
Guarantor would otherwise be entitled to the extent that such Borrower's
obligations under its Loan Documents have not been satisfied.
6. The Guarantor hereby waives:
a. Diligence and demand of payment;
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b. All notices to the Guarantor, to any Borrowers, or to
any other person, including, without limitation,
notice of the acceptance of this Guaranty, notice of
the accrual of any obligations contained in the Loan
Documents or notice of any other matters relating
thereto;
c. All demands whatsoever, other than demand for payment
under this Guaranty, provided however, failure of
Lender to make a demand for payment under this
Guaranty shall not exonerate this Guaranty or the
Guarantor;
d. Any statute of limitations affecting liability under
this Guaranty or the enforcement of this Guaranty;
e. Any duty on the part of the Lender to disclose to the
Guarantor any facts it may now or hereafter know
about the Borrowers, regardless of whether the Lender
has reason to believe that any such facts materially
increase the risk beyond that which the Guarantor
intends to assume, or has reason to believe that such
facts are unknown to the Guarantor, or has a
reasonable opportunity to communicate such facts to
the Guarantor. The Guarantor is fully responsible for
being and keeping informed of the financial condition
of the Borrowers and of all circumstances bearing on
the risk of nonpayment of any indebtedness hereby
guaranteed;
f. All rights and defenses arising out of an election of
remedies by the Lender even though that election of
remedies, such as a nonjudicial foreclosure with
respect to security for a guaranteed obligation, has
destroyed the Guarantor's rights of subrogation and
reimbursement against the Borrowers or by any
Borrower by the operation of Section 580d of the Code
of Civil Procedure or otherwise; and
g. Guarantor's rights of subrogation and reimbursement
and any other rights and defenses available to the
Guarantor by reason of Sections 2787 to 2855 of the
California Civil Code, inclusive, and any rights or
defenses the Guarantor may have by reason of
protection afforded to Guarantor and or the Borrowers
(or any Borrowers), with respect to the obligations
guaranteed herein, pursuant to the antideficiency or
other laws of the State of California limiting or
discharging the Guarantor's or the Borrowers'(or any
Borrower's) liability, obligations, or indebtedness,
including, without limitation, Sections 580a, 580b,
580d, or 726 of the Code of Civil Procedure. The
Guarantor agrees that its obligations shall not be
affected by any circumstances that constitute a legal
or equitable discharge of a guarantor or surety.
Notwithstanding the waivers set forth in Paragraph 6
or anything in this Guaranty to the contrary, upon
payment in full by Guarantor of all obligations under
the Loan Documents with respect to any individual
Borrower, Lender shall assign to Guarantor, without
representation, warranty or recourse, all right,
title, interest and security
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(including without limitation, rights or choices in
action, if any), held by Lender in respect of such
Borrower's Loan Documents.
7. The Guarantor agrees that the Lender may enforce this Guaranty
without the necessity of resorting to or exhausting any security or collateral.
The Guarantor waives the right to require the Lender to proceed against any
Borrower (or Borrowers); to foreclose any lien on any real or personal property;
to exercise any right or remedy under the Loan Documents; to pursue any other
remedy; or to enforce any other right.
8. The Guarantor agrees that the defenses of California Code of
Civil Procedure section 726 shall not apply to prevent the Lender from suing
upon the Note following taking judgment against the Guarantor. The Guarantor
further agrees that nothing herein contained shall prevent the Lender from suing
on the Note or from exercising any other rights available to it under the Note
or the Loan Documents, including, without limitation, nonjudicial foreclosure
under California Civil Code section 2924, and the exercise of any of the
aforesaid rights shall not constitute a legal or equitable discharge of the
Guarantor or the Loan Documents even though such exercise may affect, destroy,
or eliminate the Guarantor's right of subrogation against the Borrower with
respect to any sums paid to the Lender. Without limiting the generality of the
waivers contained in this Guaranty, the Guarantor expressly waives any rights or
defenses to liability under this Guaranty, based upon Union Bank v Gradsky , or
subsequent cases; arising out of California Civil Code sections 2809, 2810,
2819, 2824, 2825, and 2845 through 2850 and California Code of Civil Procedure
sections 726, 580a, 580b, and 580d; (including without limitation any right to a
fair market value hearing under section 580a of the California Code of Civil
Procedure).
9. The Guarantor shall continue to be liable under this Guaranty,
and its provisions shall remain in full force and effect notwithstanding: (a)
any defect in the genuineness, validity, regularity, or enforceability of the
Notes, the indebtedness evidenced thereby, or the other Loan Documents; (b) any
waiver of or failure to enforce any of the terms, covenants, or conditions
contained in the Notes or other Loan Documents; (c) any modification, agreement,
or stipulation between the Borrowers or a Borrower and the Lender, or their
respective successors and assigns, with respect to the Notes or other Loan
Documents, except the Lender shall obtain Guarantor's prior written consent with
respect to any increase in the amount of the indebtedness to any Borrower (not
including the accrual of interest or advances made by Lender to protect its
security, including but not limited to the payment of real property taxes and
assessments, insurance, attorney fees, costs of collection, and payment to cure
defaults on senior liens); and (d) any release by operation of law of any real
or personal property or other security then held by the Lender for the
performance of the obligations hereby guaranteed.
10. With respect to any Loans made to a Borrower or Borrowers,
until all the terms, covenants, and conditions of the Loan Documents on a
Borrower's part to be performed and ob-
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served are fully performed and observed, including payment in full of all
obligations under the Note relating to such Loan, the Guarantor:
a. Shall have no right of subrogation against such Borrower or
Borrowers by reason of any payments or acts of performance by
the Guarantor in compliance with the obligations of the
Guarantor under this Guaranty;
b. Waives any right to enforce any remedy that the Guarantor
shall have against such Borrower or Borrowers by reason of any
one or more payments or acts of performance in compliance with
the obligations of the Guarantor under this Guaranty; and
c. Subordinates any liability or indebtedness of such Borrower or
Borrowers held by the Guarantor to the obligations of such
Borrower or Borrowers to the Lender under any of the Loan
Documents or any other instrument of indebtedness.
11. The Guarantor's obligations under this Guaranty shall be
accelerated and become immediately due and payable by any breach or default as
described in the following sentence under any other agreement involving the
borrowing of money or the extension of credit under which Guarantor may be
obligated as borrower, including, without limitation, the Amended and Restated
Credit Agreement dated as of April 30, 1994, between Guarantor and Bank of
America National Trust and Savings Association, as amended from time to time,
and any credit arrangement between Guarantor and Banque Nationale de Paris. Such
breach or default shall consist solely of failure to pay any indebtedness when
due or such other default that permits or causes (or upon a lapse of time or
notice or both would permit or cause) the acceleration of any indebtedness or
the termination of any commitment to lend, after the expiration of any grace or
cure period provided therein. Provided, however, if a good faith dispute exists
between the Guarantor and any such creditor concerning the amount due or the
existence of a default, the Guarantor's failure to cure such breach or default,
or to pay any amounts claimed, pending resolution of the dispute, shall not
constitute a Guarantor's default or breach hereunder.
12. With or without notice to the Guarantor, the Lender, in its
sole discretion, at any time and from time to time, and in such manner and on
such terms as it deems fit may apply any or all payments or recoveries (i) from
a Borrower, from the Guarantor, or from any other guarantor or endorser under
this or any other instrument or (ii) realized from any security to the
indebtedness of a Borrower under its respective the Loan Documents, whether such
indebtedness is guaranteed by this Guaranty, is otherwise secured, or is due at
the time of such application provided, however, that Lender shall apply all
payments and recoveries with respect to an individual Borrower's indebtedness,
to that Borrower's indebtedness, and shall refund to Guarantor or such Borrower,
as their interests may appear, any amount paid or recovered in excess of the
amount of such indebtedness then due and payable. All such payments and
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recoveries shall be applied and in such manner, order, or priority as set forth
in the Loan Documents.
13. This Guaranty shall continue to be effective or be reinstated,
as the case may be, if any payment must be returned by Bank upon the insolvency,
bankruptcy or reorganization of a Borrower, the Guarantor, any other guarantor,
or otherwise, as though such payment had not been made.
14. No provision of this Guaranty or right of the Lender under
this Guaranty can be waived nor can the Guarantor be released from its
obligations under this Guaranty except by a writing duly executed by an
authorized representative of the Lender or the payment in full of the
obligations of all Borrowers (whether such payment is made by Borrowers,
Guarantor, proceeds received by Lender upon sale or foreclosure of any real or
personal property security, any other guarantor, or from any other source
whatsoever) the Guarantor shall continue to be liable under the terms of this
Guaranty notwithstanding the transfer by a Borrower of all or any portion of any
property securing such Borrower's indebtedness provided, however, that the Deed
of Trust shall contain a "due on sale" provision, and the indebtedness of a
Borrower shall become due and payable upon the sale or transfer of the property.
15. Except as set forth in the following sentence the Guarantor
shall forthwith pay to the Lender the amount of all reasonable attorneys' fees
and costs incurred by the Lender in enforcement or collection of this Guaranty
or in the defense or enforcement of the Lender's interests (whether or not the
Lender files a lawsuit against the Guarantor) in the event the Lender retains
counsel or incurs costs in order to: enforce, or seek to enforce, any of its
rights; commence, intervene in, respond to, or defend any action or proceeding
relating to this Guaranty; file or prosecute a claim in any action or proceeding
(including, without limitation, any probate claim, bankruptcy claim, third party
claim, or secured creditor claim) relating to this Guaranty; or represent the
Lender in any litigation with respect to the Guarantor's obligations under this
Guaranty.
If either the Guarantor or the Lender files any lawsuit
against the other predicated on this Guaranty, the prevailing party in such
action shall be entitled to recover its reasonable attorneys' fees and costs.
16. Every provision of this Guaranty is intended to be severable.
In the event any term or provision hereof is declared to be illegal or invalid
by a court of competent jurisdiction, such illegality or invalidity shall not
affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable.
17. Time is of the essence under this Guaranty and any amendment,
modification, or revision of this Guaranty shall be in writing and executed by
the parties.
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18. Any notice which any party hereto may be required or may
desire to give hereunder shall be deemed to have been given when delivered by
hand or three (3) days following mailing if mailed postage-prepaid by United
States certified or registered mail, return receipt requested, addressed to such
party at the address set forth below or to such other address as the party to be
served with notice may have furnished in writing to the party seeking or
desiring to serve notice, as a place for the service of notice:
To the Lender at:
Bank of the West
180 Montgomery Street
San Francisco, California 94104
ATTN: James M. Griffith or Carole A. Obley
To the Guarantor at:
KLA Instruments Corporation
160 Rio Robles
P.O. Box 49055
San Jose, CA 95161-9055
ATTN: Douglas D. Reed or Christopher Stoddart
19. This Guaranty shall bind the successors and assigns (including
any successors or assigns by merger, consolidation, sale of assets, or other
transfer of any kind) of the Guarantor and shall inure to the benefit of, and be
enforceable by, the Lender, its successors, or assigns. As used herein, the
singular shall include the plural, and the masculine shall include the feminine
and neuter, and vice versa, if the context so requires.
20. This Guaranty shall be construed and governed in accordance
with the laws of the State of California and Guarantor and Lender agree that the
proper venue and jurisdiction for any actions filed for enforcement of any
provision of their guarantee shall be either the State or Federal courts in the
County of San Francisco.
21. The language in all parts of this Guaranty shall be in all
cases construed simply, according to its fair meaning, regardless of which party
drafted the particular language which is being construed.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
day and year first above written.
KLA Instruments Corporation
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By: /s/ Chris Stoddart
_____________________________
Name Chris Stoddart
Title Treasurer
Date May 8, 1996
Accepted and Agreed:
Bank of the West
By: /s/ James M. Griffith
______________________________
James M. Griffith
Vice President & Manager
Date May 10, 1996
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