REVOLVING CREDIT AGREEMENT
Between
FEI COMPANY
as Borrower
and
KEYBANK NATIONAL ASSOCIATION
as Lender
Dated as of July 1, 1997
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT is made as of July 1, 1997, between FEI COMPANY, an Oregon
corporation, as Borrower and KEYBANK NATIONAL ASSOCIATION as Lender.
AGREEMENT
A. Borrower and Lender are parties to a revolving credit agreement dated
December 12, 1993, pursuant to which Lender agreed to make loans to Borrower up
to Ten Million Dollars (as amended, the "Original Agreement").
B. Pursuant to a Combination Agreement dated as of November 15, 1996
between Borrower, Philips Electron Optics International B.V., a Netherlands
corporation ("Philips International"), and Philips Electron Optics, Inc., a
Delaware corporation ("Philips Optics"), effective February 21, 1997, Xxxxxxxx
International and Philips Optics became wholly-owned subsidiaries of Borrower.
C. Borrower has requested and Lender has agreed, upon the terms and
conditions of this Agreement, to make additional loans to Borrower.
D. This Agreement amends and replaces the Original Agreement.
I. DEFINITIONS.
Section 1.1 Certain Defined Terms. As used in this Agreement, the following
terms have the following meanings, which apply to both the singular and plural
forms of the terms defined:
"Advance" means a loan made by Lender to Borrower pursuant to ss. 2.
"Advance Period" has the meaning defined in ss. 2.4(a).
"Borrower" means FEI Company, an Oregon corporation, and any
Successor.
"Business Day" means a day on which banks are open for business in
Seattle, Washington.
"Collateral" means real or personal property in which the Security
Agreement or the Stock Pledge Agreement creates or purports to create a Lien.
"Combination" means the acquisition by Borrower of all of the
outstanding shares of stock of Xxxxxxxx International and Philips Optics.
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"Combination Date" means the date Borrower satisfies the conditions
set forth in ss. 3.3.
"Commitment" has the meaning defined in ss. 2.1.
"Commitment Period" means the period between the date of this
Agreement and the Maturity Date.
"Default" means an Event of Default or other event which, with notice
or lapse of time or both, would constitute an Event of Default.
"Dollar" and the sign "$" each means lawful money of the United
States.
"EBITDA" means net income, plus taxes, interest expense, depreciation
and amortization expense.
"EBITDA Ratio" means, for any applicable measurement period, the ratio
of Indebtedness of Borrower and its consolidated subsidiaries to EBITDA of
Borrower and its consolidated subsidiaries, as calculated with respect to the
period of one full fiscal quarter for the period ended June 30, 1997, two full
fiscal quarters for the period Septemer 30, 1997, three full fiscal quarters for
the period ended December 31, 1997 and four full fiscal quarters for each fiscal
quarter thereafter. Except as otherwise provided herein (a) accounting terms not
specifically defined shall be construed, and all accounting procedures shall be
performed, in accordance with generally accepted accounting procedures; and (b)
all section references shall refer to sections of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning defined in ss. 7.1.
"Fixed Rate Advance" means an Advance bearing interest at an amount
equal to the LIBO Fixed Rate on the date of the requested Advance.
"Government Approval" means an approval, permit, license,
authorization, certificate, or consent of any Governmental Authority.
"Governmental Authority" means the government of the United States or
any State, or any foreign country or any political subdivision of any thereof or
any branch, department, agency, instrumentality, court, tribunal or regulatory
authority which constitutes a part or exercises any sovereign power of any of
the foregoing.
"Guaranty" means the Guaranty Agreement dated July 1, 1997, executed
by the Guarantors in favor of Lender.
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"Guarantors" means Philips International and Philips Optics.
"Indebtedness" means for any person (i) all items of indebtedness or
liability (except capital, surplus, deferred credits and reserves, as such)
which would be included in determining total liabilities as shown on the
liability side of a balance sheet as of the date as of which indebtedness is
determined, (ii) indebtedness secured by any Lien, whether or not such
indebtedness shall have been assumed, (iii) any other indebtedness or liability
for borrowed money or for the deferred purchase price of property or services
for which such person is directly or contingently liable as obligor, guarantor,
or otherwise, or in respect of which such person otherwise assures a creditor
against loss, and (iv) any other obligations of such person under leases which
shall have been or should be recorded as capital leases.
"Lender" means KeyBank National Association, a national banking
association, and any Successor.
"LIBO Fixed Rate" means (a) for any Advance Period where the EBITDA
Ratio is greater than or equal to 1.00:1 on the first day of such Advance
Period, the LIBO Quote plus one hundred ninety basis points (1.90%) per annum;
and (b) for any Advance Period where the EBITDA Ratio is less than 1.00:1 on the
first day of such Advance Period, the LIBO Quote plus one hundred sixty-five
basis points (1.65%) per annum.
"LIBO Quote" means a rate calculated by Lender acting in good faith,
which Lender determines with reference to, but which may be different from, its
LIBOR or Eurodollar based costs of funds, on the date of the advance request for
the Advance Period selected by Borrower. The formula used by Lender in
determining the LIBO Quote is within Lender's absolute discretion and may be
changed from time to time.
"Lien" means, for any person, any security interest, pledge, mortgage,
charge, assignment, hypothecation, encumbrance, attachment, garnishment,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such person or any real or personal property in which such person has or
hereafter acquires any interest, except (i) liens for Taxes which are not
delinquent or which remain payable without penalty or the validity or amount of
which is being contested in good faith by appropriate proceedings upon stay of
execution of the enforcement thereof; (ii) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course of business
which are not delinquent or which remain payable without penalty or the validity
or amount of which is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof; and (iii) deposits or pledges
under workmen's compensation, unemployment insurance, social security or other
similar laws or made to secure the performance of bids, tenders, contracts
(except for repayment of borrowed money), or leases, or to secure statutory
obligations or surety or appeal bonds or to secure indemnity, performance or
other similar bonds given in the ordinary course of business.
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"Loan Document" means each of this Agreement, the Note, the Security
Agreement, the Stock Pledge Agreement, and the Guaranty, as any of them shall be
from time to time modified, amended, or supplemented.
"Maturity Date" means July 31, 1997.
"New Rate" has the meaning defined in ss. 2.7.
"Note" has the meaning defined in ss. 2.5.
"Original Agreement" has the meaning defined in Recital A..
"Philips International" has the meaning defined in Recital B.
"Philips Optics" has the meaning defined in Recital B.
"Plan" means an "employee benefit pension plan" (as defined in ERISA)
which is (i) maintained by Borrower or by any other member of a controlled group
("Controlled Group") which together with Borrower are treated as a single
employer under the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) covered by Title IV of ERISA or subject to minimum funding standards under
the Code and maintained pursuant to a collective bargaining agreement or other
multi-employer arrangement under which Borrower or any other member of a
Controlled Group is making or accruing the obligation to make contributions or
has made contributions during the preceding five plan years.
"Prepayment Date" shall have the meaning defined in ss. 2.7.
"Prepayment Premium" shall have the meaning defined in ss. 2.7.
"Prime Rate" means the floating commercial loan rate announced from
time to time by Lender as its "prime rate", and is not necessarily the lowest on
any day the publicly announced prime rate charged on that day by Lender at its
principal office (which rate is not necessarily the lowest then charged by
Lender).
"Security Agreement" means the Security Agreement of even date
herewith executed by Borrower in favor of Lender.
"Senior Debt" means Indebtedness other than Indebtedness that has been
subordinated to the Advances and other amounts now or hereafter owing under this
Agreement on terms acceptable to Lender.
"Stock Pledge Agreement" means the Stock Pledge Agreement of even date
herewith executed by Borrower in favor of Lender.
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"Successor" means, for any corporation or banking association, any
successor by merger or consolidation, or by acquisition of substantially all of
the assets of the predecessor.
"Tangible Net Worth" means the excess of total assets over total
liabilities, excluding from the determination of total assets all general
intangible assets, including, but not limited to, goodwill, patents, trademarks,
copyrights, trade secrets, franchises, and research and development costs.
"Tax" means for any person any tax, assessment, duty, levy, impost or
other charge imposed by any Governmental Authority on such person or on any
property, revenue, income, or franchise of such person and any interest or
penalty with respect to any of the foregoing.
Section 2. The Credit.
2.1 Agreement to Lend. Lender agrees on the terms and conditions of
this Agreement to make loans ("Advances") to Borrower in an amount of up to (a)
during the period beginning on the date of this Agreement and ending on the
Combination Date, Twelve Million Dollars ($12,000,000); and (b) between the date
of the Combination Date and the Maturity Date, Twenty-five Million Dollars
($25,000,000) (the "Commitment"). The outstanding principal amount owing under
the Original Agreement shall constitute outstanding Advances hereunder, and any
accrued and unpaid interest, fees or other amounts owing under the Original Loan
shall constitute interest, fees or other amounts, as the case may be, owing
hereunder.
2.2 Manner of Borrowing. Borrower shall give Lender at least three
Business Days' notice by telephone (confirmed promptly in writing) or by
telephonic facsimile transmission of each borrowing. Each notice shall specify
the date of borrowing (which shall be a Business Day) and the amount of the
Advance. If Borrower wishes to make an interest rate election allowed by ss.
2.4, the notice of borrowing shall also contain the information called for by
ss. 2.4. Every notice of borrowing shall be irrevocable and shall constitute a
representation and warranty by Borrower that as of the date of the notice the
statements in ss. 4 are true and correct and no Default has occurred and is
continuing. Subject to the conditions set forth in ss. 3, Lender will disburse
the Advance by crediting the proceeds to the checking account maintained by
Borrower with Lender at KeyBank National Association Account #0000000
(Hillsboro, Oregon Branch).
2.3 Repayment of Principal. Borrower shall repay the Advances on or
before the Maturity Date.
2.4 Interest.
(a) The Advances shall bear interest at the Prime Rate, unless
Borrower elects a LIBO Fixed Rate. If Borrower elects a LIBO Fixed Rate,
Borrower shall specify in the interest rate notice the date from which and the
period for which the LIBO Fixed Rate shall apply (the "Advance Period"), and the
amount of principal which is to bear interest at the LIBO Fixed Rate for such
Advance Period. Each Fixed Rate Advance shall be for the minimum of
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Five Hundred Thousand Dollars ($500,000). Each election of a LIBO Fixed Rate
shall be irrevocable. An Advance Period may, at Borrower's option, be one, two,
three, four or six months. The right to select an Advance Period is subject to
the following restrictions: (i) no more than four Advance Periods may be in
effect at any time; (ii) no Advance Period may extend beyond the Maturity Date;
and (iii) any Advance Period that would end on a day which is not a Business Day
shall be extended to the next succeeding Business Day, unless that day falls in
the next calendar month, in which case such Advance Period shall end on the next
preceding Business Day.
(b) Upon expiration of the applicable Advance Period, Borrower
may elect to roll a Fixed Rate Advance into a new LIBO Fixed Rate, to pay the
Advance off, or have the Advance bear interest thereafter at the Prime Rate. If
Borrower fails to elect any of these options, the Advance will thereafter bear
interest at the Prime Rate until Borrower selects a new LIBO Fixed Rate.
2.5 Promissory Note. The Advances shall be evidenced by and repayable
with interest in accordance with a promissory note of Borrower payable to the
order of Lender in substantially the form of Exhibit A, dated the date of this
Agreement, and in the principal amount of the Commitment (as amended, extended
and renewed from time to time, the "Note").
2.6 Prepayment. Borrower agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. This Agreement evidences a
revolving line, which may be borrowed, repaid, and re-borrowed from time to time
until the Maturity Date or earlier termination. Principal payments shall first
be applied to reduce principal bearing interest at the Prime Rate, then to Fixed
Rate Advances. If Borrower prepays a Fixed Rate Advance prior to the last day of
the applicable Advance Period, Borrower shall also pay a Prepayment Premium,
calculated as set forth in ss. 2.7 below. Lender will be entitled to receive the
Prepayment Premium regardless of whether prepayment is voluntary or involuntary,
(including a demand on the Note at a time when Borrower is in default hereunder)
but not in the event of a demand by Lender prior to the stated maturity in the
absence of default under this Agreement or the Note. Borrower acknowledges that
Lender may or may not, in any particular case, match-fund a Fixed Rate Advance
and Borrower agrees that Lender will be entitled to receive the Prepayment
Premium irrespective of match-funding. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the principal
balance due.
2.7 Prepayment Premium. If for any reason Borrower shall prepay all or
a portion of the principal amount of any Fixed Rate Advance prior to the
expiration of the applicable Advance Period, Borrower shall also pay Lender a
Prepayment Premium. The Prepayment Premium will be equal to the present value,
at the time of prepayment (the "Prepayment Date"), of the excess of (i) the
interest that would have been payable on the amount prepaid at the interest rate
applicable to the Advance(s) from the Prepayment Date to the expiration date of
the Advance Period applicable to such Advance, over (ii) the interest that would
be chargeable on a note equal to the amount prepaid at a New Rate. The "New
Rate" shall be equal to the United States Treasury
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Security yield on a security with a current remaining term to maturity the same
as the Advance at the Prepayment Date, plus the comparable interest rate spread
as the Advance had to the United States Treasury Security yield with the same
maturity. The present value shall be computed using 1/12th of the New Rate as
the monthly discount rate. If there is no U.S. Treasury Security with a
comparable maturity, Lender will determine the appropriate yield by
interpolating between maturities.
2.8 Commitment Fee. Borrower agrees to pay a commitment fee to Lender
in an amount equal to: (a) twenty basis points (.20%) per annum during any
period when the EBITDA Ratio is greater than or equal to 1.00:1; and (b) fifteen
basis points (.15%) per annum during any period when the EBITDA Ratio is less
than 1.00:1. Such commitment fee shall be due and payable quarterly in advance
on the first Business Day of each calendar quarter and shall be fully earned and
nonrefundable upon payment.
2.9 Manner of Payments.
(a) All payments and prepayments of principal and interest on the
Advances and all other amounts payable by Borrower under the Loan Documents
shall be made by paying the same in Dollars and in immediately available funds
to Lender at the address shown below, or such other address as Lender designates
in writing, not later than 10:00 a.m., PST, on the date on which such payment or
prepayment shall become due.
(b) Borrower hereby authorizes Lender, if and to the extent any
payment is not promptly made pursuant to the Loan Documents, to charge from time
to time against any or all of the accounts of Borrower with Lender or any
affiliate of Lender any amount due under the Loan Documents.
(c) All computations of interest and fees shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable.
(d) Whenever any payment shall be stated to be due, or whenever
the last day of any Advance Period would otherwise occur, on a day other than a
Business Day, such payment shall be made and the last day of such Advance Period
shall occur on the next succeeding Business Day and such extension of time shall
in such case be included in the computation of payment of interest or commitment
fees, as the case may be, unless such extension would cause such payment to be
made or the last date of such Advance Period to occur in the next following
calendar month, in which case such payment shall be made and the last day of
such Advance Period shall occur on the next preceding Business Day.
(e) Any payment made by Borrower shall be applied, first, against
fees, expenses and indemnities due under the Loan Documents; second, against
interest due on amounts in default, if any; third, against interest due on
amounts not in default; fourth against principal due on amounts bearing interest
at the Prime Rate, and fifth against principal due on amounts bearing interest
at the LIBO Fixed Rate.
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2.10 Increased Costs. If Lender in its sole discretion shall determine
that, by reason of a change after the date of this Agreement in any law,
regulation, or order of any Governmental Authority or in the application
thereof, (a) there is a change in the basis of taxation of payments to Lender of
the principal of, or interest on, any Advance or any other amount due under this
Agreement in respect of any Advance (except for taxes imposed on the overall net
income of Lender and franchise or other taxes imposed generally on Lender by the
jurisdiction (or any political subdivision therein) in which Lender has its
principal office if such other taxes do not specifically affect the cost to
Lender of making the Advances); (b) any reserve, special deposit, capital
maintenance, or similar requirement (including without limitation any reserve
requirement under regulations of the Board of Governors of the Federal Reserve
System) against assets of, deposits with, or for the account of, or credit
extended by Lender or any capital adequacy requirement applicable to Lender is
imposed, increased, modified, or deemed applicable; or (iii) any other condition
is imposed that affects this Agreement or any Advance or (where the interest
rate is based on LIBOR) the London interbank market; and the result of any of
the foregoing is to increase the cost to Lender of making or maintaining the
Advances or to reduce the amount of any sum received or receivable by Lender
hereunder in respect thereof (and such increase or reduction shall not have been
compensated by a corresponding increase in the interest rate applicable to the
respective Advances), by an amount deemed by Lender to be material (such
increases in cost and reductions in amounts receivable being herein called
"Increased Costs"), then Borrower shall pay to Lender, upon demand, such
additional amount or amounts as will compensate Lender for those Increased Costs
(all of such as determined by Lender and notified to Borrower).
Section 3. Conditions of Lending.
3.1 The Initial Advance. The obligation of Lender to make the initial
Advance is subject to fulfillment of the following conditions.
(a) Loan Documents. Lender shall have received the Loan
Documents, each duly executed and delivered.
(b) Corporate Authority. Lender shall have received in form and
substance satisfactory to it (i) a certified copy of a resolution adopted by the
board of directors of the Borrower and each Guarantor authorizing the execution,
delivery and performance of the Loan Documents and the borrowing hereunder, (ii)
evidence of the authority and specimen signatures of the persons who have signed
this Agreement and who will sign the other Loan Documents on behalf of Borrower
and each Guarantor, and (iii) such other evidence of corporate authority as
Lender shall reasonably require.
(c) Security Interests. Lender shall have received such evidence
as it may deem necessary or advisable that the security interests created by the
Security Agreement and the Stock Pledge Agreement have been duly perfected and
that the Collateral is free and clear of any other Liens.
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3.2 Each Advance. The obligation of Lender to make any Advance is
subject to fulfillment of the following conditions.
(a) Notice of Borrowing. Lender shall have received due notice of
borrowing pursuant to ss. 2.2.
(b) Defaults, Etc. At the date of the Advance no Default shall
have occurred and be continuing or will occur as a result of the making of the
Advance and the representations of Borrower in ss. 4 shall be true on and as of
such date with the same force and effect as if made on and as of such date.
(c) Other Information. Lender shall have received such other
statements, opinions, certificates, documents and information as it may
reasonably request with respect to the matters contemplated by the Loan
Documents.
3.3 Combination Date. The obligation of Lender to increase the
Commitment from $12,000,000 to $25,000,000 on the Combination Date is subject to
Lender's receipt of evidence satisfactory to it of the fulfillment of the
following conditions:
(a) Tangible Net Worth. The Tangible Net Worth of Borrower is
equal to or greater than Eighty-Five Million Dollars ($85,000,000).
(b) Senior Debt Ratio. The ratio of Borrower's Senior Debt to
Borrower's Tangible Net Worth is not greater than 0.50:1.
(c) Current Ratio. The ratio of Borrower's current assets to
Borrower's current liabilities is equal to or greater than 2.25:1.
(d) Cash Contribution. The Philips Industrial Electronics
International B.V., or any of its affiliates, contributed Eight Million Dollars
($8,000,000) in cash to Borrower.
Section 4. Representations and Warranties. Borrower represents and warrants
to Lender as follows:
4.1 Corporate Existence and Power. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Oregon, is qualified to do business in each other jurisdiction where the
conduct of its business or the ownership of its properties requires such
qualification, and has full corporate power, authority and legal right to carry
on its business as presently conducted, to own and operate its properties and
assets, and to execute, deliver and perform the Loan Documents. Philips Electron
Optics Int'l B.V. is organized under the laws of the Netherlands and is validly
existing and in good standing under the laws of the Netherlands. Philips
Electron Optics, Inc. is organized under the laws of the State of Delaware, and
is validly existing and in good standing under the laws of the State of
Delaware. Borrower and each Guarantor has full corporate power, authority and
legal
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right to carry on its business as presently conducted to own and operate its
properties and assets and to execute, deliver and perform each of the Loan
Documents to which it is a party.
4.2 Corporate Authorization. The execution, delivery and performance
by Borrower and each of the Guarantors of the Loan Documents and any borrowing
hereunder have been duly authorized by all necessary corporate action of
Borrower and Guarantors, do not require any shareholder approval or the approval
or consent of any trustee or the holders of any Indebtedness of Borrower or
Guarantors, do not contravene any law, regulation, rule or order binding on them
or their articles of incorporation or bylaws and do not contravene the
provisions of or constitute a default under any indenture, mortgage, contract or
other agreement or instrument to which Borrower or any Guarantor is a party or
by which Borrower, any Guarantor, or any of their respective properties may be
bound or affected.
4.3 Government Approvals, Etc. No Government Approval or filing or
registration with any Governmental Authority is required for the making and
performance by Borrower or either Guarantor of the Loan Documents to which it is
a party or in connection with any of the transactions contemplated thereby.
4.4 Binding Obligations, Etc. This Agreement has been duly executed
and delivered by Borrower and constitutes, and each of the other Loan Documents
when duly executed and delivered will constitute, the legal, valid and binding
obligation of Borrower and Guarantors enforceable against Borrower and
Guarantors in accordance with their respective terms.
4.5 Litigation. There are no actions, proceedings, investigations, or
claims against or affecting Borrower or any Guarantors now pending before any
court, arbitrator or Governmental Authority (nor to the knowledge of Borrower
has any thereof been threatened nor does any basis exist therefor) which if
determined adversely to Borrower or any Guarantors would be likely to have a
material adverse effect on the financial condition or operations of Borrower or
any Guarantors, to impair Lender's Lien on Collateral or Borrower's rights
therein, or to result in a judgment or order against Borrower or any Guarantors
(in excess of insurance coverage) for more than $1,000,000 in any one case or
$2,500,000 in the aggregate, except as reflected in the financial statements
referred to in ss. 4.6 or otherwise previously disclosed to Lender in writing.
4.6 Financial Condition. The pro forma balance sheets of Borrower for
the fiscal year ending December 31, 1996 and the fiscal quarter ending March 31,
1997, and the related statements of income and cash flows of Borrower for the
fiscal year then ended, copies of which have been furnished to Lender, fairly
present the financial condition of Borrower as of such date and the results of
operations of Borrower for the period then ended, all in accordance with
generally accepted accounting principles consistently applied. Borrower did not
have on such date any material contingent liabilities, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in that balance
sheet and in the notes to those financial statements and
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since that date there has been no material adverse change in the financial
condition or operations of Borrower.
4.7 Title and Liens. Borrower has good and marketable title to each of
the properties and assets reflected in its balance sheet referred to in ss. 4.6
except such as have been since sold or otherwise disposed of in the ordinary
course of business. No assets or revenues of Borrower are subject to any Lien
except as required or permitted by this Agreement or disclosed in the balance
sheet referred to in ss. 4.6 or otherwise previously disclosed to Lender in
writing. All properties of Borrower and Borrower's use thereof comply with
applicable zoning and use restrictions and with applicable laws and regulations
relating to the environment.
4.8 Taxes. Borrower and each Guarantor has filed all tax returns and
reports required of it, has paid all Taxes which are due and payable, and has
provided adequate reserves for payment of any Tax whose payment is being
contested. The charges, accruals and reserves on the books of Borrower or any
Guarantor in respect of Taxes for all fiscal periods to date are accurate and
there are no questions or disputes between Borrower and any Governmental
Authority with respect to any Taxes except as disclosed in the balance sheet
referred to in ss. 4.6 or otherwise previously disclosed to Lender in writing.
4.9 Other Agreements. Neither Borrower nor any Guarantor is in
material breach of or default under any agreement to which it is a party or
which is binding on it or any of its assets.
4.10 ERISA. Since the effective date of ERISA, no Plan or trust
thereunder has been terminated, has engaged in any "prohibited transactions" (as
defined in ERISA), or has incurred any "accumulated funding deficiency" (as
defined in ERISA) whether or not waived, and there has been no "reportable
event" (as defined in ERISA) with respect to any Plan.
4.11 Combination. As of the Combination Date, all necessary approvals
from all Governmental Authorities have been obtained and the Merger is fully
effective.
Section 5. Affirmative Covenants. So long as Lender shall have any
Commitment hereunder and until payment in full of the Advances and performance
of all other obligations of Borrower under the Loan Documents, Borrower agrees
to do all of the following unless Lender shall otherwise consent in writing.
5.1 Use of Proceeds. Borrower will use the proceeds of the Advances
exclusively for general corporate and working capital purposes.
5.2 Payments. Borrower will pay the principal of and interest on the
Advances in accordance with the terms of this Agreement and will pay when due
all other amounts payable by Borrower under the Loan Documents.
5.3 Preservation of Corporate Existence, Etc. Borrower will, and cause
each Guarantor to, preserve and maintain its corporate existence, rights,
franchises and privileges in
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the jurisdiction of its incorporation and qualify and remain qualified as a
foreign corporation in each jurisdiction where such qualification is necessary
or advisable in view of its business and operations or the ownership of its
properties.
5.4 Visitation Rights. Borrower will, and cause each Guarantor to,
permit Lender at any reasonable time, and from time to time, to examine and make
copies of and abstracts from the records and books of account of and to visit
the properties of Borrower and each Guarantor and to discuss the affairs,
finances and accounts of Borrower and each Guarantor with any of its officers or
directors.
5.5 Keeping of Books and Records. Borrower will, and cause each
Guarantor to, keep adequate records and books of account in which complete
entries will be made, in accordance with generally accepted accounting
principles consistently applied, reflecting all financial transactions of
Borrower and each Guarantor.
5.6 Maintenance of Property, Etc. Borrower will, and cause each
Guarantor to, maintain and preserve all of its properties in good working order
and condition, ordinary wear and tear excepted, and from time to time make all
needed repairs, renewals or replacements so that the efficiency of such
properties shall be fully maintained and preserved.
5.7 Compliance with Laws, Etc. Borrower will, and cause each Guarantor
to, comply in all material respects with all laws, regulations, rules, and
orders of Governmental Authorities applicable to Borrower or to its operations
or property, except any thereof whose validity is being contested in good faith
by appropriate proceedings upon stay of execution of the enforcement thereof.
5.8 Other Obligations. Borrower will, and cause each Guarantor to, pay
and discharge before the same shall become delinquent all Indebtedness, Taxes
and other obligations for which it is liable or to which its income or property
is subject and all claims for labor and materials or supplies which, if unpaid,
might become by law a lien upon its assets, except any thereof whose validity or
amount is being contested in good faith by Borrower or any Guarantor in
appropriate proceedings with provision having been made to the satisfaction of
Lender for the payment thereof in the event the contest is determined adversely
to Borrower or any Guarantor.
5.9 Insurance. Borrower will, and cause each Guarantor to, keep in
force upon all its properties and operations policies of insurance carried with
responsible companies in such amounts and covering all such risks as shall be
customary in the industry and satisfactory to Lender. Borrower will, and cause
each Guarantor to, on request furnish to Lender certificates of insurance or
duplicate policies evidencing such coverage.
13
5.10 Financial Information. Deliver to Lender:
(a) as soon as available and in any event within 95 days after
the end of each fiscal year of Borrower, the balance sheet of Borrower as of the
end of such fiscal year and the related statements of income and cash flows of
Borrower for such year, accompanied by the audit report thereon by independent
certified public accountants selected by Borrower and approved by Lender (which
reports shall be prepared in accordance with generally accepted accounting
principles consistently applied and shall not be qualified by reason of
restricted or limited examination of any material portion of Borrower's records
and shall contain no disclaimer of opinion or adverse opinion except such as
Lender in its sole discretion determines to be immaterial), together with the
certificate of such accountants that as of the close of such fiscal year
Borrower was in compliance with the provisions of xx.xx. 5.12, 5.13, 5.14, 5.15
and 6.1 hereof;
(b) as soon as available and in any event within 50 days after
the end of each fiscal quarter of Borrower, the unaudited balance sheet and
statements of income and cash flows of Borrower as of the end of such fiscal
quarter (including the fiscal year to the end of such fiscal quarter),
accompanied by a certificate of the chief financial officer of Borrower that
such unaudited balance sheet and statements of income and cash flows have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position and the results
of operations of Borrower as of the end of and for such fiscal quarter and that
since the fiscal year-end report referred to in clause (a) there has been no
material adverse change in the financial condition or operations of Borrower as
shown on the balance sheet as of said date;
(c) within 95 days after the close of each fiscal year and 50
days after the close of each fiscal quarter of Borrower, a certificate signed by
the chief financial officer of Borrower stating that as of the close of such
fiscal year no Default had occurred and was continuing and demonstrating
Borrower's compliance as at that date with the provisions of xx.xx. 5.12, 5.13,
5.14, 5.15 and 6.1;
(d) as soon as available, all reports sent by Borrower to its
shareholders and all quarterly and annual reports filed by Borrower with the
Securities and Exchange Commission and each other Governmental Authority having
jurisdiction over Borrower; and
(e) all other statements, reports and other information as Lender
may reasonably request concerning the financial condition and business affairs
of Borrower.
5.11 Notification. Borrower will, and cause each Guarantor to,
promptly after learning thereof, notify Lender of (a) any action, proceeding,
investigation or claim against or affecting Borrower or any Guarantor instituted
before any court, arbitrator or Governmental Authority or, to Borrower's
knowledge threatened to be instituted, which if determined adversely to Borrower
or any Guarantor would be likely to have a material adverse effect on the
financial condition or operations of Borrower or any Guarantor, or to impair
Lender's Lien on Collateral or Borrower's rights therein, or to result in a
judgment or order against Borrower or any
14
Guarantor (in excess of insurance coverage) for more than $1,000,000 or, when
combined with all other pending or threatened claims, more than $1,000,000; (b)
any substantial dispute between Borrower or any Guarantor and any Governmental
Authority; (c) any labor controversy which has resulted in or, to Borrower's
knowledge, threatens to result in a strike which would materially affect the
business operations of Borrower or any Guarantor; (d) any "reportable event" (as
defined in ERISA) with respect to any Plan; and (e) the occurrence of any
Default.
5.12 Senior Debt Ratio. Borrower shall at all times cause the ratio of
Senior Debt to Borrower's Tangible Net Worth to be less than 0.50 to 1.
5.13 Current Ratio. Borrower shall at all times cause the ratio of its
current assets to current liabilities to be greater than 2.00 to 1.
5.14 Net Worth. Borrower shall at all times prior to the Combination
Date maintain a Tangible Net Worth of not less than Thirty Million Dollars
($30,000,000) and shall, at all times following the Combination Date, maintain a
Tangible Net Worth of not less than Eighty-five Million Dollars ($85,000,000).
5.15 Senior Debt to EBITDA Ratio. Borrower shall maintain the
following ratios of Senior Debt to EBITDA for the following time periods:
10:1 for the period ending June 30, 1997;
5:1 for the period ending September 30, 1997;
3.33:1 for the period ending December 31, 1997; and
2.5:1 for each fiscal quarter thereafter.
5.16 Additional Payments; Additional Acts. Borrower will from time to
time, (a) pay or reimburse Lender on request for all expenses, including legal
fees, actually incurred by Lender in connection with the preparation of the Loan
Documents and the making of the Advances or the enforcement by judicial
proceedings or otherwise of any of the rights of Lender under the Loan Documents
(including, without limitation, expenses incurred by Lender in protecting or
enforcing its rights in any bankruptcy or other insolvency proceeding); (b)
obtain and promptly furnish to Lender evidence of all such Government Approvals
as may be required to enable Borrower to comply with its obligations under the
Loan Documents; and (c) execute and deliver all such instruments (such as
Uniform Commercial Code continuation statements) and perform all such other acts
as Lender may reasonably request to carry out the transactions contemplated by
the Loan Documents and to maintain the continuous perfection and priority of
Lender's Lien on all Collateral.
Section 6. Negative Covenants. So long as Lender shall have any Commitment
hereunder and until payment in full of the Advances and performance of all other
obligations of Borrower under the Loan Documents, Borrower agrees that it will
not do any of the following unless Lender shall otherwise consent in writing.
15
6.1 Dividends, Purchase of Stock, Etc. Borrower shall not, and shall
not permit any Guarantor to, declare or pay any dividend (except dividends
payable in its capital stock) on any shares of any class of its capital stock or
apply any assets to the purchase, redemption or other retirement of, or set
aside any sum for the payment of any dividends on or for the purchase,
redemption or other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, any shares of any class of capital stock
of Borrower or any Guarantor.
6.2 Liquidation, Merger, Sale of Assets. Borrower shall not, and shall
not permit any Guarantor to, liquidate, dissolve or enter into any merger,
consolidation, joint venture, partnership or other combination nor sell, lease,
or dispose of all or any substantial portion of its business or assets or of any
Collateral (excepting sales of goods in the ordinary course of business) without
the prior written consent of Lender.
6.3 Indebtedness. Borrower shall not, and shall not permit any
Guarantor to, create, incur or become liable for any Indebtedness except (a) the
Advances, (b) any existing Indebtedness reflected on the balance sheet referred
to in ss. 4.6 or otherwise previously disclosed to Lender in writing (except any
renewal or extension of such Indebtedness or any portion thereof to a date on or
before the final maturity of any Advances), (c) current accounts payable or
accrued, incurred by Borrower or Guarantors in the ordinary course of business,
(d) Indebtedness for the deferred purchase price, or for obligations under
leases, of real or personal property used by Borrower or Guarantors in their
business, but not exceeding the aggregate sum of $5,000,000 at any time, and (e)
other Indebtedness consented to in writing by Lender.
6.4 Guaranties, Etc. Except as otherwise expressly permitted
hereunder, Borrower shall not, and shall not permit any Guarantor to, assume,
guaranty, endorse or otherwise become directly or contingently liable for, nor
obligated to purchase, pay or provide funds for payment of, any obligation or
Indebtedness of any other person, except by endorsement of negotiable
instruments for deposit or collection or by similar transactions in the ordinary
course of business.
6.5 Liens. Borrower shall not, and shall not permit any Guarantor to,
create, assume or suffer to exist any Lien on any property of any of them except
(a) Liens in favor of Lender, (b) existing Liens reflected in the balance sheet
referred to in ss. 4.6 or otherwise previously disclosed to Lender in writing,
(c) involuntary Liens, and (d) Liens to secure Indebtedness permitted by ss.
6.3(d) for the deferred price of property, but only if they are limited to such
property and its proceeds and do not exceed 90% of the fair market value
thereof.
Section 7. Events of Default.
7.1 Events of Default Defined. The occurrence of any of the following
events shall constitute an "Event of Default."
(a) Payment Default. Borrower shall fail to pay for a period of
three (3) days after the date when due any amount of principal of or interest on
the Advances or any other amount payable by it under the Loan Documents; or
16
(b) Breach of Warranty. Any representation or warranty made or
reasonably deemed made by Borrower under or in connection with the Loan
Documents shall prove to have been incorrect in any material respect when made;
or
(c) Breach of Certain Covenants. Borrower shall fail to have
complied with any provision of xx.xx. 5.3, 6.1 or 6.2; or
(d) Breach of Other Covenant. Borrower or any Guarantor shall
fail to perform or observe any covenant, obligation or term of any Loan Document
other than those governed by Sections 7.1(a) or 7.1(b) and such failure shall
remain unremedied for any grace period provided for therein or, if no grace
period is provided for therein, for 30 days after written notice thereof shall
have been given to Borrower or any Guarantor by Lender; or
(e) Cross-default. Borrower or any Guarantor shall fail (i) to
pay when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) any Indebtedness (except any Advances) or any interest or
premium thereon and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) to perform any term or covenant on its part to be
performed under any agreement or instrument relating to any such Indebtedness
and required to be performed and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such failure to perform is to accelerate or to permit the
acceleration of the maturity of such Indebtedness, or (iii) any such
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by regularly scheduled required prepayment) prior to the stated
maturity thereof; or
(f) Voluntary Bankruptcy, Etc. Borrower or any Guarantor shall:
(i) file a petition seeking relief for itself under Title 11 of the United
States Code, as now constituted or hereafter amended, or file an answer
consenting to, admitting the material allegations of or otherwise not
controverting, or fail timely to controvert a petition filed against it seeking
relief under Title 11 of the United State Code, as now constituted or hereafter
amended; or (ii) file such petition or answer with respect to relief under the
provisions of any other now existing or future applicable bankruptcy,
insolvency, or other similar law of the United States of America or any State
thereof or of any other country to jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with creditors; or
(g) Involuntary Bankruptcy, Etc. An order for relief shall be
entered against Borrower or any Guarantor under Title 11 of the United States
Code, as now constituted or hereafter amended, which order is not stayed; or
upon the entry of an order, judgment or decree by operation of law or by a court
having jurisdiction in the premises which is not stayed adjudging it a bankrupt
or insolvent under, or ordering relief against it under, or approving as
properly filed a petition seeking relief against it under the provisions of any
other now existing or future applicable bankruptcy, insolvency or other similar
law of the United States of America or any State thereof or of any other country
or jurisdiction providing for the reorganization,
17
winding-up or liquidation of corporations or any arrangement, composition,
extension or adjustment with creditors; or appointing a receiver, liquidator,
assignee, sequestrator, trustee or custodian of it or of any substantial part of
its property, or ordering the reorganization, winding-up or liquidation of its
affairs; or upon the expiration of 120 days after the filing of any involuntary
petition against it seeking any of the relief specified in ss. 7.1(f) or this
ss. 7.1(g) without the petition being dismissed prior to that time; or
(h) Insolvency, Etc. Borrower or any Guarantor shall (i) make a
general assignment for the benefit of its creditors or (ii) consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, or custodian of all or a substantial part of its property, or (iii)
admit its insolvency or inability to pay its debts generally as they become due,
or (iv) fail generally to pay its debts as they become due, or (v) take any
action (or suffer any action to be taken by its director or shareholders)
looking to the dissolution or liquidation of Borrower or any Guarantor; or
(i) Judgment. A final judgment or order for the payment of money
in excess of $1,000,000, or which impairs Lender's Lien on Collateral or
Borrower's rights therein, shall be rendered against Borrower or any Guarantor
and such judgment or order shall continue unsatisfied and in effect for a period
of 10 consecutive days; or
(j) Involuntary Liens. Any involuntary Lien in the sum of
$1,000,000 or more shall attach to any asset or property of Borrower or any
Guarantor which is not discharged within 60 days after such attachment or within
30 days after notice from Lender, whichever first occurs; or
(k) ERISA. A Plan or any trust thereunder shall be terminated (or
proceedings shall be instituted to terminate it) or shall engage in a
"prohibited transaction" (as defined in ERISA) or incur any "accumulated funding
deficiency" (as defined in ERISA) in excess of $1,000,000, whether or not
waived; or any Indebtedness of Borrower or any Guarantor in excess of that
amount to or with respect to a Plan shall not be paid when due.
7.2 Consequences of Default. If any Event of Default shall occur and
be continuing, then in any such case and at any time thereafter so long as any
such Event of Default shall be continuing, Lender may at its option immediately
terminate the Commitment and, if any Advances shall have been made, Lender may
at its option declare the principal of and the interest on the Advances and all
other sums payable by Borrower under the Loan Documents to be immediately due
and payable, whereupon the same shall become immediately due and payable without
protest, presentment, notice or demand, all of which Borrower expressly waives.
Lender, at its option, may also increase the interest rate on the Advances to a
floating rate equal to the Prime Rate plus 5.00% per annum.
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Section 8. Miscellaneous.
8.1 No Waiver; Remedies Cumulative. No failure by Lender to exercise,
and no delay in exercising, any right, power or remedy under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or remedy under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power, or remedy. The
exercise of any right, power, or remedy shall in no event constitute a cure or
waiver of any Event of Default nor prejudice the right of Lender in the exercise
of any right hereunder or thereunder, unless in the exercise of such right, all
obligations of Borrower under the Loan Documents are paid in full. The rights
and remedies provided herein and therein are cumulative and not exclusive of any
right or remedy provided by law.
8.2 Governing Law. The Loan Documents shall be governed by and
construed in accordance with the laws of the State of Washington (excluding its
conflict of laws rules).
8.3 Consent to Jurisdiction. Borrower hereby irrevocably submits to
the jurisdiction of any state or federal court sitting in King or Xxxxxx County,
Washington, in any action or proceeding brought to enforce or otherwise arising
out of or relating to any Loan Document and irrevocably waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
laying of venue in any such action or proceeding in any such forum, and hereby
further irrevocably waives any claim that any such forum is an inconvenient
forum. Borrower agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdiction by suit on the
judgment or in any other manner provided by law. Nothing herein shall impair the
right of Lender to bring any action or proceeding against Borrower or its
property in the courts of any other jurisdiction, and Borrower irrevocably
submits to the nonexclusive jurisdiction of the appropriate courts of the
jurisdiction in which Borrower is incorporated, sitting in any place where
property or an office of Borrower is located.
8.4 Notices. All notices and other communications provided for in the
Loan Documents shall be in writing or (unless otherwise specified) by telex,
telegram or telephonic facsimile transmission and shall be mailed (with air mail
postage prepaid) or sent by air courier (with air freight prepaid) or delivered
to each party at the address set forth under its name on the signature page
hereof, or at such other address as shall be designated by such party in a
written notice to each other party. Except as otherwise specified, all such
notices and communications if duly given or made shall be effective upon
receipt.
8.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective Successors and assigns, except that
Borrower may not assign or otherwise transfer all or any part of its rights or
obligations hereunder without the prior written consent of Lender, and any such
assignment or transfer purported to be made without such consent shall be
ineffective. Lender may at any time assign or otherwise transfer all or any part
of its interest under the Loan Documents (including assignments for security and
sales of participations), and to the extent of such assignment, the assignee
shall have the same rights and
19
benefits against Borrower and otherwise under the Loan Documents (including the
right of setoff) as if such assignee were Lender.
8.6 Severability. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall as to such jurisdiction be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
8.7 Conditions Not Fulfilled. If the Commitment or any portion thereof
is not borrowed owing to nonfulfillment of any condition precedent specified in
ss. 3, neither Borrower nor Lender shall be responsible to the other for any
damage or loss by reason thereof, except that Borrower shall in any event be
liable to pay the fees, Taxes, and expenses for which it is obligated hereunder.
8.8 Entire Agreement; Amendment. The Loan Documents comprise the
entire agreement of the parties and may not be amended or modified except by
written agreement of Borrower and Lender. No provision of any Loan Document may
be waived except in writing and then only in the specific instance and for the
specific purpose for which given.
8.9 Headings. The headings of the various provisions of the Loan
Documents are for convenience of reference only, do not constitute a part
hereof, and shall not affect the meaning or construction of any provision
thereof.
8.10 Construction. In the event of any conflict between the terms,
conditions and provisions of this Agreement and those of any other Loan
Document, the terms, conditions and provisions of this Agreement shall control.
8.11 Consolidated Subsidiaries. All references in xx.xx. 4.6 and 5.10
to financial statements of Borrower, refer to Borrower and its consolidated
subsidiaries on a consolidated basis.
8.12 Other Accounting Terms. Except as otherwise provided herein,
accounting terms not specifically defined shall be construed, and all accounting
procedures shall be performed, in accordance with generally accepted United
States accounting principles consistently applied.
8.13 Restated Agreement. This Agreement restates the Original
Agreement, as it may have been amended from time to time prior to the date
hereof, immediately upon the satisfaction of the conditions to the initial
Advance set forth in ss. 3.1 hereof.
20
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY A BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND
OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE
SIGNED BY THAT BANK TO BE ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers or agents thereunto duly authorized as
of the date first above written.
LENDER: KEYBANK NATIONAL ASSOCIATION
By: XXXXX X. XXXXXXX
-------------------------------------
Its: Vice President
------------------------------------
Address:
000 Xxxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 00
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. XxXxxxx
Fax No.: 000-000-0000
BORROWER: FEI COMPANY
By: XXXXXXX X. XXXXXXX
-------------------------------------
Its: CFO
------------------------------------
Address:
0000 X.X. Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Fax No.: 000-000-0000
21
