Exhibit 10.1
[BANK OF AMERICA LOGO]
LOAN AGREEMENT
This Agreement dated as of June 28, 2004, is between Bank of America, N.A. (the
"Bank") and Cohu, Inc. (the "Borrower").
1. FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS
1.1 Line of Credit Amount.
(a) During the availability period described below, the Bank will provide a
line of credit to the Borrower. The amount of the line of credit (the
"Facility No. 1 Commitment") is Five Million and 00/100 Dollars
($5,000,000.00).
(b) This is a revolving line of credit. During the availability period, the
Borrower may repay principal amounts and reborrow them.
(c) The Borrower agrees not to permit the principal balance outstanding to
exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit,
the Borrower will immediately pay the excess to the Bank upon the Bank's
demand.
1.2 Availability Period. The line of credit is available between the date of
this Agreement and July 1, 2005, or such earlier date as the availability may
terminate as provided in this Agreement (the "Facility No. 1 Expiration Date").
1.3 Repayment Terms.
(a) The Borrower will pay interest on July 1, 2004, and then on the same day
of each month thereafter until payment in full of any principal
outstanding under this facility.
(b) The Borrower will repay in full any principal, interest or other charges
outstanding under this facility no later than the Facility No. 1
Expiration Date.
1.4 Interest Rate.
(a) The interest rate is a rate per year equal to the Bank's Prime Rate.
(b) The Prime Rate is the rate of interest publicly announced from time to
time by the Bank as its Prime Rate. The Prime Rate is set by the Bank
based on 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 to its customers
at, above, or below the Prime Rate. Any change in the Prime Rate shall
take effect at the opening of business on the day specified in the public
announcement of a change in the Bank's Prime Rate.
1.5 Letters of Credit.
(a) During the availability period, at the request of the Borrower, the Bank
will issue:
(i) commercial letters of credit with a maximum maturity of one hundred
eighty (180) days but not to extend more than one hundred eighty
(180) days beyond the Facility No. 1 Expiration Date. Each
commercial letter of credit will require drafts payable at sight.
(ii) standby letters of credit with a maximum maturity of three hundred
sixty-five (365) days but not to extend more than three hundred
sixty-five (365) days beyond the Facility No. 1 Expiration Date.
(b) In calculating the principal amount outstanding under the Facility No. 1
Commitment, the calculation shall include the amount of any letters of
credit outstanding, including amounts drawn on any letters of credit and
not yet reimbursed.
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(c) The following letters of credit are outstanding from the Bank for the
account of the Borrower:
Letter of Credit Number Amount
----------------------- ------
3055074 $1,690,055.80
3055075 $ 845,027.90
As of the date of this Agreement, these letters of credit shall be deemed to be
outstanding under this Agreement, and shall be subject to all the terms and
conditions stated in this Agreement.
(e) The Borrower agrees:
(i) Any sum drawn under a letter of credit may, at the option of the
Bank, be added to the principal amount outstanding under this
Agreement. The amount will bear interest and be due as described
elsewhere in this Agreement.
(ii) If there is a default under this Agreement, to immediately prepay
and make the Bank whole for any outstanding letters of credit.
(iii) The issuance of any letter of credit and any amendment to a letter
of credit is subject to the Bank's written approval and must be in
form and content satisfactory to the Bank and in favor of a
beneficiary acceptable to the Bank.
(iv) To sign the Bank's form Application and Agreement for Commercial
Letter of Credit or Application and Agreement for Standby Letter of
Credit, as applicable.
(v) To pay any issuance and/or other fees that the Bank notifies the
Borrower will be charged for issuing and processing letters of
credit for the Borrower.
(vi) To allow the Bank to automatically charge its checking account for
applicable fees, discounts, and other charges.
2. FEES AND EXPENSES
2.1 Fees.
(a) Unused Commitment Fee. The Borrower agrees to pay a fee on any difference
between the Facility No. 1 Commitment and the amount of credit it actually
uses, determined by the average of the daily amount of credit outstanding
during the specified period. The fee will be calculated at 0.125% per
year. The calculation of credit outstanding shall not include the undrawn
amount of letters of credit.
This fee is due on June 30, 2004, payable on the 10th day of the following
month, and on the same day of each following quarter until the expiration
of the availability period.
2.2 Expenses. The Borrower agrees to immediately repay the Bank for expenses
that include, but are not limited to, filing, recording and search fees,
appraisal fees, title report fees, and documentation fees.
2.3 Reimbursement Costs.
(a) The Borrower agrees to reimburse the Bank for any expenses it incurs in
the preparation of this Agreement and any agreement or instrument required
by this Agreement. Expenses include, but are not limited to, reasonable
attorneys' fees, including any allocated costs of the Bank's in-house
counsel to the extent permitted by applicable law.
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3. DISBURSEMENTS, PAYMENTS AND COSTS
3.1 Disbursements and Payments.
(a) Each payment by the Borrower will be made in U.S. Dollars and immediately
available funds by direct debit to a deposit account as specified below
or, for payments not required to be made by direct debit, by mail to the
address shown on the Borrower's statement or at one of the Bank's banking
centers in the United States.
(b) Each disbursement by the Bank and each payment by the Borrower will be
evidenced by records kept by the Bank. In addition, the Bank may, at its
discretion, require the Borrower to sign one or more promissory notes.
3.2 Telephone and Telefax Authorization.
(a) The Bank may honor telephone or telefax instructions for advances or
repayments and telefax requests for the issuance of letters of credit
given, or purported to be given, by any one of the individuals authorized
to sign loan agreements on behalf of the Borrower, or any other individual
designated by any one of such authorized signers.
(b) Advances will be deposited in and repayments will be withdrawn from
account number 14505-50312 owned by the Borrower or such other of the
Borrower's accounts with the Bank as designated in writing by the
Borrower.
(c) The Borrower will indemnify and hold the Bank harmless from all liability,
loss, and costs in connection with any act resulting from telephone or
telefax instructions the Bank reasonably believes are made by any
individual authorized by the Borrower to give such instructions. This
paragraph will survive this Agreement's termination, and will benefit the
Bank and its officers, employees, and agents.
3.3 Direct Debit (Pre-Billing).
(a) The Borrower agrees that the Bank will debit deposit account number
14505-50312 owned by the Borrower or such other of the Borrower's accounts
with the Bank as designated in writing by the Borrower (the "Designated
Account") on the date each payment of principal and interest and any fees
from the Borrower becomes due (the "Due Date").
(b) Prior to each Due Date, the Bank will mail to the Borrower a statement of
the amounts that will be due on that Due Date (the "Billed Amount"). The
xxxx will be mailed a specified number of calendar days prior to the Due
Date, which number of days will be mutually agreed from time to time by
the Bank and the Borrower. The calculations in the xxxx will be made on
the assumption that no new extensions of credit or payments will be made
between the date of the billing statement and the Due Date, and that there
will be no changes in the applicable interest rate.
(c) The Bank will debit the Designated Account for the Billed Amount,
regardless of the actual amount due on that date (the "Accrued Amount").
If the Billed Amount debited to the Designated Account differs from the
Accrued Amount, the discrepancy will be treated as follows:
(i) If the Billed Amount is less than the Accrued Amount, the Billed
Amount for the following Due Date will be increased by the amount of
the discrepancy. The Borrower will not be in default by reason of
any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount, the Billed
Amount for the following Due Date will be decreased by the amount of
the discrepancy.
Regardless of any such discrepancy, interest will continue to accrue based
on the actual amount of principal outstanding without compounding. The
Bank will not pay the Borrower interest on any overpayment.
(d) The Borrower will maintain sufficient funds in the Designated Account to
cover each debit. If there are insufficient funds in the Designated
Account on the date the Bank enters any debit authorized by this
Agreement, the Bank may reverse the debit.
(e) The Borrower may terminate this direct debit arrangement at any time by
sending written notice to the Bank at the address specified at the end of
this Agreement. If the Borrower terminates this arrangement, then the
principal amount outstanding under this Agreement will at the option of
the Bank bear interest at a rate per annum which is 0.5 percentage
point(s) higher than the rate of interest otherwise provided under this
Agreement.
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3.4 Banking Days. Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday, Sunday or other day on which commercial banks
are authorized to close, or are in fact closed, in the state where the Bank's
lending office is located, and, if such day relates to amounts bearing interest
at an offshore rate (if any), means any such day on which dealings in dollar
deposits are conducted among banks in the offshore dollar interbank market. All
payments and disbursements which would be due on a day which is not a banking
day will be due on the next banking day. All payments received on a day which is
not a banking day will be applied to the credit on the next banking day.
3.5 Interest Calculation. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.
3.6 Default Rate. Upon the occurrence of any default under this Agreement, all
amounts outstanding under this Agreement, including any interest, fees, or costs
which are not paid when due, will at the option of the Bank bear interest at a
rate which is 2.0 percentage point(s) higher than the rate of interest otherwise
provided under this Agreement. This may result in compounding of interest. This
will not constitute a waiver of any default.
3.7 Interest Compounding. At the Bank's sole option in each instance, any
interest, fees, or costs which are not paid when due under this Agreement shall
bear interest from the due date at the Bank's Prime Rate plus 1.0 percentage
point(s). This may result in compounding of interest.
4. CONDITIONS
Before the Bank is required to extend any credit to the Borrower under this
Agreement, it must receive any documents and other items it may reasonably
require, in form and content acceptable to the Bank, including any items
specifically listed below.
4.1 Authorizations. If the Borrower or any guarantor is anything other than a
natural person, evidence that the execution, delivery and performance by the
Borrower and/or such guarantor of this Agreement and any instrument or agreement
required under this Agreement have been duly authorized.
4.2 Governing Documents. If required by the Bank, a copy of the Borrower's
organizational documents.
4.3 Payment of Fees. Payment of all fees and other amounts due and owing to
the Bank, including without limitation payment of all accrued and unpaid
expenses incurred by the Bank as required by the paragraph entitled
"Reimbursement Costs."
4.4 Good Standing. Certificates of good standing for the Borrower from its
state of formation and from any other state in which the Borrower is required to
qualify to conduct its business.
5. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewal of these representations and
warranties as of the date of the request:
5.1 Formation. If the Borrower is anything other than a natural person, it is
duly formed and existing under the laws of the state or other jurisdiction where
organized.
5.2 Authorization. This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.
5.3 Enforceable Agreement. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.
5.4 Good Standing. In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.
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5.5 No Conflicts. This Agreement does not conflict with any law, agreement, or
obligation by which the Borrower is bound.
5.6 Financial Information. All financial and other information that has been
or will be supplied to the Bank is sufficiently complete to give the Bank
accurate knowledge of the Borrower's (and any guarantor's) financial condition,
including all material contingent liabilities. Since the date of the most recent
financial statement provided to the Bank, there has been no material adverse
change in the business condition (financial or otherwise), operations,
properties or prospects of the Borrower (or any guarantor). If the Borrower is
comprised of the trustees of a trust, the foregoing representations shall also
pertain to the trustor(s) of the trust.
5.7 Lawsuits. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.
5.8 Permits, Franchises. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights, copyrights and fictitious name rights necessary to enable
it to conduct the business in which it is now engaged.
5.9 Other Obligations. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation, except as have been disclosed in
writing to the Bank.
5.10 Tax Matters. The Borrower has no knowledge of any pending assessments or
adjustments of its income tax for any year and all taxes due have been paid,
except as have been disclosed in writing to the Bank.
5.11 No Event of Default. There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.
5.12 Insurance. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.
6. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:
6.1 Use of Proceeds.
(a) To use the proceeds of Facility No. 1 only for working capital.
6.2 Financial Information. To provide the following financial information and
statements in form and content acceptable to the Bank, and such additional
information as requested by the Bank from time to time:
(a) Within ninety (90) days of the fiscal year end, the annual financial
statements of the Borrower. These financial statements must be audited
(with an opinion satisfactory to the Bank) by a Certified Public
Accountant acceptable to the Bank. The statements shall be prepared on a
consolidated basis.
(b) Within forty-five (45) days of the period's end (including the last period
in each fiscal year), quarterly financial statements of the Borrower,
certified and dated by an authorized financial officer. These financial
statements may be company-prepared. The statements shall be prepared on a
consolidated basis.
(c) Copies of the Form 10-K Annual Report and Form 10-Q Quarterly Report for
the Borrower concurrent with the date of filing with the Securities and
Exchange Commission.
6.3 Tangible Net Worth. To maintain on a consolidated basis Tangible Net Worth
equal to at least One Hundred Sixty Million Dollars ($160,000,000).
"Tangible Net Worth" means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt
discount and expense, capitalized or deferred research and development costs,
deferred marketing expenses, and other like intangibles, and monies due from
affiliates, officers, directors, employees, shareholders, members or managers)
less
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total liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated Liabilities.
"Subordinated Liabilities" means liabilities subordinated to the Borrower's
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.
6.4 Unencumbered Liquid Assets. To hold on a consolidated basis Unencumbered
Liquid Assets having an aggregate market value of not less than Fifty Million
Dollars ($50,000,0000).
For the purposes of this Agreement, "Unencumbered Liquid Assets" shall mean the
following assets owned by the Borrower (excluding assets of any retirement plan)
which (i) are not the subject of any lien, pledge, security interest or other
arrangement with any creditor to have its claim satisfied out of the assets (or
proceeds thereof) prior to the general creditors of the Borrower, and (ii) may
be converted to cash within five (5) days: (a) Cash or cash equivalents held in
the United States; (b) United States Treasury or governmental agency obligations
which constitute full faith and credit of the United States of America; (c)
Commercial paper rated P-1 or A1 by Xxxxx'x or S&P, respectively; (d) Medium and
long-term securities rated investment grade by one of the rating agencies
described in (c) above; (e) Eligible Stocks ; (f) Mutual funds quoted in The
Wall Street Journal which invest primarily in the assets described in (a) - (e)
above. For purposes of this Agreement, "Eligible Stocks" means any common or
preferred stock which (i) is not subject to statutory or contractual
restrictions on sales, (ii) is traded on a U.S. national stock exchange or
included in the National Market tier of NASDAQ and (iii) has, as of the close of
trading on the applicable exchange (excluding after hours trading), a per share
price of at least $15.
6.5 Limitation On Losses. Not to incur on a consolidated basis a net loss
before taxes and extraordinary items in excess of Seven Million Five Hundred
Thousand Dollars ($7,500,000) in any annual accounting period.
6.6 Capital Expenditures. Not to spend or incur obligations (including the
total amount of any capital leases) to acquire fixed assets for more than Seven
Million Five Hundred Thousand Dollars ($7,500,000) in any single fiscal year.
6.7 Other Debts. Not to have outstanding or incur any direct or contingent
liabilities or lease obligations (other than those to the Bank), or become
liable for the liabilities of others, without the Bank's written consent. This
does not prohibit:
(a) Acquiring goods, supplies, or merchandise on normal trade credit.
(b) Endorsing negotiable instruments received in the usual course of business.
(c) Obtaining surety bonds in the usual course of business.
(d) Liabilities, lines of credit and leases in existence on the date of this
Agreement disclosed in writing to the Bank.
(e) Additional debts and lease obligations for business purposes which do not
exceed a total principal amount of One Million Dollars ($1,000,000)
outstanding at any one time.
6.8 Other Liens. Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:
(a) Liens and security interests in favor of the Bank.
(b) Liens for taxes not yet due.
(c) Liens outstanding on the date of this Agreement disclosed in writing to
the Bank.
(d) Additional purchase money security interests in assets acquired after the
date of this Agreement, if the total principal amount of debts secured by
such liens does not exceed One Million Dollars ($1,000,000) at any one
time.
6.9 Maintenance of Assets.
(a) Not to sell, assign, lease, transfer or otherwise dispose of any part of
the Borrower's business or the Borrower's assets except in the ordinary
course of the Borrower's business.
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(b) Not to sell, assign, lease, transfer or otherwise dispose of any assets
for less than fair market value, or enter into any agreement to do so.
(c) Not to enter into any sale and leaseback agreement covering any of its
fixed assets.
(d) To maintain and preserve all rights, privileges, and franchises the
Borrower now has.
(e) To make any repairs, renewals, or replacements to keep the Borrower's
properties in good working condition.
6.10 Additional Negative Covenants. Not to, without the Bank's written consent:
(a) Enter into any consolidation, merger, or other combination, or become a
partner in a partnership, a member of a joint venture, or a member of a
limited liability company.
(b) Acquire or purchase a business or its assets for a consideration,
including assumption of direct or contingent debt, in excess of Twenty
Million Dollars ($20,000,000) in the aggregate.
(c) Engage in any business activities substantially different from the
Borrower's present business.
(d) Liquidate or dissolve the Borrower's business.
(e) Voluntarily suspend the Borrower's business for more than five (5) days in
any 30-day period.
6.11 Bank as Principal Depository. To maintain the Bank as its principal
depository bank, including for the maintenance of business, cash management,
operating and administrative deposit accounts.
6.12 Notices to Bank. To promptly notify the Bank in writing of:
(a) Any lawsuit over Five Million and 00/100 Dollars ($5,000,000.00) against
the Borrower (or any guarantor or, if the Borrower is comprised of the
trustees of a trust, any trustor).
(b) Any substantial dispute between any governmental authority and the
Borrower (or any guarantor or, if the Borrower is comprised of the
trustees of a trust, any trustor).
(c) Any event of default under this Agreement, or any event which, with notice
or lapse of time or both, would constitute an event of default.
(d) Any material adverse change in the Borrower's (or any guarantor's, or, if
the Borrower is comprised of the trustees of a trust, any trustor's)
business condition (financial or otherwise), operations, properties or
prospects, or ability to repay the credit.
(e) Any change in the Borrower's name, legal structure, place of business, or
chief executive office if the Borrower has more than one place of
business.
(f) Any actual contingent liabilities of the Borrower (or any guarantor or, if
the Borrower is comprised of the trustees of a trust, any trustor), and
any such contingent liabilities which are reasonably foreseeable, where
such liabilities are in excess of One Million and 00/100 Dollars
($1,000,000.00) in the aggregate.
6.13 Insurance.
(a) General Business Insurance. To maintain insurance as is usual for the
business it is in.
6.14 Compliance with Laws. To comply with the laws (including any fictitious or
trade name statute), regulations, and orders of any government body with
authority over the Borrower's business.
6.15 ERISA Plans. Promptly during each year, to pay and cause any subsidiaries
to pay contributions adequate to meet at least the minimum funding standards
under ERISA with respect to each and every Plan; file each annual report
required to be filed pursuant to ERISA in connection with each Plan for each
year; and notify the Bank within ten (10) days of the occurrence of any
Reportable Event that might constitute grounds for termination of any capital
Plan by the Pension Benefit Guaranty Corporation or for the appointment by the
appropriate United States District Court of a trustee to
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administer any Plan. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time. Capitalized terms in this paragraph shall
have the meanings defined within ERISA.
6.16 Books and Records. To maintain adequate books and records.
6.17 Audits. To allow the Bank and its agents to inspect the Borrower's
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of the Borrower's properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.
6.18 Cooperation. To take any action reasonably requested by the Bank to carry
out the intent of this Agreement.
7. HAZARDOUS SUBSTANCES
7.1 Indemnity Regarding Hazardous Substances. The Borrower will indemnify and
hold harmless the Bank from any loss or liability the Bank incurs in connection
with or as a result of this Agreement, which directly or indirectly arises out
of the use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of a hazardous substance. This
indemnity will apply whether the hazardous substance is on, under or about the
Borrower's property or operations or property leased to the Borrower. The
indemnity includes but is not limited to attorneys' fees (including the
reasonable estimate of the allocated cost of in-house counsel and staff). The
indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.
7.2 Definition of Hazardous Substances. "Hazardous substances" means any
substance, material or waste that is or becomes designated or regulated as
"toxic," "hazardous," "pollutant," or "contaminant" or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including without limitation petroleum or natural gas. This indemnity
will survive repayment of the Borrower's obligations to the Bank.
8. DEFAULT AND REMEDIES
If any of the following events of default occurs, the Bank may do one or more of
the following: declare the Borrower in default, stop making any additional
credit available to the Borrower, and require the Borrower to repay its entire
debt immediately and without prior notice. If an event which, with notice or the
passage of time, will constitute an event of default has occurred and is
continuing, the Bank has no obligation to make advances or extend additional
credit under this Agreement. In addition, if any event of default occurs, the
Bank shall have all rights, powers and remedies available under any instruments
and agreements required by or executed in connection with this Agreement, as
well as all rights and remedies available at law or in equity. If an event of
default occurs under the paragraph entitled "Bankruptcy," below, with respect to
the Borrower, then the entire debt outstanding under this Agreement will
automatically be due immediately.
8.1 Failure to Pay. The Borrower fails to make a payment under this Agreement
when due.
8.2 Other Bank Agreements. Any default occurs under any other agreement the
Borrower (or any Obligor) or any of the Borrower's related entities or
affiliates has with the Bank or any affiliate of the Bank. For purposes of this
Agreement, "Obligor" shall mean any guarantor, any party pledging collateral to
the Bank, or, if the Borrower is comprised of the trustees of a trust, any
trustor.
8.3 Cross-default. Any default occurs under any agreement in connection with
any credit the Borrower (or any Obligor) or any of the Borrower's related
entities or affiliates has obtained from anyone else or which the Borrower (or
any Obligor) or any of the Borrower's related entities or affiliates has
guaranteed.
8.4 False Information. The Borrower or any Obligor has given the Bank false or
misleading information or representations.
8.5 Bankruptcy. The Borrower, any Obligor, or any general partner of the
Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is
filed against any of the foregoing parties, or the Borrower, any Obligor, or any
general partner of the Borrower or of any Obligor makes a general assignment for
the benefit of creditors.
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8.6 Receivers. A receiver or similar official is appointed for a substantial
portion of the Borrower's or any Obligor's business, or the business is
terminated, or, if any Obligor is anything other than a natural person, such
Obligor is liquidated or dissolved.
8.7 Judgments. Any judgments or arbitration awards are entered against the
Borrower or any Obligor, or the Borrower or any Obligor enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Two Million and 00/100 Dollars ($2,000,000.00) or more in
excess of any insurance coverage.
8.8 Material Adverse Change. A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's (or any Obligor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.
8.9 Government Action. Any government authority takes action that the Bank
believes materially adversely affects the Borrower's or any Obligor's financial
condition or ability to repay.
8.10 Default under Related Documents. Any default occurs under any guaranty,
subordination agreement, security agreement, deed of trust, mortgage, or other
document required by or delivered in connection with this Agreement or any such
document is no longer in effect, or any guarantor purports to revoke or disavow
the guaranty.
8.11 ERISA Plans. Any one or more of the following events occurs with respect
to a Plan of the Borrower subject to Title IV of ERISA, provided such event or
events could reasonably be expected, in the judgment of the Bank, to subject the
Borrower to any tax, penalty or liability (or any combination of the foregoing)
which, in the aggregate, could have a material adverse effect on the financial
condition of the Borrower:
(a) A reportable event shall occur under Section 4043(c) of ERISA with respect
to a Plan.
(b) Any Plan termination (or commencement of proceedings to terminate a Plan)
or the full or partial withdrawal from a Plan by the Borrower or any ERISA
Affiliate.
8.12 Other Breach Under Agreement. A default occurs under any other term or
condition of this Agreement not specifically referred to in this Article. This
includes any failure or anticipated failure by the Borrower (or any other party
named in the Covenants section) to comply with the financial covenants set forth
in this Agreement, whether such failure is evidenced by financial statements
delivered to the Bank or is otherwise known to the Borrower or the Bank.
9. ENFORCING THIS AGREEMENT; MISCELLANEOUS
9.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.
9.2 California Law. This Agreement is governed by California state law.
9.3 Successors and Assigns. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not assign
this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.
9.4 Arbitration and Waiver of Jury Trial
(a) This paragraph concerns the resolution of any controversies or claims
between the parties, whether arising in contract, tort or by statute,
including but not limited to controversies or claims that arise out of or
relate to: (i) this agreement (including any renewals, extensions or
modifications); or (ii) any document related to this agreement
(collectively a "Claim"). For the purposes of this arbitration provision
only, the term "parties" shall include any parent corporation, subsidiary
or affiliate of the Bank involved in the servicing, management or
administration of any obligation described or evidenced by this agreement.
(b) At the request of any party to this agreement, any Claim shall be resolved
by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U. S. Code) (the "Act"). The Act will apply even though this
agreement provides that it is governed by the law of a specified state.
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(c) Arbitration proceedings will be determined in accordance with the Act, the
applicable rules and procedures for the arbitration of disputes of JAMS or
any successor thereof ("JAMS"), and the terms of this paragraph. In the
event of any inconsistency, the terms of this paragraph shall control.
(d) The arbitration shall be administered by JAMS and conducted, unless
otherwise required by law, in any U. S. state where real or tangible
personal property collateral for this credit is located or if there is no
such collateral, in the state specified in the governing law section of
this agreement. All Claims shall be determined by one arbitrator; however,
if Claims exceed Five Million Dollars ($5,000,000), upon the request of
any party, the Claims shall be decided by three arbitrators. All
arbitration hearings shall commence within ninety (90) days of the demand
for arbitration and close within ninety (90) days of commencement and the
award of the arbitrator(s) shall be issued within thirty (30) days of the
close of the hearing. However, the arbitrator(s), upon a showing of good
cause, may extend the commencement of the hearing for up to an additional
sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be submitted
to any court having jurisdiction to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any Claim is
barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the statute
of limitations, the service on JAMS under applicable JAMS rules of a
notice of Claim is the equivalent of the filing of a lawsuit. Any dispute
concerning this arbitration provision or whether a Claim is arbitrable
shall be determined by the arbitrator(s). The arbitrator(s) shall have the
power to award legal fees pursuant to the terms of this agreement.
(f) This paragraph does not limit the right of any party to: (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate
judicial or non-judicial foreclosure against any real or personal property
collateral; (iii) exercise any judicial or power of sale rights, or (iv)
act in a court of law to obtain an interim remedy, such as but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
(g) The procedure described above will not apply if the Claim, at the time of
the proposed submission to arbitration, arises from or relates to an
obligation to the Bank secured by real property. In this case, all of the
parties to this agreement must consent to submission of the Claim to
arbitration. If both parties do not consent to arbitration, the Claim will
be resolved as follows: The parties will designate a referee (or a panel
of referees) selected under the auspices of JAMS in the same manner as
arbitrators are selected in JAMS administered proceedings. The designated
referee(s) will be appointed by a court as provided in California Code of
Civil Procedure Section 638 and the following related sections. The
referee (or presiding referee of the panel) will be an active attorney or
a retired judge. The award that results from the decision of the
referee(s) will be entered as a judgment in the court that appointed the
referee, in accordance with the provisions of California Code of Civil
Procedure Sections 644 and 645.
(h) The filing of a court action is not intended to constitute a waiver of the
right of any party, including the suing party, thereafter to require
submittal of the Claim to arbitration.
(i) By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of
any Claim. Furthermore, without intending in any way to limit this
agreement to arbitrate, to the extent any Claim is not arbitrated, the
parties irrevocably and voluntarily waive any right they may have to a
trial by jury in respect of such Claim. This provision is a material
inducement for the parties entering into this agreement.
9.5 Severability; Waivers. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.
9.6 Attorneys' Fees. The Borrower shall reimburse the Bank for any reasonable
costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar
or successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection, or
enforcement of any rights of the Bank in such a case. As used in this paragraph,
"attorneys' fees" includes the allocated costs of the Bank's in-house counsel.
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9.7 One Agreement. This Agreement and any related security or other agreements
required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the Bank
and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail. Any reference in any
related document to a "promissory note" or a "note" executed by the Borrower and
dated as of the date of this Agreement shall be deemed to refer to this
Agreement, as now in effect or as hereafter amended, renewed, or restated.
9.8 Indemnification. The Borrower will indemnify and hold the Bank harmless
from any loss, liability, damages, judgments, and costs of any kind relating to
or arising directly or indirectly out of (a) this Agreement or any document
required hereunder, (b) any credit extended or committed by the Bank to the
Borrower hereunder, and (c) any litigation or proceeding related to or arising
out of this Agreement, any such document, or any such credit. This indemnity
includes but is not limited to attorneys' fees (including the allocated cost of
in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys,
and assigns. This indemnity will survive repayment of the Borrower's obligations
to the Bank. All sums due to the Bank hereunder shall be obligations of the
Borrower, due and payable immediately without demand.
9.9 Notices. Unless otherwise provided in this Agreement or in another
agreement between the Bank and the Borrower, all notices required under this
Agreement shall be personally delivered or sent by first class mail, postage
prepaid, or by overnight courier, to the addresses on the signature page of this
Agreement, or sent by facsimile to the fax numbers listed on the signature page,
or to such other addresses as the Bank and the Borrower may specify from time to
time in writing. Notices and other communications shall be effective (i) if
mailed, upon the earlier of receipt or five (5) days after deposit in the U.S.
mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or
(iii) if hand-delivered, by courier or otherwise (including telegram, lettergram
or mailgram), when delivered.
9.10 Headings. Article and paragraph headings are for reference only and shall
not affect the interpretation or meaning of any provisions of this Agreement.
9.11 Counterparts. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties 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.
9.12 Prior Agreement Superseded. This Agreement supersedes the Business Loan
Agreement entered into as of June 15, 1998, between the Bank and the Borrower,
and any credit outstanding thereunder shall be deemed to be outstanding under
this Agreement.
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This Agreement is executed as of the date stated at the top of the first page.
Bank:
Borrower:
Bank of America, N.A.
Cohu, Inc.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------- ---------------------------------------------
(Sgd.) Xxxx X. Xxxxx, CFO (Sgd.) Xxxxxx X. Xxxxx, Senior Vice President
Address where notices to the Address where notices to the Bank are to be sent:
Borrower are to be sent: San Diego Middle Market Banking Office #2704
CA0-103-15-25
00000 Xxxxxxxxxxx Xxxxxx 000 X Xx.
Xxxxx, XX 00000 Xxx Xxxxx, XX 00000
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