EX-10.24 4 exhibit1.htm EXHIBIT-LETTER OF CREDIT

Exhibit Number 10.24

LETTER OF CREDIT BY WELLS FARGO BANK, NATIONAL ASSOCIATION TO BARRA, INC.

 

August 1, 2001

 

 

Barra, Inc.

2100 Milvia Street

Berkeley, CA 94704

 

Dear Sir:

This letter is to confirm that WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"),
subject to all terms and conditions contained herein, has agreed to make
available the credit described below to BARRA, INC. ("Borrower"):

1. A revolving line of credit under which Bank will make advances to Borrower
from time to time up to and including August 1, 2002, not to exceed at any time
the maximum principal amount of Forty Twenty Five Million Dollars
($25,000,000.00) ("Line of Credit"), the proceeds of which shall be used for
working capital requirement for general corporate purposes.

I. CREDIT TERMS:

1. LINE OF CREDIT:

(a) Line of Credit Note. Borrower's obligation to repay advances under the Line
of Credit shall be evidenced by a promissory note substantially in the form of
Exhibit A attached hereto ("Line of Credit Note"), all terms of which are
incorporated herein by this reference.

(b) Borrowing and Repayment. Borrower may from time to time during the term of
the Line of Credit borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions contained
herein or in the Line of Credit Note; provided however, that the total
outstanding borrowings under the Line of Credit shall not at any time exceed the
maximum principal amount available thereunder, as set forth above.
Notwithstanding the foregoing, Borrower shall maintain a zero balance on
advances under the Line of Credit for a period of at least thirty consecutive
days during each fiscal year

2. COLLATERAL:

As security for all indebtedness of Borrower to Bank subject hereto, Borrower
hereby grants to Bank security interests of first priority in all Borrower's
Wells Capital Management Account #143978.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.

II. INTEREST/FEES:

1. Interest. The outstanding principal balance of the Line of Credit shall bear
interest

at the rate of interest set forth in the Line of Credit Note.

2. Computation and Payment. Interest shall be computed on the basis of a 360-day
year, actual days elapsed. Interest shall be payable at the times and place set
forth in each promissory note or other instrument required hereby.

3. Collection of Payments. Borrower authorizes Bank to collect all interest due
under each credit subject hereto by charging Borrower's deposit account number
_______________ with Bank, or any other deposit account maintained by Borrower
with Bank, for the full amount thereof. Should there be insufficient funds in
any such deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower.

III. REPRESENTATIONS AND WARRANTIES:

Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this letter and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this letter.

1. Legal Status. Borrower is a corporation, duly organized and existing and in
good standing under the laws of the State of CaliforniaMaryland, and is
qualified or licensed to do business in all jurisdictions in which such
qualification or licensing is required or in which the failure to so qualify or
to be so licensed could have a material adverse effect on Borrower.

2. Authorization and Validity. This letter and each promissory note, contract,
instrument and other document deemed necessary by Bank to evidence any extension
of credit to Borrower pursuant to the terms and conditions hereof, or now or at
any time hereafter required by or delivered to Bank in connection with this
letter (collectively, the "Loan Documents") have been duly authorized, and upon
their execution and delivery in accordance with the provisions hereof will
constitute legal, valid and binding agreements and obligations of Borrower or
the party which executes the same, enforceable in accordance with their
respective terms.

3. No Violation. The execution, delivery and performance by Borrower of each of
the Loan Documents do not violate any provision of any law or regulation, or
contravene any provision of the Articles of Incorporation or By-Laws of
Borrower, or result in a breach of or constitute a default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

4. Litigation. There are no pending, or to the best of Borrower's knowledge
threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
could have a material adverse effect on the financial condition or operation of
Borrower other than those disclosed by Borrower to Bank in writing prior to the
date hereof.

5. Correctness of Financial Statement. The financial statement of Borrower dated
March 31, 2001_______________, , a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
condition or operation of Borrower, nor has Borrower mortgaged, pledged, granted
a security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or as otherwise permitted by Bank in writing.

6. Income Tax Returns. Borrower has no knowledge of any pending assessments or
adjustments of its income tax payable with respect to any year.

7. No Subordination. There is no agreement, indenture, contract or instrument to
which Borrower is a party or by which Borrower may be bound that requires the
subordination in right of payment of any of Borrower's obligations subject to
this letter to any other obligation of Borrower.

8. Permits, Franchises. Borrower possesses, and will hereafter possess, all
permits, consents, approvals, franchises and licenses required and all rights to
trademarks, trade names, patents and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance with
applicable law.

9. ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended or
recodified from time to time ("ERISA"); Borrower has not violated any provision
of any defined employee pension benefit plan (as defined in ERISA) maintained or
contributed to by Borrower (each, a "Plan"); no Reportable Event, as defined in
ERISA, has occurred and is continuing with respect to any Plan initiated by
Borrower; Borrower has met its minimum funding requirements under ERISA with
respect to each Plan; and each Plan will be able to fulfill its benefit
obligations as they come due in accordance with the Plan documents and under
generally accepted accounting principles.

10. Other Obligations. 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.

11. Environmental Matters. Except as disclosed by Borrower to Bank in writing
prior to the date hereof, Borrower is in compliance in all material respects
with all applicable federal or state environmental, hazardous waste, health and
safety statutes, and any rules or regulations adopted pursuant thereto, which
govern or affect any of Borrower's operations and/or properties, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Federal Resource Conservation and Recovery Act of 1976, and the Federal
Toxic Substances Control Act, as any of the same may be amended, modified or
supplemented from time to time. None of the operations of Borrower is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any
toxic or hazardous waste or substance into the environment. Borrower has no
material contingent liability in connection with any release of any toxic or
hazardous waste or substance into the environment.

IV. CONDITIONS:

1. Conditions of Initial Extension of Credit. The obligation of Bank to extend
any credit contemplated by this letter is subject to fulfillment to Bank's
satisfaction of all of the following conditions:

(a) Documentation. Bank shall have received each of the Loan Documents, duly
executed and in form and substance satisfactory to Bank.

(b) Financial Condition. There shall have been no material adverse change, as
determined by Bank, in the financial condition or business of Borrower, nor any
material decline, as determined by Bank, in the market value of any collateral
required hereunder or a substantial or material portion of the assets of
Borrower.

(c) Insurance. Borrower shall have delivered to Bank evidence of insurance
coverage on all Borrower's property, in form, substance, amounts, covering risks
and issued by companies satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank.

2. Conditions of Each Extension of Credit. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank's satisfaction of each of the following conditions:

(a) Compliance. The representations and warranties contained herein and in each
of the other Loan Documents shall be true on and as of the date of the signing
of this letter and on the date of each extension of credit by Bank pursuant
hereto, with the same effect as though such representations and warranties had
been made on and as of each such date, and on each such date, no default
hereunder, and no condition, event or act which with the giving of notice or the
passage of time or both would constitute such a default, shall have occurred and
be continuing or shall exist.

(b) Documentation. Bank shall have received all additional documents which may
be reasonably required in connection with such extension of credit.

V. COVENANTS:

Borrower covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

1. Punctual Payment. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and in
the manner specified therein.

2. Accounting Records. Maintain adequate books and records in accordance with
generally accepted accounting principles consistently applied, and permit any
representative of Bank, at any reasonable time (and, so long as no default
exists, upon reasonable notice), to inspect, audit and examine such books and
records, to make copies of the same and inspect the properties of Borrower.

3. Financial Statements. Provide to Bank all of the following, in form and
detail satisfactory to Bank:

(a) not later than 120 days after and as of the end of each fiscal year, an
audited financial statement of Borrower, prepared by a certified public
accountant acceptable to Bank, to include balance sheet, income statement,
statement of cash flows and all footnotes;

(b) not later than 60 days after and as of the end of each fiscal quarter, 10Q
report, prepared by Borrower, to include balance sheet, income statement,
statement of cash flows and all footnotes;

(c) not later than 15 days after and as of the end of each month, copies of
Wells Capital Management account statement;

(d) from time to time such other information as Bank may reasonably request.

4. Compliance. Preserve and maintain all licenses, permits, governmental
approvals, rights, privileges and franchises necessary for the conduct of its
business; and comply with the provisions of all documents pursuant to which
Borrower is organized and/or which govern Borrower's continued existence and
with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to Borrower and/or its business.

5. Insurance. Maintain and keep in force insurance of the types and in amounts
customarily carried in lines of business similar to that of Borrower, including
but not limited to fire, extended coverage, public liability, flood, property
damage and workers' compensation, with all such insurance carried with companies
and in amounts satisfactory to Bank, and deliver to Bank from time to time at
Bank's request schedules setting forth all insurance then in effect.

6. Facilities. Keep all properties useful or necessary to Borrower's business in
good repair and condition, and from time to time make necessary repairs,
renewals and replace ments thereto so that such properties shall be fully and
efficiently preserved and maintained.

7. Taxes and Other Liabilities. Pay and discharge when due any and all
indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for eventual payment thereof in the
event Borrower is obligated to make such payment.

8. Litigation. Promptly give notice in writing to Bank of any litigation pending
or threatened against Borrower.

9. Financial Condition. Maintain Borrower's financial condition as follows using
generally accepted accounting principles consistently applied and used
consistently with prior practices (except to the extent modified by the
definitions herein):

(a) Tangible Net Worth not at any time less than $120,000,000.00, with "Tangible
Net Worth" defined as the aggregate of total stockholders' equity plus
subordinated debt less any intangible assets.

(b) Total Liabilities divided by Tangible Net Worth not at any time greater than
1.0 to 1.0, with "Total Liabilities" defined as the aggregate of current
liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" as defined above.

(c) Quick Ratio not at any time less than 1.0 to 1.0, with "Quick Ratio" defined
as the aggregate of unrestricted cash, unrestricted marketable securities and
receivables convertible into cash divided by total current liabilities.

(d) Net income after taxes in each fiscal quarter not less than $5,000,000.00,
determined as of each fiscal quarter end.

(e) Liquid Assets (as defined as unencumbered and unrestricted cash, cash
equivalents and marketable securities acceptable to Bank in Section 2 of the
Addendum to Security Agreement: Securities Account) held in Borrower's Wells
Capital Management Account #143978), in an aggregate amounts in excessnot less
than of $50,000,000.00, determined as of the end of each month.

10. Other Indebtedness. Not create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Bank, and (b) any
other liabilities of Borrower existing as of, and disclosed to Bank prior to,
the date hereof, and (c) purchase money indebtedness subject to the terms of
Section 15 below..

11. Merger, Consolidation, Transfer of Assets. Not merge into or consolidate
with any other entity; nor make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; nor acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business; provided however, that
Borrower may merge, consolidate, acquire all or substantially all of the assets
of any other entity, sell or dispose of all or portion of assets, so long as
such mergingmerger, consolidation, acquisition or disposition does not cause or
result in a n event of default under any other provision of this Agreement or
the other Loan Documents and Borrower, in all instances, is the surviving
entity.

12. Guaranties. Not guarantee or become liable in any way as surety, endorser
(other than as endorser of negotiable instruments for deposit or collection in
the ordinary course of business), accommodation endorser or otherwise for, nor
pledge or hypothecate any assets of Borrower as security for, any liabilities or
obligations of any other person or entity, except any of the foregoing in favor
of Bank.

13. Loans, Advances, Investments. Not make any loans or advances to or
investments in any person or entity, except any of the foregoing existing as of,
and disclosed to Bank prior to, the date hereof; provided however, that Borrower
may make loans, advances or investments, so long as such loans, advances or
investments do not cause or result in an event of default under any other
provision of this Agreement or the other Loan Documents and Borrower is the
surviving entity.

14. Dividends, Distributions. Not declare or pay any dividend or distribution
either in cash, stock or any other property on Borrower's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of
any class of Borrower's stock now or hereafter outstanding; provided however,
that Borrower may declare or pay any such dividends, or acquire any such shares
of stock, so long as such payment or acquisition does not cause or result in a n
event of default under any other provision of this Agreement or the other Loan
Documents and Borrower is the surviving entity.

15. Pledge of Assets. Not mortgage, pledge, grant or permit to exist a security
interest in, or lien (collectively, "Lien") upon, all or any portion of
Borrower's assets now owned or hereafter acquired, except:

(a) any Lien created under any Loan Document;

(b) Liens for taxes, fees, assessments or other governmental charges which are
not delinquent or remain payable without penalty; provided, that no notice of
lien has been filed or recorded;

(c) suppliers', carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent for a period of more than thirty days or
which are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;

(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;

(e) Liens on the property of Borrower securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, (ii) contingent obligations on surety and appeal bonds,
and (iii) other non-delinquent obligations of a like nature; in each case,
incurred in the ordinary course of business;

(f) leases, subleases, easements, rights-of-way, encroachments and other survey
defects, restrictions and other similar encumbrances incurred in the ordinary
course of business which do not impose material financial obligations on
Borrower, and which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of Borrower;

(g) purchase money security interests on any property acquired or held by
Borrower securing indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided, that (i) any
such Lien attaches to such property concurrently with or within 20 days after
the acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt secured
thereby does not exceed the cost of such property;

(h) Liens securing obligations in respect of capital leases on assets subject to
such leases; provided, that such capital leases are otherwise permitted
hereunder;

(i) Liens arising solely by virtue of any statutory or common law provision
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided, that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Borrower in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (ii) such deposit account is not intended by the Borrower to
provide collateral to the depository institution;

(j) Liens assumed in connection with a business acquisition or investment
permitted by this Agreement; provided, that, such Lien was created prior to such
acquisition or investment (and not in contemplation of such acquisition) and
such Lien is terminated within 30 days after such acquisition (unless permitted
under another paragraph of this Section 14); and

(k) any Lien existing on property of Borrower as of the date hereof and set
forth on Schedule I hereto; provided, that no such Lien is amended to cover
additional property and no such Lien is amended to cover additional
Indebtedness.

VI. DEFAULT, REMEDIES:

1. Default, Remedies. Upon the violation of any term or condition of any of the
Loan Documents, or upon the occurrence of any default or defined event of
default under any of the Loan Documents: (a) all indebtedness of Borrower under
each of the Loan Documents, any term thereof to the contrary notwithstanding,
shall at Bank's option and without upon prior written notice (but with no notice
if the default consists of Borrower becoming subject to a proceeding under any
federal or state bankruptcy or insolvency proceeding) become immediately due and
payable without presentment, demand, protest or notice of dishonor, all of which
are expressly waived by Borrower; (b) the obligation, if any, of Bank to extend
any further credit under any of the Loan Documents shall immediately cease and
terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any credit subject
hereto and to exercise any or all of the rights of a beneficiary or secured
party pursuant to applicable law. All rights, powers and remedies of Bank may be
exercised at any time by Bank and from time to time after the occurrence of any
such breach or default, are cumulative and not exclusive, and shall be in
addition to any other rights, powers or remedies provided by law or equity.

2. No Waiver. No delay, failure or discontinuance of Bank in exercising any
right, power or remedy under any of the Loan Documents shall affect or operate
as a waiver of such right, power or remedy; nor shall any single or partial
exercise of any such right, power or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power
or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under any of the Loan Documents must be in writing and
shall be effective only to the extent set forth in such writing.

VII. MISCELLANEOUS:

1. Notices. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this letter must be in
writing delivered to each party at its address first set forth above, or to such
other address as any party may designate by written notice to all other parties.
Each such notice, request and demand shall be deemed given or made as follows:
(a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the
earlier of the date of receipt or three (3) days after deposit in the U.S. mail,
first class and postage prepaid; and (c) if sent by telecopy, upon receipt.

2. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Bank immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees (to include outside counsel fees
and all allocated costs of Bank's in-house counsel), expended or incurred by
Bank in connection with (a) the negotiation and preparation of this letter and
the other Loan Documents, Bank's continued administration hereof and thereof,
and the preparation of amendments and waivers hereto and thereto, (b) the
enforcement of Bank's rights and/or the collection of any amounts which become
due to Bank under any of the Loan Documents, and (c) the prosecution or defense
of any action in any way related to any of the Loan Documents, including without
limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to any Borrower or any other person or
entity.

3. Successors, Assignment. This letter shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interest hereunder without Bank's prior written consent.
Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank's rights and
benefits under each of the Loan Documents. In connection therewith Bank may
disclose all documents and information which Bank now has or hereafter may
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

4. Entire Agreement; Amendment. This letter and the other Loan Documents
constitute the entire agreement between Borrower and Bank with respect to each
credit subject hereto and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This letter
may be amended or modified only in writing signed by each party hereto.

5. No Third Party Beneficiaries. This letter is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted
successors and assigns, and no other person or entity shall be a third party
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this letter or any other of the Loan Documents to which it is
not a party.

6. Severability of Provisions. If any provision of this letter shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
letter.

7. Governing Law. This letter shall be governed by and construed in accordance
with the laws of the State of California.

8. Arbitration.

(a) Arbitration. The parties hereto agree, upon demand by any party, to submit
to binding arbitration all claims, disputes and controversies between or among
them (and their respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise arising out of or relating to in
any way (i) the loan and related Loan Documents which are the subject of this
Agreement and its negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location
in California selected by the American Arbitration Association ("AAA"); (ii) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. 91 or any
similar applicable state law.

(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

(e) Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining information is
available.

(f) Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate
arbitration proceeding and such dispute shall not be consolidated with other
disputes or included in any class proceeding.

(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs
and expenses of the arbitration proceeding.

(h) Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

(i) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

Your acknowledgment of this letter shall constitute acceptance of the foregoing
terms and conditions. Bank's commitment to extend any credit to Borrower
pursuant to the terms of this letter shall terminate on August 31, 2001, unless
this letter is acknowledged by Borrower and returned to Bank on or before that
date.

Sincerely,

WELLS FARGO BANK,

NATIONAL ASSOCIATION

By: __________________________

Kenneth Lloyd

Vice President

 

Acknowledged and accepted as of _______________:

BARRA, INC.

By:_____________________________

Title: ___________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE NO. 1 TO LETTER AGREEMENT DATED AUGUST 1, 2001

The following Lien on the property of Borrower as of the date hereof is set
forth on this Schedule No. 1 to Letter Agreement dated August 1, 2001

Debtor: Barra, Inc.

Secured Party: Pacific Bell Financial Services, Inc.

4333 Edgewood Rd NE

Cedar Rapids IA 52499

Filing Date: 08/25/97

Filing Time: 8.00 AM

Expiration Date: 08/26/2002

Filing Number: 9723960324

Status: Active

Type: Financing statement

 

 

 

 

 

 

 

 

 

REVOLVING LINE OF CREDIT NOTE

 

$25,000,000.00 Oakland, California

August 1, 2001

FOR VALUE RECEIVED, the undersigned BARRA, INC. ("Borrower") promises to pay to
the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at
East Bay RCBO, One Kaiser Plaza, Suite 850, Oakland, California, or at such
other place as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of Forty
Twenty Five Million Dollars ($4025,000,000.00), or so much thereof as may be
advanced and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement as set forth herein.

DEFINITIONS:

As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:

(a) "Business Day" means any day except a Saturday, Sunday or any other day on
which commercial banks in California are authorized or required by law to close.

(b) "Fixed Rate Term" means a period commencing on a Business Day and continuing
for one (1), two (2) or three (3) months, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than One Hundred Thousand
Dollars ($100,000.00); and provided further, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

LIBOR =

Base LIBOR

   

100% - LIBOR Reserve Percentage

 

(i) "Base LIBOR" means the rate per annum for United States dollar deposits
quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding
that such rate is quoted by Bank for the purpose of calculating effective rates
of interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately equal
to the number of days in such Fixed Rate Term and in an amount approximately
equal to the principal amount to which such Fixed Rate Term applies. Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank Market
Offered Rate upon such offers or other market indicators of the Inter-Bank
Market as Bank in its discretion deems appropriate including, but not limited
to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

(ii) "LIBOR Reserve Percentage" means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.

(d) "Prime Rate" means at any time the rate of interest most recently announced
within Bank at its principal office as its Prime Rate, with the understanding
that the Prime Rate is one of Bank's base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

(a) Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360- day year, actual days elapsed) either (i) at a
fluctuating rate per annum three one quarters percent (0.7525%) below the Prime
Rate in effect from time to time, or (ii) at a fixed rate per annum determined
by Bank to be one two and three one quarters percent (1.752.25%) above LIBOR in
effect on the first day of the applicable Fixed Rate Term. When interest is
determined in relation to the Prime Rate, each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is announced
within Bank. With respect to each LIBOR selection hereunder, Bank is hereby
authorized to note the date, principal amount, interest rate and Fixed Rate Term
applicable thereto and any payments made thereon on Bank's books and records
(either manually or by electronic entry) and/or on any schedule attached to this
Note, which notations shall be prima facie evidence of the accuracy of the
information noted.

(b) Selection of Interest Rate Options. At any time any portion of this Note
bears interest determined in relation to LIBOR, it may be continued by Borrower
at the end of the Fixed Rate Term applicable thereto so that all or a portion
thereof bears interest determined in relation to the Prime Rate or to LIBOR for
a new Fixed Rate Term designated by Borrower. At any time any portion of this
Note bears interest determined in relation to the Prime Rate, Borrower may
convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.

(c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any and
all (i) withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

(d) Payment of Interest. Interest accrued on this Note shall be payable on the
1st day of each month, commencing SeptemberJune 1, 2001.

(e) Default Interest. From and after the maturity date of this Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

(a) Borrowing and Repayment. Borrower may from time to time during the term of
this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on August 1, 2002.

(b) Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of (i)
_____________________ Greg V. Stockett or Kamal Duggirala, any one acting alone,
who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received by
the holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.

(c) Application of Payments. Each payment made on this Note shall be credited
first, to any interest then due and second, to the outstanding principal balance
hereof. All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in
relation to the Prime Rate, if any, and second, to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR, with
such payments applied to the oldest Fixed Rate Term first.

PREPAYMENT:

(a) Prime Rate. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to the Prime Rate at any time, in any
amount and without penalty.

(b) LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount
of Fifty Thousand Dollars ($50,000.00); provided however, that if the
outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto by
acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a
fee which is the sum of the discounted monthly differences for each month from
the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:

(i) Determine the amount of interest which would have accrued each month on the
amount prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.

(ii) Subtract from the amount determined in (i) above the amount of interest
which would have accrued for the same month on the amount prepaid for the
remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.

(iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2.0%) above
the Prime Rate in effect from time to time (computed on the basis of a 360-day
year, actual days elapsed). Each change in the rate of interest on any such past
due prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:

The occurrence of any of the following shall constitute an "Event of Default"
under this Note:

(a) The failure to pay any principal, interest, fees or other charges when due
hereunder or under any contract, instrument or document executed in connection
with this Note.

(b) The filing of a petition by or against any Borrower, or any guarantor of
this Note or any general partner or joint venturer in any Borrower which is a
partnership or a joint venture (with each any such guarantor, general partner
and/or joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as
amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for debtors;
the appointment of a receiver, trustee, custodian or liquidator of or for any
part of the assets or property of any Borrower or Third Party Obligor; any
Borrower or Third Party Obligor becomes insolvent, makes a general assignment
for the benefit of creditors or is generally not paying its debts as they become
due; or any attachment or like levy on any property of any Borrower or Third
Party Obligor.

(c) The death or incapacity of any individual Borrower or Third Party Obligor,
or the dissolution or liquidation of any Borrower or Third Party Obligor which
is a corporation, partnership, joint venture or other type of entity.

(d) Any default in the payment or performance of any obligation, or any defined
event of default, under any provisions of any contract, instrument or document
pursuant to which any Borrower or Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder, and, if the debt or
liability is owed to a party other than Bank, Borrower is contesting, in good
faith and by appropriate proceedings, the existence of the default and the
creditor has not accelerated the obligation or otherwise exercised any
remedies..

(e) Any financial statement provided by any Borrower or Third Party Obligor to
Bank proves to be incorrect, false or misleading in any material respect.

(f) Any sale or transfer of all or a substantial or material part of the assets
of any Borrower or Third Party Obligor other than in the ordinary course of its
business.

(g) Any violation or breach of any provision of, or any defined event of default
(collectively, "Default") under, any addendum to this Note or any loan
agreement, guaranty, security agreement, deed of trust, mortgage or other
document executed in connection with or securing this Note and with respect to
any such Default which by its nature can be cured, such Default shall continue
for a period of twenty (20) days from its occurrence..

MISCELLANEOUS:

(a) Remedies. Upon the occurrence of any Event of Default, the holder of this
Note, at the holder's option, may (upon prior written notice, but with no notice
if the default consists of Borrower becoming subject to a proceeding under any
federal or state bankruptcy or insolvency proceeding) declare all sums of
principal and interest outstanding hereunder to be immediately due and payable
without presentment, demand, further notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by
each Borrower, and the obligation, if any, of the holder to extend any further
credit hereunder shall immediately cease and terminate. Each Borrower shall pay
to the holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys' fees (to include
outside counsel fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

(b) Obligations Joint and Several. Should more than one person or entity sign
this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.

(c) Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

BARRA, INC.

By: ___________________________

Title:__________________________