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 containedherein, 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 August1, 2002, not to exceed at any time the maximum principal amount of Forty Twenty Five Million Dollars ($25,000,000.00) ("Line ofCredit"), 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 apromissory note substantially in the form of Exhibit A attached hereto ("Line of Credit Note"), all terms of which areincorporated herein by this reference.

	(b)	Borrowing and Repayment.  Borrower may from time to time during the term of the Line of Credit borrow, partiallyor wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein orin the Line of Credit Note; provided however, that the total outstanding borrowings under the Line of Credit shall not at any timeexceed the maximum principal amount available thereunder, as set forth above.  Notwithstanding the foregoing, Borrower shall maintaina 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 offirst 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 oftrust and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank.  Borrower shall reimburseBank immediately upon demand for all costs and expenses incurred by Bank in connection with any of the foregoing security, includingwithout 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 bycharging 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 fullamount 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 theexecution of this letter and shall continue in full force and effect until the full and final payment, and satisfaction anddischarge, 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 theState of CaliforniaMaryland, and is qualified or licensed to do business in all jurisdictions in which such qualification orlicensing is required or in which the failure to so qualify or to be so licensed could have a material adverse effect onBorrower.

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

	3.	No Violation.  The execution, delivery and performance by Borrower of each of the Loan Documents do not violateany provision of any law or regulation, or contravene any provision of the Articles of Incorporation or By-Laws of Borrower, orresult in a breach of or constitute a default under any contract, obligation, indenture or other instrument to which Borrower is aparty 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 couldhave a material adverse effect on the financial condition or operation of Borrower other than those disclosed by Borrower to Bank inwriting prior to the date hereof.

	5.	Correctness of Financial Statement.  The financial statement of Borrower dated March 31, 2001_______________, , atrue copy of which has been delivered by Borrower to Bank prior to the date hereof, (a) is complete and correct and presentsfairly the financial condition of Borrower, (b) discloses all liabilities of Borrower that are required to be reflected orreserved 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 suchfinancial 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 asotherwise permitted by Bank in writing. 

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

	7.	No Subordination.  There is no agreement, indenture, contract or instrument to which Borrower is a party or bywhich Borrower may be bound that requires the subordination in right of payment of any of Borrower's obligations subject to thisletter 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 enableit 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 EmployeeRetirement Income Security Act of 1974, as amended or recodified from time to time ("ERISA"); Borrower has not violated any provisionof any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a "Plan"); noReportable Event, as defined in ERISA, has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower hasmet its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be able to fulfill its benefitobligations 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 moneyobligation 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 isin compliance in all material respects with all applicable federal or state environmental, hazardous waste, health and safetystatutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower's operations and/orproperties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, theSuperfund Amendments and Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the FederalToxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time.  None of the operationsof Borrower is the subject of any federal or state investigation evaluating whether any remedial action involving a materialexpenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment.  Borrower has nomaterial 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 thisletter 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 substancesatisfactory to Bank.

	(b)	Financial Condition.  There shall have been no material adverse change, as determined by Bank, in the financialcondition or business of Borrower, nor any material decline, as determined by Bank, in the market value of any collateral requiredhereunder 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, inform, substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with loss payableendorsements in favor of Bank.

	2.	Conditions of Each Extension of Credit.  The obligation of Bank to make each extension of credit requested byBorrower 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 shallbe 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, withthe same effect as though such representations and warranties had been made on and as of each such date, and on each such date, nodefault hereunder, and no condition, event or act which with the giving of notice or the passage of time or both would constitutesuch 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 connectionwith 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 inwriting:

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

	2.	Accounting Records.  Maintain adequate books and records in accordance with generally accepted accountingprinciples 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 propertiesof 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 andall footnotes;

	(b)	not later than 60 days after and as of the end of each fiscal quarter, 10Q report, prepared by Borrower, to includebalance 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 andfranchises necessary for the conduct of its business; and comply with the provisions of all documents pursuant to which Borrower isorganized and/or which govern Borrower's continued existence and with the requirements of all laws, rules, regulations and orders ofa 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 ofbusiness similar to that of Borrower, including but not limited to fire, extended coverage, public liability, flood, property damageand workers' compensation, with all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bankfrom 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, andfrom time to time make necessary repairs, renewals and replace ments thereto so that such properties shall be fully and efficientlypreserved and maintained.

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

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

	

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

	(a)	Tangible Net Worth not at any time less than $120,000,000.00, with "Tangible Net Worth" defined as the aggregate oftotal 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" asdefined 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 quarterend.

(e)	Liquid Assets (as defined as unencumbered and unrestricted cash, cash equivalents and marketable securities acceptable toBank 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 fromborrowings, 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 Bankprior 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 anysubstantial change in the nature of Borrower's business as conducted as of the date hereof; nor acquire all or substantially all ofthe assets of any other entity; nor sell, lease, transfer or otherwise dispose of all or a substantial or material portion ofBorrower's assets except in the ordinary course of its business; provided however, that Borrower may merge, consolidate, acquire allor 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 thisAgreement 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 negotiableinstruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge orhypothecate any assets of Borrower as security for, any liabilities or obligations of any other person or entity, except any of theforegoing in favor of Bank.

	13.	Loans, Advances, Investments.  Not make any loans or advances to or investments in any person or entity, exceptany 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 otherprovision 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 otherproperty on Borrower's stock now or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of anyclass of Borrower's stock now or hereafter outstanding; provided however, that Borrower may declare or pay any such dividends, oracquire any such shares of stock, so long as such payment or acquisition does not cause or result in a n event of default under anyother 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 withoutpenalty; 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 Liensarising in the ordinary course of business which are not delinquent for a period of more than thirty days or which are beingcontested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of theproperty subject thereto;

	(d)	Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course ofbusiness 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 thanfor borrowed money), leases, statutory obligations, (ii) contingent obligations on surety and appeal bonds, and (iii) othernon-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 similarencumbrances incurred in the ordinary course of business which do not impose material financial obligations on Borrower, and which donot in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conductof the business of Borrower;

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

	(h)	Liens securing obligations in respect of capital leases on assets subject to such leases; provided, that suchcapital 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-offor 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 restrictionsagainst 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 isterminated 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 additionalIndebtedness.

VI.	DEFAULT, REMEDIES:

	1.	Default, Remedies.  Upon the violation of any term or condition of any of the Loan Documents, or upon theoccurrence of any default or defined event of default under any of the Loan Documents: (a) all indebtedness of Borrower undereach of the Loan Documents, any term thereof to the contrary notwithstanding, shall at Bank's option and without upon prior writtennotice (but with no notice if the default consists of Borrower becoming subject to a proceeding under any federal or state bankruptcyor insolvency proceeding) become immediately due and payable without presentment, demand, protest or notice of dishonor, all of whichare expressly waived by Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the LoanDocuments shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each ofthe Loan Documents, or accorded by law, including without limitation the right to resort to any or all security for any creditsubject 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 ordefault, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law orequity.

	2.	No Waiver.  No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of theLoan Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of anysuch right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any otherright, power or remedy.  Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of theLoan 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 partyunder any provision of this letter must be in writing delivered to each party at its address first set forth above, or to such otheraddress as any party may designate by written notice to all other parties.  Each such notice, request and demand shall be deemedgiven or made as follows:  (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the dateof receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, uponreceipt.

	2.	Costs, Expenses and Attorneys' Fees.  Borrower shall pay to Bank immediately upon demand the full amount of allpayments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and allallocated costs of Bank's in-house counsel), expended or incurred by Bank in connection with (a) the negotiation and preparationof this letter and the other Loan Documents, Bank's continued administration hereof and thereof, and the preparation of amendmentsand waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the collection of any amounts which become due toBank under any of the Loan Documents, and (c) the prosecution or defense of any action in any way related to any of the LoanDocuments, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in anarbitration 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 toany 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 ortransfer its interest hereunder without Bank's prior written consent.  Bank reserves the right to sell, assign, transfer, negotiateor grant participations in all or any part of, or any interest in, Bank's rights and benefits under each of the Loan Documents.  Inconnection therewith Bank may disclose all documents and information which Bank now has or hereafter may acquire relating to anycredit 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 betweenBorrower and Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions andcorrespondence concerning the subject matter hereof.  This letter may be amended or modified only in writing signed by each partyhereto.

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

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

	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 thesubject 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 AmericanArbitration 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 theAAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA's commercial dispute resolutionprocedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs inwhich 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, asapplicable, as the "Rules").  If there is any inconsistency between the terms hereof and the Rules, the terms andprocedures set forth herein shall control.  Any party who fails or refuses to submit to arbitration following a demand by any otherparty shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute.  Nothing containedherein 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 anysimilar applicable state law.

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

	(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 ofgreater than $5,000,000.00.  Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority voteof a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings anddeliberations.  The arbitrator will be a neutral attorney licensed in the State of California or a neutral retired judge of the stateor federal judiciary of California, in either case with a minimum of ten years experience in the substantive law applicable to thesubject matter of the dispute to be arbitrated.  The arbitrator will determine whether or not an issue is arbitratable and will giveeffect to the statutes of limitation in determining any claim.  In any arbitration proceeding the arbitrator will decide (bydocuments only or with a hearing at the arbitrator's discretion) any pre-hearing motions which are similar to motions to dismiss forfailure to state a claim or motions for summary adjudication.  The arbitrator shall resolve all disputes in accordance with thesubstantive law of California and may grant any remedy or relief that a court of such state could order or grant within the scopehereof and such ancillary relief as is necessary to make effective any award.  The arbitrator shall also have the power to awardrecovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the sameextent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other applicablelaw.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction.  The institution andmaintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of theright of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests suchaction for judicial relief.

	(e)	Discovery.  In any arbitration proceeding discovery will be permitted in accordance with the Rules.  Alldiscovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than20 days before the hearing date and within 180 days of the filing of the dispute with the AAA.  Any requests for an extension of thediscovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that therequest for discovery is essential for the party's presentation and that no alternative means for obtaining information isavailable.

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

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

	(h)	Real Property Collateral; Judicial Reference.  Notwithstanding anything herein to the contrary, no dispute shallbe submitted to arbitration if the dispute concerns indebtedness secured directly or indirectly, in whole or in part, by any realproperty unless (i) the holder of the mortgage, lien or security interest specifically elects in writing to proceed with thearbitration, or (ii) all parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the singleaction rule statute of California, thereby agreeing that all indebtedness and obligations of the parties, and all mortgages, liensand security interests securing such indebtedness and obligations, shall remain fully valid and enforceable.  If any such dispute isnot submitted to arbitration, the dispute shall be referred to a referee in accordance with California Code of Civil ProcedureSection 638 et seq., and this general reference agreement is intended to be specifically enforceable in accordance with said Section638.  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 accordancewith 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 actionrequired to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA.  No arbitrator or otherparty to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by aparty required in the ordinary course of its business or by applicable law or regulation.  If more than one agreement for arbitrationby or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents orthe subject matter of the dispute shall control.  This arbitration provision shall survive termination, amendment or expiration ofany 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 toextend any credit to Borrower pursuant to the terms of this letter shall terminate on August 31, 2001, unless this letter isacknowledged 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 thisSchedule 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, NATIONALASSOCIATION ("Bank") at its office at East Bay RCBO, One Kaiser Plaza, Suite 850, Oakland, California, or at such other place as theholder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum ofForty Twenty Five Million Dollars ($4025,000,000.00), or so much thereof as may be advanced and be outstanding, with interestthereon, 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 Noteshall 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 areauthorized 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 determinedin relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than One Hundred ThousandDollars ($100,000.00); and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.  If anyFixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeedingBusiness Day.

	(c)	"LIBOR" means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined pursuantto 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 OfferedRate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loansmaking reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of time approximatelyequal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such FixedRate Term applies.  Borrower understands and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon suchoffers 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 ReserveSystem (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 itsPrime Rate, with the understanding that the Prime Rate is one of Bank's base rates and serves as the basis upon which effective ratesof interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcementin 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 Ratein 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 thePrime Rate, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announcedwithin Bank.  With respect to each LIBOR selection hereunder, Bank is hereby authorized to note the date, principal amount, interestrate and Fixed Rate Term applicable thereto and any payments made thereon on Bank's books and records (either manually or byelectronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of theinformation noted.

	(b)	Selection of Interest Rate Options.  At any time any portion of this Note bears interest determined in relationto LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bearsinterest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower.  At any time anyportion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so thatit bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower.  At such time as Borrower requests anadvance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the endof each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest rate option selected by Borrower; (ii) theprincipal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such noticemay 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 noticeis 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 duringany Business Day if Bank, at it's sole option but without obligation to do so, accepts Borrower's notice and quotes a fixed rate toBorrower.  If Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequentLIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable fixed rate.  If no specific designationof interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed tohave 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 otheramounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (exceptincome 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 DepositInsurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting fromcompliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmentalauthority and related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR.  In determining whichof the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank amongits 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, commencingSeptemberJune  1, 2001.

	(e)	Default Interest.  From and after the maturity date of this Note, or such earlier date as all principal owinghereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interestuntil paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to fourpercent (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 orwholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and ofany document executed in connection with or governing this Note; provided however, that the total outstanding borrowings under thisNote shall not at any time exceed the principal amount stated above.  The unpaid principal balance of this obligation at any timeshall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for anyBorrower, which balance may be endorsed hereon from time to time by the holder.  The outstanding principal balance of this Note shallbe 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 holderat the oral or written request of (i) _____________________ Greg V. Stockett or Kamal Duggirala, any one acting alone, who areauthorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority isreceived by the holder at the office designated above, or (ii) any person, with respect to advances deposited to the credit of anydeposit account of any Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for thebenefit of each Borrower regardless of the fact that persons other than those authorized to request advances may have authority todraw against such account.  The holder shall have no obligation to determine whether any person requesting an advance is or has beenauthorized by any Borrower.

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

PREPAYMENT:

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

	(i)	Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rateapplicable 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 samemonth on the amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loansmade 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/orliabilities, 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 theprepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay any prepayment fee when due, the amount of suchprepayment fee shall thereafter bear interest until paid at a rate per annum two percent (2.0%) above the Prime Rate in effect fromtime to time (computed on the basis of a 360-day year, actual days elapsed).  Each change in the rate of interest on any such pastdue 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, instrumentor 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 jointventurer in any Borrower which is a partnership or a joint venture (with each any such guarantor, general partner and/or jointventurer referred to herein as a "Third Party Obligor") under any provisions of the Bankruptcy Reform Act, Title 11 of the UnitedStates 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 theassets or property of any Borrower or Third Party Obligor; any Borrower or Third Party Obligor becomes insolvent, makes a generalassignment for the benefit of creditors or is generally not paying its debts as they become due; or any attachment or like levy onany 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 anyBorrower 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 anycontract, instrument or document pursuant to which any Borrower or Third Party Obligor has incurred any obligation for borrowedmoney, any purchase obligation, or any other liability of any kind to any person or entity, including the holder, and, if the debt orliability is owed to a party other than Bank, Borrower is contesting, in good faith and by appropriate proceedings, the existence ofthe 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 ormisleading 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 Obligorother 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, anyaddendum to this Note or any loan agreement, guaranty, security agreement, deed of trust, mortgage or other document executed inconnection with or securing this Note and with respect to any such Default which by its nature can be cured, such Default shallcontinue 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 federalor state bankruptcy or insolvency proceeding) declare all sums of principal and interest outstanding hereunder to be immediately dueand payable without presentment, demand, further notice of nonperformance, notice of protest, protest or notice of dishonor, all ofwhich are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shallimmediately 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 costsof the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rightsand/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action inany way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial orappellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with anybankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or anyother 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, theobligations 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 ofCalifornia.

	

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

BARRA, INC.

By: ___________________________

Title:__________________________
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