EXHIBIT 10.41
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LOAN AND SECURITY AGREEMENT
COMERICA BANK -- CALIFORNIA
AND
ASYST TECHNOLOGIES, INC.
$25,000,000
OCTOBER 1, 2002
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This LOAN AND SECURITY AGREEMENT is entered into as of October 1, 2002, by and
between COMERICA BANK - CALIFORNIA ("Bank") and ASYST TECHNOLOGIES, INC., a
California corporation ("Borrower").
RECITALS
Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower. This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms
shall have the definitions set forth on Exhibit A.
1.2 Accounting Terms. All accounting terms not specifically
defined on Exhibit A shall be construed in accordance with GAAP and all
calculations shall be made in accordance with GAAP. The term "financial
statements" shall include the accompanying notes and schedules.
2. LOAN AND TERMS OF PAYMENT.
2.1 Credit Extensions.
(a) Borrower promises to pay to Bank, in lawful money of
the United States of America, the aggregate unpaid principal amount of all
Credit Extensions made by Bank to Borrower, together with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.
(b) Revolving Advances.
(i) Subject to and upon the terms and conditions
of this Agreement (1) Borrower may request Advances in an aggregate outstanding
amount not to exceed the lesser of (A) the Committed Revolving Line or (B) the
Borrowing Base, and (2) amounts borrowed pursuant to this Section 2.1(b) may be
repaid and reborrowed at any time prior to the Revolving Maturity Date, at which
time all Advances under this Section 2.1(b) shall be immediately due and
payable. Advances shall be in a minimum amount of $1,000,000 each and integral
multiples of $50,000 in excess of the amount; provided that no more than five
Advances shall be outstanding at any time. Borrower may prepay any Advances
without penalty or premium other than LIBOR Funding Losses. Borrower shall
indemnify, defend, and hold Bank harmless against any loss, reasonable cost, or
reasonable expense incurred by Bank as a result of (a) the payment of any
principal of any Advance other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), or (b) the
failure
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to borrow, continue or repay any Advance on the date specified in any
Payment/Advance notice provided pursuant to subsection (ii) below (other than a
default by Bank).
(ii) Whenever Borrower desires an Advance,
Borrower will notify Bank by facsimile transmission or telephone no later than
3:00 p.m. Pacific time, on the day which is three Business Days prior to the
Business Day on which such Advance is to be made. Each such notification shall
include the Borrower's election as to the applicable Interest Period and shall
be promptly confirmed by a Payment/Advance Form in substantially the form of
Exhibit C. Bank is authorized to make Advances under this Agreement, based upon
instructions received from a Responsible Officer or a designee of a Responsible
Officer, or without instructions if in Bank's discretion such Advances are
necessary to meet Obligations which have become due and remain unpaid. Bank
shall be entitled to rely on any telephonic notice given by a person who Bank
believes in good faith to be a Responsible Officer or a designee thereof, and
Borrower shall indemnify and Bank shall have no liability to Borrower as a
result of such reliance. Bank will credit the amount of Advances made under this
Section 2.1(b) to Borrower's deposit account.
2.2 Overadvances. If the aggregate amount of the outstanding
Advances exceeds the lesser of the Committed Revolving Line or the Borrowing
Base at any time, Borrower shall promptly pay to Bank, in cash, the amount of
such excess.
2.3 Interest Rates, Payments, and Calculations.
(a) Interest Rates.
(i) Advances. Except as set forth in Section
2.3(b), the Advances shall bear interest in arrears, on the outstanding Daily
Balance thereof, at a rate per annum equal to three and one-half (3.5)
percentage points (350 basis points) above the LIBOR Rate.
(b) Default Rate. All Obligations shall bear interest,
upon the occurrence and during the continuance of an Event of Default, at a rate
equal to four percentage points above the interest rate applicable immediately
prior to the occurrence of the Event of Default.
(c) Payments. Interest hereunder shall be due and
payable on the first calendar day of each month during the term hereof. Bank
shall, at its option, charge such interest, all Bank Expenses, against any of
Borrower's deposit accounts or against the Committed Revolving Line, in which
case those amounts shall thereafter accrue interest at the rate then applicable
hereunder. Any interest not paid when due shall be compounded by becoming a part
of the Obligations, and such interest shall thereafter accrue interest at the
rate then applicable hereunder.
(d) Computation. All interest chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.
2.4 Crediting Payments. So long as an Event of Default does not
exist, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or
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Obligation as Borrower specifies. When an Event of Default has occurred and is
continuing, the receipt by Bank of any wire transfer of funds, check, or other
item of payment shall be immediately applied to conditionally reduce
Obligations, but shall not be considered a payment on account unless such
payment is of immediately available federal funds or unless and until such check
or other item of payment is honored when presented for payment. Notwithstanding
anything to the contrary contained herein, any wire transfer or payment received
by Bank after 2:00 p.m. Pacific time shall be deemed to have been received by
Bank as of the opening of business on the immediately following Business Day.
Whenever any payment to Bank under the Loan Documents would otherwise be due
(except by reason of acceleration) on a date that is not a Business Day, such
payment shall instead be due on the next Business Day, and additional fees or
interest, as the case may be, shall accrue and be payable for the period of such
extension.
2.5 Fees. Borrower shall pay to Bank the following:
(a) Up-Front Fee. An up-front fee equal to $125,000,
which shall not be refundable, which was previously paid by Borrower, subject to
the terms of the commitment letter under which it was paid, and which shall be
deemed fully earned.
(b) Facility Fee. On the Closing Date and on the first
anniversary of the Closing Date, a facility fee equal to $250,000 on each such
date. Such facility fee shall be not be refundable and shall be deemed fully
earned on the date payable.
(c) Unused Line Fee. Monthly, in arrears, on the first
day of each month, an Unused Line Fee equal to 0.375% per annum, of the positive
difference, if any, between the Committed Revolving Line and the average Daily
Balance during such month.
(d) Bank Expenses. On the Closing Date, all Bank
Expenses incurred through the Closing Date, including reasonable attorneys' fees
and expenses and, after the Closing Date, all Bank Expenses, including
reasonable attorneys' fees and expenses, within thirty (30) days after Borrower
receives an invoice thereafter.
2.6 Term. This Agreement shall become effective on the Closing
Date and, subject to Section 12.7, shall continue in full force and effect for a
term ending on the Revolving Maturity Date. Notwithstanding anything herein to
the contrary, Borrower may terminate this Agreement upon at least ten (10)
Business Days' notice to Bank, upon (a) the payment in full in cash of all
outstanding Advances, (b) the payment in full in cash of all other Obligations,
together with accrued and unpaid interest thereon, and (c) the payment in cash
of LIBOR Funding Losses. Upon termination of this Agreement in accordance with
the terms hereof, Bank agrees that Borrower shall no longer be liable for an
Unused Line Fee which would accrue after the date of termination of this
Agreement but for such termination.
2.7 Special Provisions Relating to LIBOR Rate.
(a) The LIBOR Rate may be adjusted by Bank on a
prospective basis to take into account any additional or increased costs to Bank
of maintaining or obtaining any eurodollar deposits or increased costs due to
changes in applicable law occurring subsequent to the commencement of the then
applicable Interest Period, including changes in tax laws (except changes of
general applicability in corporate income tax laws) and changes in the reserve
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requirements imposed by the Board of Governors of the Federal Reserve System (or
any successor), which additional or increased costs would increase the cost of
funding loans bearing interest at the LIBOR Rate. In any such event, Bank shall
give Borrower notice of such a determination and adjustment and, upon its
receipt of the notice from Bank, Borrower may require Bank to furnish to
Borrower a statement setting forth the basis for adjusting such LIBOR Rate and
the method for determining the amount of such adjustment; provided, however,
that Borrower shall not be obligated to pay Bank such additional compensation
attributable to any period prior to the date that is 90 days prior to the date
on which Bank gave notice to Borrower of the increased LIBOR Rate.
(b) In the event that any change in market conditions or
any law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of Bank, make it unlawful or impractical for Bank to
fund or maintain Advances bearing interest at the LIBOR Rate, or to continue
such funding or maintaining, or to determine or charge interest rates at the
LIBOR Rate, Bank shall give notice of such changed circumstances to Borrower
and, in the case of any Advances that are outstanding, the date specified in
Bank's notice shall be deemed to be the last day of the Interest Period of such
Advances, and interest upon Advances thereafter shall accrue interest at a rate
determined by Bank and Borrower to be comparable and mutually acceptable.
(c) Bank shall not be required to acquire eurodollar
deposits to fund or otherwise match fund any Advances as to which interest
accrues at the LIBOR Rate. The determination of a LIBOR Funding Loss and the
provisions of this Section shall apply as if Bank had match funded any Advance
at issue by acquiring eurodollar deposits for the applicable Interest Period in
the amount of such Advance.
(d) If, after the date hereof, Bank reasonably
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (ii) compliance by Bank
with any guideline, request, or directive of any such entity regarding capital
adequacy (whether or not having the force of law), the effect of reducing the
return on Bank's capital as a consequence of its obligations hereunder to a
level below that which Bank could have achieved but for such adoption, change,
or compliance (taking into consideration Bank's then existing policies with
respect to capital adequacy and assuming the full utilization of such entity's
capital) by any amount deemed by Bank to be material, then Bank may notify
Borrower thereof. Following receipt of such notice, Borrower agrees to pay Bank
on demand the amount of such reduction of return of capital as and when such
reduction is determined, payable within 90 days after presentation by Bank of a
statement in the amount and setting forth in reasonable detail Bank's
calculation thereof and the assumptions upon which such calculation was based
(which statement shall be deemed true and correct absent manifest error). In
determining such amount, Bank may use any reasonable averaging and attribution
methods.
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3. CONDITIONS OF LOANS.
3.1 Conditions Precedent to Initial Credit Extension. The
obligation of Bank to make the initial Credit Extension is subject to the
condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:
(a) this Agreement;
(b) an officer's certificate of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Agreement;
(c) Lien search reports confirming that no Liens are of
record against Borrower's assets other than Permitted Liens;
(d) agreement to provide insurance;
(e) payment of the fees and Bank Expenses then due
specified in Section 2.5;
(f) an audit of the Accounts, the results of which shall
be reasonably satisfactory to Bank;
(g) satisfactory review by Bank and its counsel of the
documents, instruments and agreements evidencing Borrower's Subordinated Debt;
(h) a certified copy of Borrower's investment policy as
adopted by Borrower's Board of Directors;
(i) current financial statements in accordance with
Section 6.2; and
(j) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
3.2 Conditions Precedent to all Credit Extensions. The
obligation of Bank to make each Credit Extension, including the initial Credit
Extension, is further subject to the following conditions:
(a) timely receipt by Bank of the Payment/Advance Form
as provided in Section 2.1(b)(iii); and
(b) the representations and warranties contained in
Section 5 shall be true and correct in all material respects on and as of the
date of such Payment/Advance Form and on the effective date of each Credit
Extension as though made at and as of each such date, and no Event of Default
shall have occurred and be continuing, or would exist after giving effect to
such Credit Extension (provided, however, that those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date). The making of each Credit
Extension shall be deemed to be a representation and warranty
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by Borrower on the date of such Credit Extension as to the accuracy of the facts
referred to in this Section 3.2(b).
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest. Borrower grants and pledges to
Bank a continuing security interest in all presently existing and hereafter
acquired or arising Collateral to secure prompt repayment of any and all
Obligations and to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except as set forth in Schedule
4.1 and except for Liens which constitute Permitted Liens pursuant to paragraph
(c) of the definition thereof (and any Liens incurred in connection with
extensions, renewals or refinancing of the indebtedness secured by such
Permitted Liens), upon the due filing of appropriately completed financing
statements with the applicable governing filing offices or upon taking such
additional actions as may be required by the Code or other applicable law, such
security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority
security interest in later-acquired Collateral. Notwithstanding any termination,
Bank's Lien on the Collateral shall remain in effect for so long as any
Obligations are outstanding.
4.2 Termination of Security Interest. Upon the payment in full
of all amounts due under this Agreement and of all other Obligations, Bank
shall, at the cost and expense of Borrower, execute and deliver to Borrower all
such documents and instruments that shall be necessary to evidence termination
of this Agreement and the security interests created hereunder.
4.3 Delivery of Additional Documentation Required. Borrower
shall from time to time execute and deliver to Bank, at the reasonable request
of Bank, all Negotiable Collateral and other documents that Bank may reasonably
request, in form reasonably satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents. Where
Collateral is in possession of a third party bailee, Borrower shall take such
steps as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in
form and substance satisfactory to Bank, of the bailee that the bailee holds
such Collateral for the benefit of Bank, (ii) obtain "control" of any Collateral
consisting of investment property, deposit accounts, letter-of-credit rights or
electronic chattel paper (as such items and the term "control" are defined in
Revised Article 9 of the Code) by causing the securities intermediary or
depositary institution or issuing bank to execute a control agreement in form
and substance satisfactory to Bank.
4.4 Right to Inspect. Bank (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior written
notice, from time to time during Borrower's usual business hours but no more
than once a year (unless an Event of Default has occurred and is continuing), to
inspect Borrower's Books and to make copies thereof and to check, test, and
appraise the Collateral in order to verify Borrower's financial condition or the
amount, condition of, or any other matter relating to, the Collateral.
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5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants as follows:
5.1 Due Organization and Qualification. Borrower and each
Subsidiary is a corporation duly existing under the laws of its state of
incorporation and qualified and licensed to do business in any state in which
the conduct of its business or its ownership of property requires that it be so
qualified, except where the failure to do so would not reasonably be expected to
cause a Material Adverse Effect.
5.2 Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's corporate powers, have
been duly authorized, and are not in conflict with nor constitute a breach of
any provision contained in Borrower's Articles of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any material agreement by
which it is bound, which default would reasonably be expected to have a Material
Adverse Effect.
5.3 Collateral. Borrower has good title to the Collateral, free
and clear of Liens, except for Permitted Liens. The Eligible Accounts are bona
fide existing obligations. The property or services giving rise to such Eligible
Accounts has been delivered to or performed for the account debtor or its agent
for immediate shipment to and unconditional acceptance by the account debtor,
other than customary testing and acceptance procedures and conditions consistent
with Borrower's past practices and ordinary course of business. Borrower has not
received notice of actual or imminent Insolvency Proceeding of any account
debtor whose accounts are included in any Borrowing Base Certificate as an
Eligible Account. All Inventory is in all material respects of good and
merchantable quality, free from all material defects, except for Inventory for
which adequate reserves have been made. Except as set forth in the Schedule 5.3
and as may be permitted by Bank pursuant to Section 7.10, no Collateral is
maintained or invested with a Person other than Bank or an affiliate of Bank.
5.4 Intellectual Property. Borrower is the sole owner or
licensee or otherwise has the right to use of the Intellectual Property, except
for licenses granted by Borrower to its customers in the ordinary course of
business. To the best knowledge of Borrower, no part of the Intellectual
Property has been judged invalid or unenforceable, in whole or in part, and no
claim has been made that any part of the Intellectual Property violates the
rights of any third party except to the extent such claim would not reasonably
be expected to cause a Material Adverse Effect. Except as set forth in the
Schedule 5.4, Borrower's rights as a licensee of intellectual property do not
give rise to more than 5% of its gross revenue in any given month, including
without limitation revenue derived from the sale, licensing, rendering or
disposition of any product or service.
5.5 Name; Location of Chief Executive Office. Except as
disclosed in the Schedule 5.5, Borrower has not done business under any name
other than that specified on the signature page hereof. The chief executive
office of Borrower is located at the address indicated in Section 10 hereof.
Borrower's state of incorporation is California.
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5.6 Litigation. Except as set forth in the Schedule 5.6, there
are no actions or proceedings pending by or against Borrower or any Subsidiary
before any court or administrative agency in which if adversely determined would
reasonably be expected to have a Material Adverse Effect, or a material adverse
effect on Borrower's interest or Bank's security interest in the Collateral.
5.7 No Material Adverse Change in Financial Statements. All
consolidated and consolidating financial statements related to Borrower and any
Subsidiary that are delivered by Borrower to Bank in connection with the request
for credit granted by this Agreement fairly present in all material respects
Borrower's consolidated and consolidating financial condition as of the date
thereof and Borrower's consolidated and consolidating results of operations for
the period then ended. There has not been a material adverse change in the
consolidated financial condition of Borrower since the date of the most recent
of such financial statements submitted to Bank.
5.8 Solvency, Payment of Debts. As of the Closing Date and after
giving effect to the full funding of all Advances permitted hereunder, Borrower
is able to pay its debts (including trade debts) as they mature; the fair market
value of Borrower's assets (including goodwill minus disposition costs) exceeds
the amount that will be required to be paid on its liabilities as they mature;
and Borrower is not left with unreasonably small capital to carry on its
business as conducted after the transactions contemplated by this Agreement.
5.9 Compliance with Laws and Regulations. Borrower and each
Subsidiary have met the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. No event has occurred resulting
from Borrower's failure to comply with ERISA that is reasonably likely to result
in Borrower's incurring any liability that would have a Material Adverse Effect.
Borrower is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940.
Borrower is not engaged principally, nor as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T and U of the Board of
Governors of the Federal Reserve System). Borrower has complied in all material
respects with all the applicable provisions of the Federal Fair Labor Standards
Act. Borrower is in compliance with all applicable environmental laws,
regulations and ordinances except where the failure to comply would not
reasonably be expected to have a Material Adverse Effect. Borrower has not
violated any statutes, laws, ordinances or rules applicable to it, violation of
which would reasonably be expected to have a Material Adverse Effect. Borrower
and each Subsidiary have filed or caused to be filed all tax returns required to
be filed, and have paid, or have made adequate provision for the payment of, all
taxes reflected therein except those being contested in good faith with adequate
reserves under GAAP or where the failure to file such returns or pay such taxes
would not reasonably be expected to have a Material Adverse Effect.
5.10 Subsidiaries. All Subsidiaries owned as of the Closing Date
are set forth in the Schedule 5.10.
5.11 Government Consents. Borrower and each Subsidiary have
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all
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notices to, all governmental authorities that are necessary for the continued
operation of Borrower's business as currently conducted, except where the
failure to do so would not reasonably be expected to cause a Material Adverse
Effect.
5.12 Inbound Licenses. Except as disclosed on the Schedule 5.12,
Borrower is not a party to, nor is bound by, any license or other agreement that
prohibits or otherwise restricts Borrower from granting a security interest in
Borrower's interest in such license or agreement or any other property.
5.13 Full Disclosure. No representation, warranty or other
statement made as of the date such representations and warranties are made or
deemed made by Borrower in any certificate or written statement furnished to
Bank pursuant to this Agreement taken together with all such certificates and
written statements furnished to Bank contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained in such certificates or statements in light of the circumstances under
which they were made not misleading, it being recognized by Bank that the
projections and forecasts provided by Borrower in good faith and based upon
reasonable assumptions are not to be viewed as facts and that actual results
during the period or periods covered by any such projections and forecasts may
differ from the projected or forecasted results.
6. AFFIRMATIVE COVENANTS.
Borrower covenants that, until payment in full of all outstanding
Obligations, and for so long as Bank may have any commitment to make a Credit
Extension hereunder, Borrower shall do all of the following:
6.1 Good Standing and Government Compliance. Borrower shall
maintain its and each of its Subsidiaries' corporate existence in its
jurisdiction of incorporation and maintain qualification in each jurisdiction in
which the failure to so qualify would reasonably be expected to have a Material
Adverse Effect, and shall deliver to Bank Borrower's organization number issued
in connection with Borrower's incorporation. Borrower shall meet, and shall
cause each Subsidiary to meet, the minimum funding requirements of ERISA with
respect to any employee benefit plans subject to ERISA. Borrower shall comply,
and shall cause each Subsidiary to comply, with all statutes, laws, ordinances
and government rules and regulations to which it is subject, and shall maintain,
and shall cause each of its Subsidiaries to maintain, in force all licenses,
approvals and agreements, the loss of which or failure to comply with which
would reasonably be expected to have a Material Adverse Effect, or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral.
6.2 Financial Statements, Reports, Certificates. Borrower shall
deliver to Bank: (a) as soon as available, but in any event within 50 days after
the end of each fiscal quarter, a company prepared consolidated and
consolidating balance sheets and income statements covering Borrower's
consolidated and consolidating operations during such period, in a form that
fairly presents, in all material respects, the financial condition of Borrower
and certified by a Responsible Officer; (b) as soon as available, but in any
event within 100 days after the end of Borrower's fiscal year, audited
consolidated and consolidating financial statements of Borrower prepared in
accordance with GAAP, consistently applied (except as
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otherwise disclosed in such financial statements), together with an opinion
which is unqualified or otherwise consented to in writing by Bank on such
financial statements of an independent certified public accounting firm of
recognized national standing; (c) copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt and all reports on Forms 10-K (within 100 days of
fiscal year end) and 10-Q (within 50 days of fiscal quarter end) filed with the
Securities and Exchange Commission; (d) promptly upon receipt of notice thereof,
a report of any legal actions pending or, to Borrower's knowledge, overtly
threatened against Borrower or any Subsidiary that would reasonably be expected
to have a Material Adverse Effect; (e) such budgets, sales projections,
operating plans or other financial information generally prepared by Borrower in
the ordinary course of business as Bank may reasonably request from time to
time; and (f) within 30 days of the last day of each fiscal quarter, a report
signed by Borrower, in form reasonably acceptable to Bank, listing any
applications or registrations that Borrower has made or filed in respect of any
Patents, Copyrights or Trademarks and the status of any outstanding applications
or registrations, as well as any material change in Borrower's Intellectual
Property.
(a) Within 20 days after the last day of each month,
Borrower shall deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in substantially the form of Exhibit D hereto, together with
aged listings by invoice date of accounts receivable and accounts payable.
(b) Within 50 days after the last day of each quarter,
Borrower shall deliver to Bank with the quarterly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially the form
of Exhibit E hereto.
(c) As soon as possible and in any event within three
calendar days after becoming aware of the occurrence or existence of an Event of
Default hereunder, a written statement of a Responsible Officer setting forth
details of the Event of Default, and the action which Borrower has taken or
proposes to take with respect thereto.
(d) Bank shall have a right from time to time hereafter
to audit Borrower's Accounts and appraise Collateral at Borrower's expense,
provided that such audits will be conducted no more often than every 6 months
unless an Event of Default has occurred and is continuing.
6.3 Inventory; Returns. Borrower shall keep all Inventory in
good and merchantable condition, free from all material defects except for
Inventory for which adequate reserves have been made. Returns and allowances, if
any, as between Borrower and its account debtors shall be on the same basis and
in accordance with the usual customary practices of Borrower, as they exist on
the Closing Date. Borrower shall promptly notify Bank of all returns and
recoveries and of all disputes and claims involving more than $500,000.
6.4 Taxes. Borrower shall make, and cause each Subsidiary to
make, due and timely payment or deposit of all applicable material federal,
state, and local taxes, assessments, or contributions required of it by law,
including, but not limited to, those laws concerning income taxes, F.I.C.A.,
F.U.T.A. and state disability, and will execute and deliver to Bank, on
reasonable demand, proof satisfactory to Bank indicating that Borrower or a
Subsidiary has made
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such payments or deposits and any appropriate certificates attesting to the
payment or deposit thereof; provided that Borrower or a Subsidiary need not make
any payment if the amount or validity of such payment is contested in good faith
by appropriate proceedings and is reserved against (to the extent required by
GAAP) by Borrower.
6.5 Insurance.
(a) Borrower, at its expense, shall keep the Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as ordinarily insured against by
other owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrower shall also maintain liability
and other insurance in amounts and of a type that are customary to businesses
similar to Borrower's.
(b) All such policies of insurance shall be in such
form, with such companies, and in such amounts as reasonably satisfactory to
Bank. All policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee, and all liability insurance policies shall show Bank as an additional
insured and specify that the insurer must give at least 10 days notice to Bank
before canceling its policy due to non-payment and at least 20 days notice to
Bank before canceling its policy for any other reason. Upon Bank's request,
Borrower shall deliver to Bank a certificate or certificates of insurance with
respect to all of Borrower's insurance policies. If no Event of Default has
occurred and is continuing, proceeds payable under any property policy will, at
Borrower's option, be payable to Borrower to replace the property subject to the
claim, provided that any such replacement property shall be deemed Collateral in
which Bank has been granted a first priority security interest. If an Event of
Default has occurred and is continuing, all proceeds payable under any such
policy shall, at Bank's option, be payable to Bank to be applied on account of
the Obligations.
6.6 Primary Depository and Operating Accounts. Borrower shall
maintain its primary depository and operating accounts with Bank no later than
December 31, 2002.
6.7 Financial Covenants. Borrower shall maintain, as of the last
day of each fiscal quarter unless stated otherwise:
(a) Total Liabilities to Tangible Net Worth Ratio. A
ratio of Total Liabilities to Tangible Net Worth of not more than 1.75:1.0 from
the Closing Date through June 30, 2003, 1.5:1.0 from September 30, 2003 to
December 31, 2003, and 1.4:1.0 from March 31, 2004 and thereafter.
(b) Tangible Net Worth. A Tangible Net Worth of not less
than $135,000,000; provided that such minimum amount shall be increased at the
end of each fiscal quarter by 50% of Borrower's net income after tax (but not
decreased by any net losses) for such fiscal quarter and by 75% of any new
equity investment or new Subordinated Debt received during such fiscal quarter.
(c) Minimum Liquidity. Maintain as of the Closing Date
and at all times thereafter a balance of unrestricted cash and cash equivalents
held in the United States of at
11
least $50,000,000, of which at least $10,000,000, as of the Closing Date and at
all times thereafter, shall be held in a money market investment account
maintained at Bank, and measured monthly and reported in the Borrowing Base
Certificate delivered in compliance with Section 6.2(a).
6.8 Registration of Intellectual Property Rights.
(a) Borrower shall register or cause to be registered on
an expedited basis (to the extent not already registered) with the United States
Patent and Trademark Office or the United States Copyright Office, as the case
may be, those registerable intellectual property rights now owned or hereafter
developed or acquired by Borrower, to the extent that Borrower, in its
reasonable business judgment, deems it appropriate to so protect such
intellectual property rights.
(b) Borrower shall promptly give Bank written notice of
any applications or registrations of intellectual property rights filed with the
United States Patent and Trademark Office, including the date of such filing and
the registration or application numbers, if any.
(c) Borrower shall (i) protect, defend and maintain the
validity and enforceability of the trade secrets, Trademarks, Patents and
Copyrights material to the ordinary conduct of its business as determined by
Borrower, (ii) use commercially reasonable efforts to detect infringements of
such material Trademarks, Patents and Copyrights and promptly advise Bank in
writing of material infringements detected and (iii) not allow any material
Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the
public without the written consent of Bank, which consent shall not be
unreasonably withheld.
(d) Bank may audit upon prior reasonable written notice
Borrower's Intellectual Property to confirm compliance with this Section 6.8,
provided such audit may not occur more often than twice per year, unless an
Event of Default has occurred and is continuing. Bank shall have the right, but
not the obligation, to take, at Borrower's sole expense, any actions that
Borrower is required under this Section 6.8 to take but which Borrower fails to
take, after 30 days' notice to Borrower. Borrower shall reimburse and indemnify
Bank for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this Section 6.8.
6.9 Consent of Inbound Licensors. Prior to entering into or
becoming bound by any license or agreement, Borrower shall: (i) provide written
notice to Bank of the material terms of such license or agreement with a
description of its likely impact on Borrower's business or financial condition;
and (ii) use best efforts to obtain the consent of, or waiver by, any person
whose consent or waiver is necessary for Borrower's interest in such licenses or
contract rights to be deemed Collateral and for Bank to have a security interest
in it that might otherwise be restricted by the terms of the applicable license
or agreement, whether now existing or entered into in the future.
6.10 Further Assurances. At any time and from time to time
Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Bank to effect the purposes of
this Agreement.
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7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until payment in full of the outstanding Obligations or
for so long as Bank may have any commitment to make any Credit Extensions,
Borrower will not do any of the following without Bank's prior written consent,
which shall not be unreasonably withheld:
7.1 Dispositions. Convey, sell, lease, transfer or otherwise
dispose of (collectively, to "Transfer"), or permit any of its Subsidiaries to
Transfer, all or any material part of its business or property, other than
Permitted Transfers.
7.2 Change in Name, Location or Executive Office, Change in
Business; Change in Fiscal Year. Change its name, the state of Borrower's
incorporation or organization, or relocate its chief executive office without 30
days prior written notification to Bank; engage in any business, or permit any
of its Subsidiaries to engage in any business, other than or reasonably related
or incidental to the businesses currently engaged in by Borrower; change its
fiscal year end.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any
of its Subsidiaries to merge or consolidate, with or into any other Person
(other than mergers or consolidations, or the liquidation, winding up or
dissolution, of a Subsidiary into another Subsidiary or into Borrower, or all or
any part of the business, property or assets of a Subsidiary may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction or a
series of transaction from a Subsidiary to another Subsidiary or into Borrower),
or acquire, or permit any of its Subsidiaries to acquire, all or substantially
all of the capital stock or property of another Person except Permitted
Investments or except where (i) the surviving entity has a credit rating and
creditworthiness, as determined by Bank in the exercise of its reasonable
commercial judgment, equal to or better than that of Borrower, (ii) the
surviving entity is in a similar line of business as Borrower or its
Subsidiaries, (iii) the surviving entity expressly and unconditionally assumes
the due and punctual performance of all obligations under this Agreement and
(iv) no Event of Default has occurred, is continuing or would exist after giving
effect to the transactions.
7.4 Indebtedness. Create, incur, assume or be or remain liable
with respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
7.5 Encumbrances. Create, incur, assume or allow any Lien with
respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, except for Permitted Liens,
or covenant to any other Person that Borrower in the future will refrain from
creating, incurring, assuming or allowing any Lien with respect to any of
Borrower's Intellectual Property.
7.6 Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock, except that Borrower may (a) pay dividends or
distributions or redeem, repay, prepay or convert Subordinated Debt, in each
case only in Borrower's or a Subsidiary's equity securities, (b) so long as no
Event of Default exists, repurchase the stock of former employees pursuant to
stock repurchase agreements, (d) make any redemption of securities with the
proceeds received from a
13
the substantially concurrent issue of new shares of capital stock, and (e)
distribute and redeem rights under any stockholder rights plan; provided no
distribution of capital stock that also constitutes a Permitted Investment shall
be prohibited by the application of this Section.
7.7 Investments. Directly or indirectly acquire or own, or make
any Investment in or to any Person other than Permitted Investments.
7.8 Transactions with Affiliates. Directly or indirectly enter
into or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a non-affiliated Person;
provided that the foregoing restriction shall not apply to (a) any transaction
between Borrower's wholly-owned Subsidiaries, (b) reasonable and customary fees
paid to members of the Board of Directors of Borrower and its Subsidiaries or
(c) the raising of new equity for Borrower with respect to the pricing of such
equity.
7.9 Subordinated Debt. Make any payment in respect of any
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the rate of interest,
frequency of payment, maturity date (either shortening or increasing the term),
or the unsecured and subordinated nature of the Subordinated Debt, or any other
provision which could adversely affect Bank's interests without Bank's prior
written consent which consent shall not be unreasonably withheld.
7.10 Inventory and Equipment. Except for Inventory sold in the
ordinary course of business or pursuant to Permitted Transfers and except for
such other locations as Bank may approve in writing, which approval shall not be
unreasonably withheld, Borrower shall keep the Inventory and Equipment only at
the locations set forth in Schedule 7.10 and such other locations of which
Borrower gives Bank prior written notice and as to which Bank's security
interest is perfected (including by way of delivery of any and all warehouse
receipts as may be issued in connection with such Inventory).
7.11 Compliance. Become or be controlled by an "investment
company," within the meaning of the Investment Company Act of 1940, or become
principally engaged in, or undertake as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying margin
stock, or use the proceeds of any Credit Extension for such purpose. Fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the
Federal Fair Labor Standards Act or violate any law or regulation, which
violation would reasonably be expected to have a Material Adverse Effect, or a
material adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
14
8.1 Payment Default. If Borrower fails to pay (i) principal when
due or (ii) interest and any of the other Obligations when due and such failure
to pay shall not have been cured within five (5) days after Borrower shall have
received written notice from Bank of such failure to pay;
8.2 Covenant Default. If Borrower fails to perform any
obligation under Article 6 or violates any of the covenants contained in Article
7 of this Agreement, or fails or neglects to perform or observe any other
material term, provision, condition, covenant contained in this Agreement, in
any of the Loan Documents, or in any other present or future agreement between
Borrower and Bank executed in connection therewith and as to any default under
such other term, provision, condition or covenant that can be cured, has failed
to cure such default within 30 days after Borrower receives notice thereof or
any officer of Borrower becomes aware thereof; provided, however, that if the
default cannot by its nature be cured within the 30 day period or cannot after
diligent attempts by Borrower be cured within such 30 day period, and such
default is likely to be cured within a reasonable time, then Borrower shall have
an additional reasonable period (which shall not in any case exceed 30 days) to
attempt to cure such default, and within such reasonable time period the failure
to have cured such default shall not be deemed an Event of Default but no Credit
Extensions will be made;
8.3 Defective Perfection. If Bank shall receive at any time
following the Closing Date a Lien search report indicating that except as
provided in the Schedule 7.5 and except for the Permitted Liens described in
paragraphs (c), (e) -- (m) and (p) (with respect to (p), to the extent any such
refinancing, extension or renewal relates to Permitted Liens described in such
paragraphs (c), (e) -- (m)), Bank's security interest in the Collateral
purported to be covered by this Agreement is not prior to all other security
interests or Liens of record reflected in the report on such Collateral, other
than due to the failure of Bank to take any action to protect or perfect its
security interest with respect to such Collateral, and such occurrence has not
been cured within 30 days after Borrower shall have received notice of such
failure from Bank;
8.4 Material Adverse Effect. If there occurs any circumstance or
circumstances that could have a Material Adverse Effect;
8.5 Attachment. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within 45 days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within 45 days after
Borrower receives notice thereof, provided that none of the foregoing shall
constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);
15
8.6 Insolvency. If Borrower becomes insolvent, or if an
Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding
is commenced against Borrower and is not dismissed or stayed within 60 days
(provided that no Credit Extensions will be made prior to the dismissal of such
Insolvency Proceeding);
8.7 Other Agreements. If there is a default in any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of $500,000 or that could
have a Material Adverse Effect;
8.8 Subordinated Debt. If Borrower makes any payment on account
of Subordinated Debt (including any mandatory redemption upon the occurrence of
a "Change in Control" under the Indenture, other than any such redemption which
is funded by a combination of no more than $1,000,000 in cash and where the
balance is paid in common stock of Borrower), except for regularly scheduled
payments of interest with respect to Subordinated Debt in existence as of the
Closing Date and except for payment otherwise allowed under any subordination
agreement entered into with Bank with respect to other Subordinated Debt;
8.9 Judgments. If a judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least $250,000 shall
be rendered against Borrower and shall remain unsatisfied and unstayed for a
period of 60 days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of the judgment); or
8.10 Misrepresentations. If, as of the date a representation or
warranty is made or deemed made, any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document.
9. BANK'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence and during the
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.6, all Obligations shall become immediately due and payable without
any action by Bank);
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank;
(c) Settle or adjust disputes and claims directly with
account debtors for amounts, upon terms and in whatever order that Bank
reasonably considers advisable;
(d) Make such payments and do such acts as Bank
considers necessary or reasonable to protect its security interest in the
Collateral. Borrower agrees to assemble the
16
Collateral if Bank so requires, and to make the Collateral available to Bank at
a location reasonably convenient to both parties. Borrower authorizes Bank to
enter the premises in accordance with local laws where the Collateral is
located, to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any encumbrance, charge, or lien
which in Bank's determination appears to be prior or superior to its security
interest and to pay all expenses incurred in connection therewith. With respect
to any of Borrower's owned premises, Borrower hereby grants Bank a license to
enter into possession of such premises and to occupy the same, without charge,
in order to exercise any of Bank's rights or remedies provided herein, at law,
in equity, or otherwise;
(e) Set off and apply to the Obligations any and all (i)
balances and deposits of Borrower held by Bank, and (ii) indebtedness at any
time owing to or for the credit or the account of Borrower held by Bank;
(f) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. Bank is hereby granted a license or other right,
solely pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section 9.1, Borrower's
rights under all licenses and all franchise agreements shall inure to Bank's
benefit;
(g) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply any proceeds to the Obligations
in whatever manner or order Bank reasonably deems appropriate;
(h) Bank may credit bid and purchase at any public sale;
and
(i) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
9.2 Power of Attorney. Exercisable only upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney to: (a) send requests for verification of
Accounts or notify account debtors of Bank's security interest in the Accounts;
(b) endorse Borrower's name on any checks or other forms of payment or security
that may come into Bank's possession; (c) sign Borrower's name on any invoice or
xxxx of lading relating to any Account, drafts against account debtors,
schedules and assignments of Accounts, verifications of Accounts, and notices to
account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all
claims under and decisions with respect to Borrower's policies of insurance; and
(f) settle and adjust disputes and claims respecting the accounts directly with
account debtors, for amounts and upon terms which Bank determines to be
reasonable. The appointment of Bank as Borrower's attorney in fact, and each and
every one of Bank's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid
17
and performed and Bank's obligation to provide advances hereunder is terminated,
but shall be exercisable only so long as an Event of Default exists.
9.3 Accounts Collection. Upon the occurrence and continuance of
an Event of Default, Bank may notify any Person owing funds to Borrower of
Bank's security interest in such funds and verify the amount of such Account. So
long as an Event of Default shall continue, Borrower shall collect all amounts
owing to Borrower for Bank, receive in trust all payments as Bank's trustee, and
immediately deliver such payments to Bank in their original form as received
from the account debtor, with proper endorsements for deposit.
9.4 Bank Expenses. If Borrower fails to pay any amounts or
furnish any required proof of payment due to third persons or entities, as
required under the terms of this Agreement, then Bank may do any or all of the
following after reasonable notice to Borrower: (a) make payment of the same or
any part thereof; (b) set up such reserves under the Revolving Facility as Bank
reasonably deems necessary to protect Bank from the exposure created by such
failure; or (c) obtain and maintain insurance policies of the type discussed in
Section 6.5 of this Agreement, and take any action with respect to such policies
as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute
Bank Expenses, shall be promptly due and payable, and shall bear interest at the
then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Bank shall not constitute an agreement by Bank
to make similar payments in the future or a waiver by Bank of any Event of
Default under this Agreement.
9.5 Bank's Liability for Collateral. So long as Bank complies
with reasonable banking practices and Section 9-207 of the Code, Bank shall not
in any way or manner be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion from any cause; (c) any diminution in the value thereof; or (d) any act
or default of any carrier, warehouseman, bailee, forwarding agency, or other
person whomsoever. All risk of loss, damage or destruction of the Collateral
shall be borne by Borrower; except where such loss, damage or destruction
results from the gross negligence or willful misconduct of Bank or Bank's
failure to comply with Section 9-207 of the Code.
9.6 Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.
9.7 Demand; Protest. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be liable.
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10. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, certified mail, postage prepaid, return receipt requested, or
by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:
If to Borrower: Asyst Technologies, Inc.
00000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attn: Chief Financial Officer
FAX: (000) 000-0000
If to Bank: Comerica Bank-California
0000 X. Xx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Manager
FAX: (000) 000-0000
with a copy to: Comerica Bank-California
000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
FAX: (000) 000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Xxxxx, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
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12. GENERAL PROVISIONS.
12.1 Successors and Assigns. This Agreement shall bind and inure
to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion. Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder to any Person other than a competitor
of Borrower.
12.2 Indemnification. Borrower shall defend, indemnify and hold
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement; and
(b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank
as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under this Agreement, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct. Bank
may not enter into any settlement or other compromise with respect to any claim
covered by the indemnity set forth in this Section 12.2 without giving notice
thereof to Borrower. If Bank or any other indemnified party obtains recovery of
any of the amounts that Borrower has paid to them pursuant to the indemnity set
forth in this Section, then Bank or such other indemnified party, as applicable,
shall promptly pay to Borrower such amounts paid by Borrower.
12.3 Time of Essence. Time is of the essence for the performance
of all obligations set forth in this Agreement.
12.4 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
12.5 Amendments in Writing, Integration. All amendments to or
terminations of this Agreement must be in writing. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties hereto with respect to the subject matter of this Agreement, if any, are
merged into this Agreement and the Loan Documents.
12.6 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.
12.7 Survival. All covenants, representations and warranties
made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.
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12.8 Confidentiality. In handling any confidential information
Bank and all employees and agents of Bank shall exercise the same degree of care
that Bank exercises with respect to its own proprietary information of the same
types to maintain the confidentiality of any non-public information thereby
received or received pursuant to this Agreement except that disclosure of such
information may be made (i) to the subsidiaries or affiliates of Bank in
connection with their present or prospective business relations with Borrower,
(ii) to prospective transferees or purchasers of any interest in the Loans,
provided that they have entered into a comparable confidentiality agreement in
favor of Borrower and have delivered a copy to Borrower, (iii) as required by
law, regulations, rule or order, subpoena, judicial order or similar order, (iv)
as may be required in connection with the examination, audit or similar
investigation of Bank and (v) as Bank may reasonably determine in connection
with the enforcement of any remedies hereunder. Confidential information
hereunder shall not include information that either: (a) is in the public domain
or in the knowledge or possession of Bank when disclosed to Bank, or becomes
part of the public domain after disclosure to Bank through no fault of Bank; or
(b) is disclosed to Bank by a third party, provided Bank does not have actual
knowledge that such third party is prohibited from disclosing such information.
12.9 Designated Senior Indebtedness. Bank and Borrower agree
that the Obligations are intended to be and shall be "Designated Senior
Indebtedness" under and as defined in the Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
ASYST TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Title: Chief Financial Officer
------------------------
COMERICA BANK-CALIFORNIA
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: First Vice President
------------------------
21
EXHIBIT A
DEFINITIONS
"Acceptance Certificate" means the certificate issued by a customer to whom
Borrower has delivered Inventory with respect to that customer's acceptance of
such Inventory.
"Accounts" means all presently existing and hereafter arising accounts, contract
rights, and all other forms of obligations owing to Borrower arising out of the
sale or lease of goods (including, without limitation, the licensing of software
and other technology) or the rendering of services by Borrower, whether or not
earned by performance, and any and all credit insurance, guaranties, and other
security therefor, as well as all merchandise returned to or reclaimed by
Borrower and Borrower's Books relating to any of the foregoing.
"Advance" or "Advances" means a cash advance or cash advances under the
Revolving Facility.
"Affiliate" means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, and each of such Person's senior
executive officers, directors, and partners.
"Bank Expenses" means all: reasonable costs or expenses (including reasonable
attorneys' fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank's reasonable attorneys' fees and expenses
incurred in amending, enforcing or defending the Loan Documents (including fees
and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.
"Borrower's Books" means all of Borrower's books and records including: ledgers;
records concerning Borrower's assets or liabilities, the Collateral, business
operations or financial condition; and all computer programs, or tape files, and
the equipment, containing such information.
"Borrowing Base" means, as to Advances outstanding at any time in an aggregate
amount in excess of $10,000,000 (in excess of $7,000,000 from and after March
31, 2003), an amount equal to 80% of Eligible Accounts and Eligible Foreign
Accounts, as determined by Bank with reference to the most recent Borrowing Base
Certificate delivered by Borrower; provided that up to $10,000,000 (up to
$7,000,000 from and after March 31, 2003) of Advances in the aggregate may be
outstanding at any time without regard to the amount of Eligible Accounts or
Eligible Foreign Accounts (but such "non-formula" Advances shall be deemed to be
within the Borrowing Base for the purposes of this Agreement); provided further
that, effective from the Closing Date through March 31, 2003 only, the Borrowing
Base shall also include an amount equal to 50% of Specified Eligible Foreign
Accounts (and the amount, before application of such 50% advance rate, of such
Specified Eligible Foreign Accounts shall be limited to $2,000,000 in the
aggregate at any time).
"Business Day" means any day that is not a Saturday, Sunday, or other day on
which banks in the State of California or Washington are authorized or required
to close.
"Cash Equivalents" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having, at
the time of the acquisition thereof, the highest rating obtainable from either
S&P or Xxxxx'x; (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Xxxxx'x; (iv) certificates
of deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by Bank or by any commercial bank organized under the laws of
the United States, any state thereof, the District of Columbia or any foreign
country recognized by the United States that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator), (b) has Tier 1 capital (as defined in such regulations) of not
1
less than $100,000,000 (or the foreign currency equivalent thereof) and (c) has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act); and (v) shares of any money
market mutual fund that (a) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Xxxxx'x.
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means the property described on Exhibit B attached hereto and all
Negotiable Collateral to the extent not described on Exhibit B, except to the
extent any such property (i) is nonassignable by its terms without the consent
of the licensor thereof or another party (but only to the extent such
prohibition on transfer is enforceable under applicable law), or (ii) the
granting of a security interest therein is contrary to applicable law, provided
that upon the cessation of any such restriction or prohibition, such property
shall automatically become part of the Collateral.
"Committed Revolving Line" means a credit extension of up to $25,000,000.
"Contingent Obligation" means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable; (ii) any obligations with respect to undrawn letters of credit issued
for the account of that Person; and (iii) all obligations arising under any
interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "Contingent
Obligation" shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.
"Copyrights" means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.
"Credit Extension" means each Advance or any other extension of credit by Bank
for the benefit of Borrower hereunder.
"Current Assets" means, as of any applicable date, all amounts that should, in
accordance with GAAP, be included as current assets on the consolidated balance
sheet of Borrower and its Subsidiaries as at such date.
"Daily Balance" means the amount of the Obligations owed at the end of a given
day.
"Eligible Accounts" means those Accounts that arise in the ordinary course of
Borrower's business, billed and invoiced by Borrower in the United States, that
comply with all of Borrower's representations and warranties to Bank set forth
in Section 5.3; provided, that Bank may change the standards of eligibility by
giving Borrower 30 days prior written notice. Unless otherwise agreed to by
Bank, Eligible Accounts shall not include the following:
(a) Accounts that the account debtor has failed to pay within 90 days of
invoice date; provided, that up to $2,000,000 of Accounts in existence
at any time will be considered Eligible Accounts which are unpaid more
than 90 days but less than 211 days from invoice if such Accounts are
subject to Acceptance Certificates;
2
(b) Accounts with respect to an account debtor, 50% of whose Accounts are
ineligible under clause (a) above;
(c) Accounts with respect to which the account debtor is an officer,
employee, or agent of Borrower;
(d) Accounts with respect to which goods are placed on consignment,
guaranteed sale, sale or return, sale on approval, xxxx and hold, demo
or promotional, or other terms by reason of which the payment by the
account debtor may be conditional;
(e) Accounts with respect to which the account debtor is an Affiliate of
Borrower;
(f) Accounts with respect to which the account debtor does not have its
principal place of business in the United States, except for Eligible
Foreign Accounts;
(g) Accounts with respect to which the account debtor is the United States
or any department, agency, or instrumentality of the United States;
(h) Accounts with respect to which Borrower is liable to the account debtor
for goods sold or services rendered by the account debtor to Borrower,
but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;
(i) Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed 25% of all
Accounts, to the extent such obligations exceed the aforementioned
percentage, except as approved in writing by Bank;
(j) Accounts with respect to which the account debtor disputes liability or
makes any claim with respect thereto as to which Bank believes, in its
reasonable commercial judgment, that there may be a basis for dispute
(but only to the extent of the amount subject to such dispute or claim)
after inquiry and consultation with Borrower, or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business;
and
(k) Accounts the collection of which Bank determines after inquiry and
consultation with Borrower, in the exercise of Bank's reasonable
commercial judgment, to be doubtful.
"Eligible Foreign Accounts" means Accounts with respect to which the account
debtor does not have its principal place of business in the United States and
that (i) are supported by one or more letters of credit in an amount and of a
tenor, and issued by a financial institution, acceptable to Bank, (ii) insured
under foreign credit insurance on terms and by an insurer acceptable to Bank, or
(iii) that Bank approves on a case-by-case basis.
"Equipment" means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.
"Event of Default" has the meaning assigned in Article 8.
"GAAP" means generally accepted accounting principles which are applicable to
the circumstances as of the date of determination.
"Hedge Agreements" means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other hedging agreements.
"Indebtedness" means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures, synthetic
lease agreements or similar
3
instruments, (c) all capital lease obligations that, in accordance with GAAP
would appear on a balance sheet and (d) all Contingent Obligations.
"Indenture" means that certain Indenture, dated as of July 3, 2001, entered into
by Borrower and State Street Bank and Trust Company of California, N.A., as
Trustee, with respect to Borrower's 5 3/4% Convertible Subordinated Notes due
2008.
"Insolvency Proceeding" means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
"Intellectual Property" means all of Borrower's right, title, and interest in
and to the following:
(a) Copyrights, Trademarks and Patents;
(b) Any and all trade secrets, and any and all intellectual property rights
in computer software and computer software products now or hereafter
existing, created, acquired or held;
(c) Any and all design rights which may be available to Borrower now or
hereafter existing, created, acquired or held;
(d) Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but
not the obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(e) All licenses or other rights to use any of the Copyrights, Patents or
Trademarks, and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(f) All amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents;
(g) All proceeds and products of the foregoing other than those arising in
connection with the creation of Accounts (which proceeds shall be
included in the definition of Collateral).
"Interest Period" means, for each Advance, a period of approximately one, two,
three or six months as Borrower may elect, provided that the last day of an
Interest Period for an Advance shall be determined in accordance with the
practices, of the LIBOR interbank market as from time to time in effect.
"Inventory" means all present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or at any time hereafter owned by or in the custody or
possession, actual or constructive, of Borrower, including such inventory as is
temporarily out of its custody or possession or in transit and including any
returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents
of title representing any of the above, and Borrower's Books relating to any of
the foregoing.
"Investment" means any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
"LIBOR Base Rate" means, for any Interest Period, the rate of interest per annum
determined by Bank to be the per annum rate of interest at which deposits in
United States Dollars are offered to Bank in the London interbank market in
which Bank customarily participates at 11:00 a.m. (local time in such interbank
market) three (3) Business Days
4
before the first day of such Interest Period for a period approximately equal to
such Interest Period and in an amount approximately equal to the amount of such
Advance.
"LIBOR Funding Loss" shall be deemed to equal the amount determined by Bank to
be the excess, if any, of (i) the amount of interest that would have accrued on
the principal amount of an Advance had the prepayment or failure to continue or
repay such Advance not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to the last day
of the then current Interest Period therefor (or, in the case of a failure to
borrow or continue, for the period that would have been the Interest Period
therefor), minus (ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate which Bank would be offered were it
to be offered, at the commencement of such period, deposits in U.S. dollars of a
comparable amount and period in the London interbank market.
"LIBOR Rate" shall mean, for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to (i) the LIBOR Base
Rate for such Interest Period divided by (ii) 1 minus the Reserve Requirement
for such Interest Period.
"Lien" means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"Loan Documents" means, collectively, this Agreement, any note or notes executed
by Borrower, and any other agreement entered into between Borrower and Bank in
connection with this Agreement, all as amended or extended from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the business
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.
"Negotiable Collateral" means all of Borrower's present and future letters of
credit of which it is a beneficiary, notes, drafts, instruments, securities,
documents of title, and chattel paper, and Borrower's Books relating to any of
the foregoing.
"Obligations" means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding.
"Patents" means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.
"Periodic Payments" means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.
"Permitted Indebtedness" means:
(a) Indebtedness of Borrower in favor of Bank arising under this Agreement
or any other Loan Document;
(b) Indebtedness existing on the Closing Date and disclosed in the Schedule
7.5;
(c) Indebtedness, including arising under capital leases, not to exceed
$100,000 in the aggregate secured by a lien described in clause (c) of
the definition of "Permitted Liens," provided such Indebtedness does not
exceed the lesser of the cost or fair market value of the equipment
financed with such Indebtedness;
(d) ;Subordinated Debt;
(e) Indebtedness to trade creditors incurred in the ordinary course of
business;
5
(f) Indebtedness incurred as a result of endorsing negotiable instruments
received in the usual course of business;
(g) Indebtedness of a Subsidiary to Borrower or to any other Subsidiary of
Borrower;
(h) Indebtedness in respect of Hedge Agreements incurred in the ordinary
course of business to hedge exchange rate risks;
(i) Indebtedness of Borrower's foreign Subsidiaries not to exceed $5,000,000
in the aggregate;
(j) Indebtedness not to exceed in the aggregate $1,000,000 at any time
outstanding; and
(k) Extensions, refinancings and renewals of any items of Permitted
Indebtedness.
"Permitted Investment" means:
(a) Investments existing on the Closing Date disclosed in the Schedule 7.7;
(b) Cash Equivalents and Investments made pursuant to Borrower's investment
policy in effect as of the Closing Date;
(c) Repurchases of stock from former employees or directors of Borrower
under the terms of applicable repurchase agreements in an aggregate
amount not to exceed $100,000 in the aggregate in any fiscal year,
provided that no Event of Default has occurred, is continuing or would
exist after giving effect to the repurchases;
(d) Investments accepted in connection with Permitted Transfers or asset
sales pursuant to Section 7.1;
(e) Investments (whether consisting of the purchase of securities, loans,
capital contributions or otherwise) of Subsidiaries in or to other
Subsidiaries or Borrower and Investments by Borrower in or to
Subsidiaries or in and to Persons which simultaneously with such
Investments become Subsidiaries (provided that accounts payable of
Subsidiaries owing to Borrower incurred in the ordinary course of
business are not subject to the foregoing limitations) not to exceed:
(x) $70,000,000 (whether in the form of debt or equity), subject to yen
currency rate fluctuations with respect to Borrower's acquisition of at
least 51% of the joint venture formed with Shinko Electric Co., Ltd. on
terms materially similar to those disclosed to Bank prior to the Closing
Date; (y) $400,000 with respect to Borrower's acquisition of at least
20% of Asyst Technologies (Taiwan) Ltd. and (z) $1,000,000 in the
aggregate in any fiscal year with respect to other Investments (whether
consisting of the purchase of securities, loans, capital contributions
or otherwise) in Subsidiaries or other Persons;
(f) Investments, not to exceed $500,000 in the aggregate in any fiscal year,
consisting of (i) compensation of employees, officers and directors of
Borrower so long as the Board of Directors determines that such
compensation in the best interests of Borrower, (ii) travel advances and
employee relocation loans and other employee loans and advances in the
ordinary course of business, (iii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrower or
its Subsidiaries pursuant to employee stock purchase plan agreements
approved by Borrower's Board of Directors, and (iv) employee loans
existing on the Closing Date;
(g) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of Borrower's business;
(h) Investments consisting of accounts receivable, notes receivable of, or
prepaid royalties and other credit extensions, to customers and
suppliers who are not Affiliates, in the ordinary course of business,
provided that this subparagraph (h) shall not apply to Investments of
Borrower in any Subsidiary;
6
(i) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(j) Except as permitted under clause (e) above, joint ventures or strategic
alliances in the ordinary course of Borrower's business consisting of
the non-exclusive licensing of technology, the development of technology
or the providing of technical support, provided that any cash
Investments by Borrower do not exceed $100,000 in the aggregate in any
fiscal year;
(k) Investments constituting acquisitions permitted under Section 7.3 and
the resulting Investments owned by such acquired Person;
(l) Investments (whether consisting of the purchase of securities, loans,
capital contributions or otherwise) of Subsidiaries in or to other
Subsidiaries or in or to Borrower;
(m) Investments constituting Hedging Agreements or payments or advances
under Hedging Agreements entered into in the ordinary course of business
for the purpose of hedging exchange rate risk;
(n) Investments consisting of capital expenditures or Investments made
pursuant to capital leases in the aggregate not to exceed $3,000,000
during any fiscal quarter;
(o) Investments consisting of securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to
Borrower or any of its Subsidiaries or as security for any such
Indebtedness or claim;
(p) inter-company loans permitted under the definition of "Permitted
Indebtedness"; and
(q) other Investments aggregating not in excess of $1,000,000 in an fiscal
year.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and disclosed in the Schedule or
arising under this Agreement or the other Loan Documents;
(b) Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by
appropriate proceedings and for which Borrower maintains adequate
reserves, provided the same have no priority over any of Bank's security
interests;
(c) Liens not to exceed $100,000 in the aggregate (i) upon or in any
property acquired or held by Borrower or any of its Subsidiaries to
secure the purchase price of such property or indebtedness incurred
solely for the purpose of financing the acquisition of such property, or
(ii) existing on such property at the time of its acquisition, provided
that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such property;
(d) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Sections 8.5 or 8.9;
(e) Liens in favor of other financial institutions arising in connection
with Borrower's deposit accounts held at such institutions, provided
that Bank has a perfected security interest in the amounts held in such
deposit accounts;
(f) Liens securing claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like persons and other Liens imposed
by law;
(g) Liens incurred or deposits made in the ordinary course of Borrower's or
a Subsidiary's business in connection with worker's compensation,
unemployment insurance social security and other like laws, or to
7
secure the performance of tenders, statutory obligations, surety, bid
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations;
(h) Leases, subleases, licenses and sublicenses granted to others in the
ordinary course of business not interfering in any material respect with
the conduct of the business of Borrower, and any interest or title of a
lessor , sublessor, licensor or sublicensor or under any lease,
sublease, license or sublicense;
(i) Liens in favor of customs revenue authorities arising as a matter of law
to secure payment of customs, duties in connection with the importation
of goods;
(j) Liens which constitute rights of set-off of a customary nature of
bankers' liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with arrangements entered
into with banks in the ordinary course of business;
(k) Liens on insurance proceeds in favor of insurance companies granted
solely as security for financed premiums;
(l) Liens for reasonable and customary fees, charges and expenses in favor
of a trustee under any indenture relating to Subordinated Debt securing
only amounts due to such trustee thereunder;
(m) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(n) Other Liens, not otherwise permitted herein, which Indebtedness securing
such Liens do not in the aggregate exceed $1,000,000 at any time;
(o) Other Liens not described above arising in the ordinary course of
business and not having or not reasonably likely to have a Material
Adverse Effect on Borrower and its Subsidiaries taken as a whole; and
(p) Liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by Liens of the type described in clauses
(a) through (o) above, provided that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being
extended, renewed or refinanced does not increase.
"Permitted Transfer" means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of:
(a) Inventory in the ordinary course of business;
(b) licenses and similar arrangements for the use of the property of
Borrower or its Subsidiaries in the ordinary course of business;
(c) surplus, worn-out or obsolete property;
(d) certain real estate in Fremont, California as described on Exhibit A-1
attached hereto and made a part hereof;
(e) Advanced Machine Programming, Inc., a wholly owned subsidiary of
Borrower;
(f) SemiFab Inc., a wholly owned subsidiary of Borrower;
(g) Inventory and Equipment to Solectron Corporation;
(h) transfers from any Subsidiary to Borrower;
8
(i) transfers from Borrower to any Subsidiary not greater than $2,000,000 in
any fiscal year;
(j) assets that are sold or otherwise disposed of for cash or any other
consideration which represents the fair market value thereof;
(k) assets which are substantially concurrently received in exchange for
assets which are to be used in the business of Borrower or any
Subsidiary;
(l) transfers permitted under Section 7.3 (Mergers or Acquisitions) of the
Agreement;
(m) in order to resolve disputes that occurring the ordinary course of
business, so long as no Event of Default exists, Borrower and its
Subsidiaries may discount or otherwise compromise for less than the face
value thereof, notes or accounts receivable;
(n) transfers of condemned property to the respective governmental authority
or agency that has condemned the same (whether by deed in lieu of
condemnation or otherwise), and transfers of properties that have been
subject to a casualty of the respective insurer of such property or its
designee as party of an insurance settlement;
(o) sales or other dispositions of Permitted Investments for fair market
value;
(p) sales, assignments, transfers or dispositions of accounts in the
ordinary course of business for purposes of collection;
(q) other assets of Borrower or its Subsidiaries which do not in the
aggregate exceed $100,000 per transaction or $500,000 in the aggregate
per fiscal year.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
"Reserve Requirement" means, for any Interest Period, the average maximum rate
at which reserves (including any marginal, supplemental or emergency reserves)
are required to be maintained during such Interest Period under Regulation D
against "Eurocurrency liabilities" (as such term is used in Regulation D) by
member banks of the Federal Reserve System. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by Bank by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which the LIBOR
Rate is to be determined as provided in the definition of "LIBOR Base Rate" or
(ii) any category of extensions of credit or other assets which include
Advances.
"Responsible Officer" means each of the President, Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer, Senior Director Finance,
Vice President Investor Relations and the Controller of Borrower or any other
officer of Borrower appointed by resolution of the Board of Directors of
Borrower.
"Revolving Facility" means the facility under which Borrower may request Bank to
issue Advances, as specified in Section 2.1(b) hereof.
"Revolving Maturity Date" means October 1, 2004.
"Schedule" means the Schedule of exceptions attached hereto, if any.
"Specified Eligible Foreign Accounts" means Accounts with respect to which the
account debtor does not have its principal place of business in the United
States and that (i) are due from any of Motorola (China), Fuji Research
Institute, Nikon Corporation, Tokyo Electron Limited, TSMC(Taiwan Semiconductor
Mfg. Co.), G-Electronics, or Matsubo Co. Ltd., and (ii) do not exceed at any
time $2,000,000 in the aggregate, and (iii) the account debtor has failed to pay
within 90 days of invoice date.
9
"Subordinated Debt" means the 5 3/4% Subordinated Convertible Notes due 2008, as
amended, supplemented, extended, restated, renewed or otherwise modified from
time to time ("Convertible Notes") and any debt incurred by Borrower that is
subordinated in writing to the debt owing by Borrower to Bank on terms
reasonably acceptable to Bank (and identified as being such by Borrower and
Bank).
"Subsidiary" means any corporation, association, limited liability company,
joint venture, partnership or other business entity in which (i) any general
partnership interest or (ii) more than 50% of the stock of which by the terms
thereof ordinary voting power to elect the Board of Directors, managers or
trustees of the entity, at the time as of which any determination is being made,
is owned by Borrower, either directly or through an Affiliate.
"Tangible Net Worth" means at any date as of which the amount thereof shall be
determined, the stockholders' equity of Borrower, minus intangible assets, plus
Subordinated Debt, on a consolidated basis determined in accordance with GAAP.
"Total Liabilities" means at any date as of which the amount thereof shall be
determined, all obligations that should, in accordance with GAAP be classified
as liabilities on the consolidated balance sheet of Borrower, including in any
event all Indebtedness.
"Trademarks" means any trademark and service xxxx rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.
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