SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT (this "Agreement"), dated as of August
14, 2002, is among GENUS, INC., a California corporation (the "Borrower"), the
parties listed on Schedule A hereto (the "Subordinated Creditors"), and SILICON
VALLEY BANK (the "Senior Lender"). Capitalized terms used herein shall have the
meanings ascribed thereto in Section 1 below.
R E C I T A L S
100 The Borrower and the Senior Lender are parties to a Loan and Security
Agreement dated as of December 20, 2001 and a Loan and Security Agreement
(Exim Program) dated as of December 20, 2001 (as the same have been and
further may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof, collectively the "Credit
Agreement"), pursuant to which, among other things, the Senior Lender has
made and is continuing to make certain loans and other financial
accommodations to the Borrower. The Credit Agreement, together with all
documents, instruments and agreements executed and delivered thereunder,
are referred to herein as the "Credit Documents."
101 The Subordinated Creditors have extended credit to the Borrower as
evidenced by the 7% Convertible Subordinated Notes Due 2005 of even date
herewith made by the Borrower in favor of the Subordinated Creditors in the
aggregate original principal amount of $________ (as the same may be
amended, supplemented, replaced, substituted, divided, restated or
otherwise modified from time to time in accordance with the terms hereof,
collectively the "Subordinated Note").
102 The Senior Lender has required the execution and delivery of this Agreement
by each of the Subordinated Creditors and the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto hereby agree as
follows:
Definitions. All capitalized terms shall have the respective meanings ascribed
-----------
to them in this Agreement. For purposes of this Agreement, the following terms
shall have the following meanings in this Agreement:
Credit Agreement - see Recitals.
----------------
Enforcement Action is defined in Section 2.7.
------------------
Permitted Payments shall mean (a) reimbursement and/or indemnification payments
------------------
by the Borrower to the Subordinated Creditors from time to time under
the Subordinated Notes to the extent for reasonable out-of-pocket
costs and expenses incurred by the Subordinated Creditors not to
exceed $50,000 in any fiscal year of the Borrower, (b) the issuance of
capital stock or other securities of the Borrower or any other person
or entity to the Subordinated Creditors in connection with the
conversion of all or any portion of the Subordinated Notes or the
payment of interest thereon, and any nominal cash payments in
connection therewith in lieu of the issuance of fractional shares, (c)
payments for the repurchase of the Subordinated
1
Indebtedness in accordance with the terms of the Subordinated Notes,
at the election of any Subordinated Creditor, upon the consummation of
a "Change of Control," as defined in the Subordinated Notes; provided,
that payments under this clause (c) shall not be "Permitted Payments"
if the Senior Lender shall have elected to have the Senior
Indebtedness then outstanding prepaid concurrently with such Change of
Control, unless upon or before, or otherwise in connection with, such
Change of Control the Senior Indebtedness then outstanding shall have
been paid in full, and (d) the payment and/or receipt of proceeds of
any Enforcement Action instituted by any of the Subordinated Creditors
to collect payments on the Subordinated Indebtedness to the extent
such payments were otherwise permitted to be paid by the Borrower to
the Subordinated Creditors under Section 2.2 hereof at the time due
and payable under the Subordinated Notes.
Proceeding is defined in Section 2.3.
----------
Reorganization Subordinated Securities shall mean any notes or other securities
--------------------------------------
issued in substitution of all or any portion of the Subordinated
Indebtedness that are, in the case of any such notes, subordinated in
right of payment to the Senior Indebtedness at least to the same
extent that the Subordinated Indebtedness is subordinated to the
Senior Indebtedness pursuant to the terms of this Agreement.
Senior Covenant Default shall mean any "Event of Default" under the Credit
-----------------------
Agreement, other than a Senior Payment Default or a Senior Financial
Covenant Default.
Senior Default Notice shall mean a written notice from the Senior Lender to the
---------------------
Subordinated Creditor Representative, pursuant to which the
Subordinated Creditors are notified of the existence of a Senior
Covenant Default.
Senior Financial Covenant Default shall mean any "Event of Default" under the
---------------------------------
Credit Agreement arising from the violation of the Tangible Net Worth
or other financial covenant set forth in the Credit Agreement.
Senior Indebtedness shall mean the "Obligations," as such term is defined in the
-------------------
Credit Agreement in effect on the date hereof, together with any
amendments, restatements, modifications, renewals or extensions of any
thereof to the extent permitted hereunder; provided, however, that in
no event shall the aggregate amount of the Senior Indebtedness exceed
(i) $18,000,000 in principal, plus (ii) accrued and unpaid interest
thereon and all fees, costs and expenses in connection therewith.
Nothing herein shall prohibit the Senior Lender from permitting the
Obligations to exceed the foregoing amount, but the excess shall not
be treated as "Senior Indebtedness" for purposes of this Agreement.
Senior Payment Default shall mean an "Event of Default" under the Credit
----------------------
Agreement resulting from the failure of the Borrower to pay, on a
timely basis, any principal or interest under the Credit Agreement,
including, without limitation, in each case, any default in payment of
Senior Indebtedness after acceleration thereof.
Subordinated Creditor Representative means Deutsche Bank AG, London Office, as
------------------------------------
notice agent for the Subordinated Creditors, and any successor thereto
for purposes of notices hereunder for whom the Senior Lender shall
have received contact information.
Subordinated Default shall mean a default in the payment of the Subordinated
--------------------
Indebtedness, or performance of any term, covenant or condition
contained in the Subordinated Notes, which default permits the
Subordinated Creditors to immediately accelerate or demand payment of
all or any portion of the Subordinated Indebtedness.
Subordinated Indebtedness shall mean all principal of, interest on and all other
-------------------------
sums due under the Subordinated Notes. For clarification purposes, no
obligations, liabilities or indebtedness owing to any of the
Subordinated Creditors from time to time under any agreement,
document, instrument or other arrangement, other than principal of,
interest on and all other sums due under the Subordinated Notes, shall
constitute Subordinated Indebtedness.
Subordinated Notes - see Recitals.
------------------
Subordination of Subordinated Indebtedness to Senior Indebtedness.
-----------------------------------------------------------------
Subordination. The payment of any and all of the Subordinated Indebtedness
-------------
hereby expressly is subordinated, to the extent and in the manner set forth
herein, to the prior
2
indefeasible payment in full in cash (or securities or other property acceptable
to the Senior Lender) of the Senior Indebtedness.
Restriction on Payments. The Borrower may not make, and none of the
-----------------------
Subordinated Creditors may receive, any payment of principal, interest or any
other amount with respect to the Subordinated Indebtedness (other than Permitted
Payments, which shall be permitted at all times) if, at the time of such payment
or immediately after giving effect thereto:
A Senior Payment Default exists; or
Subject to the penultimate sentence of this Section 2.2, a Senior Financial
Covenant Default exists; or
Subject to the penultimate sentence of this Section 2.2, the Senior Lender shall
have delivered to such Subordinated Creditor a Senior Default Notice stating
that a Senior Covenant Default exists.
The Borrower may resume payments (and may make any payments missed due to
the application of clauses (a), (b) and/or (c) of this Section 2.2) in respect
of the Subordinated Indebtedness:
in the case of a Senior Payment Default referred to in clause (a) of this
Section 2.2, upon a cure or written waiver thereof; or
in the case of a Senior Financial Covenant Default referred to in clause (b) of
this Section 2.2, subject to the penultimate sentence of this Section 2.2, upon
the earlier to occur of (x) the waiver of such Senior Financial Covenant Default
and (y) the expiration of 179 days from the date on which the Senior Lender
received financial statements of the Borrower evidencing the occurrence of such
Senior Financial Covenant Default;
in the case of a Senior Covenant Default referred to in clause (c) of this
Section 2.2, subject to the penultimate sentence of this Section 2.2, upon the
earlier to occur of (x) the cure or waiver of such Senior Covenant Default and
(y) the expiration of 179 days from the date on which the Senior Default Notice
was delivered.
Notwithstanding any provision of this Section 2.2 to the contrary:
The Borrower shall not be prohibited from making, and none of the
Subordinated Creditors shall be prohibited from receiving, payments under
clauses (b) and (c) of this Section 2.2 collectively for more than an aggregate
of 179 days within any period of 360 consecutive days;
no Senior Covenant Default actually known to the Senior Creditor and existing on
the date any notice is given pursuant to clause (b) of this Section 2.2 shall be
used as a basis for any subsequent such notice; and
(C) none of the foregoing restrictions shall apply at any time to any
Permitted Payments.
3
The provisions of this Section 2.2 shall not apply to any payment with
respect to which Section 2.3 would be applicable.
Proceedings. In the event of any insolvency, bankruptcy, receivership,
-----------
custodianship, liquidation, reorganization, assignment for the benefit of
creditors or other proceeding for the liquidation, dissolution or other winding
up of the Borrower or any substantial portion of its properties (a
"Proceeding"): (i) all Senior Indebtedness first shall be paid in full before
any payment of or with respect to the Subordinated Indebtedness shall be made
(other than a distribution of Reorganization Subordinated Securities and
Permitted Payments); (ii) any payment which, but for the terms hereof, otherwise
would be payable or deliverable in respect of the Subordinated Indebtedness
(other than a distribution of Reorganization Subordinated Securities and
Permitted Payments), shall be paid or delivered directly to the Senior Lender
until all Senior Indebtedness is paid in full, and each of the Subordinated
Creditors authorizes, empowers and directs all receivers, trustees, liquidators,
custodians, conservators and others having authority in the premises to effect
all such payments and deliveries, and each of the Subordinated Creditors also
irrevocably authorizes, empowers and directs the Senior Lender to demand, xxx
for, collect and receive every such payment or distribution; and (iii) each of
the Subordinated Creditors authorizes, empowers and appoints the Senior Lender
its agent and attorney-in-fact to execute, verify, deliver and file such proofs
of claim upon the failure of such Subordinated Creditor to do so prior to ten
(10) days before the expiration of the time to file any such proof; provided
that the Senior Lender shall have no obligation to execute, verify, deliver,
and/or file any such proof of claim.
Incorrect Payments. If any payment not permitted under this Agreement is
------------------
received by any of the Subordinated Creditors on account of the Subordinated
Indebtedness before all Senior Indebtedness is paid in full, such payment shall
not be commingled with any asset of such Subordinated Creditor, shall be held in
trust by such Subordinated Creditor for the benefit of the Senior Lender and
shall be paid over to the Senior Lender for application to the payment of the
Senior Indebtedness then remaining unpaid, until all of the Senior Indebtedness
is paid in full.
Sale, Transfer. None of the Subordinated Creditors shall sell, assign or
--------------
otherwise transfer all or any portion of the Subordinated Indebtedness (a)
without giving prior written notice of such action to Agent, and (b) unless
prior to the consummation of any such action, the transferee thereof executes
and delivers to the Senior Lender a joinder to this Agreement, or an agreement
substantially identical to this Agreement, in either case providing for the
continued subordination of the Subordinated Indebtedness to the Senior
Indebtedness as provided herein and for the continued effectiveness of all of
the rights of the Senior Lender arising under this Agreement. Notwithstanding
the failure to execute or deliver any such agreement, the subordination effected
hereby shall survive any sale, assignment or other transfer of all or any
portion of the Subordinated Indebtedness, and the terms of this Agreement shall
be binding upon the successors and assigns of the Subordinated Creditors, as
provided in Section 10 below.
4
Legends. Until the Senior Indebtedness is paid in full, each of the
-------
Subordinated Notes at all times shall contain in a conspicuous manner the
following legend:
"THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS
OF JULY __, 2002 AMONG GENUS, INC., THE SUBORDINATED CREDITORS
NAMED THEREIN AND SILICON VALLEY BANK, TO THE SENIOR INDEBTEDNESS
(AS DEFINED IN THE SUBORDINATION AGREEMENT); AND EACH HOLDER OF
THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE SUBORDINATION AGREEMENT."
Restriction on Action by Subordinated Creditors.
-----------------------------------------------
Until the Senior Indebtedness is paid in full and notwithstanding anything
contained in the Subordinated Notes to the contrary, none of the Subordinated
Creditors shall, without the prior written consent of the Senior Lender, agree
to any amendment, modification or supplement to any of the Subordinated Notes,
the effect of which is to (i) increase the maximum principal amount of the
Subordinated Indebtedness or rate of interest on any of the Subordinated
Indebtedness (other than in connection with the invocation of default rate
interest), (ii) shorten the scheduled dates upon which payments of principal or
interest on the Subordinated Indebtedness are due, (iii) change in a manner
adverse to the Borrower or add any event of default or add or make more
restrictive any covenant with respect to the Subordinated Notes, (iv) change the
redemption, prepayment or put provisions of the Subordinated Notes, or (v) take
any security interest, lien or charge on or in any assets of the Borrower to
secure the Subordinated Indebtedness.
Until the Senior Indebtedness is paid in full, none of the Subordinated
Creditors shall, without the prior written consent of the Senior Lender, take
any action to collect, enforce payment or accelerate any of the Subordinated
Indebtedness, exercise any of the remedies with respect to the Subordinated
Indebtedness set forth in the Subordinated Notes or that otherwise may be
available to the Subordinated Creditors, either at law or in equity by judicial
proceedings or otherwise (including, without limitation, commencement or joinder
in any involuntary bankruptcy petition, insolvency proceeding or similar
judicial proceeding against the Borrower ) (an "Enforcement Action"), except as
provided in the following sentence. Upon the earliest to occur of:
the passage of 180 days after written notice from the
Subordinated Creditor Representative or any Subordinated Creditor
to the Senior Lender, notifying the Senior Lender that a
Subordinated Default has occurred and is continuing and
identifying the same in reasonable detail, which Subordinated
Default shall not have been cured or waived in writing prior to
the date of such Enforcement Action;
5
the passage of 120 days after the acceleration of the Senior
Indebtedness;
the occurrence of a Proceeding;
the Subordinated Creditors may take any and all Enforcement Actions.
Anything contained in this Section 2.7 or elsewhere in this Agreement to
the contrary notwithstanding, none of the Subordinated Creditors shall be
prohibited, prevent or delayed in taking, and may take, any of the
following actions at any time:
(a) the exercise by such Subordinated Creditor of any conversion
rights under and in accordance with the terms of the Subordinated
Notes (and the taking of any Enforcement Actions to cause such
exercise and the delivery of securities and nominal cash in lieu of
fractional shares);
(b) any Enforcement Actions to cause the payment of and otherwise
collect any payments missed under the Subordinated Note held by such
Subordinated Creditor to the extent such payments otherwise were, at
the time due and payable, not prohibited under the terms of this
Agreement;
(c) any Enforcement Action to enforce such Subordinated
Creditor's rights and remedies upon the consummation of a "Change of
Control," as defined in the Subordinated Notes, if the Permitted
Payment, if any, in respect thereof shall not have been made prior to
the date of such Enforcement Action; and
(d) the invocation of default interest or similar penalties from
time to time in accordance with the terms of the Subordinated Note
held by such Subordinated Creditor.
Continued Effectiveness of this Agreement; Modifications to Senior Indebtedness.
-------------------------------------------------------------------------------
The terms of this Agreement, the subordination effected hereby, and the rights
and the obligations of the Subordinated Creditors and the Senior Lender arising
hereunder, shall not be affected, modified or impaired in any manner or to any
extent by: (a) any amendment or modification of or supplement to the Credit
Agreement (to the extent such amendment, modification or supplement is not
prohibited under the terms of this Agreement); or (b) any exercise or
non-exercise of any right, power or remedy under or in respect of the Senior
Indebtedness or the Subordinated Indebtedness or any of the instruments or
documents referred to in clause (a) above.
The Senior Lender may at any time and from time to time without the consent
of or notice to the Subordinated Creditors, without incurring liability to the
Subordinated Creditors and without impairing or releasing the obligations of the
Subordinated Creditors under this Agreement, change the manner or place of
payment or extend the time of payment of or renew or alter any Senior
Indebtedness, or amend, supplement, restate or otherwise modify in any manner
the Credit Agreement; provided that no such renewal, alteration, amendment,
supplement, restatement or modification shall result in an express prohibition
on any payments that from time to time may be due and owing under the
Subordinated Notes in accordance with their terms other than payments prohibited
under the terms of this Agreement.
6
Cumulative Rights, No Waivers. Each and every right, remedy and power granted
-----------------------------
to the Senior Lender hereunder shall be cumulative and in addition to any other
right, remedy or power specifically granted herein, in the Credit Agreement or
now or hereafter existing in equity, at law, by virtue of statute or otherwise,
and may be exercised by the Senior Lender, from time to time, concurrently or
independently and as often and in such order as the Senior Lender may deem
expedient. Any failure or delay on the part of the Senior Lender in exercising
any such right, remedy or power, or abandonment or discontinuance of steps to
enforce the same, shall not operate as a waiver thereof or affect the Senior
Lender's right thereafter to exercise the same, and any single or partial
exercise of any such right, remedy or power shall not preclude any other or
further exercise thereof or the exercise of any other right, remedy or power,
and no such failure, delay, abandonment or single or partial exercise of the
Senior Lender's rights hereunder shall be deemed to establish a custom or course
of dealing or performance among the parties hereto.
Modification. Any modification or waiver of any provision of this Agreement, or
------------
any consent to any departure by the Senior Lender or the Subordinated Creditors
therefrom, shall not be effective in any event unless the same is in writing and
signed by the Senior Lender and all of the Subordinated Creditors, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the specific instance and for the specific purpose given. The
Borrower's consent shall not be required to any modification or waiver of any
provision of this Agreement, or any consent to any departure by the Senior
Lender or the Subordinated Creditors therefrom.
Additional Documents and Actions. Each party hereto at any time, and from time
--------------------------------
to time, after the execution and delivery of this Agreement, upon the request of
any other party hereto and at the expense of the Borrower, promptly will execute
and deliver such further documents and do such further acts and things as such
other party may request in order to effect fully the purposes of this Agreement.
Notices. All notices and communications under this Agreement shall be in
-------
writing and shall be (i) delivered in person, (ii) delivered by overnight
express courier, or (iii) sent by telecopy (with such telecopy to be confirmed
promptly in writing sent in accordance with (i) or (ii) above), addressed in
each case as follows:
If to a Subordinated Creditor, to its address and facsimile
number set forth on the signature page hereto executed by it,
with copies to such Subordinated Creditor's representatives as
set forth thereon; Notice to all Subordinated Creditors may, in
the discretion of the party giving notice, be given to the
Subordinated Creditor Representative and such notice shall be
deemed notice to all Subordinated Creditors
7
If to the Borrower: Genus, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Shum Mukherjee,
CFO
Telecopy: (000) 000-0000
If to the Senior Lender: Silicon Valley Bank
0000 Xxxx Xxxx, Xxxxx 000
-------------------------
Palo Xxxx, XX 00000
--------------------
Attention: Xx. Xxxxxx Xxxxxxx
Telecopy:
or to any other address, as to any of the parties hereto, as such party
shall designate in a written notice to the other parties hereto. All notices
sent pursuant to the terms of this Section 7 shall be deemed received (i) if
personally delivered, then on the Business Day of delivery, (ii) if sent by
overnight, express carrier, on the next Business Day immediately following the
day sent, or (iii) if delivered by telecopy, on the date of transmission if
transmitted on a Business Day before 4:00 p.m., New York City time, otherwise on
the next Business Day.
Severability. In the event that any provision of this Agreement is deemed to be
------------
invalid by reason of the operation of any law or by reason of the interpretation
placed thereon by any court or governmental authority, this Agreement shall be
construed as not containing such provision and the invalidity of such provision
shall not affect the validity of any other provisions hereof, and any and all
other provisions hereof which otherwise are lawful and valid shall remain in
full force and effect.
Successors and Assigns. This Agreement shall inure to the benefit of the
----------------------
successors and assigns of the Senior Lender and shall be binding upon the
successors and assigns of the Subordinated Creditors.
Counterparts. This Agreement may be executed in one or more counterparts, each
------------
of which shall be deemed to be an original, but all of which taken together
shall be one and the same instrument.
Defines Rights of Creditors; Subrogation.
----------------------------------------
8
The provisions of this Agreement are solely for the purpose of defining the
relative rights of the Subordinated Creditors and the Senior Lender and shall
not be deemed to create any rights or priorities in favor of any other Person,
including, without limitation, the Borrower. The failure of the Borrower to
make any payment to the Subordinated Creditors due to the operation of this
Agreement shall not be construed as prohibiting the occurrence of a Subordinated
Default.
Subject to the prior indefeasible payment in full of all Senior Indebtedness, in
the event and to the extent cash, property or securities otherwise payable or
deliverable to the holders of the Subordinated Indebtedness shall have been
applied pursuant to this Agreement to the payment of Senior Indebtedness, then
and in each such event, the holders of the Subordinated Indebtedness shall be
subrogated to the rights of each holder of Senior Indebtedness to receive any
further payment or distribution in respect of or applicable to the Senior
Indebtedness; and, for the purposes of such subrogation, no payment or
distribution to the holders of Senior Indebtedness of any cash, property or
securities to which any holder of Subordinated Indebtedness would be entitled
except for the provisions of this Agreement shall, and no payment over pursuant
to the provisions of this Agreement to the holders of Senior Indebtedness by the
holders of the Subordinated Indebtedness shall, as between the Borrower, its
creditors other than the holders of Senior Indebtedness and the holders of
Subordinated Indebtedness, be deemed to be a payment by the Borrower to or on
account of Senior Indebtedness.
Conflict. In the event of any conflict between any term, covenant or condition
--------
of this Agreement and any term, covenant or condition of any of the Subordinated
Indebtedness Documents, the provisions of this Agreement shall control and
govern.
Headings. The paragraph headings used in this Agreement are for convenience
--------
only and shall not affect the interpretation of any of the provisions hereof.
Termination. This Agreement shall terminate upon the payment in full of the
-----------
Senior Indebtedness and the termination of the Credit Agreement; provided, that,
if any payment made on the Senior Indebtedness shall for any reason be required
to be returned by the Senior Lender, this Agreement shall thereupon in all
respects become effective with respect to such reinstated Senior Indebtedness,
without the necessity of any further act or agreement between the Senior Lender
and the Subordinated Creditors.
No Contest of Senior Indebtedness or Liens; No Security for Subordinated
------------------------------------------------------------------------
Indebtedness; Waivers. The Subordinated Creditors agrees that they will not,
---------------------
and will not encourage any other person to, at any time, contest the validity,
perfection, priority or enforceability of the Senior Indebtedness or liens
securing the Senior Indebtedness granted to the Senior Lender pursuant to the
Credit Agreement or any other Credit Document or accept or take any collateral
security for the Subordinated Indebtedness. The Subordinated Creditors waive
notice of acceptance hereof, notice of the creation of any Senior Indebtedness,
the giving or extension of any credit by the Senior Lender to the Borrower, or
the taking, waiving or releasing of any security therefor.
9
APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
--------------
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
JURISDICTION AND VENUE. THE SUBORDINATED CREDITORS HEREBY IRREVOCABLY SUBMIT TO
----------------------
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR CALIFORNIA STATE
COURT SITTING IN SANTA XXXXX COUNTY, CALIFORNIA IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE SUBORDINATED CREDITORS
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE ANY
OBJECTION THEY MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE SENIOR LENDER
TO BRING PROCEEDINGS AGAINST THE SUBORDINATED CREDITORS IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY OF THE SUBORDINATED
CREDITORS AGAINST THE SENIOR LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT
SHALL BE BROUGHT ONLY IN SUCH COURTS.
WAIVER OF RIGHT TO JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A
-----------------------------
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO
HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
Cross Default. The Borrower agrees that any of the following shall constitute
-------------
an "Event of Default" under the Credit Agreement: (i) a default or event of
default by the Borrower under or in respect of the Subordinated Indebtedness;
and (ii) a "Change of Control," as defined in the Subordinated Notes, unless the
Senior Lender shall have consented thereto.
10
Costs. In the event of any litigation between the Senior Lender, on the one
-----
hand, and any of the Subordinated Creditors, on the other hand, based upon,
arising out of, or relating to this Agreement, the prevailing party or parties
shall be entitled to recover all of its or their reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees) from the
non-prevailing party or parties.
Notice. The Borrower shall provide the Subordinated Creditor Representative
------
with notice of any "Event of Default" under the Credit Agreement upon its
knowledge of the occurrence thereof, and the Borrower shall notify the
Subordinated Creditor Representative in the event such Event of Default is cured
or waived.
11
IN WITNESS WHEREOF, the Borrower, the Senior Lender and the
Subordinated Creditors have caused this Agreement to be executed as of the date
first above written.
BORROWER:
GENUS, INC.
By:
-----------------------------------
Name:
--------------------------------------
Title:
-------------------------------
SENIOR LENDER:
SILICON VALLEY BANK
By:
-----------------------------------
Name:
--------------------------------------
Title:
-------------------------------
[SIGNATURES OF SUBORDINATED CREDITORS ON FOLLOWING PAGES]
12
SUBORDINATED CREDITOR:
--------------------------------------
By:
-----------------------------------
Name:
--------------------------------------
Title:
-------------------------------
Address:
---------------------------
-----------------------------------
Telephone:
-------------------------
Facsimile:
-------------------------
13
