AMENDMENT
TO
LOAN AGREEMENT
--------------
This Amendment to Loan Agreement is entered into as of July 23, 1999 (the
"Amendment") by and between SILICON VALLEY BANK ("Agent" or "Bank") and CREDENCE
SYSTEMS CORPORATION, a Delaware corporation ("Credence" or "Borrower").
RECITALS
Borrower, Credence Korea, Credence Systems K.K., Bank and Bank of Hawaii
are parties to that certain Loan Agreement dated as of July 26, 1996, as amended
by an Amendment to Loan Agreement dated as of July 25, 1997, an Amendment to
Loan Agreement dated as of July 24, 1998, and an Amendment to Loan Agreement
dated as of February 5, 1999. Bank of Hawaii, Credence Korea and Credence
Systems K.K. have elected not to continue to be parties to the Agreement. Bank
and Borrower desire to amend the Agreement to reflect such withdrawals and to
reflect certain other changes, all in accordance with the terms of this
Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Bank of Hawaii, Credence Korea and Credence Systems, K.K. shall cease to
be parties to the Agreement. All references to such entities in the Agreement
are deleted.
2. The following definitions in Section 1.1 are amended and replaced in
their entirety to read as follows:
a. "Collateral" means the property of each Borrower described on
Exhibit D attached hereto.
b. "Committed Line" means Twenty Million Dollars ($20,000,000)
c. "Maturity Date" means July 22, 2000.
3. The defined terms "Optional Currency", "Optional Currency Rate Advance",
"Optional Currency Rate" and "Optional Currency Rate Instruments" are deleted
from the Agreement.
4. The first paragraph of Section 2.1 (a) is amended to read as follows:
"Subject to the terms and conditions of this Agreement, Bank will make
Advances to Borrower in United States Dollars in an amount that does
not exceed the Committed Line minus the face amount of all outstanding
Letters of Credit (including undrawn and drawn but unreimbursed
Letters of Credit) minus the reserve, if any, taken under Section
2.1.1(d). Notwithstanding the foregoing, if the aggregate amount of
outstanding Advances plus Letters of Credit plus the reserve, if any,
taken under Section 2.1.1(d) exceed Fifteen Million Dollars
($15,000,000), then Bank will make Advances to Borrower in an
aggregate amount not to exceed the lesser of (i) the Committed Line or
(ii) the Borrowing Base plus one hundred percent (100%) of Accounts
that 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.
Subject to the terms and conditions of this Agreement, amounts
borrowed pursuant to this Section 2.1 may be repaid and reborrowed at
any time during the term of this Agreement."
5. Section 2.1(c) is deleted. All references to Optional Currency, Optional
Currency Rate Advance, Optional Currency Rate and Optional Currency Rate
Instrument are deleted. All Advances shall be made only in United States
Dollars.
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6. The reference in Section 2.1(c) to " 150 basis points" is amended to
read "200 basis points".
7. The first sentence in Section 2.1.1(c) is amended to read as follows:
"The maximum aggregate obligation at any one time for undrawn and drawn but
unreimbursed Letters of Credit shall be Fifteen Million Dollars ($15,000,000).
8. The reference in the last paragraph of Section 5.3 to "Twenty Million
Dollars ($20,000,000)" is amended to read "Fifteen Million Dollars
($15,000,000)".
9. Section 5.8 is deleted in its entirety.
10. Section 5.9 is deleted in its entirety and replaced with the following:
"5.9 Tangible Net Worth. Maintain, on a consolidated basis, as of the
last day of each fiscal quarter, a Tangible Net Worth, excluding
Subordinated Debt, of not less than One Hundred Twenty Five Million
Dollars ($125,000,000)."
11. Section 5.10 is deleted in its entirety and replaced with the
following:
"5.10 Profitability. Beginning the fiscal quarter ending July 31,
1999, on a consolidated basis, have a minimum net profit of at least
One Dollar ($1.00) for the four-quarter period beginning the fiscal
quarter ending July 31, 1999. Borrower may suffer losses in up to two
quarters, provided that Borrower may suffer a loss from continuing
operations in only one quarter."
12. Article 11 is deleted in its entirety and replaced with the following:
"11. Springing Lien. Borrower grants Bank a continuing security
interest in all currently existing and hereafter acquired or arising
Collateral in order to secure Prompt repayment of all Obligations and
in order to secure prompt performance by Borrower of its covenants and
duties under the Loan Documents. Except as set forth in the Schedule,
such security interest constitutes a valid, first priority security
interest in the Collateral. Borrower shall from time to time execute
and deliver to Bank, at the request of Bank, all financing statements
and other documents that Bank may reasonably request, in form
satisfactory to Bank, to perfect and continue perfected Bank's
security interest in the Collateral. Notwithstanding any provision of
this Section 11 to the contrary, the grant of security interest
hereunder shall not be effective unless at any time the balance of
Borrower's unrestricted cash and marketable securities is below Ninety
Million Dollars ($90,000,000), at which time such grant shall
automatically be effective and Bank shall have the right to file with
the California Secretary of State or such other appropriate government
office, the financing statements on Form UCC-1 delivered in connection
with this Amendment. Bank shall otherwise retain such financing
statements in its offices."
13. The attached Exhibit C is hereby added and incorporated by reference
into the Agreement.
14. As a condition to the effectiveness of this Amendment, Bank shall
receive a fee of Seventy-Five Thousand Dollars ($75,000), payable upon the date
hereof, plus all Bank Expenses incurred in connection with the preparation of
this Amendment.
15. As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:
a. resolutions by Borrower authorizing the execution and delivery of
this Amendment;
b. executed financing statement on Form UCC-1; and
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c. such other documents, and completion of such other matters, as Bank
may reasonably deem necessary or appropriate.
16. Unless otherwise defined, all capitalized terms in this Amendment shall
be as defined in the Agreement. Except as amended, the Agreement remains in full
force and effect.
17. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
18. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.
CREDENCE SYSTEMS CORPORATION
By:
--------------------------------------------
Title:
--------------------------------------------
SILICON VALLEY BANK
By:
--------------------------------------------
Title:
--------------------------------------------
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EXHIBIT C
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: CREDENCE SYSTEMS CORPORATION
The undersigned authorized officer of CREDENCE SYSTEMS CORPORATION hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is
in complete compliance for the period ending with all required covenants
except as noted below and (ii) all representations and warranties of Borrower
stated in the Agreement are true and correct in all material respects as of the
date hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies" column.
Reporting Covenant Required Complies
------------------ -------- --------
Form 10-K Annually within 5 days Yes No
Form 10-Q Quarterly within 5 days Yes No
A/R & A/P Agings, BBC Monthly within 20 days Yes No
if outstanding Advances
exceed $15,000,000
Financial Covenant Required Actual Complies
Maintain on a Quarterly Basis:
Minimum Quick Ratio 2.0:1.0 :1.0 Yes No
Tangible Net Worth, excluding Sub Debt $125,000,000 $ Yes No
Profitability 1 $ Yes No
1. Borrower, on a consolidated basis, to have a minimum net profit of at least
$1.00 for the four-quarter period that begins with the fiscal quarter ending on
July 31, 1999. Borrower may suffer losses in up to 2 quarters, provided only one
such loss is from continuing operations.
Comments Regarding Exceptions: See Attached.
Sincerely,
SIGNATURE
----------------------------------------------
TITLE
----------------------------------------------
DATE
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EXHIBIT D
The Collateral shall consist of all right, title and interest of Borrower
in and to the following:
(a) All goods and equipment now owned or hereafter acquired, including, without
limitation, all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's 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;
(c) All contract rights and general intangibles now owned or hereafter acquired,
including, without limitation, goodwill, trademarks, servicemarks, trade styles,
trade names, patents, patent applications, leases, license agreements, franchise
agreements, blueprints, drawings, purchase orders, customer lists, route lists,
infringements, claims, computer programs, computer discs, computer tapes,
literature, reports, catalogs, design rights, income tax refunds, payments of
insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods, the licensing of 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;
(e) All documents, cash, deposit accounts, securities, investment property,
financial assets, securities entitlements, securities accounts, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;
(f) All copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing; and
Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.
Inclusion of any property in the description of Collateral in this Exhibit
shall not imply any obligation to maintain any license or retain any property
that would otherwise expire or be disposed of in the ordinary course of
Borrower's business in compliance with the Loan Agreement.
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CORPORATE RESOLUTIONS TO BORROW
--------------------------------------------------------------------------------
Borrower: CREDENCE SYSTEMS CORPORATION
--------------------------------------------------------------------------------
I, the undersigned Secretary or Assistant Secretary of Credence Systems
Corporation (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State of Delaware.
I FURTHER CERTIFY that the Certificate of Incorporation and Bylaws
previously delivered to Bank are in full force and effect and have not been
amended, modified or restated.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation (or
by other duly authorized corporate action in lieu of a meeting), duly called and
held, at which a quorum was present and voting, the following resolutions were
adopted.
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITION ACTUAL SIGNATURES
Office of the President
Xxxxxx X. Xxxx EVP & CFO /s/ Xxxxxx X. Xxxx
-------------- ----------------------- -------------------
Xxxx Xxxxxxxx VP Corporate Controller /s/ Xxxx Xxxxxxxx
------------- ----------------------- -------------------
Xxxxxx Xxxx Director of Treasury /s/ Xxxxxx Xxxx
----------- ----------------------- -------------------
acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
Borrow Money. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers, employees,
or agents and Bank, such sum or sums of money as in their judgment should be
borrowed, without limitation, including such sums as are specified in that
certain Loan Agreement dated as of July 26, 1996, as amended from time to time,
including the Amendment to Loan Agreement dated as of July 23, 1999 (the "Loan
Agreement").
Execute Loan Agreement. To execute and deliver to Bank the Loan Agreement,
any amendment thereto, and one or more renewals, extensions, modifications,
refinancing, consolidations, or substitutions for one or more of the notes, or
any portion of the Loan Agreement.
Grant Security. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.
Negotiate Items. To draw, endorse, and discount with Bank all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the account of the Corporation with Bank, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.
Letters of Credit. To execute letters of credit applications and other
related documents pertaining to Bank's issuance of letters of credit.
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Foreign Exchange Contracts. To request Bank to enter into foreign exchange
contracts on its behalf.
Further Acts. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on August 12, 1999 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED AND ATTESTED BY:
X
-------------------------------------
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FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code and will remain effective, with certain exceptions, for 5 years
from date of filing.
--------------------------------------------------------------------------------
A. NAME & TEL. # OF CONTACT AT FILER B. FILING OFFICE ACCT. #
(optional) (optional)
--------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
SILICON VALLEY BANK, ATTN: LOAN SERVICES
ADMINISTRATION
0000 XXXXXX XXXXX
XXXXX XXXXX, XX 00000-0000
--------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION (if applicable): LESSOR/LESSEE CONSIGNOR/CONSIGNEE
NON-UCC FILING
--------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
--------------------------------------------------------------------------------
1a. ENTITY'S NAME
Credence Systems Corp
--------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
--------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
000 XXXXXXX XXXXXX XXXXXXX XX XXX 00000
--------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY
ADD'NL INFO RE
ENTITY XXXXXX
0x. XXXXXX'X XXXXX XX 0x. ENTITY'S ORGANIZATIONAL I.D.#, if any
COUNTRY OR ORGANIZATION
--------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME
insert only one debtor name (2a or 2b)
--------------------------------------------------------------------------------
2a. ENTITY'S NAME
--------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
--------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
--------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITy
ADD'NL INFO RE
ENTITY XXXXXX
0x. XXXXXX'X XXXXX XX 0x. ENTITY'S ORGANIZATIONAL I.D.#, if any
COUNTRY OR ORGANIZATION
--------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P or ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME
insert only one secured party name (3a or 3b)
--------------------------------------------------------------------------------
3a. ENTITY'S NAME
Silicon Valley Bank
--------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
--------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
0000 XXXXXX XXXXX XXXXX XXXXX XX XXX 00000
--------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
SEE EXHIBIT A ATTACHED HERETO FOR COLLATERAL DESCRIPTION.
--------------------------------------------------------------------------------
5. CHECK This FINANCING STATEMENT is signed by the Secured Party
BOX instead of the Debtor to perfect a security interest
(if applicable) (a) in collateral already subject to a security interest
in another jurisdiction when it was brought into this
state, or when the debtor's location was changed to this
state, or (b) in accordance with other statutory
provisions (additional date may be required)
--------------------------------------------------------------------------------
6. REQUIRED SIGNATURE (S)
--------------------------------------------------------------------------------
7. If filed in Florida (check one)
Documentary stamp tax paid Documentary stamp tax not applicable
--------------------------------------------------------------------------------
8. This FINANCING STATEMENT is to be filed (for record)
(or recorded) in the REAL ESTATE RECORDS
Attach Addendum (if applicable)
--------------------------------------------------------------------------------
9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) All Debtors Debtor 1 Debtor 2
--------------------------------------------------------------------------------
CREDENCE SYSTEMS CORPORATION
--------------------------------------------------------------------------------
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DEBTOR: CREDENCE SYSTEMS, INC.
SECURED PARTY: SILICON VALLEY BANK
EXHIBIT A
---------
The Collateral shall consist of all right, title and interest of Borrower
in and to the following:
(i) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(ii) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's 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;
(iii) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
(iv) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of 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;
(v) All documents, cash, deposit accounts, securities, investment property,
financial assets, securities entitlements, securities accounts, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;
(vi) All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and
Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.
Inclusion of any property in the description of Collateral in this Exhibit
shall not imply any obligation to maintain any license or retain any property
that would otherwise expire or be disposed of in the ordinary course of
Borrower's business in compliance with the Loan Agreement.
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