Exhibit 10.23
AMENDMENT TO LOAN DOCUMENTS
THIS AMENDMENT TO LOAN DOCUMENTS (the "Amendment") is made as of the 11th
day of December, 2002, by and between KEY TECHNOLOGY, INC., an Oregon
corporation (the "Borrower"), and BANNER BANK, a Washington banking corporation
(the "Lender").
RECITALS
A. Borrower and Lender are parties to that certain Loan Agreement dated as
of August 9, 2002 (as the same may be amended, modified or extended from time to
time the "Loan Agreement") and the related Loan Documents described therein.
B. Borrower has requested that Lender consider requests made by Borrower
from time to time for the issuance by Lender of standby letters of credit for
the account of Borrower, which requests Lender is willing to consider, subject
to, among other things, the execution and delivery of this Amendment.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration receipt of which is hereby acknowledged, Borrower and
Lender hereby agree as follows:
AGREEMENT
1. Definitions; Interpretation. Capitalized terms used herein and not
otherwise defined shall have the meaning given in the Loan Agreement. The rules
of construction and interpretation specified in Section 1.2 and Section 1.4 of
the Loan Agreement also apply to this Amendment and are incorporated herein by
this reference.
2. Amendments to Loan Agreement. The Loan Agreement is amended as follows:
(a) Amendment to Definitions. In Section 1.1, amendments are made to
the definitions, as follows:
(1) Credit Utilization. The definition of "Credit Utilization"
is added to read as follows:
"Credit Utilization" means, as of any date of determination, the
sum of
(i) the aggregate principal amount of all outstanding Revolving Loans;
plus
(ii) the Letter of Credit Usage.
(2) Letter of Credit. The definition of "Letter of Credit" is
added to read as follows:
"Letter of Credit" means any standby or commercial letter of credit
issued by Lender for Borrower's account.
(3) Letter of Credit Application. The definition of "Letter of
Credit Application" is added to read as follows:
"Letter of Credit Application" means a letter of credit application in
the standard form then used by Lender executed and delivered by Borrower in
respect of a Letter of Credit.
(4) Letter of Credit Usage. The definition of "Letter of Credit
Usage" is added to read as follows:
"Letter of Credit Usage" means, as of any date of determination, the
sum of (i) the aggregate face amount of all outstanding unmatured Letters
of Credit plus (ii) the aggregate amount of all payments made by Lender
under Letters of Credit and not yet reimbursed by Borrower.
(5) Loan Documents. The definition of "Loan Documents" is
amended and restated to read as follows:
"Loan Documents" means, collectively, this Agreement, the Notes, the
Letter of Credit Applications and the Security Documents, as any thereof
shall be amended, restated, supplemented or otherwise modified from time to
time and all other certificates, instruments and other documents executed
by Borrower in connection with this Agreement or the transactions
contemplated hereby.
(b) Amendments to Section 2.1. Section 2.1(a) is hereby amended and
restated as follows:
(a) Revolving Credit Line. Subject to the terms and conditions of
this Agreement, Lender agrees during the period from the date this
Agreement is executed and delivered by the parties hereto until the
Revolving Maturity Date (the "Revolving Commitment Period") to make
loans (the "Revolving Loans") requested by Borrower in a Notice of
Borrowing given under this Agreement; provided that, after giving
effect to any such requested borrowing (i) the aggregate outstanding
principal balance of all Revolving Loans will not exceed the Revolving
Commitment Amount and (ii) the Credit Utilization will not exceed the
Borrowing Base. The Revolving Loans described in this Section 2.1(a)
constitute a revolving credit, and up to the Revolving Commitment
Amount and during the Revolving Commitment Period, Borrower may pay,
prepay and reborrow.
(c) Amendments to Section 2.3. Section 2.3(a) is hereby amended and
restated as follows:
(a) Revolving Credit Line. On each day that the Credit
Utilization exceeds the Borrowing Base, Borrower shall repay Revolving
Loans in such an amount as is necessary to reduce the Credit
Utilization to an amount equal to or less than the Borrowing Base,
and, if, after repayment of all Revolving Loans, the Credit
Utilization exceeds the Borrowing Base, Borrower shall deposit with or
deliver to Lender and to grant to Lender, a security interest in
deposit account balances held or maintained in blocked,
non-interest-bearing deposit accounts at Lender to secure all advances
to, and debts, liabilities, obligations, covenants and duties of
Borrower arising under the Loan Agreement and each other Loan
Document, including, without limitation, with respect to the Letters
of Credit, pursuant to documentation in form and substance
satisfactory to Lender. Borrower shall repay to Lender the outstanding
principal balance of the Revolving Loans on or before the Revolving
Maturity Date.
(d) Amendments to Section 7.2. Section 7.2 is hereby amended and
restated as follows:
Section 7.2 Consequences of Default.
(a) General. If any of the Events of Default described in Section
7.1(g) or Section 7.1(h) shall occur, the Commitment shall immediately
terminate and, if any Loans or Letters of Credit shall have been made
or issued, the principal of and interest on the Loans, the face
amounts of all issued and outstanding Letters of Credit, and all other
sums payable by Borrower under this Agreement and the other Loan
Documents shall become immediately due and payable all without
protest, presentment, notice or demand, all of which Borrower
expressly waives. If any other Event of Default shall occur and be
continuing, then in any such case and at any time thereafter so long
as any such Event of Default shall be continuing, Lender may at its
option immediately terminate the Commitment and, if any Loans or
Letters of Credit shall have been made or issued, Lender may at its
option declare the principal of and interest on the Loans, the face
amounts of all issued and outstanding Letters of Credit and all other
sums payable by Borrower under this Agreement and the other Loan
Documents to be immediately due and payable, whereupon the same shall
become immediately due and payable all without protest, presentment,
notice, or demand, all of which Borrower expressly waives. The rights
and remedies set forth in this Section 7.2 shall be in addition to any
and all rights and remedies set forth in the other Loan Documents.
(b) Cash Collateral. Regardless of whether Borrower's obligations
to repay the Loans and to pay the face amounts of the Letters of
Credit have been accelerated pursuant to the preceding sentences,
Lender may realize on any or all of the Collateral by exercising any
remedies provided in the Security Documents. Amounts paid or received
hereunder in respect of issued and outstanding Letters of Credit which
exceed amounts paid by Lender under such Letters of Credit shall be
held (and applied) as cash collateral to secure the performance of all
obligations of Borrower owing to Lender under the Letter of Credit
Applications and the other Loan Documents.
3. Amendment to Security Agreement. The Security Agreement is amended by
adding Section 13(g) as follows:
(g) Proceeds Account. To the extent that any of the Secured
Obligations may be contingent, unmatured or unliquidated (including,
without limitation, with respect to undrawn amounts under any Letter
of Credit), upon the occurrence and during the continuance of an Event
of Default, Secured Party may, at its option, (i) retain the proceeds
of any sale, collection, disposition or other realization upon the
Collateral (or any portion thereof) in a special purpose non
interest-bearing restricted deposit account (the "Proceeds Account")
created and maintained by Secured Party for such purpose (which shall
constitute a Deposit Account included within the Collateral hereunder)
until such time as Secured Party may elect to apply such proceeds to
the Secured Obligations, and Debtor agrees that such retention of such
proceeds by Secured Party shall not be deemed strict foreclosure with
respect thereto; (ii) in any reasonable manner elected by Secured
Party, estimate the liquidated amount of any of the Secured
Obligations that may be contingent, unmatured or unliquidated and
apply the proceeds of the Collateral against such amount; or (iii)
otherwise proceed in any manner permitted by applicable laws. Debtor
agrees that the Proceeds Account shall be a blocked account and that
upon the irrevocable deposit of funds into the Proceeds Account,
Debtor shall not have any right of withdrawal with respect to such
funds. Accordingly, Debtor irrevocably waives the right to make any
withdrawal from the Proceeds Account and the right to instruct Secured
Party to honor drafts against the Proceeds Account.
4. Conditions to Effectiveness. Notwithstanding anything contained herein
to the contrary, this Amendment shall not become effective until each of the
following conditions is fully and simultaneously satisfied:
(a) Delivery of Amendment. Borrower and Lender shall have executed and
delivered counterparts of this Amendment to each other;
(b) Payment of Fees. Borrower shall have paid to Lender an amendment
fee in the amount of One Hundred Dollars ($100) in respect of Lender's
agreement to enter into this Amendment;
(c) Corporate Authority. Lender shall have received in form and
substance reasonably satisfactory to it such evidence of corporate
authority as Lender shall reasonably request;
(d) Representations True; No Default. The representations of Borrower
as set forth in Article 4 of the Loan Agreement shall be true on and as of
the date of this Amendment with the same force and effect as if made on and
as of this date or, if any such representation or warranty is stated to
have been made as of or with respect to a specific date, as of or with
respect to such specific date. No Event of Default and no event which, with
notice or lapse of time or both, would constitute an Event of Default,
shall have occurred and be continuing or will occur as a result of the
execution, delivery or performance of the Amendment
Documents; and
(e) Other Documents. Lender shall have received such other documents,
instruments, and undertakings as Lender may reasonably request.
5. Representations and Warranties. Borrower hereby represents and warrants
to Lender that each of the representations and warranties set forth in Article 4
of the Loan Agreement is true and correct in each case as if made on and as of
the date of this Amendment or, if any such representation or warranty is stated
to have been made as of or with respect to a specific date, as of or with
respect to such specific date. Borrower expressly agrees that it shall be an
additional Event of Default under the Loan Agreement if any representation or
warranty made hereunder shall prove to have been incorrect in any material
respect when made.
6. Confirmation of Security Interest. Borrower hereby confirms that the
grant by Borrower of the security interest in the Collateral pursuant to the
Security Documents remains in full force and effect, and that the indebtedness,
liabilities and obligations of Borrower under the Loan Documents secured by the
Collateral shall include the indebtedness, liabilities and obligations of
Borrower under the Letter of Credit Applications and in respect of the Letters
of Credit (as each such term is defined in the Loan Agreement as amended by this
Amendment).
7. Applicability of ISP98. Unless otherwise expressly agreed by Lender and
Borrower, if any standby letter of credit is issued by Lender for Borrower's
account, performance under such standby letter of credit by Lender, its
correspondents, and beneficiaries will be governed by the rules of the
"International Standby Practices 1998" (ISP98) or such later revision as may be
published by the International Chamber of Commerce.
8. No Further Amendment. Except as expressly modified by this Amendment,
the Loan Agreement and the other Loan Documents shall remain unmodified and in
full force and effect and the parties hereby ratify their respective obligations
thereunder.
9. Reservation of Rights. Borrower acknowledges and agrees that the
execution and delivery by Lender of this Amendment shall not be deemed to create
a course of dealing or otherwise obligate Lender to forbear or execute similar
amendments under the same or similar circumstances in the future. Borrower
further acknowledges and agrees that the execution and delivery by Lender of
this Amendment shall not be deemed to obligate Lender to issue any standby or
commercial letter of credit for Borrower's account.
10. Miscellaneous.
(a) Entire Agreement. This Amendment and the other Amendment Documents
comprise the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior oral or written agreements,
representations or commitments.
(b) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of
which taken together shall constitute one and the same Amendment. Delivery
of an originally executed signature page or pages hereto, a counterpart
signature page, or a photocopy thereof transmitted by telephone facsimile
transmission, shall be as effective as delivery of a manually signed
counterpart of this Amendment.
(c) Governing Law. This Amendment and the other agreements provided
for herein and the rights and obligations of the parties hereto and thereto
shall be construed and interpreted in accordance with the laws of the State
of Washington, excluding its conflicts of law rules.
(d) Oral Agreements Not Enforceable.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers or agents thereunto duly authorized as of
the date first above written.
BORROWER: KEY TECHNOLOGY, INC., an Oregon corporation
By /s/ Xxx X. Xxxxx
------------------------------------------
Its CFO
-----------------------------------------
LENDER: BANNER BANK, a Washington banking corporation
By /s/ Xxxx Xxxxxx
------------------------------------------
Its SVP
-----------------------------------------
