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TEGAL CORPORATION
LOAN AND SECURITY AGREEMENT
DATED AS OF AUGUST 15, 1997
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LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement ("Agreement") is made and entered into
as of August 15, 1997, by and among Imperial Bank ("Imperial") as Collateral
Agent and a Bank, and Sanwa Bank California ("Sanwa"). Imperial and Sanwa are
referred to individually herein as a "Bank" and collectively as the "Banks") and
Tegal Corporation ("Borrower").
RECITALS
Borrower wishes to obtain credit from time to time from Banks, and Banks
desire to extend credit to Borrower. This Agreement sets forth the terms on
which Banks will advance credit to Borrower, and Borrower will repay the amounts
owing to Banks.
AGREEMENT
The parties agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"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.
"ACQUISITION" means any transaction, or series of transactions, by
which Borrower or any of its Subsidiaries directly or indirectly acquires all
or substantially all of any ongoing business, whether through the purchase of
stock or assets for cash, a cash merger, or consolidation.
"ADVANCE" or "ADVANCES" means an advance or advances under the
Committed Revolving Line.
"AFFILIATE" means, with respect to any Person, any Person that owns or
controls directly or indirectly such Person, and Person that controls 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, amendment, and enforcement of the
Loan Documents; and each Bank's reasonable attorneys' fees and expenses
incurred in enforcing or defending the Loan Documents, 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.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or other
day on which banks in the State of California are authorized or required to
close.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the California Uniform Commercial Code.
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"COLLATERAL" means the property described on EXHIBIT A attached hereto.
"COLLATERAL AGENT" means Imperial or such entity as may succeed to such
position.
"COMMITTED REVOLVING LINE" means Twenty Million Dollars ($20,000,000).
"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 creditor 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.
"CURRENT LIABILITIES" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included a current liabilities on the
consolidated balance sheet of the Borrower and its Subsidiaries, as at such
date, plus, to the extent not already included therein, all outstanding
Advances made under this Agreement, but including all other Indebtedness that
is payable upon demand or within one year from the date of determination
thereof unless such Indebtedness is renewable or extendable at the option of
Borrower or any Subsidiary to a date more than one year from the date of
determination, but excluding Subordinated Debt.
"DAILY BALANCE," means the amount of the Obligation owed at the end of
a given day.
"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 Employment Retirement Income Security Act of 1974, as
amended, and the regulation thereunder.
"EVENT OF DEFAULT" has the meaning set forth in Section 8.
"FEDERAL FUNDS RATE" means, for any period, the rate set forth in the
weekly statistical release designated as H.15(519) or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication published by the Federal
Reserve Bank of New York (including any such successor, the "Composite" 3:30
p.m. Quotation") for such day under the caption "Federal Funds Effective Rate."
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System and any successor thereto.
"GAAP" means generally accepted accounting principles as in effect from
time to time.
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"Indebtedness" means (a) all indebtedness for borrowed money or the
deferred purchase price of property or services (other than trade payables not
past due incurred in the ordinary course of business), including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
"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.
"Inventory" means all present and future inventory in which Borrower or
its Subsidiaries 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 account 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.
"Investing" 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.
"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, the Disclosure Letter and any other agreement entered into
between Borrower and Banks 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 or obligations owed to either Banks 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 and including any
debt, liability, or obligation owing from Borrower to others that either Bank
may have obtained by assignment or otherwise.
"Payment Date" means the fifteenth (15th) calendar day of each month.
"Percentage Share" means, as to each Bank, the percentage calculated in
accordance with SECTION 12.6 hereof.
"Periodic Payments" means all installments or similar recurring payments
that Borrower may now or hereafter become obligated to pay to either Bank
pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and such Bank.
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"PERMITTED INDEBTEDNESS" means:
(a) Indebtedness of Borrower in favor of Banks arising under this
Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date and disclosed in the
Schedule;
(c) Indebtedness in Japan under the note discount facility as
disclosed in the Schedule;
(d) Subordinated Debt;
(e) Letters of credit;
(f) Indebtedness incurred in connection with mortgage financing and
purchase money security interests as defined in Section 9-107 of the UCC;
(g) Guaranties of Indebtedness or other obligations permitted
hereunder;
(h) Obligations related to stock options, provided that such stock
options have been approved by the Borrower's Board of Directors;
(i) Extensions, renewals or refinancings of Indebtedness permitted
under this Loan Agreement, other than clause (d) above; and
(j) Other Indebtedness in the aggregate amount not exceeding Three
Million Dollars ($3,000,000).
"PERMITTED INVESTMENT" means:
(a) Investments existing on the Closing Date disclosed in the
Schedule;
(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one (1) year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having one of the two highest ratings obtainable from
either Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc., (iii)
any Investments permitted by Borrower's investment policy, as amended from time
to time, provided that such investment policy (and any amendment thereto) has
been approved in writing by Banks, which approval shall not be unreasonably
withheld, and (iv) certificates of deposit maturing no more than one (1) year
from the date of investment therein issued by either Bank; and
(c) Investments constituting Acquisitions permitted under Section
7.3 hereof.
"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, provided the same have no priority over any of Collateral Agent's
or either Bank's security interests;
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(c) Liens (i) upon or in any equipment acquired or held by Borrower
or any of its Subsidiaries to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment, or (ii) existing on such equipment 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 equipment;
(d) Liens incurred for the purchase or improvement of real property;
(e) Liens for taxes, assessments or governmental charges or claims
the payment of which is not at the time required hereunder;
(f) Statutory Liens of landlords and depository institutions and
Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums not delinquent for a
period of more than sixty (60) days or being contested in good faith, provided,
however, that Borrower shall have made such reserve or other provision therefor
as may be required by GAAP;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(h) Any attachment or judgment Lien, if the judgment it secures
shall, within sixty (60) days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged within
sixty (60) days after the expiration of any such stay;
(i) Easements, rights-of-way, zoning and similar restrictions and
other encumbrances affecting real property which do not in any case materially
interfere with the ordinary conduct of the business of Borrower or any of its
Subsidiaries;
(j) Any interest or title of a lessor under any lease not prohibited
hereunder; and
(k) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (j) 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.
"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.
"PRIME RATE" means either (i) the variable rate of interest, per annum,
most recently announced by Imperial, as its "prime rate," or (ii) the variable
rate of interest, per annum, most recently announced by Sanwa as its "reference
rate," whichever rate is higher, as applicable to the Advances made hereunder by
the Banks whether or not such announced rate is the lowest available from such
Bank.
"QUICK ASSETS" means, at any date as of which the amount thereof shall be
determined, the consolidated cash, cash-equivalents, accounts receivable and
investments of Borrower determined to be quick assets in accordance with GAAP.
"RESPONSIBLE OFFICER" means each of the Chief Executive Officer, the Chief
Financial Officer and the Controller of Borrower.
"REVOLVING MATURITY DATE" means August 15, 1998.
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"SCHEDULE" means the schedule of exceptions attached hereto.
"SUBORDINATED DEBT" means any debt incurred by Borrower that is
subordinated to the debt owing by Borrower to Banks on terms reasonably
acceptable to each Bank (and identified as being such by Borrower and each
Bank), where the subordinated lender has executed a subordination agreement (in
a form provided by the Banks) in favor of each of the Banks.
"SUBSIDIARY" means any corporation or partnership 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 shall, at the time as of which any determination is
being made, be owned by Borrower, either directly of through an Affiliate.
"TANGIBLE NET WORTH" means at any date as of which the amount thereof
shall be determined, the consolidated total assets of Borrower and its
Subsidiaries minus, without duplication, (i) the sum of any amounts
attributable to (a) goodwill, (b) intangible items such as unamortized debt
discount and expense, parents, trade and service marks and names, copyrights
and research and development expenses except prepaid expenses, and (c) all
reserves not already deducted from assets, and (ii) Total Liabilities.
"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, but specifically excluding
Subordinated Debt.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and all calculations made
hereunder shall be made in accordance with GAAP. When used herein, the terms
"financial statements" shall include the notes and schedules thereto.
SECTION 2. LOAN AND TERMS OF PAYMENT
2.1 ADVANCES. Subject to and upon the terms and conditions of this
Agreement, each Bank severally agrees to make its Percentage Share of each
Advance to Borrower in an aggregate amount not to exceed such Bank's Percentage
Share of the Committed Revolving Line. 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.
Whenever Borrower desires an Advance, Borrower will notify each
Bank by facsimile transmission or telephone no later than 11:00 a.m. Pacific
time, on the Business Day that the Advance is to be made. Each such
notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of EXHIBIT B hereto. Each Bank is authorized to make
Advances under this Agreement, based upon instructions received from a
Responsible Officer. Each Bank shall be entitled to rely on any telephonic
notice given by a person who such Bank reasonably believes to be a Responsible
Officer, and Borrower shall indemnify and hold such Bank harmless for any
damages or loss suffered by such Bank as a result of such reliance. Such Bank
will credit the amount of Advances made under this SECTION 2.1 to Borrower's
deposit account held by Imperial or Collateral Agent not later than 3:00 p.m.
Pacific time on the Business Day such Advance is to be made. Borrower's
Obligations under the Committed Revolving Line shall be evidenced by this
Agreement and by a Promissory Note, executed in favor of each Bank, in the form
attached hereto as EXHIBIT D.
The Committed Revolving Line shall terminate on the Revolving
Maturity Date, at which time all Advances under this SECTION 2.1 and other
amounts due under this Agreement (except as otherwise expressly specified
herein) shall be immediately due and payable.
2.2 INTEREST RATES, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATE. Except as set forth in SECTION 2.2(b), any
Advances of each Bank shall bear interest, on the average Daily Balance, at a
rate equal to the Prime Rate.
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(b) LATE PAYMENT RATE. All Obligations which have not been paid
when due shall bear interest at a rate equal to two (2) percentage points above
the interest rate applicable immediately prior to the date such payment was due.
(c) (i) PAYMENTS. Interest hereunder shall be due and payable
on the Payment Date of each month during the term hereof. Borrower hereby
authorizes Imperial or Collateral Agent to debit any accounts with Imperial or
Collateral Agent, including, without limitation, Account Number 00017057057 for
payments of principal and interest due on the Obligations and any other amounts
owing by Borrower to Banks. Imperial or Collateral Agent will promptly notify
Borrower of all debits which Imperial or Collateral Agent makes against
Borrower's accounts. Any such debits against Borrower's accounts in no way
shall be deemed a set-off. 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.
(ii) DISTRIBUTION OF PAYMENTS. All amounts received by
Imperial or Collateral Agent shall be allocated and paid to Banks as necessary
to ensure a sharing of all amounts received by Imperial or Collateral Agent as
set forth in SECTION 12.6. Imperial or Collateral Agent shall immediately
distribute to each Bank, at such address as each Bank shall designate, such
Bank's interest in all repayments and prepayments of principal and all payments
of interest, loan fees, commitment fees and other fees, expenses and costs
received by Imperial or Collateral Agent on the same day and in the same type
of funds as payment was received. In the event Agent does not distribute such
payments on the same day received, such payment shall accrue interest at the
Federal Funds Rate, which shall be payable by Imperial or Collateral Agent.
Imperial or Collateral Agent shall indemnify and hold Borrower harmless from
any claim for overnight interest by any Lender under this SECTION 2.2(c)(ii).
(D) COMPUTATION. In the event the Prime Rate is changed from
time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of 12:01 a.m. on the day the Prime Rate is
changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.
2.3 CREDITING PAYMENTS. Prior to the occurrence of an Event of
Default, each Bank shall credit a wire transfer of funds, check, or other item
of payment to such deposit account held at such Bank or Obligation as Borrower
specifies. After the occurrence of an Event of Default, the receipt by a 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 a Bank after 2:00
p.m. Pacific time shall be deemed to have been received by such Bank as of the
opening of business on the immediately following Business Day. Whenever any
payment to a 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.
2.4 FEES. Borrower shall pay to Banks the following:
(a) FACILITY FEE. A Facility Fee equal to Twelve Thousand Five
Hundred Dollars ($12,500.00), which fee shall be payable to Imperial on the
Closing Date and shall be fully earned and non-refundable; and a Facility Fee
equal to Seven Thousand Five Hundred Dollars ($7,500.00), which fee shall be
payable to Sanwa on the Closing Date and shall be fully earned and
non-refundable;
(b) LOAN FEE. A Loan Fee equal to three-eighths of one percent
(0.375%) per annum of the average unused amount of the Committed Revolving Line
which fee shall be due quarterly, beginning September 30, 1997, payable in
arrears to each Bank based upon such Bank's Percentage Share of the Committed
Revolving Line.
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(c) FINANCIAL EXAMINATION AND APPRAISAL FEES. Bank's customary and
reasonable fees and out-of-pocket expenses for such Bank's audits of Borrower's
Accounts, and for each appraisal of Collateral and financial analysis and
examination of Borrower performed from time to time and, if an Event of Default
does not exists, at reasonable intervals by such Bank or its agents; and
(d) BANK EXPENSES. Upon the date hereof, all Bank Expenses incurred
through the Closing Date, including reasonable attorneys' fees and expenses,
and, within thirty (30) days of demand, other Bank Expenses as they become due
from time to time hereunder.
2.5 Additional Costs. In case any law, regulation, treaty or official
directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof, in any such
case enacted or made effective after the date hereof, or the compliance with any
guideline or request of any central bank or other governmental authority
(whether or not having the force of law) made effective after the date hereof:
(a) subjects either Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for
taxes on the overall net income of such Bank imposed by the United States of
America or any political subdivision thereof);
(b) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by any Bank; or
(c) imposed upon any Bank any other condition with respect to its
performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such Bank,
reduce the income receivable by such Bank or impose any expense upon such Bank
with respect to any Advances, such Bank shall notify Borrower thereof. Borrower
agrees to pay to such Bank the amount of such increase in cost, reduction in
income or additional expense as and when such cost, reduction or expense is
incurred or determined, upon presentation by such Bank of a statement of the
amount and setting forth such Bank's calculation thereof, all in reasonable
detail, which statement shall be deemed true and correct absent manifest error.
No Bank shall be entitled to any compensation pursuant to this Section 2.5 in
respect of any such event (i) for any period of time in excess of ninety (90)
days prior to such notice or (ii) for any period of time prior to such notice
if such Bank shall not have given such notice within ninety (90) days of the
date on which such event shall have been enacted, promulgated, adopted or
issued in definitive or final form unless such event is retroactive.
2.6 TERM. Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to SECTION 13.7, shall
continue in full force and effect for a term ending on the Revolving Maturity
Date. Notwithstanding the foregoing, Banks shall have the right to terminate any
obligation to make Advances under this Agreement immediately and without notice
upon the occurrence and during the continuance of an Event of Default.
Notwithstanding termination (but subject to SECTION 13.7), Collateral Agent and
Banks shall retain their Lien on the Collateral which remain in effect for so
long as any Obligations are outstanding.
SECTION 3. CONDITIONS OF LOANS
3. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of either
Bank to make the initial Advance is subject to the condition precedent that
such Bank shall have received, in form and substance satisfactory to such Bank,
the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Agreement;
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(c) a certificate of the Secretary of State of State of Delaware
and California with respect to Borrower's standing (and foreign qualification);
(d) financing statements (Forms UCC-1 and UCC-2);
(e) insurance certificate;
(f) payment of the fees and Bank Expenses then due (to the extent
invoiced) specified in SECTION 2.4 hereof; and
(g) such other documents, and completion of such other matters,
as Banks may reasonably request prior to the Closing Date.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of either Bank
to make each Advance, including the initial Advance, is further subject to the
following conditions;
(a) receipt by each Bank of the Payment/Advance Form as provided
in SECTION 2.1; 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 Advance as though
made at and as of each such date, 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, and no Event of Default
shall have occurred and be continuing, or would result from such Advance, or
with the lapse of time or the giving of notice or both would constitute an
Event of Default. The making of each Advance shall be deemed to be a
representation and warranty by Borrower on the date of such Advance as to the
accuracy of the facts referred to in this SECTION 3.2(b).
SECTION 4. CREATION OF SECURITY INTEREST
4.1 GRANT OF SECURITY INTEREST. Borrower grants and pledges to
Collateral Agent on behalf of Banks a continuing security interest in all
presently existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all Obligations and in order to secure
prompt performance by Borrower of each of its covenants and duties under the
Loan Documents. 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 Collateral a "hold" on any Deposit
Account pledged as Collateral to secure the Obligations.
4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall from
time to time execute and deliver to Collateral Agent, at the request of either
Bank, all Negotiable Collateral, all financing statements and other documents
that either Bank may reasonably request, in form satisfactory to such Bank, to
perfect and continue perfect Bank's security interest in the Collateral.
4.3 RIGHT TO INSPECT. Either Bank (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior notice, from
time to time during Borrower's usual business hours, and, if an Event of
Default does not exist, at reasonable intervals, 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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SECTION 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 and in good standing under the laws of its state
of incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property required that it be so qualified except where the failure to be so
qualified would not reasonably be expected to have a Material Adverse Effect.
5.2 DUE AUTHORIZATION; NO CONFLICT. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default would reasonably be expected to have a Material Adverse Effect.
5.3 NO PRIOR ENCUMBRANCES. Borrower has good and indefeasible title to
the Collateral, free and clear of Liens, except for Permitted Liens.
5.4 MERCHANTABLE INVENTORY. All Inventory (net of reserves) is in all
material respects of good and marketable quality, free from all material
defects.
5.5 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE. Except as disclosed in
the Schedule, 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.
5.6 Litigation. Except as set forth in the Schedule, there are no
actions or proceedings pending by or against Borrower or any Subsidiary before
any court of administrative agency in which an adverse decision 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.
Borrower does not have knowledge of any such pending or threatened actions or
proceedings.
5.7 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS. All
consolidated financial statements related to Borrower and any Subsidiary that
have been delivered by Borrower to Banks fairly present in all material
respects Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a change in the consolidated financial condition of Borrower since
the date of the most recent of such financial statements submitted to Banks,
which in the reasonable determination of Banks has a Material Adverse Effect.
For the quarters ending September 30, 1997, December 31, 1997, and March 31,
1998, the Banks shall determine whether there has been a Material Adverse Effect
in accordance with the terms of the disclosure letter provided by Borrower of
even date herewith the "DISCLOSURE LETTER").
5.8 SOLVENCY. Borrower is solvent and able to pay its debts (including
trade debts) as they mature.
5.9 REGULATORY COMPLIANCE. Borrower and each Subsidiary has met the
minimum funding requirements of ERISA with respect to any applicable employee
benefit plans subject to ERISA. No events 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 reasonably be expected to 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, or 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 G, T and
U of the Board of Governors of the Federal Reserve System). Borrower has
complied with all applicable
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provisions of the Federal Fair Labor Standards Act to the extent failure to
comply would 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.
5.10 ENVIRONMENTAL CONDITION. None of Borrower's or any Subsidiary's
properties or assets has ever been used by Borrower or any Subsidiary or, to
the best of Borrower's knowledge, by previous owners or operators, in the
disposal of, or to produce, store, handle, treat, release, or transport, any
hazardous waste or hazardous substance other than in accordance with applicable
law except where failure to act in accordance with applicable law would not
reasonably be expected to have a Material Adverse Effect as determined by the
Banks; to the best of Borrower's knowledge, none of Borrower's properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a hazardous waste or hazardous substance
disposal site, or a candidate for closure pursuant to any environmental
protection statute; no lien arising under any environmental protection statute
has attached to any revenues or to any real or personal property owned by
Borrower or any Subsidiary which would reasonably be expected to have a
Material Adverse Effect as determined by the Banks; and neither Borrower nor
any Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous
waste or hazardous substances into the environment that would reasonably be
expected to have a Material Adverse Effect as determined by the Banks.
5.11 TAXES. Borrower and cash Subsidiary has filed or caused to be filed
all tax returns required to be filed, and has paid, or has made adequate
provision for the payment of, all taxes reflected therein.
5.12 SUBSIDIARIES. Borrower does not own any stock, partnership interest
or other equity securities of any Person, except for Permitted Investments.
5.13 GOVERNMENT CONSENTS. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as currently conducted in
all material respects.
5.14 FULL DISCLOSURE. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Banks
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 not misleading.
Section 6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as any Bank may have any commitment to
make an Advance hereunder, Borrower shall do all of the following:
6.1 GOOD STANDING. Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing 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. Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, to the extent consistent with prudent management of Borrower's
business, in force all licenses, approvals and agreements, the loss of which
would reasonably be expected to have a Material Adverse Effect.
6.2 GOVERNMENT COMPLIANCE. 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, noncompliance with
which would reasonably be expected to have a Material Adverse Effect or a
material adverse effect on the Collateral or the priority of Banks' Lien on the
Collateral.
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6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall
deliver to Banks: (a) as soon as available, but in any event within forty-five
(45) days after the end of each quarter, a company prepared consolidated and
consolidating balance sheer and income statement covering Borrower's
consolidated operations during such period, certified by an officer of Borrower
reasonably acceptable to Bank; (b) as soon as available, but consolidating
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank; (c)
within five (5) days of filing, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders or to any holders of Subordinated Debit and all reports on Form 10-K,
10-Q and 8-K filed with the Securities and Exchange Commission; (d) promptly
upon receipt of notice thereof, a report of any legal actions pending or
threatened against Borrower or any Subsidiary that would reasonably be expected
to result in damages or costs to Borrower or any Subsidiary of Two Hundred and
Fifty Thousand Dollars ($250,000) or more; and (e) upon the reasonable request
of either Bank, such budgets, sales projections, operating plans, consolidating
financial statements or other financial information as Bank may reasonably
request from time to time.
Borrower shall deliver to Banks with the quarterly financial
statements a Compliance Certificate signed by a Responsible Officer in
substantially the form of EXHIBIT C hereto.
Any Bank shall have a right from time to time hereafter to audit
Borrower's Accounts at Borrower's expense, provided that such audits will be
conducted no more often than every twelve (12) months unless an Event of Default
has occurred and is continuing.
6.4 INVENTORY; RETURNS. Borrower shall keep all Inventory (net of
reserves) in good and marketable condition, free from all material defects.
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 at the time of the execution and delivery of this
Agreement. Borrower shall promptly notify Bank of all returns and recoveries and
of all disputes and claims, where the return, recovery, dispute or claim
involves more than Two Hundred and Fifty Thousand Dollars ($250,000).
6.5 TAXES. Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Banks, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal taxes, and will, upon request, furnish each Bank with proof
satisfactory to such Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; 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.
6.6 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 insurance
relating to Borrower's ownership and use of the Collateral 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 amount as reasonably satisfactory to Banks. All
such policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Banks, showing Banks as an additional
loss payees thereof and all liability insurance policies shall show the Banks as
additional insureds, and shall specify that the insurer must give
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at least twenty (20) days notice to Banks before canceling its policy for any
reason. Borrower shall deliver to Banks certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under nay such policy shall, at the option of Banks, be payable to
Banks to be applied on account of the Obligations.
6.7 PRINCIPAL DEPOSITORY. Borrower shall maintain in principal
depository and operating accounts, other than cash management accounts, with
Imperial or Collateral Agent.
6.8 QUICK RATIO. Borrower shall maintain, as of the last day of each
calendar month, a ratio of Quick Assets to Current Liabilities of at least 1.25
to 1.00.
6.9 DEBT-NET WORTH RATIO. Borrower shall maintain, as of the last day of
each calendar month, a ratio of Total Liabilities to Tangible Net Worth of not
more than 0.75 to 1.00.
6.10 TANGIBLE NET WORTH. Borrower shall maintain, as of the last day of
each calendar month, a Tangible Net Worth of not less than Forty Million Dollars
($40,000,000).
6.11 MAXIMUM QUARTERLY LOSS. Beginning July 1, 1997, Borrower shall not
suffer a pre-tax loss in excess of Three Million Dollars ($3,000,000), measured
as of the end of each fiscal quarter for the two quarter period then ended. For
purposes of this calculation, the pre-tax loss shall exclude (i) non-recurring
income and expenses as determined by the Banks and (ii) research and
development costs in excess of Five Million Dollars ($5,000,000) for the two
quarter period then ended.
6.12 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 Banks to effect the purposes of this Agreement.
SECTION 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 any Bank may have any commitment to make any Advances, Borrower will
not do any of the following without the prior written consent of Banks:
7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "TRANSFER"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than: (i) Transfers of Inventory
in the ordinary course of business; (ii) Transfer of non-exclusive licenses and
similar arrangements for the use of the property of Borrower or its
Subsidiaries; (iii) Transfers of worn-out or obsolete Equipment; or (iv)
Transfers in the aggregate amount not to exceed One Million Five Hundred
Thousand Dollars ($1,500,000) in any fiscal year.
7.2 CHANGE IN BUSINESS. Engage in any business, or permit any of its
Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related
thereto (or incidental thereto), or suffer a material change in Borrower's
ownership or directors. Borrower will not, without thirty (30) days prior
written notification to Banks, relocate its chief executive office.
7.3 MERGERS OR ACQUISITIONS. Enter into any Acquisition, or permit any
of its Subsidiaries to enter into any Acquisition, having an aggregate cash
purchase price in excess of Twenty Million Dollars ($20,000,000) for any fiscal
year, provided, however, that the aggregate cash purchase price for such
Acquisitions shall be subject to SECTION 7.8 hereof. Borrower or its
Subsidiaries may enter into such Acquisitions at or under the Twenty Million
Dollar ($20,000,000) per fiscal year limitation, provided that no Event of
Default has occurred and is continuing or would result from such Acquisition.
Concurrently with any Acquisition, Borrower or its Subsidiaries shall execute
and deliver to Banks such documentation, in form and substance satisfactory to
Banks, as Banks may request to perfect their security interest in such assets.
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7.4 INDEBTEDNESS. Create, incur, assume or be or remain liable with
respect to any Indebtedness or any Contingent Obligations, or permit any
Subsidiary so to do, other than Permitted Indebtedness.
7.5 ENCUMBRANCES. Create incur, assume or suffer to exist any Lien with
respect to any of its property, or assigns or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.
7.6 DISTRIBUTIONS. Pay any cash dividends or make any other distribution
or payment on account of or in redemption, retirement or purchase of any capital
stock, provided, however, Borrower may (i) make such distributions or payments
subject to the terms of employee stock option plans which have been approved by
Borrower's Board of Directors, or (ii) repurchase capital stock in an amount
not to exceed Five Million dollars ($5,000,000) per fiscal year.
7.7 INVESTMENTS. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.
7.8 LOANS. Make any loans or advances to any person or other entity other
than in the ordinary and normal course of its business as now conducted,
provided, however, that Borrower may make such loans or advances to its
Subsidiaries in an amount not to exceed Eleven Million Dollars ($11,000,000)
net of any loans or advances made by such Subsidiaries to Borrower.
7.9 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate or 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 nonaffiliated Person.
7.10 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 Subordinated Debt without Banks'
prior written consent.
7.11 INVENTORY. Store the Inventory with a bailee, warehouseman, or
similar party unless Bank has received a pledge of the warehouse receipt
covering such Inventory. Except for Inventory sold in the ordinary course of
business and except for such other locations as Banks may approve in writing,
Borrower shall keep the Inventory only at the locations set forth in SECTION 10
hereof and such other locations of which Borrower gives Banks prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Collateral Agent's security interest on behalf of and for the
benefit of Banks.
7.12 CAPITAL EXPENDITURES. Except as permitted under SECTION 7.3, make
capital expenditures in excess of Two Million Five Hundred Thousand Dollars
($2,500,000) per fiscal quarter.
7.13 COMPLIANCE. Become an "investment company" 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 Advance 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 Collateral
Agent's Lien on the Collateral, or permit any of its Subsidiaries to do any of
the foregoing.
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SECTION 8. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1 PAYMENT DEFAULT.
(a) If Borrower fails to pay, when due, any principal; and
(b) If Borrower fails to pay, within five (5) days of the
invoice payment date, any of the Obligations, exclusive of principal.
8.2 COVENANT DEFAULT.
(a) If Borrower fails to perform any obligation under SECTIONS
6.7, 6.8, 6.9, 6.10 or 6.11 or violates any of the covenants contained in
Article 7 of this Agreement, or
(b) If Borrower fails or neglects to perform, keep, or observe
any other material term, provision, condition, covenant, or agreement contained
in this Agreement, in any of the Loan Documents, or in any other present or
future agreement between Borrower and any Bank and as to any default under such
other term, provision, condition, covenant or agreement that can be cured, has
failed to cure such default with in thirty (30) days after Borrower receives
notice thereof or any officer of Borrower becomes aware thereof;
8.3 MATERIAL ADVERSE CHANGE. If there is a change in Borrower's
business, assets, liabilities, financial condition, operations or affairs,
other than changes in the ordinary course of business, or if there is a
material impairment of the prospect of repayment of any portion of the
Obligations or a material impairment of the value or priority of Banks'
security interests in the Collateral, which in the reasonable determination of
Banks has, either individually or in the aggregate, a Material Adverse Effect.
8.4 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 thirty (30) 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 material portion 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 thirty (30) 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 Advances will be required to be made
during such cure period);
8.5 INSOLVENCY. If borrower is not Solvent, 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 forty-five
(45) days (provided that no Advances will be made prior to the dismissal of
such Insolvency Proceeding); "Solvent," meaning (a) the fair market value of
Borrower's assets will be in excess of the amount that will be required to be
paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of Borrower as they mature; (b) Borrower shall not have
unreasonably small capital to carry on its business as conducted or as proposed
to be conducted; (c) Borrower does not intend to or believe that it will incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be received by it and the amounts to be
payable on or in respect of its obligations); (d) Borrower does not intend to
hinder, delay or defraud either present or future creditors; and (e) Borrower
will have received fair consideration and reasonably
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equivalent value in exchange for incurring its Obligations under the Loan
Documents and Borrower will be a direct beneficiary of the full proceeds of the
credit made available by Banks pursuant to this Loan Agreement.
8.6 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 Two Hundred and Fifty Thousand
Dollars ($250,000) or that would reasonably be expected to have a Material
Adverse Effect;
8.7 JUDGMENTS. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least One Hundred and Twenty
Five Thousand Dollars ($125,000) shall be rendered against Borrower and shall
remain unsatisfied and unstayed for a period of thirty (30) days (provided that
no Advances will be made prior to the satisfaction or stay of such judgment); or
8.8 MISREPRESENTATIONS. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set
forth herein or in any certificate delivered to any Bank by any Responsible
Officer pursuant to this Agreement or to induce Bank to enter into this
Agreement or any other Loan Document.
SECTION 9. BANK'S RIGHTS AND REMEDIES Upon the occurrence and during the
continuance of an Event of Default, an enforcing Bank may be appointed by the
Banks to enforce the rights and remedies herein on behalf of itself and as
agent for the other Bank(s) (the "ENFORCING BANK"). Appointment of the
Enforcing Bank shall be subject to the approval of either (i) both Banks, as
long as there are only two Banks whose combined Pro Rata Share (and voting
interest with respect thereto) of all amounts outstanding under this Agreement,
or, in the event there are no amounts outstanding, the Committed Revolving
Line, total one hundred percent (100.0%) of all such amounts outstanding or the
Committee Revolving Line, as the case may be, or (ii) if there are more than
two Banks, any combination of Banks whose combined Pro Rata Share (and voting
interest with respect thereto) of all amounts outstanding under this Agreement,
or, in the event there are no amounts outstanding, the Committed Revolving
Line, as the case may be. Upon such appointment of the Enforcing Bank, the
Collateral Agent will transfer all of its rights under this Loan Agreement to
the Enforcing Bank.
9.1 RIGHTS AND REMEDIES. Upon the occurrence and during the continuance
of an Event of Default, the Enforcing Bank, or any Bank, if applicable, may,
subject to Article 12, 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
8.5 all Obligations shall become immediately due and payable without any action
by any 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 any Bank;
(c) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Enforcing Bank or
such Bank reasonably considers advisable;
(d) Without notice to or demand upon Borrower, make such payments
and do such acts as Enforcing Bank or such Bank considers necessary or
reasonable to protect its security interest in the Collateral. Borrower agrees
to assemble the Collateral if Enforcing Bank or such Bank so requires, and to
make the Collateral available to Enforcing Bank or such Bank as Enforcing Bank
or such Bank may designate. Borrower authorizes Enforcing Bank or such Bank to
enter the premises where the Collateral is located, to take and maintain
possess of the Collateral, or any part of it, and to pay, purchase, contest, or
compromise any encumbrance, charge, or lien which in Enforcing Bank's or such
Bank's determination appears to be prior or superior to its security interests
and
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to pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned premises, Borrower hereby grants Enforcing Bank or such Bank a
license to enter into possession of such premises and to occupy the same,
without charge, for up to one hundred twenty (120) days in order to exercise any
of Enforcing Bank's or such Bank's rights or remedies provided herein, at law,
in equity, or otherwise;
(e) Without notice to Borrower set off and apply to the Obligations
any and all (i) balances and deposits of Borrower held by such Bank, or (ii)
indebtedness at any time owing to or for the credit or the account of Borrower
held by such 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. Enforcing Bank or such 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 Enforcing Bank's or such Bank's exercise of its rights under
this SECTION 9.1, Borrower's rights under all licenses and all franchise
agreements shall inure to Enforcing Bank's or such 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 Enforcing Bank
or such Bank determines is commercially reasonable;
(h) Enforcing Bank or such 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. Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints
Enforcing Bank or Banks (and any of their designated officers, or employees) as
Borrower's true and lawful attorney to: (a) send requests for verification of
Accounts or notify account debtors of Collateral Agent's or Enforcing Bank's
security interest in the Accounts, on behalf of and for the benefit of Banks;
(b) endorse Borrower's name on any checks or other forms of payment or security
that may come into any Collateral Agent's or Enforcing 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,
verification of Accounts, and notices to account debtors;(d) make, settle, and
adjust all claims under and decisions with respect to Borrower's policies of
insurance; and (e) settle and adjust disputes and claims respecting the accounts
directly with account debtors, for amounts and upon terms which Enforcing Bank
or such Bank determines to be reasonable; provided Enforcing Bank or such Bank
may exercise such power of attorney to sign the name of Borrower on any of the
documents described in SECTION 4.2 regardless of whether an Event of Default has
occurred. The appointment of Enforcing Bank or Banks as Borrower's attorney in
fact, and each and every one of Enforcing Bank's or Bank's rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations have
been fully repaid and performed and Banks' obligation to provide advances
hereunder is terminated.
9.3 ACCOUNTS COLLECTION. At any time from the date of this Agreement,
Enforcing Bank or Banks may notify any Person owing funds to Borrower of
Collateral Agent's or Enforcing Bank's security interest in such funds, on
behalf of and for the benefit of Banks, and verify the amount of such Account.
Borrower shall collect all amounts owing to Borrower for Bank, receive in trust
all payments as Enforcing Bank's or Bank's trustee, and immediately deliver such
payments to Enforcing Bank or Banks 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 Banks may do any or all of the following: (a)
make payment of the same or any part thereof; (b) set up such reserves under the
Committed
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Revolving Line as Banks reasonably deem necessary to protect Banks from the
exposure created by such failure; or (c) obtain and maintain insurance policies
of the type discussed in SECTION 6.6 of this Agreement, and take any action with
respect to such policies as Banks deem prudent. Any amounts so paid or deposited
by Banks shall constitute Bank Expenses, shall be immediately 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 such Bank to make similar payments in the future or a
waiver by such Bank of any Event of Default under this Agreement.
9.5 BANK'S LIABILITY FOR COLLATERAL. So long as each Bank complies with
prudent banking practices, such 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.
9.6 REMEDIES CUMULATIVE. Subject to Article 12, Banks' rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Subject to Article 12, Banks shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by any Bank of one right or remedy shall be deemed an
election, and no waiver by any Bank of any Event of Default on Borrower's part
shall be deemed a continuing waiver. No delay by any Bank shall constitute a
waiver, election, or acquiescence by it. No waiver by any Bank shall be
effective unless made in a written document signed on behalf of such 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 any Bank on which Borrower may in any way be liable.
SECTION 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 each Bank, as the case may be, at its
addresses set forth below:
If to Borrower: Tegal Corporation
0000 Xxxxx XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Fax: 707/000-0000
If to Banks: Imperial Bank
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Fax: 415/000-0000
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Sanwa Bank California
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxx
Fax: 415/000-0000
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. NOTICES TO ONE BANK SHALL NOT BE DEEMED NOTICE TO THE OTHER BANK.
SECTION 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 Banks hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Xxxxx, State of California. BORROWER AND BANKS 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 RECOGNIZED 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 WAIVERS ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
SECTION 12. INTERCREDITOR PROVISIONS
12.1 OWNERSHIP OF ADVANCES. Notwithstanding any other terms of this
Agreement, each Bank shall be the holder and the sole owner of the respective
Advances made by such Bank, and no Bank shall have any interest in the Advances
of any other Bank.
12.2 LIMITATION ON FURTHER LOANS. Except for daily cash transfers that
arise out of the ordinary course of Borrower's cash management operations,
neither Bank may make loans to or otherwise extend credit to Borrower without
the consent of the other Bank, which consent will not be unreasonably withheld.
Except as otherwise expressly provided herein, the provisions of this Agreement
apply only to Advances arising under this Agreement.
12.3 DISBURSEMENTS. All Advances shall be made pro rata by Banks. Each
Bank shall make the funds it is to lend under this Agreement available to
Borrower no later than 3:00 p.m. Pacific time on the date of disbursement by
payment to such account at Imperial, Collateral Agent or Enforcing Bank as
Borrower specific. No Bank is obligated to advance any funds in lieu of or for
the account of the other Bank if the latter Bank fails to make such Advance.
12.4 TRANSFER OF INTEREST IN ADVANCES.
(A) CONSENT. If an Event of Default does not exist, no Bank may sell
or otherwise transfer any of its interest in this Agreement without the prior
written consent of the other Bank and the Borrower, which consent shall not be
unreasonably withheld, provided that either Bank may grant to up to two (2)
other financial institutions (including any Affiliate of such Bank)
participations in all or any part of such Bank's obligations, rights and
benefits hereunder without obtaining the other Bank's consent. The grant of a
participation interest shall be on such terms as the Bank granting the
participation determines are appropriate, provided only that (1) the holder of
such a participation interest shall not have any of the rights of a Bank under
this Agreement except, if the participation agreement so provides, rights to
demand the payment of costs of the type described in SECTION 2.5,
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provided that the aggregate amount that the Borrower shall be required to pay
under SECTION 2.5 with respect to any ratable share of the Committed Revolving
Line or any Advance (including amounts paid to participants) shall not exceed
the amount that Borrower would have had to pay if no participation agreements
had been entered into, and (2) the consent of the holder of such a
participation interest shall not be required for amendments or waivers of
provisions of the Loan Agreement other than those which (i) increase the amount
of the Committed Revolving Line, (ii) extend the term of this Agreement, (iii)
decrease the rate of interest or the amount of any fee or any other amount
payable to such participant under this Agreement. Notwithstanding the grant of
participation, the Bank granting the participation shall remain solely
responsible for the performance of its obligations under this Agreement, and
Borrower shall continue to deal with such Bank in connection with this
Agreement. Each proposed transferee shall satisfy all of the requirements of
this SECTION 12.4 as a condition to any such transfer.
(b) ASSUMPTION OF OBLIGATIONS. Each assignee (other than a
participant) shall assume all obligations of the transferring Bank with respect
to the portion of the transferor's interest under this Agreement so assigned
pursuant to documentation substantially in the form of EXHIBIT E hereto. Upon
such assumption, Borrower shall be deemed to release and discharge the
transferor from the transferor's obligations to Borrower under this Agreement
with respect to the portion of the transferor's obligations assumed by the
transferee, and such transferee shall be deemed a Bank hereunder.
(c) LEGAL AUTHORITY AND FINANCIAL ABILITY. The transferee shall
provide to the remaining Bank(s) and the Borrower evidence satisfactory to the
remaining Bank(s) and the Borrower that the proposed transferee has the legal
authority and financial ability to assume and perform all obligations of the
transferring Bank under this Agreement and the Loan Documents.
(d) RECEIVE AND HOLD INTEREST. The transferee shall agree in writing
(in form satisfactory to the remaining Bank and Borrower) to receive and hold
the transferred interest subject to all of the provisions of this Agreement.
(e) CONFIDENTIALITY. Subject to SECTION 13.8 hereof, Borrower
authorizes each Bank to disclose to any prospective transferee and any actual
transferee any and all information designated by Borrower as confidential, in
such Bank's possession concerning Borrower and this Agreement, subject to such
prospective transferee or actual transferee agreeing to hold such information
confidential, in accordance with SECTION 13.8 hereof. Provided that such
prospective transferee or actual transferee has executed a confidentiality
agreement in favor of the Borrower agreeing to the provisions of SECTION 13.8
hereof, neither Bank shall be responsible if such prospective transferee or
actual transferee fails to hold such information confidentially.
(f) VOIDABILITY. Any sale or transfer of an interest in this
Agreement shall be voidable at the option of the remaining Bank or Borrower
unless the provisions of this SECTION 12.4 are satisfied.
12.5 INFORMATION. Each Bank shall use efforts that are reasonable under
the circumstances to deliver to the other Bank copies of reports and all other
documents received from Borrower or otherwise relating to this Agreement, and
to share all other material information relating to Borrower or to this
Agreement that such Bank receives. Neither Bank shall be responsible for the
accuracy, of any information shared pursuant to this SECTION 12.5, nor shall
either Bank be liable to the other for any damages incurred as a result of any
reliance on such shared information.
12.6 PROPORTIONATE INTERESTS. Except as otherwise provided in this
Agreement, the rights, interests, and obligations of each Bank under this
Agreement and the Loan Documents at any time shall be shared in the ratio
(expressed as a percentage) of (a) the maximum amount the Bank has committed to
advance as set forth on the signature page signed by the Bank to (b) the
Committed Revolving Line (the "PERCENTAGE SHARE"). Any reference in this
Agreement or the Loan Documents to an allocation between or sharing by the
Banks of any right, interest, or duty "ratably," "proportionally," "pro
rata" or in similar terms shall refer to this ratio.
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12.7 ALLOCATION OF PAYMENTS. All amounts received by Banks for the account
of Borrower, whether by payment, set-off, counterclaim, or otherwise, shall be
allocated and paid to Banks as necessary to ensure a sharing of all amounts
received on account of the Advances as contemplated in SECTION 12.6. Each Bank
shall promptly remit to Collateral Agent or Enforcing Bank for disbursement to
the other Banks such sums (whether received by the Bank for the account of
Borrower or otherwise) as may be necessary to ensure a sharing of all amounts
received on account of the Advances as contemplated in SECTION 12.6. The Banks
likewise shall contribute in such proportions as are necessary to ensure a
sharing as contemplated in SECTION 12.6 if any amount received for the account
of Borrower is required to be returned as a voidable transfer or otherwise. All
amounts received with respect to any other obligations at the time when Borrower
is not in compliance with all of the material provisions of this Agreement and
the Loan Documents shall be applied to the Obligations hereunder unless the
Banks agree otherwise.
12.8 DETERMINATION OF A COURSE OF ACTION UPON DEFAULT. Each Bank will
promptly advise the other if it acquires knowledge that an Event of Default has
occurred or with the passage of time, will occur, or that Borrower is not likely
to be in compliance with any financial covenant as of any measurement date.
Banks shall use efforts that are reasonable under the circumstances to consult
with each other before taking any action to enforce this Agreement or the Loan
Documents or to collect or enforce the Obligations under the Loan Documents. In
connection therewith, the Enforcing Bank may engage such attorneys and other
agents as it may deem appropriate. The Enforcing Bank may deduct from the gross
proceeds of any action or other collective effort any reasonable costs and
expenses, including reasonable attorneys fees, incurred in connection with such
action or effort. The Enforcing Bank will not be liable to the other Bank for
any act or omission in the absence of the Enforcing Bank's gross negligence or
willful misconduct.
12.9 FORECLOSURE.
(a) CREDIT BID BY BANKS. The Enforcing Bank shall have the exclusive
right to enter a credit bid at any foreclosure sale or other sale of any of the
Collateral on behalf of both the Enforcing Bank and the other Bank. If the Banks
cannot agree on the amount of an opening credit bid, the Bank advocating the
lower bid shall prevail in the use of such lower bid as the opening credit bid.
If the Banks are the successful bidder at the sale, then (a) the amount to be
credited against the Credit shall be allocated between the Banks in proportion
to the balances of their respective Obligations under the Loan Documents; and
(b) the Banks shall take title to the Collateral so purchased together, each
holding an undivided interest in that Collateral in proportion to the amount
credited against its Obligations under the Loan Documents.
(b) CASH BID FOR ACCOUNT OF ONE BANK. Either Bank shall have the
right to enter a cash bid for such Bank's own account at any sale. If such bid
is the successful one, then (a) the proceeds of the sale shall be allocated and
paid to each Bank in proportion to the outstanding balance of its Obligations
under the Loan Documents, and (b) the Bank that entered the bid shall acquire
the Collateral so purchased for its own account, and the other Bank shall have
no further interest in that Collateral upon payment to such other Bank of its
proportionate share of the sale proceeds in cash.
(c) THIRD PARTY BID. If the successful bid is entered by a third
party, then the sale proceeds shall be shared by the Banks as provided in
SECTION 12.7.
12.10 OTHER OBLIGATIONS. A Bank shall not obtain any interest in any
property of the Borrower taken as security for any loan made or acquired by such
Bank outside of this Agreement, or in any property in the possession or control
of such Bank, unless such other property or the proceeds thereof is applied to
an Obligation arising under this Agreement or the Loan Documents, in which case
banks shall share proportionately in such property or proceeds.
12.11 INDEPENDENT REVIEW. Each Bank has reviewed this Agreement and the
Loan Documents, the financial statements of Borrower, and such other materials
as the Bank has deemed appropriate. Each Bank has made its decision to execute
this Agreement and the Loan Documents based upon its review and its independent
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evaluation of Borrower's creditworthiness. No Bank has made any representation,
and no Bank shall rely on any alleged representation by any other Bank, as to
the form, substance, or enforceability of this Agreement or any of the Loan
Documents or the ability of any party thereto to pay any debt or perform any
obligation. Each Bank is a sophisticated commercial bank experienced in making
loans to companies similar to Borrower. Subject to SECTION 12.5, each Bank shall
make its own decision as how to perform its obligations hereunder. Each Bank has
the capacity to protect its own interests in connection with, and evaluate the
merits and risks of, the transactions contemplated by this Agreement. Each Bank
has had an opportunity to ask questions of the Borrower and its officers,
employees, accountants, and representatives concerning Borrower's business
operations, financial condition, assets, liabilities, and all other matters the
Bank deems appropriate in connection with the transactions contemplated by this
Agreement, and has based its decision to enter into those transactions on such
information.
12.12 DUE AUTHORIZATION. The execution, delivery, and performance of this
Agreement and the Loan Documents have been duly authorized by all requisite
corporate or other actions of each Bank. This Agreement and each Loan Document
to which each Bank is a party, is a valid and binding obligation of such Bank,
legally enforceable in accordance with its terms.
12.13 DESIGNATION OF COLLATERAL AGENT. To facilitate the administration of
this Agreement, Imperial shall act as "COLLATERAL AGENT" for itself and Sanwa.
Collateral Agent or Enforcing Bank shall have only such duties as are expressly
set forth in this Agreement, or as otherwise agreed in writing by the Banks.
Collateral Agent or Enforcing Bank shall be deemed to act on behalf of both
Banks whenever Collateral Agent or Enforcing Bank acts under this Agreement.
12.14 RESIGNATION. Collateral Agent may resign as Collateral Agent, upon
thirty (30) day's written notice to the other Banks and to Borrower and
appointment of a successor Collateral Agent. Upon receipt of notice of
resignation, the Banks shall appoint a successor Collateral Agent which, if an
Event of Default does not exist, shall be reasonably acceptable to Borrower. The
resigning Collateral Agent shall cooperate fully in delivering to the successor
Collateral Agent the Loan Documents and copies of all records relating to the
Advances and payments made hereunder that the successor Collateral Agent
reasonably requests.
12.15 NO REAL ESTATE COLLATERAL. Each Bank agrees with, and for the benefit
of, the other Bank (which agreement shall not be for the benefit of Borrower or
any of its Subsidiaries) that Borrower's Obligations to such Bank under this
Agreement and the other Loan Documents are not and shall not be secured by any
real property collateral now or hereafter acquired by such Bank.
12.16 LOAN COLLECTIONS. Subject to the provisions of this Agreement,
Collateral Agent or Enforcing bank shall have the right, and shall use
reasonable efforts, to collect all sums due under this Agreement. All sums
collected by any Bank shall be held in trust by that Bank as trustee for the
benefit of all Banks in accordance with this Agreement.
12.17 REPORTS. Collateral Agent or Enforcing Bank shall use reasonable
efforts to deliver to Banks notices from Borrower and reports concerning
Borrower that Collateral Agent receives pursuant to this Agreement. Collateral
Agent shall have no obligation to deliver any such notices or reports that
Borrower or a third party simultaneously has forwarded to Banks.
12.18 COLLATERAL AGENT'S AND ENFORCING BANK'S DUTY OF CARE. Collateral
Agent and Enforcing Bank shall act or refrain from acting in accordance with the
instructions of the Banks. In so doing, Collateral Agent and Enforcing Bank may
engage such attorneys and other agents to act on behalf of the Banks as
Collateral Agent or the Enforcing Bank may deem appropriate and shall make
reasonable efforts to keep Banks appraised of all material actions taken. Action
taken by Collateral Agent or Enforcing Bank pursuant to the instruction of Banks
shall not be deemed to be discretionary action. In any case where this
Agreement, the Loan Documents, or the Banks have not directed Collateral Agent
or Enforcing Bank to perform specific acts or omissions, Collateral Agent or
Enforcing Bank may take or omit such actions as Collateral Agent or Enforcing
Bank deems to be appropriate, and in the absence of gross negligence or willful
misconduct, Banks shall not later bring a claim against Collateral Agent or
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Enforcing Bank if, in hindsight, they disagree with Collateral Agent's or
Enforcing Bank's acts or omissions. Collateral Agent and Enforcing Bank shall
not be liable to Banks for any act or omission in the absence of Collateral
Agent's or Enforcing Bank's, respectively, own gross negligence or willful
misconduct.
12.19 EXPENSES. Upon request, Banks shall promptly reimburse Collateral
Agent and Enforcing Bank for their ratable share of any reasonable fees, costs,
and expenses Collateral Agent or Enforcing Bank may incur in connection with
this Agreement. Upon request, Collateral Agent or Enforcing Bank shall provide
to Banks written evidence of such fees, costs, and expenses. If any Bank fails
to so reimburse Collateral Agent or Enforcing Bank, Collateral Agent or
Enforcing Bank may deduct the amount due from any amount to be remitted to such
Banks. If the funds due a non-reimbursing Bank are not sufficient to pay the
non-reimbursing Bank's share of Collateral Agent's or Enforcing Bank's fees,
costs, and expenses, the other Banks shall make up the unreimbursed amount in
accordance with the Bank's proportionate interests as set forth in SECTION 12.6.
12.20 COMMUNICATION. Collateral Agent and Enforcing Bank shall promptly
inform Banks if Collateral Agent or Enforcing Bank receives any communication
from Borrower calling for action on the part of Banks, or if Collateral Agent or
Enforcing Bank concludes that an Event of Default has occurred under this
Agreement.
12.21 LIMITED LIABILITY OF COLLATERAL AGENT AND ENFORCING BANK. Except as
provided in SECTION 12.18 in this Agreement, Collateral Agent and Enforcing Bank
shall not be liable or answerable to Banks for anything whatsoever in connection
with this Agreement or the Loan Documents, including responsibility in respect
to the execution, construction, or enforcement of this Agreement or the Loan
Documents, except to the extent of Collateral Agent's or Enforcing Bank's
Percentage Share of such liability. Collateral Agent and Enforcing Bank have no
duties or obligations to Banks other than as provided in this Agreement.
Collateral Agent and Enforcing Bank may rely on any opinion of counsel
(including counsel for Borrower) in relations to this Agreement and the Loan
Documents, and upon statements and communications received from Borrower, or
from any other person believed by Collateral Agent or Enforcing Bank to be
authentic. Collateral Agent and Enforcing Bank shall not be liable for any
action taken or omitted on such reliance.
12.22 INDEMNIFICATION OF COLLATERAL AGENT AND ENFORCING BANK. Each Bank
shall indemnify, defend, and hold Collateral Agent and Enforcing Bank harmless
(to the extent not reimbursed by Borrower), according to its pro rata interest,
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses, and disbursements
of any kind or nature whatsoever (including attorneys fees) that may be imposed
on, incurred by, or asserted against Collateral Agent or Enforcing Bank in any
way relating to or arising out of this Agreement or the Loan Documents, except
that Collateral Agent and Enforcing Bank shall not be indemnified against its
own gross negligence or willful misconduct.
12.23 COLLATERAL AGENT AND ENFORCING BANK AS BANK. Collateral Agent and
Enforcing Bank shall have the same rights and powers under this agreement as any
other Bank and may exercise the same as though it were not Collateral Agent or
Enforcing Bank. The term "Banks" includes Collateral Agent in Collateral Agent's
individual capacity and Enforcing Bank in Enforcing Bank's individual capacity.
Subject to the provisions of SECTION 12.2, Collateral Agent or Enforcing Bank
and their Subsidiaries and Affiliates may accept deposits from, lend money to,
act as agent or trustee for other lenders to, and generally engage in any kind
of banking, trust, or other business with, Borrower or any Subsidiary or
Affiliates as if Collateral Agent were not Collateral Agent and as if Enforcing
Bank were not Enforcing Bank.
12.24 CREDIT DECISION. Each Bank shall make its own independent
investigations of the financial condition and affairs of Borrower and its own
appraisal of the credit-worthiness of Borrower in connection with its interest
this Agreement. Except as set forth in this Agreement, Agent has no duty to
provide any Bank with any information (other than information provided pursuant
to this Agreement), whether coming into Agent's possession before the Closing
Date or at any time thereafter.
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12.25 NO AGENCY. EXCEPT AS SPECIFIED HEREIN, NEITHER BANK IS AN AGENT OF
THE OTHER. NEITHER BANK HAS ANY AUTHORITY TO ACT OR FAIL TO ACT FOR THE OTHER.
THE OBLIGATIONS OF EACH BANK HEREUNDER ARE SEVERAL. NO BANK SHALL BE LIABLE FOR
THE FAILURE OF ANY OTHER BANK TO PERFORM ITS OBLIGATIONS HEREUNDER.
12.26 NO RELIANCE. The provisions of this Article 12 (except for SECTIONS
12.3, 12.4, AND 12.14) are solely for the benefit of Banks in specifying their
rights and obligations with respect to each other, and not for the benefit of
Borrower or its assigns or successors.
SECTION 13. GENERAL PROVISIONS
13.1 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the respective successor and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without each Bank's prior written consent, which
consent may be granted or withheld in each Bank's sole discretion, provided
further, that assignment by each Bank is subject to SECTION 12.4 hereof.
13.2 INDEMNIFICATION. Borrower shall defend, indemnify and hold harmless
Collateral Agent, Enforcing Bank and each Bank and it 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 such Bank as a result of or in any way arising out of,
following, or consequential to transactions between such Bank and Borrower
whether under this Agreement, or in connection with any matter related hereto
(including without limitation reasonable attorneys fees and expenses), except
for losses caused by such Bank's gross negligence or willful misconduct.
13.3 TIME OF ESSENCE. Time is of the essence for the performance of all
obligations set forth in this Agreement.
13.4 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.
13.5 AMENDMENTS IN WRITING, INTEGRATION. This Agreement cannot be amended
or terminated orally. All prior agreements, understanding, representations,
warranties, and negotiations between the parties hereto with respect to the
subject matter of this Agrement, if any, are merged into this Agreement and the
Loan Documents.
13.6 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.
13.7 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 Banks with respect
to the expenses, damages, losses, costs and liabilities described in SECTION
13.2 shall survive until all applicable statute of limitations periods with
respect to actions that may be brought against Banks have run, provided that so
long as the obligations set forth in the first sentence of this SECTION 13.7
have been satisfied, and neither bank has a commitment to make any Advances or
to make any other loans to Borrower hereunder, Collateral Agent, Enforcing Bank
and Banks shall release all security interests granted hereunder and redeliver
all Collateral held by it in accordance with applicable law.
13.8 CONFIDENTIALITY. In handling any confidential information each Bank
shall exercise the same degree of care that it exercises with respect to its
own proprietary information of the same types to maintain the confidentiality
of any non-public information received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of such Bank in connection with their present
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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 and (iv) as may be required
in connection with the examination, audit or similar investigation of such
Bank. Confidential information hereunder shall not include information that
either: (a) is in the public domain or becomes part of the public domain after
disclosure to such Bank through no fault of such Bank; or (b) is disclosed to
such Bank by a third party, provided such Bank does not have actual knowledge
that such third party is prohibited from disclosing such information.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
TEGAL CORPORATION
By: [SIG]
---------------------------------------
Title: President & CEO
By: /s/ XXXXX XXXXXX
---------------------------------------
Title: Vice President & CFO
IMPERIAL BANK
By:
---------------------------------------
Title:
------------------------------------
Maximum Commitment Amount: $12,500,000 (62.5%)
SANWA BANK CALIFORNIA
By:
---------------------------------------
Title:
------------------------------------
Maximum Commitment Amount: $7,500,000 (37.5%)
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EXHIBIT A
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 financial 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;
(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;
(e) All documents, cash, deposit accounts, securities, investment
property, 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
(g) All Borrower's Books relating to 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.
1.
29
EXHIBIT B
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 11:00 A.M., P.S.T.
TO: DATE:
FAX#: TIME:
--------------------------------------------------------------------------------
FROM:
CLIENT NAME(BORROWER)
REQUESTED BY:
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE:
PHONE NUMBER:
FROM ACCOUNT #_________________ TO ACCOUNT #
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
-------------------------- ---------------------
PRINCIPAL INCREASE (ADVANCE) $
PRINCIPAL PAYMENT (ONLY) $
INTEREST PAYMENT (ONLY) $
PRINCIPAL AND INTEREST (PAYMENT) $
OTHER INSTRUCTIONS:
All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as
of the date of the telephone request for and Advance confirmed by this
Borrowing Certificate; 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.
--------------------------------------------------------------------------------
BANK USE ONLY
TELEPHONE REQUEST:
-----------------
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
Phone #
------------------------------ -------------------
Authorized Requester
Phone #
------------------------------ -------------------
Received By (Bank)
------------------------------
Authorized Signature (Bank)
--------------------------------------------------------------------------------
1.
30
EXHIBIT C
COMPLIANCE CERTIFICATE
The consolidated financial statements dated as of ____________________ of TEGAL
CORPORATION ("Borrower") attached hereto and submitted to IMPERIAL BANK
("Imperial") and SANWA BANK CALIFORNIA ("Sanwa," collectively, the "Banks")
pursuant to that certain Loan and Security Agreement dated as of August 15,
1997 entered into between Borrower and Banks (the "Loan Agreement"), shows
compliance with all financial covenants (unless otherwise noted below) as
specified therein, as follows:
QUARTERLY COVENANT: ACTUAL:
a. Minimum Tangible Net Worth of:
$40,000,000 -----------------
b. Maximum Liabilities to Tangible Net Worth Ratio:
0.75 : 1.00 -----------------
c. Minimum Quick Ratio:
1.25 : 1.00 -----------------
d. Maximum Pre-Tax Losses not greater than:
$3,000, 000 (measured for the two quarter -----------------
period then ended, excluding (i) non-recurring
income and expenses, and (ii) R&D expense in
excess of $5,000,000 for the two quarter
period then ended
Exceptions: (if none, so state):
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The undersigned authorized officer of Borrower hereby certifies in such
capacity that Borrower is in complete compliance with the terms and conditions
of the Loan Agreement for the period ending ______ ______ ______, and as of the
date of this Compliance Certificate the representations and warranties stated
therein are true, accurate and complete as of the date hereof (except as to
those representations and warranties which specifically reference a particular
date and except as noted above).
The undersigned further certifies that s/he knows of no pending conditions
which may cause an Event of Default (as defined in the Loan Agreement) to exist
in the next thirty (30) days. The required support documents for this
certification are attached and prepared in accordance with generally
accepted accounting principles, consistently applied.
Date: TEGAL CORPORATION
---------------------
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
1.
31
EXHIBIT D
----------------------------------
NOTE
$ Petaluma, California
---------------------------------
On the Revolving Maturity Date, and as hereinafter provided, for value
received, the undersigned promises to pay to _________________________ ("Bank"),
a California banking corporation, or order, at its San Jose, California office,
the lesser of (i) the principal sum of $ _________________________ or (ii) such
sums up to such maximum as the Bank may now or hereafter advance to or for the
benefit of the undersigned in accordance with the terms of that certain Loan and
Security Agreement by and among the undersigned, Bank, and Sanwa Bank of
California of even date herewith, as amended from time to time (the "Loan
Agreement"), together with interest from date of disbursement on the unpaid
principal balance at the Prime Rate (as defined in the Loan Agreement), which
shall vary concurrently with any change in such Prime Rate. Interest shall be
computed at the above rate on the basis of the actual number of days during
which the principal balance is outstanding, divided by 360, which shall, for
interest computation purposes, be considered one year. All capitalized terms not
otherwise defined herein shall have the meanings given to such terms in the Loan
Agreement.
Interest shall be payable monthly in arrears beginning September 15, 1997,
and if not so paid shall become a part of the principal. All payments shall be
applied first to interest, and the remainder, if any, on principal. Advances not
to exceed any unpaid balance owing at any one time equal to the maximum amount
specified above, may be made at the option of Bank.
Should any Event of Default occur and be continuing, the entire balance of
principal and accrued interest then remaining unpaid may become immediately due
and payable in accordance with the terms of the Loan Agreement. Should an Event
of Default occur and be continuing under Section 8.1 of the Loan Agreement, all
principal and accrued interest then due and remaining unpaid shall thereafter
bear interest, until paid, at the increased rate of 2% per year in excess of the
rate provided for above, as it may vary from time to time.
If this note is not paid when due, Borrower promises to pay all costs and
expenses of collection and reasonable attorney fees incurred by the holder
hereof on account of such collection, plus interest at the rate applicable to
principal, whether or not suit is filed hereon. Borrower shall be liable hereon
and consents to renewals, replacements and extensions of time for payment
hereof, before, at, or after maturity; consents to the acceptance, release or
substitution of security for this note; and waives demand and protest and the
right to assert any statute of limitations. The indebtedness evidenced hereby
shall be payable in lawful money of the Untied States. In any action brought
under or arising out of this note, Borrower, including successor(s) or
assign(s) hereby consents to the application of California law, to the
jurisdiction of any competent court within the State of California, and to
service of process by any means authorized by California law.
4.
32
No single or partial exercise of any power hereunder, or under any deed of
trust, security agreement or other agreement in connection herewith shall
preclude other or further exercises thereof or the exercise of any other such
power. Subject to the terms of the Loan Agreement, the holder hereof shall at
all times have the right to proceed against any portion of the security for
this note in such order and in such manner as such holder may consider
appropriate, without waiving any rights with respect to any of the security.
Any delay or omission on the part of the holder hereof in exercising any right
hereunder, or under any deed of trust, security agreement or other agreement,
shall not operate as a waive of such right, or of any other right, under this
note or any deed of trust, security agreement or other agreement in connection
herewith.
TEGAL CORPORATION
By:___________________
Title: _______________
By:___________________
Title: _______________
2.
33
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated __________, ____ between ________________
________________________ ("Assignor") and __________________________________
("Assignee").
PRELIMINARY STATEMENT
A. Reference is made to the Loan and Security Agreement dated as of
August 15, 1997 (as the same may from time to time hereafter be amended,
modified, supplemented or restated, the "Loan Agreement"), among Tegal
Corporation (the "Borrower"), Imperial Bank and Sanwa Bank (the "Banks"), and
Imperial Bank as the Collateral Agent for the Banks. Capitalized terms used but
not otherwise defined herein have the meanings given them in the Loan Agreement.
B. Assignor is a Bank under and as defined in the Loan Agreement and, as
such, presently has the following Commitment to Borrower:
Committed Revolving Line $_____________________
C. On the terms and conditions set forth below, Assignor desires to sell
and assign to Assignee, and Assignee desires to purchase and assume from
Assignor, a __________% interest (the "Revolving Line Assigned Percentage") in
and to all of Assignor's rights and obligations under the Committed Revolving
Line as of the effective Date (as defined below), representing a Commitment
under the Committed Revolving Line of _______________ Dollars $ _____________.
D. After giving effect to the assignments described in Section C above,
the respective Loans of Assignor and Assignee under the Loan Agreement will be:
Assignor
Committed Revolving Line $_____________________
Assignee
Committed Revolving Line $_____________________
NOW, THEREFORE, Assignor and Assignee hereby agree as follows:
1. Assignor hereby sells and assigns to Assignee, WITHOUT RECOURSE, and
Assignee hereby purchases and assumes from Assignor, the Revolving Line
Assigned Percentage of Assignor's rights and obligations under the Loan
Agreement as of the Effective Date.
1.
34
2. ASSIGNOR:
(a) represents and warrants that as of the date hereof its principal
amount outstanding under the Committed Revolving Line (without giving effect to
assignments thereof which have not yet become effective) are as follows:
Committed Revolving Line $_____________________
(b) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim;
(c) makes no representations or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other Loan Document furnished pursuant thereto; and
(d) makes no representations or warranty and assumes no
responsibility with respect to the financial condition of the borrower or the
performance or observance by the Borrower or any of its obligations under the
Loan Agreement or any other Loan Document furnished pursuant thereto.
3. ASSIGNEE:
(a) confirms that it has received a copy of the Loan Agreement,
together with copies of such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter this
Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the
Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Agreement and any other Loan
Documents;
(c) represents and warrants that commercial loans of money made by
Assignee of the type contemplated by the Loan Agreement are exempt from the
"usury" restrictions of Section 1 of Article XV of the California Constitution;
and
(d) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan Agreement and the other Loan
Documents are required to be performed by Bank hereunder.
4. Following the execution of this Assignment and Acceptance by Assignor
and Assignee, it will be delivered to the Banks for acceptance and recording by
the Banks and acceptance by the Borrower. The effective date for this
Assignment and Acceptance shall be ______________, ____ (the "Effective Date"),
subject to acceptance by the Banks and the Borrower.
2.
35
5. Subject to and upon such acceptance and recording as the Effective
Date, (a) Assignee shall be a party to the Loan Agreement and shall be entitled
to the rights and benefits of the Loan Documents and, to the extent of the
percentage assigned in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (b) Assignor shall, to the extent of the
percentage assigned in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Loan Agreement and the other
Loan Documents. Assignor shall retain all rights applicable to it under the
Loan Agreement relating to credits extended, acts or omissions made, or other
matters arising, prior to the Effective Date.
6. Upon such acceptance and recording, from and after the Effective
Date, Imperial or the Collateral Agent shall make all payments under the Loan
Agreement which are payable by Imperial or the Collateral Agent for the account
of the appropriate Bank to the appropriate Banks severally in proportion to
their respective percentages determined after giving effect to this assignment,
when payment is due. Assignor and Assignee shall make all appropriate
adjustments in payments under the Loan Agreement and the other Loan Documents
for periods prior to the Effective Date directly between themselves.
7. Assignee's address for the purpose of receiving notices under the
Loan Agreement is as set forth below Assignee's signature below.
3.
36
8. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the law of the State of California.
___________________________________________
By: _______________________________________
Printed Name: _____________________________
Title: ____________________________________
___________________________________________
By: _______________________________________
Printed Name: _____________________________
Title: ____________________________________
Address for notices:
___________________________________________
___________________________________________
___________________________________________
ACCEPTED this ____ day of
________________, ____
TEGAL CORPORATION
a Delaware corporation
By: _______________________________________
Printed Name: _____________________________
Title: ____________________________________
4.
37
TEGAL CORPORATION
SCHEDULE 1 -- INDEBTEDNESS EXISTING ON AUGUST 15, 1997
Telogy 3,538.00
Phoenixcor 319,614.39
Xerox 63,436.96
Tokai Financing 132,057.28
Hewlett Packard 9,922.95
----------
Total 528,569.58
==========
SCHEDULE 3 -- INVESTMENTS EXISTING ON AUGUST 15, 1997
Monarch Fund Balance
August 15, 1997 $ 27,312,590
============
38
Schedule 2
Indebtedness in Japan under Note Discount Facility on Xxxxxx 0, 0000
XXXXX XXXXXXXXXXX
Xxxxx line of credit August 15, 1997
Credit amount Credit used Credit available
Sumitomo bank 300,000,000 116,961,161 183,038,839
Sanwa bank 300,000,000 163,857,984 136,142,016
----------- ----------- -----------
600,000,000 280,819,145 319,180,855
=========== =========== ===========
U.S.D. U.S.D. U.S.D.
Sumitomo bank 2,528,445 985,766 1,542,679
Sanwa bank 2,528,445 1,381,020 1,147,425
----------- ----------- -----------
5,056,890 2,366,786 2,690,104
note: additional note payable to vendor XXXXXXX 1,648,500 yen equals XXXXXXX
1,648,500 yen 13,894
2,380,680 tegal trial balance
=========
Page 1
39
SCHEDULE 4
TEGAL CORPORATION
SCHEDULE OF LIENS
# OF
DEBTOR SECURED PARTY STATEMENT DATE DESCRIPTION
------ ------------- --------- ---- -----------
Tegal Corporation Advanta Leasing Corp. 92164161 July 27, 1992 Security System
Tegal Corporation IBM Credit Corp. 93010582 January 19, 1993 Computer Equipment
Tegal Corporation IBM Credit Corp. 93025753 February 4, 1993 Computer Equipment
Tegal Corporation Imperial Bank 00000000 March 26, 1993 Tencor Thin Film Monitor
Tegal Corporation Telogy Inc. 93105519 May 25, 1993 Equipment as specified on
Financing Statement
Tegal Corporation Vendor Funding Co. Inc. 93106749 June 3, 1993 Computer Printer
Tegal Corporation First Trust Natl. Assoc. 94052673 March 25, 1994 Tencor Thin Film Monitor
as Trustee et al
Natl. Westminster BK USA
as Agent
Tegal Corporation Hewlett-Packard Co. 94099133 May 18, 1994 Computer Equipment
Tegal Corporation IBM Credit Corporation 9512460008 May 2, 1995 Computer Equipment
Tegal Corporation IBM Credit Corporation 9512460013 May 2, 1995 Computer Equipment
Tegal Corporation Master Lease Div. of Tokai 9515160413 May 26, 1995 Telephone Equipment
Financial Serv.
Tegal Corporation Phoenixcor, Inc. 9518060408 June 27, 1995 Electron Microscope
Tegal Corporation Phoenixcor, Inc. 9522960906 August 15, 1995 Long Scan Profiler
Tegal Corporation Phoenixcor, Inc. 9522960920 August 15, 1995 Film Surface Analysis System
Tegal Corporation Master Lease Div. of Tokai 9604460275 February 8, 1996 Telephone System
Financial Serv.
40
TEGAL CORPORATION
WORLDWIDE INVENTORY LOCATIONS
DOMESTIC
California
0000 X. XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
0000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Arizona
0000 Xxxxxxxx Xxxx
Xxxxx 000X
Xxxxx, XX 00000
Xxxxx
XX Courier
0000 Xxxxxxx, Xxxxx X00
Xxxxxx, XX 00000
FOREIGN - EUROPE FOREIGN - ASIA
Austria Japan
Herrgott Xxxxxxxxx 00 Xxxxxxxx Science Park
8020 Graz, Austria Building B, 1013
0-0-0, Xxxxxx, Xxxxxxx-xx
Xxxxxxxx-xxx
Xxxxxx Kanagawa Prefecture
Xxxxx 000
XX de L'Observatoire
0 Xxxxxx xxx Xxxxx Xxxxxxx Xxxxxx
00000 Montigny le Bretonneux 00X-0, Xx. 000, Xxx. 0
Xxxxx Xxxxxx Kuang Fu Road, Hsin-Chu
Taiwan, ROC 300
41
Page Two
FOREIGN -- EUROPE (CONTINUED) FOREIGN -- ASIA (CONTINUED)
Germany Korea
Xxxx-Xxxxxxx - Xxx. 0 0X, Xxxxx-Xxx X/X,0-0
00000 Xxxxxxxxxxxxxxxxx Xxxxx-Xxxx, Bundang-Ku
Germany Sungnam-City, Kyungki-Do
Korea
Italy
Xxxxxxxx Xxxxxxx
XX 000 Xx 0,000
00000 Xxxxx Xxxxxx(XX)
Xxxxx
Netherlands
Air Express Internatinal
Celsiusweg 66 5928 PR Xxxxx
0000 XX Xxxxx
Xxx Xxxxxxxxxxx
