Exhibit 10.2
June 30, 2003
Tegal Corporation
0000 Xxxxx XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
Gentlemen:
Reference is made to (i) the Loan and Security Agreement, and the Loan
and Security Agreement (Exim Program), both between you ("Borrower") and us
("Silicon"), and both dated as of June 26, 2002 (as amended, restated,
supplemented, or otherwise modified from time to time, collectively the "Loan
Agreements"), and (ii) the Schedule to Loan and Security Agreement, and the
Schedule to Loan and Security Agreement (Exim Program), both between Borrower
and Silicon, and both dated as of June 26, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, collectively the "Loan
Agreement Schedules"). This letter agreement (this "Agreement"), the Loan
Agreements, the Loan Agreement Schedules, and all other written documents and
agreements between us are referred to herein collectively as the "Loan
Documents". Capitalized terms used, but not defined, in this Agreement shall
have the meanings set forth in the Loan Agreements and the Loan Agreement
Schedules.
You have advised us that you desire to provide to Xxxx Xxxxxxxxx
("Xxxxxxxxx") a security interest in intellectual property "Collateral" (as that
term is defined in the Subordination Agreement referenced below), and you have
requested that (i) such security interest be considered a Permitted Lien under
the Loan Agreements and (ii) Silicon enter into a Subordination Agreement (the
"Subordination Agreement") with Xxxxxxxxx pursuant to which Silicon subordinates
its security interest in the Collateral in favor of Xxxxxxxx'x security interest
in the Collateral.
Silicon hereby agrees that the security interest of Xxxxxxxxx to which
Silicon subordinates pursuant to the Subordination Agreement shall be considered
a Permitted Lien, based upon your agreement that you shall not request, and
Silicon shall have no obligation to provide, any Loan, Letter of Credit, FX
Forward Contract, Cash Management Service or other credit accommodation under
the Loan Documents (collectively, "Credit Accommodations") until 45 days
following written notice from you of your desire to have Silicon provide Credit
Accommodations, provided that at that time (i) Silicon has been provided
evidence satisfactory to Silicon that the security interests in favor of
Xxxxxxxxx have been terminated, and (ii) the Subordination Agreement has been
terminated pursuant to a written agreement reasonably acceptable to Silicon.
Notwithstanding the foregoing, if a factoring arrangement is agreed to on terms
acceptable to you and Silicon (in your discretion and Silicon's discretion),
then such factoring shall be pursuant to such agreed upon terms and not subject
to the 45-days notice requirement set forth herein.
This Agreement, the Loan Agreements, the Loan Agreement Schedules, and
the other Loan Documents set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, oral representations, oral agreements and oral
understandings between the parties with respect to the subject hereof.
1
Except as herein expressly amended, all of the respective terms and provisions
of the Loan Agreements, the Loan Agreement Schedules, and all other Loan
Documents shall continue in full force and effect and the same are hereby
ratified and confirmed. This Agreement is part of the Loan Agreements, and the
terms of the Loan Agreements are incorporated herein by reference.
If the foregoing correctly sets forth our agreement, please sign the
enclosed copy of this Agreement and return it to us.
Sincerely yours,
Silicon Valley Bank
By /s/ Xxxxxxx X'Xxxxxxx
Title Vice President
Acknowledged and agreed:
Borrower:
Tegal Corporation
By /s/ Xxxxxx X. Xxxx .
President or Vice President
By /s/ Xxxxx Xxxxxxx .
Secretary or Assistant Secretary
