Exhibit 10.25

 

EXECUTION COPY

 

 

 

$20,000,000 Yen Denominated

 

CREDIT AGREEMENT

 

Dated as of October 30th, 2001

 

Between

 

CYMER JAPAN, INC.

 

and

 

WELLS FARGO HSBC TRADE BANK, N.A.

 

 

 

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TABLE OF CONTENTS

 

ARTICLE 1

 

 

 

 

CREDIT FACILITY

 

 

Section 1.01

Commitment to Lend.

Section 1.02

Manner of Borrowing.

Section 1.03

Interest.

 

(a)   Rates.

 

(b)   Payment.

 

(c)   Maximum Interest Rate.

Section 1.04

Repayment.

Section 1.05

Prepayments.

Section 1.06

Evidence of Indebtedness.

Section 1.07

Commitment Fee; Reduction of Commitment.

Section 1.08

Computation of Interest and Fees.

Section 1.09

Payments by the Borrower.

 

(a)   Time, Place and Manner.

 

(b)   No Reductions.

 

(c)   Grossing-up of Payments.

 

(d)   Authorization to Charge Accounts.

 

(e)   Extension of Payment Dates.

 

 

ARTICLE 2

 

 

 

 

CONDITIONS TO LOANS

 

 

Section 2.01

Conditions to Initial Loan.

Section 2.02

Conditions to Each Loan.

 

 

ARTICLE 3

 

 

 

 

CERTAIN REPRESENTATIONS AND WARRANTIES

 

 

Section 3.01

Organization; Power; Qualification.

Section 3.02

Subsidiaries.

Section 3.03

Authorization; Enforceability; Required Consents; Absence of Conflicts.

Section 3.04

Litigation.

Section 3.05

Burdensome Provisions.

Section 3.06

No Adverse Change or Event.

 

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ARTICLE 4

 

 

 

 

CERTAIN COVENANTS

 

 

A.

 

Section 4.01

Preservation of Existence and Properties, Scope of Business, Compliance with
Law, Payment of Taxes and Claims, Preservation of Enforceability.

Section 4.02

Insurance.

Section 4.03

Use of Proceeds.

 

 

B.

 

Section 4.04

Guaranties.

Section 4.05

Liens.

Section 4.06

Restricted Payments.

Section 4.08

Minimum Tangible Net Worth.

Section 4.10

Benefit Plans.

Section 4.11

Transactions with Affiliates.

Section 4.12

Issuance or Disposition of Capital Securities.

 

 

ARTICLE 5

 

 

 

 

FINANCIAL STATEMENTS AND INFORMATION

 

 

Section 5.01

Financial Statements and Information to Be Furnished.

 

(a)   Quarterly Financial Statements; Officer’s Certificate.

 

(b)   Year-End Financial Statements; Accountants’ and Certificates.

 

(c)   Requested Information.

 

(d)   Notice of Defaults, Material Adverse Changes and Other Matters.

Section 5.02

Accuracy of Financial Statements and Information.

 

(a)   Historical Financial Statements.

 

(b)   Future Financial Statements.

 

(c)   Historical Information.

 

(d)   Future Information.

Section 5.03

Additional Covenants Relating to Disclosure.

 

(a)   Accounting Methods and Financial Records.

 

(b)   Fiscal Year.

 

(c)   Visits, Inspections and Discussions.

 

 

ARTICLE 6

 

 

 

 

DEFAULT

 

 

Section 6.01

Events of Default.

Section 6.02

Remedies upon Event of Default.

 

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ARTICLE 7

 

 

 

 

ADDITIONAL CREDIT FACILITY PROVISIONS

 

 

Section 7.01

Mandatory Suspension of Loans.

Section 7.02

Regulatory Changes.

Section 7.03

Capital Requirements.

Section 7.04

Funding Losses.

Section 7.05

Determinations.

Section 7.06

Change of Lending Office.

 

 

ARTICLE 8

 

 

 

 

MISCELLANEOUS

 

 

Section 8.01

Notices and Deliveries.

Section 8.02

Expenses; Indemnification.

Section 8.03

Amounts Payable Due upon Request for Payment.

Section 8.04

Remedies of the Essence.

Section 8.05

Rights Cumulative.

Section 8.06

Disclosures.

Section 8.07

Amendments; Waivers.

Section 8.08

Set-Off; Suspension of Payment and Performance.

Section 8.09

Assignments and Participations.

 

(a)   Assignments.

 

(b)   Participations.

 

(c)   Rights of Assignees and Participants.

Section 8.10

Governing Law.

Section 8.11

Judicial Proceedings; Waiver of Jury Trial.

Section 8.12

LIMITATION OF LIABILITY.

Section 8.13

Severability of Provisions.

Section 8.14

Counterparts.

Section 8.15

Survival of Obligations.

Section 8.16

Entire Agreement.

Section 8.17

Successors and Assigns.

 

 

ARTICLE 9

 

 

 

 

INTERPRETATION

 

 

Section 9.01

Definitional Provisions.

 

(a)   Defined Terms.

 

(b)   Other Definitional Provisions.

Section 9.02

Accounting Matters.

Section 9.03

Representations and Warranties.

Section 9.04

Captions.

 

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Schedule 1.02

NOTICE OF BORROWING

 

 

Schedule 2.01(a)

SECRETARY’S CERTIFICATE OF BORROWER

 

 

Schedule 2.01(b)

SECRETARY’S CERTIFICATE OF GUARANTOR

 

 

Schedule 2.01(c)

CERTIFICATE OF (BORROWER/GUARANTOR)

 

 

Schedule 2.01(f)

CERTIFICATE OF NEGOTIATING OFFICER

 

 

Schedule 3.03

SCHEDULE OF REQUIRED CONSENTS AND GOVERNMENTAL APPROVALS

 

 

Schedule 3.04

SCHEDULE OF MATERIAL LITIGATION

 

 

Schedule 4.04

SCHEDULE OF EXISTING GUARANTIES

 

 

Schedule 4.05

LIENS

 

 

Schedule 4.11

TRANSACTIONS WITH AFFILIATES

 

 

Schedule 5.01(a)

CERTIFICATE AS TO QUARTERLY FINANCIAL STATEMENTS

 

 

Schedule 5.01(b)

CERTIFICATE AS TO YEAR-END FINANCIAL STATEMENTS

 

 

Schedule 5.02(a)

SCHEDULE OF HISTORICAL FINANCIAL INFORMATION

 

 

EXHIBIT A

NOTE

 

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CREDIT AGREEMENT

 

Dated as of October 30th, 2001

 

CYMER JAPAN, INC., a Japanese corporation, and WELLS FARGO HSBC TRADE BANK, N.A.
agree as follows (with certain terms used herein being defined in Article 9):

 

ARTICLE 1

 

CREDIT FACILITY

 

Section 1.01             Commitment to Lend.  Upon the terms and subject to the
conditions of this Agreement, the Bank agrees to make, from time to time during
the period from the Agreement Date through the Termination Date, one or more
Loans to the Borrower in an aggregate unpaid principal amount not exceeding at
any one time outstanding the Commitment at such time.

 

Section 1.02             Manner of Borrowing.  (a)  The Borrower shall give the
Bank notice (which shall be irrevocable) no later than 2:00 p.m. (California
time) on the third Business Day before the requested date for the making of any
Loan (such third Business Day being called the “Notification Date”).  Each such
notice of borrowing shall be in the form of Schedule 1.02  and shall specify (a)
the requested date for the making of the requested Loan, which shall be a
Business Day, (b) the account to which proceeds of the Loan will be remitted,
(c) the Maturity Date for such Loan requested pursuant to Section 1.04, and (d)
the amount of such Loan, the Dollar Equivalent of which (determined as of the
Notification Date) shall not be less than $5,000,000 (unless the requested Loan
is for the entire undrawn amount of the Commitment then available for borrowing
hereunder).  Not later than the second Business Day before the requested date
for the making of such Loan, the Bank will determine the Dollar Equivalent of
the amount of the requested Loan as of the Notification Date, and notify the
Borrower if (i) the requested amount of the Loan would exceed the undrawn
Commitment (determined as of the Notification Date, but assuming that all other
Loans which are scheduled to mature on or prior to the date requested for the
making of such Loan will be duly repaid), whereupon the amount of the requested
Loan will be reduced to the undrawn Commitment, and (ii) the Bank is unable to
accept the Borrower’s requested Maturity Date due to its inability to obtain
funding for the relevant maturity on commercially reasonable terms, whereupon
the Maturity Date of the Loan will be such date as may be determined by the
Bank.

 

(b)  Each Loan so requested shall be disbursed by the Bank not later than the
requested date therefor (Tokyo time) in Yen in funds immediately available to
the Borrower by credit to an account of the Borrower as shall have been
specified in the applicable notice of borrowing and as shall be acceptable to
the Bank; provided that the Borrower hereby irrevocably directs the Bank to
apply the proceed of any Loan to any amounts then due hereunder (including any
unpaid principal amount of and interest accrued on any other Loan maturing on or
prior to the date of disbursement of such Loan).

 

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Section 1.03             Interest.  (a)  Rates.  Unless an Event of Default is
continuing, each Loan and each other amount due and payable under the Borrower
Loan Documents shall bear interest on the outstanding principal amount thereof
at a rate per annum equal to the applicable Adjusted Euroyen Rate for the
Interest Period plus 1.5%.  Any principal or interest on any Loan, and any other
amount payable under the Loan Documents, which is not paid when due, and during
an Event of Default, shall bear interest at a rate per annum equal to the
applicable Post-Default Rate (whether before or after judgment).

 

(b)  Payment.  Interest shall be payable, (a) in the case of any Loan, (i) on
the last day of the Interest Period (and, if the duration of an Interest Period
is longer than three months, at intervals of three months after the first day of
such Interest Period), (ii) when such Loan shall be due (whether at maturity, by
reason of notice of prepayment or acceleration or otherwise), but only to the
extent then accrued on the amount then so due, and (b) in the case of all other
amounts due and payable under the Borrower Loan Documents, promptly on demand. 
Interest at the Post-Default Rate shall be payable on demand.

 

(c)  Maximum Interest Rate.  Nothing contained in the Loan Documents shall
require the Borrower at any time to pay interest at a rate exceeding the Maximum
Permissible Rate. If interest payable by the Borrower on any date would exceed
the maximum amount permitted by the Maximum Permissible Rate, such interest
payment shall automatically be reduced to such maximum permitted amount, and
interest for any subsequent Loans, to the extent less than the maximum amount
permitted for such Loans by the Maximum Permissible Rate, shall be increased by
the unpaid amount of any other Loan.  Any interest actually received for any
Loan in excess of such maximum amount permitted for such period shall be deemed
to have been applied as a prepayment of the Loans in the inverse order of
maturity.

 

Section 1.04             Repayment.  Unless required to be repaid earlier
pursuant to the terms of this Agreement, each Loan shall be repaid by Borrower
in full on the Maturity Date.  The Maturity Date for each Loan shall be
approximately the same day as the date of making the Loan in the first, second,
third, or sixth calendar months after the date of the making of such Loan as may
be requested by the Borrower in a notice of borrowing and approved and accepted
by the Bank which approval or acceptance shall not be withheld other than due to
the Bank’s inability to obtain funding for the relevant maturity on commercially
reasonable terms; provided that if the Maturity Date would not otherwise be a
Business Day, such day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case Maturity
Date shall be the next preceding Business Day.

 

Section 1.05             Prepayments.  The Borrower acknowledges that the Bank
may enter into currency and/or interest rate swap agreements in order to fund
the Loans, the termination of which may result in substantial costs. 
Accordingly, the Borrower agrees that it shall have no voluntary right to repay
or prepay any Loan in whole or in part prior to the Maturity Date, and that in
the event any Loan is repaid or prepaid (whether by acceleration prior to the
maturity or any other reason) in whole or in part prior to the Maturity Date,
the Borrower shall compensate the Bank for any losses, costs, or expenses
pursuant to Section 7.04.

 

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Section 1.06             Evidence of Indebtedness.  The Loans and the Borrower’s
obligation to repay the Loans with interest in accordance with the terms of this
Agreement shall be evidenced by this Agreement, a single Note, and the records
of the Bank.  The Bank shall be authorized to make notations on the Note to
reflect borrowings and payments.  The notations and records of the Bank shall be
conclusive evidence of the Loans and accrued interest thereon and of all
payments made in respect thereof, absent manifest error.

 

Section 1.07             Commitment Fee; Reduction of Commitment.  The Borrower
shall pay to the Bank a commitment fee in Dollars on the daily unused amount of
$20,000,000 (utilization to be calculated at the exchange rate applicable to the
borrowing of each Loan hereunder from time to time as may be relevant for such
calculation) for each day from the Agreement Date through the Termination Date,
as calculated by the Bank on a quarterly basis in arrears based upon the daily
utilization for that quarter, at a rate per annum of 0.20%, due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each year, the Termination Date and on the date of any reduction of
the Commitment (to the extent accrued and unpaid on the amount of the
reduction). The Borrower may reduce the Dollar Equivalent of the Commitment by
giving the Bank notice (which shall be irrevocable) thereof no later than 10:00
a.m. (California time) on the fifth Business Day before the requested date of
such reduction, except that, (a) no reduction of the Commitment shall be
effective prior to the 180th day after the Agreement Date, (b) no partial
reduction shall be in an amount less than $5,000,000, (c) no reduction may
reduce the Dollar Equivalent of the Commitment to an amount less than the
aggregate amount of the Loans outstanding hereunder, and (d) once reduced, such
reduced amount cannot be increased thereafter.

 

Section 1.08             Computation of Interest and Fees.  Interest and the
commitment fee shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed. Interest for any period shall be calculated
from and including the first day thereof to and including the last day thereof.

 

Section 1.09             Payments by the Borrower.  (a)  Time, Place and
Manner.  All payments due to the Bank under the Borrower Loan Documents shall be
made to the Bank at the Bank’s Office or at such other address as the Bank may
designate by notice to the Borrower.  All such payments shall be made for the
account of the Lending Office.  A payment shall not be deemed to have been made
on any day unless such payment has been received by the Bank, at the required
place of payment, in Yen (or such other currency as may be specified herein) in
funds immediately available to the Bank on such day.

 

(b)  No Reductions.  The Borrower represents and warrants to the Bank that all
payments by the Borrower will be paid free and clear of and (except to the
extent required by law) without any deduction or withholding on account of any
tax imposed, levied, collected, withheld or assessed by or within the United
States of America or any political subdivisions in or of the United States of
America, Japan, or any other jurisdiction from or to which a payment is made by
or on behalf of the Borrower or by any federation or organization of which the
United States of America or such other jurisdiction is a member at the time of
payment, except for any Japanese withholding Taxes imposed at a rate not
exceeding 10% on each payment of interest and commitment fee to the extent
required to be withheld or deducted under Applicable Law.

 

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(c)  Grossing-up of Payments.  If the Borrower or any other person or entity is
required by law to make any deduction or withholding on account of any such tax
from any sum paid or payable by the Borrower to the Bank hereunder:

 

(i)   the Borrower shall notify the Bank of any such requirement or any change
in any requirement as soon as the Borrower becomes aware of it;

 

(ii)   the Borrower shall pay any such tax before the date on which penalties
attach thereto, such payment to be made (if the liability to pay is imposed on
the Borrower) for its own account or (if that liability is imposed on the Bank
on behalf of and in the name of Bank) for the Bank’s account;

 

(iii)   The sum payable by the Borrower in respect of which the relevant
deduction, withholding or payment is required shall be increased to the extent
necessary to ensure that, after the making of that deduction, withholding or
payment, the Bank receives on the due date and retains (free from any liability
in respect of any such deduction, withholding or payment) a net sum equal to
what it would have received and so retained had no such deduction, withholding
or payment been required or made; and

 

Within thirty (30) days after payment of any sum from which it is required by
law to make any deductions or withholding and within thirty (30) days after the
due date of payment of any tax which it is required by Applicable Law to pay,
the Borrower shall deliver to the Bank any original vouchers or receipts, or
certified copies of such vouchers or receipts, evidencing payment of such
withholding tax and any other documents or information relating to such payments
received by the Borrower from governmental authorities in the country levying
such withholding taxes.

 

(iv)   Notwithstanding the foregoing, the Borrower shall not be required to
gross up any Japanese withholding Taxes imposed at a rate not exceeding 10% on
each payment of interest and commitment fee to the extent required to be
withheld or deducted under Applicable Law, provided that the Borrower has
complied with all of the requirements of the foregoing clauses of this Section
1.09(c).

 

(d)  Authorization to Charge Accounts.  The Borrower hereby authorizes the Bank,
if and to the extent any amount payable by the Borrower under the Borrower Loan
Documents is not otherwise paid when due, to charge such amount against any or
all of the accounts of the Borrower with the Bank or any of its Affiliates
(whether maintained at a branch or office located within or without the United
States), with the Borrower remaining liable for any deficiency.

 

(e)  Extension of Payment Dates.  Whenever any payment to the Bank under the
Borrower Loan Documents would otherwise be due (except by reason of
acceleration) on a day that is not a Business Day, such payment shall instead be
due on the next succeeding Business Day, unless such extension would cause
payment to be due in the next succeeding calendar month, in which case such due
date shall be advanced to the next preceding Business Day.  If the date any
payment under the Borrower Loan Documents is due is extended (whether by
operation

 

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of any Borrower Loan Document, Applicable Law or otherwise), such payment shall
bear interest for such extended time at the rate of interest applicable
hereunder.

 

ARTICLE 2

 

CONDITIONS TO LOANS

 

Section 2.01             Conditions to Initial Loan.  The obligation of the Bank
to make the initial Loan is subject to its receipt of each of the following, in
form and substance and, in the case of the materials referred to in clauses (a),
(b), (c), (f) and (g), certified in a manner reasonably satisfactory to the
Bank:

 

(a)  Copies of the Articles of Incorporation of the Borrower and minutes of the
meeting of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement, in form and substance reasonably
satisfactory to the Bank (See Schedule 2.01(a));

 

(b)  Incumbency certificates and certified resolutions, articles of
incorporation and bylaws from the President of Guarantor, in form and substance
reasonably satisfactory to the Bank (See Schedule 2.01(b));

 

(c)  Certificate from a Director of the Borrower and Certificate from the Senior
Vice President and Chief Financial Officer of the Guarantor, in form and
substance reasonably satisfactory to the Bank in its sole discretion (See
Schedule 2.01(c));

 

(d)  opinions of counsel for the Guarantor, dated the requested date for the
making of such Loan, in form and substance reasonably satisfactory to the Bank;

 

(e)  an opinion of Messrs. Miyake and Yamazaki, counsel to the Borrower, or
other counsel reasonably satisfactory to the Bank, in form and substance
satisfactory to the Bank;

 

(f)  Certificate in the form of Schedule 2.01(f) from the appropriate officer of
each Loan Party;

 

(g)  Unqualified good standing certificates from the Nevada and California
Secretaries of State certifying that Guarantor is in good standing and has paid
all franchise and other taxes;

 

(h)  a duly executed Note and a duly executed copy of each of the other Loan
Documents, each of which shall have been duly entered into and be in full force
and effect; and

 

(i)  Fax Transmission and Acceptance of Requests, Instructions, Documents and
Information, duly executed by the Borrower.

 

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Section 2.02             Conditions to Each Loan.  The obligation of the Bank to
make each Loan, including the initial Loan, is subject to the determination of
the Bank, in its sole and absolute discretion, that each of the following
conditions has been fulfilled to the reasonable satisfaction of the Bank:

 

(a)  the Bank shall have received a notice of borrowing with respect to such
Loan complying with the requirements of Section 1.02;

 

(b)  each Loan Document Representation and Warranty shall be true and correct in
all material aspects at and as of the time such Loan is to be made, both with
and without giving effect to such Loan and all other Loans to be made at such
time and to the application of the proceeds thereof;

 

(c)  no Default shall have occurred and be continuing at the time such Loan is
to be made or would result from the making of such Loan and all other Loans to
be made at such time or from the application of the proceeds thereof;

 

(d)  the Bank shall have received such materials as it may have requested
pursuant to Section 5.01(c);

 

(e)  such Loan will not contravene any Applicable Law;

 

(f)  all legal matters incident to such Loan and the other transactions
contemplated by the Loan Documents shall be reasonably satisfactory to the Bank
and its legal counsel; and

 

(g)  upon the making of such Loan, the aggregate unpaid principal of all Loans
will not exceed the Commitment.

 

(h)  Parent Credit Agreement is in full force and effect and the Parent is in
full compliance with all of the covenants thereunder.

 

(i)  the unpaid principal and interest of any Loan hereunder maturing on or
prior to the date of disbursement of such Loan has been paid in full.

 

Except to the extent that the Borrower shall have disclosed in the notice of
borrowing, or in a subsequent notice given to the Bank prior to 5:00 p.m.
(California time) on the Business Day before the requested date for the making
of the requested Loans, that a condition specified in clause (b) or (c) above
will not be fulfilled as of the requested time for the making of such Loans, the
Borrower shall be deemed to have made a Representation and Warranty as of the
time of the making of such Loans that the conditions specified in such clauses
have been fulfilled as of such time.  No such disclosure by the Borrower that a
condition specified in clause (b) or (c) above will not be fulfilled as of the
requested time for the making of the requested Loans shall affect the right of
the Bank to not make the Loans requested to be made by it if, in the Bank’s
determination, such condition has not been fulfilled at such time.

 

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ARTICLE 3

 

CERTAIN REPRESENTATIONS AND WARRANTIES

 

In order to induce the Bank to enter into this Agreement and to make each Loan,
the Borrower represents and warrants as of the date hereof and on each day of
subsequent borrowing, as follows:

 

Section 3.01             Organization; Power; Qualification.  The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of incorporation, and has the corporate power and authority
to own its properties and to carry on its businesses as now being and hereafter
proposed to be conducted.  The principal place of business of the Borrower is
located at 4-17-8 Minamiyawata, Ichikawa-shi, Chiba Prefecture, Japan 272-0023.

 

Section 3.02             Subsidiaries.  As of the Agreement Date, the Borrower
has no Subsidiary.  Any references to Borrower in Articles 3, 4, 5 and 6 of this
Agreement shall be read as references to the Borrower and any Subsidiaries of
the Borrower that may from time to time exist.

 

Section 3.03             Authorization; Enforceability; Required Consents;
Absence of Conflicts.  The Borrower has the power, and has taken all necessary
action (including, if a corporation, any necessary stockholder action) on the
part of the Borrower to authorize it, to execute, deliver and perform in
accordance with their respective terms the Borrower Loan Documents and to borrow
hereunder in the unused amount of the Commitment.  This Agreement has been, and
each of the other Borrower Loan Documents when delivered to the Bank will have
been, duly executed and delivered by the Borrower and is, or when so delivered
will be, a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general equitable
principles (whether enforcement is sought by proceedings in equity or at law). 
The execution, delivery and performance in accordance with their respective
terms by the Borrower of the Borrower Loan Documents, and each borrowing
hereunder, whether or not in the amount of the unused Commitment, do not and
(absent any change in any Applicable Law or applicable Contract) will not (a)
require any Governmental Approval or any other consent or approval, including
any consent or approval of any Subsidiary or any consent or approval of the
stockholders of the Borrower, other than Governmental Approvals and other
consents and approvals that have been obtained, are final and not subject to
review on appeal or to collateral attack, are in full force and effect and, in
the case of any such required under any Applicable Law or material Contract as
in effect on the Agreement Date, are listed on Schedule 3.03, or (b) violate,
conflict with, result in a breach of, constitute a default under, or result in
or require the creation of any Lien upon any assets of any of the Loan Party
under, (i) any material Contract to which any Loan Party is a party or by which
the any Loan Party or any of their respective properties may be bound or (ii)
any Applicable Law binding upon any Loan Party or any of their respective
properties.

 

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Section 3.04             Litigation.  Except as set forth on Schedule 3.04,
there are not, in any court or before any arbitrator of any kind or before or by
any governmental or non-governmental body, any actions, suits or proceedings
pending or threatened (nor, to the knowledge of the Borrower, is there any basis
therefor) against or in any other way relating to or affecting (a) any Loan
Party or any of such Loan Party’s businesses or properties or (b) any Loan
Document, except actions, suits or proceedings that, if adversely determined,
would not be reasonably expected to, singly or in the aggregate, have a
Materially Adverse Effect on (x) any Loan Party or (y) any Loan Document.

 

Section 3.05             Burdensome Provisions.  The Borrower is not a party to
or bound by any Contract or Applicable Law, compliance with which would
reasonably be expected to have a Materially Adverse Effect on (a) any Loan Party
or  (b) any Loan Document.

 

Section 3.06             No Adverse Change or Event.  Since June 29, 2001, no
change in the business, assets, Liabilities, financial condition, results of
operations or business prospects of the Borrower has occurred, and no event has
occurred or failed to occur, that has had or would reasonably be expected to
have, either alone or in conjunction with all other such changes, events and
failures, a Materially Adverse Effect on (a) any Loan Party or (b) any Loan
Document.

 

ARTICLE 4

 

CERTAIN COVENANTS

 

From the Agreement Date and until the Repayment Date,

 

A.                                   The Borrower shall:

 

Section 4.01             Preservation of Existence and Properties, Scope of
Business, Compliance with Law, Payment of Taxes and Claims, Preservation of
Enforceability.  (a) Preserve and maintain its corporate existence and all of
its other franchises, licenses, rights and privileges necessary or desirable in
the normal conduct of its business except in connection with sales of assets and
mergers and consolidations permitted under Section 4.07, (b) preserve and
protect all Intellectual Property, and preserve and maintain in good repair,
working order and condition all other properties, required for the conduct of
its business, (c) engage only in businesses in substantially the same fields as
the businesses conducted on the Agreement Date, (d) comply with Applicable Law
having jurisdiction over their respective businesses except such as may be
contested in good faith or to which a bona fide dispute may exist, (e) pay or
discharge when due all material Taxes and all Liabilities that might become a
Lien on any of its properties, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided, and (f) take all action and obtain all consents and Governmental
Approvals required so that its obligations under the Loan Documents will at all
times be legal, valid and binding and enforceable in accordance with their
respective terms, except that this

 

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Section 4.01 (other than clauses (a), in so far as it requires any Loan Party to
preserve its corporate existence, (c) and (f)) shall not apply in any
circumstance where noncompliance, together with all other noncompliances with
this Section 4.01, would not reasonably be expected to (assuming that any
dispute or contest were to be determined adversely to the Borrower) have a
Materially Adverse Effect on (x) any Loan Party or (y) any Loan Document.

 

Section 4.02             Insurance.  Maintain insurance with responsible
insurance companies against at least such risks and in at least such amounts as
is customarily maintained by similar businesses owning similar properties in
localities where the Borrower operates, or as may be required by Applicable Law.

 

Section 4.03             Use of Proceeds.  Use the proceeds of the Loans only
for general working capital and other general corporate requirements.  None of
the proceeds of any of the Loans shall be used to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulations U and X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any margin stock.  If requested by the Bank,
the Borrower shall complete and sign Part I of a copy of Federal Reserve Form
U-1 referred to in Regulation U and deliver such copy to the Bank.

 

B.                                     The Borrower shall not, directly or
indirectly:

 

Section 4.04             Guaranties.  Be obligated, at any time, in respect of
any Guaranty, except that this Section 4.04 shall not apply to (a) Existing
Guaranties and (b) Permitted Guaranties.

 

Section 4.05             Liens.  Permit to exist, at any time, any Lien upon any
of its accounts receivables or its other properties or assets of any character,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, except that this Section 4.05 shall not apply to Permitted Liens,
provided, however, that if, notwithstanding this Section 4.05, any Lien to which
this Section is applicable shall be created or arise, each relevant Loan Party
shall automatically be deemed to have granted to the Bank a Lien equally and
ratably with the other Liabilities secured thereby; provided further, however,
that notwithstanding such equal and ratable securing, the existence of such Lien
shall constitute a default by the Borrower in the performance or observance of
this Section 4.05.  The Borrower shall deliver to the Bank from time to time
upon demand, an updated extract from the land or such other register, evidencing
the absence of any recorded mortgage, charge, pledge, security interest, lien or
other encumbrance pertaining to the Borrower’s accounts receivables or other
properties or assets.

 

Section 4.06             Restricted Payments.  Make or declare or otherwise
become obligated to make any Restricted Payment, except that this Section 4.06
shall not apply to any Restricted Payment to the Parent or any wholly owned
Subsidiary of the Parent if (a) at both the time of the declaration or other
incurrence of the obligation to make such Restricted Payment, if any, and the
time of the making thereof, and immediately after giving effect thereto, a
Default would not exist and (b) the amount thereof, together with the amounts of
all Restricted Payments that the Borrower and its Subsidiaries have made or
declared or otherwise become obligated to make since the beginning of the fiscal
year, would not exceed the annual Net Profit of the Borrower

 

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and its Subsidiaries.  This Section 4.06 shall not prohibit the payment of a
dividend that constitutes a Restricted Payment if such Restricted Payment is
made within 45 days of the declaration thereof and if this Section 4.06 did not
apply to such Restricted Payment at the time of its declaration.

 

Section 4.07             Merger or Consolidation.  Merge into or consolidate
with any other entity, except Borrower may merge or consolidate with any other
entity so long as (1) the surviving, continuing or resulting entity (a) is a
solvent corporation, (b) is in any similar line of business as the Borrower, and
(c) expressly and unconditionally assumes the due and punctual performance of
all obligations under this Agreement, and (2) there exists no Event of Default
and after reasonable investigation by the Borrower no Event of Default will be
created as a result of such merger or consolidation; make any substantial change
in the nature of the Borrower’s business as conducted as of the date hereof;
acquire all or substantially all of the assets of any other entity except in the
ordinary course of business and (i) the Borrower may acquire all or
substantially all of the assets or capital stock of any entity so long as the
Borrower is the surviving or continuing entity, (ii) the Borrower may acquire
all or substantially all of the capital stock or property of an entity in
connection with a transaction in which the consideration consists of capital
stock of the Borrower or any of the Borrower’s Subsidiaries or, to the extent
any consideration consists of cash or other property (other than capital stock)
such transaction would be permitted as a Permitted Investment (other than
clauses (h) and (j) thereof), and (iii) there exists no Event of Default, nor
sell, lease, transfer or otherwise dispose of all or a substantial or material
portion of the Borrower’s assets except for sales, transfers or other
dispositions of (i) worn-out or obsolete property or equipment, (ii) assets
acquired in an acquisition subsequent to the Effective Date to the extent such
assets are sold or otherwise disposed of for cash or any other consideration
with represents the fair market value thereof, (iii) assets for fair market
value to the extent that the net after tax proceeds of such transaction are
applied within 365 days from the date of such transaction to the purchase,
acquisition or construction of assets which are to be used in the business of
the Borrower or any Subsidiary, (iv) assets which are substantially concurrently
received in exchange for assets which are to be used in the business of the
Borrower or any Subsidiary, (v) license agreements in the ordinary course of
business for the use of any intellectual property or other intangible assets of
the Borrower or any Subsidiary or the disposition of such intellectual property
which is determined by the Borrower to be no longer in its best interests to
retain, and (vi) factoring of accounts receivable from Nikon and Cannon for cash
in the ordinary course of business under facilities substantially similar to
those existing as of the date of this Agreement; provided that, in each case
under this Section 4.07, the Guarantor expressly confirms to the Bank that the
Guaranty Agreement and the Guarantor’s obligations thereunder remain in full
force and effect and subject to no defense or impairment.

 

Section 4.08             Minimum Tangible Net Worth.  Permit Tangible Net Worth
to be less than an amount, the Dollar Equivalent of which as of the date of the
current financial statements is 1,200,000,000 yen.

 

Section 4.09             Minimum Net Profit.   Permit Net Profit as of the end
of each of its quarterly accounting period to be less than zero.

 

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Section 4.10             Benefit Plans.  Have any pension plan other than those
that have been disclosed to and approved by the Bank prior to the Agreement
Date.

 

Section 4.11             Transactions with Affiliates.  Effect any transaction
with any Affiliate on a basis less favorable than would at the time be
obtainable for a comparable transaction in arms-length dealing with an unrelated
third party except (a) as set forth on Schedule 4.11, (b) transactions between
the Borrower and the Guarantor, (c) payment of reasonable fees and compensation
to officers and directors of the Borrower and reasonable indemnification
arrangements entered into by the Borrower, including any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, employee stock options and
employee stock ownership plans with respect to employees and officers of the
Borrower, approved by the Board of Directors, and (d) reimbursement of
out-of-pocket expenses incurred by directors in connection with Board of
Directors meetings and other Board duties.

 

Section 4.12             Issuance or Disposition of Capital Securities.  Issue
any of its Capital Securities or sell, transfer or otherwise dispose of any
Capital Securities of any Subsidiary without the prior written consent of the
Bank.

 

ARTICLE 5

 

FINANCIAL STATEMENTS AND INFORMATION

 

Section 5.01             Financial Statements and Information to Be
Furnished.  From the Agreement Date and until the Repayment Date, the Borrower
shall furnish to the Bank:

 

(a)  Quarterly Financial Statements; Director’s Certificate.  As soon as
available and in any event within 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of the Borrower,
commencing with the quarterly period ended September 28, 2001, balance sheets of
the Borrower as at the end of such quarterly period and the related statements
of income and retained earnings of the Borrower for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, setting forth in each case in comparative form the figures for
the corresponding periods of the previous fiscal year, and accompanied by a
certificate with respect thereto of a Representative Director of the Borrower in
the form of Schedule 5.01(a).

 

(b)  Year-End Financial Statements; Accountants’ and Director’s
Certificates.  As soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, commencing with the fiscal year ending
December 31, 2001:

 

(i)  balance sheets of the Borrower as at the end of such fiscal year and the
related statements of income and retained earnings of the Borrower for such
fiscal year, setting forth in comparative form the figures as at the end of and
for the previous fiscal year;

 

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(ii)  an audit report of Shin Nihon Ernst & Young, or other independent
certified public accountants of recognized standing satisfactory to the Bank, on
such of the financial statements referred to in clause (i) as financial
statements, which report shall be in scope and substance reasonably satisfactory
to the Bank; and

 

(iii)  a certificate of a Director of the Borrower in the form of Schedule
5.01(b).

 

(c)  Requested Information.  From time to time and promptly upon reasonable
request of the Bank, such Information regarding the Borrower Loan Documents, the
Loans or the business, assets, Liabilities, financial condition, results of
operations or business prospects of any Loan Party as the Bank may reasonably
request, in each case in form and substance and certified in a manner reasonably
satisfactory to the Bank.

 

(d)  Notice of Defaults, Material Adverse Changes and Other Matters.  Prompt
notice of: (i) any Default, (ii) the acquisition or formation of a new
Subsidiary and, in the case of each such new Subsidiary, its name, jurisdiction
of incorporation, the percentages of the various classes of its Capital
Securities owned by the Borrower and whether or not such new Subsidiary is a
Consolidated Subsidiary, (iii) any change in the name of any Subsidiary, its
jurisdiction of incorporation, the percentages of the various classes of its
Capital Securities owned by the Borrower or its status as a Consolidated or
non-Consolidated Subsidiary, (iv) the threatening or commencement of, or the
occurrence or nonoccurrence of any change or event relating to, any action, suit
or proceeding that would cause the Representation and Warranty contained in
Section 3.04 to be incorrect if made at such time, (v) the occurrence or
nonoccurrence of any change or event that would cause the Representation and
Warranty contained in Section 3.06 to be incorrect if made at such time, (vi)
any amendment of the articles of incorporation of the Borrower, and (vii) any
transaction referred to in Section 4.07.

 

Section 5.02             Accuracy of Financial Statements and Information.

 

(a)  Historical Financial Statements.  The Borrower hereby represents and
warrants that (i) Schedule 5.02(a) sets forth a complete and correct list of the
financial statements submitted by the Borrower to the Bank in order to induce it
to execute and deliver this Agreement, (ii) such financial statements are
complete and correct and present fairly in all material respects, in accordance
with Generally Accepted Accounting Principles (subject, in the case of unaudited
statements, to good faith year-end audit adjustments and the absence of
auditor’s footnotes), the financial position of the Borrower as at their
respective dates and the results of operations, retained earnings and, as
applicable, changes in financial position of the Borrower for the respective
periods to which such statements relate, and (iii) except as disclosed or
reflected in such financial statements, as at June 29, 2001, the Borrower did
not have any Liability, contingent or otherwise, or any unrealized or
anticipated loss, that, singly or in the aggregate, has had or might have a
Materially Adverse Effect on the Borrower.

 

(b)  Future Financial Statements.  The financial statements delivered pursuant
to Section 5.01(a) or (b) shall be complete and correct and present fairly in
all material respects, in accordance with Generally Accepted Accounting
Principles (except for changes therein or

 

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departures therefrom that are described in the certificate or report
accompanying such statements and that have been approved in writing by the
Borrower’s then current independent certified public accountants)(subject, in
the case of unaudited statements, to good faith year-end audit adjustments and
the absence of auditor’s footnotes), the financial position of the Borrower as
at that date and the results of operations and retained earnings of the Borrower
for the respective periods to which such statements relate, and the furnishing
of the same to the Bank shall constitute a representation and warranty by the
Borrower made on the date the same are furnished to the Bank to that effect and
to the further effect that, except as disclosed or reflected in such financial
statements, as at the respective dates thereof, the Borrower did not have any
Liability, contingent or otherwise, or any unrealized or anticipated loss, that,
singly or in the aggregate, has had or might have a Materially Adverse Effect on
the Borrower.

 

(c)  Historical Information.  The Borrower hereby represents and warrants that
all Information furnished to the Bank by or on behalf of the Borrower prior to
the Agreement Date in connection with or pursuant to the Loan Documents and the
relationships established thereunder, at the time the same was so furnished, but
in the case of Information dated as of a prior date, as of such date, (i) in the
case of any Information prepared in the ordinary course of business, was
complete and correct in all material respects in the light of the purpose
prepared, and, in the case of any Information the preparation of which was
requested by the Bank, was complete and correct in all material respects in
light of the circumstances under which the Information was given to the extent
necessary to give the Bank true and accurate knowledge of the subject matter
thereof, (ii) did not contain any untrue statement of a material fact in light
of the circumstances under which the Information was given, and (iii) did not
omit to state a material fact necessary in order to make the statements
contained therein not misleading in the light of the circumstances under which
they were made.

 

(d)  Future Information.  All Information furnished to the Bank by or on behalf
of any Loan Party on or after the Agreement Date in connection with or pursuant
to the Loan Documents or in connection with or pursuant to any amendment or
modification of, or waiver of rights under, the Loan Documents, shall, at the
time the same is so furnished, but in the case of Information dated as of a
prior date, as of such date, (i) in the case of any Information prepared in the
ordinary course of business, be complete and correct in all material respects in
the light of the purpose prepared, and, in the case of any Information required
by the terms of the Loan Documents or the preparation of which is requested by
the Bank, be complete and correct in all material respects in light of the
circumstances under which the Information is delivered to the extent necessary
to give the Bank true and accurate knowledge of the subject matter thereof, (ii)
not contain any untrue statement of a material fact in all material respects in
light of the circumstances under which the Information is delivered, and (iii)
not omit to state a material fact necessary in order to make the statements
contained therein not misleading in the light of the circumstances under which
they are made, and the furnishing of the same to the Bank shall constitute a
representation and warranty by the Borrower made on the date the same are so
furnished to the effect specified in clauses (i), (ii) and (iii).

 

Section 5.03             Additional Covenants Relating to Disclosure.  From the
Agreement Date and until the Repayment Date, the Borrower shall:

 

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(a)  Accounting Methods and Financial Records.  Maintain a system of accounting,
and keep such books, records and accounts (which shall be true and complete), as
may be required or necessary to permit (i) the preparation of financial
statements required to be delivered pursuant to Section 5.01(a) and (b) and (ii)
the determination of the compliance of the Borrower with the terms of the Loan
Documents.

 

(b)  Fiscal Year.  Maintain the same opening and closing dates for each fiscal
year as for the fiscal year reflected in the Base Financial Statements or, if
the opening and closing dates for the fiscal year reflected in the Base
Financial Statements were determined pursuant to a formula, determine the
opening and closing dates for each fiscal year pursuant to the same formula.

 

(c)  Visits, Inspections and Discussions.  Permit, or, in the case of premises,
property, books, records or Persons not within its immediate control, promptly
take such actions as are necessary or desirable in order to permit,
representatives (whether or not officers or employees) of the Bank, from time to
time, as often as may be reasonably requested upon 24 hour prior written notice
during regular business hours, to (i) visit any of its premises or property or
any premises or property of others on which any of its property or books and
records (or books and records of others relating to it) may be located, (ii)
inspect, and verify the amount, character and condition of, any of its property,
(iii) review and make extracts from its books and records and books and records
of others relating to it, including management letters prepared by its
independent certified public accountants, and (iv) discuss with any principal
officers and independent certified public accountants, its business, assets,
Liabilities, financial condition, results of operation. The Borrower hereby
authorizes and directs all principal offices, independent certified public
accountants and suppliers (i) to permit representatives of the Bank to make such
visits, inspections, reviews and extracts of premises, property, books and
records within their possession or control and (ii) to discuss such matters with
such representatives.

 

ARTICLE 6

 

DEFAULT

 

Section 6.01             Events of Default.  Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary, or within or without the control of the
Borrower or any other Loan Party, or be effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:

 

(a)  Any payment of principal of or interest on any of the Loans or of the
commitment fee shall not be made within five (5) days after its due date
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) and in accordance with the terms of this Agreement;

 

(b)  Any Loan Document Representation and Warranty shall at any time prove to
have been incorrect or misleading in any material respect when made;

 

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(c)          (i)  The Borrower shall default in the performance or observance of

 

(A)  any term, covenant, condition or agreement contained in Section 4.01(a)
(insofar as such Section requires the preservation of the corporate existence of
the Borrower), 4.01(f), 4.03 through 4.12, 5.01(d)(i), 5.03(b) or 5.03(c); or

 

(B)  any term, covenant, condition or agreement contained in this Agreement
(other than a term, covenant, condition or agreement a default in the
performance or observance of which is elsewhere in this Section specifically
dealt with) and, if capable of being remedied, such default shall continue
unremedied for a period of 30 days after notice shall have been given by the
Bank to the Borrower requiring that such default be cured; or

 

(II)  ANY LOAN PARTY SHALL DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF:

 

(A)  SECTION 4 OF THE GUARANTY AGREEMENT; OR

 

(B)  any term, covenant, condition or agreement contained in any Loan Document
(other than any term, covenant, condition or agreement a default in the
performance or observance of which is elsewhere in this Section specifically
dealt with) and, if capable of being remedied, such default shall continued
unremedied for a period of 30 days after notice shall have been given by the
Bank to the Borrower such Loan Party requiring that such default be cured;

 

(d)  An “Event of Default” shall occur and be continuing under the Parent Credit
Agreement;

 

(e)  (i)  The Borrower or any other Loan Party shall fail to pay, in accordance
with its terms and when due and payable, any of the principal of or interest on
any Indebtedness (other than the Loans) having a then outstanding principal
amount in excess of $1,000,000 (or the equivalent in other currencies), (ii) the
maturity of any such Indebtedness shall, in whole or in part, have been
accelerated, or any such Indebtedness shall, in whole or in part, have been
required to be prepaid prior to the stated maturity thereof, in accordance with
the provisions of any Contract evidencing, providing for the creation of or
concerning such Indebtedness, or (iii) (A) any event shall have occurred and be
continuing that permits (or, with the passage of time or the giving of notice or
both, would permit) any holder or holders of such Indebtedness, any trustee or
agent acting on behalf of such holder or holders or any other Person so to
accelerate such maturity or require any such prepayment and (B) if the Contract
evidencing, providing for the creation of or concerning such Indebtedness
provides for a cure period for such event, such event shall not be cured prior
to the end of such cure period or such shorter period of time as the Bank may
specify.

 

(f)  A default shall be continuing under any Contract (other than a Contract
relating to Indebtedness to which clause (d) of this Section 6.01 is applicable)
binding upon the Borrower or any other Loan Party pursuant to which the Borrower
or any other Loan Party has incurred any debt or other material liability to any
person or entity aggregating in excess of $1,000,000, such default resulting in
a right by a third party to accelerate such debt or material

 

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liability, except a default that, together with all other such defaults, has not
had and will not have a Materially Adverse Effect on (i) the Borrower or any
other Loan Party or (ii) any Loan Document;

 

(g)  (i)  The Borrower or any other Loan Party shall (A) commence a voluntary
case under the U.S. Federal or Japanese bankruptcy laws (as now or hereafter in
effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, (C) consent to or fail to contest in a
timely and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (D) apply for, or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or the like
of itself or of a substantial part of its assets, domestic or foreign, (E) admit
in writing its inability to pay, or generally not be paying, its debts (other
than those that are the subject of bona fide disputes) as they become due, (F)
make a general assignment for the benefit of creditors, or (G) take any
corporate action for the purpose of effecting any of the foregoing; or

 

(ii)  (A)  A case or other proceeding shall be commenced against the Borrower or
any other Loan Party seeking (1) relief under the U.S. Federal or Japanese
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, or (2) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Borrower or any other Loan
Party, or of all or any substantial part of the assets, domestic or foreign, of
the Borrower or any other Loan, and such case or proceeding shall continue
undismissed or unstayed for a period of 60 days, or (B) an order granting the
relief requested in such case or proceeding the Borrower or any other Loan Party
(including an order for relief under such Federal bankruptcy laws) shall be
entered;

 

(h)  The filing of a notice of judgment lien against a substantial part of the
property of the Borrower, or the recording of any abstract of judgment against a
substantial part of the property of Borrower, in any county in which Borrower
has an interest in real property, or the service of a notice of levy and/or of a
writ of attachment or execution, or other like process, against a substantial
part of the assets of Borrower, or the entry of a judgement against Borrower and
such writ, judgment, judgment lien, levy warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 45 days
after commencement, filing recording, service or levy;

 

(i)  Any Loan Party or any Affiliate of any Loan Party asserts, or any Loan
Party or any Affiliate of any Loan Party or any other Person institutes any
proceedings seeking to establish, that any provision of the Loan Documents is
invalid, not binding or unenforceable.

 

Section 6.02             Remedies upon Event of Default.  During the continuance
of any Event of Default (other than one specified in Section 6.01(g)) and in
every such event, the Bank may do either or both of the following: (a) declare,
in whole or, from time to time, in part, the principal of and interest on the
Loans and all other amounts owing under the Borrower Loan Documents to be, and
the Loans and all such other amounts shall thereupon and to that extent become,
due and payable and (b) terminate, in whole or, from time to time, in part, the
Commitment. Upon the

 

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occurrence of an Event of Default specified in Section 6.01(g), automatically
and without any notice to the Borrower, (a) the principal of and interest on the
Loans and all other amounts owing under the Borrower Loan Documents shall be due
and payable and (b) the Commitment shall terminate. Presentment, demand, protest
or notice of any kind (other than the notice provided for in the first sentence
of this Section 6.02) are hereby expressly waived.

 

ARTICLE 7

 

ADDITIONAL CREDIT FACILITY PROVISIONS

 

Section 7.01             Mandatory Suspension of Loans.  The Bank’s obligations
to make or continue Loans shall be suspended if:

 

(a)  on or prior to the determination of an interest rate for any Interest
Period, the Bank determines that for any reason appropriate quotations are not
available to it (including, in the case of the Yen COF Rate, quotations in the
interbank market selected by it for deposits with it) for purposes of
determining the Yen COF Rate for such Interest Period or that such Rate would
not accurately reflect the cost to the Bank of making or continuing a Loan for
such Interest Period;

 

(b)  at any time the Bank determines that any Regulatory Change makes it
unlawful or impracticable for the Bank or the Lending Office to make or continue
any Loan or to comply with its obligations hereunder in respect thereof; or

 

(c)  the Bank determines that, by reason of any Regulatory Change, the Bank or
the Lending Office is restricted, directly or indirectly, in the amount that it
may hold of (i) a category of liabilities that includes deposits by reference to
which, or on the basis of which, the interest rate applicable to Loans is
directly or indirectly determined or (ii) the category of assets that includes
Loans.

 

The Bank shall promptly notify the Borrower of any circumstance that would make
the provisions of this Section 7.01 applicable, but the failure to give any such
notice shall not affect the Bank’s rights hereunder.

 

Section 7.02             Regulatory Changes.  If in the determination of the
Bank (a) any Regulatory Change shall directly or indirectly (i) reduce the
amount of any sum received or receivable by the Bank with respect to any Loan or
the return to be earned by the Bank on any Loan, (ii) impose a cost on the Bank
or any Affiliate of the Bank that is attributable to the making or maintaining
of, or the Bank’s commitment to make, any Loan, (iii) require the Bank or any
Affiliate of the Bank to make any payment on or calculated by reference to the
gross amount of any amount received by the Bank under any Loan Document or (iv)
reduce, or have the effect of reducing, the rate of return on any capital of the
Bank or any Affiliate of the Bank that the Bank or such Affiliate is required to
maintain on account of any Loan or the Bank’s commitment to make any Loan and
(b) such reduction, increased cost or payment shall not be fully compensated for
by an adjustment in the applicable rates of interest payable under the Loan
Documents, then the Borrower shall pay to the Bank such additional amounts as
the Bank

 

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reasonably determines will, together with any adjustment in the applicable rates
of interest payable hereunder, fully compensate for such reduction, increased
cost or payment.  Such additional amounts shall be payable, in the case of those
applicable to prior periods, within 15 days after request by such Bank for such
payment and, in the case of those applicable to future periods, on the dates
specified, or determined in accordance with a method specified, by the Bank. 
The Bank will promptly notify the Borrower of any determination made by it
referred to in clauses (a) and (b) above, but the failure to give such notice
shall not affect the Bank’s right to compensation.

 

Section 7.03             Capital Requirements.  If, in the determination of the
Bank, the Bank or any Affiliate of the Bank is required, under Applicable Law,
interpretations, directives, requests and guidelines (whether or not having the
force of law) to maintain capital on account of any Loan or the Bank’s
commitment to make any Loan, then, upon reasonable request by the Bank, the
Borrower shall from time to time thereafter pay to the Bank such additional
amounts as the Bank reasonably determines will fully compensate for any
reduction in the rate of return on the capital that the Bank or such Affiliate
is so required to maintain on account of such Loan or commitment suffered as a
result of such capital requirement. Such additional amounts shall be payable, in
the case of those applicable to prior periods, within 15 days after request by
the Bank for such payment and, in the case of those relating to future periods,
on the dates specified, or determined in accordance with a method specified, by
the Bank.

 

Section 7.04             Funding Losses.  The Borrower shall pay to the Bank,
upon request, such amount or amounts as the Bank reasonably determines are
necessary to compensate it for any loss, cost or expense incurred by it as a
result of (a) any payment or prepayment of a Loan on a date other than the last
day of an Interest Period for such Loan or (b) a Loan not being made for any
reason after the Borrower has given a notice of borrowing, including for
Borrower’s failure to fulfill the conditions specified in this Agreement, or any
payment of principal thereof or interest thereon not being made, on the date
therefor determined in accordance with the applicable provisions of this
Agreement. At the election of the Bank, and without limiting the generality of
the foregoing, but without duplication, such compensation on account of losses
may include an amount equal to the excess of (i) the interest that would have
been received from the Borrower under this Agreement on any amounts to be
reemployed during an Interest Period or its remaining portion over (ii) the
interest component of the return that the Bank determines it could have obtained
had it placed such amount on deposit in the interbank Yen market selected by it
for a period equal to such Interest Period or its remaining portion.

 

Section 7.05             Determinations.  In making the determinations
contemplated by Sections 7.01, 7.02, 7.03, and 7.04, the Bank may make such
estimates, assumptions, allocations and the like that the Bank in good faith
determines to be appropriate, and the Bank’s selection thereof in accordance
with this Section 7.05, and the determinations made by the Bank on the basis
thereof, shall be final, binding and conclusive upon the Borrower, except, in
the case of such determinations, for manifest errors in computation or
transmission; provided, that the Borrower shall not be obligated to compensate
or reimburse the Bank for any amount that the Bank knows has been incurred more
than one year before the date the Bank requests for such compensation or
reimbursement.  The Bank shall furnish to the Borrower upon request a
certificate outlining in reasonable detail the computation of any amounts
claimed by it under this Article 7 and the assumptions underlying such
computations.

 

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Section 7.06             Change of Lending Office.  If an event occurs with
respect to a Lending Office that obligates the Borrower to pay any amount under
Section 1.09(c), makes operable the provisions of clause (b) or (c) of Section
7.01 or entitles the Bank to make a claim under Section 7.02 or 7.03, the Bank
shall, if requested by the Borrower, use reasonable efforts to designate another
Lending Office or Offices the designation of which will reduce the amount the
Borrower is so obligated to pay, eliminate such operability or reduce the amount
the Bank is so entitled to claim, provided that such designation would not, in
the sole and absolute discretion of the Bank, be disadvantageous to the Bank in
any manner or contrary to Bank policy.  The Bank may at any time and from time
to time change any Lending Office and shall give notice of any such change to
the Borrower.  Except in the case of a change in Lending Offices made at the
request of the Borrower, the designation of a new Lending Office by the Bank
shall not obligate the Borrower to pay any amount to the Bank under Section
1.09(c), make operable the provisions of clause (b) or (c) of Section 7.01 or
entitle the Bank to make a claim under Section 7.02 or 7.03 if such obligation,
the operability of such clause or such claim results solely from such
designation and not from a subsequent Regulatory Change.

 

ARTICLE 8

 

MISCELLANEOUS

 

Section 8.01             Notices and Deliveries.

 

(a)  Manner of Delivery.  All notices, communications and materials (including
all Information) to be given or delivered pursuant to the Borrower Loan
Documents shall, except in those cases where giving notice by telephone is
expressly permitted, be given or delivered in writing (which shall include telex
and telecopy transmissions). Notices under Sections 1.02, 1.07 and 6.02 may be
by telephone, promptly, in the case of each notice other than one under Section
6.02, confirmed in writing. In the event of a discrepancy between any telephonic
notice and any written confirmation thereof, such written confirmation shall be
deemed the effective notice except to the extent that the Bank has acted in
reliance on such telephonic notice.

 

(b)  Addresses.  All notices, communications and materials to be given or
delivered pursuant to the Borrower Loan Documents shall be given or delivered at
the following respective addresses and telex, telecopier and telephone numbers
and to the attention of the following individuals or departments:

 

(A)  if to the Borrower, to it at:

 

Cymer Japan, Inc.

4-17-8 Minamiyawata

Ichikawa-shi, Chiba Prefecture

272-0023 Japan

Telex No.:

Telecopier No.: 47-393-5672

Telephone No.: 47-393-5668

 

Attention:

 

 

 

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(B)  if to the Bank, to it at:

 

Wells Fargo HSBC Trade Bank, N.A.

333 South Grand Avenue, Suite 800

Los Angeles, CA 90071  U.S.A.

Telex No.:  184904 WELLS UT

Telecopier No.: (213)625-1055

Telephone No.: (213)253-3573

 

Attention:  Regional Vice President

 

or at such other address or telex, telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify for the purpose in a notice to the
other specifically captioned “Notice of Change of Address”.

 

(c)  Effectiveness.  Each notice and communication and any material to be given
or delivered pursuant to the Borrower Loan Documents shall be deemed so given or
delivered (A) if sent by registered or certified mail, postage prepaid, return
receipt requested, on the third Business Day after such notice, communication or
material, addressed as above provided, is delivered to a United States post
office and a receipt therefor is issued thereby, (B) if sent by any other means
of physical delivery, when such notice, communication or material is delivered
to the appropriate address as above provided, (C) if sent by telex, when such
notice, communication or material is transmitted to the appropriate number
determined as above provided in this Section 8.01 and the appropriate
answer-back is received, (D) if sent by telecopier, when such notice,
communication or material is transmitted to the appropriate telecopier number as
above provided and is received at such number and (E) if given by telephone,
when communicated to the individual or any member of the department specified as
the individual or department to whose attention notices, communications and
materials are to be given or delivered, or, in the case of notice by the Bank to
the Borrower under Section 6.02 given by telephone as above provided, if any
individual or any member of the department to whose attention notices,
communications and materials are to be given or delivered is unavailable at the
time, to any other officer or employee of the Borrower, except that (x) notices
of a change of address, telex, telecopier or telephone number or individual or
department to whose attention notices, communications and materials are to be
given or delivered shall not be deemed given until received and (y) notices,
communications and materials to be given or delivered to the Bank pursuant to
Sections 1.02, 1.07 and Article 5 shall not be deemed given or delivered until
received by the officer of the Bank responsible, at the time, for the
administration of the Loan Documents.

 

(d)  Reasonable Notice.  Any requirement under Applicable Law of reasonable
notice by the Bank to the Borrower of any event in connection with, or in any
way related to, the Loan Documents or the exercise by the Bank of any of its
rights thereunder shall

 

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be met if notice of such event is given to the Borrower in the manner prescribed
above at least 10 days before (A) the date of such event or (B) the date after
which such event will occur.

 

Section 8.02             Expenses; Indemnification.  Whether or not any Loans
are made hereunder, the Borrower shall:

 

(a)  pay or reimburse the Bank for all transfer, documentary, stamp and similar
taxes, and all recording and filing fees and taxes, payable in connection with,
arising out of, or in any way related to, the execution, delivery, performance
or enforcement of the Loan Documents or the making of the Loans;

 

(b)  pay or reimburse the Bank for all costs and expenses (including reasonable
fees and disbursements of legal counsel, appraisers, accountants and other
experts employed or retained by the Bank) incurred by the Bank in connection
with, arising out of, or in any way related to (i) the negotiation, preparation,
execution and delivery of the Loan Documents and any waiver, amendment or
consent thereunder or thereto, whether or not executed, (ii) the administration
of and any operations under the Loan Documents, (iii) consulting with respect to
any matter in any way arising out of, related to, or connected with, the Loan
Documents, including (A) the protection, preservation, exercise or enforcement
of any of its rights under or related to the Loan Documents or (B) the
performance of any of its obligations under or related to the Loan Documents, or
(iv) protecting, preserving, exercising or enforcing any of its rights under or
related to the Loan Documents; and

 

(c)  indemnify and hold each Indemnified Person harmless from and against all
losses (including judgments, penalties and fines) suffered, and pay or reimburse
each Indemnified Person for all costs and expenses (including reasonable fees
and disbursements of legal counsel and other experts employed or retained by
such Indemnified Person) incurred, by such Indemnified Person in connection
with, arising out of, or in any way related to (i) any Loan Document Related
Claim (whether asserted by such Indemnified Person or the Borrower or any other
Person), including the prosecution or defense thereof and any litigation or
proceeding with respect thereto (whether or not, in the case of any such
litigation or proceeding, such Indemnified Person is a party thereto), or (ii)
any investigation, governmental or otherwise, arising out of, related to, or in
any way connected with, the Loan Documents or the relationships established
thereunder, except that the foregoing indemnity shall not be applicable to any
loss suffered by any Indemnified Person to the extent such loss is determined by
a judgment of a court that is binding on the Borrower and such Indemnified
Person, final and not subject to review on appeal, to be the result of acts or
omissions on the part of such Indemnified Person constituting (x) willful
misconduct or gross negligence, (y) knowing violations of law or (z) in the case
of claims by the Borrower against such Indemnified Person, such Indemnified
Person’s failure to observe any other standard applicable to it under any of the
other provisions of the Loan Documents or, but only to the extent not waivable
thereunder, Applicable Law.

 

Section 8.03             Amounts Payable Due upon Request for Payment.  All
amounts payable by the Borrower under Section 8.02 and under the other
provisions of the Borrower Loan Documents shall, except as otherwise expressly
provided, be promptly due upon request for the payment thereof.

 

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Section 8.04             Remedies of the Essence.  The various rights and
remedies of the Bank under the Borrower Loan Documents are of the essence of
those agreements, and the Bank shall be entitled to obtain a decree requiring
specific performance of each such right and remedy.

 

Section 8.05             Rights Cumulative.  Each of the rights and remedies of
the Bank under the Loan Documents shall be in addition to all of its other
rights and remedies under the Loan Documents and Applicable Law, and nothing in
the Loan Documents shall be construed as limiting any such rights or remedies.

 

Section 8.06             Disclosures.  The Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as “confidential” or “secret” by the Borrower;
provided that no information shall be considered “confidential” or “secret”
hereunder if such information (i) is or becomes generally available to the
public through no violation of this Agreement by the Bank, (ii) was in the
Bank’s possession or known by it without restriction prior to receipt from the
Borrower, or (iii) was rightfully disclosed to the Bank by a third party without
restriction.  Notwithstanding the foregoing, the Bank may disclose to, and
exchange and discuss with, any other Person (the Bank and each such other Person
being hereby authorized to do so) any information concerning the Borrower
(whether received by the Bank or such other Person in connection with or
pursuant to the Loan Documents or otherwise) for the purpose of (a) complying
with Applicable Law, (b) protecting, preserving, exercising or enforcing any of
its rights under or related to the Loan Documents, (c) performing any of its
obligations under or related to the Loan Documents or (d) consulting with
respect to any of the foregoing matters.

 

Section 8.07             Amendments; Waivers.  Any term, covenant, agreement or
condition of the Borrower Loan Documents may be amended, and any right under the
Borrower Loan Documents may be waived, if, but only if, such amendment or waiver
is in writing and is signed by the Bank and, in the case of an amendment, by the
Borrower.  Unless otherwise specified in such waiver, a waiver of any right
under the Borrower Loan Documents shall be effective only in the specific
instance and for the specific purpose for which given.  No election not to
exercise, failure to exercise or delay in exercising any right, nor any course
of dealing or performance, shall operate as a waiver of any right of the Bank
under the Borrower Loan Documents or Applicable Law, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right of the Bank under the Borrower Loan
Documents or Applicable Law.

 

Section 8.08             Set-Off; Suspension of Payment and Performance.  The
Bank is hereby authorized by the Borrower, at any time and from time to time,
without notice, (a) during any Event of Default, to set off against, and to
appropriate and apply to the payment of, the Liabilities of the Borrower under
the Borrower Loan Documents (whether matured or unmatured, fixed or contingent
or liquidated or unliquidated) any and all Liabilities owing by the Bank or any
of its Affiliates to the Borrower (whether payable in Yen or any other currency,
whether matured or unmatured and, in the case of Liabilities that are deposits,
whether general or special, time or demand and however evidenced and whether
maintained at a branch or office located within or without the United States)
and (b) during any Default, to suspend the payment and performance of such
Liabilities owing by the Bank or its Affiliates and, in the case of

 

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Liabilities that are deposits, to return as unpaid for insufficient funds any
and all checks and other items drawn against such deposits.

 

Section 8.09             Assignments and Participations.  (a) 
Assignments.  (i)  The Borrower may not assign any of its rights or obligations
under the Borrower Loan Documents without the prior written consent of the Bank,
and no assignment of any such obligation shall release the Borrower therefrom
unless the Bank shall have consented to such release in a writing specifically
referring to the obligation from which the Borrower is to be released.

 

(II)  THE BANK MAY FROM TIME TO TIME ASSIGN ANY OR ALL OF ITS RIGHTS AND
OBLIGATIONS UNDER THE BORROWER LOAN DOCUMENTS TO ANY AFFILIATE OF THE BANK OR AN
ELIGIBLE ASSIGNEE WITHOUT THE CONSENT OF THE BORROWER. ANY ASSIGNMENT BY THE
BANK OF ANY OR ALL OF ITS OBLIGATIONS UNDER THE BORROWER LOAN DOCUMENTS SHALL
RELEASE THE BANK THEREFROM IF SUCH ASSIGNMENT IS TO AN AFFILIATE OF THE BANK OR
AN ELIGIBLE ASSIGNEE OR IS CONSENTED TO IN WRITING BY THE BORROWER; PROVIDED,
HOWEVER, THAT THE BORROWER MAY CONTINUE TO DEAL SOLELY AND DIRECTLY WITH THE
BANK OR ITS AFFILIATES IN CONNECTION WITH THE INTEREST SO ASSIGNED UNTIL WRITTEN
NOTICE OF SUCH ASSIGNMENT, TOGETHER WITH PAYMENT INSTRUCTIONS, ADDRESSES AND
RELATED INFORMATION WITH RESPECT TO THE ASSIGNEE, SHALL HAVE BEEN GIVEN TO THE
BORROWER BY THE BANK AND THE ASSIGNEE.  IN CONNECTION THEREWITH, THE BANK MAY
DISCLOSE ANY INFORMATION RELATING TO THE LOAN DOCUMENTS, BORROWER OR ITS
BUSINESS, OR THE GUARANTOR OR ITS BUSINESS.

 

(b)  Participations.  The Bank may from time to time sell or otherwise grant
participations in any or all of its rights and obligations under the Borrower
Loan Documents without the consent of the Borrower to one or more Eligible
Assignees or Affiliates.

 

(c)  Rights of Assignees and Participants.  Each assignee of, and each holder of
a participation in, the rights of the Bank under the Borrower Loan Documents, if
and to the extent the applicable assignment or participation agreement so
provides, (i) shall, with respect to its assignment or participation, be
entitled to all of the rights of the Bank (as fully, in the case of a holder of
a participation, as though it were the Bank) and (ii) may exercise any and all
rights of set-off or banker’s lien with respect thereto (as fully, in the case
of a holder of a participation, as though the Borrower were directly indebted to
such holder for amounts payable under the Borrower Loan Documents to which such
holder is entitled under the applicable participation agreement); provided,
however, that no assignee or holder of a participation shall be entitled to any
amounts that would otherwise be payable to it with respect to its assignment or
participation under Section 1.09(b) or (c) or Section 7.02 unless (x) such
amounts are payable in respect of Regulatory Changes that are enacted, adopted
or issued after the date the applicable assignment or participation agreement
was executed or (y) such amounts would have been payable to the Bank that made
such assignment or granted such participation if such assignment had not been
made or such participation had not been granted.

 

Section 8.10             Governing Law.  This Agreement and the Note shall be
construed in accordance with and governed by the law of the State of California
(without giving effect to its choice of law principles).

 

Section 8.11             Judicial Proceedings; Waiver of Jury Trial.  Any
judicial proceeding brought against the Borrower with respect to any Loan
Document Related Claim may be brought

 

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in any court of competent jurisdiction in the State of California or in Japan as
selected by the Bank, and, by execution and delivery of this Agreement, the
Borrower (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby in connection with any Loan
Document Related Claim and (b) irrevocably waives any objection it may now or
hereafter have as to the venue of any such proceeding brought in such a court or
that such a court is an inconvenient forum.  The Borrower hereby waives personal
service of process and consents that service of process upon it may be made by
certified or registered mail, return receipt requested, at its address specified
or determined in accordance with the provisions of Section 8.01(a)(ii), and
service so made shall be deemed completed on the third Business Day after such
service is deposited in the mail. Nothing herein shall affect the right of the
Bank or any other Indemnified Person to serve process in any other manner
permitted by law or shall limit the right of the Bank or any other Indemnified
Person to bring proceedings against the Borrower in the courts of any other
jurisdiction. Any judicial proceeding by the Borrower against the Bank involving
any Loan Document Related Claim shall be brought only in a court located in the
State of California. THE BORROWER AND THE BANK HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING ANY LOAN DOCUMENT
RELATED CLAIM.

 

Section 8.12             LIMITATION OF LIABILITY.  NEITHER THE BANK NOR ANY
OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE
BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH
ANY LOAN DOCUMENT RELATED CLAIM.

 

Section 8.13             Severability of Provisions.  Any provision of the
Borrower Loan Documents that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, the Borrower hereby
waives any provision of Applicable Law that renders any provision of the
Borrower Loan Documents prohibited or unenforceable in any respect.

 

Section 8.14             Counterparts.  This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.

 

Section 8.15             Survival of Obligations.  Except as otherwise expressly
provided therein, the rights and obligations of the Borrower, the Bank and the
other Indemnified Persons under the Borrower Loan Documents shall survive the
Repayment Date.

 

Section 8.16             Entire Agreement.  This Agreement and the Note embody
the entire agreement between the Borrower and the Bank relating to the subject
matter hereof and supersede all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.

 

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Section 8.17             Successors and Assigns.  All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

 

Section 8.18             Currency of Payment.  The obligation of the Borrower to
pay in Yen (or such other currency as may be specified herein) under this
Agreement or the Loan Documents shall not be deemed to have been novated,
discharged or satisfied by any tender of (or recovery under judgement expressed
in) any currency other than Yen (or other than such specified currency), except
to the extend to which such tender (or recovery) shall result in the effective
payment of such aggregate amount in Yen (or such other currency) at the place
where such payment is to be made and, accordingly, the amount (if any) by which
any such tender (or recovery) shall fall short of such amount shall be and
remain due to the Bank as a separate obligation, unaffected by judgement having
been obtained (if such is the case) for any other amounts due or in respect of
this Agreement of the Loan Documents.  For the avoidance of doubt, it is
understood that the exchange rate used for this purpose may be less favorable to
the Borrower than the definition of the Applicable Currency Exchange Rate.

 

Section 8.19             Process Agent.   The Borrower irrevocably designates,
appoints, and empowers the Guarantor to receive for it and on its behalf,
service of process issued out of a court of competent jurisdiction in the State
of California in any proceedings arising out of or in connection with Loan
Document Related Claim.  If at any time such process agent shall cease for any
reason to act as such, the Borrower shall irrevocably appoint and designate
without delay another reputable person to act as such agent and shall promptly
deliver to the Bank evidence in writing of such other agent’s acceptance of such
appointment and designation.  Failing any such appointment and designation
within seven (7) days after written demand therefor by the Bank, the Bank shall
be entitled at the cost of the Borrower irrevocably to appoint and designate
another such agent on behalf of the Borrower, and the Borrower hereby appoints
the Bank its duly authorized attorney for this purpose.  The Borrower agrees
that service on any such person in the State of California shall be deemed due
service for the purpose of the Proceedings in courts therein without prejudice
to any other mode of service and agrees that the failure of the person
authorized in the State of California to give any notice of any such service to
it shall not impari or affect the validity of such service or of any judgment
rendered in any proceeding based thereon.

 

ARTICLE 9

 

INTERPRETATION

 

Section 9.01             Definitional Provisions.  (a)  Defined Terms.  For the
purposes of this Agreement:

 

“Adjusted Euroyen Rate” means, for any Interest Period, a rate per annum
(rounded upward, if necessary, to the next higher 1/100 of 1%) equal to the rate
obtained by dividing (i) the Yen COF Rate for such Interest Period by (ii) a
percentage equal to 1 minus the Reserve Requirement in effect from time to time
during such Interest Period.

 

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“Affiliate” means, with respect to a Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such first Person; unless otherwise specified,
“Affiliate” means an Affiliate of the Borrower.

 

“Agreement” means this Agreement, including all schedules, annexes and exhibits
hereto.

 

“Agreement Date” means the date set forth as such on the last signature page
hereof.

 

“Applicable Currency Exchange Rate” means, as of any date of determination and
as the context may require, the telegraphic transfer mean rate of exchange (net
of all fees and commissions) then applicable to: (a) the conversion of Dollars
to Yen or (b) the conversion of Yen to Dollars, as the context may require.  The
applicable rate of exchange shall be the spot mid rate or the TTM rate at 10:00
a.m. in Tokyo indicated on Reuter’s page TKFF on the relevant date (or, if no
such quotations shall be available on such date, on the date closest to such
date).  For the avoidance of doubt, this rate will apply only for the notional
currency conversions expressly provided for herein.

 

“Applicable Law” means, anything in Section 8.10 to the contrary
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of governmental bodies, (B) Governmental Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or
admiralty) and arbitrators.

 

“Bank” means (i) Wells Fargo HSBC Trade Bank, N.A. and (ii) any Person that has
been assigned any or all of the rights or obligations of the Bank pursuant to
Section 8.09(a).

 

“Bank’s Office” means the address of the Bank specified in or determined in
accordance with the provisions of Section 8.01(a)(ii).

 

“Base Financial Statements” means the most recent, audited balance sheet of the
Borrower referred to in Schedule 5.02(a) and the related statements of income
and retained earnings and for the fiscal year ended with the date of such
balance sheet.

 

“Borrower” means Cymer Japan, Inc., a Japanese corporation.

 

“Borrower Loan Documents” means the Loan Documents to which the Borrower is a
party.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
banking institutions are authorized or required by law or regulation to be
closed in: (a) London, England for the purposes of determining Yen COF Rate, and
(b) New York, San Francisco, or Tokyo for all other purposes.

 

“Capital Security” means, with respect to any Person, (i) any share of capital
stock of such Person or (ii) any security convertible into, or any option,
warrant or other right to acquire, any share of capital stock of such Person.

 

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“Certificate” means, an Officer’s or Director’s certificate substantially in the
form of Schedule 2.01 (c).

 

“Commitment” means (i) an amount of Yen the Dollar Equivalent of which as of
five Business Days prior to making each Loan hereunder is $20,000,000, as the
same may be reduced from time to time pursuant to Section 1.07, or (ii) as the
context may require, the obligation of the Bank to make Loans in an aggregate
unpaid principal amount not exceeding such amount.

 

“Consolidated Net Income” means, for any period, the amount of net income of the
Borrower for such period provided that there shall be excluded: (i) any net
income (or net loss) of a Consolidated Subsidiary (A) for any period during
which it was not a Consolidated Subsidiary or (B), in case of any such net
income, to the extent that the declaration or payment of dividends or similar
distributions by that Consolidated Subsidiary is not at the time permitted by
operation of the terms of any Contract or Applicable Law; (ii) any net income
(or net loss) of any Person (other than a Consolidated Subsidiary) in which the
Borrower or any Consolidated Subsidiary has an ownership interest, except to the
extent that any such income has actually been received by the Borrower or such
Subsidiary in the form of cash dividends or similar distributions; (iii) any
restoration of any contingency reserve, except to the extent that provision for
such reserve was made out of income during such period; (iv) any net gains or
losses on the sale or other disposition, not in the ordinary course of business,
of investments and other capital assets, provided that there shall also be
excluded any related charges for taxes thereon; (v) any net gain arising from
the collection of the proceeds of any insurance policy; (vi) any write-up of any
asset; (vii) any net gains resulting from the extinguishment or defeasance of
any Indebtedness; (viii) any earnings from discontinued businesses and (ix) any
extraordinary gains or losses.

 

“Consolidated Subsidiary”  means, with respect to any Person at any time, any
Subsidiary or other Person the accounts of which would be consolidated with
those of such first Person in its consolidated financial statements as of such
time under the provisions of U.S. GAAP; unless otherwise specified,
“Consolidated Subsidiary” means a Consolidated Subsidiary of the Borrower, if
any should exist from time to time.

 

“Contract” means (i) any agreement (whether bi-lateral or uni-lateral or
executory or non-executory and whether a Person entitled to rights thereunder is
so entitled directly or as a third-party beneficiary), including an indenture,
lease or license, (ii) any deed or other instrument of conveyance, (iii) any
certificate of incorporation or charter and (iv) any bylaw.

 

“Debt” means any Liability that constitutes “debt” or “Debt” under section
101(11) of the Bankruptcy Code or under the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act or any analogous Applicable Law.

 

“Default” means any condition or event that constitutes an Event of Default or
that with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

 

“Dollars” and the sign “$” mean lawful money of the United States of America.

 

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“Dollar Equivalent” means the amount in Dollars obtainable by converting the
amount of Yen involved in such computation into Dollars at the Applicable
Currency Exchange Rate at approximately 10:00 a.m. (Tokyo time) on the date of
determination thereof.

 

“Eligible Assignee” means (i) any commercial bank, savings and loan institution
or savings bank organized under the laws of the United States, or any State
thereof, and having combined capital and surplus in excess of $100,000,000, (ii)
any commercial bank organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development (“OECD”), or
a political subdivision of any such country, and having combined capital and
surplus (or the equivalent thereof under the accounting principles applicable
thereto) in excess of $100,000,000, provided that such bank is acting through a
branch, agency or Affiliate located in the country in which it is organized or
another country that is also a member of the OECD, (iii) the central bank of any
country that is a member of the OECD or (iv) any insurance company, pension
fund, mutual fund or other financial institution of recognized standing.

 

“Event of Default” means any of the events specified in Section 6.01.

 

“Existing Guaranty” means (i) any Guaranty outstanding on the Agreement Date, to
the extent set forth on Schedule 4.04, and (ii) any Guaranty that constitutes a
renewal, extension or replacement of an Existing Guaranty, but only if (A) at
the time such Guaranty is entered into and immediately after giving effect
thereto, no Default would exist, (B) such Guaranty is binding only on the
obligor or obligors under the Guaranty so renewed, extended or replaced, (C) the
principal amount of the obligations Guaranteed by such Guaranty does not exceed
the principal amount of the obligations Guaranteed by the Guaranty so renewed,
extended or replaced and (D) the obligations Guaranteed by such Guaranty bear
interest at a rate per annum not exceeding the rate borne by the obligations
Guaranteed by the Guaranty so renewed, extended or replaced except for any
increase that is commercially reasonable at the time of such increase.

 

“Generally Accepted Accounting Principles” means generally accepted accounting
principles in Japan from time to time, applied in a manner consistent with the
accounting principles followed in Japan in the preparation of the Base Financial
Statements.

 

“Governmental Approval” means any authorization, consent, approval, license or
exemption of, registration or filing with, or report or notice to, any
governmental unit.

 

“Guarantor” means Cymer, Inc., a Nevada corporation.

 

“Guaranty” of any Person means any obligation, contingent or otherwise, of such
Person (i) to pay any Liability of any other Person or to otherwise protect, or
having the practical effect of protecting, the holder of any such Liability
against loss (whether such obligation arises by virtue of such Person being a
partner of a partnership or participant in a joint venture or by agreement to
pay, to keep well, to purchase assets, goods, securities or services or to take
or pay, or otherwise) or (ii) incurred in connection with the issuance by a
third Person of a Guaranty of any Liability of any other Person (whether such
obligation arises by agreement to reimburse or indemnify such third Person or
otherwise).  The word “Guarantee” when used as a verb has the correlative
meaning.

 

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“Guaranty Agreement” means the Parent Guaranty, dated as of even date herewith,
between Cymer Inc. and the Bank.

 

“Indebtedness” of any Person means (in each case, whether such obligation is
with full or limited recourse) (i) any obligation of such Person for borrowed
money, (ii) any obligation of such Person evidenced by a bond, debenture, note
or other similar instrument, (iii) any obligation of such Person to pay the
deferred purchase price of property or services, except a trade account payable
that arises in the ordinary course of business, (iv) any obligation of such
Person as lessee under a capital lease, (v) any Mandatorily Redeemable Stock of
such Person owned by any Person other than such Person or an Indebtedness-Free
Subsidiary of such Person (the amount of such Mandatorily Redeemable Stock to be
determined for this purpose as the higher of the liquidation preference of and
the amount payable upon redemption of such Mandatorily Redeemable Stock), (vi)
any obligation of such Person to purchase securities or other property that
arises out of or in connection with the sale of the same or substantially
similar securities or property, (vii) any non-contingent obligation of such
Person to reimburse any other Person in respect of amounts paid under a letter
of credit or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(viii) any obligation with respect to an interest rate or currency swap or
similar obligation obligating such Person to make payments, whether periodically
or upon the happening of a contingency, except that if any agreement relating to
such obligation provides for the netting of amounts payable by and to such
Person thereunder or if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount thereof, (ix) any Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on any asset of such Person
and (x) any Indebtedness of others Guaranteed by such Person.

 

“Indemnified Person” means any Person that is, or at any time was, the Bank, an
Affiliate of the Bank or a director, officer, employee or agent of any such
Person.

 

“Information” means data, certificates, reports, statements (including financial
statements), opinions of counsel, documents and other information.

 

“Intellectual Property” means (i) (A) patents and patent rights, (B) trademarks,
trademark rights, trade names, trade name rights, corporate names, business
names, trade styles, service marks, logos and general intangibles of like nature
and (C) copyrights, in each case whether registered, unregistered or under
pending registration and, in the case of any such that are registered or under
pending registration, whether registered or under pending registration under the
laws of the United States or any other country, (ii) reissues, continuations,
continuations-in-part and extensions of any Intellectual Property referred to in
clause (i), and (iii) rights relating to any Intellectual Property referred to
in clause (i) or (ii), including rights under applications (whether pending
under the laws of the United States or any other country) or licenses relating
thereto.

 

“Interest Period” means, with respect to each Loan, the period commencing on the
date of the making of such Loan and ending on the Maturity Date for such Loan.

 

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“Lending Office” means the Los Angeles office or such other branch or office of
the Bank designated by the Bank from time to time as the branch or office at
which Loans are to be made or maintained.

 

“Liability” of any Person means (in each case, whether with full or limited
recourse) any indebtedness, liability, obligation, covenant or duty of or
binding upon, or any term or condition to be observed by or binding upon, such
Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under Contract, Applicable Law, or
otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.

 

“Lien” means, with respect to any property or asset (or any income or profits
therefrom) of any Person (in each case whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise) (i) any mortgage, lien, pledge, attachment, levy or other security
interest of any kind thereupon or in respect thereof or (ii) any other
arrangement, express or implied, under which the same is subordinated,
transferred, sequestered or otherwise identified so as to subject the same to,
or make the same available for, the payment or performance of any Liability in
priority to the payment of the ordinary, unsecured creditors of such Person. For
the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

 

“Loan” means any amount advanced by the Bank pursuant to Section 1.01.

 

“Loan Document Related Claim” means any claim (whether civil, criminal or
administrative and whether sounding in tort, contract or otherwise) in any way
arising out of, related to, or connected with, the Loan Documents or the
relationships established thereunder, whether such claim arises or is asserted
before or after the Agreement Date or before or after the Repayment Date.

 

“Loan Document Representation and Warranty” means any “Representation and
Warranty” as defined in any Loan Document and any other representation or
warranty made or deemed made under any Loan Document.

 

“Loan Documents” means (i) this Agreement, the Note, the Guaranty Agreement, and
the Parent Credit Agreement, and (ii) all other agreements, documents and
instruments relating to, arising out of, or in any way connected with (A) any
agreement, document or instrument referred to in clause (i), (B) any other
agreement, document or instrument referred to in this clause (ii) or (C) any of
the transactions contemplated by any agreement, document or instrument referred
to in clause (i) or in this clause (ii).

 

“Loan Party” means any Person (other than the Bank) that is a party to a Loan
Document.

 

“Mandatorily Redeemable Stock” means, with respect to any Person, any share of
such Person’s capital stock to the extent that it is (i) redeemable, payable or
required to be purchased or otherwise retired or extinguished, or convertible
into any Indebtedness or other Liability of such Person, (A) at a fixed or
determinable date, whether by operation of a sinking fund or

 

30

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otherwise, (B) at the option of any Person other than such Person or (C) upon
the occurrence of a condition not solely within the control of such Person, such
as a redemption required to be made out of future earnings or (ii) convertible
into Mandatorily Redeemable Stock.

 

“Materially Adverse Effect” means, (i) a material adverse effect on the business
operations or financial condition of the Borrower taken as a whole, and (ii)
with respect to any Loan Document, any material adverse effect on the binding
nature, validity or enforceability thereof as an obligation of any Loan Party
that is a party thereto.

 

“Maturity Date” means ,with respect to a Loan, such date as shall be specified
in the relevant notice of borrowing subject to Section 1.04.

 

“Maximum Permissible Rate” means, with respect to interest payable on any
amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (i) civil or criminal penalties being imposed on the
payee or (ii) the payee’s being unable to enforce payment of (or, if collected,
to retain) all or any part of such amount or the interest payable thereon.

 

“Net Profit” means net profit as determined under Generally Accepted Accounting
Principles and in a manner reasonably acceptable to the Bank.

 

“Note” means the promissory note in the form of Exhibit A.

 

“Notification Date” means such date as shall be determined in accordance with
Section 1.02.

 

“Parent Credit Agreement” means the Credit Agreement dated June 28, 2001 by and
between Cymer, Inc. and the Bank, as the same may be amended from time to time.

 

“Permitted Guaranty” means any Guaranty that is (i) endorsement of instruments
for deposit into Borrower’s account in the ordinary course of the Borrower’s
business, (ii) unsecured guaranties of the Borrower with respect to obligations
of any of its Subsidiaries, (iii) unsecured guaranties relating to the financing
of accounts receivable, (iv) unsecured guaranties existing as of the Effective
Date, (v) unsecured guaranties under surety instruments, (vi) unsecured
guaranties of the obligations of vendors and supplier or the Borrower in respect
of transactions entered into in the ordinary course of business, and (vii) other
unsecured guaranties in an aggregate principal amount not to exceed $1,000,000 .

 

“Permitted Investment” means:

 

(a)            investments existing on the date on which the initial Loan is
made;

 

(b)           cash equivalents and marketable securities;

 

(c)            investments consisting of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business;

 

(d)           advances to customers or suppliers in the ordinary course of
business;

 

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(e)            investments consisting of (i) compensation of employees, officers
and directors of Borrower so long as the Board of Directors of Borrower
determines that such compensation is in the best interests of Borrower, (ii)
travel advances, employee relocation loans and other employee loans and advances
in the ordinary course of business, (iii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrower pursuant to
employee stock purchase plans approved by Borrower’s Board of Directors, and
(iv) other loans to officers and employees approved by the Board of Directors;

 

(f)              investments (including debt obligations) received in connection
with the bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of business;

 

(g)           investments consisting of prepaid royalties and other credit
extensions to, customers and suppliers who are not affiliates, in the ordinary
course of business;

 

(h)           investments constituting acquisitions permitted under Section
4.07, if any;

 

(i)               deposit accounts of Borrower maintained in the ordinary course
of business;

 

(j)               investments accepted in connection with transfers permitted by
Section 4.07;

 

(k)            investments (whether consisting of the purchase of securities,
loans, capital contributions or otherwise) of Borrower in or to Subsidiaries and
investments by Borrower in or to companies which simultaneously with such
investments become Subsidiaries; provided, that accounts payable of Subsidiaries
owing to Borrower incurred in the ordinary course of business consistent with
the general past business practices of Borrower and Subsidiaries are not subject
to the foregoing limitations;

 

(l)               investments (whether consisting of the purchase of securities,
loans, capital contributions, or otherwise) of Subsidiaries in or to other
Subsidiaries or in or to Borrower;

 

(m)         investments by Borrower consisting of the purchase of securities of
Borrower in an aggregate amount not in excess of 20% of the Tangible Net Worth
of Borrower on a consolidated basis; and

 

(n)           other investments aggregating not in excess of 10% of the Tangible
Net Worth of Borrower on a consolidated basis.

 

“Permitted Lien” means:

 

(a)          Minor imperfections of title and encumbrances which do not, singly
or in the aggregate, materially interfere with the value or prevent use of
Borrower’s property or transfer of title thereto;

 

(b)         Liens that may be from time to time created in favor of the Bank;

 

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(c)          Liens disclosed on Schedule 4.05 attached hereto and made a part
hereof;

 

(d)         inchoate Liens for Taxes, fees, assessments or other governmental
charges or levies which are not delinquent or being contested in good faith by
appropriate proceedings;

 

(e)          Liens (i) upon or in any real property acquired or held by the
Borrower to secure the purchase price of such property or indebtedness incurred
solely for the purpose of financing the acquisitions of such property or (ii)
existing on such property 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 property;

 

(f)            suppliers’, carriers’, warehousemen’s, mechanics’, landlords’,
materialmen’s, repairmen’s, or other similar Liens arising in the ordinary
course of business which are not delinquent for a period of more than thirty
days or remain payable without penalty or which are being contested in good
faith and by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto;

 

(g)         Liens (other than any lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
worker’s compensation, unemployment insurance and other social security
legislation;

 

(h)         Liens securing obligations in respect of capital leases on assets
subject to such leases;

 

(i)             leases or subleases and non-exclusive licenses and sublicenses
to others in the ordinary course of the Borrower’s business not interfering in
any material respect with the business of the Borrower taken as a whole, and any
interest or title of a lessor, licensor or under any lease or license;

 

(j)             Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;

 

(k)          easements, reservations, rights-of-way, restrictions,
encroachments, minor defects or irregularities in title or survey defects and
other similar charges or encumbrances affecting real property not constituting a
Materially Adverse Effect;

 

(l)             Liens which constitute rights or set-off of a customary nature
or bankers’ liens with respect to amounts on deposit, whether arising by
operation of law or by contract in connection with arrangements entered into
with banks in the ordinary course of business;

 

(m)       Liens in favor of customs and revenue authorities arising as a matter
of law to secure payments of customs duties in connection with the importation
of goods;

 

(n)         Liens on insurance proceeds in favor of insurance companies granted
solely as security for financed premiums; and

 

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(o)         Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by liens of the type described in
clauses 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.

 

“Person” means any individual, sole proprietorship, corporation, partnership,
trust, unincorporated organization, mutual company, joint stock company, estate,
union, employee organization, government or any agency or political subdivision
thereof.

 

“Post-Default Rate” means a rate per annum equal to 3.5% plus the Adjusted
Euroyen Rate (determined for interest periods not less than one day nor more
than six months) selected by the Bank from time to time.

 

“Purchase Money Indebtedness” means (i) Indebtedness of the Borrower that is
incurred to finance part or all of (but not more than) the purchase price of a
tangible asset, provided that (A) neither the Borrower nor any Subsidiary had at
any time prior to such purchase any interest in such asset other than a security
interest or an interest as lessee under an operating lease and (B) such
Indebtedness is incurred within 30 days after such purchase, or (ii)
Indebtedness that (A) constitutes a renewal, extension or refunding of, but not
an increase in the principal amount of, Purchase Money Indebtedness that is such
by virtue of clause (i) or (ii) and (B) bears interest at a rate per annum that
is commercially reasonable at the time such Indebtedness is incurred.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System.

 

“Regulatory Change” means any Applicable Law, interpretation, directive, request
or guideline (whether or not having the force of law), or any change therein or
in the administration or enforcement thereof, that becomes effective or is
implemented or first required or expected to be complied with after the
Agreement Date, whether the same is (i) the result of an enactment by a
government or any agency or political subdivision thereof, a determination of a
court or regulatory authority, or otherwise or (ii) enacted, adopted, issued or
proposed before or after the Agreement Date, including any such that imposes,
increases or modifies any Tax, reserve requirement, insurance charge, special
deposit requirement, assessment or capital adequacy requirement, but excluding
any such that imposes, increases or modifies any income or franchise tax imposed
upon the Bank by any jurisdiction (or any political subdivision thereof) in
which the Bank or any Lending Office is located.

 

“Repayment Date” means the later of (i) the termination of the Commitment
(whether as a result of the occurrence of the Termination Date, reduction to
zero pursuant to Section 1.07 or termination pursuant to Section 6.02) and (ii)
the payment in full of the Loans and all other amounts payable or accrued
hereunder.

 

“Representation and Warranty” means any representation or warranty made pursuant
to or under (i) Section 2.02, Article 3, Section 5.02 or any other provision of
this Agreement or (ii) any amendment to, or waiver of rights under, this
Agreement, WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION OR WARRANTY
REFERRED TO IN CLAUSE (i) OR (ii) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO
THE EXTENT OTHERWISE

 

34

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EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT MATTER THEREOF IS
WITHIN THE KNOWLEDGE OF THE BORROWER.

 

“Reserve Requirement” means, at any time, the then current maximum rate for
which reserves (including any marginal, supplemental or emergency reserve) are
required to be maintained under Regulation D by member banks of the Federal
Reserve System in California with deposits comparable in amount to those of the
Bank against “Eurocurrency liabilities” as that term is used in Regulation D.
Adjusted Euroyen Rates shall be adjusted automatically on and as of the
effective date of any change in the applicable Reserve Requirement.

 

“Restricted Payment” means (i) any dividend or other distribution on account of
any shares of the Borrower’s capital stock (other than dividends payable solely
in shares of any of its capital stock other than Mandatorily Redeemable Stock),
(ii) any payment on account of the principal of or premium, if any, on any
Indebtedness convertible into shares of the Borrower’s capital stock or (iii)
any payment on account of any purchase, redemption, retirement, exchange or
conversion of any of the Borrower’s Capital Securities.  For the purposes of
this definition a “payment” shall include the transfer of any asset or the
issuance of any Indebtedness or other obligation (the amount of any such payment
to be the fair market value of such asset or the amount of such obligation,
respectively) but shall not include the issuance of any capital stock other than
Mandatorily Redeemable Stock.

 

“Subsidiary” means, with respect to any Person, any other Person (i) securities
of which having ordinary voting power to elect a majority of the board of
directors (or other persons having similar functions) or (ii) other ownership
interests of which ordinarily constituting a majority voting interest, are at
the time, directly or indirectly, owned or controlled by such first Person, or
by one or more of its Subsidiaries, or by such first Person and one or more of
its Subsidiaries; unless otherwise specified, “Subsidiary” means a Subsidiary of
the Borrower.

 

“Tangible Net Worth” means, at any time, the aggregate of total consolidated
assets determined in accordance with GAAP plus subordinated debt, less, without
duplication, (i) all assets which would be classified as intangible assets under
GAAP, including but not limited to goodwill, patents, trademarks, trade names,
copyrights, capitalized software, research and development expenses except
prepaid expenses and all reserves not already deducted from assets and (ii)
total liabilities.

 

“Tax” means any national, federal, state or local tax, assessment or other
governmental charge or levy (including any withholding tax) imposed by any
Japanese, U.S. or other governmental authority upon a Person or upon its assets,
revenues, income or profits.

 

“Termination Date” means June 15, 2002, as such date may from time to time be
extended by mutual agreement of Borrower and the Bank.

 

“U.S. GAAP” means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and

 

35

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authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

 

“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of
such Person all of the Capital Securities and all other ownership interests and
rights to acquire ownership interests of which (except directors’ qualifying
shares) are, directly or indirectly, owned or controlled by such Person or one
or more Wholly Owned Subsidiaries of such Person or by such Person and one or
more of such Subsidiaries; unless otherwise specified, “Wholly Owned Subsidiary”
means a Wholly Owned Subsidiary of the Borrower.

 

“Yen” and “¥” means the lawful currency of Japan.

 

“Yen COF Rate” means, for any Interest Period, the Euroyen London Libor rate as
reported on Reuters Page LIBOR01 as of 11:00 a.m. London time on the second
Business Day prior to the beginning of such Interest Period for a period equal
to the duration of such Interest Period as determined by the Bank.

 

(b)  Other Definitional Provisions.  (i)  Except as otherwise specified herein,
all references herein (A) to any Person shall be deemed to include such Person’s
successors and assigns, (B) to any Applicable Law defined or referred to herein
shall be deemed references to such Applicable Law or any successor Applicable
Law as the same may have been or may be amended or supplemented from time to
time and (C) to any Loan Document or Contract defined or referred to herein
shall be deemed references to such Loan Document or Contract (and, in the case
of the Note or any instrument, any instrument issued in substitution therefor)
as the terms thereof may have been or may be amended, supplemented, waived or
otherwise modified from time to time.

 

(ii)               When used in this Agreement, the words “herein”, “hereof” and
“hereunder” and words of similar import shall refer to this Agreement as a whole
and not to any provision of this Agreement, and the words “Article”, “Section”,
“Annex”, “Schedule” and “Exhibit” shall refer to Articles and Sections of, and
Annexes, Schedules and Exhibits to, this Agreement unless otherwise specified.

 

(iii)            Whenever the context so requires, the neuter gender includes
the masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.

 

(iv)           Any item or list of items set forth following the word
“including”, “include” or “includes” is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in which
such item or items are “included”, such item or items are in such category, and
shall not be construed as indicating that the items in the category in which
such item or items are “included” are limited to such items or to items similar
to such items.

 

(v)              Each authorization in favor of the Bank or any other Person
granted by or pursuant to this Agreement shall be deemed to be irrevocable and
coupled with an interest.

 

(vi)           Except as otherwise specified herein, all references herein to
the Bank or any Loan Party shall be deemed to refer to such Person however
designated in Loan

 

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Documents, so that (A) a reference to rights of the Bank under the Loan
Documents shall be deemed to include the rights of such Person as the Guaranteed
Party under the Guaranty Agreement, (B) a reference to costs incurred by the
Bank in connection with the Loan Documents shall be deemed to include costs
incurred by such Person as the Guaranteed Party under the Guaranty Agreements.

 

(vii)  Except as otherwise specified therein, all terms defined in this
Agreement shall have the meanings herein ascribed to them when used in the Note
or any certificate, opinion or other document delivered pursuant hereto or
thereto.

 

Section 9.02             Accounting Matters.  Unless otherwise specified herein,
all accounting determinations hereunder and all computations utilized by the
Borrower in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
Generally Accepted Accounting Principles, except, in the case of such financial
statements, for departures from Generally Accepted Accounting Principles that
may from time to time be approved in writing by the independent certified public
accountants who are at the time, in accordance with Section 5.01(b), reporting
on the Borrower’s financial statements.

 

Section 9.03             Representations and Warranties.  All Representations
and Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any Representation
and Warranty contained in this Agreement or any other document at the time any
Loan is made, at and as of such time and (c) in the case of any particular
Representation and Warranty, wherever contained, at such other time or times as
such Representation and Warranty is made or deemed made in accordance with the
provisions of this Agreement or the document pursuant to, under or in connection
with which such Representation and Warranty is made or deemed made.

 

Section 9.04             Captions.  Captions to Articles, Sections and
subsections of, and Annexes, Schedules and Exhibits to, this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers all as of the Agreement Date, and acknowledge
that this Agreement has been made and delivered in the City of Los Angeles, the
last signature hereto having been affixed in said City, and this Agreement
having become effective only upon such execution and delivery.

 

 

CYMER JAPAN, INC.

 

 

 

 

 

By

/s/ William A. Angus III

 

 

 

Name:  William A. Angus III

 

 

Title:  Director

 

 

 

 

 

 

 

WELLS FARGO HSBC TRADE BANK, N.A.

 

 

 

 

 

By

/s/ Kollyn D. Kanz

 

 

 

Name:  Kollyn D. Kanz

 

 

Title:  Assistant Vice President

 

 

 

 

 

 

 

Agreement Date:  October 30, 2001

 

38

--------------------------------------------------------------------------------

 

Schedule 1.02

 

NOTICE OF BORROWING

 

[Name and address
of Bank in accordance with
Section 8.01(a)(ii)]

 

Date:

 

Gentlemen:

 

Reference is made to the Credit Agreement (the “Credit Agreement”), dated as of
            , 2001 between Cymer Japan, Inc. (“Borrower”) and Wells Fargo HSBC
Trade Bank, N.A. (the “Bank”). The Borrower hereby gives notice pursuant to
Section 1.02 of the Credit Agreement of its request to have the following Loan
made to it on [insert requested date of borrowing] (the “Borrowing Date”):

 

Loan
Amount                                                                                                               
¥

 

Maturity Date

 

Interest Period

 

We request that the proceeds of the Loan be remitted to:

 

Account Name (Beneficiary):

Bank:

Bank Name:

Bank Address:

SWIFT Number:

Account Number:

 

The aggregate amount of other Loans that are scheduled to mature on or prior to
the Borrowing Date is ¥[                     ].  If such amount is duly repaid,
then the aggregate unpaid principal amount of all Loans will be
¥[                     ].

 

Each Loan Document Representation and Warranty is true and correct in all
material aspects at and as of the date hereof and will be true and correct in
all material aspects at and as of the time the Loans are made, in each case both
with and without giving effect to the Loans and the application of the proceeds
hereof.

 

No Default has occurred and is continuing as of the date hereof or would result
from the making of the Loans or from the application of the proceeds thereof if
the Loan was made on the date hereof, and no Default will have occurred and be
continuing at the time the Loan is to be made or would result from the making of
the Loan or from the application of the proceeds thereof.

 

39

--------------------------------------------------------------------------------

 

This notice of borrowing may be executed in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

 

 

CYMER JAPAN, INC.

 

 

 

 

 

By

 

 

 

 

William A. Angus III

 

 

Director

 

40

--------------------------------------------------------------------------------

 

Schedule 2.01(a)

 

DIRECTOR’S CERTIFICATE OF BORROWER

 

I, Pascal Didier, Representative Director of Cymer Japan, Inc., a Japanese
corporation (the “Company”), do hereby certify that:

 

1.                                       Attached hereto as Exhibit A is a true
and complete copy of the Articles of Incorporation of the Company, as in full
force and effect on December 10, 1990, and at all times since said date, to and
including the date hereof;

 

2.                                       Attached hereto as Exhibit B is a true
and complete copy of the Resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of the Credit Agreement
dated as of October 31, 2001 by and between the Company and Wells Fargo HSBC
Trade Bank, N.A. (the “Credit Agreement”), and the documents related thereto;

 

3.                                       The Director of the Company has full
authority given to him by the Board of Directors of the Company to enter into
the transactions contemplated by the Credit Agreement without express Board
approval;

 

4.                                       The following people are duly elected
or appointed, qualified and acting officers of the Company holding the office
set forth opposite each such officers’ respective names below, the signature
appearing opposite each such name below is the genuine signature of such person
and each such person is authorized to execute the Credit Agreement and the
documents related thereto:

 

NAME

 

OFFICE

 

SIGNATURE

 

 

 

 

 

William A. Angus III

 

Director

 

/s/ William A. Angus III

 

 

IN WITNESS WHEREOF, I have hereunto set my hand this 30 day of October, 2001.

 

 

 

/s/ Pascal Didier

 

 

Pascal Didier

 

Representative Director

 

 

I, the undersigned, as Director of Cymer Japan, Inc., do hereby certify that
Pascal Didier is the duly elected, qualified and acting Representative Director
of the Company, and that his signature on the foregoing certificate is his
genuine signature.

 

 

 

/s/ William A. Angus III

 

 

William A. Angus III

 

Director

 

41

--------------------------------------------------------------------------------

 

Schedule 2.01(b)

 

OFFICER’S CERTIFICATE OF GUARANTOR

 

I, Pascal Didier, President of Cymer, Inc. a Nevada corporation (the “Company”),
do hereby certify that:

 

1.                                       Attached hereto as Exhibit A is a true
and complete copy of the Second Amended and restated Articles of Incorporation
of the Company, as in full force and effect on September 24, 1996, and at all
times since said date, to and including the date hereof;

 

2.                                       Attached hereto as Exhibit B is a true
and complete copy of the Bylaws of the Company, as in full force and effect on
January 3, 2001, and at all times since said date, to and including the date
hereof;

 

3.                                       Attached hereto as Exhibit C is a true
and complete copy of the Resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of the Guaranty and the
Parent Guaranty dated as of October 30, 2001 by the Company for the benefit of
Wells Fargo HSBC Trade Bank, N.A (the “Guaranty Agreement”) and the documents
related thereto;

 

4.                                       The Senior Vice President and Chief
Financial Officer of the Company has full authority given to him by the Board of
Directors of the Company to enter into the transactions contemplated by the
Guaranty Agreement without express Board approval;

 

5.                                       The following people are duly elected
or appointed, qualified and acting officers of the Company holding the office
set forth opposite each such officers’ respective names below, the signature
appearing opposite each such name below is the genuine signature of such person
and each such person is authorized to execute the Guaranty Agreement and the
documents related thereto:

 

NAME

 

OFFICE

 

SIGNATURE

 

 

 

 

 

William A. Angus III

 

 

Senior Vice President and Chief Financial Officer

 

/s/ William A. Angus III

 

42

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, I have hereunto set my hand this 30 day of October, 2001.

 

 

/s/ Pascal Didier

 

 

Pascal Didier

 

President

 

I, the undersigned, as Senior Vice President and Chief Financial Officer of
Cymer, Inc., do hereby certify that Pascal Didier is the duly elected, qualified
and acting President of the Company, and that his signature on the foregoing
certificate is his genuine signature.

 

 

/s/ William A. Angus III

 

 

William A. Angus III

 

Senior Vice President and
Chief Financial Officer

 

--------------------------------------------------------------------------------

 

Schedule 2.01(c)

 

(DIRECTOR’S/OFFICER’S) CERTIFICATE OF (BORROWER/GUARANTOR)

 

I,                                           , do hereby certify that I am the
[Director / Chief Financial Officer] of (Borrower/Guarantor) (the “Company”),
and do further hereby certify pursuant to that certain Credit Agreement dated as
of                      , 2001 (the “Credit Agreement”) by and between the Cymer
Japan, Inc. and Wells Fargo HSBC Trade Bank N.A. (capitalized terms used herein
without definition shall have the meanings ascribed thereto in the Credit
Agreement), that:

 

(a)          the borrowing requested hereby complies with the requirements of
Section 1.02 of the Credit Agreement;

 

(b)         [except to the extent set forth on Annex A hereto,]: (i) each Loan
Document Representation and Warranty is true and correct in all material aspects
at and as of the date hereof and (except to the extent the undersigned gives
notice to the Bank to the contrary prior to 5:00 p.m. (California time) on the
Business Day before the requested date for the making of the Loans) will be true
and correct in all material aspects at and as of the time the Loans are made, in
each case both with and without giving effect to the Loans and the application
of the proceeds thereof, and (ii) no Default has occurred and is continuing as
of the date hereof or would result from the making of the Loans or from the
application of the proceeds thereof if the Loans were made on the date hereof,
and (except to the extent the undersigned gives notice to the Bank to the
contrary prior to 5:00 p.m. (California time) on the Business Day before the
requested date for the making of the Loans) no Default will have occurred and be
continuing at the time the Loans are to be made or would result from the making
of the Loans or from the application of the proceeds thereof.

 

 

This Certificate is given in my capacity as the Director / Chief Financial
Officer of the Company.

 

IN WITNESS WHEREOF, I have signed my name as the Director / Chief Financial
Officer of the Company this           day of                     2001.

 

 

 

 

 

[                                                          ]

 

 

[Director / Chief Financial Officer]

 

I,                                  , the Representative Director / President of
[Borrower/Guarantor], do hereby certify that
                                                is the duly qualified Director /
Chief Financial Officer of [Borrower/Guarantor], that the signature set forth
above is his genuine signature and that the statements in the foregoing
certificate are true and correct.

 

 

 

 

 

[                                                          ]

 

 

[Representative Director/President]

 

 

--------------------------------------------------------------------------------

 

Schedule 2.01(f)

 

[Letterhead of Borrower]

 

 

CERTIFICATE OF NEGOTIATING OFFICER

 

 

Dated October 30, 2001

 

Cymer Japan, Inc. (the “Company”) is today entering into the Credit Agreement
dated as of October 30, 2001 (the “Credit Agreement”), with Wells Fargo HSBC
Trade Bank, N.A. (the “Bank”).  Capitalized terms not defined herein shall have
the meaning ascribed to such terms in the Credit Agreement.

 

I am the Director of the Company who was principally involved in negotiating the
Credit Agreement.

 

I hereby confirm that I have read the Loan Documents and that I understand that
they require the Company to waive any rights it may have to trial by jury and to
claim any special, indirect and consequential damages.  I also understand that
the Loan Documents prohibit prepayment of any Loan by the Company.  I also
confirm that I understand that the Loan Documents embody the entire agreement
between the Company and the Bank and supersede all prior agreements,
representations and understandings relating to the subject matter thereof.

 

I further confirm that I have reviewed my understanding of the Loan Documents
with Messrs. Miyake & Yamazaki and Messrs. Cooley Godward LLP who have acted as
lawyers for the Company in the transaction.

 

I further confirm that I have reviewed the terms and provisions of the Loan
Documents with the Board of Directors of the Company and that, in particular, I
have called to their attention those provisions under and pursuant to which (a)
the Company waives its right to trial by jury and its right to claim special,
indirect and consequential damages, (b) the Company agrees that it has no
voluntary right to prepay any Loan prior to the Maturity Date, and (c) the Loan
Documents embody the entire agreement between the Company and the Bank relating
to the subject matter thereof and supersede all prior agreements,
representations and understandings, if any, relating to the subject matter
thereof and may only be amended, or any of the terms or provisions thereof
waived, or any departures therefrom consented to, in a writing signed by the
Bank.

 

Finally, I confirm to you that in the course of negotiating the Loan Documents I
worked principally with Ms. Kollyn Kanz and neither he/she nor any other
representative of the Bank, nor the lawyers for the Bank, made any
representations to me that are inconsistent with the terms and provisions of the
Loan Documents.

 

 

/s/ William A. Angus III

 

William A. Angus III

 

Director

 

--------------------------------------------------------------------------------

 

Schedule 3.03

 

SCHEDULE OF REQUIRED CONSENTS AND
GOVERNMENTAL APPROVALS

 

 

Application Form for Income Tax Convention (Relief from Japanese Income Tax on
Interest)

 

--------------------------------------------------------------------------------

 

Schedule 3.04

 

SCHEDULE OF MATERIAL LITIGATION

 

 

ONE OF JAPANESE CONTRACT MANUFACTURERS FOR CYMER, INC. HAS BEEN GIVEN A WARNING
LETTER BY KOMATSU LIMITED, A JAPANESE CORPORATION, THAT THE LASER PRODUCTS IT
MANUFACTURES AND SUPPLIES TO CYMER, INC. COULD INFRINGE KOMATSU LIMITED’S
MULTIPLE JAPANESE PATENTS.  PARTIES HAD NEGOTIATED FOR A POSSIBLE SETTLEMENT,
BUT NOTHING WAS AGREED UPON.  KOMATSU LIMITED MIGHT PROCEED TO A LEGAL ACTION
BASED ON SUCH PATENTS AGAINST CYMER, INC. AS WELL AS CYMER JAPAN, INC.

 

CYMER, INC. HAS BEEN NAMED AS A DEFENDANT IN SEVERAL PUTATIVE SHAREHOLDER CLASS
ACTION LAWSUITS WHICH WERE FILED IN SEPTEMBER AND OCTOBER, 1998 IN THE U. S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA.  CERTAIN EXECUTIVE
OFFICERS AND DIRECTORS OF CYMER, INC. ARE ALSO NAMED AS DEFENDANTS.  THE
PLAINTIFFS PURPORT TO REPRESENT A CLASS OF ALL PERSONS WHO PURCHASED CYMER,
INC.’S COMMON STOCK BETWEEN APRIL 24, 1997 AND SEPTEMBER 26, 1997 (THE “CLASS
PERIOD”).  THE COMPLAINTS ALLEGE CLAIMS UNDER THE FEDERAL SECURITIES LAWS.  THE
PLAINTIFFS ALLEGE THAT CYMER, INC. AND THE OTHER DEFENDANTS MADE VARIOUS
MATERIAL MISREPRESENTATIONS AND OMISSIONS DURING THE CLASS PERIOD.  THE
COMPLAINTS DO NOT SPECIFY THE AMOUNT OF DAMAGES SOUGHT.  THE COMPLAINTS HAVE
BEEN CONSOLIDATED INTO A SINGLE ACTION AND A CLASS REPRESENTATIVE HAS BEEN
APPOINTED BY THE COURT.  A CONSOLIDATED AMENDED COMPLAINT WAS FILED IN EARLY
AUGUST, 1999.  ON NOVEMBER 5, 1999, CYMER, INC. AND THE OTHER DEFENDANTS FILED A
MOTION TO DISMISS THE CONSOLIDATED AMENDED CLAIM FOR FAILURE TO STATE A CAUSE OF
ACTION.  ON APRIL 1, 2000, THE COURT GRANTED DEFENDANT’S MOTION TO DISMISS WITH
LEAVE TO AMEND THE COMPLAINT BY THE PLAINTIFFS.  THE PLAINTIFFS FILED THEIR
SECOND AMENDED COMPLAINT ON JUNE 5, 2000.  CYMER, INC. MOVED TO DISMISS THE
AMENDED COMPLAINT ON AUGUST 4, 2000.  ON JANUARY 22, 2001, THE COURT HEARD ORAL
ARGUMENT ON CYMER, INC.’S MOTION TO DISMISS, BUT HAS NOT YET DECIDED THE MOTION.

 

--------------------------------------------------------------------------------

 

Cymer, Inc. has been named as a defendant in a complaint for (1) breach of
contract, (2) breach of covenant of good faith and fair dealing, (3) wrongful
termination in violation of public policy, (4) intentional misrepresentation,
and (5) negligent misrepresentation arising out of the termination of the
plaintiff (Gerald Haugen), a former employee at Cymer, Inc.’s San Diego
location.  The plaintiff’s termination was part of an overall staff reduction
program. The plaintiff has plead damages in excess of $200,000 principally
resulting from the exercise of the plaintiff’s stock options.  The pleading was
filed with the Superior Court of the State of California in San Diego.  The
plaintiff has agreed to dismiss the complaint without prejudice, and expects to
enter into a settlement agreement within the next thirty (30) days.

 

--------------------------------------------------------------------------------

 

Schedule 4.04

 

SCHEDULE OF EXISTING GUARANTIES

 

 

NONE.

 

 

--------------------------------------------------------------------------------

 

Schedule 4.05

 

SCHEDULE OF LIENS

 

 

NONE.

 

 

--------------------------------------------------------------------------------

 

Schedule 4.11

 

TRANSACTIONS WITH AFFILIATES

 

 

NONE.

 

 

--------------------------------------------------------------------------------

 

Schedule 5.01(a)

 

[CYMER JAPAN, INC.]

 

CERTIFICATE AS TO QUARTERLY FINANCIAL STATEMENTS

 

 

I,                                  , [Director] of Cymer Japan, Inc., a
Japanese corporation (the “Borrower”), hereby certify, pursuant to Section
5.01(a) of the Credit Agreement dated as of                                 ,
20     between the Borrower and Wells Fargo HSBC Trade Bank, N.A. (the “Credit
Agreement”) that:

 

1.                           (a)    The accompanying unaudited financial
statements of the Borrower as at and for the quarterly accounting period ending
                          , 20    , are complete and correct and present fairly
in all material respects, in accordance with Generally Accepted Accounting
Principles (except for changes therein or departures therefrom described below
that have been approved in writing by Messrs. , the Borrower’s current
independent certified public accountants), the financial position of the
Borrower as at the end of such quarterly period, and the results of operations
for such quarterly period, and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, in each case on the basis presented
and subject only to normal year-end auditing adjustments and the absence of
auditor’s footnotes.

 

(b)    Except as disclosed or reflected in such financial statements, as at
         , the Borrower did not have any Liability, contingent or otherwise, or
any unrealized or anticipated loss, that, singly or in the aggregate, have had
or might have a Materially Adverse Effect on the Borrower.

 

2.                           (a)    The changes in and departures from Generally
Accepted Accounting Principles are as follows:

 

All such changes have been approved in writing by Messrs.
                                    .

 

(b)    Attached as Annex A are unaudited financial statements of the Borrower as
at                                         and for the quarterly accounting
period ending                      , 200  , which have been prepared in
accordance with Generally Accepted Accounting Principles without giving effect
to the changes referred to in Paragraph 2(a) of this Certificate or any previous
Certificate. Such financial statements are complete and correct and present
fairly in all material respects, in accordance with Generally Accepted
Accounting Principles, the financial position of the Borrower as at the end of
such quarterly period, and the results of operations for such quarterly period,
and for the elapsed portion of the fiscal year ending with the last day of

 

--------------------------------------------------------------------------------

 

such quarterly period, in each case on the basis presented and subject only to
normal year-end auditing adjustments and the absence of auditor’s footnotes.]*

--------------------------------------------------------------------------------

*                      Paragraph (b) should be included in, and Annex A attached
to, the Certificate only if changes from Generally Accepted Accounting
Principles are specified in Paragraph 2(a) of this or any previous Certificate.

 

 

3.                           There follow the calculations required to establish
whether or not the Borrower was in compliance with the following Sections of the
Agreement:

 

(a)                      Section 4.08.

 

(b)                     Section 4.09.

 

4.                           Based on an examination sufficient to enable me to
make an informed statement, no Default exists, including, in particular, any
such arising under the provisions of Article 4, except the following:

 

5.                           Capitalized term not defined herein shall have the
meaning ascribed to such terms in the Credit Agreement.

 

[If none such exist, insert “None”; if any do exist, specify the same by
Section, give the date the same occurred, whether it is continuing, and the
steps being taken by the Borrower with respect thereto.]

 

Dated:

 

 

 

CYMER JAPAN, INC.

 

 

 

 

 

 

 

William A. Angus III

 

Director

 

 

--------------------------------------------------------------------------------

 

Schedule 5.01(b)

 

[CYMER JAPAN, INC.]

 

CERTIFICATE AS TO YEAR-END FINANCIAL STATEMENTS

 

I, William A. Angus III, a Director of Cymer Japan, Inc., a Japanese corporation
(the “Borrower”), hereby certify, pursuant to Section 5.01(b) of the Credit
Agreement dated as of                          , 20     between the Borrower and
Wells Fargo HSBC Trade Bank, N.A. that:

 

1.                           (a)    The accompanying financial statements of the
Borrower as at                        and for the [fiscal year] [12 months]
ending                            , 20      , are complete and correct and
present fairly in all material respects, in accordance with Generally Accepted
Accounting Principles (except for changes therein or departures therefrom
described below, that have been approved in writing by
Messrs.                           , the Borrower’s current independent certified
public accountants), the financial position of the Borrower as at the end of
such fiscal [year] [period], and the results of operations for such fiscal
[year] [period], in each case on the basis presented.

 

(b)    Except as disclosed or reflected in such financial statements, as at
                          , the Borrower did not have any Liability, contingent
or otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, have had or might have a Materially Adverse Effect on the Borrower.

 

2.                           (a)    The changes in and departures from Generally
Accepted Accounting Principles are as follows:

 

All such changes have been approved in writing by Messrs.                      .

 

[(b)    Attached as Annex A are unaudited financial statements of the Borrower
as at                                     and for the [fiscal year] [12 months]
ending                              , 20     , which have been prepared in
accordance with Generally Accepted Accounting Principles without giving effect
to the changes referred to in Paragraph 2(a) of this Certificate or any previous
Certificate. Such financial statements are complete and correct and present
fairly in all material respects, in accordance with Generally Accepted
Accounting Principles, the financial position of the Borrower and as at the end
of such fiscal [year] [period], and the results of operations for such fiscal
[year] [period], in each case on the basis presented.]*

 

--------------------------------------------------------------------------------

*                      Paragraph (b) should be included in, and Annex A attached
to, the Certificate only if changes from Generally Accepted Accounting
Principles are specified in Paragraph 2(a) of this or any previous Certificate.

 

 

--------------------------------------------------------------------------------

 

3.                           There follow the calculations required to establish
whether or not the Borrower was in compliance with the following Sections of the
Agreement:*

 

(a)                                  Section 4.08.

 

(b)                                 Section 4.09.

 

--------------------------------------------------------------------------------

*                      The calculations should be made in the same manner and
with the same degree of detail as the calculations set forth in the certificate
delivered by the Borrower pursuant to Section 2.01(h).

 

4.                           Based on an examination sufficient to enable me to
make an informed statement, no Default exists, including, in particular, any
such arising under the provisions of Article 4, except the following:

 

[If none such exist, insert “None”; if any do exist, specify the same by
Section, give the date the same occurred, whether it is continuing, and the
steps being taken by the Borrower with respect thereto.]

 

5.                           Capitalized terms not defined herein shall have the
meaning ascribed to such terms in the Credit Agreement.

 

Dated:

 

 

CYMER JAPAN, INC.

 

 

 

 

 

By

 

 

 

Name:  William A. Angus III

 

Title: Director

 

 

 

--------------------------------------------------------------------------------

 

Schedule 5.02(a)

 

 

SCHEDULE OF HISTORICAL FINANCIAL INFORMATION

 

1. Cymer Japan, Inc. Summary Statement of Operations, 12/00

2. Cymer Japan, Inc. Summary Balance Sheet, 12/00

3. Cymer Japan, Inc. Summary Statement of Operations, 03/01

4. Cymer Japan, Inc. Summary Balance Sheet, 03/01

5. Cymer Japan, Inc. Summary Statement of Operations, 06/01

6. Cymer Japan, Inc. Summary Balance Sheet, 06/01

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

[CYMER JAPAN, INC.]

 

PROMISSORY NOTE

 

 

Los Angeles, California

 

             October 30, 2001

 

FOR VALUE RECEIVED, Cymer Japan, Inc. (the “Borrower”) hereby promises to pay to
the order of Wells Fargo HSBC Trade Bank, N.A. (the “Bank”) the principal amount
of the Japanese yen equivalent (determined as provided in the Credit Agreement
referred to below) Twenty Million Dollars ($20,000,000), or, if less, the
principal amount of the Loans outstanding, on the dates and in the amounts
specified in Section 1.04 of the Credit Agreement referred to below, and to pay
interest on such principal amount on the dates and at the rates specified in
Section 1.03 of such Credit Agreement. All payments due the Bank hereunder shall
be made to the Bank at the place, in the type of money and funds and in the
manner specified in Section 1.09 of such Credit Agreement.

 

Each holder hereof is authorized to endorse on the grid attached hereto, or on a
continuation thereof, each Loan and each payment with respect thereto.

 

Presentment, demand, protest, notice of dishonor and notice of intent to
accelerate are hereby waived by the undersigned.

 

This Note evidences Loans made under, and is entitled to the benefits of, the
Credit Agreement, dated as of October 30, 2001, between the Borrower and the
Bank, as the same may be amended from time to time. Reference is made to such
Credit Agreement, as so amended, for provisions relating to the prepayment and
the acceleration of the maturity hereof. This Note is also entitled to the
benefits of the Guaranty Agreement,.

 

This Note shall be construed in accordance with and governed by the law of the
State of California (without giving effect to its choice of law principles).

 

 

CYMER JAPAN, INC.

 

 

 

 

 

By

/s/ William A. Angus III

 

Name: William A. Angus III

 

Title: Director

 

 

--------------------------------------------------------------------------------

 

GRID

 

PROMISSORY NOTE

 

Date

 

Amount of Loan

 

Amount of
Principal Paid,

 

Unpaid Principal
Amount of Note

 

Notation Made
By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXECUTION COPY

 

PARENT GUARANTY

 

THIS PARENT GUARANTY  (this “Guaranty”), entered into as of this 30th day of
October, 2001, by CYMER, INC., a Nevada corporation (together with its permitted
successors, assigns and transferees, “Guarantor”), for the benefit of WELLS
FARGO HSBC TRADE BANK, N.A., a national banking association (together with its
successors, assigns and transferees, “Bank”), and with respect to that certain
Credit Agreement of even date herewith (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement”) between Bank and CYMER
JAPAN, INC., a Japanese corporation (together with its permitted successors,
assigns and transferees, “Borrower”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower is a wholly-owned Subsidiary of Guarantor; and

 

WHEREAS, it is a condition precedent to the effectiveness of the Loan Documents
that Guarantor shall have executed and delivered to the Bank this Guaranty;

 

NOW, THEREFORE,  in order to induce Bank to execute and deliver the Loan
Documents, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, Guarantor hereby covenants and agrees with Bank as
follows:

 

1.             Definitions.  The following terms when used in this Guaranty,
including its preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof). 
All capitalized terms not defined herein shall have the meaning set forth in the
Credit Agreement.

 

“Bank” has the meaning given it in the preamble.

 

“Guaranteed Obligations” has the meaning given it in Section 2.1 hereof.

 

“Guarantor” has the meaning given it in the preamble.

 

“Guaranty” has the meaning given it in the preamble.

 

“Interest” shall mean all or any of the right, title, or interest and
obligations of Bank in and to the Loan Documents, and all or any of the
benefits, advantages and obligations of Bank under the Loan Documents.

 

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise.

 

“Credit Agreement” has the meaning given it in the preamble.

 

“Borrower” has the meaning given it in the preamble.

 

--------------------------------------------------------------------------------

 

“Subsidiary” shall mean any corporation, partnership, joint venture, association
or other business entity of which Guarantor now or hereafter owns, directly or
indirectly, securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other governing body thereof.

 

2.             Guaranty Provisions.

 

2.1           Guaranteed Obligations.  Guarantor hereby absolutely,
unconditionally and irrevocably guarantees:

 

(i)            the full and prompt payment when due (whether at an the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of Borrower incurred under
the Credit Agreement and other Loan Documents, now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement and
other Loan Documents, and the due performance and compliance by Borrower with
the terms of the Credit Agreement and other Loan Documents; and

 

(ii)           all costs, fees, expenses and other amounts set forth in Section
11.2 hereof or any other provisions of this Guaranty;

 

all such obligations, liabilities, sums and expenses set forth in clauses (i)
and (ii) of this Section 2.1 being collectively called the “Guaranteed
Obligations”, it being acknowledged and agreed that the “Guaranteed Obligations”
shall include Loans made under the Loan Documents, whether made on the date of
this Guaranty or from time to time after the date of this Guaranty.

 

2.2           Guaranty of Payment.  This Guaranty constitutes a guaranty of
payment when due and not merely of collection, and Guarantor specifically agrees
that it shall not be necessary or required that Bank exercise any right, assert
any claim or demand or enforce any remedy whatsoever against Borrower (or any
other Person) or any property before or as a condition to the obligations of
Guarantor hereunder.

 

2.3           Guaranty Absolute, etc.  This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all of the Guaranteed Obligations
have been absolutely, irrevocably, and unconditionally fulfilled, performed or
met, whether by Guarantor, Borrower or other Person.  Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents under which they arise, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of Bank. Without limiting the foregoing, the liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable,
to the fullest extent permitted by applicable laws irrespective of:

 

(a)           any lack of validity, legality or enforceability of the Loan
Documents or any lack of capacity or change in status of the Borrower
(including, without limitation, any bankruptcy

 

2

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reorganization, insolvency, merger, consolidation, liquidation or other
proceeding or event relating to the Borrower);

 

(b)           any exercise of, or any election not or failure to exercise, delay
in the exercise of, waiver of, or forbearance or other indulgence with respect
to, any right, remedy or power available to Bank, including (i) any election not
or failure to exercise any right of setoff, recoupment or counterclaim, (ii) any
election of remedies effected by Bank, including the foreclosure upon any real
estate constituting collateral, whether or not such election affects the right
to obtain a deficiency judgment, and (iii) any election by Bank in any
proceeding under the Bankruptcy Code of the application of Section 1111(b)(2) of
such Code;

 

(c)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other increase,
decrease, prepayment, extension, compromise or renewal of any Guaranteed
Obligation;

 

(d)           any increase, reduction, limitation, impairment or termination
(except to the extent the Guaranteed Obligations are thereby absolutely,
irrevocably, indefeasibly, and unconditionally fulfilled, performed or met) of
the Guaranteed Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Guaranteed Obligations;

 

(e)           any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Loan Documents;

 

(f)            any addition, exchange, release, surrender or nonperfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, provided in favor of Bank in
connection with the Guaranteed Obligations; or

 

(g)           any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, Guarantor, any surety or any
guarantor.

 

2.4           Reinstatement, etc. Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by Bank, upon the insolvency, bankruptcy
or reorganization of Guarantor, Borrower or otherwise, as though such payment
had not been made.

 

2.5           Rights and Remedies.  Guarantor waives any and all rights under
Section 2845 of the California Civil Code or any other provision of any other
applicable law to require Bank to (a) proceed against Borrower; (b) proceed
against or exhaust any security held from Borrower; or (c) pursue any other
remedy in Bank’s power whatsoever.  Bank may, at its election, exercise any
right or remedy it may have against Guarantor or any security now or hereafter
held by or for the benefit of Bank including, without limitation, the right to
foreclose upon any such security by

 

3

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judicial or nonjudicial sale, without affecting or impairing in any way the
liability of Guarantor hereunder except to the extent the Guaranteed Obligations
may thereby be paid, even though any rights which Guarantor may have or
otherwise might obtain by subrogation against others might be diminished or
destroyed.  Guarantor waives all rights and defenses arising out of an election
or non-election of remedies by Bank, even though that election or non-election
of remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Guarantor’s rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure.  Guarantor acknowledges that any such
exercise or non-exercise of a right or remedy with respect to any collateral
security for the Guaranteed Obligations may result in a loss, in part or whole,
of Bank’s right to collect from Borrower any deficiency that may remain after
any such exercise of such a right or remedy and that, where such a loss occurs,
Guarantor will also suffer a loss of any rights and remedies, arising in law or
equity, which Guarantor may have to collect any amount from Borrower; and
Guarantor agrees to remain bound notwithstanding any such loss.  Only the net
proceeds from any such foreclosure, after deduction of all costs and expenses
authorized to be deducted pursuant to the documents under which such security is
held or by law, shall be applied against the Guaranteed Obligations.  Bank may
at its discretion purchase all or any part of such security so sold or offered
for sale for its own account and may apply against the amount bid therefor all
or any part of the Guaranteed Obligations for which such security is held; and
in such case, only that portion of the Guaranteed Obligations so applied, after
deduction of all costs and expenses authorized to be deducted pursuant to the
documents under which such security is held or law, shall be applied against the
Guaranteed Obligations.  Guarantor waives any defense arising out of the
absence, impairment or loss of any right of reimbursement or subrogation or
other right or remedy of Guarantor against Borrower or any such security,
whether resulting from the election by Bank to exercise any right or remedy it
may have against Borrower, any defect in, failure of, or loss or absence of
priority with respect to Bank’s interest in such security, or otherwise.  In the
event that any fore­closure sale is deemed to be not commercially reasonable,
Guarantor waives any right that it may have to have any portion of the
Guaranteed Obligations discharged except to the extent of the amount actually
bid and received by Bank at any such sale.  Bank shall not be required to
institute or prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof.

 

2.6           Separate Guaranteed Obligation.  The obligations hereunder are
independent of the obligations of Borrower, and a separate action or actions may
be brought and prosecuted against Guarantor whether action is brought against
Borrower or whether Borrower be joined in any such action or actions; Guarantor
waives the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof, to the fullest extent permitted by law. 
Any part performance of the Guaranteed Obligations by Borrower or other
circum­stances, which operate to toll any statute of limitations as to Borrower
shall not operate to toll the statute of limitations as to Guarantor.  Guarantor
hereby waives any rights it may have under Sections 2809 and 2810 of the
California Civil Code and reaffirms that, in any event, the obligations of
Guarantor are independent of those of Borrower.  Guarantor understands that Bank
would not have entered into the transaction with the Guarantor in the absence of
the foregoing covenants by Guarantor and the other covenants of Guarantor
contained in this Guaranty.

 

4

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2.7           Covenant to Prevent Events of Default.  Guarantor covenants and
agrees that on and after the date hereof until such time as (i) each of the Loan
Documents is terminated in its entirety and no provision thereof remains in
force and effect and (ii) all outstanding payments and obligations arising
therefrom or from this Guaranty including, without limitation, the Guaranteed
Obligations, have been paid in full, Guarantor shall take, or refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained in
the Loan Documents, and so that no Event of Default, is caused by the actions or
failure to act of Guarantor or any of its Subsidiaries.

 

2.8           Waiver of Notices and Demands.  Guaran­tor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, notices of default, and notices of
acceptance of this Guaranty and of the existence, creation or incurring of new
or additional Guaranteed Obligations.  At the option of Bank, Guarantor may be
joined in any action or proceeding commenced by Bank against Borrower in
connection with or based upon the Guaranteed Obligations or any security
therefor and recovery may be had against Guarantor in such action or proceeding,
without any requirement that Bank first assert, prosecute or exhaust any remedy
or claim against Borrower.  Without limiting the foregoing, Guarantor
acknowledges that repeated and successive demands may be made and payments or
performance made hereunder in response to such demands as and when, from time to
time, Borrower may default in performance of the Guaranteed Obligations. 
Notwithstanding any such performance hereunder, this Guaranty shall remain in
full force and effect and shall apply to any and all subsequent defaults by
Borrower in payment or performance of the Guaranteed Obligations.

 

2.9           Waiver of Defenses.  Guarantor waives any defense arising by
reason of any disability or other defense of Borrower or by reason of the
cessation from any cause whatsoever of the liability of Borrower.  Guarantor
waives any setoff, recoupment, defense or counterclaim which Borrower or
Guarantor may have or claim to have against Bank. Guarantor waives any and all
rights under California Civil Code Sections 2787 through 2855.  All payments due
to Bank hereunder shall be made without any reduction or deduction whatsoever,
including any reduction or deduction for taxes (except for any withholding or
deduction for taxes required to be withheld or deducted under Applicable Law).

 

2.10         Right of Subrogation.  Notwithstanding any payment or payments made
by Guarantor hereunder or any setoff or application of funds of Guarantor by
Bank, Guarantor shall not be entitled to be subrogated to any of the rights of
Bank against Borrower or any other Person or any collateral security or Guaranty
or right of offset held by Bank for the payment of the Guaranteed Obligations,
nor shall Guarantor, in its capacity as Guarantor, seek or be entitled to seek
any contribution or reimbursement from Borrower or any other Person in respect
of payments made by Guarantor hereunder until all the Guaranteed Obligations
have been absolutely, irrevocably, indefeasibly and unconditionally fulfilled,
performed or met.  If any amount shall be paid to Guarantor on account of such
subrogation rights at any time when all of the Guaranteed Obligations and all
amounts owing hereunder shall not have been paid in full, such amount shall be
held by Guarantor in trust for Bank, segregated from other funds of Guarantor,
and shall, forthwith upon receipt by Guarantor, be turned over to Bank in the
exact form received by Guarantor (duly indorsed by Guarantor to Bank, if
required), to be applied

 

5

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against the Guaranteed Obligations, whether matured or unmatured, in such order
as Bank may determine.

 

2.11         Transfers of Interests, etc.  This Guaranty shall inure to the
benefit of and be enforceable by Bank.  Without limiting the generality of
Section 11.1, Bank may assign or otherwise transfer (in whole or in part) any
Interest held by it to any Eligible Assignee who is vested with Bank’s rights
and benefits in respect of such Interest under the Loan Documents, and such
Eligible Assignee shall thereupon become vested with all rights and benefits in
respect thereof granted to Bank under the Loan Documents and this Guaranty or
otherwise.

 

2.12 Time, Place and Manner of Payments by the Guarantor.   (a) All payments due
to Bank hereunder shall be made to Bank at time and place and in the manner
specified under Section 1.09 of the Credit Agreement.

 

(b) In the case of each Guaranteed Obligation that is payable in a currency
other than Dollars, the Guarantor shall, at Bank’s option, either pay the unpaid
amount of such Guaranteed Obligation in accordance with the provisions of
Section 2.12(a) or pay to Bank at the Bank’s Office the equivalent thereof in
Dollars computed at the Bank’s selling rate, on the date such Guaranteed
Obligation became or was deemed to be due, for cable transfers of such foreign
currency to the place where such Guaranteed Obligation is payable, and shall
hold Bank harmless from any loss incurred by it arising from any change in the
value in Dollars of such foreign currency between the date such Guaranteed
Obligation became or was deemed to be due and the date of payment thereof.  For
the avoidance of doubt, it is understood that the exchange rate used for this
purpose may be less favorable to the Guarantor than the definition of the
Applicable Currency Exchange Rate.  If on the date such Guaranteed Obligation
became or was deemed to be due no such selling rate is quoted by Bank, or if at
any time Bank is unable for any reason, including interruption of communications
between Bank and any branch, to establish the amount of such Guaranteed
Obligation, Bank may reasonably determine the equivalent in Dollars of the
amount of such Guaranteed Obligation on the basis of such factors as it shall,
in its sole reasonable judgment, deem appropriate, and the Guarantor shall be
obligated, on demand, to furnish such security or to make such payments on
account of its contingent liability hereunder in respect of such Guaranteed
Obligation as Bank shall reasonably request.

 

2.13   Without prejudice to the Bank’s rights hereunder and under the Loan
Agreement, Guarantor hereby agrees to pay directly to the Bank on behalf of the
Borrower all mounts specified under Section 1.07 of the Credit Agreement, and
authorizes and instructs the Bank to debit any such amounts due from the
Guarantor’s account at the Bank (account number 4496888819).

 

 

3.             Representations and Warranties. Guarantor hereby represents and
warrants and covenants that:

 

(a)           Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it was incorporated,
and is qualified to do business and is in good standing as a foreign corporation
in each other state or jurisdiction where the character of the property owned or
the nature of its business requires it to be so qualified, except where the

 

6

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failure to so qualify would not be reasonably expected to have a material
adverse change to Guarantor’s business, operations or financial statements;

 

(b)           neither the execution nor delivery of this Guaranty or any of the
other documents related hereto nor performance of nor compliance with the terms
and provisions hereof or thereof will conflict with or result in a breach of any
laws, statutes, codes, rules, ordinance, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations or orders of
any governmental department, commission, board, courts, authority or agency
binding upon Guarantor (collectively, “Laws and Permits”) or any other material
agreement or instrument binding upon Guarantor or any of its property
(collectively, “Property”), or conflict with or result in a breach of any
provision of the charter documents or by-laws of Guarantor.  No authorization,
consent or approval or other action by, and no notice to or filing with, any
governmental authority is required to be obtained or made by Guarantor for the
due execution, delivery and performance by Guarantor of this Guaranty.

 

(c)           Guarantor has full power and authority to execute, deliver and
perform this Guaranty and to incur the obligations provided for herein, all of
which have been duly authorized by all proper and necessary company action.  No
consent or approval is required as a condition to the validity or performance
of, or the exercise by Bank of any of its rights and remedies under this
Guaranty.

 

(d)           this Guaranty constitutes legal, valid and binding obligations
enforceable against Guarantor in accordance with its terms, except as may be
limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditor’s rights generally and by general principles of equity, and its
execution and performance will not cause a breach, or an act which with the
passage of time or the giving of notice, or both, would constitute a breach, of
any other material agreement to which Guarantor is a party or to which any of
its respective properties is subject;

 

(e)           Guarantor is now, after giving effect to this Guaranty, and at all
times during the term of this Guaranty shall be, solvent;

 

(f)            the principal place of business of Guarantor is 16750 Via Del
Campo Court, San Diego, CA  92127;

 

(g)           there is no action, suit, or proceeding at law or in equity or by
or before any governmental instrumentality or other agency, domestic or foreign,
now pending or, to the knowledge of Guarantor, threatened against Guarantor or
any property or rights of Guarantor, the effect of which would result in a
material adverse change to Guarantor’s business, operations or financial
statements.  Guarantor is not in default in any material respect with respect to
any judgment, writ, injunction, decree, rule, or regulation applicable to
Guarantor of any court or governmental instrumentality or other agency, domestic
or foreign, which would result in a material adverse change to Guarantor’s
business, operations or financial statements; and

 

(h)           neither this Guaranty nor any of the other certificates,
statements or information furnished to Bank by or on behalf of Guarantor in
connection with this Guaranty or the transactions contemplated hereby contains
or will contain any untrue statement of a material fact

 

7

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or omits or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, misleading.

 

4.             Covenants. Guarantor covenants and agrees that so long as any
Guaranteed Obligation is outstanding it shall comply with the following
provisions.

 

4.1           Mergers.  Guarantor shall not enter into any transaction which
violates Section 5.1 of the Parent Credit Agreement or, if the Parent Credit
Agreement shall not be in effect, any transaction which would violate said
section 5.1 if it were in effect.

 

5.             Renewal and Extension.  Guarantor authorizes Bank, without notice
to, demand of, or consent from Guarantor, and without affecting its liability to
Bank hereunder, from time to time to (a) renew, extend, accelerate or otherwise
change the time or place for payment of, or otherwise change the terms of the
Guaranteed Obligations or any part thereof; (b) take and hold security for the
payment or performance of the Guaranteed Obligations or this Guaranty, and
exchange, enforce, waive, surrender, modify, impair, change, alter, renew,
continue, compromise or release in whole or in part any security, or fail to
perfect its interest in any such security or to establish its priority with
respect thereof; (c) release Borrower, in whole or in part, from any or all of
the Guaranteed Obligations or substitute any or all of the Guaranteed
Obligations; (d) settle or compromise any or all of the Guaranteed Obligations
with Borrower or any endorser or guarantor of the Guaranteed Obligations; and
(e) subordinate any or all of the Guaranteed Obligations to any other
obligations of or claim against Borrower, whether owing to or existing in favor
of Bank or any other party.  Guarantor shall be and remains bound hereunder
notwithstanding any such renewal, extension, acceleration, change, taking,
holding, exchange, enforcement, waiver, surrender, modification, impairment,
alteration, renewal, continuation, compromise, release, failure, application,
direction, substitution, settlement, or subordination.

 

6.             Insolvency.  In the event that Borrower becomes insolvent or
files a petition for reorganization, arrangement, composition, discharge or
similar relief under any present or future provision of the Bankruptcy Code, or
if such a petition be filed against Borrower, and in any such proceedings some
or all of the Guaranteed Obligations shall be terminated or rejected or any of
the Guaranteed Obligations modified or abrogated, Guarantor agrees that its
liability hereunder shall not thereby be affected or modified, and such
liability shall continue in full force and effect as if no such action or
proceeding had occurred.  This Guaranty shall continue to be effective or
reinstated, as the case may be, if any payment of any of the obligations must be
returned by Bank upon the insolvency, bankruptcy or reorganization of Borrower
or Guarantor, or otherwise, as though such payment had not been made.

 

7.             Duty To Keep Informed. Guarantor assumes the responsibility for
being and keeping itself informed of the financial condition of Borrower until
the termination of all of the Guaranteed Obligations hereunder pursuant to
Section 2 above, and of all other circumstances bearing upon the risk of
nonpayment or default under the Guaranteed Obligations which diligent inquiry
would reveal, and agrees that Bank shall have no duty to advise Guarantor of
information known to it regarding such condition or any such circumstances.

 

8.             Lien and Right of Setoff.  In addition to all liens upon, and
right of setoff against the moneys, securities or other property of Guarantor
given to Bank by law, Bank shall have a

 

8

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lien upon and right to setoff against all moneys, securities and other property
of Guarantor now or hereafter in the possession of or on deposit with Bank,
whether held in a general or special account or deposit, or for safekeeping or
otherwise; and every such lien and right of setoff may be exercised without
demand upon or notice to Guarantor.  No lien or right to setoff shall be deemed
to have been waived by any act or conduct on the part of Bank, or by any neglect
to exercise such right of setoff or to enforce such lien, or by any delay in so
doing; and every right of setoff and lien shall continue in full force and
effect until such right of setoff or lien is specifically waived or released by
an instrument in writing executed by Bank.

 

9.             Subordination of Liens.  Any obligations of Borrower now or
hereafter held by Guarantor are hereby subordinated to the Guaranteed
Obligations; and such obligations of Borrower to Guarantor if Bank so requests
shall, upon the occurrence and during the continuation of a Default or Event of
Default, be collected, enforced, supervised and received by Guarantor as trustee
for Bank and be paid over to Bank but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty.

 

10.           Officers and Directors.  It is not necessary for Bank to inquire
into the power of Guarantor or the officers, directors or agents acting or
purporting to act on Guarantor’s behalf, and any obligations made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.

 

11.           Miscellaneous Provisions.

 

11.1         Binding on Successors, Transferees and Assigns; Assignment of
Guaranty.  This Guaranty shall be binding upon Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
Bank and its respective successors and assigns; provided, however, that
Guarantor may not transfer or assign any of its obligations hereunder or, as
long as the Guarantor shall have any liability hereunder, enter into any
transaction which violates Section 4.1 without, in each case, the prior written
consent of Bank (any such transfer, assignment or transaction without such
consent to be void) which consent shall not be unreasonably withheld.

 

11.2         Expenses of Borrower. Guarantor shall reimburse Bank for any and
all costs or expenses incurred by or on behalf of Bank (including, without
limitation, any reasonable legal fees and expenses of Bank’s in-house or outside
counsel and any fees and expenses incurred by any auditor or in connection with
any audit) in the preparation and consummation of this Guaranty.

 

11.3         Amendments, etc.  No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by Bank and
the Guarantor and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

11.4         Addresses for Notices to Guarantor.  All notices, demands,
requests, consents, approvals and other communications hereunder shall be in
writing and directed to the address

 

9

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described in, and deemed received in accordance with the provisions of, Section
8.01 of the Credit Agreement.

 

11.5         No Waiver; Remedies.  In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.  The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

 

11.6         Section Captions.  Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.

 

11.7         Severability.  Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

 

11.8         Termination of Guaranty.  The obligations of Guarantor under this
Guaranty shall terminate on the date upon which (i) Guarantor has fully
performed all of its obligations under this Guaranty and (ii) all Guaranteed
Obligations are satisfied in full.

 

11.9         Entire Agreement.  This Guaranty constitutes and contains the
entire agreement of the parties with respect to the subject matter hereof, and
supersedes any and all prior negotiations, correspondence, understandings, and
agreements respecting the subject matter hereof.

 

11.10.      Counterparts.  This Guaranty may be executed in any number of
counterparts each of which shall be an original with the same effect as if the
signatures thereof and hereto were upon the same instrument.

 

11.11                     Governing Law.  THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF THE STATE OF CALIFORNIA.  FOR
PURPOSES OF ANY ACTION OR PROCEEDING INVOLVING THIS GUARANTY, GUARANTOR HEREBY
EXPRESSLY SUBMITS TO THE JURISDICTION OF ALL FEDERAL AND STATE COURTS LOCATED IN
THE STATE OF CALIFORNIA AND CONSENTS THAT IT MAY BE SERVED WITH ANY PROCESS OR
PAPER BY REGISTERED MAIL OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
CALIFORNIA.

 

11.12       Waiver of Jury Trial.  GUARANTOR AND BANK EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY.

 

10

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IN WITNESS WHEREOF,  Guarantor has caused this Guaranty to be duly executed as
of the date first set forth above.

 

 

CYMER, INC., a Nevada corporation

 

 

 

By

/s/ William A. Angus, III

 

 

 

 

Its Senior Vice President and Chief Financial Officer

 

 

 

 

 

Accepted by:

 

 

 

WELLS FARGO HSBC TRADE BANK N.A.,

 

a national banking association

 

 

 

 

 

By

/s/ Kollyn D. Kanz

 

 

 

 

 

 

Its Assistant Vice President

 

 

 

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AMENDMENT NO. 1

 

DATED AS OF JUNE 7, 2002

 

TO

 

CREDIT AGREEMENT

 

DATED AS OF OCTOBER 30, 2001

 

 

CYMER JAPAN, INC., a Japanese corporation, and WELLS FARGO HSBC TRADE BANK,
N.A., hereby agree as follows:

 

1.             Credit Agreement.  Reference is made to the Credit Agreement (the
“Credit Agreement”), dated as of October 30, 2001, between Cymer Japan, Inc.
(the “Borrower”) and Wells Fargo HSBC Trade Bank, N.A. (the “Bank”), and Parent
Guaranty (the “Guaranty”), dated as of October 30, 2001, by Cymer, Inc., a
Nevada Corporation, for the benefit of the Bank and with respect to the Credit
Agreement.  Terms used but not defined in this Amendment No. 1 (this
“Amendment”) shall have the meaning ascribed thereto in the Credit Agreement.

 

2.             Amendments.  Effective as of the Effective Date (as defined
below), the definition of “Termination Date” in Section 9.01(a) of the Credit
Agreement is amended by deleting the words “June 15, 2002” and inserting, in
lieu thereof, the words “June 16, 2003”.

 

3.             Continuing Effect of Credit Agreement.  Except as expressly
provided herein, the Credit Agreement and the other Borrower Loan Documents
shall remain unmodified and in full force and effect.  The Credit Agreement and
the other Borrower Loan Documents, as amended by this Amendment, are hereby in
all respects confirmed, approved and ratified.

 

4.             Representations and Warranties.  The Borrower represents and
warrants to the Bank as follows:

 

(a)  The Borrower has the power, and has taken all necessary action (including
any necessary stockholder action) to authorize it to authorize it to execute,
deliver and perform this Amendment, to perform the Credit Agreement and the
other Borrower Loan Documents as amended hereby, and to borrow Loans in the
unused amount of the Commitment.

 

(b)  This Amendment has been duly executed and delivered by the Borrower.

 

(c)  This Amendment and the Credit Agreement and the other Borrower Loans
Documents as amended hereby are each a legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of

 

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creditors’ rights generally or by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

(d)  The execution, delivery and performance in accordance with their respective
terms by the Borrower of this Amendment and the Borrower Loan Documents as
amended hereby, and each borrowing thereunder, whether or not in the amount of
the unused Commitment, do not and (absent any change in any Applicable Law or
applicable Contract) will not (a) require any Governmental Approval or any other
consent or approval, including any consent or approval of any Subsidiary or any
consent or approval, of the stockholders of the Borrower, other than
Governmental Approvals and other consents and approvals that have been obtained,
are final and not subject to review on appeal or to collateral attack, and are
in full force and effect, or (b) violate, conflict with, result in a breach of,
constitute a default under, or result in or require the creation of any Lien
upon any assets of any of the Loan Party under, (i) any material Contract to
which any Loan Party is a party or by which the any Loan Party or any of their
respective properties may be bound or (ii) any Applicable Law binding upon any
Loan Party or any of their respective properties.

 

(e)  Each representation and warranty made in the credit Agreement is true and
correct at and as of the date hereof, both with and without giving effect to
this Amendment.

 

(f)  No Default has occurred and is continuing or would result from this
Amendment.

 

5.             Conditions to Effectiveness.  The effectiveness of the amendment
set forth in Section 2 hereof shall be subject to the fulfillment to the
satisfaction of the Bank, on or prior to June 15, 2002, of the following
conditions precedent (the date on which all of such conditions precedent are so
fulfilled is being called the “Effective Date”):

 

(a)              The Bank shall have received this Amendment duly executed by
the Borrower and consent of Guarantor attached hereto duly executed by the
Guarantor;

 

(b)             The Bank shall have received a certificate from a Director of
the Borrower in substantially the form of Exhibit A attached hereto;

 

(c)     No Default shall have occurred and be continuing;

 

(d)    Each Loan Document Representation and Warranty shall be true and correct
in all material respects:

 

(e)     Each representation and warranty contained in Section 4 hereof shall be
true and correct in all material respects; and

 

(f)                Parent Credit Agreement is in full force and effect and the
Parent is in full compliance with all of the covenants thereunder.

 

6.             Governing Law.  This Amendment shall be construed in accordance
with and governed by the law of the State of California (without giving effect
to its choice of law principles).

 

2

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7.             Counterparts.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.

 

8.             Headings.  Section headings in this Amendment are included herein
for convenience and reference only and shall not constitute a part of this
Amendment for any other purpose.

 

[The next page is the signature page]

 

3

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their duly authorized officers all as of the date hereof.

 

 

 

CYMER JAPAN, INC.

 

 

 

 

 

 

 

By:

/s/ Nancy J. Baker

 

 

 

Name: Nancy J. Baker

 

 

Title: Director

 

 

 

 

 

 

 

WELLS FARGO HSBC TRADE BANK, N.A.

 

 

 

 

 

 

 

By:

/s/ Kollyn D. Kanz

 

 

 

Name: Kollyn D. Kanz

 

 

Title:  Assistant Vice President

 

CONSENT OF GUARANTOR

 

The undersigned, as guarantor of the Guaranteed Obligations under the parent
Guaranty dated as of October 30, 2001, hereby acknowledges and consents to this
Amendment and agrees that the Guaranty shall remain in full force and effect
with respect to the obligations of the Borrower under the Credit Agreement and
the other Loan Documents, as amended by this Amendment, and the Guarantor does
further reaffirm the validity and enforceability of the Guaranty after the
effectiveness of this Amendment.

 

Dated: June 7, 2002

 

 

 

 

 

 

CYMER, INC.

 

 

 

 

 

By:

/s/ Nancy J. Baker

 

 

 

 

 

 

Name:  Nancy J. Baker

 

 

 

 

 

Title: Senior Vice President
and Chief Financial Officer

 

4

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EXHIBIT A

 

DIRECTOR’S CERTIFICATE

 

I, Pascal Didier, Representative Director of Cymer Japan, Inc., a Japanese
corporation (the “company”), do hereby certify that:

 

1.                   The copy of the Articles of Incorporation of the Company
delivered pursuant to Section 2.01(a) of the Credit Agreement dated as of
October 30, 2001 between Wells Fargo HSBC Trade Bank, N.A. and the Company
continues to be true and correct copy thereof in effect as of the date hereof;

 

2.                   Attached hereto as Exhibit            is a true and
complete copy of the resolutions of the Board of Directors of the Company
authorizing the execution and delivery of Amendment No. 1, dated as of June 7,
2002 (the “Amendment”), to the Credit Agreement, dated as of October 30, 2001,
between Wells Fargo HSBC Trade Bank, N.A. and the Company (the “Credit
Agreement”) and the performance of the Credit Agreement and the other Borrower
Loan Documents (as defined in the Credit Agreement) as amended by the Amendment;
and such resolutions are in full force and effect as of the date hereof;

 

3.                   Each Loan Document Representations and Warranty is true and
correct in all material respects at and as of the date hereof;

 

4.                   Each representation and warranty in Section 4 of the
Amendment is true and correct in all material respects at and as of the date
hereof;

 

5.                   No Default has occurred and is continuing as of the date
hereof;

 

6.                   The following persons are duly elected or appointed,
qualified and acting officers of the Company holding the office set forth
opposite each such officers’ respective names below, the signature appearing
opposite each such name below is the genuine signature of such person and each
such person is authorized to execute the Amendment and the documents relating
thereto:

 

NAME

 

POSITION

 

SIGNATURE

 

 

 

 

 

Nancy J. Baker

 

Director

 

/s/ Nancy J. Baker

 

IN WITNESS WHEREOF, I have hereunto set may hand this 7th day of June, 2002.

 

 

/s/ Pascal Didier

 

 

Name: Pascal Didier

 

Title: Representative Director

 

5

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I, Nancy J. Baker, as Director of the Company, do hereby certify that Pascal
Didier is the duly elected, qualified and acting Representative Director of the
Company, and that his signature on the foregoing certificate is his genuine
signature.

 

 

/s/ Nancy J. Baker

 

 

Name: Nancy J. Baker

 

Title: Director

 

6

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