FIFTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This Fifth Amendment to Loan and Security Agreement (“Amendment”) is entered
into as of April 23, 2012 by and between Comerica Bank (“Bank”) and Nanometrics
Incorporated, a Delaware corporation, successor by merger to Accent Optical
Technologies Nanometrics, Inc., successor by merger to Nanometrics IVS Division,
Inc. (“Borrower”).
RECITALS
Borrower and Bank are parties to that Loan and Security Agreement dated as of
February 14, 2007, as amended from time to time, including, without limitation
by that First Amendment to Loan and Security Agreement dated September 14, 2007,
that Second Amendment to Loan and Security Agreement dated as of April 29, 2009,
that Third Amendment to Loan and Security Agreement dated as of June 15, 2009
and that Fourth Amendment to Loan and Security Agreement dated April 13, 2010
(collectively, “Agreement”).
The parties desire to amend the Agreement further in accordance with the terms
of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1.Exhibit A to the Agreement is amended by adding (in the appropriate
alphabetical order) or amending and restating the following terms to read in
their entirety as follows:
“ 'Fifth Amendment Date' means April 23, 2012.”
“ 'Revolving Maturity Date' means April 30, 2014.”
2.The reference to “0.1875%” in Section 2.5(b) of the Agreement is deleted and
replaced with “0.10%”.
3.Section 2.3(a) of the Agreement is amended and restated to read in its
entirety as follows:
“(a)    Interest Rates.
(i)    Advances. Except as set forth in Section 2.3(b), the Advances shall bear
interest, on the outstanding daily balance thereof, as set forth in the Prime
Referenced Rate Addendum to Loan and Security Agreement attached hereto as
Exhibit F.”
4.Section 6.2 of the Agreement is amended in its entirety to read as follows:
“6.2    Financial Statements, Reports, Certificates. Borrower shall deliver to
Bank: (i) as soon as available, but in any event within forty five (45) days
after the end of each calendar quarter, a company prepared consolidated and
consolidating balance sheet and income statement covering Borrower's operations
during such period, together with Forms 10-Q filed with the Securities and
Exchange Commission, each in a form reasonably acceptable to Bank and certified
by a Responsible Officer; (ii) as soon as available, but in any event within
ninety (90) days after the end of Borrower's fiscal year, audited consolidated
and consolidating financial statements of Borrower prepared in accordance with
GAAP, consistently applied, together with an opinion which is unqualified
(including no going concern comment or qualification) or otherwise consented to
in writing by Bank on such financial statements of an independent certified
public accounting firm reasonably acceptable to Bank, together with copies of
all statements, reports and notices sent or made available generally by Borrower
to its security holders or to any holders of Subordinated Debt and all reports
on Forms 10-K filed with the Securities and Exchange Commission; (iii) promptly
upon receipt of notice thereof, a report of any legal actions pending or
threatened against Borrower or any Subsidiary that could result in damages or
costs to Borrower or any Subsidiary of One Million Dollars ($1,000,000) or more;
(iv) promptly upon receipt, each management letter prepared by Borrower's
independent certified public accounting firm regarding Borrower's management
control systems; and (v) as soon as possible, and in any event not later than 30
days after the end of each fiscal year of Borrower, Borrower's annual budget,
sales projections, and operating plans for the current fiscal year, which
budget, projections and plans shall be in a form reasonably acceptable to Bank
and any other budgets, sales projections, operating plans or other financial
information generally prepared by Borrower in the ordinary course of business as
Bank may reasonably request from time to time.

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(a)    So long as there are any outstandings under the Revolving Line, within 25
days after the last day of each calendar quarter, Borrower shall deliver to Bank
a Borrowing Base Certificate signed by a Responsible Officer in substantially
the form of Exhibit D hereto, together with aged listings by invoice date of
domestic accounts receivable and accounts payable, listings of all Bank approved
domestic standby letters of credit and the Borrower's domestic cash position as
of such month's end and (ii) within 25 days after the last day of each calendar
quarter thereafter, Borrower shall deliver to Bank a Compliance Certificate
(including the Borrower's domestic cash position and consolidated cash position
as of such month's end) in substantially the form of Exhibit E hereto.
(b)    As soon as possible and in any event within 3 calendar days after
becoming aware of the occurrence or existence of an Event of Default hereunder,
a written statement of a Responsible Officer setting forth details of the Event
of Default, and the action which Borrower has taken or proposes to take with
respect thereto.
(c)    At any time that the aggregate amount of Advances (including both U.S.
Dollar Advances and Alternative Currency Advances) outstanding under the
Revolving Line exceeds $7,500,00, Bank shall have a right from time to time
hereafter to audit Borrower's Accounts and appraise Collateral at Borrower's
expense, provided that such audits will be conducted no more often than every 6
months, unless an Event of Default has occurred and is continuing.
Borrower may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer. If
Borrower delivers this information electronically, it shall also deliver to Bank
by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or
.pdf file within five (5) Business Days of submission of the unsigned electronic
copy the certification of monthly financial statements, the intellectual
property report, the Borrowing Base Certificate and the Compliance Certificate,
each bearing the physical signature of the Responsible Officer.”
5.The last sentence of Section 6.3 is amended and restated to read in its
entirety as follows:
“Borrower shall promptly notify Bank of all returns and recoveries and of all
disputes and claims involving more than $2,500,000.”
6.Section 6.6 of the Agreement is amended and restated to read in its entirety
as follows:
“6.6    Primary Depository. Borrower shall maintain all its domestic depository
and operating accounts with Bank at all times. Borrower shall maintain not less
than fifty percent (50%) of the aggregate balance of all of its operating and
investment accounts in operating and investment accounts maintained with Bank.
Borrower acknowledges and agrees that any account not maintained at Bank shall
be governed by a fully executed control agreement in form and substance
reasonably acceptable to Bank.”
7.Section 6.7(a) of the Agreement is amended in its entirety to read as follows:
“(a)    Minimum Liquidity Ratio. Reported quarterly, at all times when there are
any outstandings under the Revolving Line, Borrower shall maintain a ratio of
(i) Cash plus Eligible Accounts to (ii) all Indebtedness to Bank, of at least
1.50 to 1.00.”
8.New clause (d) is added to Section 6.7 of the Agreement to read in its
entirety as follows:
“(d)    Minimum Cash re Outstanding Utilizations. Borrower shall, at all times,
maintain Cash in an account with Bank in an amount not less than the amount by
which Outstanding Utilizations exceed the Borrowing Base, reported quarterly.”
9.Section 8.9 of the Agreement is amended and restated to read in its entirety
as follows:
“8.9    Judgments.    If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least $5,000,000 shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of 10 days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of the judgment); or”

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10.Notwithstanding anything to the contrary set forth in the Agreement, Borrower
acknowledges and agrees that prior to each Advance, Borrower shall submit to
Bank a Borrowing Base Certificate, together with aged listings by invoice date
of domestic accounts receivable and accounts payable, listings of all Bank
approved domestic standby letters of credit and the Borrower's domestic cash
position as of such month's end and a Compliance Certificate.
11.Exhibits E (Compliance Certificate) and F (Interest Rate Addendum) to the
Agreement are deleted and replaced with Exhibits E and F attached hereto.
12.No course of dealing on the part of Bank or its officers, nor any failure or
delay in the exercise of any right by Bank, shall operate as a waiver thereof,
and any single or partial exercise of any such right shall not preclude any
later exercise of any such right. Bank's failure at any time to require strict
performance by Borrower of any provision shall not affect any right of Bank
thereafter to demand strict compliance and performance. Any suspension or waiver
of a right must be in writing signed by an officer of Bank.
13.Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof.
14.Borrower represents and warrants that the Representations and Warranties
contained in the Agreement are true and correct as of the date of this
Amendment, and that no Event of Default has occurred and is continuing.
15.As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:
(a)this Amendment, duly executed by Borrower;
(b)a Prime Referenced Rate Addendum to Loan and Security Agreement, duly
executed by Borrower;
(c)a Certificate of the Secretary of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Amendment;
(d)a non-refundable commitment fee in the amount of $15,000, which fee may be
debited from any of Borrower's accounts;
(e)all reasonable Bank Expenses incurred through the date of this Amendment,
which may be debited from any of Borrower's accounts; and
(f)such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
16.This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the undersigned have executed this Fifth Amendment to Loan
and Security Agreement as of the first date above written.
    
 
NANOMETRICS, INC.

By: /s/ Ronald W Kisling

Title: Chief Financial Officer
 

COMERICA BANK

By: /s/ Robert R Shutt

Title: SVP

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EXHIBIT E
Form of Compliance Certificate
Please send all Required Reporting to:                         Comerica Bank
Technology & Life Sciences Division
Loan Analysis Department
250 Lytton Avenue
3rd Floor, MC 4240
Phone: (650) 462-6060
Fax: (650) 462-6061
FROM:        NANOMETICS INCORPORATED

The undersigned authorized Officer of Nanometrics Incorporated (“Borrower”),
hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement between Borrower and Bank (as amended from time to time,
the “Agreement”), (i) Borrower is in complete compliance for the period ending
__________________________ with all required covenants, including without
limitation the ongoing registration of intellectual property rights in
accordance with Section 6.8, except as noted below and (ii) all representations
and warranties of Borrower stated in the Agreement are true and correct in all
material respects as of the date hereof. Attached herewith are the required
documents supporting the above certification. The Officer further certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied from one period to the next except as
explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under “Complies” column.

REPORTING COVENANTS
REQUIRED
COMPLIES
Consolidated F/S, Customer Detail Report
Quarterly, within 45 days of calendar quarter
YES
NO
Compliance Certificate
Quarterly, within 25 days of calendar quarter
YES
NO
CPA Audits, Unqualified F/S
Annually, within 90 days of FYE
YES
NO
A/R Aging
So long as there are Advances outstanding, quarterly, within 25 days of calendar
quarter
YES
NO
A/P Aging
So long as there are Advances outstanding, quarterly, within 25 days of calendar
quarter
YES
NO
Borrowing Base Certificate
So long as there are Advances outstanding, quarterly, within 25 days of calendar
quarter
YES
NO
Standby Letters of Credit
So long as there are Advances outstanding, quarterly, within 25 days
YES
NO
Budgets, sales projections and operating plans
Annually, within 30 days of FYE
YES
NO
If Public:
 
 
 
10-Q
Quarterly, within 45 days of calendar quarter
YES
NO
10-K
Annually, within 90 days of FYE
YES
NO

FINANCIAL COVENANTS
REQUIRED
ACTUAL
COMPLIES
TO BE REPORTED QUARTERLY, UNLESS OTHERWISE NOTED:
Minimum Liquidity Ratio
1.50:1.00
__________:1.00
YES
NO
Minimum TNW Plus Subordinated Debt (tested quarterly)
See Section 6.7(b) of the Agreement
$_______________________
YES
NO
Cash Percentage
Cash to be at least 35% of Consolidated Cash
Cash:
$

Consolidated Cash:
$
YES
NO
Minimum Cash re Outstanding Utilizations
See Section 6.7(d) of the Agreement
$
YES
NO

Please Enter Below Comments Regarding Covenant Violations:

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The Officer further acknowledges that at any time Borrower is not in compliance
with all the terms set forth in the Agreement, including, without limitation,
the financial covenants, no credit extensions will be made.
Very truly yours,
 
BANK USE ONLY
 
 
 
 
 
 
Rec'd By:
 
Authorized Signer:
 
Date:
 
 
 
Reviewed By:
 
 
 
Date:
 
Name:
 
Financial Compliance Status: YES/NO
 
 
 
 
 
 
 
 
Title:
 
 
 

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EXHIBIT F
(attached Prime Referenced Rate Addendum to Loan and Security Agreement)

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Corporation Resolutions and Incumbency Certification
Authority to Procure Loans

I certify that I am the duly elected and qualified Secretary of NANOMETRICS
INCORPORATED, a Delaware corporation (the “Corporation”), that the following is
a true and correct copy of resolutions duly adopted by the Board of Directors of
the Corporation in accordance with its bylaws and applicable statutes.
Copy of Resolutions:
Be it Resolved, That:
1.
Any officer of the Corporation is authorized, for, on behalf of, and in the name
of the Corporation to:

(a)
Negotiate and procure loans, letters of credit and other credit or financial
accommodations from Comerica Bank (“Bank”), including, without limitation, that
certain Loan and Security Agreement dated as of February 14, 2007, as amended
from time to time, including but not limited to that certain First Amendment to
Loan and Security Agreement dated as of September 14, 2007, that certain Second
Amendment to Loan and Security Agreement dated as of April 29, 2009, that
certain Third Amendment to Loan and Security Agreement dated as of June 15,
2009, that certain Fourth Amendment to Loan and Security Agreement dated as of
April 13, 2010 and that certain Fifth Amendment to Loan and Security Agreement
dated as of April 23, 2012 (collectively, the “Agreement”).

(b)
Discount with the Bank, commercial or other business paper belonging to the
Corporation made or drawn by or upon third parties, without limit as to amount;

(c)
Purchase, sell, exchange, assign, endorse for transfer and/or deliver
certificates and/or instruments representing stocks, bonds, evidences of
Indebtedness or other securities owned by the Corporation, whether or not
registered in the name of the Corporation;

(d)
Give security for any liabilities of the Corporation to the Bank by grant,
security interest, assignment, lien, deed of trust or mortgage upon any real or
personal property, tangible or intangible of the Corporation;

(e)
Issue warrants to purchase the Corporation's capital stock; and

(f)
Execute and deliver in form and content as may be required by the Bank any and
all notes, evidences of Indebtedness, applications for letters of credit,
guaranties, subordination agreements, loan and security agreements, financing
statements, assignments, liens, deeds of trust, mortgages, trust receipts and
other agreements, instruments or documents to carry out the purposes of these
Resolutions, any or all of which may relate to all or to substantially all of
the Corporation's property and assets.

2.
Said Bank be and it is authorized and directed to pay the proceeds of any such
loans or discounts as directed by the persons so authorized to sign, in
accordance with the Agreement;

3.
Any and all agreements, instruments and documents previously executed and acts
and things previously done to carry out the purposes of these Resolutions are
ratified, confirmed and approved as the act or acts of the Corporation.

4.
These Resolutions shall continue in force, and the Bank may consider the holders
of said offices and their signatures to be and continue to be as set forth in a
certified copy of these Resolutions delivered to the Bank, until notice to the
contrary in writing is duly served on the Bank (such notice to have no effect on
any action previously taken by the Bank in reliance on these Resolutions).

5.
Any person, corporation or other legal entity dealing with the Bank may rely
upon a certificate signed by an officer of the Bank to the effect that these
Resolutions and any agreement, instrument or document executed pursuant to them
are still in full force and effect and binding upon the Corporation.

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6.
The Bank may consider the holders of the offices of the Corporation and their
signatures, respectively, to be and continue to be as set forth in the
Certificate of the Secretary of the Corporation until notice to the contrary in
writing is duly served on the Bank.

I further certify that the above Resolutions are in full force and effect as of
the date of this Certificate; that these Resolutions and any borrowings or
financial accommodations under these Resolutions have been properly noted in the
corporate books and records, and have not been rescinded, annulled, revoked or
modified; that neither the foregoing Resolutions nor any actions to be taken
pursuant to them are or will be in contravention of any provision of the
certificate of incorporation or bylaws of the Corporation or of any agreement,
indenture or other instrument to which the Corporation is a party or by which it
is bound; and that neither the certificate of incorporation nor bylaws of the
Corporation nor any agreement, indenture or other instrument to which the
Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described
in the foregoing Resolutions.
I further certify that the following named persons have been duly elected to the
offices set opposite their respective names, that they continue to hold these
offices at the present time, and that the signatures which appear below are the
genuine, original signatures of each respectively:
(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)
NAME (Type or Print)
TITLE
SIGNATURE
Timothy J. Stultz
Chief Executive Officer
/s/ Timothy J. Stultz
Bruce A. Crawford
Chief Operating Officer
/s/ Bruce A. Crawford
Ronald W. Kisling
Chief Financial Officer
/s/ Ronald W. Kisling
Nancy E. Egan
General Counsel & Secretary
/s/ Nancy E. Egan
 
 
 

In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal (where available) of said Corporation to be affixed on April 23,
2012.
            
/s/ Nancy E. Egan
Secretary

The Above Statements are Correct.
/s/ Ronald W Kisling
 
SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE, A SHAREHOLDER OTHER THAN SECRETARY
WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.

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Prime Referenced Rate Addendum
To Loan and Security Agreement
This Prime Referenced Rate Addendum to Loan and Security Agreement (this
“Addendum”) is entered into as of April 23, 2012, by and between Comerica Bank
(“Bank”) and Nanometrics Incorporated, a Delaware corporation (“Borrower”). This
Addendum supplements the terms of the Loan and Security Agreement dated February
14, 2007 (as the same may be amended, modified, supplemented, extended or
restated from time to time, the “Agreement”).
1.Definitions. As used in this Addendum, the following terms shall have the
following meanings. Initially capitalized terms used and not defined in this
Addendum shall have the meanings ascribed thereto in the Agreement.
a.“Applicable Margin” means one half of one percent (0.50%) per annum.
b.“Business Day” means any day, other than a Saturday, Sunday or any other day
designated as a holiday under Federal or applicable State statute or regulation,
on which Bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in San Jose,
California, and, in respect of notices and determinations relating the Daily
Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also
carried on in the London interbank market and on which banks are open for
business in London, England.
c.“Change in Law” means the occurrence, after the date hereof, of any of the
following: (i) the adoption or introduction of, or any change in any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not applicable to Bank on such date, or (ii) any change
in interpretation, administration or implementation thereof of any such law,
treaty, rule or regulation by any Governmental Authority, or (iii) the issuance,
making or implementation by any Governmental Authority of any interpretation,
administration, request, regulation, guideline, or directive (whether or not
having the force of law), including any risk-based capital guidelines. For
purposes of this definition, (x) a change in law, treaty, rule, regulation,
interpretation, administration or implementation shall include, without
limitation, any change made or which becomes effective on the basis of a law,
treaty, rule, regulation, interpretation administration or implementation then
in force, the effective date of which change is delayed by the terms of such
law, treaty, rule, regulation, interpretation, administration or implementation,
and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L.
111-203, H.R. 4173) and all requests, rules, regulations, guidelines,
interpretations or directives promulgated thereunder or issued in connection
therewith shall be deemed to be a “Change in Law”, regardless of the date
enacted, adopted, issued or promulgated, whether before or after the date
hereof, and (z) all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States regulatory
authorities, in each case pursuant to Basel III, shall each be deemed to be a
"Change in Law", regardless of the date enacted, adopted, issued or implemented.
d.“Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate
which is equal to the quotient of the following:
(1)    for any day, the per annum rate of interest determined on the basis of
the rate for deposits in United States Dollars for a period equal to one (1)
month appearing on Page BBAM of the Bloomberg Financial Markets Information
Service as of 8:00 a.m. (California time) (or as soon thereafter as practical)
on such day, or if such day is not a Business Day, on the immediately preceding
Business Day. In the event that such rate does not appear on Page BBAM of the
Bloomberg Financial Markets Information Service (or otherwise on such Service)
on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by
reference to such other publicly available service for displaying eurodollar
rates as may be reasonably selected by Bank, or in the absence of such other
service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be
determined based upon the average of the rates at which Bank is offered dollar
deposits at or about 8:00 a.m. (California time) (or as soon thereafter as
practical), on such day, or if such day is not a Business Day, on the
immediately preceding Business Day, in the interbank eurodollar market in an
amount comparable to the outstanding principal amount of the Obligations and for
a period equal to one (1) month;
divided by
(2)    1.00 minus the maximum rate (expressed as a decimal) on such day at which
Bank is required to maintain reserves on "Euro-currency Liabilities" as defined
in and pursuant to Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and as long as Bank is
required to maintain reserves against a category of liabilities which includes
eurodollar deposits or includes a category of assets which includes eurodollar
loans, the rate at which such reserves are required to be maintained on such
category.
e.“Governmental Authority” means the government of the United States of America
or any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including, without limitation, any supranational bodies such as the
European Union or the European Central Bank).
f.“LIBOR Lending Office” means Bank's office located in the Cayman Islands,
British West Indies, or such other branch

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of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending
Office by notice to Borrower.
g."Prime Rate" means the per annum interest rate established by Bank as its
prime rate for its borrowers, as such rate may vary from time to time, which
rate is not necessarily the lowest rate on loans made by Bank at any such time.
h."Prime Referenced Rate" means, for any day, a per annum interest rate which is
equal to the Prime Rate in effect on such day, but in no event and at no time
shall the Prime Referenced Rate be less than the sum of the Daily Adjusting
LIBOR Rate for such day plus two and one-half percent (2.50%) per annum. If, at
any time, Bank determines that it is unable to determine or ascertain the Daily
Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day
shall be the Prime Rate in effect at such time, but not less than two and
one-half percent (2.50%) per annum.
2.Interest Rate Options. Subject to the terms and conditions of this Addendum,
the Obligations under the Agreement shall bear interest at the Prime Referenced
Rate plus the Applicable Margin.
3.Payment of Interest. Accrued and unpaid interest on the unpaid balance of the
Obligations outstanding under the Agreement shall be payable monthly, in
arrears, on the first Business Day of each month, until maturity (whether as
stated herein, by acceleration, or otherwise). In the event that any payment
under this Addendum becomes due and payable on any day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day,
and, to the extent applicable, interest shall continue to accrue and be payable
thereon during such extension at the rates set forth in this Addendum. Interest
accruing hereunder shall be computed on the basis of a year of 360 days, and
shall be assessed for the actual number of days elapsed, and in such
computation, effect shall be given to any change in the applicable interest rate
as a result of any change in the Prime Referenced Rate on the date of each such
change.
4.Bank's Records. The amount and date of each advance under the Agreement, its
applicable interest rate, and the amount and date of any repayment shall be
noted on Bank's records, which records shall be conclusive evidence thereof,
absent manifest error; provided, however, any failure by Bank to make any such
notation, or any error in any such notation, shall not relieve Borrower of its
obligations to repay Bank all amounts payable by Borrower to Bank under or
pursuant to this Addendum and the Agreement, when due in accordance with the
terms hereof.
5.Default Interest Rate. From and after the occurrence of any Event of Default,
and so long as any such Event of Default remains unremedied or uncured
thereafter, the Obligations outstanding under the Agreement shall bear interest
at a per annum rate of five percent (5%) above the otherwise applicable interest
rate hereunder, which interest shall be payable upon demand. In addition to the
foregoing, a late payment charge equal to five percent (5%) of each late payment
hereunder may be charged on any payment not received by Bank within ten (10)
calendar days after the payment due date therefor, but acceptance of payment of
any such charge shall not constitute a waiver of any Event of Default under the
Agreement. In no event shall the interest payable under this Addendum and the
Agreement at any time exceed the maximum rate permitted by law.
6.Prepayment. Borrower may prepay all or part of the outstanding balance of any
Obligations at any time without premium or penalty. Any prepayment hereunder
shall also be accompanied by the payment of all accrued and unpaid interest on
the amount so prepaid. Borrower hereby acknowledges and agrees that the
foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect
Bank's right to make demand for payment of all or any part of the Obligations
under the Agreement due on a demand basis in Bank's sole and absolute
discretion.
7.Regulatory Developments or Other Circumstances Relating to the Daily Adjusting
LIBOR Rate.
a.If any Change in Law shall: (a) subject Bank to any tax, duty or other charge
with respect to this Addendum or any Obligations under the Agreement, or shall
change the basis of taxation of payments to Bank of the principal of or interest
under this Addendum or any other amounts due under this Addendum in respect
thereof (except for changes in the rate of tax on the overall net income of Bank
or its LIBOR Lending Office imposed by the jurisdiction in which Bank's
principal executive office or LIBOR Lending Office is located); or (b) impose,
modify or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by Bank, or shall impose on Bank or the foreign
exchange and interbank markets any other condition affecting this Addendum or
the Obligations; and the result of any of the foregoing is to increase the cost
to Bank of maintaining any part of the Obligations or to reduce the amount of
any sum received or receivable by Bank under this Addendum by an amount deemed
by Bank to be material, then Borrower shall pay to Bank, within fifteen (15)
days of Borrower's receipt of written notice from Bank demanding such
compensation, such additional amount or amounts as will compensate Bank for such
increased cost or reduction. A certificate of Bank, prepared in good faith and
in reasonable detail by Bank and submitted by Bank to Borrower, setting forth
the basis for determining such additional amount or amounts necessary to
compensate Bank shall be conclusive and binding for all purposes, absent
manifest error.
b.In the event that any Change in Law affects or would affect the amount of
capital required or expected to be maintained by Bank (or any corporation
controlling Bank), and Bank determines that the amount of such capital is
increased by or based upon the existence of any obligations of Bank hereunder or
the maintaining of any Obligations, and such increase has the effect of reducing
the rate of return on Bank's (or such controlling corporation's) capital as a
consequence of such obligations or the maintaining of such Obligations to a
level below that which Bank (or such controlling corporation) could have
achieved but for such circumstances (taking into consideration its policies with
respect to capital adequacy), then Borrower shall pay to Bank, within fifteen
(15) days of Borrower's receipt of written notice from Bank demanding such
compensation, additional amounts as are sufficient to compensate Bank (or such
controlling corporation) for any increase in the amount of capital and reduced
rate of return which Bank reasonably determines to be allocable to the existence
of any obligations of Bank hereunder or to maintaining

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

any Obligations. A certificate of Bank as to the amount of such compensation,
prepared in good faith and in reasonable detail by Bank and submitted by Bank to
Borrower, shall be conclusive and binding for all purposes absent manifest
error.
8.Legal Effect. Except as specifically modified hereby, all of the terms and
conditions of the Agreement remain in full force and effect.
9.Conflicts. As to the matters specifically the subject of this Addendum, in the
event of any conflict between this Addendum and the Agreement, the terms of this
Addendum shall control.

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.
 
 
 
 
 
COMERICA BANK

 
 
NANOMETRICS INCORPORATED
 
 
 
 
By:
/S/ Robert S. Shutt
 
By:
/S/ Ronald W. Kisling
Name:
Robert R. Shutt
 
Name:
Ronald W. Kisling
Title:
SVP
 
Title:
Chief Financial Officer