Exhibit 10.1


 


SECOND LOAN MODIFICATION AGREEMENT


 


THIS SECOND LOAN MODIFICATION
AGREEMENT (this “Agreement”) is made and entered into as of April 29,
2010 by and between UNION BANK, N.A., successor to
UNION BANK OF CALIFORNIA, N.A. (“Bank”) and
COHERENT, INC., a Delaware corporation (“Borrower”), with respect to the following facts:


 


RECITALS


 


This Agreement is made
and entered into in reliance on the following recitals, which are acknowledged
by Borrower and Bank to be true and accurate:


 


A.                                    Bank and Borrower entered into:  a revolving credit facility (collectively,
the “Revolving Loans”) including
subfacilities for commercial and standby letters of credit, pursuant to the
terms of that certain Loan Agreement dated as of March 31, 2008 (as
amended, from time to time, including by that certain First Loan Modification
Agreement, dated as of February 10, 2010, the “Loan
Agreement”).  The Revolving
Loans are evidenced by that certain Promissory Note (Base Rate) dated as of March 31,
2008 in the maximum principal amount of FORTY MILLION DOLLARS ($40,000,000) (as
amended, from time to time, the “Revolving Note”).  Borrower may have liabilities to Bank under
other credit facilities; Bank and Borrower intend that such other facilities
shall not be affected by this Agreement and shall remain in full force and
effect in all respects.


 


B.                                    There are no written or oral agreements
concerning or affecting the Revolving Loans, the L/C’s between Borrower, on the one hand, and Bank, on the
other, other than the Loan Documents.  Capitalized terms not defined herein shall
have the meanings assigned to them in the Loan Agreement.


 


C.                                    At Borrower’s request, Bank is willing to
modify the Loan Documents as set forth herein, provided that the conditions set
forth herein are satisfied within the time periods required under this
Agreement.


 


AGREEMENT


 


NOW THEREFORE, in consideration of the foregoing and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:


 


1.                                      Incorporation of Recitals. 
Each of the above recitals is incorporated herein as true and correct
and is relied upon by each party to this Agreement in agreeing to the terms of
this Agreement.


 


2.                                      Confirmation of Debt. 
Borrower hereby ratifies, reaffirms and confirms all of the terms and
conditions of the Loan Documents in all respects and hereby acknowledge that
the Loan Documents are valid and enforceable obligations against Borrower, due
and payable in full, without defenses, setoffs or counterclaims of any
kind.  The indebtedness evidenced by the
Loan Documents is hereby acknowledged and admitted.  Except as expressly set
forth herein, this Agreement shall not alter, modify, amend, or in any way
affect any of the terms, conditions, obligations, covenants, or agreements
contained in the Loan Agreement or any other Loan Document.


 


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3.                                      Conditions Precedent. 
Borrower understands that this Agreement shall not be effective and Bank
shall have no obligation to amend the terms of the Loan Documents as provided
herein, unless and until each of the following conditions precedent has been
satisfied not later than April 12, 2010, or waived by Bank (in Bank’s sole
discretion):


 


(a)                                  Borrower shall have executed and
delivered to Bank this Agreement.


 


(b)                                  The
representations and warranties of Borrower under the Loan Agreement, this
Agreement and each other Loan Documents, as applicable, shall be true and
correct as of the date hereof (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they are true,
correct and complete as of such earlier date.


 


(c)                                  Borrower shall have reimbursed Bank for
Bank’s costs and expenses, including, without limitation, reasonable attorneys’
fees and expenses (including the fees of Bank’s in-house legal counsel and
staff), incurred in connection with the negotiation and drafting of this
Agreement and the transactions contemplated hereby.


 


4.                                      [Reserved].


 


5.                                      Modification of Loan Documents. 
To induce Bank to enter into this Agreement, Borrower agrees that the
Loan Documents are hereby supplemented and modified as follows, which
modifications shall supersede and prevail over any conflicting provisions of
the Loan Documents:


 


(a)                                  Section 5.5 of the Loan Agreement is
hereby amended and restated in its entirety to read as follows:


 


“5.5                         Redemption of Stock. 
Except for the payment of an aggregate amount not to exceed $50,000,000
for the repurchase of Borrower’s common stock prior to March 31, 2012
pursuant to a stock repurchase plan approved by Borrower’s Board of Directors,
Borrower will not repurchase, redeem or retire any share of its capital stock
for value.”


 


6.                                      Representations and Warranties. 
To induce Bank to enter into this Agreement, Borrower hereby represents
and warrants to Bank as follows:


 


(a)                                  All representations and warranties
contained in this Agreement and in any and all of the other Loan Documents are
and remain true, correct and complete as of the date of this Agreement (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case, they are and remain true, correct and complete as of such
earlier date), and all such representations and warranties shall survive the
execution of this Agreement.


 


(b)                                  The execution, delivery and performance
by Borrower of this Agreement and all documents contemplated hereunder are
within Borrower’s powers, have been duly authorized, and are not in conflict
with Borrower’s certificate of incorporation or by-laws, or the terms of any
charter or other organizational document of Borrower; and all such documents
constitute valid and binding obligations of Borrower, enforceable in 


 


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accordance with their
terms.  In addition, such execution,
delivery and performance by Borrower will not violate any law, rule or
order of any court or governmental agency or body to which Borrower is subject;
and cannot (except as expressly provided or contemplated herein) result in the
creation or imposition of any lien, security interest or encumbrance on any now
owned or hereafter acquired property of Borrower.


 


(c)                                  No event has occurred or failed to occur
that is, or, with notice or lapse of time or both would constitute a default,
an Event of Default, or a breach or failure of any condition under any Loan
Document.


 


(d)                                  The Revolving Note represents an
unconditional, absolute, valid and enforceable obligation against
Borrower.  Borrower has no claims,
counterclaims, or defenses against Bank or any other person or entity which
would or might affect: (i) the enforceability of any provisions of the
Loan Documents; or (ii) the collectability of sums advanced by Bank in
connection with the Loan.  Borrower has
no offsets, disputes or disagreements of any kind or nature whatsoever with
respect to its obligations under the Loan Documents.  Borrower understands and acknowledges that
Bank is entering into this Agreement in reliance upon, and in partial
consideration for, these acknowledgments and representations, and agrees that
such reliance is reasonable and appropriate.


 


7.                                      Dispute Resolution.  This Agreement hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between Borrower, and Bank.


 


8.                                      Miscellaneous


 


(a)                                  All the parties hereto agree to and will
cooperate fully with each other in the performance of this Agreement and the
Loan Documents including, without limitation, executing any additional
documents and instruments reasonable or necessary to the full performance of
this Agreement.  Without limiting the
generality of the foregoing, Borrower agrees to execute such other and further
documents and instruments as Bank may request to implement the provisions of
this Agreement.


 


(b)                                  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto, and their
respective successors and assigns.  No
other person or entity shall be entitled to claim any right or benefit
hereunder, including, without limitation, the status of a third party
beneficiary hereunder.


 


(c)                                  Bank and Borrower agree that except as
expressly provided herein, the Loan Documents shall remain in full force and
effect in accordance with their respective terms, and this Agreement shall not
be construed to:


 


(i)                                    Waive or impair any rights, powers or
remedies of Bank under the Loan Documents;


 


(ii)                                Constitute an agreement by Bank or
require Bank to grant forbearance periods or extend the term of the Note or the
time for payment of any of Borrower’s obligations to Bank except as expressly
provided herein, none of 


 


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which Bank agrees or has
agreed to do, and all of which matters are in Bank’s sole and absolute
discretion;


 


(iii)                            Make any other loans or other extension
of credit to Borrower;


 


(iv)                               Imply a willingness on the
part of Bank to grant any similar or other future amendments or modifications
to any of the terms and conditions of the Loan Agreement or the other Loan
Documents or grant any waivers, or shall in any way prejudice, impair or effect
any rights or remedies of the Bank under the Loan Agreement or the other Loan
Documents;


 


(v)                                   Operate as a
waiver of, or as an amendment of, any right, power, or remedy of Bank under the
Loan Agreement, as in effect prior to the date hereof; or


 


(vi)                               Constitute a
satisfaction of Borrower’s or any Guarantor’s Obligations.


 


In the event of any
inconsistency between the terms of this Agreement and any other Loan Document,
this Agreement shall govern.  Borrower
acknowledges that it has consulted with counsel and with such other experts and
advisors as it has deemed necessary in connection with the negotiation,
execution and delivery of this Agreement, or has had an opportunity to so
consult and has knowingly chosen not to do so. 
This Agreement shall be construed without regard to any presumption or rule requiring
that it be construed against the party causing this Agreement or any part
hereof to be drafted.  The headings used
in this Agreement are for convenience only and shall be disregarded in
interpreting the substantive provisions of this Agreement.


 


(d)                                  This Agreement and the other Loan
Documents shall not be deemed or construed to create a partnership, tenancy in
common, joint tenancy, joint venture, co-ownership or any other relationship
aside from a continuing debtor-creditor relationship between Borrower, on the one hand, and Bank, on the
other.


 


(e)                                  In case any provision in this Agreement
shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of this Agreement and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


(f)                                    If Bank receives any payments or rents,
issues, profits or proceeds of any collateral which are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be paid to a trustee, debtor-in-possession, receiver or any other party
under any bankruptcy law, common law, equitable cause or otherwise, then, to
such extent, the obligations or part thereof intended to be satisfied by such
payments or proceeds shall be reversed and continue as if such payments or
proceeds had not been received by Bank.


 


(g)                                 Notwithstanding the rights given to Borrower
pursuant to California Civil Code sections 1479 and 2822 (and any amendments or
successors thereto), to designate how payments will be applied, Borrower hereby
waives such rights and Bank shall have the right in its sole discretion to
determine the order and method of the application of 


 


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payments to this and/or
any other credit facilities that may be provided by Bank to Borrower and to
revise such application prospectively or retroactively at its discretion.


 


(h)                                 This Agreement may not be amended, waived
or modified in any manner without the prior written consent of the party
against whom the amendment, waiver or modification is sought to be enforced.


 


(i)                                    Borrower shall reimburse Bank for all
costs and expenses, including, without limitation, reasonable attorneys’ fees
and disbursements (and fees and disbursements of Bank’s in-house legal counsel
and staff) expended or incurred by Bank in any arbitration, mediation, judicial
reference, legal action or otherwise in connection with: (i) the
negotiation, preparation, amendment, interpretation and enforcement of the Loan
Documents, including, without limitation, during any workout, attempted
workout, and/or in connection with the rendering of legal advice as to Bank’s
rights, remedies and obligations under the Loan Documents; (ii) collecting
any sum which becomes due Bank under any Loan Document; (iii) any
proceeding for declaratory relief, any counterclaim to any proceeding, or any
appeal; or (iv) the protection, preservation or enforcement of any rights
of Bank.  For purposes of this section,
attorneys’ fees shall include, without limitation, fees incurred in connection
with the following:  (1) contempt
proceedings; (2) discovery; (3) any motion, proceeding or other
activity of any kind in connection with a bankruptcy proceeding or case arising
out of or relating to any petition under Title 11 of the United States Code, as
the same shall be in effect from time to time, or any similar law; (4) garnishment,
levy, and debtor and third party examinations; and (5) postjudgment
motions and proceedings of any kind, including, without limitation, any
activity taken to collect or enforce any judgment.  All of such costs and expenses shall bear
interest from the time of demand at the rate then in effect under the Revolving
Note.


 


(j)                                    Except as otherwise provided herein, this
Agreement and all other Loan Documents and the rights and obligations of the
parties hereto shall be governed by the laws of the State of California without
regard to principles concerning choice of law.


 


(k)                                This Agreement may be executed in any
number of counterparts which, when taken together, shall constitute but one
agreement.


 


(l)                                    This Agreement and the other Loan
Documents are intended by the parties as the final expression of their
agreement and therefore incorporate all negotiations of the parties hereto and
are the entire agreement of the parties hereto. 
Borrower acknowledges that it is relying on no written or oral
agreement, representation, warranty, or understanding of any kind made by Bank
or any employee or agent of Bank except for the agreements of Bank set forth
herein or in the other Loan Documents. 
Except as expressly set forth in this Agreement, the other Loan
Documents remain unchanged and in full force and effect.


 


[Remainder of Page Left Blank]


 


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IN
WITNESS WHEREOF,
Bank and Borrower have executed this Agreement as of the date set forth in the
preamble.


 


 


	
  BORROWER

  	
   

  	
  BANK

  
	
   

  	
   

  	
   

  
	
  COHERENT, INC.

  	
   

  	
  UNION BANK, N.A.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Helene Simonet

  	
   

  	
  By:

  	
  /s/ Allan B. Miner

  
	
  Name:

  	
  Helene Simonet

  	
   

  	
  Name:

  	
  Allan B. Miner

  
	
  Title:

  	
  EVP CFO

  	
   

  	
  Title:

  	
  Vice President

  



 


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