**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 WELLSFARGO HSBC TRADE BANK, N.A. agree as follows (with certain terms used hereinbeing defined in Article 9):

 

ARTICLE1

 

CREDIT FACILITY

 

Section 1.01             Commitmentto Lend.  Uponthe terms and subject to the conditions of this Agreement, the Bank agrees tomake, from time to time during the period from the Agreement Date through theTermination Date, one or more Loans to the Borrower in an aggregate unpaidprincipal amount not exceeding at any one time outstanding the Commitment atsuch time.

 

Section 1.02             Mannerof Borrowing.  (a)  TheBorrower shall give the Bank notice (which shall be irrevocable) no later than2:00 p.m. (California time) on the third Business Day before the requested datefor the making of any Loan (such third Business Day being called the “NotificationDate”).  Each such notice ofborrowing shall be in the form of Schedule 1.02  and shall specify (a) the requested date forthe making of the requested Loan, which shall be a Business Day, (b) theaccount to which proceeds of the Loan will be remitted, (c) the Maturity Datefor such Loan requested pursuant to Section 1.04, and (d) the amount of suchLoan, 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 entireundrawn amount of the Commitment then available for borrowing hereunder).  Not later than the second Business Daybefore the requested date for the making of such Loan, the Bank will determinethe Dollar Equivalent of the amount of the requested Loan as of theNotification Date, and notify the Borrower if (i) the requested amount of theLoan would exceed the undrawn Commitment (determined as of the NotificationDate, but assuming that all other Loans which are scheduled to mature on orprior 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 undrawnCommitment, and (ii) the Bank is unable to accept the Borrower’s requestedMaturity Date due to its inability to obtain funding for the relevant maturityon commercially reasonable terms, whereupon the Maturity Date of the Loan willbe such date as may be determined by the Bank.

 

(b)  Each Loanso requested shall be disbursed by the Bank not later than the requested datetherefor (Tokyo time) in Yen in funds immediately available to the Borrower bycredit to an account of the Borrower as shall have been specified in theapplicable notice of borrowing and as shall be acceptable to the Bank; providedthat the Borrower hereby irrevocably directs the Bank to apply the proceed ofany Loan to any amounts then due hereunder (including any unpaid principalamount of and interest accrued on any other Loan maturing on or prior to thedate of disbursement of such Loan).

 

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Section 1.03             Interest.  (a)  Rates.  Unlessan Event of Default is continuing, each Loan and each other amount due andpayable under the Borrower Loan Documents shall bear interest on theoutstanding principal amount thereof at a rate per annum equal to theapplicable Adjusted Euroyen Rate for the Interest Period plus 1.5%.  Any principal or interest on any Loan, andany 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 equalto the applicable Post-Default Rate (whether before or after judgment).

 

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

 

(c)  MaximumInterest Rate.  Nothingcontained in the Loan Documents shall require the Borrower at any time to payinterest at a rate exceeding the Maximum Permissible Rate. If interest payableby the Borrower on any date would exceed the maximum amount permitted by theMaximum Permissible Rate, such interest payment shall automatically be reducedto such maximum permitted amount, and interest for any subsequent Loans, to theextent less than the maximum amount permitted for such Loans by the MaximumPermissible Rate, shall be increased by the unpaid amount of any otherLoan.  Any interest actually receivedfor any Loan in excess of such maximum amount permitted for such period shallbe deemed to have been applied as a prepayment of the Loans in the inverseorder of maturity.

 

Section 1.04             Repayment.  Unlessrequired to be repaid earlier pursuant to the terms of this Agreement, eachLoan shall be repaid by Borrower in full on the Maturity Date.  The Maturity Date for each Loan shall beapproximately 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 asmay be requested by the Borrower in a notice of borrowing and approved andaccepted by the Bank which approval or acceptance shall not be withheld otherthan due to the Bank’s inability to obtain funding for the relevant maturity oncommercially reasonable terms; provided that if the Maturity Date wouldnot otherwise be a Business Day, such day shall be extended to the nextsucceeding Business Day unless such Business Day falls in another calendarmonth, in which case Maturity Date shall be the next preceding Business Day.

 

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

 

2

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

 

Section 1.07             CommitmentFee; Reduction of Commitment.  TheBorrower shall pay to the Bank a commitment fee in Dollars on the daily unusedamount of $20,000,000 (utilization to be calculated at the exchange rateapplicable to the borrowing of each Loan hereunder from time to time as may berelevant for such calculation) for each day from the Agreement Date through theTermination Date, as calculated by the Bank on a quarterly basis in arrearsbased upon the daily utilization for that quarter, at a rate per annum of0.20%, due and payable quarterly in arrears on the last Business Day of eachMarch, June, September and December of each year, the Termination Date and onthe date of any reduction of the Commitment (to the extent accrued and unpaidon the amount of the reduction). The Borrower may reduce the Dollar Equivalentof 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 Daybefore the requested date of such reduction, except that, (a) no reduction ofthe Commitment shall be effective prior to the 180th day after the AgreementDate, (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 amountless than the aggregate amount of the Loans outstanding hereunder, and (d) oncereduced, such reduced amount cannot be increased thereafter.

 

Section 1.08             Computationof Interest and Fees.  Interestand the commitment fee shall be computed on the basis of a year of 360 days andpaid for the actual number of days elapsed. Interest for any period shall becalculated from and including the first day thereof to and including the lastday thereof.

 

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

 

(b)  NoReductions.  TheBorrower represents and warrants to the Bank that all payments by the Borrowerwill 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 orany political subdivisions in or of the United States of America, Japan, or anyother jurisdiction from or to which a payment is made by or on behalf of theBorrower or by any federation or organization of which the United States ofAmerica or such other jurisdiction is a member at the time of payment, exceptfor any Japanese withholding Taxes imposed at a rate not exceeding 10% on eachpayment of interest and commitment fee to the extent required to be withheld ordeducted under Applicable Law*.*

 

3

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

 

(i)   the Borrower shall notify the Bank of any suchrequirement or any change in any requirement as soon as the Borrower becomesaware of it;

 

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

 

(iii)   The sum payable by the Borrower in respectof which the relevant deduction, withholding or payment is required shall beincreased to the extent necessary to ensure that, after the making of thatdeduction, withholding or payment, the Bank receives on the due date andretains (free from any liability in respect of any such deduction, withholdingor payment) a net sum equal to what it would have received and so retained hadno such deduction, withholding or payment been required or made; and

####  

Withinthirty (30) days after payment of any sum from which it is required by law tomake any deductions or withholding and within thirty (30) days after the duedate of payment of any tax which it is required by Applicable Law to pay, theBorrower shall deliver to the Bank any original vouchers or receipts, orcertified copies of such vouchers or receipts, evidencing payment of suchwithholding tax and any other documents or information relating to suchpayments received by the Borrower from governmental authorities in the countrylevying such withholding taxes.

 

(iv)   Notwithstanding the foregoing, the Borrowershall not be required to gross up any Japanese withholding Taxes imposed at arate not exceeding 10% on each payment of interest and commitment fee to theextent required to be withheld or deducted under Applicable Law, providedthat the Borrower has complied with all of the requirements of the foregoingclauses of this Section 1.09(c).

 

(d)  Authorizationto Charge Accounts.  TheBorrower hereby authorizes the Bank, if and to the extent any amount payable bythe 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 withthe Bank or any of its Affiliates (whether maintained at a branch or officelocated within or without the United States), with the Borrower remainingliable for any deficiency.

 

(e)  Extensionof Payment Dates.  Wheneverany payment to the Bank under the Borrower Loan Documents would otherwise bedue (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, unlesssuch extension would cause payment to be due in the next succeeding calendarmonth, in which case such due date shall be advanced to the next precedingBusiness Day.  If the date any paymentunder the Borrower Loan Documents is due is extended (whether by operation 

 

4

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

 

ARTICLE2

 

CONDITIONS TO LOANS

 

Section 2.01             Conditions toInitial Loan.  Theobligation of the Bank to make the initial Loan is subject to its receipt ofeach of the following, in form and substance and, in the case of the materialsreferred to in clauses (a), (b), (c), (f) and (g), certified in a mannerreasonably satisfactory to the Bank:

 

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

 

(b)  Incumbencycertificates and certified resolutions, articles of incorporation and bylawsfrom the President of Guarantor, in form and substance reasonably satisfactoryto the Bank (See Schedule 2.01(b));

 

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

 

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

 

(e)  an opinionof Messrs. Miyake and Yamazaki, counsel to the Borrower, or other counselreasonably satisfactory to the Bank, in form and substance satisfactory to theBank;

 

(f)  Certificatein the form of Schedule 2.01(f) from the appropriate officer of eachLoan Party;

 

(g)  Unqualifiedgood standing certificates from the Nevada and California Secretaries of Statecertifying that Guarantor is in good standing and has paid all franchise andother taxes;

 

(h)  a dulyexecuted 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 andeffect; and

 

(i)  FaxTransmission and Acceptance of Requests, Instructions, Documents andInformation, duly executed by the Borrower.

 

5

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Section 2.02             Conditionsto Each Loan.  Theobligation of the Bank to make each Loan, including the initial Loan, issubject to the determination of the Bank, in its sole and absolute discretion,that each of the following conditions has been fulfilled to the reasonablesatisfaction of the Bank:

 

(a)  the Bankshall have received a notice of borrowing with respect to such Loan complyingwith the requirements of Section 1.02;

 

(b)  each LoanDocument Representation and Warranty shall be true and correct in all materialaspects at and as of the time such Loan is to be made, both with and withoutgiving effect to such Loan and all other Loans to be made at such time and tothe application of the proceeds thereof;

 

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

 

(d)  the Bankshall have received such materials as it may have requested pursuant to Section5.01(c);

 

(e)  such Loanwill not contravene any Applicable Law;

 

(f)  all legalmatters incident to such Loan and the other transactions contemplated by theLoan Documents shall be reasonably satisfactory to the Bank and its legalcounsel; and

 

(g)  upon themaking of such Loan, the aggregate unpaid principal of all Loans will notexceed the Commitment.

 

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

 

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

 

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

 

6

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ARTICLE3

 

CERTAIN REPRESENTATIONS AND WARRANTIES

 

In order to induce theBank to enter into this Agreement and to make each Loan, the Borrowerrepresents and warrants as of the date hereof and on each day of subsequentborrowing, as follows:

 

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

 

Section 3.02             Subsidiaries.  Asof 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 anySubsidiaries of the Borrower that may from time to time exist.

 

Section 3.03             Authorization;Enforceability; Required Consents; Absence of Conflicts.  TheBorrower has the power, and has taken all necessary action (including, if acorporation, any necessary stockholder action) on the part of the Borrower toauthorize it, to execute, deliver and perform in accordance with theirrespective terms the Borrower Loan Documents and to borrow hereunder in theunused amount of the Commitment.  ThisAgreement has been, and each of the other Borrower Loan Documents whendelivered to the Bank will have been, duly executed and delivered by theBorrower and is, or when so delivered will be, a legal, valid and bindingobligation of the Borrower, enforceable against the Borrower in accordance withits terms, except as may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally or by general equitable principles (whether enforcementis sought by proceedings in equity or at law). The execution, delivery and performance in accordance with theirrespective terms by the Borrower of the Borrower Loan Documents, and eachborrowing hereunder, whether or not in the amount of the unused Commitment, donot and (absent any change in any Applicable Law or applicable Contract) willnot (a) require any Governmental Approval or any other consent or approval,including any consent or approval of any Subsidiary or any consent or approvalof the stockholders of the Borrower, other than Governmental Approvals andother consents and approvals that have been obtained, are final and not subjectto 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 Contractas 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, orresult in or require the creation of any Lien upon any assets of any of theLoan Party under, (i) any material Contract to which any Loan Party is a partyor by which the any Loan Party or any of their respective properties may bebound or (ii) any Applicable Law binding upon any Loan Party or any of their respectiveproperties.

 

7

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Section 3.04             Litigation.  Exceptas set forth on Schedule 3.04, there are not, in any court or before anyarbitrator of any kind or before or by any governmental or non-governmentalbody, any actions, suits or proceedings pending or threatened (nor, to theknowledge of the Borrower, is there any basis therefor) against or in any otherway relating to or affecting (a) any Loan Party or any of such Loan Party’sbusinesses or properties or (b) any Loan Document, except actions, suits orproceedings that, if adversely determined, would not be reasonably expected to,singly or in the aggregate, have a Materially Adverse Effect on (x) any LoanParty or (y) any Loan Document.

 

Section 3.05             BurdensomeProvisions.  TheBorrower is not a party to or bound by any Contract or Applicable Law,compliance with which would reasonably be expected to have a Materially AdverseEffect on (a) any Loan Party or  (b) anyLoan Document.

 

Section 3.06             NoAdverse Change or Event.  SinceJune 29, 2001, no change in the business, assets, Liabilities, financialcondition, results of operations or business prospects of the Borrower hasoccurred, and no event has occurred or failed to occur, that has had or wouldreasonably be expected to have, either alone or in conjunction with all othersuch changes, events and failures, a Materially Adverse Effect on (a) any LoanParty or (b) any Loan Document.

 

ARTICLE 4

 

CERTAIN COVENANTS

 

From the Agreement Dateand until the Repayment Date,

 

A.                                   TheBorrower shall:

 

Section 4.01             Preservationof Existence and Properties, Scope of Business, Compliance with Law, Payment ofTaxes 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 ofits business except in connection with sales of assets and mergers andconsolidations permitted under Section 4.07, (b) preserve and protect all IntellectualProperty, and preserve and maintain in good repair, working order and conditionall other properties, required for the conduct of its business, (c) engage onlyin businesses in substantially the same fields as the businesses conducted onthe Agreement Date, (d) comply with Applicable Law having jurisdiction overtheir respective businesses except such as may be contested in good faith or towhich a bona fide dispute may exist, (e) pay or discharge when due all materialTaxes and all Liabilities that might become a Lien on any of its properties,except those which are being contested in good faith by appropriate proceedingsand for which adequate reserves have been provided, and (f) take all action andobtain all consents and Governmental Approvals required so that its obligationsunder the Loan Documents will at all times be legal, valid and binding andenforceable in accordance with their respective terms, except that this 

 

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Section 4.01 (other thanclauses (a), in so far as it requires any Loan Party to preserve its corporateexistence, (c) and (f)) shall not apply in any circumstance wherenoncompliance, together with all other noncompliances with this Section 4.01,would not reasonably be expected to (assuming that any dispute or contest wereto 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.  Maintaininsurance with responsible insurance companies against at least such risks andin at least such amounts as is customarily maintained by similar businessesowning similar properties in localities where the Borrower operates, or as maybe required by Applicable Law.

 

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

 

B.                                     TheBorrower shall not, directly or indirectly:

 

Section 4.04             Guaranties.  Beobligated, at any time, in respect of any Guaranty, except that this Section4.04 shall not apply to (a) Existing Guaranties and (b) Permitted Guaranties.

 

Section 4.05             Liens.  Permitto exist, at any time, any Lien upon any of its accounts receivables or itsother properties or assets of any character, whether now owned or hereafteracquired, or upon any income or profits therefrom, except that this Section4.05 shall not apply to Permitted Liens, provided, however, thatif, notwithstanding this Section 4.05, any Lien to which this Section isapplicable shall be created or arise, each relevant Loan Party shallautomatically be deemed to have granted to the Bank a Lien equally and ratablywith the other Liabilities secured thereby; provided further, however,that notwithstanding such equal and ratable securing, the existence of suchLien shall constitute a default by the Borrower in the performance orobservance of this Section 4.05.  TheBorrower shall deliver to the Bank from time to time upon demand, an updatedextract from the land or such other register, evidencing the absence of anyrecorded mortgage, charge, pledge, security interest, lien or other encumbrancepertaining to the Borrower’s accounts receivables or other properties orassets.

 

Section 4.06             RestrictedPayments.  Makeor declare or otherwise become obligated to make any Restricted Payment, exceptthat this Section 4.06 shall not apply to any Restricted Payment to the Parentor any wholly owned Subsidiary of the Parent if (a) at both the time of thedeclaration or other incurrence of the obligation to make such RestrictedPayment, if any, and the time of the making thereof, and immediately aftergiving 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 Subsidiarieshave made or declared or otherwise become obligated to make since the beginningof the fiscal year, would not exceed the annual Net Profit of the Borrower 

 

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and itsSubsidiaries.  This Section 4.06 shallnot prohibit the payment of a dividend that constitutes a Restricted Payment ifsuch Restricted Payment is made within 45 days of the declaration thereof andif this Section 4.06 did not apply to such Restricted Payment at the time ofits declaration.

 

Section 4.07             Merger or Consolidation.  Mergeinto or consolidate with any other entity, except Borrower may merge orconsolidate with any other entity so long as (1) the surviving, continuing orresulting entity (a) is a solvent corporation, (b) is in any similar line ofbusiness as the Borrower, and (c) expressly and unconditionally assumes the dueand punctual performance of all obligations under this Agreement, and (2) thereexists no Event of Default and after reasonable investigation by the Borrowerno Event of Default will be created as a result of such merger orconsolidation; make any substantial change in the nature of the Borrower’sbusiness as conducted as of the date hereof; acquire all or substantially allof 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 capitalstock of any entity so long as the Borrower is the surviving or continuingentity, (ii) the Borrower may acquire all or substantially all of the capitalstock or property of an entity in connection with a transaction in which theconsideration consists of capital stock of the Borrower or any of theBorrower’s Subsidiaries or, to the extent any consideration consists of cash orother property (other than capital stock) such transaction would be permittedas a Permitted Investment (other than clauses (h) and (j) thereof), and (iii)there exists no Event of Default, nor sell, lease, transfer or otherwisedispose of all or a substantial or material portion of the Borrower’s assetsexcept for sales, transfers or other dispositions of (i) worn-out or obsoleteproperty or equipment, (ii) assets acquired in an acquisition subsequent to theEffective Date to the extent such assets are sold or otherwise disposed of forcash or any other consideration with represents the fair market value thereof,(iii) assets for fair market value to the extent that the net after taxproceeds of such transaction are applied within 365 days from the date of suchtransaction to the purchase, acquisition or construction of assets which are tobe used in the business of the Borrower or any Subsidiary, (iv) assets whichare substantially concurrently received in exchange for assets which are to beused in the business of the Borrower or any Subsidiary, (v) license agreementsin the ordinary course of business for the use of any intellectual property orother intangible assets of the Borrower or any Subsidiary or the disposition ofsuch intellectual property which is determined by the Borrower to be no longerin its best interests to retain, and (vi) factoring of accounts receivable fromNikon and Cannon for cash in the ordinary course of business under facilitiessubstantially similar to those existing as of the date of this Agreement; providedthat, in each case under this Section 4.07, the Guarantor expressly confirms tothe Bank that the Guaranty Agreement and the Guarantor’s obligations thereunderremain in full force and effect and subject to no defense or impairment.

 

Section 4.08             MinimumTangible Net Worth.  PermitTangible Net Worth to be less than an amount, the Dollar Equivalent of which asof 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 ofits quarterly accounting period to be less than zero.

 

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

 

Section 4.11             Transactionswith Affiliates.  Effectany transaction with any Affiliate on a basis less favorable than would at thetime be obtainable for a comparable transaction in arms-length dealing with anunrelated third party except (a) as set forth on Schedule 4.11, (b)transactions between the Borrower and the Guarantor, (c) payment of reasonablefees and compensation to officers and directors of the Borrower and reasonableindemnification arrangements entered into by the Borrower, including anyissuance of securities, or other payments, awards or grants in cash, securitiesor otherwise pursuant to, or the funding of, employment arrangements, employeestock options and employee stock ownership plans with respect to employees andofficers of the Borrower, approved by the Board of Directors, and (d)reimbursement of out-of-pocket expenses incurred by directors in connectionwith Board of Directors meetings and other Board duties.

 

Section 4.12             Issuanceor Disposition of Capital Securities.  Issue any of its Capital Securities or sell,transfer or otherwise dispose of any Capital Securities of any Subsidiarywithout the prior written consent of the Bank.

 

ARTICLE5

 

FINANCIAL STATEMENTS AND INFORMATION

 

Section 5.01             FinancialStatements and Information to Be Furnished.  Fromthe Agreement Date and until the Repayment Date, the Borrower shall furnish tothe Bank:

 

(a)  QuarterlyFinancial Statements; Director’s Certificate.  Assoon as available and in any event within 45 days after the close of each ofthe first three quarterly accounting periods in each fiscal year of theBorrower, commencing with the quarterly period ended September 28, 2001,balance sheets of the Borrower as at the end of such quarterly period and therelated statements of income and retained earnings of the Borrower for suchquarterly period and for the elapsed portion of the fiscal year ended with thelast day of such quarterly period, setting forth in each case in comparativeform the figures for the corresponding periods of the previous fiscal year, andaccompanied by a certificate with respect thereto of aRepresentative Director of the Borrower in the form of Schedule 5.01(a).

 

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

 

(i)  balancesheets of the Borrower as at the end of such fiscal year and the related statementsof income and retained earnings of the Borrower for such fiscal year, settingforth in comparative form the figures as at the end of and for the previousfiscal year;

 

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

 

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

 

(c)  RequestedInformation.  Fromtime to time and promptly upon reasonable request of the Bank, such Informationregarding the Borrower Loan Documents, the Loans or the business, assets,Liabilities, financial condition, results of operations or business prospectsof any Loan Party as the Bank may reasonably request, in each case in form andsubstance and certified in a manner reasonably satisfactory to the Bank.

 

(d)  Noticeof Defaults, Material Adverse Changes and Other Matters.  Promptnotice of: (i) any Default, (ii) the acquisition or formation of a newSubsidiary and, in the case of each such new Subsidiary, its name, jurisdictionof incorporation, the percentages of the various classes of its CapitalSecurities owned by the Borrower and whether or not such new Subsidiary is aConsolidated Subsidiary, (iii) any change in the name of any Subsidiary, itsjurisdiction of incorporation, the percentages of the various classes of itsCapital Securities owned by the Borrower or its status as a Consolidated ornon-Consolidated Subsidiary, (iv) the threatening or commencement of, or theoccurrence or nonoccurrence of any change or event relating to, any action,suit or proceeding that would cause the Representation and Warranty containedin Section 3.04 to be incorrect if made at such time, (v) the occurrence ornonoccurrence of any change or event that would cause the Representation and Warrantycontained in Section 3.06 to be incorrect if made at such time, (vi) anyamendment of the articles of incorporation of the Borrower, and (vii) anytransaction referred to in Section 4.07.

 

Section 5.02             Accuracyof Financial Statements and Information.

 

(a)  HistoricalFinancial Statements.  TheBorrower hereby represents and warrants that (i) Schedule 5.02(a) setsforth a complete and correct list of the financial statements submitted by theBorrower to the Bank in order to induce it to execute and deliver thisAgreement, (ii) such financial statements are complete and correct and presentfairly in all material respects, in accordance with Generally AcceptedAccounting Principles (subject, in the case of unaudited statements, to goodfaith year-end audit adjustments and the absence of auditor’s footnotes), thefinancial position of the Borrower as at their respective dates and the resultsof operations, retained earnings and, as applicable, changes in financialposition of the Borrower for the respective periods to which such statementsrelate, and (iii) except as disclosed or reflected in such financialstatements, as at June 29, 2001, the Borrower did not have any Liability,contingent or otherwise, or any unrealized or anticipated loss, that, singly orin the aggregate, has had or might have a Materially Adverse Effect on theBorrower.

 

(b)  FutureFinancial Statements.  Thefinancial statements delivered pursuant to Section 5.01(a) or (b) shall becomplete and correct and present fairly in all material respects, in accordancewith Generally Accepted Accounting Principles (except for changes therein or 

 

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departures therefrom thatare described in the certificate or report accompanying such statements andthat have been approved in writing by the Borrower’s then current independentcertified public accountants)(subject, in the case of unaudited statements, togood 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 ofoperations and retained earnings of the Borrower for the respective periods towhich such statements relate, and the furnishing of the same to the Bank shallconstitute a representation and warranty by the Borrower made on the date thesame 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 therespective dates thereof, the Borrower did not have any Liability, contingentor otherwise, or any unrealized or anticipated loss, that, singly or in theaggregate, has had or might have a Materially Adverse Effect on the Borrower.

 

(c)  HistoricalInformation.  TheBorrower hereby represents and warrants that all Information furnished to theBank by or on behalf of the Borrower prior to the Agreement Date in connectionwith or pursuant to the Loan Documents and the relationships establishedthereunder, at the time the same was so furnished, but in the case of Informationdated as of a prior date, as of such date, (i) in the case of any Informationprepared in the ordinary course of business, was complete and correct in allmaterial respects in the light of the purpose prepared, and, in the case of anyInformation the preparation of which was requested by the Bank, was completeand correct in all material respects in light of the circumstances under whichthe Information was given to the extent necessary to give the Bank true andaccurate knowledge of the subject matter thereof, (ii) did not contain anyuntrue statement of a material fact in light of the circumstances under whichthe Information was given, and (iii) did not omit to state a material factnecessary in order to make the statements contained therein not misleading inthe light of the circumstances under which they were made.

 

(d)  FutureInformation.  AllInformation furnished to the Bank by or on behalf of any Loan Party on or afterthe Agreement Date in connection with or pursuant to the Loan Documents or in connectionwith or pursuant to any amendment or modification of, or waiver of rightsunder, the Loan Documents, shall, at the time the same is so furnished, but inthe case of Information dated as of a prior date, as of such date, (i) in thecase of any Information prepared in the ordinary course of business, becomplete and correct in all material respects in the light of the purposeprepared, and, in the case of any Information required by the terms of the LoanDocuments or the preparation of which is requested by the Bank, be complete andcorrect in all material respects in light of the circumstances under which theInformation is delivered to the extent necessary to give the Bank true andaccurate knowledge of the subject matter thereof, (ii) not contain any untruestatement of a material fact in all material respects in light of thecircumstances under which the Information is delivered, and (iii) not omit tostate a material fact necessary in order to make the statements containedtherein not misleading in the light of the circumstances under which they aremade, and the furnishing of the same to the Bank shall constitute arepresentation and warranty by the Borrower made on the date the same are sofurnished to the effect specified in clauses (i), (ii) and (iii).

 

Section 5.03             AdditionalCovenants Relating to Disclosure.  Fromthe Agreement Date and until the Repayment Date, the Borrower shall:

 

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(a)  AccountingMethods and Financial Records.  Maintaina system of accounting, and keep such books, records and accounts (which shallbe true and complete), as may be required or necessary to permit (i) thepreparation of financial statements required to be delivered pursuant toSection 5.01(a) and (b) and (ii) the determination of the compliance of theBorrower with the terms of the Loan Documents.

 

(b)  FiscalYear.  Maintainthe same opening and closing dates for each fiscal year as for the fiscal yearreflected in the Base Financial Statements or, if the opening and closing datesfor the fiscal year reflected in the Base Financial Statements were determinedpursuant to a formula, determine the opening and closing dates for each fiscalyear pursuant to the same formula.

 

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

 

ARTICLE6

 

DEFAULT

 

Section 6.01             Events of Default.  Eachof the following shall constitute an Event of Default, whatever the reason forsuch event and whether it shall be voluntary or involuntary, or within orwithout the control of the Borrower or any other Loan Party, or be effected byoperation of law or pursuant to any judgment or order of any court or anyorder, rule or regulation of any governmental or nongovernmental body:

 

(a)  Anypayment of principal of or interest on any of the Loans or of the commitmentfee shall not be made within five (5) days after its due date (whether atmaturity, by reason of notice of prepayment or acceleration or otherwise) andin accordance with the terms of this Agreement;

 

(b)  Any LoanDocument Representation and Warranty shall at any time prove to have beenincorrect or misleading in any material respect when made;

 

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

 

(A)  anyterm, covenant, condition or agreement contained in Section 4.01(a) (insofar assuch Section requires the preservation of the corporate existence of theBorrower), 4.01(f), 4.03 through 4.12, 5.01(d)(i), 5.03(b) or 5.03(c); or

 

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

 

#### (ii)  Any LoanParty shall default in the performance or observance of:

 

##### (A)  Section4 of the Guaranty Agreement; or

 

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

 

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

 

(e)  (i)  TheBorrower or any other Loan Party shall fail to pay, in accordance with itsterms and when due and payable, any of the principal of or interest on anyIndebtedness (other than the Loans) having a then outstanding principal amountin excess of $1,000,000 (or the equivalent in other currencies), (ii) thematurity of any such Indebtedness shall, in whole or in part, have beenaccelerated, or any such Indebtedness shall, in whole or in part, have beenrequired to be prepaid prior to the stated maturity thereof, in accordance withthe provisions of any Contract evidencing, providing for the creation of orconcerning such Indebtedness, or (iii) (A) any event shall have occurred and becontinuing that permits (or, with the passage of time or the giving of noticeor both, would permit) any holder or holders of such Indebtedness, any trusteeor agent acting on behalf of such holder or holders or any other Person so toaccelerate such maturity or require any such prepayment and (B) if the Contractevidencing, providing for the creation of or concerning such Indebtednessprovides for a cure period for such event, such event shall not be cured priorto the end of such cure period or such shorter period of time as the Bank mayspecify.

 

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

 

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

 

(g)  (i)  TheBorrower or any other Loan Party shall (A) commence a voluntary case under theU.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 orforeign, relating to bankruptcy, insolvency, reorganization, winding up orcomposition or adjustment of debts, (C) consent to or fail to contest in atimely and appropriate manner any petition filed against it in an involuntarycase under such bankruptcy laws or other laws, (D) apply for, or consent to, orfail to contest in a timely and appropriate manner, the appointment of, or thetaking of possession by, a receiver, custodian, trustee, liquidator or the likeof 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 becomedue, (F) make a general assignment for the benefit of creditors, or (G) takeany corporate action for the purpose of effecting any of the foregoing; or

 

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

 

(h)  The filingof a notice of judgment lien against a substantial part of the property of theBorrower, or the recording of any abstract of judgment against a substantialpart of the property of Borrower, in any county in which Borrower has aninterest in real property, or the service of a notice of levy and/or of a writof attachment or execution, or other like process, against a substantial partof the assets of Borrower, or the entry of a judgement against Borrower andsuch writ, judgment, judgment lien, levy warrant of attachment, execution orsimilar process shall not be released, vacated or fully bonded within 45 daysafter commencement, filing recording, service or levy;

 

(i)  Any LoanParty or any Affiliate of any Loan Party asserts, or any Loan Party or anyAffiliate of any Loan Party or any other Person institutes any proceedingsseeking to establish, that any provision of the Loan Documents is invalid, notbinding or unenforceable.

 

Section 6.02             Remediesupon Event of Default.  Duringthe continuance of any Event of Default (other than one specified in Section6.01(g)) and in every such event, the Bank may do either or both of thefollowing: (a) declare, in whole or, from time to time, in part, the principalof and interest on the Loans and all other amounts owing under the BorrowerLoan Documents to be, and the Loans and all such other amounts shall thereuponand to that extent become, due and payable and (b) terminate, in whole or, fromtime to time, in part, the Commitment. Upon the 

 

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

 

ARTICLE7

 

ADDITIONAL CREDIT FACILITY PROVISIONS

##  

Section 7.01             MandatorySuspension of Loans.  TheBank’s obligations to make or continue Loans shall be suspended if:

 

(a)  onor prior to the determination of an interest rate for any Interest Period, theBank determines that for any reason appropriate quotations are not available toit (including, in the case of the Yen COF Rate, quotations in the interbankmarket selected by it for deposits with it) for purposes of determining the YenCOF Rate for such Interest Period or that such Rate would not accuratelyreflect the cost to the Bank of making or continuing a Loan for such InterestPeriod;

 

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

 

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

 

The Bank shall promptlynotify the Borrower of any circumstance that would make the provisions of thisSection 7.01 applicable, but the failure to give any such notice shall notaffect the Bank’s rights hereunder.

 

Section 7.02             RegulatoryChanges.  Ifin the determination of the Bank (a) any Regulatory Change shall directly orindirectly (i) reduce the amount of any sum received or receivable by the Bankwith 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 isattributable 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 anypayment on or calculated by reference to the gross amount of any amountreceived by the Bank under any Loan Document or (iv) reduce, or have the effectof reducing, the rate of return on any capital of the Bank or any Affiliate ofthe Bank that the Bank or such Affiliate is required to maintain on account ofany 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 adjustmentin the applicable rates of interest payable under the Loan Documents, then theBorrower shall pay to the Bank such additional amounts as the Bank 

 

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reasonably determineswill, together with any adjustment in the applicable rates of interest payablehereunder, fully compensate for such reduction, increased cost or payment.  Such additional amounts shall be payable, inthe case of those applicable to prior periods, within 15 days after request bysuch Bank for such payment and, in the case of those applicable to futureperiods, on the dates specified, or determined in accordance with a methodspecified, by the Bank.  The Bank willpromptly notify the Borrower of any determination made by it referred to inclauses (a) and (b) above, but the failure to give such notice shall not affectthe Bank’s right to compensation.

 

Section 7.03             CapitalRequirements.  If,in the determination of the Bank, the Bank or any Affiliate of the Bank isrequired, under Applicable Law, interpretations, directives, requests andguidelines (whether or not having the force of law) to maintain capital onaccount of any Loan or the Bank’s commitment to make any Loan, then, uponreasonable request by the Bank, the Borrower shall from time to time thereafterpay to the Bank such additional amounts as the Bank reasonably determines willfully compensate for any reduction in the rate of return on the capital thatthe Bank or such Affiliate is so required to maintain on account of such Loanor commitment suffered as a result of such capital requirement. Such additionalamounts 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 ofthose relating to future periods, on the dates specified, or determined inaccordance with a method specified, by the Bank.

 

Section 7.04             Funding Losses.  TheBorrower shall pay to the Bank, upon request, such amount or amounts as theBank reasonably determines are necessary to compensate it for any loss, cost orexpense incurred by it as a result of (a) any payment or prepayment of a Loanon a date other than the last day of an Interest Period for such Loan or (b) aLoan not being made for any reason after the Borrower has given a notice ofborrowing, including for Borrower’s failure to fulfill the conditions specifiedin this Agreement, or any payment of principal thereof or interest thereon notbeing made, on the date therefor determined in accordance with the applicableprovisions of this Agreement. At the election of the Bank, and without limitingthe generality of the foregoing, but without duplication, such compensation onaccount of losses may include an amount equal to the excess of (i) the interestthat would have been received from the Borrower under this Agreement on anyamounts to be reemployed during an Interest Period or its remaining portionover (ii) the interest component of the return that the Bank determines itcould have obtained had it placed such amount on deposit in the interbank Yenmarket selected by it for a period equal to such Interest Period or itsremaining portion.

 

Section 7.05             Determinations.  Inmaking 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 thatthe Bank in good faith determines to be appropriate, and the Bank’s selectionthereof in accordance with this Section 7.05, and the determinations made bythe Bank on the basis thereof, shall be final, binding and conclusive upon theBorrower, except, in the case of such determinations, for manifest errors incomputation or transmission; provided, that the Borrower shall not beobligated to compensate or reimburse the Bank for any amount that the Bankknows has been incurred more than one year before the date the Bank requestsfor such compensation or reimbursement. The Bank shall furnish to the Borrower upon request a certificateoutlining in reasonable detail the computation of any amounts claimed by itunder this Article 7 and the assumptions underlying such computations.

 

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Section 7.06             Changeof Lending Office.  Ifan event occurs with respect to a Lending Office that obligates the Borrower topay 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 7.02or 7.03, the Bank shall, if requested by the Borrower, use reasonable effortsto designate another Lending Office or Offices the designation of which willreduce the amount the Borrower is so obligated to pay, eliminate suchoperability or reduce the amount the Bank is so entitled to claim, providedthat such designation would not, in the sole and absolute discretion of theBank, be disadvantageous to the Bank in any manner or contrary to Bankpolicy.  The Bank may at any time andfrom time to time change any Lending Office and shall give notice of any suchchange to the Borrower.  Except in thecase of a change in Lending Offices made at the request of the Borrower, thedesignation of a new Lending Office by the Bank shall not obligate the Borrowerto pay any amount to the Bank under Section 1.09(c), make operable theprovisions of clause (b) or (c) of Section 7.01 or entitle the Bank to make aclaim under Section 7.02 or 7.03 if such obligation, the operability of suchclause or such claim results solely from such designation and not from asubsequent Regulatory Change.

 

ARTICLE8

 

MISCELLANEOUS

 

Section 8.01             Notices andDeliveries. 

####  

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

 

(b)  Addresses.  Allnotices, communications and materials to be given or delivered pursuant to theBorrower Loan Documents shall be given or delivered at the following respectiveaddresses and telex, telecopier and telephone numbers and to the attention ofthe following individuals or departments:

 

(A)  if to theBorrower, to it at:

 

Cymer Japan, Inc.

4-17-8 Minamiyawata

Ichikawa-shi, ChibaPrefecture

272-0023 Japan

Telex No.:

Telecopier No.: 47-393-5672

Telephone No.: 47-393-5668

 

Attention:

 

 

 

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(B)  if to theBank, to it at:

 

Wells Fargo HSBC TradeBank, 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 addressor telex, telecopier or telephone number or to the attention of such otherindividual or department as the party to which such information pertains mayhereafter specify for the purpose in a notice to the other specificallycaptioned “Notice of Change of Address”.

 

(c)  Effectiveness.  Eachnotice and communication and any material to be given or delivered pursuant tothe Borrower Loan Documents shall be deemed so given or delivered (A) if sentby registered or certified mail, postage prepaid, return receipt requested, onthe third Business Day after such notice, communication or material, addressedas above provided, is delivered to a United States post office and a receipttherefor is issued thereby, (B) if sent by any other means of physicaldelivery, when such notice, communication or material is delivered to theappropriate address as above provided, (C) if sent by telex, when such notice,communication or material is transmitted to the appropriate number determinedas above provided in this Section 8.01 and the appropriate answer-back isreceived, (D) if sent by telecopier, when such notice, communication ormaterial is transmitted to the appropriate telecopier number as above providedand is received at such number and (E) if given by telephone, when communicatedto the individual or any member of the department specified as the individualor department to whose attention notices, communications and materials are tobe given or delivered, or, in the case of notice by the Bank to the Borrowerunder Section 6.02 given by telephone as above provided, if any individual orany member of the department to whose attention notices, communications andmaterials are to be given or delivered is unavailable at the time, to any otherofficer or employee of the Borrower, except that (x) notices of a change ofaddress, telex, telecopier or telephone number or individual or department towhose attention notices, communications and materials are to be given ordelivered shall not be deemed given until received and (y) notices,communications and materials to be given or delivered to the Bank pursuant toSections 1.02, 1.07 and Article 5 shall not be deemed given or delivered untilreceived by the officer of the Bank responsible, at the time, for theadministration of the Loan Documents.

 

(d)  Reasonable Notice.  Anyrequirement under Applicable Law of reasonable notice by the Bank to theBorrower of any event in connection with, or in any way related to, the LoanDocuments or the exercise by the Bank of any of its rights thereunder shall 

 

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

 

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

 

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

 

(b)  pay orreimburse the Bank for all costs and expenses (including reasonable fees anddisbursements of legal counsel, appraisers, accountants and other expertsemployed 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 orconsent thereunder or thereto, whether or not executed, (ii) the administrationof and any operations under the Loan Documents, (iii) consulting with respectto any matter in any way arising out of, related to, or connected with, theLoan Documents, including (A) the protection, preservation, exercise orenforcement 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 LoanDocuments, or (iv) protecting, preserving, exercising or enforcing any of itsrights under or related to the Loan Documents; and

 

(c)  indemnifyand hold each Indemnified Person harmless from and against all losses(including judgments, penalties and fines) suffered, and pay or reimburse eachIndemnified Person for all costs and expenses (including reasonable fees anddisbursements of legal counsel and other experts employed or retained by suchIndemnified 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 otherPerson), including the prosecution or defense thereof and any litigation orproceeding with respect thereto (whether or not, in the case of any suchlitigation or proceeding, such Indemnified Person is a party thereto), or (ii)any investigation, governmental or otherwise, arising out of, related to, or inany way connected with, the Loan Documents or the relationships establishedthereunder, except that the foregoing indemnity shall not be applicable to anyloss suffered by any Indemnified Person to the extent such loss is determinedby a judgment of a court that is binding on the Borrower and such IndemnifiedPerson, final and not subject to review on appeal, to be the result of acts oromissions on the part of such Indemnified Person constituting (x) willfulmisconduct or gross negligence, (y) knowing violations of law or (z) in thecase of claims by the Borrower against such Indemnified Person, suchIndemnified Person’s failure to observe any other standard applicable to itunder any of the other provisions of the Loan Documents or, but only to theextent not waivable thereunder, Applicable Law.

 

Section 8.03             AmountsPayable Due upon Request for Payment.  Allamounts payable by the Borrower under Section 8.02 and under the otherprovisions of the Borrower Loan Documents shall, except as otherwise expresslyprovided, be promptly due upon request for the payment thereof.

 

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Section 8.04             Remediesof the Essence.  Thevarious rights and remedies of the Bank under the Borrower Loan Documents areof the essence of those agreements, and the Bank shall be entitled to obtain adecree requiring specific performance of each such right and remedy.

 

Section 8.05             RightsCumulative.  Eachof the rights and remedies of the Bank under the Loan Documents shall be inaddition to all of its other rights and remedies under the Loan Documents andApplicable Law, and nothing in the Loan Documents shall be construed as limitingany such rights or remedies.

 

Section 8.06             Disclosures.  TheBank agrees to take normal and reasonable precautions and exercise due care tomaintain the confidentiality of all information identified as “confidential” or“secret” by the Borrower; provided that no information shall beconsidered “confidential” or “secret” hereunder if such information (i) is orbecomes generally available to the public through no violation of thisAgreement by the Bank, (ii) was in the Bank’s possession or known by it withoutrestriction prior to receipt from the Borrower, or (iii) was rightfullydisclosed to the Bank by a third party without restriction.  Notwithstanding the foregoing, the Bank maydisclose to, and exchange and discuss with, any other Person (the Bank and eachsuch other Person being hereby authorized to do so) any information concerningthe Borrower (whether received by the Bank or such other Person in connectionwith or pursuant to the Loan Documents or otherwise) for the purpose of (a)complying with Applicable Law, (b) protecting, preserving, exercising orenforcing 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.  Anyterm, covenant, agreement or condition of the Borrower Loan Documents may beamended, and any right under the Borrower Loan Documents may be waived, if, butonly 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 underthe Borrower Loan Documents shall be effective only in the specific instanceand for the specific purpose for which given. No election not to exercise, failure to exercise or delay in exercisingany right, nor any course of dealing or performance, shall operate as a waiverof 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 otheror further exercise thereof or the exercise of any other right of the Bankunder the Borrower Loan Documents or Applicable Law.

 

Section 8.08             Set-Off;Suspension of Payment and Performance.  TheBank 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 toappropriate and apply to the payment of, the Liabilities of the Borrower underthe Borrower Loan Documents (whether matured or unmatured, fixed or contingentor liquidated or unliquidated) any and all Liabilities owing by the Bank or anyof its Affiliates to the Borrower (whether payable in Yen or any othercurrency, whether matured or unmatured and, in the case of Liabilities that aredeposits, whether general or special, time or demand and however evidenced andwhether maintained at a branch or office located within or without the UnitedStates) and (b) during any Default, to suspend the payment and performance ofsuch Liabilities owing by the Bank or its Affiliates and, in the case of 

 

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

 

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

 

#### (ii)  The Bankmay from time to time assign any or all of its rights and obligations under theBorrower Loan Documents to any Affiliate of the Bank or an Eligible Assigneewithout the consent of the Borrower. Any assignment by the Bank of any or allof its obligations under the Borrower Loan Documents shall release the Banktherefrom if such assignment is to an Affiliate of the Bank or an EligibleAssignee or is consented to in writing by the Borrower; provided, however, thatthe Borrower may continue to deal solely and directly with the Bank or itsAffiliates in connection with the interest so assigned until written notice ofsuch assignment, together with payment instructions, addresses and relatedinformation with respect to the assignee, shall have been given to the Borrowerby the Bank and the assignee.  Inconnection therewith, the Bank may disclose any information relating to theLoan Documents, Borrower or its business, or the Guarantor or its business.

 

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

 

(c)  Rightsof Assignees and Participants.  Eachassignee of, and each holder of a participation in, the rights of the Bankunder the Borrower Loan Documents, if and to the extent the applicableassignment or participation agreement so provides, (i) shall, with respect toits 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 theBank) and (ii) may exercise any and all rights of set-off or banker’s lien withrespect thereto (as fully, in the case of a holder of a participation, asthough the Borrower were directly indebted to such holder for amounts payableunder the Borrower Loan Documents to which such holder is entitled under theapplicable participation agreement); provided, however, that noassignee or holder of a participation shall be entitled to any amounts thatwould otherwise be payable to it with respect to its assignment orparticipation under Section 1.09(b) or (c) or Section 7.02 unless (x) suchamounts are payable in respect of Regulatory Changes that are enacted, adoptedor issued after the date the applicable assignment or participation agreementwas executed or (y) such amounts would have been payable to the Bank that madesuch assignment or granted such participation if such assignment had not beenmade or such participation had not been granted.

 

Section 8.10             Governing Law.  ThisAgreement and the Note shall be construed in accordance with and governed bythe law of the State of California (without giving effect to its choice of lawprinciples).

 

Section 8.11             JudicialProceedings; Waiver of Jury Trial.  Anyjudicial proceeding brought against the Borrower with respect to any LoanDocument Related Claim may be brought 

 

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in any court of competentjurisdiction 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 andany related appellate court and irrevocably agrees to be bound by any judgmentrendered thereby in connection with any Loan Document Related Claim and (b)irrevocably waives any objection it may now or hereafter have as to the venueof any such proceeding brought in such a court or that such a court is aninconvenient forum.  The Borrower herebywaives personal service of process and consents that service of process upon itmay be made by certified or registered mail, return receipt requested, at itsaddress specified or determined in accordance with the provisions of Section8.01(a)(ii), and service so made shall be deemed completed on the thirdBusiness Day after such service is deposited in the mail. Nothing herein shallaffect the right of the Bank or any other Indemnified Person to serve processin any other manner permitted by law or shall limit the right of the Bank orany other Indemnified Person to bring proceedings against the Borrower in thecourts of any other jurisdiction. Any judicial proceeding by the Borroweragainst the Bank involving any Loan Document Related Claim shall be broughtonly in a court located in the State of California. THE BORROWER AND THE BANKHEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTHPARTIES INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.

 

Section 8.12             LIMITATIONOF LIABILITY.  NEITHERTHE BANK NOR ANY OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECTTO, AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, ANYSPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN CONNECTIONWITH ANY LOAN DOCUMENT RELATED CLAIM.

 

Section 8.13             Severabilityof Provisions.  Anyprovision of the Borrower Loan Documents that is prohibited or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extentof such prohibition or unenforceability without invalidating the remainingprovisions thereof or affecting the validity or enforceability of suchprovision in any other jurisdiction. To the extent permitted by Applicable Law,the Borrower hereby waives any provision of Applicable Law that renders anyprovision of the Borrower Loan Documents prohibited or unenforceable in anyrespect.

 

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

 

Section 8.15             Survivalof Obligations.  Exceptas otherwise expressly provided therein, the rights and obligations of theBorrower, the Bank and the other Indemnified Persons under the Borrower LoanDocuments shall survive the Repayment Date.

 

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

 

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Section 8.17             Successorsand Assigns.  Allof the provisions of this Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns.

 

Section 8.18             Currency of Payment.  Theobligation of the Borrower to pay in Yen (or such other currency as may bespecified herein) under this Agreement or the Loan Documents shall not bedeemed to have been novated, discharged or satisfied by any tender of (orrecovery under judgement expressed in) any currency other than Yen (or otherthan such specified currency), except to the extend to which such tender (orrecovery) 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) shallfall short of such amount shall be and remain due to the Bank as a separateobligation, unaffected by judgement having been obtained (if such is the case)for any other amounts due or in respect of this Agreement of the LoanDocuments.  For the avoidance of doubt,it is understood that the exchange rate used for this purpose may be lessfavorable to the Borrower than the definition of the Applicable CurrencyExchange Rate.

 

Section 8.19             Process Agent.   TheBorrower irrevocably designates, appoints, and empowers the Guarantor toreceive for it and on its behalf, service of process issued out of a court ofcompetent jurisdiction in the State of California in any proceedings arisingout of or in connection with Loan Document Related Claim.  If at any time such process agent shallcease for any reason to act as such, the Borrower shall irrevocably appoint anddesignate without delay another reputable person to act as such agent and shallpromptly deliver to the Bank evidence in writing of such other agent’sacceptance 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 atthe cost of the Borrower irrevocably to appoint and designate another suchagent on behalf of the Borrower, and the Borrower hereby appoints the Bank itsduly authorized attorney for this purpose. The Borrower agrees that service on any such person in the State ofCalifornia shall be deemed due service for the purpose of the Proceedings incourts therein without prejudice to any other mode of service and agrees thatthe failure of the person authorized in the State of California to give anynotice of any such service to it shall not impari or affect the validity ofsuch service or of any judgment rendered in any proceeding based thereon.

 

ARTICLE9

 

INTERPRETATION

 

Section 9.01             DefinitionalProvisions.  (a)  DefinedTerms.  Forthe 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) theYen COF Rate for such Interest Period by (ii) a percentage equal to 1 minus theReserve 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 throughone or more intermediaries, controls, or is controlled by, or is under commoncontrol with, such first Person; unless otherwise specified, “Affiliate” meansan Affiliate of the Borrower.

 

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

 

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

 

“Applicable CurrencyExchange Rate” means, as of any date of determination and as the contextmay require, the telegraphic transfer mean rate of exchange (net of all feesand 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 thespot mid rate or the TTM rate at 10:00 a.m. in Tokyo indicated on Reuter’s pageTKFF on the relevant date (or, if no such quotations shall be available on suchdate, on the date closest to such date). For the avoidance of doubt, this rate will apply only for the notionalcurrency conversions expressly provided for herein.

 

“Applicable Law”means, anything in Section 8.10 to the contrary notwithstanding, (i) allapplicable common law and principles of equity and (ii) all applicableprovisions of all (A) constitutions, statutes, rules, regulations and orders ofgovernmental 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 assignedany or all of the rights or obligations of the Bank pursuant to Section8.09(a).

 

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

 

“Base FinancialStatements” means the most recent, audited balance sheet of the Borrowerreferred to in Schedule 5.02(a) and the related statements of income andretained earnings and for the fiscal year ended with the date of such balancesheet.

 

“Borrower” meansCymer Japan, Inc., a Japanese corporation.

 

“Borrower LoanDocuments” 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 bankinginstitutions 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) NewYork, San Francisco, or Tokyo for all other purposes.

 

“Capital Security”means, with respect to any Person, (i) any share of capital stock of suchPerson or (ii) any security convertible into, or any option, warrant or otherright 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 ofSchedule 2.01 (c).

 

“Commitment” means(i) an amount of Yen the Dollar Equivalent of which as of five Business Daysprior to making each Loan hereunder is $20,000,000, as the same may be reducedfrom 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 amountnot exceeding such amount.

 

“Consolidated NetIncome” means, for any period, the amount of net income of the Borrower forsuch period provided that there shall be excluded: (i) any net income (or netloss) of a Consolidated Subsidiary (A) for any period during which it was not aConsolidated Subsidiary or (B), in case of any such net income, to the extentthat the declaration or payment of dividends or similar distributions by thatConsolidated Subsidiary is not at the time permitted by operation of the termsof any Contract or Applicable Law; (ii) any net income (or net loss) of anyPerson (other than a Consolidated Subsidiary) in which the Borrower or anyConsolidated Subsidiary has an ownership interest, except to the extent thatany such income has actually been received by the Borrower or such Subsidiaryin the form of cash dividends or similar distributions; (iii) any restorationof any contingency reserve, except to the extent that provision for suchreserve was made out of income during such period; (iv) any net gains or losseson the sale or other disposition, not in the ordinary course of business, ofinvestments and other capital assets, provided that there shall also beexcluded any related charges for taxes thereon; (v) any net gain arising from thecollection of the proceeds of any insurance policy; (vi) any write-up of anyasset; (vii) any net gains resulting from the extinguishment or defeasance ofany Indebtedness; (viii) any earnings from discontinued businesses and (ix) anyextraordinary gains or losses.

 

“ConsolidatedSubsidiary”  means, with respect toany Person at any time, any Subsidiary or other Person the accounts of whichwould be consolidated with those of such first Person in its consolidatedfinancial statements as of such time under the provisions of U.S. GAAP; unlessotherwise specified, “Consolidated Subsidiary” means a Consolidated Subsidiaryof the Borrower, if any should exist from time to time.

 

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

 

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

 

“Default” meansany condition or event that constitutes an Event of Default or that with thegiving of notice or lapse of time or both would, unless cured or waived, becomean Event of Default.

 

“Dollars” and thesign “$” 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 involvedin such computation into Dollars at the Applicable Currency Exchange Rate atapproximately 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 bankorganized under the laws of the United States, or any State thereof, and havingcombined capital and surplus in excess of $100,000,000, (ii) any commercialbank organized under the laws of any other country that is a member of theOrganization for Economic Cooperation and Development (“OECD”), or a politicalsubdivision of any such country, and having combined capital and surplus (orthe equivalent thereof under the accounting principles applicable thereto) inexcess 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 anothercountry that is also a member of the OECD, (iii) the central bank of anycountry that is a member of the OECD or (iv) any insurance company, pensionfund, 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 setforth on Schedule 4.04, and (ii) any Guaranty that constitutes arenewal, extension or replacement of an Existing Guaranty, but only if (A) atthe time such Guaranty is entered into and immediately after giving effectthereto, no Default would exist, (B) such Guaranty is binding only on theobligor or obligors under the Guaranty so renewed, extended or replaced, (C)the principal amount of the obligations Guaranteed by such Guaranty does notexceed the principal amount of the obligations Guaranteed by the Guaranty sorenewed, extended or replaced and (D) the obligations Guaranteed by suchGuaranty bear interest at a rate per annum not exceeding the rate borne by theobligations Guaranteed by the Guaranty so renewed, extended or replaced exceptfor any increase that is commercially reasonable at the time of such increase.

 

“Generally AcceptedAccounting Principles” means generally accepted accounting principles inJapan from time to time, applied in a manner consistent with the accountingprinciples followed in Japan in the preparation of the Base FinancialStatements.

 

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

 

“Guarantor” meansCymer, Inc., a Nevada corporation.

 

“Guaranty” of anyPerson means any obligation, contingent or otherwise, of such Person (i) to payany Liability of any other Person or to otherwise protect, or having thepractical 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 partnershipor participant in a joint venture or by agreement to pay, to keep well, topurchase 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 aGuaranty of any Liability of any other Person (whether such obligation arisesby agreement to reimburse or indemnify such third Person or otherwise).  The word “Guarantee” when used as a verb hasthe 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” ofany Person means (in each case, whether such obligation is with full or limitedrecourse) (i) any obligation of such Person for borrowed money, (ii) anyobligation of such Person evidenced by a bond, debenture, note or other similarinstrument, (iii) any obligation of such Person to pay the deferred purchaseprice of property or services, except a trade account payable that arises inthe ordinary course of business, (iv) any obligation of such Person as lesseeunder a capital lease, (v) any Mandatorily Redeemable Stock of such Personowned by any Person other than such Person or an Indebtedness-Free Subsidiaryof such Person (the amount of such Mandatorily Redeemable Stock to bedetermined for this purpose as the higher of the liquidation preference of andthe amount payable upon redemption of such Mandatorily Redeemable Stock), (vi)any obligation of such Person to purchase securities or other property thatarises out of or in connection with the sale of the same or substantiallysimilar securities or property, (vii) any non-contingent obligation of suchPerson to reimburse any other Person in respect of amounts paid under a letterof credit or other Guaranty issued by such other Person to the extent that suchreimbursement obligation remains outstanding after it becomes non-contingent,(viii) any obligation with respect to an interest rate or currency swap orsimilar obligation obligating such Person to make payments, whetherperiodically or upon the happening of a contingency, except that if anyagreement relating to such obligation provides for the netting of amountspayable by and to such Person thereunder or if any such agreement provides forthe simultaneous payment of amounts by and to such Person, then in each suchcase, the amount of such obligation shall be the net amount thereof, (ix) anyIndebtedness of others secured by (or for which the holder of such Indebtednesshas an existing right, contingent or otherwise, to be secured by) a Lien on anyasset of such Person and (x) any Indebtedness of others Guaranteed by suchPerson.

 

“Indemnified Person”means any Person that is, or at any time was, the Bank, an Affiliate of theBank 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 registrationand, in the case of any such that are registered or under pending registration,whether registered or under pending registration under the laws of the UnitedStates or any other country, (ii) reissues, continuations,continuations-in-part and extensions of any Intellectual Property referred toin clause (i), and (iii) rights relating to any Intellectual Property referredto in clause (i) or (ii), including rights under applications (whether pendingunder the laws of the United States or any other country) or licenses relatingthereto.

 

“Interest Period”means, with respect to each Loan, the period commencing on the date of themaking 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 Bankdesignated by the Bank from time to time as the branch or office at which Loansare to be made or maintained.

 

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

 

“Lien” means, withrespect to any property or asset (or any income or profits therefrom) of anyPerson (in each case whether the same is consensual or nonconsensual or arisesby Contract, operation of law, legal process or otherwise) (i) any mortgage,lien, pledge, attachment, levy or other security interest of any kind thereuponor in respect thereof or (ii) any other arrangement, express or implied, underwhich the same is subordinated, transferred, sequestered or otherwiseidentified so as to subject the same to, or make the same available for, thepayment or performance of any Liability in priority to the payment of theordinary, 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 hasacquired or holds subject to the interest of a vendor or lessor under anyconditional sale agreement, capital lease or other title retention agreementrelating to such asset.

 

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

 

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

 

“Loan DocumentRepresentation and Warranty” means any “Representation and Warranty” asdefined in any Loan Document and any other representation or warranty made ordeemed made under any Loan Document.

 

“Loan Documents”means (i) this Agreement, the Note, the Guaranty Agreement, and the ParentCredit Agreement, and (ii) all other agreements, documents and instrumentsrelating 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 thetransactions contemplated by any agreement, document or instrument referred toin clause (i) or in this clause (ii).

 

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

 

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

 

30

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otherwise, (B) at theoption of any Person other than such Person or (C) upon the occurrence of acondition not solely within the control of such Person, such as a redemptionrequired to be made out of future earnings or (ii) convertible into MandatorilyRedeemable Stock.

 

“Materially AdverseEffect” means, (i) a material adverse effect on the business operations orfinancial condition of the Borrower taken as a whole, and (ii) with respect toany Loan Document, any material adverse effect on the binding nature, validityor enforceability thereof as an obligation of any Loan Party that is a partythereto.

 

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

 

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

 

“Net Profit” meansnet profit as determined under Generally Accepted Accounting Principles and ina manner reasonably acceptable to the Bank.

 

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

 

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

 

“Parent CreditAgreement” means the Credit Agreement dated June 28, 2001 by and betweenCymer, 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 intoBorrower’s account in the ordinary course of the Borrower’s business, (ii)unsecured guaranties of the Borrower with respect to obligations of any of itsSubsidiaries, (iii) unsecured guaranties relating to the financing of accountsreceivable, (iv) unsecured guaranties existing as of the Effective Date, (v)unsecured guaranties under surety instruments, (vi) unsecured guaranties of theobligations of vendors and supplier or the Borrower in respect of transactionsentered into in the ordinary course of business, and (vii) other unsecuredguaranties in an aggregate principal amount not to exceed $1,000,000 .

 

“Permitted Investment”means:

 

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

 

(b)           cashequivalents and marketable securities;

 

(c)            investmentsconsisting of the endorsement of negotiable instruments for deposit orcollection or similar transactions in the ordinary course of business;

 

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

 

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(e)            investmentsconsisting of (i) compensation of employees, officers and directors of Borrowerso long as the Board of Directors of Borrower determines that such compensationis in the best interests of Borrower, (ii) travel advances, employee relocationloans and other employee loans and advances in the ordinary course of business,(iii) loans to employees, officers or directors relating to the purchase ofequity securities of Borrower pursuant to employee stock purchase plansapproved by Borrower’s Board of Directors, and (iv) other loans to officers andemployees approved by the Board of Directors;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(m)         investmentsby Borrower consisting of the purchase of securities of Borrower in anaggregate amount not in excess of 20% of the Tangible Net Worth of Borrower ona consolidated basis; and

 

(n)           otherinvestments aggregating not in excess of 10% of the Tangible Net Worth ofBorrower on a consolidated basis.

 

“Permitted Lien”means:

 

(a)          Minorimperfections of title and encumbrances which do not, singly or in theaggregate, materially interfere with the value or prevent use of Borrower’sproperty or transfer of title thereto;

 

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

 

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

 

(d)         inchoateLiens for Taxes, fees, assessments or other governmental charges or levieswhich are not delinquent or being contested in good faith by appropriateproceedings;

 

(e)          Liens(i) upon or in any real property acquired or held by the Borrower to secure thepurchase price of such property or indebtedness incurred solely for the purposeof financing the acquisitions of such property or (ii) existing on suchproperty at the time of its acquisition, provided that the lien is confinedsolely to the property so acquired and improvements thereon, and the proceedsof 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 notdelinquent for a period of more than thirty days or remain payable withoutpenalty or which are being contested in good faith and by appropriateproceedings, which proceedings have the effect of preventing the forfeiture orsale of the property subject thereto;

 

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

 

(h)         Lienssecuring obligations in respect of capital leases on assets subject to suchleases;

 

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

 

(j)             Liensarising from judgments, decrees or attachments in circumstances notconstituting an Event of Default;

 

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

 

(l)             Lienswhich constitute rights or set-off of a customary nature or bankers’ liens withrespect to amounts on deposit, whether arising by operation of law or bycontract in connection with arrangements entered into with banks in theordinary course of business;

 

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

 

(n)         Lienson insurance proceeds in favor of insurance companies granted solely assecurity for financed premiums; and

 

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(o)         Liensincurred in connection with the extension, renewal or refinancing of theIndebtedness secured by liens of the type described in clauses above, providedthat any extension, renewal, or replacement lien shall be limited to the propertyencumbered by the existing lien and the principal amount of the Indebtedness.

 

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

 

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

 

“Purchase MoneyIndebtedness” means (i) Indebtedness of the Borrower that is incurred tofinance part or all of (but not more than) the purchase price of a tangibleasset, provided that (A) neither the Borrower nor any Subsidiary had atany time prior to such purchase any interest in such asset other than asecurity 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 notan increase in the principal amount of, Purchase Money Indebtedness that issuch by virtue of clause (i) or (ii) and (B) bears interest at a rate per annumthat 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 theadministration or enforcement thereof, that becomes effective or is implementedor 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 anyagency or political subdivision thereof, a determination of a court orregulatory authority, or otherwise or (ii) enacted, adopted, issued or proposedbefore or after the Agreement Date, including any such that imposes, increasesor modifies any Tax, reserve requirement, insurance charge, special depositrequirement, assessment or capital adequacy requirement, but excluding any suchthat imposes, increases or modifies any income or franchise tax imposed uponthe Bank by any jurisdiction (or any political subdivision thereof) in whichthe Bank or any Lending Office is located.

 

“Repayment Date”means the later of (i) the termination of the Commitment (whether as a resultof the occurrence of the Termination Date, reduction to zero pursuant to Section1.07 or termination pursuant to Section 6.02) and (ii) the payment in full ofthe Loans and all other amounts payable or accrued hereunder.

 

“Representation andWarranty” means any representation or warranty made pursuant to or under(i) Section 2.02, Article 3, Section 5.02 or any other provision of thisAgreement 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 INCLAUSE (i) OR (ii) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO THE EXTENTOTHERWISE 

 

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EXPRESSLY PROVIDED), THEINFORMATION THAT IS THE SUBJECT MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THEBORROWER.

 

“Reserve Requirement”means, at any time, the then current maximum rate for which reserves (includingany marginal, supplemental or emergency reserve) are required to be maintainedunder Regulation D by member banks of the Federal Reserve System in Californiawith deposits comparable in amount to those of the Bank against “Eurocurrencyliabilities” as that term is used in Regulation D. Adjusted Euroyen Rates shallbe adjusted automatically on and as of the effective date of any change in theapplicable Reserve Requirement.

 

“Restricted Payment”means (i) any dividend or other distribution on account of any shares of theBorrower’s capital stock (other than dividends payable solely in shares of anyof its capital stock other than Mandatorily Redeemable Stock), (ii) any paymenton account of the principal of or premium, if any, on any Indebtednessconvertible into shares of the Borrower’s capital stock or (iii) any payment onaccount of any purchase, redemption, retirement, exchange or conversion of anyof the Borrower’s Capital Securities. For the purposes of this definition a “payment” shall include thetransfer 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 orthe amount of such obligation, respectively) but shall not include the issuanceof any capital stock other than Mandatorily Redeemable Stock.

 

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

 

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

 

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

 

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

 

“U.S. GAAP” meansgenerally accepted accounting principles set forth from time to time in theopinions and pronouncements of the Accounting Principles Board and the AmericanInstitute of Certified Public Accountants, and statements and pronouncements ofthe Financial Accounting Standards Board (or agencies with similar functions ofcomparable stature and 

 

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

 

“Wholly OwnedSubsidiary” means, with respect to any Person, any Subsidiary of suchPerson all of the Capital Securities and all other ownership interests andrights to acquire ownership interests of which (except directors’ qualifyingshares) are, directly or indirectly, owned or controlled by such Person or oneor more Wholly Owned Subsidiaries of such Person or by such Person and one ormore of such Subsidiaries; unless otherwise specified, “Wholly OwnedSubsidiary” 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 onReuters Page LIBOR01 as of 11:00 a.m. London time on the second Business Dayprior to the beginning of such Interest Period for a period equal to theduration of such Interest Period as determined by the Bank.

 

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

 

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

 

(iii)            Whenever the contextso requires, the neuter gender includes the masculine or feminine, themasculine gender includes the feminine, and the singular number includes theplural, and vice versa.

 

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

 

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

 

(vi)           Except as otherwisespecified herein, all references herein to the Bank or any Loan Party shall bedeemed to refer to such Person however designated in Loan 

 

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

 

(vii)  Exceptas otherwise specified therein, all terms defined in this Agreement shall havethe 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             AccountingMatters.  Unlessotherwise specified herein, all accounting determinations hereunder and allcomputations utilized by the Borrower in complying with the covenants containedherein shall be made, all accounting terms used herein shall be interpreted,and all financial statements required to be delivered hereunder shall beprepared, in accordance with Generally Accepted Accounting Principles, except,in the case of such financial statements, for departures from GenerallyAccepted Accounting Principles that may from time to time be approved inwriting by the independent certified public accountants who are at the time, inaccordance with Section 5.01(b), reporting on the Borrower’s financialstatements.

 

Section 9.03             Representationsand Warranties.  AllRepresentations and Warranties shall be deemed made (a) in the case of anyRepresentation and Warranty contained in this Agreement at the time of itsinitial execution and delivery, at and as of the Agreement Date, (b) in thecase of any Representation and Warranty contained in this Agreement or anyother document at the time any Loan is made, at and as of such time and (c) inthe case of any particular Representation and Warranty, wherever contained, atsuch other time or times as such Representation and Warranty is made or deemedmade in accordance with the provisions of this Agreement or the document pursuantto, under or in connection with which such Representation and Warranty is madeor deemed made.

 

Section 9.04             Captions.  Captionsto Articles, Sections and subsections of, and Annexes, Schedules and Exhibitsto, this Agreement are included for convenience of reference only and shall notconstitute a part of this Agreement for any other purpose or in any way affectthe meaning or construction of any provision of this Agreement.

 

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IN WITNESS WHEREOF, the partieshereto have caused this Agreement to be executed by their duly authorizedofficers all as of the Agreement Date, and acknowledge that this Agreement hasbeen made and delivered in the City of Los Angeles, the last signature heretohaving been affixed in said City, and this Agreement having become effectiveonly 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 |

 

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Schedule 1.02

 

NOTICEOF BORROWING

 

[Name and addressof Bank in accordance withSection 8.01(a)(ii)]

 

Date:

 

Gentlemen:

 

Reference is made to theCredit Agreement (the “Credit Agreement”), dated as of            , 2001between 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 theCredit 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 thatthe proceeds of the Loan be remitted to:

 

Account Name(Beneficiary):

Bank: 

Bank Name: 

Bank Address:

SWIFT Number:

Account Number:

 

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

 

Each Loan DocumentRepresentation and Warranty is true and correct in all material aspects at andas of the date hereof and will be true and correct in all material aspects atand as of the time the Loans are made, in each case both with and withoutgiving effect to the Loans and the application of the proceeds hereof.

 

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

 

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This notice of borrowingmay be executed in separate counterparts, each of which when so executed anddelivered shall be an original, but all such counterparts shall togetherconstitute but one and the same instrument.

 
|   | CYMER JAPAN, INC. |
|--------|-------------------|
|   |              |
|   |              |
|   | By                |   |   |
|   |              | William A. Angus III |
|   |              | Director |

 

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Schedule 2.01(a)

 

DIRECTOR’SCERTIFICATE OF BORROWER

 

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

 

1.                                       Attachedhereto as Exhibit A is a true and complete copy of the Articles ofIncorporation 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.                                       Attachedhereto as Exhibit B is a true and complete copy of the Resolutions ofthe Board of Directors of the Company authorizing the execution, delivery andperformance of the Credit Agreement dated as of October 31, 2001 by and betweenthe Company and Wells Fargo HSBC Trade Bank, N.A. (the “Credit Agreement”), andthe documents related thereto;

 

3.                                       TheDirector of the Company has full authority given to him by the Board ofDirectors of the Company to enter into the transactions contemplated by theCredit Agreement without express Board approval;

 

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

 
| **NAME**             |   | **OFFICE** |   | **SIGNATURE**             |
|----------------------|--------|------------|--------|---------------------------|
|                 |   |       |   |                      |
| William A. Angus III |   | Director   |   | /s/ William A. Angus  III |

 

 

IN WITNESSWHEREOF, 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 theduly elected, qualified and acting Representative Director of the Company, andthat his signature on the foregoing certificate is his genuine signature.

 

 
|   | /s/ William A. Angus  III |   |
|--------|---------------------------|--------|
|   | William A. Angus III      |
|   | Director                  |

 

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Schedule 2.01(b)

 

OFFICER’SCERTIFICATE OF GUARANTOR

 

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

 

1.                                       Attachedhereto as Exhibit A is a true and complete copy of the Second Amendedand restated Articles of Incorporation of the Company, as in full force andeffect on September 24, 1996, and at all times since said date, to andincluding the date hereof;

 

2.                                       Attachedhereto as Exhibit B is a true and complete copy of the Bylaws of theCompany, as in full force and effect on January 3, 2001, and at all times sincesaid date, to and including the date hereof;

 

3.                                       Attachedhereto as Exhibit C is a true and complete copy of the Resolutions ofthe Board of Directors of the Company authorizing the execution, delivery andperformance 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.                                       TheSenior Vice President and Chief Financial Officer of the Company has fullauthority given to him by the Board of Directors of the Company to enter intothe transactions contemplated by the Guaranty Agreement without express Boardapproval;

 

5.                                       Thefollowing people are duly elected or appointed, qualified and acting officersof the Company holding the office set forth opposite each such officers’respective names below, the signature appearing opposite each such name belowis the genuine signature of such person and each such person is authorized toexecute 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

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IN WITNESSWHEREOF, 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 herebycertify that Pascal Didier is the duly elected, qualified and acting Presidentof the Company, and that his signature on the foregoing certificate is hisgenuine signature.

 
|   | /s/ William A. Angus  III                           |   |
|--------|-----------------------------------------------------|--------|
|   | William A. Angus III                                |
|   | Senior Vice President  and  Chief Financial Officer |

 

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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 tothat certain Credit Agreement dated as of                     ,2001 (the “Credit Agreement”) by and between the Cymer Japan, Inc. and WellsFargo HSBC Trade Bank N.A. (capitalized terms used herein without definitionshall have the meanings ascribed thereto in the Credit Agreement), that:

 

(a)          theborrowing requested hereby complies with the requirements of Section 1.02 of theCredit Agreement;

 

(b)         [except to the extent setforth on Annex A hereto,]: (i) each Loan Document Representation and Warrantyis 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 contraryprior to 5:00 p.m. (California time) on the Business Day before the requesteddate for the making of the Loans) will be true and correct in all materialaspects at and as of the time the Loans are made, in each case both with andwithout 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 orwould result from the making of the Loans or from the application of theproceeds thereof if the Loans were made on the date hereof, and (except to theextent the undersigned gives notice to the Bank to the contrary prior to 5:00p.m. (California time) on the Business Day before the requested date for themaking of the Loans) no Default will have occurred and be continuing at thetime the Loans are to be made or would result from the making of the Loans orfrom the application of the proceeds thereof.

 

 

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

 

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

 
|   |                                                                                                                                                                                                                                                                                                                                                           |   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | [                                                          ] |   |
|   | [Director / Chief  Financial Officer]                                                                                                                                                                                                                                                                                                                          |   |
|        |                                                                                                                                                                                                                                                                                                                                                                |        |  |  |

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

 
|   |                                                                                                                                                                                                                                                                                                                                                           |   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | [                                                          ] |   |
|   | [Representative  Director/President]                                                                                                                                                                                                                                                                                                                           |   |
|        |                                                                                                                                                                                                                                                                                                                                                                |        |  |  |

 

----

 

Schedule 2.01(f)

 

[Letterhead ofBorrower]

 

 

CERTIFICATEOF NEGOTIATING OFFICER

 

 

DatedOctober 30, 2001

 

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

 

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

 

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

 

I further confirm that I have reviewed myunderstanding of the Loan Documents with Messrs. Miyake & Yamazaki andMessrs. Cooley Godward LLP who have acted as lawyers for the Company in thetransaction.

 

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

 

Finally, I confirm to you that in the course ofnegotiating the Loan Documents I worked principally with Ms. Kollyn Kanz andneither he/she nor any other representative of the Bank, nor the lawyers forthe Bank, made any representations to me that are inconsistent with the termsand provisions of the Loan Documents.

 
|   | /s/ William A. Angus  III |
|--------|---------------------------|
|   | William A. Angus III      |
|   | Director                  |

 

----

 

Schedule 3.03

 

SCHEDULEOF REQUIRED CONSENTS ANDGOVERNMENTAL APPROVALS

 

 

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

 

----

 

Schedule 3.04

 

SCHEDULEOF MATERIAL LITIGATION

 

 

###### One of Japanese contractmanufacturers for Cymer, Inc. has been given a warning letter by KomatsuLimited, a Japanese corporation, that the laser products it manufactures andsupplies to Cymer, Inc. could infringe Komatsu Limited’s multiple Japanesepatents.  Parties had negotiated for apossible settlement, but nothing was agreed upon.  Komatsu Limited might proceed to a legal action based on suchpatents against Cymer, Inc. as well as Cymer Japan, Inc.

 

###### Cymer, Inc. has beennamed as a defendant in several putative shareholder class action lawsuitswhich were filed in September and October, 1998 in the U. S. District Court forthe Southern District of California. Certain executive officers and directors of Cymer, Inc. are also namedas defendants.  The plaintiffs purportto represent a class of all persons who purchased Cymer, Inc.’s Common Stockbetween April 24, 1997 and September 26, 1997 (the “Class Period”).  The complaints allege claims under thefederal securities laws.  The plaintiffsallege that Cymer, Inc. and the other defendants made various materialmisrepresentations and omissions during the Class Period.  The complaints do not specify the amount ofdamages sought.  The complaints havebeen consolidated into a single action and a class representative has beenappointed by the court.  A consolidatedamended complaint was filed in early August, 1999.  On November 5, 1999, Cymer, Inc. and the other defendants filed amotion to dismiss the consolidated amended claim for failure to state a causeof action.  On April 1, 2000, the courtgranted defendant’s motion to dismiss with leave to amend the complaint by theplaintiffs.  The plaintiffs filed theirsecond amended complaint on June 5, 2000. Cymer, Inc. moved to dismiss the amended complaint on August 4,2000.  On January 22, 2001, the courtheard oral argument on Cymer, Inc.’s motion to dismiss, but has not yet decidedthe motion.

 

----

 

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

 

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Schedule 4.04

 

SCHEDULEOF EXISTING GUARANTIES

 

 

NONE.

 

 

----

 

Schedule 4.05

 

SCHEDULE OF LIENS

 

 

NONE.

 

 

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Schedule 4.11

 

TRANSACTIONSWITH AFFILIATES

 

 

NONE.

 

 

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Schedule 5.01(a)

 

[CYMER JAPAN, INC.]

 

CERTIFICATE AS TOQUARTERLY 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 TradeBank, N.A. (the “Credit Agreement”) that:

 

1.                           (a)    Theaccompanying unaudited financial statements of the Borrower as at and for thequarterly accounting period ending                          ,20    , are complete and correct and present fairly in allmaterial respects, in accordance with Generally Accepted Accounting Principles(except for changes therein or departures therefrom described below that havebeen approved in writing by Messrs. , the Borrower’s current independentcertified public accountants), the financial position of the Borrower as at theend of such quarterly period, and the results of operations for such quarterlyperiod, and for the elapsed portion of the fiscal year ended with the last dayof such quarterly period, in each case on the basis presented and subject onlyto normal year-end auditing adjustments and the absence of auditor’s footnotes.

 

(b)    Exceptas disclosed or reflected in such financial statements, as at         , the Borrower did nothave any Liability, contingent or otherwise, or any unrealized or anticipatedloss, that, singly or in the aggregate, have had or might have a MateriallyAdverse Effect on the Borrower.

 

2.                           (a)    Thechanges in and departures from Generally Accepted Accounting Principles are asfollows:

 

All such changeshave been approved in writing by Messrs.                                    .

 

(b)    Attachedas 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 AcceptedAccounting Principles without giving effect to the changes referred to inParagraph 2(a) of this Certificate or any previous Certificate. Such financialstatements are complete and correct and present fairly in all materialrespects, in accordance with Generally Accepted Accounting Principles, thefinancial position of the Borrower as at the end of such quarterly period, andthe results of operations for such quarterly period, and for the elapsedportion of the fiscal year ending with the last day of

 

----

 

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

----

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

 

 

3.                           Therefollow the calculations required to establish whether or not the Borrower wasin compliance with the following Sections of the Agreement:

 

(a)                      Section4.08.

 

(b)                     Section 4.09.

 

4.                           Basedon an examination sufficient to enable me to make an informed statement, noDefault exists, including, in particular, any such arising under the provisionsof Article 4, except the following:

 

5.                           Capitalizedterm not defined herein shall have the meaning ascribed to such terms in theCredit Agreement.

 

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

 

Dated:

 

 
|   | CYMER JAPAN, INC.    |
|--------|----------------------|
|   |                 |
|   |                 |
|   |                 |
|   | William A. Angus III |
|   | Director             |

 

 

----

 

Schedule 5.01(b)

 

[CYMER JAPAN, INC.]

 

CERTIFICATEAS TO YEAR-END FINANCIAL STATEMENTS

 

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

 

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

 

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

 

2.                           (a)    Thechanges in and departures from Generally Accepted Accounting Principles are asfollows:

 

All such changeshave been approved in writing by Messrs.                     .

 

[(b)    Attachedas 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 withGenerally Accepted Accounting Principles without giving effect to the changesreferred to in Paragraph 2(a) of this Certificate or any previous Certificate.Such financial statements are complete and correct and present fairly in allmaterial 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], ineach case on the basis presented.]*

 

----

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

 

 

----

 

3.                           Therefollow the calculations required to establish whether or not the Borrower wasin compliance with the following Sections of the Agreement:*

 

(a)                                  Section4.08.

 

(b)                                 Section4.09.

 

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*                      Thecalculations should be made in the same manner and with the same degree ofdetail as the calculations set forth in the certificate delivered by theBorrower pursuant to Section 2.01(h).

 

4.                           Basedon an examination sufficient to enable me to make an informed statement, noDefault exists, including, in particular, any such arising under the provisionsof Article 4, except the following:

 

[Ifnone 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 beingtaken by the Borrower with respect thereto.]

 

5.                           Capitalizedterms not defined herein shall have the meaning ascribed to such terms in theCredit Agreement.

 

Dated:

 
|   | CYMER JAPAN, INC.                |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By                               |   |   |
|   | Name:  William A. Angus III |
|   | Title: Director                  |

 

 

 

----

 

Schedule 5.02(a)

 

 

SCHEDULEOF 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 asprovided in the Credit Agreement referred to below) Twenty Million Dollars($20,000,000), or, if less, the principal amount of the Loans outstanding, onthe dates and in the amounts specified in Section 1.04 of the Credit Agreementreferred to below, and to pay interest on such principal amount on the datesand at the rates specified in Section 1.03 of such Credit Agreement. Allpayments due the Bank hereunder shall be made to the Bank at the place, in thetype of money and funds and in the manner specified in Section 1.09 of suchCredit Agreement.

 

Each holder hereof isauthorized to endorse on the grid attached hereto, or on a continuationthereof, each Loan and each payment with respect thereto.

 

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

 

This Note evidences Loans made under, and is entitledto the benefits of, the Credit Agreement, dated as of October 30, 2001, betweenthe 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 provisionsrelating to the prepayment and the acceleration of the maturity hereof. ThisNote is also entitled to the benefits of the Guaranty Agreement,.

 

This Note shall be construed in accordance with andgoverned by the law of the State of California (without giving effect to itschoice 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** |   |
|----------|--------|--------------------|--------|--------------------------------|--------|--------------------------------------|--------|-----------------------|--------|
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |
|     |   |               |   |                           |   |                                 |   |                  |   |

 

 

----

 

**EXECUTIONCOPY**

 

PARENT GUARANTY

 

THIS PARENT GUARANTY  (this “Guaranty”), entered into as of this30th day of October, 2001, by CYMER, INC., a Nevada corporation (together withits permitted successors, assigns and transferees, “Guarantor”), for thebenefit of WELLS FARGO HSBC TRADE BANK, N.A., a national banking association(together with its successors, assigns and transferees, “Bank”), and withrespect 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 itspermitted successors, assigns and transferees, “Borrower”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower is awholly-owned Subsidiary of Guarantor; and

 

WHEREAS, it is acondition precedent to the effectiveness of the Loan Documents that Guarantorshall have executed and delivered to the Bank this Guaranty;

 

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

 

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

 

“Bank” has the meaninggiven it in the preamble.

 

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

 

“Guarantor” has themeaning given it in the preamble.

 

“Guaranty” has themeaning given it in the preamble.

 

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

 

“Person” shall mean anyindividual, partnership, joint venture, firm, corporation, association, limitedliability company, trust or other enterprise.

 

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

 

“Borrower” has themeaning given it in the preamble.

 

----

 

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

 

2.             GuarantyProvisions.

 

2.1           GuaranteedObligations.  Guarantor herebyabsolutely, unconditionally and irrevocably guarantees:

 

(i)            thefull and prompt payment when due (whether at an the stated maturity, byacceleration or otherwise) of all obligations (including obligations which, butfor the automatic stay under Section 362(a) of the Bankruptcy Code, wouldbecome due) and liabilities of Borrower incurred under the Credit Agreement andother Loan Documents, now existing or hereafter incurred under, arising out ofor in connection with the Credit Agreement and other Loan Documents, and thedue performance and compliance by Borrower with the terms of the CreditAgreement and other Loan Documents; and

 

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

 

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

 

2.2           Guarantyof Payment.  This Guarantyconstitutes a guaranty of payment when due and not merely of collection, andGuarantor specifically agrees that it shall not be necessary or required thatBank exercise any right, assert any claim or demand or enforce any remedywhatsoever against Borrower (or any other Person) or any property before or asa condition to the obligations of Guarantor hereunder.

 

2.3           GuarantyAbsolute, etc.  This Guaranty shallin all respects be a continuing, absolute, unconditional and irrevocableguaranty of payment, and shall remain in full force and effect until all of theGuaranteed Obligations have been absolutely, irrevocably, and unconditionallyfulfilled, performed or met, whether by Guarantor, Borrower or otherPerson.  Guarantor guarantees that theGuaranteed Obligations will be paid strictly in accordance with the terms ofthe Loan Documents under which they arise, regardless of any law, regulation ororder now or hereafter in effect in any jurisdiction affecting any of suchterms or the rights of Bank. Without limiting the foregoing, the liability ofGuarantor under this Guaranty shall be absolute, unconditional and irrevocable,to the fullest extent permitted by applicable laws irrespective of:

 

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

 

2

----

 

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

 

(b)           anyexercise of, or any election not or failure to exercise, delay in the exerciseof, 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 toexercise any right of setoff, recoupment or counterclaim, (ii) any election ofremedies effected by Bank, including the foreclosure upon any real estateconstituting collateral, whether or not such election affects the right toobtain a deficiency judgment, and (iii) any election by Bank in any proceedingunder the Bankruptcy Code of the application of Section 1111(b)(2) of suchCode;

 

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

 

(d)           anyincrease, reduction, limitation, impairment or termination (except to theextent the Guaranteed Obligations are thereby absolutely, irrevocably,indefeasibly, and unconditionally fulfilled, performed or met) of theGuaranteed Obligations for any reason, including any claim of waiver, release,surrender, alteration or compromise, and shall not be subject to (and Guarantorhereby 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 otherevent or occurrence affecting, the Guaranteed Obligations;

 

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

 

(f)            anyaddition, exchange, release, surrender or nonperfection of any collateral, orany amendment to or waiver or release or addition of, or consent to departurefrom, any other guaranty, provided in favor of Bank in connection with theGuaranteed Obligations; or

 

(g)           anyother circumstance which might otherwise constitute a defense available to, ora 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 orbe reinstated, as the case may be, if at any time any payment (in whole or inpart) of any of the Guaranteed Obligations is rescinded or must otherwise berestored by Bank, upon the insolvency, bankruptcy or reorganization ofGuarantor, Borrower or otherwise, as though such payment had not been made.

 

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

 

3

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judicial or nonjudicial sale, without affecting or impairing in any waythe liability of Guarantor hereunder except to the extent the GuaranteedObligations may thereby be paid, even though any rights which Guarantor mayhave or otherwise might obtain by subrogation against others might bediminished or destroyed.  Guarantorwaives all rights and defenses arising out of an election or non-election ofremedies by Bank, even though that election or non-election of remedies, suchas a nonjudicial foreclosure with respect to security for a guaranteedobligation, has destroyed Guarantor’s rights of subrogation and reimbursementagainst the principal by the operation of Section 580d of the California Codeof Civil Procedure.  Guarantoracknowledges that any such exercise or non-exercise of a right or remedy withrespect to any collateral security for the Guaranteed Obligations may result ina loss, in part or whole, of Bank’s right to collect from Borrower anydeficiency that may remain after any such exercise of such a right or remedyand that, where such a loss occurs, Guarantor will also suffer a loss of anyrights and remedies, arising in law or equity, which Guarantor may have tocollect any amount from Borrower; and Guarantor agrees to remain boundnotwithstanding any such loss.  Only thenet proceeds from any such foreclosure, after deduction of all costs andexpenses authorized to be deducted pursuant to the documents under which suchsecurity is held or by law, shall be applied against the GuaranteedObligations.  Bank may at its discretionpurchase all or any part of such security so sold or offered for sale for itsown account and may apply against the amount bid therefor all or any part ofthe Guaranteed Obligations for which such security is held; and in such case,only that portion of the Guaranteed Obligations so applied, after deduction ofall costs and expenses authorized to be deducted pursuant to the documents underwhich such security is held or law, shall be applied against the GuaranteedObligations.  Guarantor waives anydefense arising out of the absence, impairment or loss of any right ofreimbursement or subrogation or other right or remedy of Guarantor againstBorrower or any such security, whether resulting from the election by Bank toexercise 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 insuch security, or otherwise.  In theevent that any fore­closure sale is deemed to be not commercially reasonable,Guarantor waives any right that it may have to have any portion of theGuaranteed Obligations discharged except to the extent of the amount actuallybid and received by Bank at any such sale. Bank shall not be required to institute or prosecute proceedings torecover any deficiency as a condition of payment hereunder or enforcementhereof.

 

2.6           SeparateGuaranteed Obligation.  Theobligations hereunder are independent of the obligations of Borrower, and aseparate action or actions may be brought and prosecuted against Guarantorwhether action is brought against Borrower or whether Borrower be joined in anysuch action or actions; Guarantor waives the benefit of any statute oflimitations affecting its liability hereunder or the enforcement thereof, tothe fullest extent permitted by law. Any part performance of the Guaranteed Obligations by Borrower or othercircum­stances, which operate to toll any statute of limitations as to Borrowershall not operate to toll the statute of limitations as to Guarantor.  Guarantor hereby waives any rights it mayhave under Sections 2809 and 2810 of the California Civil Code and reaffirms that,in any event, the obligations of Guarantor are independent of those ofBorrower.  Guarantor understands thatBank would not have entered into the transaction with the Guarantor in theabsence of the foregoing covenants by Guarantor and the other covenants ofGuarantor contained in this Guaranty.

 

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2.7           Covenant to Prevent Events ofDefault.  Guarantor covenants andagrees that on and after the date hereof until such time as (i) each of theLoan Documents is terminated in its entirety and no provision thereof remainsin force and effect and (ii) all outstanding payments and obligations arisingtherefrom or from this Guaranty including, without limitation, the GuaranteedObligations, 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 sothat no violation of any provision, covenant or agreement contained in the LoanDocuments, and so that no Event of Default, is caused by the actions or failureto act of Guarantor or any of its Subsidiaries.

 

2.8           Waiverof Notices and Demands.  Guaran­torwaives all presentments, demands for performance, notices of nonperformance,protests, notices of protest, notices of dishonor, notices of default, andnotices of acceptance of this Guaranty and of the existence, creation orincurring of new or additional Guaranteed Obligations.  At the option of Bank, Guarantor may bejoined in any action or proceeding commenced by Bank against Borrower inconnection with or based upon the Guaranteed Obligations or any securitytherefor and recovery may be had against Guarantor in such action orproceeding, without any requirement that Bank first assert, prosecute orexhaust any remedy or claim against Borrower. Without limiting the foregoing, Guarantor acknowledges that repeated andsuccessive demands may be made and payments or performance made hereunder inresponse to such demands as and when, from time to time, Borrower may defaultin performance of the Guaranteed Obligations. Notwithstanding any such performance hereunder, this Guaranty shallremain in full force and effect and shall apply to any and all subsequentdefaults by Borrower in payment or performance of the Guaranteed Obligations.

 

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

 

2.10         Rightof Subrogation.  Notwithstanding anypayment or payments made by Guarantor hereunder or any setoff or application offunds of Guarantor by Bank, Guarantor shall not be entitled to be subrogated toany of the rights of Bank against Borrower or any other Person or anycollateral security or Guaranty or right of offset held by Bank for the paymentof the Guaranteed Obligations, nor shall Guarantor, in its capacity asGuarantor, seek or be entitled to seek any contribution or reimbursement fromBorrower or any other Person in respect of payments made by Guarantor hereunderuntil all the Guaranteed Obligations have been absolutely, irrevocably,indefeasibly and unconditionally fulfilled, performed or met.  If any amount shall be paid to Guarantor onaccount of such subrogation rights at any time when all of the GuaranteedObligations 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 otherfunds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turnedover to Bank in the exact form received by Guarantor (duly indorsed by Guarantorto Bank, if required), to be applied 

 

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

 

2.11         Transfersof Interests, etc.  This Guarantyshall inure to the benefit of and be enforceable by Bank.  Without limiting the generality of Section11.1, Bank may assign or otherwise transfer (in whole or in part) any Interestheld by it to any Eligible Assignee who is vested with Bank’s rights and benefitsin respect of such Interest under the Loan Documents, and such EligibleAssignee shall thereupon become vested with all rights and benefits in respectthereof granted to Bank under the Loan Documents and this Guaranty orotherwise.

 

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

 

(b) In the case of each Guaranteed Obligation that ispayable in a currency other than Dollars, the Guarantor shall, at Bank’soption, either pay the unpaid amount of such Guaranteed Obligation inaccordance with the provisions of Section 2.12(a) or pay to Bank at the Bank’sOffice 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, forcable transfers of such foreign currency to the place where such GuaranteedObligation is payable, and shall hold Bank harmless from any loss incurred byit arising from any change in the value in Dollars of such foreign currencybetween the date such Guaranteed Obligation became or was deemed to be due andthe date of payment thereof.  For theavoidance of doubt, it is understood that the exchange rate used for thispurpose may be less favorable to the Guarantor than the definition of theApplicable Currency Exchange Rate.  Ifon the date such Guaranteed Obligation became or was deemed to be due no suchselling rate is quoted by Bank, or if at any time Bank is unable for anyreason, including interruption of communications between Bank and any branch,to establish the amount of such Guaranteed Obligation, Bank may reasonablydetermine the equivalent in Dollars of the amount of such Guaranteed Obligationon the basis of such factors as it shall, in its sole reasonable judgment, deemappropriate, and the Guarantor shall be obligated, on demand, to furnish suchsecurity or to make such payments on account of its contingent liabilityhereunder in respect of such Guaranteed Obligation as Bank shall reasonablyrequest.

 

2.13   Without prejudice to the Bank’s rightshereunder and under the Loan Agreement, Guarantor hereby agrees to pay directlyto the Bank on behalf of the Borrower all mounts specified under Section 1.07of the Credit Agreement, and authorizes and instructs the Bank to debit anysuch amounts due from the Guarantor’s account at the Bank (account number4496888819).

 

 

3.             Representations and Warranties. Guarantor herebyrepresents and warrants and covenants that:

 

(a)           Guarantor is a corporation duly organized, validlyexisting and in good standing under the laws of the jurisdiction in which itwas incorporated, and is qualified to do business and is in good standing as aforeign corporation in each other state or jurisdiction where the character ofthe property owned or the nature of its business requires it to be soqualified, except where the

 

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failure to so qualify would not be reasonablyexpected to have a material adverse change to Guarantor’s business, operationsor financial statements;

 

(b)           neither the execution nor delivery of this Guarantyor any of the other documents related hereto nor performance of nor compliancewith the terms and provisions hereof or thereof will conflict with or result ina breach of any laws, statutes, codes, rules, ordinance, orders, judgments,decrees, injunctions, rules, regulations, permits, licenses, authorizations ororders of any governmental department, commission, board, courts, authority oragency binding upon Guarantor (collectively, “Laws and Permits”) or any othermaterial agreement or instrument binding upon Guarantor or any of its property(collectively, “Property”), or conflict with or result in a breach of anyprovision of the charter documents or by-laws of Guarantor.  No authorization, consent or approval orother action by, and no notice to or filing with, any governmental authority isrequired to be obtained or made by Guarantor for the due execution, deliveryand 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 forherein, all of which have been duly authorized by all proper and necessarycompany action.  No consent or approvalis required as a condition to the validity or performance of, or the exerciseby Bank of any of its rights and remedies under this Guaranty.

 

(d)           this Guaranty constitutes legal, valid and bindingobligations enforceable against Guarantor in accordance with its terms, exceptas may be limited by bankruptcy, insolvency or other laws affecting theenforcement 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 withthe passage of time or the giving of notice, or both, would constitute abreach, of any other material agreement to which Guarantor is a party or towhich 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 ViaDel Campo Court, San Diego, CA  92127;

 

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

 

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

 

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

 

4.             Covenants. Guarantorcovenants and agrees that so long as any Guaranteed Obligation is outstandingit shall comply with the following provisions.

 

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

 

5.             Renewal and Extension.  Guarantor authorizes Bank, without noticeto, demand of, or consent from Guarantor, and without affecting its liabilityto Bank hereunder, from time to time to (a) renew, extend, accelerate orotherwise change the time or place for payment of, or otherwise change theterms of the Guaranteed Obligations or any part thereof; (b) take and holdsecurity for the payment or performance of the Guaranteed Obligations or thisGuaranty, 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 itspriority with respect thereof; (c) release Borrower, in whole or in part, fromany or all of the Guaranteed Obligations or substitute any or all of theGuaranteed Obligations; (d) settle or compromise any or all of theGuaranteed Obligations with Borrower or any endorser or guarantor of theGuaranteed Obligations; and (e) subordinate any or all of the GuaranteedObligations to any other obligations of or claim against Borrower, whetherowing to or existing in favor of Bank or any other party.  Guarantor shall be and remains bound hereundernotwithstanding 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 insolventor files a petition for reorganization, arrangement, composition, discharge orsimilar relief under any present or future provision of the Bankruptcy Code, orif such a petition be filed against Borrower, and in any such proceedings someor all of the Guaranteed Obligations shall be terminated or rejected or any ofthe Guaranteed Obligations modified or abrogated, Guarantor agrees that itsliability hereunder shall not thereby be affected or modified, and suchliability shall continue in full force and effect as if no such action orproceeding had occurred.  This Guarantyshall continue to be effective or reinstated, as the case may be, if anypayment of any of the obligations must be returned by Bank upon the insolvency,bankruptcy or reorganization of Borrower or Guarantor, or otherwise, as thoughsuch payment had not been made.

 

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

 

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

 

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lien upon and right tosetoff against all moneys, securities and other property of Guarantor now orhereafter in the possession of or on deposit with Bank, whether held in ageneral or special account or deposit, or for safekeeping or otherwise; andevery such lien and right of setoff may be exercised without demand upon ornotice to Guarantor.  No lien or rightto setoff shall be deemed to have been waived by any act or conduct on the partof Bank, or by any neglect to exercise such right of setoff or to enforce suchlien, or by any delay in so doing; and every right of setoff and lien shall continuein full force and effect until such right of setoff or lien is specificallywaived or released by an instrument in writing executed by Bank.

 

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

 

10.           Officers and Directors.  It is not necessary for Bank to inquire intothe power of Guarantor or the officers, directors or agents acting orpurporting to act on Guarantor’s behalf, and any obligations made or created inreliance upon the professed exercise of such powers shall be guaranteedhereunder.

 

11.           MiscellaneousProvisions.

 

11.1         Bindingon Successors, Transferees and Assigns; Assignment of Guaranty.  This Guaranty shall be binding uponGuarantor and its successors, transferees and assigns and shall inure to thebenefit of and be enforceable by Bank and its respective successors and assigns;provided, however, that Guarantor may not transfer or assign any of itsobligations hereunder or, as long as the Guarantor shall have any liabilityhereunder, enter into any transaction which violates Section 4.1 without, ineach case, the prior written consent of Bank (any such transfer, assignment ortransaction without such consent to be void) which consent shall not beunreasonably withheld.

 

11.2         Expensesof Borrower. Guarantor shall reimburse Bank for any and all costs orexpenses incurred by or on behalf of Bank (including, without limitation, anyreasonable legal fees and expenses of Bank’s in-house or outside counsel andany 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 ofany provision of this Guaranty, nor consent to any departure by Guarantorherefrom, shall in any event be effective unless the same shall be in writingand signed by Bank and the Guarantor and then such waiver or consent shall beeffective only in the specific instance and for the specific purpose for whichgiven.

 

11.4         Addressesfor Notices to Guarantor.  Allnotices, demands, requests, consents, approvals and other communicationshereunder shall be in writing and directed to the address 

 

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

 

11.5         NoWaiver; Remedies.  In addition to, andnot in limitation of, Section 2.3 and Section 2.5, no failure on the part ofBank to exercise, and no delay in exercising, any right hereunder shall operateas a waiver thereof; nor shall any single or partial exercise of any righthereunder preclude any other or further exercise thereof or the exercise of anyother right.  The remedies hereinprovided are cumulative and not exclusive of any remedies provided by law.

 

11.6         SectionCaptions.  Section captions used inthis Guaranty are for convenience of reference only, and shall not affect theconstruction of this Guaranty.

 

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

 

11.8         Terminationof Guaranty.  The obligations ofGuarantor 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         EntireAgreement.  This Guarantyconstitutes and contains the entire agreement of the parties with respect tothe 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 numberof counterparts each of which shall be an original with the same effect as ifthe signatures thereof and hereto were upon the same instrument.

 

11.11                     GoverningLaw.  THIS GUARANTY SHALL BEGOVERNED BY AND CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF THE STATE OFCALIFORNIA.  FOR PURPOSES OF ANY ACTIONOR PROCEEDING INVOLVING THIS GUARANTY, GUARANTOR HEREBY EXPRESSLY SUBMITS TOTHE JURISDICTION OF ALL FEDERAL AND STATE COURTS LOCATED IN THE STATE OFCALIFORNIA AND CONSENTS THAT IT MAY BE SERVED WITH ANY PROCESS OR PAPER BYREGISTERED MAIL OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OFCALIFORNIA.

 

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 JURYIN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR INCONNECTION WITH, THIS GUARANTY.

 

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IN WITNESS WHEREOF,  Guarantor has caused this Guaranty to beduly 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 TRADEBANK, N.A., hereby agree as follows:

 

1.             CreditAgreement.  Reference is made to theCredit 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 October30, 2001, by Cymer, Inc., a Nevada Corporation, for the benefit of the Bank andwith 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 (asdefined below), the definition of “Termination Date” in Section 9.01(a) of theCredit Agreement is amended by deleting the words “June 15, 2002” andinserting, in lieu thereof, the words “June 16, 2003”.

 

3.             ContinuingEffect of Credit Agreement.  Exceptas expressly provided herein, the Credit Agreement and the other Borrower LoanDocuments shall remain unmodified and in full force and effect.  The Credit Agreement and the other BorrowerLoan Documents, as amended by this Amendment, are hereby in all respectsconfirmed, approved and ratified.

 

4.             Representationsand Warranties.  The Borrowerrepresents and warrants to the Bank as follows:

 

(a)  The Borrower has the power, and has takenall necessary action (including any necessary stockholder action) to authorizeit to authorize it to execute, deliver and perform this Amendment, to performthe 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 anddelivered by the Borrower.

 

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

 

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

 

(d)  The execution, delivery and performance inaccordance with their respective terms by the Borrower of this Amendment andthe 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 changein any Applicable Law or applicable Contract) will not (a) require anyGovernmental Approval or any other consent or approval, including any consentor approval of any Subsidiary or any consent or approval, of the stockholdersof the Borrower, other than Governmental Approvals and other consents andapprovals that have been obtained, are final and not subject to review onappeal 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, orresult in or require the creation of any Lien upon any assets of any of theLoan Party under, (i) any material Contract to which any Loan Party is a partyor by which the any Loan Party or any of their respective properties may be boundor (ii) any Applicable Law binding upon any Loan Party or any of theirrespective properties.

 

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

 

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

 

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

 

(a)              The Bank shall havereceived this Amendment duly executed by the Borrower and consent of Guarantorattached hereto duly executed by the Guarantor;

 

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

 

(c)     No Default shall have occurred and becontinuing;

 

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

 

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

 

(f)                Parent CreditAgreement is in full force and effect and the Parent is in full compliance withall of the covenants thereunder.

 

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

 

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

 

8.             Headings.  Section headings in this Amendment areincluded herein for convenience and reference only and shall not constitute apart of this Amendment for any other purpose.

 

*[Thenext page is the signature page]*

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Amendment to be executed by their duly authorized officers all as of thedate 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 GuaranteedObligations under the parent Guaranty dated as of October 30, 2001, herebyacknowledges and consents to this Amendment and agrees that the Guaranty shallremain in full force and effect with respect to the obligations of the Borrowerunder the Credit Agreement and the other Loan Documents, as amended by thisAmendment, and the Guarantor does further reaffirm the validity andenforceability 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 |

 

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EXHIBIT A

 

DIRECTOR’S CERTIFICATE

 

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

 

1.                   The copy of theArticles 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 HSBCTrade Bank, N.A. and the Company continues to be true and correct copy thereofin effect as of the date hereof;

 

2.                   Attached heretoas Exhibit            is atrue and complete copy of the resolutions of the Board of Directors of theCompany authorizing the execution and delivery of Amendment No. 1, dated as ofJune 7, 2002 (the “Amendment”), to the Credit Agreement, dated as of October30, 2001, between Wells Fargo HSBC Trade Bank, N.A. and the Company (the“Credit Agreement”) and the performance of the Credit Agreement and the otherBorrower Loan Documents (as defined in the Credit Agreement) as amended by theAmendment; and such resolutions are in full force and effect as of the datehereof;

 

3.                   Each LoanDocument Representations and Warranty is true and correct in all materialrespects at and as of the date hereof;

 

4.                   Eachrepresentation and warranty in Section 4 of the Amendment is true and correctin all material respects at and as of the date hereof;

 

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

 

6.                   The followingpersons are duly elected or appointed, qualified and acting officers of theCompany holding the office set forth opposite each such officers’ respectivenames below, the signature appearing opposite each such name below is thegenuine signature of such person and each such person is authorized to executethe 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 this7th day of June, 2002.

 
|   | /s/ Pascal Didier              |   |
|--------|--------------------------------|--------|
|   | Name: Pascal Didier            |
|   | Title: Representative Director |

 

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

 
|   | /s/ Nancy J. Baker   |   |
|--------|----------------------|--------|
|   | Name: Nancy J. Baker |
|   | Title: Director      |

 

6

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