Document:

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.

 

 

 

 

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.

  

 

 

	
  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.

  

 

ii

 

	
  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.

  

 

iii

 

	
  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

  

 

iv

 

CREDIT AGREEMENT

 

Dated as of October 30th, 2001

 

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

 

ARTICLE
1

 

CREDIT FACILITY

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

ARTICLE
2

 

CONDITIONS TO LOANS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

ARTICLE
3

 

CERTAIN REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

ARTICLE 4

 

CERTAIN COVENANTS

 

From the Agreement Date
and until the Repayment Date,

 

A.                                   The
Borrower shall:

 

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

 

8

 

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

 

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

 

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

 

B.                                     The
Borrower shall not, directly or indirectly:

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

ARTICLE
5

 

FINANCIAL STATEMENTS AND INFORMATION

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

Section 5.02             Accuracy
of Financial Statements and Information.

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

ARTICLE
6

 

DEFAULT

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

(ii)  Any Loan
Party shall default in the performance or observance of:

 

(A)  Section
4 of the Guaranty Agreement; or

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

ARTICLE
7

 

ADDITIONAL CREDIT FACILITY PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

18

 

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

 

ARTICLE
8

 

MISCELLANEOUS

 

Section 8.01             Notices and
Deliveries. 

 

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

 

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

 

(A)  if to the
Borrower, to it at:

 

Cymer Japan, Inc.

4-17-8 Minamiyawata

Ichikawa-shi, Chiba
Prefecture

272-0023 Japan

Telex No.:

Telecopier No.: 47-393-5672

Telephone No.: 47-393-5668

 

Attention:

 

 

 

19

 

(B)  if to the
Bank, to it at:

 

Wells Fargo HSBC Trade
Bank, N.A.

333 South Grand Avenue, Suite 800

Los Angeles, CA 90071 
U.S.A.

Telex No.:  184904 WELLS UT

Telecopier No.: (213)625-1055

Telephone No.: (213)253-3573

 

Attention:  Regional Vice President

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

(ii)  The Bank
may from time to time assign any or all of its rights and obligations under the
Borrower Loan Documents to any Affiliate of the Bank or an Eligible Assignee
without the consent of the Borrower. Any assignment by the Bank of any or all
of its obligations under the Borrower Loan Documents shall release the Bank
therefrom if such assignment is to an Affiliate of the Bank or an Eligible
Assignee or is consented to in writing by the Borrower; provided, however, that
the Borrower may continue to deal solely and directly with the Bank or its
Affiliates in connection with the interest so assigned until written notice of
such assignment, together with payment instructions, addresses and related
information with respect to the assignee, shall have been given to the Borrower
by the Bank and the assignee.  In
connection therewith, the Bank may disclose any information relating to the
Loan Documents, Borrower or its business, or the Guarantor or its business.

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

ARTICLE
9

 

INTERPRETATION

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Permitted Investment”
means:

 

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

 

(b)           cash
equivalents and marketable securities;

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Permitted Lien”
means:

 

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

 

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

 

32

 

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

 

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

 

(e)          Liens
(i) upon or in any real property acquired or held by the Borrower to secure the
purchase price of such property or indebtedness incurred solely for the purpose
of financing the acquisitions of such property or (ii) existing on such
property at the time of its acquisition, provided that the lien is confined
solely to the property so acquired and improvements thereon, and the proceeds
of such property;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

(o)         Liens
incurred in connection with the extension, renewal or refinancing of the
Indebtedness secured by liens of the type described in clauses above, provided
that any extension, renewal, or replacement lien shall be limited to the property
encumbered by the existing lien and the principal amount of the Indebtedness.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ William A. Angus
  III

  	
   

  
	
   

  	
   

  	
  Name: 
  William A. Angus III

  
	
   

  	
   

  	
  Title: 
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO HSBC TRADE
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kollyn D. Kanz

  	
   

  
	
   

  	
   

  	
  Name: 
  Kollyn D. Kanz

  
	
   

  	
   

  	
  Title: 
  Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Agreement Date: 
  October 30, 2001

  

 

38

 

Schedule 1.02

 

NOTICE
OF BORROWING

 

[Name and address

of Bank in accordance with

Section 8.01(a)(ii)]

 

Date:

 

Gentlemen:

 

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

 

Loan Amount                                                                                                                ¥

 

Maturity Date

 

Interest Period

 

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

 

Account Name
(Beneficiary):

Bank: 

Bank Name: 

Bank Address:

SWIFT Number:

Account Number:

 

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

 

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

 

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

 

39

 

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

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  William A. Angus III

  
	
   

  	
   

  	
  Director

  

 

40

 

Schedule 2.01(a)

 

DIRECTOR’S
CERTIFICATE OF BORROWER

 

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

 

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

 

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

 

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

 

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

 

	
  NAME

  	
   

  	
  OFFICE

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  William A. Angus III

  	
   

  	
  Director

  	
   

  	
  /s/ William A. Angus
  III

  

 

 

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

 

 

	
   

  	
  /s/ Pascal Didier

  	
   

  
	
   

  	
  Pascal Didier

  
	
   

  	
  Representative Director

  

 

 

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

 

 

	
   

  	
  /s/ William A. Angus
  III

  	
   

  
	
   

  	
  William A. Angus III

  
	
   

  	
  Director

  

 

41

 

Schedule 2.01(b)

 

OFFICER’S
CERTIFICATE OF GUARANTOR

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  NAME

  	
   

  	
  OFFICE

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  William A. Angus III

  	
   

  	
   

  	
  Senior Vice President
  and Chief Financial Officer

  	
   

  	
  /s/ William A. Angus
  III

  
						

 

42

 

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

 

	
   

  	
  /s/ Pascal Didier

  	
   

  
	
   

  	
  Pascal Didier

  
	
   

  	
  President

  

 

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

 

	
   

  	
  /s/ William A. Angus
  III

  	
   

  
	
   

  	
  William A. Angus III

  
	
   

  	
  Senior Vice President
  and

  Chief Financial Officer

  

 

 

Schedule 2.01(c)

 

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

 

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

 

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

 

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

 

 

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

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
  [                                                          ]

  	
   

  
	
   

  	
  [Director / Chief
  Financial Officer]

  	
   

  
					

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

 

	
   

  	
   

  	
   

  
	
   

  	
  [                                                          ]

  	
   

  
	
   

  	
  [Representative
  Director/President]

  	
   

  
					

 

 

Schedule 2.01(f)

 

[Letterhead of
Borrower]

 

 

CERTIFICATE
OF NEGOTIATING OFFICER

 

 

Dated
October 30, 2001

 

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

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  /s/ William A. Angus
  III

  
	
   

  	
  William A. Angus III

  
	
   

  	
  Director

  

 

 

Schedule 3.03

 

SCHEDULE
OF REQUIRED CONSENTS AND

GOVERNMENTAL APPROVALS

 

 

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

 

 

Schedule 3.04

 

SCHEDULE
OF MATERIAL LITIGATION

 

 

One of Japanese contract
manufacturers for Cymer, Inc. has been given a warning letter by Komatsu
Limited, a Japanese corporation, that the laser products it manufactures and
supplies to Cymer, Inc. could infringe Komatsu Limited’s multiple Japanese
patents.  Parties had negotiated for a
possible settlement, but nothing was agreed upon.  Komatsu Limited might proceed to a legal action based on such
patents against Cymer, Inc. as well as Cymer Japan, Inc.

 

Cymer, Inc. has been
named as a defendant in several putative shareholder class action lawsuits
which were filed in September and October, 1998 in the U. S. District Court for
the Southern District of California. 
Certain executive officers and directors of Cymer, Inc. are also named
as defendants.  The plaintiffs purport
to represent a class of all persons who purchased Cymer, Inc.’s Common Stock
between April 24, 1997 and September 26, 1997 (the “Class Period”).  The complaints allege claims under the
federal securities laws.  The plaintiffs
allege that Cymer, Inc. and the other defendants made various material
misrepresentations and omissions during the Class Period.  The complaints do not specify the amount of
damages sought.  The complaints have
been consolidated into a single action and a class representative has been
appointed by the court.  A consolidated
amended complaint was filed in early August, 1999.  On November 5, 1999, Cymer, Inc. and the other defendants filed a
motion to dismiss the consolidated amended claim for failure to state a cause
of action.  On April 1, 2000, the court
granted defendant’s motion to dismiss with leave to amend the complaint by the
plaintiffs.  The plaintiffs filed their
second amended complaint on June 5, 2000. 
Cymer, Inc. moved to dismiss the amended complaint on August 4,
2000.  On January 22, 2001, the court
heard oral argument on Cymer, Inc.’s motion to dismiss, but has not yet decided
the motion.

 

 

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

 

 

Schedule 4.04

 

SCHEDULE
OF EXISTING GUARANTIES

 

 

NONE.

 

 

 

Schedule 4.05

 

SCHEDULE OF LIENS

 

 

NONE.

 

 

 

Schedule 4.11

 

TRANSACTIONS
WITH AFFILIATES

 

 

NONE.

 

 

 

Schedule 5.01(a)

 

[CYMER JAPAN, INC.]

 

CERTIFICATE AS TO
QUARTERLY FINANCIAL STATEMENTS

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

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

 

 

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

 

(a)                      Section
4.08.

 

(b)                     Section 4.09.

 

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

 

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

 

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

 

Dated:

 

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  William A. Angus III

  
	
   

  	
  Director

  

 

 

 

Schedule 5.01(b)

 

[CYMER JAPAN, INC.]

 

CERTIFICATE
AS TO YEAR-END FINANCIAL STATEMENTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

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

 

(a)                                  Section
4.08.

 

(b)                                 Section
4.09.

 

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

 

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

 

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

 

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

 

Dated:

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
  Name:  William A. Angus III

  
	
   

  	
  Title: Director

  

 

 

 

 

Schedule 5.02(a)

 

 

SCHEDULE
OF HISTORICAL FINANCIAL INFORMATION

 

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

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

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

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

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

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

  

 

 

 

EXHIBIT A

[CYMER JAPAN, INC.]

 

PROMISSORY NOTE

 

 

Los Angeles, California

 

            
October 30, 2001

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ William A. Angus
  III

  
	
   

  	
  Name: William A. Angus III

  
	
   

  	
  Title: Director

  

 

 

 

GRID

 

PROMISSORY NOTE

 

	
  Date

  	
   

  	
  Amount of Loan

  	
   

  	
  Amount of

  Principal Paid,

  	
   

  	
  Unpaid Principal

  Amount of Note

  	
   

  	
  Notation Made

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EXECUTION
COPY

 

PARENT GUARANTY

 

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

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

2.             Guaranty
Provisions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

11.           Miscellaneous
Provisions.

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

	
   

  	
  CYMER, INC., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ William A.
  Angus, III

  	
   

  
	
   

  	
   

  
	
   

  	
  Its Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted by:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO HSBC
  TRADE BANK N.A.,

  
	
   

  	
  a national
  banking association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kollyn D.
  Kanz

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its Assistant Vice President

  
	
   

  	
   

  

 

11

 

AMENDMENT NO. 1

 

DATED AS OF JUNE 7, 2002

 

TO

 

CREDIT AGREEMENT

 

DATED AS OF OCTOBER 30,
2001

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

[The
next page is the signature page]

 

3

 

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

 

 

	
   

  	
  CYMER JAPAN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy J. Baker

  	
   

  
	
   

  	
   

  	
  Name: Nancy J. Baker

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO HSBC TRADE BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kollyn D. Kanz

  	
   

  
	
   

  	
   

  	
  Name: Kollyn D. Kanz

  
	
   

  	
   

  	
  Title: 
  Assistant Vice President

  
					

 

CONSENT OF GUARANTOR

 

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

 

	
  Dated: June 7,
  2002

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CYMER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy J. Baker

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Nancy
  J. Baker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: Senior
  Vice President

  and Chief Financial Officer

  

 

4

 

EXHIBIT A

 

DIRECTOR’S CERTIFICATE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  NAME

  	
   

  	
  POSITION

  	
   

  	
  SIGNATURE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nancy J. Baker

  	
   

  	
  Director

  	
   

  	
  /s/ Nancy J. Baker

  

 

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

 

	
   

  	
  /s/ Pascal Didier

  	
   

  
	
   

  	
  Name: Pascal Didier

  
	
   

  	
  Title: Representative Director

  

 

5

 

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

 

	
   

  	
  /s/ Nancy J. Baker

  	
   

  
	
   

  	
  Name: Nancy J. Baker

  
	
   

  	
  Title: Director

  

 

6Exhibit
10.26

 

Description of
President/COO Bonus Plan: 2001-2003

 

 

1.  Purpose
of the plan: For a period spanning 2 years, to retain Cymer president/COO
and to provide additional incentive to operate within approved quarterly
financial budgets while (a) achieving/maintaining market leadership through the
current downturn, (b) executing the Company’s product roadmap, and (c)
establishing the infrastructure necessary to deal with the next anticipated
industry upturn.   The plan is separate
from, and in addition to, the standard Cymer bonus framework.

 

2.  Time
Period: The bonus plan is composed of two contiguous 12 month periods (each
a “Bonus Period”), the first beginning October 1, 2001 and ending September 30,
2002: the second period beginning October 1, 2002 and ending September 30,
2003.

 

3.  Measurement
of Performance: Metrics and performance milestones for each Bonus Period
are agreed to in advance by the Chief Executive Officer and the President/COO,
subject to approval of the Compensation Committee of the Company’s Board of
Directors.  The Chief Executive Officer
will meet quarterly with the President/COO to review achievement of relevant
milestones within that quarter.  At the
Chief Executive Officer’s discretion, for medium-term milestones, achievement
may be reviewed and based on performance over multiple quarters.  Achievement of milestones for each Bonus
Period is capped at 100%.

 

4.  Plan
Payment: Payment is contingent upon the President/COO’s ongoing employment
at Cymer through the end of each Bonus Period and satisfactory achievement of
the relevant milestones.  A single
payment for each Bonus Period will be made at the conclusion of such
period.  The maximum amount payable with
respect to each Bonus Period is $1M.

 

5.  Compensation
Committee Review: The Chief Executive Officer shall review the plan’s
status with the Compensation Committee near the conclusion of each Bonus Period
and prior to any plan payment, or at any other time upon the request of the
Compensation Committee.

 

6.  Change
of Control: If the Company is acquired during a Bonus Period and the
President/COO is terminated for reasons other than cause, the plan payments
will become guaranteed.

 

1

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