Document:

exv10w46

 

Exhibit 10.46

ASYST TECHNOLOGIES, INC.

CHANGE-IN-CONTROL AGREEMENT

     THIS CHANGE-IN-CONTROL AGREEMENT (this “Agreement”) is made and entered into as of
[ ], 200_ (the “Effective Date”), by and between Asyst Technologies, Inc., a
California corporation (“Asyst”), and [             ] (the “Executive”).

     WHEREAS, Asyst considers it essential to foster the continued employment of key management
personnel and recognizes the distraction and disruption that the possibility of a Change in Control
(as defined in Section 1(e) below) may raise, to the detriment of Asyst and its stockholders; and

     WHEREAS, Asyst has determined to take appropriate steps to reinforce and encourage the
continued attention and dedication of key management personnel to their assigned duties in the face
of a possible Change in Control;

     NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein,
Asyst and the Executive hereby agree as follows:

     1. DEFINITIONS.

          (a) “Base Salary” shall mean the annualized base salary of the Executive at the time of
termination of his employment, within the application of this Agreement.

          (b) “Beneficiary” shall mean (i) the person or persons named, by the Executive
by written notice to Asyst, to receive any compensation or benefit payable
under this Agreement, or (ii) in the event of his death, if no such person is named and
survives the Executive, his estate. 

          (c) “Board” shall mean the Board of Directors of Asyst, acting in such capacity.

          (d) “Cause” shall mean any of the following, occurring during the term of the
Executive’s employment or employment relationship with Asyst:

               (i) the Executive’s conviction in a court of law of, or guilty plea, no contest plea or
nolo contendere plea to, a felony charge;

               (ii) willful, substantial and continued failure by the Executive to perform the duties
of his position after receiving notice of the same;

               (iii) willful engagement by the Executive in conduct that is demonstrably, materially
and economically injurious to Asyst; or

               (iv) gross negligence by the Executive during the performance of the duties of his
position resulting in demonstrable, material and economic injury to Asyst.

 

          (e) “Change in Control” shall mean any of the following, occurring during the term of
the Executive’s employment or employment relationship with Asyst:

               (i) an acquisition by an individual, an entity or a group (excluding Asyst, an employee
benefit plan of Asyst, or a corporation controlled by Asyst) of 30 percent or more of
Asyst’s then-outstanding common stock or voting securities;

               (ii) a change in composition of the Board occurring within a rolling two-year period,
as a result of which fewer than a majority of the directors are Incumbent Directors
(“Incumbent Directors” shall mean directors who either (x) are members of the Board as of
the Effective Date or (y) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time of such
election or nomination, but shall not include an individual not otherwise an Incumbent
Director whose election or nomination is in connection with an actual or threatened proxy
contest (relating to the election of directors to the Board)); or

               (iii) consummation of a complete liquidation or dissolution of Asyst, or a merger,
consolidation or sale of all or substantially all of Asyst’s then-existing assets
(collectively, a “Business Combination”), other than a Business Combination (x) in which the
stockholders of Asyst immediately prior to the Business Combination receive 50 percent or
more of the voting stock resulting from the Business Combination, (y) at least a majority of
the board of directors of the corporation resulting from the Business Combination were
Incumbent Directors and (z) after which no individual, entity or group (excluding any
corporation resulting from the Business Combination or any employee benefit plan of such
corporation or of Asyst) owns 30 percent or more of the stock of the corporation resulting
from the Business Combination who did not own such stock immediately before the Business
Combination.

          (f) “Disability” shall mean the illness or other mental or physical disability of the
Executive, as determined by a physician acceptable to Asyst and the Executive, resulting in his
failure (i) to perform substantially the material duties of his position for a period of six or
more consecutive months, or an aggregate of nine months in any 12-month period, and (ii) to return
to the performance of his duties within 30 days after receiving written notice of termination.

          (g) “Good Reason” shall mean, without the Executive’s prior written consent or his
acquiescence:

               (i) assignment to the Executive of duties incompatible with his position, failure to maintain
him in this position and its reporting relationship, or a substantial diminution in the nature of
his authority or responsibilities;

               (ii) reduction in his then-current Base Salary or in the bonus or incentive compensation
opportunities or benefits coverage available during the term of this Agreement, except pursuant to
an across-the-board reduction similarly affecting all senior executives of Asyst;

               (iii) termination of the Executive’s employment, for any reason other than Cause, death,
Disability or voluntary termination, within two years following a Change in Control;

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               (iv) within two years following a Change in Control, relocation of the Executive’s principal
place of business to a location more than 30 miles from the location of such office on the date of
this Agreement; or

               (v) (v) Asyst’s failure to pay the Executive any material amounts otherwise vested and due him
hereunder or under any plan, program or policy of Asyst.

     2. TERM OF AGREEMENT.

          This Agreement shall be effective immediately as of the Effective Date, and shall remain in
effect until the earliest to occur of (a) termination of the Executive’s employment with
Asyst following a Change in Control (i) by reason of death or Disability, (ii) by Asyst for Cause,
or (iii) by the Executive other than for Good Reason; (b) two years after the date of a Change in
Control; or (c) two years after the Effective Date, provided that a Change in Control has not
occurred within such two-year period.

     3. ENTITLEMENT UPON TERMINATION BY ASYST WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD
REASON WITHIN TWO YEARS FOLLOWING A CHANGE IN CONTROL.

     In the event of termination of the Executive’s employment within two years following a Change
in Control (a) by Asyst without Cause or (b) by the Executive for Good Reason, he shall be entitled
to the entitlements set out below in this section 3. Generally, such amounts to be paid to the
Executive in a cash lump sum within 30 business days after termination except that (i) the
payment of any equity awards may be made in shares and (ii) in the event it is determined that the
Executive is a “Specified Employee” as defined in Section 409A(a)(2)(B)(i) of the Internal Revenue
Code of 1986, as amended (the “Code”), any payment to be made under this Agreement that is
“nonqualified deferred compensation” subject to Section 409A of the Code shall be delayed for six
months following the Executive’s termination of employment.

          (a) General Entitlement:

               (i) his Base Salary through the date of termination, but not yet paid to him;

               (ii) payment in lieu of any unused vacation, in accordance with Asyst’s vacation policy and
applicable laws;

               (iii) any annual or discretionary bonus earned but not yet paid to him for any completed
fiscal year prior to the fiscal year in which his termination occurs;

               (iv) any compensation under any deferred compensation plan of Asyst or deferred compensation
agreement with Asyst then in effect (subject to the terms and conditions of such plan);

               (v) any other compensation or benefits, including without limitation any benefits under
long-term incentive compensation plans, any benefits under equity grants and awards and employee
benefits under plans that have vested through the date of termination, or to which he may then be
entitled, in accordance with the applicable terms of each grant, award or plan; and

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               (vi) reimbursement of any business expenses reasonably and properly incurred by the Executive
through the date of termination, but not yet paid to him.

          (b) Change-in-Control Entitlement:

               (i) two times the sum of (A) his Base Salary, at the rate in effect immediately before such
termination, and (B) an amount equal to the average of his annual bonuses actually paid by Asyst to
the Executive during the three completed fiscal years prior to the year in which termination
occurs;

               (ii) continuing coverage under the life, disability, accident, health, dental and vision
insurance programs covering senior executives of Asyst generally, as from time to time in effect,
to the extent permitted under COBRA coverage or the terms of such programs, for the two-year period
from such termination, or, if earlier, through such date as he becomes eligible for substantially
similar coverage under the employee benefit plans of a new employer, provided that the
Executive agrees that the period of continuation coverage under such plans shall count against any
obligation by the plan or Asyst to provide continuation coverage pursuant to COBRA; and

               (iii) immediate and unconditional vesting of any unvested stock options and stock grants
previously awarded to the Executive and, for the period ending with the later of (i) the
15th day of 3rd month following the date on which the exercise period for the
option in question would otherwise have expired or (ii) December 31 of the calendar year in which
that exercise period would otherwise have expired, the right to exercise all stock options, grants
and awards vested as of the termination of employment, provided, however, that in no event shall
this section 3(b)(iii) extend the exercise period for an option beyond the date that is one year
following the termination of employment.

          (c) Determination of Amount of Payment. In the event that any payments or other benefits
received or to be received by the Executive pursuant to this Agreement (“Payments”) would (i)
constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for
this Section 3(c), be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then, the Executive shall receive either (x) the full amount of any parachute payment or (y)
2.99 times the Executive’s “base amount” (as such term is defined under the Parachute Rules),
whichever of the foregoing amounts (after taking into account any applicable federal, state and
local income taxes and the Excise Tax) results in the receipt by the Executive, on an after-tax
basis, of the greater payment provided that (a) the acquiring person in the Change of Control, in
its sole discretion, does not object thereto and does not impose on Asyst or its stockholders any
added cost, price reduction, or other detriment therefrom (economic or otherwise as determined in
Asyst’s sole discretion), and (b) the Executive deposits at least three (3) business days prior to
consummation of the Change of Control with a party designated by Asyst a cash sum sufficient in
the discretion of Asyst to fund all withholding payments that may arise in connection with the
Executive’s parachute payments from any source. In the event a reduction provides the greater
benefit Asyst shall reduce and cancel, and the Executive hereby waives, the parachute payment to
the minimum extent necessary to equal the amount described in (y) above.

     In no event shall Asyst be required to gross up any payment or benefit to the Executive to
avoid the effects of Section 280G of the Code or to pay any regular or excise taxes arising
therefrom. Unless Asyst and the Executive otherwise agree in writing, any parachute payment
calculation shall be made in writing by independent public accounts agreed to by Asyst and the
Executive, whose

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calculations shall be conclusive and binding upon Asyst and the Executive for all
purposes. Asyst and the Executive shall furnish to the accountants such information and documents
as the accountants may reasonable request in order to make a parachute payment determination. If
the Internal Revenue Service (the “IRS”) determines that a Payment is subject to the Excise Tax,
then the following paragraph shall apply.

     Notwithstanding any reduction described in the immediately preceding paragraph (or in the
absence of any such reduction), if the IRS determines that the Executive is liable for the Excise
Tax as a result of the receipt of Payments, then the Executive shall be obligated to pay back to
Asyst, within 30 days after final IRS determination, an amount of the Payments equal to the
“Repayment Amount.” The Repayment Amount shall be the smallest such amount, if any, as shall be
required to be paid to Asyst so that the Executive’s net proceeds with respect to the Payments
(after taking into account the payment of the Excise Tax imposed on such Payments) shall be
maximized. Notwithstanding the foregoing, the Repayment Amount shall be zero if a Repayment Amount
of more than zero would not eliminate the Excise Tax imposed on the Payments. If the Excise Tax is
not eliminated pursuant to this paragraph, the Executive shall pay the Excise Tax.

          (d) Release. Asyst may require, as a condition of receiving the foregoing Change-in-Control
payment or other Payment under subsection (b) or (c) above, that the Executive execute in
conjunction with his termination a general release substantially in the form annexed hereto as
 Exhibit A  (subject to such reasonable changes as may be required by
circumstances or changes in applicable law as are necessary to give effect to the same), which
upon execution shall be deemed incorporated herein by reference as a material part of this
Agreement.

           (e) Compliance with Section 409A of the Code. It is the intent of the parties to this
Agreement that any of the payments set forth in this Agreement which meet the definition of
nonqualified deferred compensation under Section 409A of the Code shall be made in a manner that
complies with Section 409A of the Code. Asyst reserves the right, to the extent Asyst deems
necessary or advisable in its sole discretion, to unilaterally amend or modify this Agreement as
may be necessary to ensure that all benefits provided under this Agreement are made in a manner
that qualifies for exemption from or complies with Section 409A of the Code, provided, however,
that Asyst makes no representations that the compensation or benefits provided under this Agreement
will be exempt from Section 409A of the Code and makes no undertakings to preclude Section 409A of
the Code from applying to the benefits provided under this Agreement.

           (f) Relation to Other Agreements. Payments under this Section 3 shall supersede and
replace any other payments under any other employment contract or offer letter to which the
Executive may be a party or participant and that otherwise would become due as a result of a
termination of employment.

     4. NO MITIGATION.

          Asyst agrees that if the Executive’s employment with Asyst terminates, he shall not be
obligated to seek other employment or to attempt to reduce any amount payable to him under this
Agreement. Further,  with the exception of the benefits described in Section 3(b)(ii),  no
amount of any payment hereunder shall be reduced by any compensation earned by the Executive as the
result of employment by a subsequent employer or otherwise.

     5. NOTICES.

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          Any notice or other communication required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered by hand, electronic transmission
(with a copy following by hand or by overnight courier), by registered or certified mail, postage
prepaid, return receipt requested or by overnight courier addressed to the other party. All notices
shall be addressed as follows, or to such other address or addresses as may be substituted by
notice in writing:

To Asyst :                                                                       
          To the Executive:

Asyst Technologies, Inc.

General Counsel

46897 Bayside Parkway

Fremont, CA 94538

Fax: (510) 661-5624

     6. GENERAL PROVISIONS.

          
(a) Amendments. Except as otherwise set forth in Section 3(e), no provision of this
Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be
agreed to in writing and signed by the Executive and by the Compensation Committee of the Board.

          (b) Severability. If any provision of this Agreement shall be determined to be invalid or
unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect to the fullest extent
permitted by law.

          (c) Partial Invalidity. If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in any way.

          (d) Governing Law. This Agreement shall be construed, interpreted and governed in accordance
with the laws of the State of California, without reference to rules relating to conflicts of law.

          (e) Inconsistencies. The terms of this Agreement supersede any inconsistent prior promises,
policies, representations, understandings, arrangements or agreements between the parties, whether
by employment contract or otherwise.

          (f) Survival. Notwithstanding the termination of the term of this Agreement, the duties and
obligations of Asyst, if any, following the termination of the Executive’s employment following a
Change in Control shall survive indefinitely.

          (g) Withholding. Asyst may deduct and withhold from any payments hereunder the amount that
Asyst, in its reasonable judgment, is required to deduct and withhold for any federal, state or
local income or employment taxes.

          (h) No Other Compensation; Employee at Will. Except and to the extent specifically provided
in Section 3 above, no amount or benefit shall be due or payable to the

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Executive, and no
obligation or liability due or owing by Asyst, under this Agreement or otherwise in respect of
termination of his employment (at any time or within two years following a Change in Control).
This Agreement shall not be construed as creating an express or implied contract of employment and,
except and to the extent specifically otherwise agreed in writing between the Executive and Asyst,
the Executive is and shall remain an “employee at will” and shall not have any right or expectation
(reasonable or otherwise) to be retained or continue in the employ of Asyst.

          (i) Arbitration. Any right or benefit, or obligation or liability, granted or arising under
this Agreement, and any other dispute between the Executive and Asyst arising from or relating to
the Executive’s employment or termination of employment, shall be subject to and resolved
exclusively by binding non-appealable arbitration. The terms and conditions of the
Agreement to Arbitrate Disputes and Claims shall govern such arbitration (in the event entered
between the parties, and as amended from time to time), be binding on the Executive and Asyst and
shall be deemed incorporated herein by reference as a material part of this Agreement. Neither the
Executive nor Asyst shall be liable to, or entitled to recover from, the other, for any claim,
cause or action, suit or proceeding relating to any right or obligation hereunder, any incidental,
special, consequential or exemplary damages of any kind, including punitive damages (and the
arbitrator will be without jurisdiction to award such damages). The arbitrator also will not have
authority to award attorneys’ fees or costs to either party, unless a statute at issue which is the
basis for the dispute expressly authorizes the award of attorneys’ fees or costs to the prevailing
party. In this instance, the arbitrator shall have the authority to make an award of only of
reasonable attorneys’ fees and costs to the prevailing party, and to the extent and in the manner
permitted by the applicable statute. However, any award of fees and costs will be limited to the
amount of reasonable fees and costs actually incurred and which bear a reasonable relation to the
prevailing party’s actual recovery.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ASYST TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Executive          	 	 

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EXHIBIT A 

SEVERANCE AGREEMENT AND RELEASE OF ALL CLAIMS

This Severance Agreement and Release of All Claims (“Agreement and Release”) is intended to
constitute a binding agreement between you, ___ (“Employee”), and Asyst Technologies, Inc.,
on behalf of its subsidiary and affiliated entities (“Asyst” or the “Company”). Please review the
terms carefully. By signing below, you are agreeing to end your employment relationship with Asyst
on the terms identified below, and in return for the benefits provided herein. We advise you to
consult with an attorney or other advisor concerning its terms and obligations and the specific
effect on your legal rights. This Agreement and Release is deemed effective as of ___ (the
“Effective Date”).

     1. Your employment with Asyst shall terminate on ___. You understand you have no
recall rights.

     2. You and Asyst agree that this Agreement and Release is contractual in nature and not a mere
recital, and that this Agreement and Release shall be interpreted as though drafted jointly by the
Employee and Asyst.

     3. You will be entitled to the benefits described in the Change-in-Control Agreement between
Asyst and you dated ___. You understand that, except as provided herein, you will not
be entitled to any additional payments or severance or any other benefits from Asyst associated
with any claimed work or right to work beyond the date of your termination.

     4. During the course of your employment with Asyst, you have had access to or have had
possession of confidential and proprietary information or materials of Asyst (including, but not
limited to, technical information, business plans, client, supplier and employee information,
telephone records or lists, and non-public financial information). You acknowledge and understand
that all such information or material constitutes confidential information of Asyst and/or its
customers and affiliates; you agree that you shall not retain any, and that you must return to
Asyst all, originals and copies of such material. You further agree that you shall not use,
disclose or divulge any such material or other confidential or trade secret information of Asyst,
its customers or affiliates to any third party company, individual or institution without the
direct written authorization of Asyst’s C.E.O., and that your confidentiality obligations to Asyst
are continuing into the future regardless of termination of your employment.

     5. You also agree to return promptly all property of Asyst, including pagers, cellular phones,
PDAs and any other materials or equipment in your possession or which were provided to you by or
through Asyst. You further understand that any use of credit or telephone cards, cellular phones,
pagers, PDAs, and other materials or equipment provided to you by or through Asyst will not be
authorized beyond your termination date, and any expenses incurred after your termination date will
not be eligible for reimbursement.

     6. You hereby fully waive, release and discharge Asyst, its parent, subsidiary and affiliated
entities, and the shareholders, directors, officers, employees, agents and representatives of each
(the “Released Parties”) from, and agree never to assert against any of the Released Parties any

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and all claims, liabilities, charges and causes of action of any kind whatsoever which you have,
had or may have against them as of the date on which you sign this Agreement, including without
limitation any and all claims, liabilities, charges and causes of action relating to:

	 	(a)	 	your employment, termination of employment or any right,
expectation, claim or benefit relating to or arising in any manner from your
employment;
	 
	 	(b)	 	any and all rights or claims relating to or in any manner
arising under the California Fair Employment and Housing Act (Government Code
section 12900 et seq., as amended);
	 
	 	(c)	 	any and all rights or claims relating to or in any manner
arising under the Civil Rights Act of 1964 (42 U.S.C. 2000, et seq., as
amended);
	 
	 	(d)	 	any and all rights or claims relating to or in any manner
arising under the Americans with Disabilities Act (29 U.S.C. 706 et seq., as
amended);
	 
	 	(e)	 	any and all rights or claims relating to or in any manner
arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621
et seq., as amended);
	 
	 	(f)	 	any and all rights or claims relating to or in any manner
arising under the WARN Act (as amended), and any comparable provisions of
California or other applicable law;
	 
	 	(g)	 	any and all rights or claims relating to or in any manner
arising under the Equal Pay Act of 1963 (as amended);
	 
	 	(h)	 	any and all rights or claims relating to or in any manner
arising under the California Labor Code Section 1197.5 (as amended); and
	 
	 	(i)	 	any and all rights or claims otherwise relating to or in any
manner arising under federal, state or local statutory, administrative or
common law or regulation, including claims for wrongful termination or
constructive discharge or demotion, breach of contract (written, oral or
implied), breach of the covenant of good faith and fair dealing, violation of
public policy, infliction of emotional distress, personal injury, defamation
and misrepresentation.

Asyst hereby fully waives, releases and discharges you from, and agrees never to assert against
you, any and all claims, liabilities, charges and causes of action of any kind whatsoever which
Asyst has, had or may have against you as of the date on which you sign this Agreement, provided,
however, that nothing in this Paragraph 6 shall preclude Asyst from enforcing its rights
with respect to your obligations under the terms and conditions of (i) this Agreement and Release,
(ii) the releases from you contained herein, and (iii) the Agreement to Arbitrate Disputes and
Claims and the Confidential Information and Inventions Assignment Agreement you may have executed
previously in conjunction with your employment with Asyst.

     7. Each party waives his or its rights under section 1542 of the Civil Code of California, or
other comparable provision of applicable law, which states:

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A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known to him must have materially affected his
settlement with the debtor.

     8. This Agreement and Release shall not affect any waiver or release of any claim for workers’
compensation benefits and unemployment insurance benefits.

     9. You understand, represent and agree that:

	 	(a)	 	you have had a reasonable opportunity to consider this
Agreement and Release and to consult an attorney or other advisor before
signing this Agreement and Release;
	 
	 	(b)	 	you have read this Agreement and Release in full and understand
all of the terms and conditions set forth herein;
	 
	 	(c)	 	you knowingly and voluntarily agree to all of the terms and
conditions set forth herein and intend to be legally bound by them;
	 
	 	(d)	 	you may rescind this Agreement and Release only with respect to
claims arising under the Age Discrimination in Employment Act of 1967 (29
U.S.C. 621 et seq.) and only if you do so within seven (7) days after signing
it (in which case you will forfeit in full and agree immediately to refund,
return to and reimburse Asyst any and all benefits provided to you under
Paragraph 8, above); and
	 
	 	(e)	 	this Agreement and Release will not become effective or
enforceable with respect to claims arising under the Age Discrimination in
Employment Act of 1967 (29 U.S.C. 621 et seq.) until seven (7) days after you
have signed it.

     10. You represent that you have not filed any complaints, claims, grievances or actions
against Asyst, its parent, subsidiary and affiliated entities, and the shareholders, directors,
officers, employees, agents and representatives of each, or any other of the Released Parties in
any state, federal or local court or agency, and you covenant not to file any such complaints,
claims, grievances, or actions (other than for workers’ compensation benefits, unemployment
insurance benefits or otherwise not subject to by law to your waiver or releases herein) at any
time hereafter. You hereby grant power of attorney to Asyst to dismiss on your behalf any such
complaint, claim grievance or action you filed in violation of this Paragraph. Notwithstanding
the foregoing, you acknowledge and agree that in the event you successfully assert any claim
against Asyst, despite the waivers, releases and other representations provided in this Agreement
and Release, that an amount equal to any and all benefits provided to you under Paragraph 3, above,
may and shall be off-set and deducted from any recovery from such claim.

     11. Asyst represents that it has not filed any complaints, claims, grievances or actions
against you in any state, federal or local court or agency, and Asyst covenants not to file any
such complaints, claims, grievances, or actions at any time hereafter with respect to the claims
released by Asyst hereunder. Asyst hereby grants power of attorney to you to dismiss on Asyst’s
behalf any such complaint, claim grievance or action Asyst filed in violation of this Paragraph.

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     12. You agree not to defame, disparage or criticize Asyst or its shareholders, directors,
officers, employees or business or employment practices at any time. In addition, you agree not to
engage in any conduct that you know or reasonably should know will damage the reputation of Asyst
or cause third parties to view Asyst or its shareholders, directors, officers or employees in a
less favorable light.

     13. You agree to not to disclose the existence of this Agreement and Release, its terms, or
any information relating to this Agreement and Release to anyone other than your spouse (if any),
tax preparer, accountant, attorney and other professional adviser or party to whom disclosure is
necessary in order to comply with the law. In such event, you will instruct them to maintain the
confidentiality of this Agreement and Release just as you must.

     14. The parties agree that this Agreement and Release shall be binding upon their successors
and assignees. Each represents that it has not transferred to any person or entity any of the
rights released or transferred through this Agreement.

     15. If a court of competent jurisdiction declares or determines that any provision of this
Agreement and Release is invalid, illegal or unenforceable, the invalid, illegal or unenforceable
provision(s) shall be deemed not a part of this Agreement, but the remaining provisions shall
continue in full force and effect.

     16. Each party, upon breach of this Agreement and Release by the other, shall have the right
to seek all necessary and proper relief, including, but not limited to, specific performance, from
a court of competent jurisdiction.

     17. Each party agrees that any differences, disputes or controversies between us arising from
this Agreement and Release or from rights or obligations hereunder, or any liabilities asserted or
arising from your employment or its termination, shall be exclusively submitted to binding
arbitration before an independent and qualified arbitrator in accordance with the American
Arbitration Association and the National Rules for the Resolution of Employment Disputes then in
effect, without reference to conflict of laws principles. Arbitration shall be the exclusive forum
for any dispute, claim or cause arising hereunder, or any liabilities asserted or arising from your
employment or its termination, and the decision and award by the arbitrator shall be final and
binding upon, and non-appealable by, the parties and may be entered in any state or federal court
having jurisdiction. In all other respects, the arbitration shall be subject to the terms and
conditions provided in the Agreement to Arbitrate Disputes and Claims
(if previously or contemporaneously executed by you and Asyst), which said terms and
conditions are deemed incorporated in his Agreement and Release in full by this reference and made
a material part hereof.

     18. Neither you nor Asyst shall be able to recover from the other, for any claim, cause or
action arising hereunder, any incidental, special, consequential or exemplary damages of any
nature, including but not limited to punitive damages, or attorneys fees or costs incurred in any
such claim, cause or action, unless and to the extent any such award of damages, fees or costs is
specifically provided and available to the party as a remedy under the statute asserted as a basis
for the claim, cause or action, and, unless so specifically provided, the court or arbitrator in
any such claim, cause or action shall be without authority or jurisdiction to award such damages
fees or costs; provided, however, that provisional or injunctive remedies and relief shall be
available as appropriate to each party.

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     19. We each, to the fullest extent permitted by law, waive any right or expectation against
the other to trial or adjudication by a jury of any claim, cause or action arising hereunder or
from the rights, duties or liabilities created hereby.

     20. The laws of the State of California shall govern the construction and enforcement of this
Agreement and Release and any rights, obligations or liabilities hereunder, without regard to
conflicts of laws considerations.

     21. You certify and confirm that you do not have in your possession any, and that you have
returned to Asyst as of termination of your employment all, property, devices, records, data,
notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches,
materials equipment, other documents or property, or reproductions of any aforementioned items
belonging to Asyst.

     22. You also certify and confirm that you have complied during your employment with all the
terms of Asyst’s Confidential Information and Inventions Assignment Agreement in the event
previously signed by you, including the reporting of any inventions and original works of
authorship (as defined therein), conceived or made by you (solely or jointly with others) covered
by that agreement. You further agree that you will continue to be required to preserve as
confidential all trade secrets, confidential knowledge, data or other proprietary information
relating to services, clients, products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of authorship, customer
lists, business plans, financial information or other subject matter pertaining to any business of
Asyst or any of its employees, clients, consultants or licensees.

     23. You further agree that for the six (6) month period from the date of termination of your
employment or consulting relationship with Asyst, you will not recruit or solicit any employee to
leave Asyst for any reason or to accept employment with any other company, and will not interview
or knowingly provide any assistance or input to any third party regarding any such employee.

     24. You understand that the provisions of the Change-in-Control Agreement between Asyst and
you dated ___and the provisions of this Agreement and Release set forth the entire
agreement between you and Asyst concerning your employment, separation benefits and termination of
employment, and that this Agreement and Release replaces any other promises, representations or
agreement between you and Asyst, whether written or oral, concerning such matters. You also
understand that any benefits provided you under this Agreement and Release are offered on a
one-time basis, and are not a part of a funded employee welfare program or established Asyst
practice or policy. Any modification of this Agreement and Release, or change to the benefits
offered hereunder, must be in writing and executed in advance by you and the Vice President, Human
Resources for Asyst, or else such notification will not be binding or effective.

     25. In the event that you breach any of your obligations under this Agreement and Release or
as otherwise imposed by law, Asyst will be entitled to recover the sums and benefits paid under the
Agreement and Release and to obtain all other relief provided by law or equity.

     26. The parties agree and represent that they have not relied and do not rely upon any
representation or statement regarding the subject matter or effect of this Agreement and Release

12

 

made by any other party to this Agreement and Release or any party’s agents, attorneys or
representatives.

I, THE UNDERSIGNED, HAVE HAD A SUFFICIENT OPPORTUNITY TO CONSIDER THIS AGREEMENT AND RELEASE AND
HAVE BEEN ADVISED IN WRITING THAT I MAY CONSULT WITH AN ATTORNEY CONCERNING ITS TERMS AND EFFECT
PRIOR TO EXECUTING THIS AGREEMENT AND RELEASE.

I, THE UNDERSIGNED, HAVE READ THIS AGREEMENT AND RELEASE AND UNDERSTAND THAT I ENTER THIS AGREEMENT
AND RELEASE INTENDING TO AND DO WAIVE, SETTLE AND RELEASE ALL CLAIMS I HAVE OR MIGHT HAVE AGAINST
ASYST TO THE FULL EXTENT PERMITTED BY LAW. I SIGN THIS AGREEMENT AND RELEASE VOLUNTARILY AND
KNOWINGLY.

ACKNOWLEDGED, UNDERSTOOD AND AGREED:

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	ASYST TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

13exv10w2

 

EXHIBIT 10.2

WESTERN NATIONAL BANK

508 WEST WALL STREET, SUITE 1100

MIDLAND, TEXAS

79701

January 18, 2007

Dawson Geophysical Company

508 West Wall Street, Suite 800

Midland, Texas 79701

			
	      RE:	 	Revolving Line of Credit Loan from Western National Bank to Dawson Geophysical
Company

Gentlemen:

Pursuant to the terms of a letter loan agreement, dated as of January 18, 2006, (the “Existing Loan
Agreement”), Western National Bank, a national banking association (alternatively, “Western” or the
“Bank”), has previously committed to provide to Dawson Geophysical Company, a Texas corporation
(alternatively “Dawson Geophysical” or the “Borrower”), a revolving line of credit loan in the
original principal amount of Ten Million and No/Dollars ($10,000,000.00) (the Existing Loan”).
The Existing Loan is evidenced by a Revolving Line of Credit Note, of even date herewith, executed
by the Borrower on behalf of Western, in the original principal amount of Ten Million and No/100
Dollars ($10,000,000.00) (the “Existing Note”). The Existing Note is secured by that certain
Security Agreement, dated as of January 18, 2006, covering those accounts receivable described
therein (the “Existing Security Agreement”). From time to time, the Security Agreement, and any
financing statements filed to perfect the security interest created thereunder, may be collectively
referred to herein as the “Existing Security Instruments”.

Borrower has now requested that Western renew and extend the Existing Loan, as well as provide
additional funds under a new revolving line of credit loan in the original principal amount of
Twenty Million and No/100 Dollars ($20,000,000.00) (the “Loan”). The Loan will be evidenced by a
Revolving Line of Credit Note, of even date herewith, in the original principal amount of Twenty
Million and No/100 Dollars ($20,000,000.00), which will renew and extend the Existing Note (the
“Note”). The Borrower’s performance under the Note will be secured by its execution of a new
Security Agreement, of even date herewith, the security interest of which will be perfected by the
filing of amendments to the financing statement, both covering the accounts receivable described
therein (collectively, the “Security Instruments”). This Agreement, as defined below, the Note,
the Security Instruments, and any other documents executed simultaneously herewith are collectively
referred to as the “Loan Documents”.

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Western has agreed to renew the Existing Loan into the Loan, as well as provide additional
funds under the Loan. In consideration of Western’s renewal of the Existing Loan into the Loan and
agreement to advance of additional funds, Borrower has agreed to execute this Loan Agreement, the
Note, and the Security Agreement required by the Bank, subject to the fulfillment of the following
terms and conditions of this letter loan agreement (the “Agreement”):

I. TERMS

Agreement

This Agreement, dated as of January 18, 2007, and any extensions, renewals, or modifications
hereof.

Borrower

Dawson Geophysical Company

Bank

Western National Bank

Commitment

The lesser of the following amounts: (a) the face amount of the Note; or (b) the Borrowing Base
then in effect.

Rate

Interest under the Note shall accrue at an annual rate equal to the Prime Rate. For purposes of
this Agreement, the “Prime Rate” shall be defined as that rate established as the prime rate in the
money rate table of The Wall Street Journal, a Dow Jones publication, as of each Business Day, as
hereinafter defined, (and for holidays or weekends, the Prime Rate shall be the prime rate
published in that money rate table of The Wall Street Journal, as of the close of business on the
most recent Business Day immediately preceding such weekend or holiday). Without notice to the
Borrower or any other person, the Prime Rate may change from time to time pursuant to the preceding
sentence, with the effective date of each change to be the effective date reflected in the money
rate table of The Wall Street Journal. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The Bank may make commercial
loans or other loans at rates of interest at, above, or below the Prime Rate. “Business Day” shall
mean any day other than a Saturday, Sunday or legal holiday for commercial banks under the laws of
the State of Texas.

Security

The Loan shall be secured by the Security Instruments.

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Structure

Under the Note, funds will be available on a revolving basis through January 18, 2008, the maturity
date of the Loan (the “Revolving Period”). During the Revolving Period, the Borrower may borrow,
repay, and re-borrow funds as long as the aggregate amount (including outstanding letters of
credit) does not exceed the Commitment.

Borrowing Base

At any time, and from time to time, the amounts outstanding under the Revolver Note shall not
exceed the lesser of: (a) the face amount of the Revolver Note; or (b) the Borrowing Base, as
determined from time to time by the Bank, acting in its sole and unlimited discretion (said lesser
amount being referred to herein as the “Revolver Commitment”). As used in this Agreement, the term
“Borrowing Base” shall mean an amount equal to seventy-five percent (75%) of the Borrower’s
Eligible Accounts.

For the purposes of this Agreement, the term “Eligible Account” shall mean an account receivable of
any of the Borrower (net of any credit balance, trade discount, or unbilled amount or retention)
that is contractually due, for which each of the following statements is accurate and complete (and
the Borrower, by including such account receivable in any computation of the Borrowing Base, shall
be deemed to represent and warrant to the Bank the accuracy and completeness of such statements):

	 	a.	 	Said account receivable is a binding and valid obligation of
the obligor thereon, in full force and effect, and enforceable in accordance
with its terms;
	 
	 	b.	 	Said account receivable is genuine, in all respects, as
appearing on its face as represented in the books and records of Borrower, and
all information set forth therein is true and correct;
	 
	 	c.	 	Said account receivable is free of all default of any party
thereto, counterclaims, offsets, and defenses, and from any rescission,
cancellation, or avoidance, and all right thereof, whether by operation of law
or otherwise;
	 
	 	d.	 	The payment of said account receivable is not more than ninety
(90) days past due the invoice date thereof;
	 
	 	e.	 	Said account receivable is free of concessions or
understandings with the obligor thereon of any kind not disclosed to and
approved by the Bank in writing;
	 
	 	f.	 	Said account receivable is, and at all times will be, free and
clear of all liens except those in favor of the Bank;
	 
	 	g.	 	Said account receivable is not a receivable arising from
intercompany indebtedness existing between or among any of the Borrower;

3

 

	 	h.	 	Said account receivable is derived from sales made or services rendered to
the obligor in the ordinary course of the business of the Borrower;
	 
	 	i.	 	The obligor on said account receivable (i) is located within
the United States or the District of Columbia; (ii) is not the subject of any
bankruptcy or insolvency proceeding, nor has a trustee or receiver been
appointed for all or a substantial part of its property, nor has said obligor
made an assignment for the benefit of creditors, admitted its inability to pay
its debts as they mature or suspended its business, (iii) is not affiliated,
directly or indirectly, with Borrower, as a subsidiary or affiliate, employee
or otherwise; and (iv) is not a state or federal government department,
commission, board, bureau, or agency;
	 
	 	j.	 	Said account receivable did not arise from a single customer
whose accounts receivable to Borrower constitute more than twenty-five percent
(25%) of Borrower’s accounts receivable;
	 
	 	k.	 	Said account receivable is not owed by a customer whose
principal place of business is located in a foreign country; and
	 
	 	l.	 	Said account receivable did not arise from sales to an obligor
as to whom fifteen percent (15%) or more of the total accounts receivable owing
by such obligor to the Borrower are delinquent accounts receivable (that is, an
account that is more than ninety (90) days delinquent).

The Borrower may request in writing an increase in the Borrowing Base, such request to be
accompanied by a description and evaluation of any additional collateral to be provided by the
Bank. The Bank may evaluate such for an increase in its sole and absolute discretion, and in
conjunction with such evaluation, may conduct a full credit analysis of the Borrower and the
existing or additional collateral.

If the aggregate amounts outstanding under the Note exceeds the Revolver Commitment at any time,
the Bank will provide written notice of that event to Borrower. On or before the tenth
(10th) day following receipt of such notification by Borrower, Borrower will either, at
the direction of the Bank, acting in its sole and absolute discretion: (a) make a mandatory payment
to the Bank of the principal of the Note in an amount at least equal to the amount necessary to
cause the outstanding principal balance of the Note to be less than or equal to the Revolver
Commitment; or (b) create liens on other assets of Borrower, satisfactory in nature, quantity, and
value to the Bank, acting in its sole discretion, said assets to have a fair market value
sufficient to at least equal to the amount necessary to cause the outstanding principal balance of
the Note to be less than or equal to the Revolver Commitment.

Non-Recourse

Although the Borrower is responsible on a corporate basis for the full repayment of
principal and interest due on the Obligations and for any other Event of Default for which the
Borrower is responsible, the Bank specifically acknowledges and agrees that neither any of the
directors, officers,

4

 

 or employees of the Borrower nor any of the Borrower’s shareholders shall have
any personal liability whatsoever for the repayment of the Loan. The sole party responsible for
repayment of the Loan shall be the Borrower, and the sole security for the Loan shall be the
Collateral covered by the Security Instruments.

Purpose

Funds from the Loan shall be to renew and extend the Existing Loan and to provide working capital
to offset the increase in accounts receivable due to the significant growth in Borrower’s business.
No proceeds from the Loan shall be used for the purpose of purchasing or carrying margin stock in
violation of Regulations G, U, or X of the Board of Governors of the Federal Reserve System.

Maturity Date

As stated, the maturity date of the Note is January 18, 2008.

II. REPRESENTATIONS AND WARRANTIES

     A. Good Standing and Identity. The Borrower is a corporation, duly organized and in
good standing under the laws of Texas. The Borrower’s legal name is that reflected in the address
of this Agreement. Borrower has the power to own its property and to carry on its business in each
jurisdiction in which the Borrower operates.

     B. Authority and Compliance. The Borrower has full power and authority to enter into
this Agreement, to make the borrowing hereunder, to execute and deliver the Note, to mortgage those
interests covered by the Security Instruments, and to incur the obligations provided for herein,
all of which will be duly authorized by all proper and necessary corporate action. No consent or
approval of any public authority is required as a condition to the validity of this Agreement, the
Note, and the Security Instrument, and Borrower is in compliance with all laws and regulatory
requirements to which he is subject.

     C. Litigation. There are no proceedings pending or, to the knowledge of Borrower,
threatened before any court or administrative agency that will or may have a material adverse
effect on the financial condition or operations of Borrower, except as disclosed to the Bank in
writing prior to the date of this Agreement.

     D. Ownership of Assets. As of the date of this Agreement, Borrower has good title to
the interests covered by the Security Instruments and any other collateral pledged and the other
collateral is owned free and clear of liens. Borrower will at all times maintain its tangible
property, real and personal, in good order and repair, taking into consideration reasonable wear
and tear.

     E. Taxes. All income taxes and other taxes due and payable through the date of this
Agreement have been paid prior to becoming delinquent.

     F. Financial Statements. The books and records of the Borrower properly reflect the
financial condition of the Borrower in all material respects, and there has been no material change
in Borrower’s financial condition as represented in its most recent financial statements.

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     G. Hazardous Wastes and Substances. To the best knowledge of the Borrower, the
Borrower and its properties are in compliance with applicable state and federal environmental laws
and regulations and the Borrower is not aware of and has not received any notice of any violation
of any applicable state or federal environmental law or regulation and there has not heretofore
been filed any complaint, nor commenced any administrative procedure, against the Borrower or any
of its predecessors, alleging a violation of any environmental law or regulation. Currently and
from time to time, the Borrower, in the course of its regular business, may use or generate on a
portion of its properties materials which are Hazardous Materials, as hereinafter defined. The
Borrower has and will make a good faith attempt to comply with all applicable statutes and
regulations in the use, generation and disposal of such materials. To the best of its knowledge,
the Borrower has not otherwise installed, used, generated, stored or disposed of any hazardous
waste, toxic substance, asbestos or related material (“Hazardous Materials”) on its properties.
For the purposes of this Agreement, Hazardous Materials shall include, but shall not be limited to,
substances defined as “hazardous substances” or “toxic substances” in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9061, et
seq., Hazardous Materials Transportation Act, 49 U.S.C. §1802, et seq., and the
Resource Conservation and Recovery Act, 42 U.S.C. §6901, et seq., or as “hazardous
substances,” “hazardous waste” or “pollutant or contaminant” in any other applicable federal, state
or local environmental law or regulation. There do not exist upon any property owned by Borrower
any underground storage tanks or facilities, and to the knowledge of Borrower, none of such
property has ever been used for the treatment, storage, recycling, or disposal of any Hazardous
Materials.

III. CONDITIONS PRECEDENT

The provisions of this Agreement will serve as the proposed terms of the borrowing arrangements.
Prior to any funds being made available, Borrower will execute and deliver to the Bank, in form and
substance satisfactory to the Bank, this Agreement, the Note, and the Security Instruments.

IV. COVENANTS

Unless the Bank will otherwise consent in writing, and so long as any debt remains outstanding or
the commitment still available, the Borrower agrees to comply with the following covenants:

     A. Affirmative Covenants.

     1. As soon as available, but in any event not later than ninety (90) days after the end
of each fiscal year, Borrower will provide financial statements, in form and substance
satisfactory to the Bank, reflecting Borrower’s financial performance as of the end of such
year and the related statements of income and changes in cash flows for such year, with the
first fiscal year ending on September 30, 2007, such statements to be audited by an
independent certified accountant and to be prepared according to generally accepted
accounting principals, consistently applied (“GAAP”)

     2. Within ninety (90) days of the end of each fiscal quarter, with the next
quarter ending on December 31, 2006, the Borrower will submit to the Bank a financial
statement reflecting Borrower’s financial performance during the previous calendar quarter,
such

6

 

statements to be reviewed by an independent certified accountant and to be prepared
according to GAAP.

     3. Within thirty (30) days of the end of each calendar month, Borrower shall provide
internally prepared financial statements reflecting Borrower’s financial performance during
the previous month, such statements to be prepared according GAAP.

     4. Within thirty (30) days of the end of each calendar month, Borrower shall provide
monthly accounts receivable aging reports.

     5. Within thirty (30) days of transmitting any tax return to any governmental
authority, the Borrower will submit to the Bank a copy of that tax return.

     6. Within thirty (30) days following the end of each calendar month, Borrower shall
provide a monthly borrowing base report and compliance certificate in the form attached
hereto as Exhibit “A”.

     7.
Borrower shall maintain an average Cash Flow Coverage Ratio of not less than 1.50 to
1.0, calculated monthly, beginning on January 31, 2007, from the date of the Loan to
maturity. For purposes of this Agreement, “Cash Flow Coverage Ratio” means, with respect to
any period of calculation thereof, the ratio of the sum of: (i) the net income (or loss)
from continuing operations of Borrower during such period calculated after any and all
distributions to shareholders, plus (ii) interest, depreciation, depletion, and amortization
expenses of Borrower during such period, less (iii) gains from the sale of any assets; plus
(iv) losses from the sale of any assets; less (v) extraordinary adjustments to net income
divided by (vi) scheduled capital lease obligations and principal and interest payments, all
determined in accordance with GAAP.

     8. Borrow shall maintain a Current Ratio of not less than 1.50 to 1.0, measured
monthly, beginning on January 31, 2007, from the date of the Loan to maturity. For purposes
of this Agreement, “Current Ratio” means, with respect to any period of calculation thereof,
the ratio of the sum of: (i) current assets, plus (ii) availability under the Revolver
Loan, divided by (iii) current liabilities. Current assets shall include a minimum balance
of cash, plus marketable securities, of not less than $3,500,000.00.

     9. Borrower shall submit copies of all financial statements, reports, notices, and
proxy statements sent or made available generally by the Borrower to its shareholders, of
all regular and periodic reports and all private placement memorandums and all registration
statements and prospectuses, if any, filed by the Borrower with any securities exchange or
with the Security Exchange Commission; and all press releases and other statements made
available generally by the Borrower to the public concerning material changes in the
business of the Borrower upon their becoming available, but in no event later than 10 days
after the same was sent.

     10. Borrower shall maintain a minimum Tangible Net Worth of $40,000,000.00, to
be measured monthly. “Tangible Net Worth” means the excess, if any, of the total assets

7

 

of any person over all items of indebtedness, obligations, or liability which would be
classified as liabilities of that person, for the time period to be measured, each to be
determined in accordance with GAAP; provided, however, that for the purposes of any such
computation of Tangible Net Worth, “assets” will not include (a) goodwill (whether
representing the excess of cost over book value of assets acquired or otherwise), and (b)
patents, trademarks, trade names, copyrights, franchises, and deferred charges.

     11. For any time period for which reporting is required, Borrower will maintain a Debt
to Tangible Net Worth ratio of at least 1.50 to 1.00 to be measured monthly. For purposes
of this paragraph, “Debt” shall mean, all liabilities, obligations, and indebtedness of the
Borrower, of any kind or nature, now or hereafter owing, arising, due or payable, howsoever
evidenced, created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise, and “Tangible Net Worth” shall have the same meaning set
forth in paragraph (11) above.

     12. The Borrower will maintain its existence in good standing and comply with all laws,
regulations and governmental requirements applicable to it or to any of its property,
business operations and transactions.

     13. The Borrower will promptly pay any reasonable costs incurred by the Bank in
connection with the preparation or enforcement of this Agreement, the Notes, the Security
Instruments, and any other documentation executed concurrently herewith.

     14. The Borrower will remain in substantial compliance with same and will not place or
permit to be placed any Hazardous Materials on any of its properties in violation of
applicable state and federal environmental laws. In the event that the Borrower should
discover any Hazardous Materials on any of its properties that could result in a breach of
the foregoing covenant, the Borrower shall notify the Bank within three (3) days after such
discovery. The Borrower shall dispose of all material amounts of Hazardous Materials that
it generates only at facilities or with carriers that maintain valid governmental permits
under the Resource Conservation and Recovery Act, 42 U.S.C. §6901. In the event of any
notice or filing of any procedure against the Borrower alleging a violation of any
environmental law or regulation, the Borrower shall give notice to the Bank within five (5)
days after receiving notice of such notice or filing.

     15. The Borrower will provide such other information as the Bank may reasonably request
from time to time in its sole discretion.

     B. Negative Covenants.

     1. The Borrower will not make any change in its present accounting method or change its
present fiscal year.

     2. The Borrower will not make any substantial change in the nature of its business as
now conducted.

8

 

     3. The Borrower will not reorganize or merge with any other entity, without the
prior written consent of the Bank.

     4. With respect to the Borrower’s interest in any of the properties covered by the
Security Instrument, the Borrower will not sell, contract to sell, convey, assign, transfer,
mortgage, pledge, hypothecate, encumber, or in any way alienate that interest in such
properties, without the consent of the Bank.

V. EVENTS OF DEFAULT

The occurrence and continuing existence of any one of the following will constitute an Event of
Default under this Agreement and the Note:

     A. Borrower fails to pay when due any principal, interest, or other amount payable under this
Agreement, the Note, or any other promissory notes executed or guaranteed by the Borrower in favor
of the Bank;

     B. Any representation or warranty made by the Borrower hereunder or in any related collateral
security or other documents entered into with the Bank proves to be at any time incorrect in any
significant respect;

     C. The Borrower fails to observe or perform any covenant, obligation, agreement, or other
provision contained herein or in any other contract or instrument executed in connection herewith;

     D. Any default or defined Event of Default under any security agreement, deed of trust,
promissory note, loan agreement or other contract or instrument executed by the Borrower pursuant
to, or as required by, this Agreement;

     E. Any final judgment or judgments for the payment of money is rendered against Borrower and
is not be satisfied or discharged at least thirty (30) days prior to the date on which any of their
assets could be lawfully sold to satisfy such judgment or judgments, unless Borrower brings
litigation to stay same; or

     F. Borrower: (a) becomes insolvent, or suffers or consents to, or applies for the appointment
of a receiver, trustee, custodian or liquidator for himself or any of his property, or generally
fails to pay his debts as they become due, or makes a general assignment for the benefit of
creditors; or (b) files a voluntary petition in bankruptcy, or seeking reorganization, in order to
effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform
Act, Title 11 of the United States Code, as recodified from time to time (“Bankruptcy Code”), or as
now or hereafter in effect, or any involuntary petition or proceeding pursuant to said Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy or reorganization or other
relief for debtors is filed or commenced against Borrower; or (c) files any answer admitting the
jurisdiction of the court and the material allegations of any such involuntary petition; or (d) is
adjudicated a bankrupt, under said Bankruptcy Code or any other state or federal law relating to
bankruptcy, reorganization, or other relief for debtors.

9

 

VI. REMEDIES

If any Event of Default occurs, any term hereof or of the Note to the contrary notwithstanding, the
Note shall at the Bank’s option become immediately due and payable. In addition, the obligation,
if any, of the Bank to permit further borrowings hereunder will immediately cease and terminate and
the Bank will have all rights, powers, and remedies available under this Agreement, the Note, or
other contracts or instruments executed in connection herewith, or accorded by law, including,
without limitation, the right to resort to any or all of the collateral and to exercise any or all
of its rights, powers, or remedies at any time and from time to time after the occurrence of an
Event of Default.

ONCE AN EVENT OF DEFAULT HAS OCCURRED, WESTERN MAY PURSUE THE REMEDIES PROVIDED FOR IN THIS
AGREEMENT, THE NOTE, AND THE SECURITY INSTRUMENTS WITHOUT PRESENTMENT, DEMAND, PROTEST, NOTICE OF
ACCELERATION, NOTICE OF INTENT TO ACCELERATE, NOTICE OF PROTEST OR NOTICE OF DISHONOR, OR ANY OTHER
NOTICE OF ANY KIND, ALL OF WHICH ARE EXPRESSLY WAIVED BY BORROWER.

All rights, powers, and remedies of the Bank in connection with this Agreement, the promissory
notes or any other contract or instrument on which the Borrower may at any time be obligated to the
Bank (or any holder thereof) are cumulative and not exclusive and will be in addition to any other
rights, powers, or remedies provided by law or equity, including without limitation the right to
set off any liability owing by the Bank to the Borrower (including sums deposited in any deposit
account of Borrower with the Bank) against any liability of the Borrower to the Bank.

VII. WAIVER

No delay, failure, or discontinuation by the Bank, or any holder of the Note, in exercising any
right, power, or remedy under this Agreement, the Note or any other contract or instrument on which
the Borrower may at any time be obligated to the Bank (or any holder thereof) will affect or
operate as waiver of such right, power or remedy. Any waiver, permit, consent, or approval of any
kind by the Bank (or any holder of the Note), or of any provisions or conditions of, or any breach
or default under this Agreement, the Note or any other contract or instrument on which the Borrower
may at any time be obligated, must be in writing and will be effective only to the extent set forth
in such writing.

VIII. NOTICES

All notices, requests, and demands given to or made upon the respective parties must be in writing
and shall be deemed to have been given or made: (1) at the time of personal delivery thereof, (2)
or

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two days after any of the same are deposited in the U.S. Mail, first class and postage
prepaid, addressed as follows:

			
	      Borrower:	 	Dawson Geophysical Company

508 West Wall Street, Suite 800

Midland, Texas 79701

			
	     Western:	 	Western National Bank

Attention: James R. Kreuz

508 West Wall Street, Suite 1100

Midland, Texas 79701

or other such address as any party may designate by written notice to all other parties.

IX. SUCCESSORS, ASSIGNMENTS

This Agreement will be binding on and inure to the benefit of the heirs, executors, administrators,
legal representatives, successors, and assigns of the parties, provided, however, that this
Agreement may not be assigned by the Borrower without the prior written consent of the Bank. The
Bank reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any
part of, or any interest in, the Bank’s rights and benefits under this Agreement, the Note or any
contracts or instruments relating thereto. In connection therewith, the Bank may disclose all
documents and information which the Bank now has or may hereafter acquire relating to the loan or
the Note, the Borrower or his business, or any collateral required hereunder.

X. SEVERABILITY OF PROVISIONS

If any of the provisions of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this Agreement.

XI. VENUE AND JURISDICTION

Any suit, action or proceeding against the Borrower arising out of or relating to this Agreement or
any judgment entered by any court in respect thereof, may be brought or enforced in the courts of
the State of Texas, County of Midland, or in the United States District Court for the Western
District of Texas, as Western in its sole discretion may elect, and Borrower hereby submits to the
nonexclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding.
The Borrower hereby irrevocably consents to service of process in any suit, action or proceeding in
any of said courts by the mailing thereof by the Bank by registered or certified mail, postage
prepaid, to the Borrower, at the address set forth herein.

THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS THAT THEY MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT BROUGHT IN ANY OF SAID COURTS AND HEREBY FURTHER IRREVOCABLY

11

 

 WAIVES ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM
AND ANY RIGHT GRANTED BY STATUTE, RULE OR COURT OR OTHERWISE TO HAVE SUCH SUIT, ACTION, OR
PROCEEDING TRIED BY A JURY.

XII. MISCELLANEOUS

     A. Texas Law Applicable. This Agreement, the Note, the Security Instruments, and any
contracts or instruments relating thereto, shall be governed by and construed in accordance with
the laws of the State of Texas, except to the extent that the Bank has greater rights or remedies
under federal law or the law of any jurisdiction in which the collateral properties are located, in
which case such choice of Texas law shall not be deemed to deprive the Bank of such rights and
remedies under federal law or the law of any jurisdiction in which the collateral properties are
located, in which case such choice of Texas law shall not be deemed to deprive the Bank of such
rights and remedies as may be available under such law.

     B. Notice of Final Agreement. THIS AGREEMENT, THE NOTE, ANY CONTRACTS OR INSTRUMENTS
RELATING THERETO, REPRESENT THE ENTIRE AGREEMENT BETWEEN THE PARTIES, AND IT IS EXPRESSLY
UNDERSTOOD THAT ALL PRIOR CONVERSATIONS OR MEMORANDA BETWEEN THE PARTIES REGARDING THE TERMS OF
THIS AGREEMENT SHALL BE SUPERSEDED BY THIS AGREEMENT. ANY AMENDMENT, APPROVAL, OR WAIVER BY
WESTERN OF THE TERMS OF THIS AGREEMENT, THE NOTE AND ANY CONTRACTS OR INSTRUMENTS RELATING THERETO,
MUST BE IN WRITING OR CONFIRMED WRITING, AND SHALL BE EFFECTIVE ONLY TO THE EXTENT SPECIFICALLY SET
FORTH IN SUCH WRITING. THIS AGREEMENT, IN CONJUNCTION WITH THE NOTE AND ANY CONTRACTS OR
INSTRUMENTS RELATING THERETO, SHALL SERVE TO EVIDENCE THE TERMS OF THE ENTIRE AGREEMENT BETWEEN THE
PARTIES.

{The remainder of this page is intentionally left blank. Signature page follows.}

12

 

     Please acknowledge your acceptance of and agreement to the terms of this Agreement by
dating and executing where indicated.

	 	 	 	 	 
	 	Very truly yours,

WESTERN NATIONAL BANK

 	 
	 	By:  	/s/
James R. Kreuz	 
	 	 	James R. Kreuz 	 
	 	 	President 	 
	 

AGREED TO AND ACCEPTED AS OF THE

18th
 DAY OF JANUARY 2007.

BORROWER:

DAWSON GEOPHYSICAL COMPANY

	 	 	 	 	 
	By:

	 	/s/ Stephen C. Jumper	 	 
	 

	 	 	 	 
	 

	 	Stephen C. Jumper	 	 
	 

	 	President	 	 
	 
	 	 	 	 
	By:
	 	/s/ L. Decker Dawson	 	 
	 

	 	 	 	 
	 

	 	L. Decker Dawson	 	 
	 

	 	Chairman of the Board	 	 

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