“Holdings IP Security Agreement” means an Intellectual Property Security Agreement executed and delivered by Holdings to Bank dated as of the Effective Date.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services (excluding trade accounts payable and other accrued obligations incurred in the ordinary course of business), (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.
“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) of Holdings and its Subsidiaries determined in accordance with GAAP.
“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest, members interests or other securities), and any loan, advance or capital contribution to any Person.
“Intellectual Property” means all present and future (a) copyrights, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, (b) trade secret rights, including all rights to unpatented inventions and know how, and confidential information; (c) mask work or similar rights available for the protection of semiconductor chips; (d) patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same; (e) trademarks, servicemarks, trade styles, and trade names, whether or not any of the foregoing are registered, and all applications to register and registrations of the same and like protections, and the entire goodwill of the business of any Borrower connected with and symbolized by any such trademarks; (f) computer software and computer software products; (g) designs and design rights; (h) technology; (i) all claims for damages by way of past, present and future infringement of any of the rights included above; and (j) all licenses or other rights to use any property or rights of a type described above.
“IP Security Agreements” the Holdings IP Security Agreement and the Ultra Clean IP Security Agreement.
“L/C Sublimit” is defined in Section 2.1.2.(a).
“Letter of Credit” means any documentary or standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2.
“Letter of Credit Application” is defined in Section 2.1.2(a).
“Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(d).
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“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.
“Loan Amount” in respect of each Equipment Advance is the original principal amount of such Equipment Advance.
“Loan Documents” are, collectively, this Agreement, the Perfection Certificates, the IP Security Agreements, the Securities Pledge Agreement, the Collateral Assignment of Merger Documents, any note, or notes or guaranties or post-closing letter agreements executed by a Borrower, Guarantor or any other guarantor, and any other present or future agreement between a Borrower, Guarantor, any other guarantor and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified.
“Loan Party” means Borrowers and Guarantor.
“Material Adverse Change” is a material adverse change in (i) the business, operations, or condition of Holdings and its Subsidiaries, taken as a whole or (ii) the ability of Borrower to repay the Obligations hereunder under the Loan Documents or (iii) the priority of Bank's security interest in the Collateral.
“Merger Documents” means, collectively the Agreement and Plan of Merger, dated as June 29, 2006, among Sieger Engineering, Inc., Leonid Mezhvinsky, Holdings, Bob Acquisition Inc., Pete Acquisition LLC and the other “Sellers” specified therein, all related documents and certificates executed and/or delivered in connection therewith, and all schedules, exhibits, annexes and amendments thereto and all material side letters and agreements affecting the terms thereof or to be entered into in connection therewith.
“Net Borrowing Availability” is defined in Section 2.1.1 (a).
“Net Income” means, for any date of determination, as calculated on a consolidated basis for Holdings and its Subsidiaries for any period, the net profit (or loss), after provision for taxes, of Guarantor, Borrower and its Subsidiaries for such period taken as a single accounting period.
“Obligations” are Borrowers’ obligation to pay when due any debts, principal, interest, Bank Expenses and other amounts Borrowers owe Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to Letters of Credit, Cash Management Services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrowers assigned to Bank, and the performance of Borrowers’ duties under the Loan Documents.
“Operating Documents” are, for any Person, such Person’s formation documents, as filed with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Payment/Advance Form” is that certain form attached hereto asExhibit B.
“Perfection Certificate” is defined in Section 5.1.
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“Permitted Indebtedness” is:
(a) Borrowers’ Indebtedness to Bank under this Agreement and the other Loan Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors and with respect to surety bonds and similar obligations incurred in the ordinary course of business;
(e) Indebtedness in respect of the Equipment Financing not to exceed $5,000,000 in the aggregate;
(f) Indebtedness (other than the Obligations, but including capitalized lease obligations) of any Borrower or their Subsidiaries incurred at the time of, or within 90 days after, the acquisition, construction, restoration or improvement of any assets for the purpose of financing all or any part of the acquisition cost thereof in an aggregate principal amount outstanding at any one time, together with any refinancings thereof, not in excess of $500,000 in the aggregate;
(g) Indebtedness comprising Permitted Investments;
(h) Indebtedness incurred by Holdings or any Borrower with respect to indemnities and purchase price adjustment obligations under the Merger Documents;
(i) Indebtedness in connection with Contingent Obligations of the type described in clause (c) of the definition thereof) entered into in the ordinary course of business and not for speculative purposes;
(j) Indebtedness in an aggregate principal amount not to exceed $250,000 secured by Permitted Liens;
(k) Indebtedness owing to any officers or directors of Borrowers, provided that the aggregate principal amount of all such Indebtedness does not exceed $25,000 outstanding at any time and only to the extent it is Subordinated Debt;
(l) other unsecured Indebtedness not otherwise permitted by Section 7.4 not exceeding $250,000 in the aggregate outstanding at any time
(m) Indebtedness in an aggregate principal amount not to exceed $250,000 secured by Permitted Liens;
(n) Indebtedness owing to any officers or directors of Borrowers, provided that the aggregate principal amount of all such Indebtedness does not exceed $25,000 and only to the extent it is Subordinated Debt;
(o) other Indebtedness not otherwise permitted by Section 7.4 not exceeding $50,000 in the aggregate outstanding at any time; and
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(p) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (g) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.
“Permitted Investments” are:
(a) Investments shown on the Perfection Certificate and existing on the Effective Date;
(b) (i) cash and Cash Equivalents, and (ii) any other Investments permitted by Borrower’s investment policy, as amended from time to time, provided that any material changes in such investment policy after the Effective Date has been approved by Bank;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrowers;
(d) Investments consisting of deposit accounts in which Bank has a perfected security interest or that are permitted under Section 6.8(c);
(e) Investments accepted in connection with Transfers permitted by Section 7.1;
(f) Investments of Subsidiaries in or to other Domestic Subsidiaries or Borrower and Investments by Borrower in Domestic Subsidiaries and Investments in Shanghai,provided that any such Investments in Shanghai shall be upon fair and reasonable terms that are no less favorable to Borrowers than would be obtained in an arm’s length transaction with a non-affiliated Person or shall not exceed, in the aggregate, $1,000,000 in cash and Equipment during the term of this Agreement;
(g) Investments consisting of travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business;
(h) Investments (including debt obligations) received (i) in connection with the bankruptcy or reorganization of customers or suppliers, (ii) in settlement of delinquent obligations of, and other disputes with, customers or suppliers effected in the ordinary course of business or (iii) upon the foreclosure or enforcement of any Lien in favor of a Borrower or any Subsidiary of a Borrower;
(i) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates (other than Permitted Portfolio Companies), in the ordinary course of business; provided that this paragraph (i) shall not apply to Investments of Borrower in any Subsidiary;
(j) Investments in connection with the Acquisition;
(k) Investments consisting of guarantees constituting of Indebtedness permitted under Section 7.1; and
(l) other Investments not otherwise permitted by clauses (a) through (k) not exceeding $250,000 in the aggregate outstanding at any time.
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“Permitted Liens” are:
(a) Liens existing on the Effective Date and described in the Perfection Certificate; and Liens arising under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not delinquent or (ii) being contested in good faith and for which the applicable Borrower or Subsidiary maintains adequate reserves on its Books, if they have no priority over any of Bank’s Liens;
(c) the Liens solely on Equipment financed by the Equipment Financing;
(d) purchase money Liens (i) on Equipment acquired or held by each Borrower incurred for financing the acquisition of the Equipment securing no more than $500,000 in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;
(e) Liens arising by operation of law in favor of materialmen, mechanics, carriers, warehousemen, landlords, laborers, suppliers and other Persons imposed, provided that such Liens either (i) were incurred in the ordinary course of either Borrowers’ any Subsidiary’s business and not in connection with the borrowing of money, and (A) are for sums not yet delinquent more than 60 days past due or (ii) are being contested in good faith and for which the applicable Borrower or Subsidiary maintains adequate reserves on its Books or (ii) have no priority over any of Bank’s Lien and the aggregate amount of obligations secured by such Liens does not at any time exceed $100,000;
(f) Liens arising in connection with workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business;
(g) Liens arising from pledges and deposits made as security for appeal bonds in connection with obtaining such bonds in the ordinary course of business;
(h) inchoate and unperfected Liens for escheat or use taxes that are not the subject of any judgment or other asserted claim for the payment of money;
(i) with respect to any real property, reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and zoning restrictions and similar encumbrances that (i) do not materially interfere with or impair the use or operation thereof and (ii) are not Environmental Liens;
(j) leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses of property (other than real property or Intellectual Property) granted in the ordinary course of Borrowers’ businesses, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest;
(k) non-exclusive license of Intellectual Property granted to third parties in the ordinary course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas outside of the United States;
(l) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7; and
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(m) Liens in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts or the amounts on deposit in such account comply with Section 6.8(d);
(n) Liens securing Indebtedness or other obligations in an aggregate amount not exceeding $250,000 outstanding at any time; and
(o) Liens incurred in the extension, renewal or refinancing of the obligations secured by Liens described in clauses (a), (c), (d), (m) and (n),providedany extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the obligations secured thereby may not increase.
“Permitted Portfolio Company” means a portfolio company of the private equity fund of Francisco Partners.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.
“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made
“Reserves” means reserves established by Bank from time to time against Eligible Accounts of Borrowers that Bank may, in its reasonable credit judgment, establish from time to time. Without limiting the generality of the foregoing, Reserves established to ensure the payment of accrued Interest Expense or Indebtedness shall be deemed to be a reasonable exercise of Bank’s credit judgment.
“Responsible Officer” is any of the Chief Executive Officer, President, and Chief Financial Officer of each Borrower.
“Revolving Line” is an Advance or Advances in an aggregate amount of up to $25,000,000 outstanding at any time.
“Revolving Line Maturity Date” is June 29, 2009.
“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.
“Securities Pledge Agreement” that certain Securities Pledge Agreement executed and delivered by Holdings to Bank dated as of the Effective Date.
“Senior Funded Debt” means, on any day, the principal amount of Indebtedness (other than Subordinated Debt) that would, under GAAP, be classified as indebtedness on a consolidated balance sheet of Holdings and its Subsidiaries on such date.
“Senior Leverage Ratio” is defined in Section 6.9(a).
“Settlement Date” is defined in Section 2.1.3.
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“Shanghai” means Ultra Clean Technology (Shanghai) Co., LTD.
“Subordinated Debt” is indebtedness incurred by Holdings and its Subsidiaries subordinated to all of Holdings’ and its Subsidiaries’ now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.
“Subsidiary” means, with respect to any Person, any Person of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person.
“Term Loan” is a loan made by Bank pursuant to the terms of Section 2.1.5 hereof.
“Term Loan Amount” is an aggregate amount equal to $7,500,000 outstanding at any time.
“Term Loan Maturity Date” is June 29, 2009.
“Term Loan Payment” is defined in Section 2.1.5(b).
“Transaction Report” is that certain report in form and substance satisfactory to Bank, including, without limitation, sales journals, collection journals, and credit memorandum attached thereto.
“Transfer” is defined in Section 7.1.
“Trigger Availability” means the sum of (i) Eligible Accounts multiplied by the advance rate then in effect as set forth in the definition ofBorrowingBase minus (ii) the sum of all outstanding Obligations to Bank in respect of the Revolving Line, the Term Loan and all outstanding Letters of Credit, plus (iii) unrestricted cash and Cash Equivalents of Borrowers.
“Ultra Clean IP Security Agreement” means an Intellectual Property Security Agreement executed and delivered by Ultra Clean to Bank dated as of the Effective Date.
“Union Bank Control Agreement” means the Three Party Lockbox and Deposit Account Control Agreement, of even date herewith, among Union Bank of California, Bank and Borrowers.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.
BORROWERS:
BOB ACQUISITION INC. (and any successor by merger)
PETE ACQUISITION LLC (to be renamed UCT Sieger Engineering LLC)
ULTRA CLEAN TECHNOLOGY SYSTEMS AND SERVICE, INC.
| |
| | | |
| By: | /s/ Jack Sexton |
| |
|
| | Name: | Jack Sexton |
| | Title: | Chief Financial Officer |
| BANK: |
| |
| SILICON VALLEY BANK |
| |
| | | |
| By: | /s/ Maria Fischer Leaf |
| |
|
| | Name: | Maria Fischer Leaf |
| | Title: | Senior Relationship Manager |
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EXHIBIT A
The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the “Collateral” does not include more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter.
EXHIBIT B
Loan Payment/Advance Request Form
DEADLINE FOR SAME DAY PROCESSING ISNOONP.S.T.*
| Fax To: | Date: __________________ |
| LOAN PAYMENT: |
| |
| [Insert Borrower name] |
| | | |
| From Account #________________________________ To Account | | |
| #__________________________________________________ | | |
| (Deposit Account #) | | (Loan Account #) |
| Principal $____________________________________ and/or Interest | | |
| $________________________________________________ | | |
| Authorized Signature: _____________________ | | Phone Number: _____________________ |
| Print Name/Title: _____________________ | | |
| LOAN ADVANCE: | | |
| | | |
| Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire. |
| | | |
| From Account #________________________________ | | To Account |
| #__________________________________________________ | | |
| (Loan Account #) | | (Deposit Account #) |
| Amount of Advance $___________________________ | | |
| | | |
| All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date: |
| | | |
| Authorized Signature: _____________________ | | Phone Number: _____________________ |
| Print Name/Title: _____________________ | | |
| OUTGOING WIRE REQUEST: |
| Complete only if all or a portion of funds from the loan advance above is to be wired. |
| Deadline for same day processing is noon, P.S.T. |
| | | |
| Beneficiary Name:____________________________________________________________________________________ |
| | | Amount of Wire: $ _______________________ |
| | |
| Beneficiary Bank: ____________________________________________________________________________________ |
| | Account Number: _______________________ |
| | | |
| City and State: _______________________________________ | | |
| Beneficiary Bank Transit (ABA) #: ________________________ | | Beneficiary Bank Code (Swift, Sort, Chip, etc.): __________ |
| | | (For International Wire Only) |
________________
* Unless otherwise provided for an Advance bearing interest at LIBOR.1
| Intermediary Bank: _________________________ | | Transit (ABA) #: _____________________ |
| For Further Credit to: ______________________________________________________________________________ |
| | | |
| Special Instruction: ________________________________________________________________ |
| | | |
|
|
| By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us). |
| | | |
| Authorized Signature: _____________________________ | | | 2ndSignature (if required): |
| _______________________________________ | | | |
| Print Name/Title: ________________________________ | | | Print Name/Title: |
| _____________________________________________ | | | |
| Telephone #: _____________________________ | | Telephone #: _______________________ |
2
EXHIBIT C
Perfection Certificate Form
PERFECTION CERTIFICATE
| 1. | The legal name of the [Borrower][Guarantor] is __________________ (the “Company”). |
| |
| 2. | The Company was formed on ____________in ____________________as a ______________. Since its formation, the Company has had the following legal names (other than its current legal name): |
| |
| | | | | | Date Company’s Name |
| | Prior Name | | | | Was Changed From Such Name |
| 3. | The Company does business under the following trade names: |
| |
| | Trade Name | | | | Is This Name Registered? |
| 4. | The Company has the following places of business or has assets located at the following locations: |
| |
| | Address | | Owner of Location | | Brief Description of Assets |
| 5. | The Company owns the following domestic and foreign registered patents and patent applications: |
| |
| | Title of Patent | | Registration/Application No. | | Registration/Filing Date |
| 6. | The Company owns the following domestic and foreign registered and applied for trademarks, tradenames and service marks: |
| |
| | Trademarks, Tradenames or | | | | |
| | Service Marks | | Registration/Application No. | | Registration/Filing Date |
1
| 7. | The Company owns the following domestic and foreign copyrights and copyright registrations: |
| | Description of Copyright | | Registration No. | | Registration Date |
| 8. | The Company uses the following material unregistered copyrights in the ordinary course of its business: |
| 9. | The following is a complete list of pending and threatened litigation or claims involving amounts claimed against Company in an indefinite amount or in excess of $50,000 in each case: |
| |
| 10. | The Company’s federal employer I.D. number is: |
| |
| 11. | The Company’s organizational I.D. number is ___ ____________________
.. |
| |
| 12. | The Company’s assets are subject to the following security interests: |
| |
| | Assets | | | | Name and Address of Secured Party |
| 14. | The Company has investments in excess of $50,000 (calculated at thehigherof cost or market value) in equity or debt securities of the following entities (other than subsidiaries): |
| |
| | Name of Entity | | | | Nature and Amount of Investment |
| 15. | The Company maintains the following deposit accounts (including demand, time, savings, passbook or similar accounts): |
| |
| | Name and Address of Depository | | | | |
| | Institution | | Type and Account No. | | Account Holder |
| 16. | The Company beneficially owns “investment property” in the following securities accounts: |
| |
| | Name and Address of Securities | | | | |
| | Intermediary | | Type and Account No. | | Account Holder |
2
| 17. | The Company has the following subsidiaries: |
| | | | | | |
| | | | State of Formation or | | Percentage Owned by |
| | Name of Subsidiary | | Organization | | Entity |
| 18. | True and correct copies of the Company’s organizational/charter documents are attached. |
3
The undersigned hereby certifies that the foregoing information contained on this Perfection Certificate is true and correct in all material respects as of June 29, 2006.
| _____________________________ |
| |
| By: ___________________________ |
| |
| Printed Name: |
| Title: |
4
