EXHIBIT 10.25
EXECUTION VERSION
FIFTH AMENDMENT TO PARTICIPATION AGREEMENT
THIS FIFTH AMENDMENT TO PARTICIPATION AGREEMENT (this
"Amendment"), dated as of September 30, 1999, is entered into
by and among:
(a) ETEC SYSTEMS, INC., a Nevada corporation
("Lessee");
(b) LEASE PLAN NORTH AMERICA, INC., an Illinois corporation
("Lessor");
(c) Each of the financial institutions which are listed in
Schedule I to the Participation Agreement referred to in Recital
A below (collectively, the "Participants") that executes
this Amendment; and
(d) ABN AMRO BANK N.V., a Netherlands public company acting through
its San Francisco Representative Office, as agent for the Participants (in such
capacity, "Agent").
RECITALS
A. Lessee, Lessor, the Participants and Agent are parties to a
Participation Agreement dated as of December 5, 1997, as amended by that certain
First Amendment to Participation Agreement dated as of December 30, 1997, as
further amended by that certain Second Amendment to Participation Agreement
dated as of February 28, 1998, as further amended by that certain Third
Amendment to Participation Agreement dated as of April 29, 1998 and as further
amended by that certain Fourth Amendment to Participation Agreement dated as of
July 20, 1998 (as amended, the "Participation Agreement").
B. Lessee has requested Agent, Lessor and the Participants to amend the
Participation Agreement in certain respects.
C. Lessor, the Participants executing this Amendment and Agent are
willing so to amend the Participation Agreement upon the terms and subject to
the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Lessee, Lessor, the Participants executing this Amendment
and Agent hereby agree as follows:
1. Definitions, Interpretation. All capitalized terms
defined above and elsewhere in this Amendment shall be used herein as so
defined. Unless otherwise defined herein, all other capitalized terms used
herein shall have the respective meanings given to those terms in the
Participation Agreement, as amended by this Amendment. The rules of construction
set forth in Section I of the Participation Agreement shall, to the
extent not inconsistent with the terms of this Amendment, apply to this
Amendment and are hereby incorporated by reference.
2. Amendments to Participation Agreement. Subject to the
satisfaction of the conditions set forth in Paragraph 4 below, the
Participation Agreement is hereby amended as follows:
- Subparagraph 2.04(b) of the Participation Agreement
is hereby amended
to read in its entirety as follows:
(b) Commitment Fees. Lessee shall pay to Agent, for the ratable
benefit of the Participants as provided in clause (ii) of Subparagraph
2.06(c), commitment fees (the "Commitment Fees") as
follows:
(i) Lessee shall pay Commitment Fees of one hundred seventy-five
thousandths of one percent (0.175%) per annum on the daily average Unused 364-
Day Commitment for the 364-Day Commitment Period.
(ii) Lessee shall pay Commitment Fees on the daily average Unused Two-Year
Commitment for the entire Commitment Period as follows:
(A) At all times prior to the Fifth Amendment Effective Date, 0.2750% per
annum; and
(B) At all times on and after the Fifth Amendment Effective Date, 0.30%;
provided, however, that if, after the Fifth Amendment Effective
Date, both (A) the cumulative Adjusted Net Income of Lessee and its Subsidiaries
for its most recent consecutive four-quarter period is greater than $0 and (B)
the Adjusted Net Income of Lessee and its Subsidiaries for each of two
consecutive quarters occurring within such consecutive four quarter period is
greater than $0 (each as reflected in Lessee's most recent Financial Statements
delivered to Agent pursuant to Subparagraph 5.01(a)), then beginning on
the first day of the month following the delivery of such Financial Statements,
the Commitment Fees payable by Lessee on the daily average Unused Two-Year
Commitment shall once again be calculated at a rate of 0.2750% per
annum.
Lessee shall pay the Commitment Fees in arrears on the last Business Day in
each February, May, August and November (commencing February 27, 1998) and on
the Commitment Termination Date (or if the Total Commitment is cancelled on a
date prior to such day, on such prior date).
(b) Subparagraph 5.02(c) of the Participation Agreement is hereby
amended by (i) deleting the word "and" at the end of clause
(ix) thereof, (ii) adding thereto, immediately following clause (ix),
a new clause (x) to read in its entirety as follows, and (iii) changing
the designation of current clause (x) to "(xi)":
(x) Sales by Lessee and its Subsidiaries of other assets and property that
are leased back by Lessee and its Subsidiaries, provided that (A) all such
leases are operating leases under GAAP and (B) the aggregate value of all such
assets and property (based upon the greater of the fair market or book value of
such assets and property) so sold and leased back in any fiscal year does not
exceed five percent (5%) of Lessee's Tangible Net Worth on the last day of the
immediately preceding fiscal year; and
(c) Subparagraph 5.03(d) of the Participation Agreement is hereby
amended to read in its entirety as follows:
(d) Cash Balances. Lessee shall not permit the Cash Balances of
Lessee and its Subsidiaries to be less than $35,000,000 on the last day of any
fiscal quarter.
(d) Subparagraph 5.03(e) of the Participation Agreement is hereby
amended to read in its entirety as follows:
(e) Debt Service Coverage Ratio. Lessee shall not permit the Debt
Service Coverage Ratio of Lessee and its Subsidiaries for any consecutive four-
quarter period ending on any date set forth below to be less than the ratio set
forth opposite such quarter below:
Quarter ending on
October 31, 1999 2.00 to 1.00;
Quarters ending on
January 31, 2000, and
April 30, 2000 2.50 to 1.00;
Quarter ending on
July 31, 2000 3.00 to 1.00;
Each quarter thereafter 5.00 to 1.00.
(e) Subparagraph 5.03(f) of the Participation Agreement is hereby
amended to read in its entirety as follows:
(f) Profitability. Lessee shall not permit:
(i) The Adjusted Net Income of Lessee and its Subsidiaries to be a loss
greater than $4,000,000 for the quarter ended July 31, 1999;
(ii) The Adjusted Net Income of Lessee and its Subsidiaries to be a loss
greater than $6,000,000 for the quarter ending October 31, 1999;
(iii) The Adjusted Net Income of Lessee and its Subsidiaries to be a loss
greater than $1,500,000 for the quarter ending January 31, 2000;
(iv) The Adjusted Net Income of Lessee and its Subsidiaries to be less
than $1 for the quarter ending April 30, 2000;
(v) Beginning with the quarter ending July 31, 2000 and for each quarter
thereafter, the cumulative Adjusted Net Income of Lessee and its Subsidiaries
for any consecutive four-quarter period to be less than $1.00.
(vi) Beginning with the quarter ending October 31, 1999, the Adjusted Net
Income of Lessee and its Subsidiaries to be a loss in more than two quarters in
any consecutive four-quarter period or the aggregate amount of any such two
quarterly losses to exceed $10,000,000; or
(vii) The Operating Income of Lessee and its Subsidiaries to be a loss in
more than two quarters in any consecutive four-quarter period or the aggregate
amount of any such two quarterly losses to exceed $10,000,000.
(f) Paragraph 5.03 of the Participation Agreement is hereby amended
by adding a new clause (g) thereto immediately after clause (f)
thereof to read in its entirety as follows:
(g) Capital Expenditures. Lessee and its Subsidiaries shall not
pay or incur Capital Expenditures which exceed $22,000,000 in the aggregate
during the two fiscal quarter periods ending on October 31, 1999 and January 31,
2000.
(g) Schedule 1.01 of the Participation Agreement is hereby amended
by adding thereto in alphabetical order a new definition of the term "Fifth
Amendment Effective Date" to read in its entirety as follows:
"Fifth Amendment Effective Date" shall mean September 30,
1999.
(h) Schedule 1.01 of the Participation Agreement is hereby amended
by changing clause (a)(i) of the definition of "Applicable
Margin" set forth therein to read in its entirety as follows:
(i) No Cash Collateral. During any period when Agent does not
have, in accordance with the Cash Collateral Agreement, a first priority
perfected security interest in any Cash Collateral securing the Lessee
Obligations:
(A) With respect to the LIBOR Rental Rate:
(1) At all times prior to the Fifth Amendment Effective Date, nineteen-
twentieths of one percent (0.95%); and
(2) At all times on and after the Fifth Amendment Effective Date, one and
one quarter percent (1.25%); provided, however, that if, after the
Fifth Amendment Effective Date, both (A) the cumulative Adjusted Net Income of
Lessee and its Subsidiaries for its most recent consecutive four-quarter period
is greater than $0 and (B) the Adjusted Net Income of Lessee and its
Subsidiaries for each of two consecutive quarters occurring within such
consecutive four quarter period is greater than $0 (each as reflected in
Lessee's most recent Financial Statements delivered to Agent pursuant to
Subparagraph 5.01(a)), then beginning on the first day of the month
following the delivery of such Financial Statements, the Applicable Margin with
respect to the LIBOR Rental Rate shall once again be nineteen-twentieths of one
percent (0.95%); or
(B) With respect to the Alternate Rental Rate, zero percent
(0%);
(i) Schedule 1.01 of the Participation Agreement is hereby further
amended by changing clause (a)(iii) of the definition of "Applicable
Margin" set forth therein to read in its entirety as follows:
(iii) Partial Cash Collateral. During any period when Agent has,
in accordance with the Cash Collateral Agreement, a first priority perfected
security interest in Cash Collateral that secures the Lessee Obligations but has
a value less than the full Outstanding Lease Amount:
(A) The per annum margin equal to the sum of the following with
respect to the LIBOR Rental Rate:
(1) The product of (y) at all times prior to the Fifth Amendment Effective
Date, nineteen-twentieths of one percent (0.95%) and at all times on and after
the Fifth Amendment Effective Date, one and one quarter percent (1.25%);
provided, however, that if, after the Fifth Amendment Effective
Date, both the cumulative Adjusted Net Income of Lessee and its Subsidiaries for
its most recent consecutive four-quarter period is greater than $0 and the
Adjusted Net Income of Lessee and its Subsidiaries for each of two consecutive
quarters occurring within such consecutive four quarter period is greater than
$0 (each as reflected in Lessee's most recent Financial Statements delivered to
Agent pursuant to Subparagraph 5.01(a)), then beginning on the first day
of the month following the delivery of such Financial Statements, the percentage
used for calculating the LIBOR Rental Rate thereafter shall once again be
nineteen-twentieths of one percent (0.95%) times (z) a fraction, the
numerator of which is the remainder of the Outstanding Lease Amount minus the
value of the Cash Collateral and the denominator of which is the Outstanding
Lease Amount; plus
(2) The product of (y) twenty-five hundredths of one percent (0.25%)
per annum above times (z) a fraction, the numerator of which is the value of the
Cash Collateral and the denominator of which is the Outstanding Lease Amount;
or
(B) Zero percent (0%) per annum with respect to the Alternate Rental
Rate; and
(j) Schedule 1.01 of the Participation Agreement is hereby further
amended by changing the definition of "Debt Service Coverage Ratio"
set forth therein to read in its entirety as follows:
"Debt Service Coverage Ratio" shall mean, with respect to
Lessee and its Subsidiaries for any quarter, the ratio, determined on a
consolidated basis in accordance with GAAP where applicable, of:
(a) The remainder of (i) EBITDA of Lessee and its Subsidiaries for such
period minus (ii) all Capital Expenditures of Lessee and its Subsidiaries for
such period; provided, however, that (i) for the fiscal quarter
periods ending on October 31, 1999 and January 31, 2000, all Capital
Expenditures made by Lessee and its Subsidiaries during such periods shall be
excluded from such calculation and (ii) for the fiscal quarter periods ending on
April 30, 2000 and July 31, 2000, fifty percent (50%) of all Capital
Expenditures made by Lessee and its Subsidiaries during such period shall be
excluded from such calculation;
to
(b) The sum of (i) all Interest Expenses of Lessee and its Subsidiaries
for such quarter and (ii) all principal payments on long-term Indebtedness for
borrowed money of Lessee and its Subsidiaries scheduled for payment during the
immediately succeeding quarter (excluding any payments of the Outstanding Lease
Amount payable on the Expiration Date of the Lease Agreement);
Provided, however, that for purposes of calculating Lessee's
Debt-Service Coverage Ratio during its fiscal year 2000, EBITDA shall be
calculated as follows:
(A) for the consecutive four-quarter period ending on October 31, 1999,
EBITDA of Lessee and its Subsidiaries for such period shall be an amount equal
to the EBITDA of Lessee and its Subsidiaries for the fiscal quarter period
ending on October 31, 1999 multiplied by four (4);
(B) for the consecutive four-quarter period ending on January 31, 2000,
EBITDA of Lessee and its Subsidiaries for such period shall be an amount equal
to the EBITDA of Lessee and its Subsidiaries for the two fiscal quarter periods
ending on January 31, 2000 multiplied by two (2); and
(C) for the consecutive four-quarter period ending on April 30, 2000,
EBITDA of Lessee and its Subsidiaries for such period shall be an amount equal
to the EBITDA of Lessee and its Subsidiaries for the three fiscal quarter
periods ending on April 30, 2000 multiplied by one and one-third (1 and
1/3).
3. Representations and Warranties. Lessee hereby
represents and warrants to Lessor, the Participants and Agent that the following
are true and correct on the date of this Amendment and that, after giving effect
to the amendments set forth in Paragraph 2 above, the following will be
true and correct on the Effective Date (as defined below):
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other Operative
Documents are true and correct in all material respects (except for
representations and warranties expressly made as of a specified date, which are
true and correct as of such date);
(b) No Default has occurred and is continuing which has not otherwise
been waived by the Participants; and
(c) All of the Operative Documents are in full force and
effect.
(Without limiting the scope of the term "Operative Documents,"
Lessee expressly acknowledges in making the representations and warranties set
forth in this Paragraph 3 that, on and after the date hereof, such term
includes this Amendment.)
4. Effective Date. The amendments effected by
Paragraph 2 above shall become effective on September 30, 1999 (the
"Effective Date"), subject to receipt by Lessor, the
Participants and Agent on or prior to the Effective Date of the following, each
in form and substance satisfactory to Lessor, the Participants executing this
Amendment and Agent and their respective counsel:
(a) This Amendment, duly executed by Lessee, the Required Participants
and Agent;
(b) A Certificate of the Secretary or an Assistant Secretary of
Lessee, dated the Effective Date, certifying (i) that the Certificate of
Incorporation and Bylaws of Lessee, in the form delivered to Agent on the
Closing Date, are in full force and effect and have not been amended,
supplemented, revoked or repealed since such date, (ii) that the resolution of
Lessee, in the form delivered to Agent on the Closing Date, is in full force and
effect and has not been amended, supplemented, revoked or repealed since such
date, and (iii) the incumbency, signatures and authority of the officers of
Lessee authorized to execute, deliver and perform the Participation Agreement,
this Amendment, the other Operative Documents and all other documents,
instruments or agreements relating thereto executed or to be executed by
Lessee;
(c) A nonrefundable amendment fee to be paid to each Participant that
executes this Amendment on or before September 30, 1999 equal to 0.10% of each
such Participant's respective Proportionate Share; and
(d) Such other evidence as Lessor, any Participant executing this
Amendment or Agent may reasonably request to establish the accuracy and
completeness of the representations and warranties and the compliance with the
terms and conditions contained in this Amendment and the other Operative
Documents.
5. Effect of this Amendment. On and after the Effective
Date, each reference in the Participation Agreement and the other Operative
Documents to the Participation Agreement shall mean the Participation Agreement
as amended hereby. Except as specifically amended above, (a) the Participation
Agreement and the other Operative Documents shall remain in full force and
effect and are hereby ratified and confirmed and (b) the execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power, or remedy of Lessor, the Participants
or Agent, nor constitute a waiver of any provision of the Participation
Agreement or any other Operative Document.
6. Miscellaneous.
(a) Counterparts. This Amendment may be executed in any
number of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
(b) Headings. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.
[the signature pages follow]
IN WITNESS WHEREOF, Lessee, Lessor, the Participants executing this
Amendment and Agent have caused this Agreement to be executed as of the day and
year first above written.
LESSEE: ETEC SYSTEMS, INC.
By:______/s/_______________________________
Name:_Neil J.
Young____________________
Title:__Treasurer________________________
LESSOR: LEASE PLAN NORTH AMERICA, INC.
By:________/s/_____________________________
Name:__Richard R
DaCosta________________
Title:___Vice
President___________________
AGENT: ABN AMRO BANK N.V.
By:_______/s/______________________________
Name:__ Richard R
DaCosta_______________
Title:___Vice
President___________________
By:_______/s/_____________________________
Name:__Christopher L.
Snider______________
Title:____Assistant Vice
President___________
PARTICIPANTS: ABN AMRO BANK N.V.
By:__________ ______/s/____________________
Name:__ Richard R
DaCosta_______________
Title: ___Vice
President___________________
By:________________/s/____________________
Name:_Christopher L.
Snider______________
Title:__Assistant Vice
President____________
INDUSTRIAL BANK OF JAPAN, LTD.
By:________________/s/_____________________
Name:_Ken
Iwata________________________
Title:__Senior Vice
President_______________
COMERICA BANK - CALIFORNIA
By:______________/s/______________________
Name:__Robert
Ways____________________
Title:___C.B.O._________________________
KEYBANK, NATIONAL ASSOCIATION
By:______________/s/_______________________
Name:____Mary K.
Young________________
Title:_____Assistant Vice
President_________
