[UNION BANK OF CALIFORNIA LETTERHEAD]
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EXHIBIT 10.7
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Commercial Loan Documentation
P.O. Box 30115
Los Angeles, California 90030-0115
June 2, 2004
Ultra Clean Technology Systems and Service, Inc.
150 Independence Drive
Menlo Park, CA 94025-1136
Attn: Kevin L. Griffin, C.F.O. and Secretary
Dear Mr. Griffin:
This letter is being sent at the request of your Account Manager, Timothy
Reilly, and is to confirm that UNION BANK OF CALIFORNIA, N.A. ("Bank") has
agreed to extend the maturity date of the Revolving Credit Line ("Facility")
granted to Ultra Clean Technology Systems and Service, Inc. ("Borrower") in the
principal amount of Ten Million and 00/100ths Dollars ($10,000,000.00)
originally made under a certain note dated July 9, 2003, and Loan Agreement
dated July 9, 2003, as amended from time to time, (collectively, the
"Agreements"). A copy of the note is attached.
The maturity date of the Facility is hereby extended to September 15, 2004
("New Maturity Date"). The Agreements shall be deemed modified as of the date
of this letter to reflect the New Maturity Date. All other terms and conditions
of the Agreements remain in full force and effect, without waiver or
modification.
Each advance request, or Borrower's continued payments of principal or interest
on the outstanding balance of any term loan, constitutes Borrower's warranty
that no event of default as defined in the Agreements and no condition, event
or act which, with the giving of notice or the passage of time or both, would
constitute such an event of default, shall have occurred and be continuing or
shall exist.
BANK HAS NOT COMMITTED TO MAKE ANY FURTHER EXTENSION OF THE MATURITY DATE, OR TO
RENEW THE FACILITY BEYOND THE NEW MATURITY DATE. ANY FURTHER EXTENSION OR ANY
RENEWAL REMAINS IN THE DISCRETION OF BANK.
If you have any questions, please call your Account Manager, Timothy Reilly, at
(510) 494-5792.
Very truly yours,
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Trudy Gerber
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Name: Trudy Gerber
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Title: Assistant Vice President
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COMMERCIAL PROMISSORY NOTE
(BASE RATE)
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Borrower Name
ULTRA CLEAN TECHNOLOGY SYSTEMS AND SERVICE, INC.
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Borrower Address Office Loan Number
Santa Clara 935-342-882-4
150 Independence Drive Commercial Banking 0080-00-0-000
Menlo Park, California 94025
Maturity Date Amount
June 15, 2004 $10,000,000.00
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$10,000,000.00 Date July 9, 2003
FOR VALUE RECEIVED, on June 15, 2004, the undersigned ("Borrower") promises to
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated
below, the principal sum of Ten Million and No/100 Dollars ($10,000,000.00),
or so much thereof as is disbursed, together with interest on the balance of
such principal from time to time outstanding, at the per annum rate or rates
and at the times set forth below.
All computations of interest under this note shall be made on the basis of a
year of 360 days, for actual days elapsed. If any interest rate defined in this
note ceases to be available from Bank for any reason, then said interest rate
shall be replaced by the rate then offered by Bank, which, in the sole
discretion of Bank, most closely approximates the unavailable rate.
1. INTEREST PAYMENTS. Borrower shall pay interest on the 15th day of each
month commencing August 15, 2003. Should interest not be paid when due, it
shall become part of the principal and bear interest as herein provided.
(A) BASE INTEREST RATE. At Borrower's option, amounts outstanding
hereunder in minimum principal amounts of $250,000 shall bear interest at a
rate, based on an index selected by Borrower, which is 2.00% per annum in
excess of Bank's LIBOR Rate for the Interest Period selected by Borrower.
No Base Interest Rate may be changed, altered or otherwise modified until
the expiration of the Interest Period selected by Borrower. The exercise of
interest rate options by Borrower shall be as recorded in Bank's records,
which records shall be prima facie evidence of the amount borrowed under
either interest option and the interest rate; provided, however, that
failure of Bank to make any such notation in its records shall not
discharge Borrower from its obligations to repay in full with interest all
amounts borrowed. In no event shall any Interest Period extend beyond the
maturity date of this note.
To exercise this option, Borrower may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and on
the expiration of any Interest Period with respect to principal outstanding
on which a Base Interest Rate has been accruing, select an index offered by
Bank for a Base Interest Rate Loan and an Interest Period by telephoning an
authorized lending officer of Bank located at the banking office identified
below prior to 10:00 a.m., Pacific time, on any Business Day and advising
that officer of the selected index, the Interest Period and the Origination
Date selected (which Origination Date, for a Base Interest Rate Loan based
on the LIBOR Rate, shall follow the date of such selection by no more than
two (2) Business Days).
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Bank will mail a written confirmation of the terms of the selection to
Borrower promptly after the election is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the rate
selected. If, on the date of the selection, the index selected is
unavailable for any reason, the selection shall be void. Bank reserves the
right to fund the principal from any source of funds notwithstanding any
Base Interest Rate selected by Borrower.
(b) VARIABLE INTEREST RATE. All principal outstanding hereunder which is
not bearing interest at a Base Interest Rate shall bear interest at a rate
per annum of .25% in excess of the Reference Rate, which rate shall vary as
and when the Reference Rate changes.
At any time prior to the maturity of this note, subject to the provisions
of paragraph 4, below, of this note, Borrower may borrow, repay and
reborrow hereon so long as the total outstanding at any one time does not
exceed the principal amount of this note.
Borrower shall pay all amounts due under this note in lawful money of the
United States at Bank's Santa Clara Valley Commercial Banking Office, or
such other office as may be designated by Bank, from time to time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall
remain unpaid ten (10) days after same is due, at the option of Bank, Borrower
shall pay a fee of $100.00 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to two percent
(2%) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until such default is cured or waived.
4. PREPAYMENT
(a) Amounts outstanding under this note bearing interest at a rate based
on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Borrower may prepay amounts outstanding under
this note bearing interest at a Base Interest Rate in whole or in part
provided Borrower has given Bank not less than five (5) Business Days prior
written notice of Borrower's intention to make such prepayment and pays to
Bank a prepayment fee due as a result. The prepayment fee shall also be
paid, if Bank, for any other reason, including acceleration or foreclosure,
receives all or any portion of principal bearing interest at a Base
Interest Rate prior to its scheduled payment date. The prepayment fee shall
be an amount equal to the present value of the product of: (i) the
difference (but not less than zero) between (a) the Base Interest Rate
applicable to the principal amount which is being prepaid, and (b) the
return which Bank could obtain if it used the amount of such prepayment of
principal to purchase at bid price regularly quoted securities issued by
the United States having a maturity date most closely coinciding with the
relevant Base Rate Maturity and such securities were held by Bank until the
relevant Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the
numerator of which is the number of days in the period between the date of
prepayment and the relevant Base Rate Maturity Date and the denominator of
which is 360; and (iii) the amount of the principal so prepaid (except in
the event that principal payments are required and have been made as
scheduled under the terms of the Base Interest Rate Loan being prepaid,
then an amount equal to the lesser of (A) the amount prepaid or (B) 50% of
the sum of (1) the amount prepaid and (2) the amount of principal scheduled
under the terms of the Base Interest Rate Loan being prepaid to be
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outstanding at the relevant Base Rate Maturity Date). Present value under
this note is determined by discounting the above product to present value
using the Yield Rate as the annual discount factor.
(b) In no event shall Bank be obligated to make any payment or refund to
Borrower, nor shall Borrower be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this
prepayment formula exceed the interest that Bank would have received if no
prepayment had occurred. All prepayments shall include payment of accrued
interest on the principal amount so prepaid and shall be applied to payment
of interest before application to principal. A determination by Bank as to
the prepayment fee amount, if any, shall be conclusive.
(c) Bank shall provide Borrower a statement of the amount payable on
account of prepayment. Borrower acknowledges that (i) Bank establishes a
Base Interest Rate upon the understanding that it apply to the Base
Interest Rate Loan for the entire Interest Period, and (ii) Bank would not
lend to Borrower without Borrower's express agreement to pay Bank the
prepayment fee described above.
Initials K.G.
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5. DEFAULT. The occurrence of an Event of Default under that certain Loan
Agreement dated as of July 9, 2003, as amended, extended, renewed or replaced
from time to time, shall constitute a default under this note.
6. ADDITIONAL AGREEMENTS OF BORROWER. If any amounts owing under this note
are not paid when due, Borrower promises to pay all costs and expenses,
including reasonable attorneys' fees (including the costs of Bank's in house
counsel and legal staff), incurred by Bank in the collection or enforcement of
this note. Borrower and any endorser of this note, for the maximum period of
time and the full extent permitted by law, (a) waive diligence, presentment,
demand, notice of nonpayment, protest, notice of protest, and notice of every
kind, other than any notice expressly provided for in the Loan Agreement; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party,the term "Borrower" includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the
credit of such payment based upon Bank's schedule of funds availability, and
interest under this note shall accrue until the funds are deemed collected. In
any action brought under or arising out of this note, Borrower, including its
successors and assigns, hereby consents to the jurisdiction of any competent
court within the State of California, as provided in any alternative dispute
resolution agreement executed between Borrower and Bank, and consents to
service of process by any means authorized by said state's law. The term "Bank"
includes, without limitation, any holder of this note. This note shall be
construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Borrower and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note that bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest
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Period with respect to principal outstanding under a Base Interest Rate Loan.
"BUSINESS DAY" means a day on which Bank is open for business for the funding
of corporate loans, and, with respect to the rate of interest based on the
LIBOR Rate, on which dealings in U.S. dollar deposits outside of the United
States may be carried on by Bank. "INTEREST PERIOD" means with respect to funds
bearing interest at a rate based on the LIBOR Rate, any calendar period of one,
three, six, nine or twelve months. In determining an Interest Period, a month
means a period that starts on one Business Day in a month and ends on and
includes the day preceding the numerically corresponding day in the next month.
For any month in which there is no such numerically corresponding day, then as
to that month, such day shall be deemed to be the last calendar day of such
month. Any Interest Period which would otherwise end on a non-Business Day
shall end on the next succeeding Business Day unless that is the first day of a
month, in which event such Interest Period shall end on the next preceding
Business Day. "LIBOR RATE" means a per annum rate of interest (rounded upward,
if necessary, to the nearest 1/100 of 1%) at which dollar deposits, in
immediately available funds and in lawful money of the United States would be
offered to Bank, outside of the United States, for a term coinciding with the
Interest Period selected by Borrower and for an amount equal to the amount of
principal covered by Borrower's interest rate selection, plus Bank's costs,
including the cost, if any, of reserve requirements. "ORIGINATION DATE" means
the first day of the Interest Period. "REFERENCE RATE" means the rate announced
by Bank from time to time at its corporate headquarters as its "Reference Rate."
The Reference Rate is an index rate determined by Bank from time to time as a
means of pricing certain extensions of credit and is neither directly tied to
any external rate of interest or index nor necessarily the lowest rate of
interest charged by Bank at any given time.
ULTRA CLEAN TECHNOLOGY SYSTEMS AND SERVICE, INC.
By: /s/ Kevin Griffin
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Kevin Griffin, Chief Financial Officer/SECT.
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